FO – HISTORY OF HOTELS

Trading between cultures created the need for group of people to travel. Along the routes,
certain stopping points become favored out of necessity.
Mountains became a resting place.
Intersections became stopping points, eventually became cities.
When travelling long hours – limit their food
A journey segment – is the maximum reasonable distance travelled in one day
A journey segment by a camel or a horse is longer than a journey by foot.
At these journey segment, lodging facilities became a need.
They were called relay houses in China, Khans in Persia and tabernas in Rome.
As history of lodging unfolds, innovations emerged.
1. Some innkeepers incorporate food and beverage.
2. Another development was the Roman network of roads.
New facilities by the wealthy – spare rooms in their castle for rent
1794 – the first lodging facility or modern hotel, City Hotel was built in New York
different because the previous inns were home first, lodging second
1829 – 1st 5 star hotel, Tremont Hotel was built in Boston

FOUNDERS OF HOTEL INDUSTRY

1863 – 1928 E.M. Statler Statlers
1887 – 1979 Conrad Hilton Mobley Hotel, Hilton Hotel, Hilton Garden Inns,
Embassy Suites, Hampton Inns, Homewood Suites
125 hotels Red Lion Hotels
1893 William Valdorf Astor and John Jacob Astor IV Waldorf Astoria
4 years later – 17 floors Astoria Hotel
1950’s Kemmons Wilson Holiday Inn Chain of Hotels
1900 – 1985 J.W. Marriott and J.W. Marriott Jr. Marriott Hotels
1937 Ernest Henderson and Robert Moore Sheraton Hotels
1950 Jay Pritzker Hyatt Hotels
1980’s Ray Schultz Hampton Inn Hotels
LODGING MANAGEMENT ASSOCIATION
This is the managing structure and how that structure is related to a hotel’s ownership arrangement.
The relationship between ownership and management is what we call Lodging Management Association.
5 basic lodging management associations
1. Owner-operated – hotel that is run by the owner, owner cooks the meals, cleans the rooms and performs
all tasks in the hotel.
2. Owner-managed – those hotels where the owner hired additional non-family members to help run the
hotel. The over- all management remains with the owner.
3. Independent – hotels are not chain affiliated. The owner has no role in management in the day to day
operations. An independent group of managers are responsible to the owner for the hotel’s
performance.
4. Franchised – hotels are independently owned hotels that affiliates with a chain. The owner pays a
franchise fee to the chain in exchange for the rights to use their name. The chain provides the standard
operating procedure and other guidelines in the operation. Owner can choose their own management.
The use of a chain’s name, logo, and signage is often referred to as “flying a flag”. When a hotel changes
its association from one chain to another, it is said to have been “reflagged”.
5. Management contract – similar to franchise in that it is supplied with standard operating procedure as
well as quality and service level targets. However, these hotels differ in that they are actually operated by
the company that supplied those standards. Owners can not choose their own managers.

FRANCHISE VERSUS MANAGEMENT CONTRACT

Brand Recognition
Central Reservations System
National Marketing Support
Shared Benefits
Standard Operating Procedures

Greater Quality Control Less Quality Control

Higher Fee to Owners Lower Fee to Owners
Higher Employee Standards Varying Level of Employees
Higher performance Expectations Experience and Training
Management Contracts Franchise
 LODGING MANAGEMENT ASSOCIATIONS

Owner-Operated

Run by an owner and the owner’s family

Owner-Managed Independent

The owner has hired additional non The owner had no role in management or
family personnel to help. The hotel is day to day operations. An independent
not chain affiliated. group of managers are hired. Not chain
affiliated.

Franchised Management Contract

Independently owned hotels that affiliates with Independently owned that affiliates a chain.
a chain. The chain has limited control. The The Chain operates the hotel on the owner’s
owner can choose their own management team. behalf.