BECAMEX BUSINESS SCHOOL

HMGT358
LODGING OPERATIONS
Session 1: The Hotel Business: Yesterday & Today

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NGUYỄN THỊ PHƯƠNG YẾN (Ms)

Bachelor of Commerce (Marketing) at RMIT Vietnam

MBA in Hospitality Management at Les Roches Global
Hospitality Education, Switzerland

Email: yen.nguyenthiphuong@eiu.edu.vn

Room: 105.B3

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 CLASS DISCIPLINES
1. Wear BUSINESS ATTIRE, a MUST!!!
2. Be on time
3. Ask questions when in doubt – VERY IMPORTANT
4. Study the chapters/materials before lessons
5. Do your homework promptly for discussions and submission
6. Be active
7. Talk to me
8. Email me for anything related to your study!

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How to wear proper Formal/Business Attire?
WOMEN: YES
- Nice, appropriate skirt and an equally formal blouse.
- Formal blouse: dress shirts, button-down tops, turtlenecks as
long as they look professional, should either be tucked in or
fall just below your waistline
- Shoes, boots, flats, open-toed and closed-toed shoes in a
leather or dress material are appropriate and should be clean
and polished.
- Blazers are recommended.

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How to wear proper Formal/Business Attire?
WOMEN: NO
- Casual shirts, T-shirts, tank tops
- Blouses that are too low-cut or reveal shoulders, back
- Mini skirts, or skirts that are short and tight
- Jackets, bombers
- Sneakers
- Jeans
- Flip flops, thongs, crocs

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How to wear proper Formal/Business Attire?
MEN: YES MEN: NO
- Formal shirts - Jeans
- Long pants - Sneakers
- Closed-toe shoes - Tight pants
- Vests are - Sandals, flip flops,
recommended thongs, crocs
- Tie is a MUST!

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MODULE STRUCTURE & ASSESSMENTS

Attendance 10%
Quizzes 10%
Homework 10%
Final Group Report 20%
Final Group Presentation 10%
Final Exam 40%
Total 100%

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 SESSION OBJECTIVES
At the end of the session, you should be able to:
- Review the origins and specific characteristics of the hospitality
industry.
- Correctly use the basic terminology of the lodging industry.
- List the various divisions and departments within a standard
property.
- Explain the basic success factors of a lodging property.
- Review possible career paths in the industry.
- Review and describe the various types of management
corporations that are found in the lodging industry.

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 The History of the Industry
• The origins of the words hotel and hospitality have Latin roots of the
word, “hospitium”.
• The Romans traveled throughout Britain, Europe and the Near East
during their conquering and exploration expeditions. They patronized
taverns called “tabernas” with an attached inn known as “cauponas”.
• During the Middle Ages, inns began to spring up along trade routes all
over Europe and The Silk Road.
• The term “hostelers”, was adopted around 1473. In the 1800’s, the
word “hostel” was introduced and used to denote an inn.

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 The History of the Industry
The Middle Ages
• The hotel industry developed rapidly during the Crusades. The conquering
armies opened up many routes into Asia and Europe. As the armies needed
to be constantly re-supplied, various garrisons were set up along the routes
to act as warehouse and re-supply depots.
• Merchants, who were keen to reach new markets set up their business
along these garrisons as they provided a source of income and protection.
• Inns started to spring up to provide food, shelter and entertainment for the
weary travelers and soldiers.

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 The History of the Industry
The Colonial Era
• Public horse driven coach services helped foster the development of inns in the
U.K. from 1650 and USA from onwards 1710.
• Coach inns were built along the routes where team of horses were changed. The
British referred to such inns as “ordinary”.
The 19th Century
• The introduction of railroads significantly impacted the industry in the 1800s
throughout the Western world. Depot hotels appeared along the routes to house
weary travelers .
• As railway travel grew in popularity and popular tourist locations became more
accessible, more and more beautiful resorts, spas and luxury hotels were built.

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 The History of the Industry
The 20th Century
• New and different modes of transportation, including air, sea and overland travel gained
popularity.
• As new airports, highways and ports were developed; travel became more prevalent among
business and leisure travelers.
• Demand for lodging facilities grew.
World War II
• The 1930s Great Depression was a major setback for the industry.
• The advent of World War Two brought mass movement of people - troops, workers and
victims. Lodging operations sprung up along re-supply routes, military bases and industrial
areas. People needed to be housed and this rekindled the demand for lodging
establishments.

