Question 1 Describe all main characteristics of hospitality industry. Provide examples to demonstrate your answers. 1. Cyclical The demand for hotel rooms rises and falls with the business cycle. Business and pleasure travel are easy expenses to cut in a declining economy and to restore when it improves. 2) Capital & labour intensive A large amount of money is invested in the building of hotels. The industry needs a huge manpower base to operate. Skill requirements can vary from one functional area to another 3. Technologically revolutionized Technology will continue to shape the industry and will impact all areas of the hotel business. 4. Service as a key differentiator Products sold in the hospitality industry are very similar, especially the tangible aspect. In order to achieve the competitive edge & differentiation, hotels must focus on the service (intangible) that it provides. 5. Create customer satisfaction, while making profit 6. Intangibility -High risk associated with service -Difficult for guests to evaluate service before and after experience 7. Inseparability Guests become part of the service. Cannot separate the production and consumption of service product. ‘’The moment of truth’ Need of managing and training employees for communication (empowerment) 8. Variability -Quality depends on circumstances -> may lack of consistency -Need to manage: standardize procedures, customized services, train contact employees. 9. Perishability ‘a room is not sold today is a room of lost’ Capacity and demand management needed. Understanding demand patterns: reservations, overbookings, events… Managing capacity: schedule down and peak time, cross-training. Question 2 Your friend is thinking about to choose Hospitality for her future's career. As she knows you already studied about Hospitality Industry, so she comes to ask for your advice. Explain to your friends all main characteristics needed for career path in hospitality industry. Provide examples to demonstrate your explanation. -Being a labor-intensive industry, hospitality relies on a large workforce to meet the needs of its guests. -As a service-oriented industry, hospitality depends on people with interpersonal skills. -Every encounter with a customer is centered around the employee’s ability to communicate effectively with the guest. -Hotel operations are becoming increasingly complex, with a greater emphasis on specialized training. -The demand is increasing for people with higher qualifications. Work experience and a solid education would help career advancement. -Attitude is an important consideration. Those who enjoy meeting people from different cultures will enjoy the variety of contacts available. -Other personal qualities, eg. responsibility, self-management self-esteem and integrity are also important. Question 3: There are 4 main types of hotel ownership. Explain the chain ownership and vacation ownership, giving examples if possible. Discuss both advantages and disadvantages of each type. 1.Independent Ownership - Owned and managed by individual or company with complete responsibility for hotel’s success or failure. - Example: Family-owned-and-operated hotels and B&Bs. Advantages Disadvantages - Complete control - Financial challenges - lacks buying and marketing power - Full autonomy in operating - Limited access to capital and financing - Flexibility in management - Develop own operations systems vs. using contract management - Easy adaptation to changing market conditions - Lack of brand recognition 2. Chain Ownership -A Chain Hotel is a hotel that is part of a series or of a group of hotels operated by the same company or owner. -A Hotel Chain therefore is an administration company, that manages a number of hotels having the same name but being located in different areas. They can be total or partial owners of the hotel and they manage their administration, marketing and promotion. Advantages Disadvantages - Strong brand identity, through shared marketing programs (national and intl) - Less flexibility in management procedures - Strong brand loyalty with frequent guest programs - Strong control over individual properties (minimum standards, rules, policies and procedures) - Centralized & specialized services, practices (training, site selection & information systems) - Compete not only with other hotels but within own chain - Have economy of scale, eg. bulk purchasing - Lack of differentiation - Central Reservation System 2.1. Franchising -Franchise agreement - contract in which franchisor grants franchisee right to use franchisee’s name or methods for a fee. -Benefit both for: + Franchisor: who want to expand business quickly + Franchisee: who has financial back but lacks expertise and recognition Advantages Disadvantages - Set of plans