Essentials of Tourism summary

Essentials of Tourism
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Chapter 9: Accommodation

Lashley (2000), definition of hospitality:
‘Contemporaneous human exchange, which is voluntarily entered into and designed to enhance the
mutual well-being of the parties concerned through the provision of accommodation and/or food
and drink’

Selwyn (2000), definition of hospitality:
‘The purely commercial aspect of providing accommodation, food, and beverage to include the social
and cultural aspects of host and guest relationships and ‘gastronomy’, where the geography and
culture of food and wine become important’

Hospitality is not a purely commercial transaction, but includes human interactions, cultural
considerations and exchange

Three domains of hospitality: (the overlap is where hospitality management is performed)
1. The private domain relating to the host/guest relationship and fulfilling physiological and
psychological needs;
2. The commercial domain relating to services provided for profit, clearly linked to the
economics of the market place – here the host-guest relationship is commoditised;
3. The social domain providing hospitality for strangers in an act of generosity and the social
space in which this occurs

There has always been a close link between the development of hospitality and both transportation
and economic growth (Knowles 1998)

80% of accommodation establishments have a capacity of less than 50 rooms

Timeshare is ‘a form of ownership that may include an estate interest in immovable property and
which allows use of the property on a recurring annual basis for a fixed or variable time period’

Two key issues for the food service industry:
1. Labour supply and the quality of jobs on offer;
2. Their sensitivity to economic conditions for demand

International Hotel and Restaurant Association (IHRA)
- The peak industry body providing industry information and research for the industry as well
as lobbying in bodies such as the UNWTO

Managing the Hospitality Industry
 Management approaches
o International strategy (hospitality businesses look beyond domestic markets to
international expansion, for market and revenue growth)  two contrasting
approaches
 Development of standardised products, operating procedures and properties
across the world – here, there is a danger of all destinations becoming
similar with identikit Hiltons, Marriott’s and fast food outlets; or
 Development of locally sensitised products and locally designed hotels and
products tailored according to the destination, often by companies that

, specialise in particular regions of the world, such as the Taj group in India –
the issue here is for companies to balance the need for international quality
standards with local delivery in indigenously designed properties with local
decor and culture
o Management strategies (strategic options for hospitality businesses focus upon
creating market and revenue growth)
 Management contracts
 Franchising
 Consortia
 Contract catering

Management contracts (Knowles 1998):
‘A written agreement between the owner and the operator of a hotel … by which the owner employs
the operator as an agent to assume full responsibility for operating and managing the property’

Franchising operates by the franchisor granting the rights to a product format – such as a fast food
restaurant – to a franchisee, and the right to distribute its products or services
Benefits for both sides:
 The franchisor can grow their concept rapidly using investment form the franchisee
 The franchisee has access to an established product and support network such as market and
product knowledge, allowing access to the industry for small businesses

One issue for small hospitality businesses is their lack of marketing and purchasing power. This has
led to the development of ‘consortia’ of businesses where resources are pooled for purchasing and
marketing

 Marketing approaches
o Five features which impact upon the market and the marketing of a property:
 Location
 The mix of facilities
 Image
 The type of service
 Price

 Managing quality
o The hospitality industry has embraced the concept of quality in terms of service-
oriented strategies  heart of a hospitality business is anticipating and serving
customer needs. Key dimensions for this approach:
 The service encounter (the interaction between a guest and a hospitality
operation through its front-line employees  when successful, it builds
loyalty and creates satisfaction
 Customer satisfaction
 Service quality (a cognitive evaluation of a performance by a service
provider, and its broad dimensions include some degrees of reliability,
responsiveness, tangibles, empathy and assurance). Two distinct models:
 SERVQUAL, where service quality is measure using five dimensions
(also known as a ‘gaps’ model)
 The Nordic Model which has two dimensions – an ‘outcome’
dimension, such as providing the meal and a ‘process’ dimension, i.e.
how the meal was prepared and served
 Linking service quality and business performance

, Classification and grading is an important aspect of controlling the quality of hospitality business
It is a controversial issue, and competing organisations are involved in the process. These include:
- In some countries, registration for classification and grading purposes is compulsory to gain a
licence to operate – schemes are often run by tourism ministries or boards. Some argue that
this approach generates red tape and inhibits innovation
- Private organizations are also involved and include the Automobile Association with is star
rating of accommodation or Michelin
- Public industry organizations such as tourist boards also classify and grade accommodation
for legal purposes
It is important to distinguish between ‘classification’ which allocates properties to a particular class
on the basis of their features and services (a descriptive approach) – and ‘grading’ which look not
only at the facilities but also at a range of verifiable features and services such the time room service
is available

Elements of the hospitality business:
 Finance
o Hotel revenue
 Rooms revenue
 Food and beverage revenue
 Other revenue
o Hotel operating costs
 Labour
 Marketing and administration
 Energy and maintenance
 Food and beverage
o ‘Uniform system of accounts’
 Developed to allow comparison of the accounts of different properties (both
revenue and costs are captured)
 Occupancy
o In the food service industry: ‘covers’ as the measure
o Average accommodation occupancies worldwide are around 65%, but across Asia
and world cities (London, New York, Milan) they are considerably higher)
o Yield management: a technique used to maximise the revenue achieved per room by
managing occupancy. Ideally, hotels will achieve the full-advertised price for the
room (rack rate)
 Hospitality management (mostly disguised between revenue earning activities as restaurant,
accommodation, and service activities as marketing or reservations)
o Major operational departments in a hotel
 The rooms department
 The food and beverage department
 The administration department

Environmental issues
Surprisingly, the accommodation industry is a significant source of carbon emissions, as well as being
perceived as a heavy user of energy and water
Initiatives which have been established to promote sound environmental behaviours by hotels:
- The International Tourism Partnership
- Hotel Energy Solutions
- Considerate Hoteliers