Hospitality and Tourism Management
11.0 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 11.10
MANAGING HOSPITALITY OPERATIONS: ORGANISED SECTOR
Objectives Introduction Types of Accommodation in the Organised Sector Policy Formulation and Strategies Financial Management Product Design Marketing Management Safety and Security Organisation of a Hotel Let Us Sum Up Clues to Answers
After going through this Unit you will be able to explain the: • • • • typology of accommodation in unorganised sector, procedures involved in policy and strategy formulation, application of marketing management in hotels, and role of safety and security in organised accommodation sector.
Ever since man started to travel in search of food, work, better prospects or leisure, there has been a demand for overnight stay. Lodging houses were built to provide accommodation along the trade and caravan route. Missionaries and religious travellers were accommodated by local people in their houses. But the demand for shelter kept on increasing with the development of highways and technological advancements in modes of travelling. As a result inns gave way to hotels. Hospitability industry today is a massive industry providing home facilities away from home to millions of travellers. These travellers can be segmented into various categories like business travellers, tourists, etc. All have different needs and expectations. However, the hospitality industry is so versatile that it is catering to the needs of all of them. In this Unit, we will discuss the operations of the organised sector of the hospitality sector which design and implements the strategies and policies to support these operations.
11.2 TYPES OF ACCOMMODATION IN THE ORGANISED SECTOR
The term “tourist accommodation” invar iably turns our attention to hotel. But tourist accommodation does not revolve around hotels only. The available types of accommodation can be classified as: 1) HOTELS Hotel is the most important unit of tourist accommodation. Though you are familiar with its features as a recap we mention them briefly again. The dictionary defines hotel as “a place which supplies board and lodging”; “a large city house of distinction”; “a place for the entertainment of travellers” and “a public building”. We can say that
Hotels provide accommodation, meals and refreshments for at periods of time for those who stay on the premises and pay for the services provided. Today, the hotels provide much more than just accommodation and meals. Services are provided to the guests based on their needs and now the hotel industry is commonly referred to as hospitality industry. We can classify hotels on the basis of infra-structure, facilities and services that are provided by them. Broadly speaking hotels can be classified on the following basis: a) room charges or price, i.e., budget, luxury, etc. b) range of facilities, i.e., five star, no star, etc. c) location, i.e., resort, etc. d) length of stay, i.e., transit, residential, etc. e) ownership and management, i.e., chain, individual, etc. Types of Hotels i) International Hotel or Star Hotel
These hotels are modern western style hotels located in almost all metropolitan and other large cities as well as at principal tourist destinations. Usually, they are located at a prime location in the city. These hotels are luxury hotels and are classified based on an internationally accepted system of classification grading. There categories range from 7 to 1 star grade depending upon the facilities and services provided by these hotels. In addition to accommodation various other facilities are provided to make the stay more comfortable. These facilities include – information counters, banquet halls, conference facilities, a number of shops, travel agency, desk business centre facilities, money changing and safe deposit facilities, theme restaurants, beverages, swimming pool, gymnasium, health clubs and other entertainment programmes in the form of games, music and dance, etc. Price of the room varies depending on the category of hotel. The facilities available also affect the pricing. Usually the clientele is business executives and up budget tourists. It is important to note here that the categorisation of hotels into stars is not mandatory in some countries but it delivers some satisfaction to guests that he/she is using a graded hotel. ii) Non-Star or Commercial Hotels At every tourist destination one comes across hotels which do not come into any classified criteria. These hotels mainly depend upon individual travellers, middle budget tourists and many of the guests are repeat guests. These hotels are located near the business or commercial centres of the city and have easy access to transportation. They provide accommodation, parking space for guests and their visitors, restaurants and sometimes business centre facilities as well. Size of such a hotel varies from small to medium. The rooms of these hotels are priced lower than International hotels. iii) Residential Hotels These hotels can be described as an apartment house complete with hotel services. They are also referred to as apartment hotels. These hotels are largely located in big cities and they mostly operate under the European Plans where no meals are provided to the guests. Though in United States, room service along with maid and valet services are provided to the wealthy guests in the luxurious residential hotels. The concept of residential hotels started in America where people found that permanent living in hotel offers many advantages. These are very popular in United States and Europe.