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 The characteristics of the industry
Cyclical
• As for any product, there is a product life cycle for the lodging
establishments. It is not uncommon to find retrofitting or renovation
works being carried out every few years.
• As the product (property) reaches the maturity phase of the product cycle,
lodging establishments have to embark on altering, adding to or completely
changing the physical facility.

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 The characteristics of the industry
Seasonal
• Off peak and peak periods. Depending on its location, a property
faces seasonal trends.
• A ski resort will experience high peak occupancy levels during the
height of winter and taper off when spring starts to set in.

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Intangibility - High risk associated with service.
- Difficult for guests to evaluate service before and after experience.

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)

Variability - Quality depends on circumstances 🡪 may lack of consistency

- Need to manage: standardize procedures, customized services, train contact
employees

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.

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Hayes, D. K, Ninemeier, J. D. & Miller, A. A (2014). Foundations of Lodging Management. Pearson Education Limited.
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 ‘The moment of truth’

• Term created by Jan Carlson – president of Scandinavian Airline System.

• Spent lots of time to coach his front-line staffs to handle guest encounters.

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 ‘The moment of truth’
• Any (and every) time a guest has an opportunity to form an impression about the
hospitality organization. Moments of truth can be positive or negative..

• While a moment of truth may involve an employee (excellent or rude service), there
need not be any human interaction.

• Every hospitality establishment has thousands of moments of truth everyday

🡺 challenges in maintaining the expected levels of services.

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Hayes, D. K, Ninemeier, J. D. & Miller, A. A (2014). Foundations of Lodging Management. Pearson Education Limited.
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Hayes, D. K, Ninemeier, J. D. & Miller, A. A (2014). Foundations of Lodging Management. Pearson Education Limited.

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 The characteristics of the industry
• Capital and labor intensive
• Long investment payback period. Generally, 7 to 10 years at least.
• Service as a key differentiator
• Hotels are commodities offering similar products and services in a highly
competitive industry
• Location – depending on the target market, the location has an important
bearing on the success of a property.
• Fixed supply – unlike other products, the supply is fixed, as new properties
cannot be constructed overnight to meet a surging demand.
• High operating costs – regardless of the classification of a property, operating
cost, utilities, labor and outfitting costs are high.

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 Common Terms
• Property – Industry term to denote the hotel, motel, etc.
• Occupancy – The number of rooms occupied by guests against the actual
number available for rental. Represented as a percentage.
• Number of rooms occupied – Includes all rooms occupied whether paid for
or otherwise. Some properties assigned permanent living quarters to senior
management in the form of guest rooms.
• Number of rooms sold – Rooms that are rented out for the night/day.
• ADR (Average Daily Rate) – The average rate for all rooms in the property.
• Revenue generating – Two main divisions of the property generate revenue
– Rooms and Food & Beverage.

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 Common Terms
• Non-revenue generating – primarily all the support departments such as
housekeeping, accounting.
• Accommodation plan – whether the quoted rate of the room includes
meal(s) or not.
• Front of the house – areas/operation that are accessible to the public.
• Back of the house – areas/operations that are not accessible to members of
the public.
• Opening of the house – although properties operate 24 hours, this is a
housekeeping term to denote the opening of the hotel for business, usually
after the morning shift has clocked in and started to get the property cleaned
up and ready for guests.

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 Common Terms
• Guest areas – areas accessible to in-house guests.

• Common areas – areas accessible to members of the public.

• Executive office – houses senior management offices.

• Stewarding – back of the house operation, providing dishwashers/kitchen

cleaners for the Food & Beverage division.

• Housekeeping – responsible for cleaning guest rooms and common areas.

• Maintenance - also called engineering or janitor (USA).

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 Functional Divisions
Most hotel properties will have the following divisions:

Food and
Rooms Accounts Administration
Beverage

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 Room Division
The Rooms Division Includes the following departments:

• Front office (primary revenue generating department) – includes reception and cashiering.

• Guest services – includes bellhops, concierge, car valet and door man.

• Reservations – process all guest reservations and room inquires.

