Strategic hospitality
Chapter 0: course structure and content
0.3 Strategy
Strategy = Looking for a competitive advantage
- You need something the other doesn’t have
- Visible for the other clients
- Leads to a positive buying process
Porte said: “you need to change it continuously”
The internet, technology has changed everything (except cleaning)
- Used to be: client goes to TA – TO – hotel → use of intermediates = disintermediation process
- Thought they will be gone, isn’t gone is now just OTA → direct booking = reintermediation
process
Compression = pressure places on a market as a result of demand
- Core business of hotel management
- It can be any situation that occurs whenever an activity or event forces demand to be pressed
outward to the surrounding area
Three phenomena that have changed the context in wich we compete:
1. Technological
2. Globalization and changes in the international context
Three main strategies:
1. Produces the cheapest way possible (not equales low prices)
2. Differentiation: boutique hotel trough architecture
a. Only works if people are prepared to pay more for the difference
b. Ex: flower hotel
3. Focus strategy: focus on a specific segment
a. Ex: hotel with the dogs
People want to bet out of their home and go somewhere else! Why? Because
Chapter 1: the hotel environment
1.1 Hospitality and hospitality management
= There are 2 broad approaches to defining ‘hospitality’: the first semantic and the second evidential.
1. Semantic
- friendly and generous reception and entertainment of guests or strangers
- 'hospitaller' and 'host' (those who provide hospitality) and
- 'hospitator' and 'guest' (those who are the recipients of hospitality)
- ‘the provision of overnight accommodation for people staying away from home, and the
provision of sustenance for people eating away from home’
2. Evidential
- the role(s) of rules, customs, manners, rituals, and habits in regulating hospitality exchanges
- social relations as a central aspect of the hospitality exchange = human exchange
- All hospitality situations are filled with symbolic associations and significance (Ex: opening a
door)
1
, - increasing commodification and subject to the dictates of fashion
o how we eat now is fundamentally different than 10 years ago
- the enduring nature of the essence of hospitality imbued: filled with a feeling or quality
Exam question: what is the inuring nature of the essence nature of hospitality, what is the core of
hospitality?
= human exchange between guest and host, human interaction
Synthesis by Brotherton
A contemporaneous human exchange, which is voluntarily entered into, and designed to enhance the
mutual wellbeing of the parties concerned through the provision of accommodation, and/or food,
and/or drink
Hospitality management = about the management of commercial organizations in the business of
providing the three key related services of food, drinks and accommodations and hospitality
management principally entails the application of management concepts and techniques to the
provision of these goods and services
Privat and public provision
1. PH (professionalized hospitality).
PH → forgets about management
- Management = choosing what to do and what not the
do
- They get bankrupt
2. HM (hospitality management).
3. PHM (professionalized hospitality management).
4. PM (professionalize management). This represents
generic management in an industrial context.
You need all three for professionalized hospitality
management!
A brand is a promise. You know what you are going to get.
1.2 The competitive environment of hospitality industry
Is all about a hotel must be a profit center. So before discussing how to manage a hotel, it is very
important to understand what the hotel business is all about. Hotels are many things:
1. Hotels are commodities: competitions is more strict, heftier
- The physical appearance and layout of guest rooms and public spaces of most competing hotels
are similar enough so that the average guest finds it hard to choose one hotel over another.
- architectural and location differences can give some hotels distinct and, in a
few cases, even lasting advantages over their competition
Hotels tend to look the same, they provide the same: bed and shower → only way to win? = price
Setting your prices according to the message you want to convey
Using your prices to compete with competitors
- Look out for ruinous price competition: never make people pay less who would have come to
the hotel. Only lover your prices if it means business
2
, 2. Permanent overbuilding
→ Low barriers: ways to enter a market
- Zoning: in Brugge you can not build a new hotel
- Environment: being able to build their
- Capitol: how much does it cost (per room €400 000)
- Operating experiences: one cockroach can ruin your hotel
→ overcapacity → increased competition → lower prices
3. Rooms are perishable products
If you don’t sell it today, it is gone forever
Problem → you have a fixes supply of rooms and flexible demand. It can be fully booked one minute
and the next it is empty
A hotel's ability to manipulate demand will often determine its financial success or failure. Dealing with
a fixed supply and variable demand is one of the central features of the hotel business.
4. Forecasting demand
→ flexible demand → flexible prices → forecasting demand
= forecasting profit
An experienced rooms division manager of the 800-room General Eisenhower Hotel, who was
responsible for forecasting occupancy, said “All other problems pale in comparison to occupancy
forecasting.”
