Introduction to Hospitality Industry MidTerm Review Midterm Exam

Introduction to Hospitality Industry (Mid-Term Review)

Mid-term Exam Date: October 24 th (Tuesday) Time: 11: 00~11: 50 Location: Building #4 room 502

Hospitality is “the cordial and generous reception and entertainment of guests or strangers, either socially or commercially”. Originate from Latin language ‘Hospes’ Guest (Customer) (Reciproc ity) Host (Employee) kindness in welcoming quests or strangers

Hospitality Host (Employee) Guest (Customer) No complain Don’t stay too long Build longterm relationship (Reciprocit y) Understand differences Warm welcome Safety Lodging Food Entertainme nt Make yourself at home!

Characteristics of hospitality industry. Intangibility Inseparability Perishability Variability Labor-intensive Service-oriented

Current Trends With this advancements, comes challenges: Heightened competition Eroding consumer loyalty Need a brand differentiation Increased global competition Continuous improvements in the customer experience • The incorporation of new technologies • • •

New Breakthrough of Hospitality Industry Industrial Revolution. French Revolution. Emergence of new transportation. Internet

Current Trends To effectively navigate the hospitality industry, managers should focus on: • • Technology Social Media Sustainability Business Ethics

Historical Perspectives Cezar Ritz Ellsworth Milton Statler

Technology: E-Commerce Electronic commerce (E-commerce) consists of the buying and selling of products and/or services through electronic systems via the Internet and other computer networks. Characteristics • Global reach: across national boundaries around the world • Richness: supports video, audio, and text messages • Interactivity: works through interaction with the user • Information density: vast increases in information

Technology: E-Commerce Advantages • faster buying/selling procedure, as well as easy to find • • products or services 24/7 transaction available no theoretical geographic limitations reduced operation costs easily select products or services from different providers without moving around physically

Technology: E-Commerce Disadvantages • No guarantee of product or service quality • Technological(mechanical) failure • Cultural and legal issues

Sustainability is formally defined as “the ability to be sustained, supported, upheld, or confirmed”. Environmental scientists refer to sustainability as the quality of not being harmful to the environment or depleting natural resources, and thereby supporting long-term ecological balance.

Sustainability Efforts by hotels and other hospitality businesses include: • • • Reuse towels Low-flow shower heads Energy efficient central heating and air conditioning units Recycling programs Compact fluorescent lighting Linen change if asked Recycler basket organic or local-grown foods Donation of the leftover food Reusable items such as napkins, cups, dishes etc.

Business Ethics is an element of philosophy that involves analyzing concepts of right and wrong in human behavioral conduct. Advantages of ethical behavior in a business: • Positive customer support resulting in higher revenue • Increased brand business awareness and • • recognition Improved employee motivation and recruitment Financial collaboration from ethic-centered investors Long-term cost reductions Social responsibility development

Business Ethics Disadvantages of ethical business practices are: • Higher up-front costs for energy efficient equipment • Increased overhead costs for training and policy implementation • Growing pains of implementing a new system

Introduction to Hospitality Industry “Hospitality Service Fundamentals”

Definition of Service is defined as “a part of transaction (intangible) part of or and its customer, client, An invisible relationship between ”. transaction relationship between Service provider Itits alsocustomer, refers to “work or assistance done for others as an and client, or service consumer. occupation or business”. Hospitality guest service involves welcoming complete strangers/visitors and in a making them feel welcome and like they are a part of the f.

Service Economy The reasons of expanding the service economy • Various customers’ needs • Rapid development of technology • Increase in wealth • Increase in leisure hours • Increase women in workforce • Increase in average lifetime • Complicated products/services

Service Characteristics Intangibility Inseparability Service cannot be seen, tasted, felt, heard, or smelled before purchase. service provider & customer must be present for the transaction to occur. Characterist ics Variability Perishability Services cannot be stored. Service quality depends on who provides them and when & where they are provided.

Who is Involved All staff members are involved in a service • Corporate executives • Hospitality managers • Line level front of house employees • Line level back of house employees

The Service Circle Seven These are seven steps to assuring you are providing the guest service that is needed and desired: • Know what your guests truly want • Determine standards of performance based on • • • those needs Train and develop all your staff to develop and teach those standards of performance Monitor the service being offered to your guests Offer service recovery if needed Continually evaluate your service circle Make changes as needed to keep current with guest needs

Moment of Truth Whenever a guest interacts with an employee, there exist “moments of truth (or service encounters)”. • It can potentially be critical in determining customer satisfaction and loyalty. • It can make or break the guest experiences.