iv) Floating Hotels As the name suggests, these hotels are located on the surface of the water. It may be on seawater or river water or even on a lake. These hotels provide all the facilities and services of a hotel and are very popular with the tourists. In many cases, across the world old ships have been converted into these types of hotels and have become popular among the tourists. The size and price depend upon the hotels. Sometimes they are part of a hotel chain or they can be owned by individuals as in case of the houseboats in Kashmir. v) Capsule Hotels Capsule hotel is the latest innovation in the budget hotel market. The first of its kind was opened in Osaka, Japan in the year 1979. Now, they have mushroomed not only in big cities of Japan but also in other parts of the world. The capsule is a box made of glass reinforced plastic or cement, open either at one side or one end in which they provide some functions of a traditional hotel such as a bed, a clock, radio, colour TV, flexible lighting, a box for valuables and a miniature table for writing. Rooms in a capsule hotel are lined up in a double decker fashion along with a central aisle as in a sleeping compartment of a train. Toilets and washrooms, vending machines and lounge area are clos e by on each floor of the hotel. The function of each capsule is monitored by a central computer system and security is controlled by close circuit TV cameras. They mainly cater to the business travellers. The low tariff and vintage locations are the major factors for their popularity. vi) Transit Transient Hotels As the name suggests their location are in close proximity of the airports, catering to guests who stay for a limited period of time from few hours to a few days. This category may include any type of hotel providing temporary accommodation to its guests. vii) Heritage Hotels Old properties of the royal and aristocratic families are renovated and the old aura is recreated for the tourists to stay in heritage surroundings. The heritage properties are an attraction in themselves and the best example would be the state of Rajasthan and Gujarat in India, which have made huge profits by using the concept of heritage. Paradors in Spain and Posadas in Portugal are castles and other historic buildings that have been converted into hotels by the government. They cater primarily to vacationers, offer full meal plans and are reasonably priced. More luxurious castle accommodations are available in France (Choteaux) and in Germany and Austria (Schlosse). These heritage properties render a valuable and memorable experience to their guests when they serve them as nobles or members of royal family. 2) MOTELS The basic difference between hotel and motel is that it provides parking space to the travellers travelling by automobiles and the rooms opens to the parking lot. The history of motels can be traced back to tourist cabins which were located near highway, catering to businessmen travelling by road. Tourist cabins gave way to Tourist Courts which provided the same services and facilities but it became a 24 hours business. They offered 20 to 24 rooms around a central parking space with some garage and refuelling facilities. The concept of motels became very popular in America as the automobile travelling increased. Over the time many motels started adding a lot of extra amenities such as swimming pool, restaurants, business centre and in-room television became standard features. And thus, these motels also started attracting vacationers as well. 3) RESORTS A resort hotel is one which is visited by holiday maker or tourists for relaxation, recreation and/or for entertainment.