• Housekeeping – responsible for cleanliness, appearance of hotel, including guest rooms

and public areas.

• Laundry – including laundry services.

• Horticulture – in charge of landscaping, grounds and flower shop.

• Telephone – all in/out going telephone calls.

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 Food & Beverage Division
The Food & Beverage Division includes the following departments:

• Outlets – all Food & Beverage outlets.

• Kitchens – back of the house operations. Not limited to outlet kitchens, also includes the
main kitchen that serves many outlets in one form or another.

• Banquets – in charge of in-house and off site events/functions.

• F&B stores – where all Food & Beverage related items are stored. Includes beverage, food,
kitchenware, glassware, etc.

• Stewarding – responsible for cleaning the cooking and outlet utensils and cleaning of
kitchens.

• *Only the outlets and banquets generate revenue.

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 Administrative Division
A non-revenue generating division, the Administration Division provides vital support services for
effective and efficient operations of the hotel through the following departments:

• Human resource – also called the Personnel department.

• Security & Safety – responsible for the safety and security of guests and employees and their
properties.

• Engineering – maintains property’s furniture & fittings and physical facilities.

• Sales & marketing – in charge of generating sales and marketing revenues for the property by
promoting the hotel to the public.

• Corporate communications – could also be referred to as Public Relations. Act as the property’s
spokesperson.

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 Administrative Division
• Service Quality – a relatively new concept, in charge of ensuring that all
service quality standards are met and exceeded; attend to any complaints
about service delivery.

• Training & Development – in charge of formulating and conducting training

for employees, unless outsourced.

• Medical Centre – may be found in some resorts where medical services are
not available in close proximity.

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 Accounts Division
Another non-revenue generating division, the Accounts Division includes the following
departments:
• Accounts payable – in charge of all billings that need to be paid for.
• Accounts receivables – in charge of all monies owed to the property.
• Payroll – in charge of salary matters.
• Computer department – vital in modern highly computerized properties.
• Audit – department that attends to audits of cashiers and other accounts
(receivables, etc) work.
• Cost Control – divided into two sections, one for beverage and the other for food.
Assists in monitoring costs.
• Purchasing – in charge of procuring all goods for the property.

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 Basic Success Factors
• Guest’s patronize an outlet or a property for a variety of reasons. From a basic need
to seek shelter to experiencing a special dining and lodging experience, attending or
hosting an event or attending a business meeting.

• The reasons are many, but the common denominator in the lodging industry is to
satisfy the needs of the guest, be it a budget traveler or a millionaire.

• For a property to be successful, it must first meet, then exceed the expectations
of its guests. Through this, customer demand market share can be captured and
revenue and profits increased.

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 Basic Success Factors
A simple formula: Meet and exceed expectations.

🡺 To achieve this, attention must be paid to the following aspects of the business:
❖Décor
• Includes furnishings and fittings (e.g. floorings and wall furnishings, lights) found in the public
areas, Food & Beverage outlets, common grounds and guest rooms.
• Must correlate to the categorization of the property. E.g. a 5- star property must have fittings that
give a perception of high value. On the other end of the scale, a backpackers inn, simple,
comfortable, ordinary (not superior quality leathered) couches in the lobby would suffice.

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Remember the need of our target customers…

• List out some main differences of hotels which target between

business and leisure travellers?

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 Basic Success Factors
❖Cleanliness
• All guests expect a clean environment within the compounds of the property. The
Housekeeping Department plays a crucial role towards meeting this goal.
❖Quietness/Peacefulness
• There is a need to provide a quiet and peaceful environment for all guests.
• Noise should be minimized and all back of the house operations housed in areas where
noise can be channeled out. Any major renovation or maintenance works should be
carried out without generating too much noise.
• Some properties, located along major roads, airports, bus terminals, try to limit the noise
by installing double glazed windows, planting trees to act as natural noise barriers, etc.