1.3 Developing picture on hospitality industry averages
Richt Skweness = the position of the mean, median and mode in these graphs reveals
the distance between these statics and shows the asymmetry in U.S. lodging demand
The mean in mean ADR is not a true reflection s of the ADR
Exam question: does the restore happen in RevPAR follow ADR of occupancy?
Lower occupancy doesn’t influence it
The mean market is way much more pulled to the right → they have way more luxury
hotels
Mean = the average
New York is way smaller than LA so the amount of expensive hotels ways way more than the cheaper
hotels
LA is way bigger; there are way more motels and budget friendly hotels
A city can tell the skewness
What can you learn from it?
3
, Average ADR and RevPAR. In general, whether it is Amsterdam or Paris, if you say what is the average
ADR, it masks the real hotel market, because it has luxury hotels. Average mask true patterns → caution
when making conclusion on the bases of averages
Chapter 2: tourism management for hoteliers
2.1 World tourism ranking by country
- Imported because: tourism is the container of hotels
- Tourism has been growing since the 1940, but in the last decade it is the first time that we saw
declines
- Asia pacific: was difficult to open their borders, they were protective of their markets
- Middle east: they just started opening their borders
- France is the biggest county in tourism
2.2 defining the economic contribution of travel & tourism
GDP = how we calculate the economic
T&T = travel and tourism = relates to the activity of travekkers in trips outside their usual environment
with a duration of less than one year. Economic activity related to all aspects of sush trips is measures
within the research.
Contribution of T&T en GDP
- Direct contribution: everything you spend in the hotel
o ex: accommodation, F&B, entertainment, etc
- indirect contribution: eating breakfast in the hotel, they indirect pay the supplier
- Induced: spending of employees
o Ex: clothing, housing, etc
Multiplying effect
2.3. tourism today in 2005
Importance of tourism:
- It is constantly evolving/changing
- Over tourism has become a problem
Tourism significance growth:
1. New employment oppertuneties wich may assist in developing
and modernizing the economy, focused on service industries
2. Quality of life issues: they need it to feel well, escape their life
3. Has become a defining feature: meeting someone you ask where
they went on a holiday
4. A basic right
5. More accessible: budget airlines and cut-price travel
6. Perceived as less costly
7. Discretionary activity: it has become normal
8. Growing economic significance at a global scale
9. Technology
So why study tourism?
- Multidisciplinarity = a wide range of other subject examine it (economics, psycho, etc) → There
is no overarching academic agreement on how to approach the study tourism
4
Chapter 0: course structure and content
0.3 Strategy
Strategy = Looking for a competitive advantage
- You need something the other doesn’t have
- Visible for the other clients
- Leads to a positive buying process
Porte said: “you need to change it continuously”
The internet, technology has changed everything (except cleaning)
- Used to be: client goes to TA – TO – hotel → use of intermediates = disintermediation process
- Thought they will be gone, isn’t gone is now just OTA → direct booking = reintermediation
process
Compression = pressure places on a market as a result of demand
- Core business of hotel management
- It can be any situation that occurs whenever an activity or event forces demand to be pressed
outward to the surrounding area
Three phenomena that have changed the context in wich we compete:
1. Technological
2. Globalization and changes in the international context
Three main strategies:
1. Produces the cheapest way possible (not equales low prices)
2. Differentiation: boutique hotel trough architecture
a. Only works if people are prepared to pay more for the difference
b. Ex: flower hotel
3. Focus strategy: focus on a specific segment
a. Ex: hotel with the dogs
People want to bet out of their home and go somewhere else! Why? Because
Chapter 1: the hotel environment
1.1 Hospitality and hospitality management
= There are 2 broad approaches to defining ‘hospitality’: the first semantic and the second evidential.
1. Semantic
- friendly and generous reception and entertainment of guests or strangers
- 'hospitaller' and 'host' (those who provide hospitality) and
- 'hospitator' and 'guest' (those who are the recipients of hospitality)
- ‘the provision of overnight accommodation for people staying away from home, and the
provision of sustenance for people eating away from home’
2. Evidential
- the role(s) of rules, customs, manners, rituals, and habits in regulating hospitality exchanges
- social relations as a central aspect of the hospitality exchange = human exchange
- All hospitality situations are filled with symbolic associations and significance (Ex: opening a
door)
1
, - increasing commodification and subject to the dictates of fashion
o how we eat now is fundamentally different than 10 years ago
- the enduring nature of the essence of hospitality imbued: filled with a feeling or quality
Exam question: what is the inuring nature of the essence nature of hospitality, what is the core of
hospitality?