and specifications for building - Conform to the agreement - National advertising - Maintain all standards quality - Participation in volume purchasing discounts - High fees, both to join and ongoing - Listing in the franchisor’s directory - Central reservations produces 17-26% of reservations 2.2. Management Contract -Contract is owned by an investor or investors and is operated by a brand name. -Become popular because involve little or no up-front financing, equity. -Allows the hotel company to manage the property for a period of 5, 10 or 20 years. -The company receives a percentage of profit as a management fee. -The hotel companies form partnership to provide operational expertise, marketing, etc., for hotel owners who do not have desire or ability to operate hotel business. -Increasing competition among hotel companies has decreased management fee past few years, as the hotel owners are demanding better bottom-line results and reduced fees. -The hotel companies are seeking more sustainability and bigger share of business. 3. Referral Groups - Investors own and operate their hotels but participate in a group reservation System. Hotels in a referral group share a CRS and a common image, logo or ads slogan. Members pay an initial fee to join the group. Compared to franchising agreement: lower cost and less strict in size and appearance standards promoting the individuality of each member. Share most of the advantages and disadvantages of independent ownership. 4. Vacation Ownership - ‘Type of shared ownership in which the buyer purchases the right to use a residential dwelling unit for a portion of the year’ (ARDA, 2009) - Offer consumers chance to purchase fully-furnished vacation accommodation in various forms, for a percentage of the cost of full ownership. - Major holders of the market: Marriott, Ritz-Carlton, Four Seasons, Hyatt, Accor, Starwood, Carlson and Disney. - Members of VO can travel to other destinations through Vacation Exchange Network/Program: Interval World, RCI. Advantages Disadvantages - Save costs for vacation over long term, with one-time purchase price - Various costs, fees involved (maintenance, taxes, special assessment fees) - Suitable for families and groups, with space and flexibility - Lifetime contract - Fully-furnished amenities, unlike hotels - Loss in long-term value - Vacation timeframe is all set Question 4 : Explain the difference between Dining Market and Eating Market. As represent the two markets, Fine-dining restaurants and Quick-service restaurants are operated differently. Compare two types of restaurant mentioned. Provide examples to demonstrate your answers. * the differences between “ dining market” and “eating market” service market” service offered , the need of guests, the category of restaurants offered. Dining Market Eating Market - People dine out for various reasons: to socialize, escape from boredom, different foods from home serving and for convenience. - Service is important for dining out. => Fine-dining restaurants and Casual Upscale Dining -Customers of Quick-service Restaurants (QSRs), Fast casual Restaurants and Midscale Restaurants are the heart of eating market. =>Take-out, Drive-through and Delivery. 1. - 2. 3. 4. 5. - FINE-DINING RESTAURANT Full service, high price Offer good selection of menu items. Guests expect superb, excellent experience Having professional, qualified and high skilled staff: chefs, servers.. Most of fine-dining restaurants serve haute cuisine, means ‘elegant dining’, ‘high food’ Ex: SaiGon Princess, Hoi An Sense Restaurant ,Lai - Cantonese Restaurant,Lai - Cantonese Restaurant CASUAL UPSCALE DINING Dining: one of the fastest growing segments of food service Casual Upscale Dining or Casual Fine-dining: represents restaurants that are at the top end of the casual segment. Meals are less time-consuming, significant lower prices than fine-dining, but the service and quality is still professional and formal. Example: La Cuisine, La Plancha QUICK-SERVICE RESTAURANTS with slogan ‘quick food’ Offer limited menus for the convenience of people on the go. Mostly located at convenient locations. Provide fast service and usually include self-service. Highly standardized products. Require minimum use of skilled and unskilled labor. EX: KFC, Lotteria FAST CASUAL RESTAURANTS - Offering ‘full service quality food in a quick-service format’ - Include ‘made-to-order’ items with fresh ingredients - Easy to change menu, add items to menu Ex: Kichi Kichi, Gogi House, Wrap & Roll, Pizza Hut, Mon Hue, Thai Express MIDSCALE RESTAURANTS ‘moderately quick service’ The production system have been simplified, to reduce skill level required of employees. Including: + Family Restaurants + Commercial Cafeterias & Buffets EX: MY HIEN restaurant, Zone FM
