Lecture 5: The role of the accommodation

sector in international tourism

Lecturer: Janelle Murray
TOUR 2000 - International Tourism

Date: 25 October 20220

Email: janellepmurray@gmail.com
 Learning Objectives

 At the end of the lecture students should be able to:

 Explain the role and importance of the accommodation sector in international tourism
 Describe the major classifications within the accommodation sector
 Explain the primary management/ownership arrangements associated with hotels
 Discuss some of the challenges and trends in the contemporary accommodation sector
 Demonstrate knowledge of basic accommodation terminology
The Role of the Accommodation Sector
(1)

• Accommodation or lodging is, by a long way, the largest and most ubiquitous
sub-sector within the tourism economy. With few exceptions, tourists
require a location where they can rest and revive during their travel through,
or stay within, a tourism destination. (Fletcher et al, 2017) 
 • Diverse and complex sector and constantly
changing.

SERVICED SELF-CATERING
Resorts
Caravan and campsites
Accommodation
Hotels
Motels Villas
Guesthouses Apartments
providers Farmhouses
Sharing economy
Chalets
Sharing economy

Cruise ships Hired yachts

 The role of the accommodation sector

• Forms an integral part of the international tourism product

• Provides the opportunity for visitors to stay for a length of time
• Assists in providing wider investment in the destination
Elements of the accommodation
product
TANGIBLE FACTORS INTANGIBLE FACTORS
• Physical surroundings • Atmosphere
• Location • Services
• Décor
• Dining experience
Key characteristics of the
accommodation sector

• Is capital and labour intensive

• Able to generate additional revenue
• Is affected by seasonality
• Differentiated by grading systems
• Subject to numerous regulatory codes and laws
• Can be synonymous with the entire tourist experience
• Is very diverse/heterogeneous
Core elements of a successful
accommodation product

Components of the accommodation product:

• Location
• Facilities
• Service
• Image
• Pricing
A closer look at major players
in the accommodation sector
Major Hotel Groups
The Boutique Hotel

• Offers a lifestyle product, with unique architectural style.

• Design- minimalist strategy, individualistic

• Location- urban areas
• Size- smaller properties
• Service- usually limited
• Technology – high tech
The sharing economy

DEFINITION:
• Tussydiah and Pesonen, (2015:1)
described the sharing economy as
a socioeconomic system that
allows for shared creation,
production, distribution, and
consumption of goods and
resources among individuals
The sharing economy across sectors
TRANSPORTATION: ACCOMMODATION:
• Lyft • AirBnb
• Uber • Homeaway
• Sidecar • VRBO
• TT RideShare • Couchshare
• Roomorama
EATING OUT:
• Eatwith ACTIVITIES:
• Feastly • Vayable
• Kitchensurfing • Sidetour

• Deliveroo • Dopios
 How do we classify & rate
the accommodation sector?
Classification ( AHLA)

• Limited-service budget hotel/motel

• Select service hotel/motel
• Full-service. Mid-priced hotels and motels
• Full-service upscale hotels
• Luxury hotels
• All-suite hotels
• Extended stay hotels – Residence Inns, Homewood Suites
 Rating Systems

• The assignment of accommodation units to a category relative

to the facilities and services they provide
What is the
Examples:
• Michelin Guide (1900)
importance of grading
• Forbes Travel Guide (formerly Mobil) (1958) systems for the hotel
• AAA (1963) and the consumer???
 Accommodation
management models and
revenue
Type of
management
operations
 Franchise Requirements

COMPANY MIN # OF ROOMS ANNUAL MARKETING FEE APPLICATION FEE

FRANCHISE FEE
DAYS INNS 40 5% OF REV 3.8% $35,000 PLUS $1000 APP
WORLDWIDE FEE
HILTON 120 5% 4% $85,000 MIN
HOLIDAY INN EXPRESS 70 6% 3% OF REV $500PER ROOM

MOTEL 6 60 4% 3.5% OF REV $25,000

PREFERRED HOTELS & 100 $300 PER ROOM PER YR $20,000 PER YR $35,000 -$50,000
RES
Revenue and
Profitability
Streams
New operating realities in
the accommodation sector
 Green Initiatives in the
accommodation sector

•Green Globe
• CHENACT Programme
• Green Hotels
• Hospitality Assured
• LEED
ICT and the accommodation Sector

• Reservations • Updating inventory records

• Guest profile • Tracking the effectiveness of
• Guest check-in and daily information marketing programmes
• Room management • Kitchen and bars
• Updating housekeeping data

• Maintaining employee payrolls

Current and future trends in
the accommodation sector
Current Trends (1)

• Very strict health, safety and sanitation operating requirements

• Growing internationalizatiion of hotel chains
• Growth in the non-serviced sector internationally
• New ownership models (franchising and management contract)
• Growth in second home ownership
• Increasing use of technology for marketing, purchasing and management
Current Trends (2)

• Demand for luxury in accommodation experiences

• Mixed-use developments ( residential, hotel and other components)
• Macdonaldization of the accommodation sector
• Aggressive competition from the sharing economy
Future Challenges & Opportunities

• Increasing external costs and taxes

• Focus on service quality
• New customer and evolving preferences
• Embrace new ways of interacting with the customer
• Shift in consumer behaviour post COVID-19 pandemic
• Digitization - Integrating technological developments in operations
• Sustainability - managing impact and effect on environment and social issues
Summary • The sector is very diverse
• There are a number of dominant chains

Points • Grading systems are used in this sector more

than any other
• The sector is characterised by different types of
management operations
• The boutique hotel is a response to a new
individualistic-type consumer
• ICT and Environmental management have
become key features of the contemporary
accommodation product
 Suggested Readings

• See Suggested Reading list on Course Outline