= human exchange between guest and host, human interaction
Synthesis by Brotherton
A contemporaneous human exchange, which is voluntarily entered into, and designed to enhance the
mutual wellbeing of the parties concerned through the provision of accommodation, and/or food,
and/or drink
Hospitality management = about the management of commercial organizations in the business of
providing the three key related services of food, drinks and accommodations and hospitality
management principally entails the application of management concepts and techniques to the
provision of these goods and services
Privat and public provision
1. PH (professionalized hospitality).
PH → forgets about management
- Management = choosing what to do and what not the
do
- They get bankrupt
2. HM (hospitality management).
3. PHM (professionalized hospitality management).
4. PM (professionalize management). This represents
generic management in an industrial context.
You need all three for professionalized hospitality
management!
A brand is a promise. You know what you are going to get.
1.2 The competitive environment of hospitality industry
Is all about a hotel must be a profit center. So before discussing how to manage a hotel, it is very
important to understand what the hotel business is all about. Hotels are many things:
1. Hotels are commodities: competitions is more strict, heftier
- The physical appearance and layout of guest rooms and public spaces of most competing hotels
are similar enough so that the average guest finds it hard to choose one hotel over another.
- architectural and location differences can give some hotels distinct and, in a
few cases, even lasting advantages over their competition
Hotels tend to look the same, they provide the same: bed and shower → only way to win? = price
Setting your prices according to the message you want to convey
Using your prices to compete with competitors
- Look out for ruinous price competition: never make people pay less who would have come to
the hotel. Only lover your prices if it means business
2
, 2. Permanent overbuilding
→ Low barriers: ways to enter a market
- Zoning: in Brugge you can not build a new hotel
- Environment: being able to build their
- Capitol: how much does it cost (per room €400 000)
- Operating experiences: one cockroach can ruin your hotel
→ overcapacity → increased competition → lower prices
3. Rooms are perishable products
If you don’t sell it today, it is gone forever
Problem → you have a fixes supply of rooms and flexible demand. It can be fully booked one minute
and the next it is empty
A hotel's ability to manipulate demand will often determine its financial success or failure. Dealing with
a fixed supply and variable demand is one of the central features of the hotel business.
4. Forecasting demand
→ flexible demand → flexible prices → forecasting demand
= forecasting profit
An experienced rooms division manager of the 800-room General Eisenhower Hotel, who was
responsible for forecasting occupancy, said “All other problems pale in comparison to occupancy
forecasting.”
1.3 Developing picture on hospitality industry averages
Richt Skweness = the position of the mean, median and mode in these graphs reveals
the distance between these statics and shows the asymmetry in U.S. lodging demand
The mean in mean ADR is not a true reflection s of the ADR
Exam question: does the restore happen in RevPAR follow ADR of occupancy?
Lower occupancy doesn’t influence it
The mean market is way much more pulled to the right → they have way more luxury
hotels
Mean = the average
New York is way smaller than LA so the amount of expensive hotels ways way more than the cheaper
hotels
LA is way bigger; there are way more motels and budget friendly hotels
A city can tell the skewness
What can you learn from it?
3
, Average ADR and RevPAR. In general, whether it is Amsterdam or Paris, if you say what is the average
ADR, it masks the real hotel market, because it has luxury hotels. Average mask true patterns → caution
when making conclusion on the bases of averages
Chapter 2: tourism management for hoteliers
2.1 World tourism ranking by country
- Imported because: tourism is the container of hotels
- Tourism has been growing since the 1940, but in the last decade it is the first time that we saw
declines
- Asia pacific: was difficult to open their borders, they were protective of their markets
- Middle east: they just started opening their borders
- France is the biggest county in tourism
2.2 defining the economic contribution of travel & tourism
GDP = how we calculate the economic
T&T = travel and tourism = relates to the activity of travekkers in trips outside their usual environment
with a duration of less than one year. Economic activity related to all aspects of sush trips is measures
within the research.
Contribution of T&T en GDP
- Direct contribution: everything you spend in the hotel
o ex: accommodation, F&B, entertainment, etc
- indirect contribution: eating breakfast in the hotel, they indirect pay the supplier
- Induced: spending of employees
o Ex: clothing, housing, etc
Multiplying effect
2.3. tourism today in 2005
Importance of tourism:
- It is constantly evolving/changing
- Over tourism has become a problem
Tourism significance growth:
1. New employment oppertuneties wich may assist in developing
and modernizing the economy, focused on service industries
2. Quality of life issues: they need it to feel well, escape their life
3. Has become a defining feature: meeting someone you ask where
they went on a holiday
4. A basic right
5. More accessible: budget airlines and cut-price travel
6. Perceived as less costly
7. Discretionary activity: it has become normal
8. Growing economic significance at a global scale
9. Technology
So why study tourism?
- Multidisciplinarity = a wide range of other subject examine it (economics, psycho, etc) → There
is no overarching academic agreement on how to approach the study tourism
4