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 Basic Success Factors
❖Safety
• Both for legal and moral reasons. This factor has an increased value in crime-ridden
locations. Guests must feel that their persons and belongings are safe and protected.
• The provision of individual room safes and electronic key cards are features
introduced to meet guests’ needs.
• Also covers provision of safe fittings, equipment. Guests expect that all facilities and
equipment are of good quality, in good working order and safe for use.
• Provision of facilities for the physically challenged and elderly are also necessary. For the
health conscious, non-smoking floors may be introduced while single female travelers
may be housed on a “Ladies” floor

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 Basic Success Factors
❖Point of Differentiation
• In the face of increasing competition, some properties may
incorporate special elements and provide unique services to
different themselves.
• For example, installation of handicapped-friendly rooms and ramps
for the wheelchairs, provisions of Braille menus, low carbohydrate
meal options, alcohol lite beverages, etc.
• About creating the “WOW” factors in service and product offers
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Can you think of any WOW factors?

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 The Service Personnel
• Service can be loosely defined as conduct that is useful or helpful to
others.
• All things being equal, the key element is the service standards of an
establishment.
• Service is an overriding factor for the guest to select one property over
another.
• Staff must be well trained, empowered and motivated to provide a very
high level of service that will ensure a satisfying experience for the guest
and repeat patronage.
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 The Service Personnel
🡺 To provide a high level of service, certain traits must be present within the
service personnel:
• Courtesy – the ability to be polite and courteous at all times. All staff should use
respectful terms such as Sir, Madam, Please, etc. when addressing guests. It
must be extended directly (in person) or indirectly (telephone operator).
• Friendliness – by having friendly staff, guests are made to feel welcome and
better able to enjoy their stay.
• Efficiency and promptness – the ability to process orders promptly and
accurately - from order taking to delivery of food. A systematic and efficient
working system and organized service personnel should be present in all
properties.

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 The Service Personnel
🡺 To provide a high level of service, certain traits must be present within the
service personnel:
• Attractive and neat appearance – all staff should be well groomed and project
a neat and professional appearance at all time whilst on the job. Staff must take
pride in their personal appearance and wear their uniforms with pride.
• Ability to serve orders – a correct attitude is required by service staff to deliver
good, efficient and genuine service.
• Ability to deal with international visitors – the ability to interact with guests of
different cultures is a necessary is essential. The ability to communicate in
different languages aids greatly in this aspect.

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 The Service Personnel
🡺 To provide a high level of service, certain traits must be present within the
service personnel:

• Service Recovery – the ability to listen and empathize with the guests who
encounter problems. Staff can be empowered to respond promptly to
genuine complaints and taking actions to resolve and eradicate these
problem areas.

• Selling skills – the ability to ‘up sell’ is required from many staff members -
the reservation clerk, front desk clerk, watering staff, etc.

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 Career Opportunities
• Positions – a multitude of positions are available in a hotel.
• From entry-level to supervisory and junior management posts to middle and senior
management positions.
🡺 Entry level – chambermaids, technicians, waiters, checkers, accounts clerks, etc
🡺 Supervisory - primarily in-charge sections or teams. Ensure that all operations are
carried out in an efficient and professional manner.
🡺 Middle management – includes assistant managers, department heads. Involve with
managing day-to-day affairs of respective departments, delivering on revenue forecast and
training.

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 Career Opportunities
🡺 Senior management – division heads, general managers, chief operating
officer, chief executive offices, etc. Responsible for strategic planning, budget
control, delivering on profitability levels for their divisions.
🡺 The corporate offices – centralized office of chain or franchise properties.
Strategic level planning of new projects, new avenues of revenue sources,
branding, centralized procurement of goods and services, negotiation of
contracts and sourcing of new management contracts.

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 Training & Development
• The hotel industry suffers from a very high turnover rate and has
difficulties in attracting top talents.
• Perceived to attract personnel who see it as a last resort industry.
• Service delivery is vital component to developing a competitive
advantage in the business environment.
• Training is therefore crucial in ensuring that high service standards
are meet and operations can be executed by all staff professionally.

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 Training & Development
🡺 Training Methods and Approaches:
• Lectures – conduct by in-house trainers or professional trainers.
• Video training - with structured testing.
• OJT (On-the-Job Training) – most common form of training in the industry.
• Attachments – normally conducted for in-house management trainees who are
required to experience the whole spectrum of the lodging industry.
• Training courses – conducted in-house by the property’s training department or
by professional trainers. Can also be conducted off-site, e.g. – St. Johns Ambulance
Basic First Aid Course.

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