Introduction to Hospitality Industry “Lodging Segments”

Lodging Segment Definition of Lodging: commercial establishment providing accommodation for sleep, meals, and other guest services with people who travel and stay away from house.

Reasons for demand creation in America’s hotel 수요창출 요인 Gas Price Demographic s Air travel fair Demand creation in hotel business

Reasons for demand creation in Korea's hotel National income Foreign currency exchange rate Internation al event Demand creation in hotel business Import & export ( Economy prospect)

Characteristics of Lodging Segment Intangibility, Inseparability, Variability, Perishability Immobility Seasonality Elasticity External environment (exchange rate, terror) Location Repetitiveness

Levels of Services Rating Services - American Automobile Association (AAA) Diamond Rating - Mobile Travel Guide Star rating

Price (Market price segmentation) Luxury (Upper Upscale) • Four Seasons, Ritz-Carlton, Park Hyatt First Class (Upscale) • J W Marriott, Hilton, Sheraton, Westin Mid-priced (Full F&B service) • Courtyard, Holiday Inn, Ramada Plaza Mid-scale (Limited F&B service) • Fairfield Inn, Hampton Inn, Comport Inn Economy/Budget • Days Inn, Sleep Inn, Motel 6, Super 8

Location (Properties by Location) Downtown/Urban/City Hotel Highway Hotel/Motel 20. 80% 30. 80% Suburban Hotel 21. 10% Resort/Vacational Hotel 20. 80% Airport Hotel 6. 40%

Airport Hotels provide guest rooms, meeting and other hotel service facilities near airports target the traveling public and are in high demand during the workweek, when airport traffic volume is highest Appeal to the busy business executive or salesperson with the convenience and cost efficiency of holding a meeting or staying overnight at the airport hotel

Target Market Target Markets - Target markets are distinctly defined groups of people that the hotel hopes to retain or attract as guests. - Market segmentation is needed for success (J. W. Marriott, Marriott Marquis, Marriott - “You can please some people all the time and all people some time, but you cannot please all people all the time. ” - Target: Business travelers? Convention travelers? Casino travelers? Pleasure travelers? Hotels, Marriott Inns, Courtyard by Marriott, Fairfield Inn by Marriott, and Residence Inn by Marriott)

Other Lodging Segments Vacation Ownership Hotels Cruise Ships Boutique/Lifestyle Hotels Senior Service and Residential Hotels Motels

Cruise Ships Considered as alternative lodging Many amenities similar to those offered at resort hotels (It competes with resort hotels)

Introduction to Hospitality Industry “Hotel Operations”

Characteristics of Hotel Business (24/7) open throughout the year. Fast depreciation of facilities. Require huge early stage Investment. Return on investment is very slow. High Fixed cost. Totally depend on human resource.

Guest Services Department Room Division Responsibilities of front desk staff • registration services at the hotel’s front desk and assist in maintaining guest accounts • serve as an information center for guests • check guests out as they settle their accounts upon departure • perform the accounting tasks (Night Audit): balance all accounts for each day Øruns daily revenue report and a trial balance Øpost charge to guest accounts and banquet charges to group accounts Øverifies credit card receipts and cash deposits

Example test In terms of service characteristics, perishability is service provider & customer must be present for the transaction to occur. True / False Ø Caravanserai is Islamic traditional hospitality facility True / False

Example test For Resort hotel, location is not a major concern to attract customer. False True / Midscale hotel is slightly higher than limited-service hotels and below luxury hotel True / False

Example test ______ hotels are attractive to busy business executive or sales person because of the location, which are convenience and cost efficiency of holding a meeting or saying overnight and easy to departure. A. B. C. D. E. City (Downtown) hotel Highway hotel Economy hotel Airport hotel none of the options

Example test Which of the following is a common lodging classification? A. number of rooms B. price C. location D. market E. all of the options

Example test _______ is the most famous European hotelier of the early 1900’s A. Cezar Ritz B. Conrad Hilton C. Ellsworth Statler D. J. Willard Marriott E. none of the options