DEVELOPING

HOSPITALITY
PROPERTIES &
FACILITIES

ALLIMAR M. NUEVO, MM
 Today, the development process entails a
lengthy process of conceptualization,
planning and construction before it becomes
operational and starts to generate income.
 Further, this requires ever larger capital
investment, risk assessment and a wider range
of management skills.
 Buildings of a highly serviced nature, such as hotels,
have historically been of a single use type -difficult and
expensive to alter.

 As the building or property forms the essential physical

component of the hospitality product, altering the
facilities or product profile is a major and costly
undertaking. The property configuration is critical to
achieving a number of key aims, including attracting
customers, ease of operations and providing an
acceptable return on investment.
Development process
 Introduction

CONCEPT

PLANNING

Feedback BUILDING

OPERATIONS

Figure I.1 MAINTENANCE

The development process
Source: Ransley and Ingram
(2000: 3)
The hospitality industry is moving through a similar evolution-
ary process, in which the supply-led market is changing to a
demand-led market, although many different opinions exist as to
which stage is the current one. Countries too, are in differing stages
of development, reflecting factors such as regional economies, local and
international markets and culture. As the hospitality industry becomes more
globalized, this is an additional complication or challenge. In the current climate
of choice, the notion of guests waking up in a branded hotel room and wondering
where they are from the décor, is less accepted.

● ● ● ● ●
Development process
The business and leisure traveller of the twenty-
first century, like the modern motorist,
confidently expects the basic physical product
to be acceptable, thus making their criteria for
selecting a particular purchase more complex
and discerning than those of previous
generations. A more sophisticated market, in
turn, requires a more augmented and responsive
product.
Figure I.2 shows the five stages in the development process:

1. Concept. The first task in the development process is to

envision, in conceptual terms, how the finished product
might look and what market it might serve. This usually
entails communication between the developer and a designer
to draw up plans and concept drawings. For larger
organizations, this might be part of an overall development
and brand management strategy, and will take in issues of
asset management.
2 Planning. The concept must be planned and
coated so that it can be completed within a suitable
budget and to an agreed standard. The project will
usually include a feasibility study and planning for
finance and legal issues.
THE HOSPITALITY AND TOURISM CONCEPT:

QUALIT
Y
SERVICE
OPERATIONS

CONCEP
T AND
PRODUC
T MARKE PRICE
T

MANAG ATMOSPHERE
LOCATION
EMENT
THE HOSPITALITY AND TOURISM CONCEPT:
as the twentieth century drew to a close, the industry faced a
series of dilemmas. These included issues of how to:

 Differentiate its full service brands between each other and

those of the competition .

 Standardize product and still reflect local culture and

environment .

 Obtain funding for global expansion

 Establish a management structure for a worldwide multi-

product, service and operating group

 Maintain short-term returns on capital intensive and long-term development

projects requiring individual management
 Raise staff skill and retention levels while maintaining afford-
able staffing costs .

 Maintain or extend planned product life cycles

 Deal with rising market fragmentation in terms of age, culture

and consumer lifestyle aspirations .

 Address the increase in competitive distribution systems avail-

able through the Internet

 Keep control of room stock pricing

 Grow the overall market in competition with other consumer

discretionary products

 Reduce exposure to a more volatile travel environment.

Other external factors that have, and will continue to impact
on the industry’s development include:

 Environmental considerations and consumer expectations

 Increased consumer protection legislation and liability

claims

 Increased recognition of minority group requirements and

legislation aimed at reducing discrimination against, for
example,
disabled persons

 Increased employment legislation.

The conceptual process
Construction systems are becoming more systemized and
manufacture based:
The provision of flexible internal space is no longer
revolutionary as airport terminals and such buildings
as the Pompidou Centre in Paris and the Lloyds
building in London demonstrate. On a smaller scale the
biannual drive down International Drive in Miami
dramatically illustrates how a
serviced building shell can have its restaurant product
completely altered on an economical basis. The
challenge therefore is perhaps not so great as the need to
alter the established process of management thinking.
The new century may be more about innovation in
management than the management of systems, an
approach that is taking hold in some of the more
enlightened management schools. While many will
argue that investors are too ‘hard-nosed’ for such
thinking, it should be remembered that investment is
simply about balancing risk and return ratios, something
that all those working in the financial world are only to
aware of but may be a little reticent to share in a public
forum.
Bricks and brains: From an investment point of view, the industry has already seen a divergence of operations and property; the