Resort hotels cater to tourists and are located near place of some scenic beauty, i.e., the sea, mountains or in ‘off the beaten track destinat ion’. These days, resorts are also found in wildlife sanctuaries or national parks. The primary reason, as is mentioned earlier, for visiting a resort is rest and relaxation and these hotels are built with the objective of indoor recreation activities giving visitors special welcome and atmosphere of informality. The services and amenities offered by resorts include swimming pool, tennis court, skiing, boating, surfing and many others. The clientele of resort hotels is mostly persons with considerable incom e looking for relaxation and recreation. Resorts can be of various types and can be classified on the basis of climate and topography. Broadly, they fall in the following categories: i) Summer Resorts,
ii) Winter Resorts, iii) All Seasons Resorts, iv) Hill Resorts, and v) Health Resorts. A majority of the resorts are seasonal establishments and provide special facilities and other concessions to the guests with a view to extend their seasons of operations. 4) TIMESHARE APARTMENTS/CONDOMINIUMS Concept of ti eshare, is also popular as vacation ownership or holiday ownership, offers the m purchaser the right to enjoy, for a set period or interval, each year, vacation time in an apartment or other type of lodging that is a part of a tourist complex, equipped with a variety of services and facilities. In other words, it is effectively the advance purchase of time in holiday accommodation. The period of time sold is usually based on modules of a week, fortnight or a month. Across the world people enjoy the value of timeshare. Timeshare concept grew into a major phenomenon and large number of people started using it only in 1980s and 90s. Origin of this concept can be traced back to 1960s. Since then it has become a global product. Consumers have option of more than 4 000 timeshare resort projects being consumed by nearly 3.1 million purchasers worldwide. This impressive growth is largely due to value of this product and its market appeal which doesn’t recognise any geographical boundary, age or social status. Above all, it provides flexibility and variety to the holiday experience and choice for purchasers to choose from world’s most exciting holiday destinations at a very reasonable price. It is believed that more attention will be placed on recreation and personal renewal, on cultural and educational stimulation, and on a sense of balance of life that not only purchasers will simply leisure but also need in its basic sense. Why and how this will happen. To answer this question we can refer to report of a recent US survey of more than 2000 timeshare owners entitled – “Timeshare Ownership Benefits”, conducted by Ragataz Association, following results were recorded: i) 82% believe that timeshare has had a positive impact on their vacation planning;
ii) 73% enjoy vacations more as timeshare owners; iii) 70% agree timeshare has allowed them to stay in higher quality accommodation; iv) 68% have developed a greater sense of confidence that they can travel and vacation without worries as a result of owning timeshare; and v) 65% find they have more opportunity to spend quality family time together during vacation.
(Source: Timeshare: The new Force in Tourism, An Affiliate Member Publication of the World Tourism Organisation; pp IX; 1996)
The growth of timeshare at an annual rate is of over 15%. Since the 1980s it can be compared with that of travel and tourism overall (4%) and hotel accommodation (2%) in the same period. However, timeshare in the context of world tourism is still a relatively insignificant part and can be seen from the following broad comparison:
Estimate of Timeshare Related Tourism as Percentage of Total Related
Timeshare owning households worldwide (m) Average family size No. of intervals owned per family Estimated nos. of timeshare related trips (m) Total no. of vacation trips inc. domestic Time share related as % total
figures assume that all intervals are of one week and that time share owners take holiday trips one week at a time. (Source: US Survey entitled “Timeshare Ownership Benefits”, conducted by Ragataz Association, on behalf of WTO.)
Let us now discuss the various managerial functions associated with the running of a hospitality organisation in the organised sector of tourist accommodation.
11.3 POLICY FORMULATION AND STRATEGIES
Hotel policies primarily decide the direction for the operational aspects of a hotel. Usually, the type of ownership plays an important role in the formulation of the hotel policies. The type of ownership can be: i) Individual: This means the owner is completely independent with regard to policy formulation and operating procedures.
ii) Chain Ownership: A chain owns the hotels, formulates policies for them and staffs it with its own employees. iii) Lease and Joint Venture: An individual or a chain can operate a hotel without owning it by entering into a lease arrangement. Here a fixed monthly rent is given to the landlord or a profit sharing is agreed upon. In joint ventures, two companies or two individuals or a company and an individual form a partnership and start a hotel with profit sharing policy. iv) Franchisee: Under a franchise scheme, a hotel owner contracts with an established chain to operate the property under the chain name. The owner of the hotel or franchisee pays an initial development fee and a monthly licence or franchise fee. v) Management Contracts: Under a management contract one company owns the property and another (the chain) operates it. The principles and policies of the hotel are thus formulated keeping in mind the type of ownership of the hotel. According to S. Medlik, a) A customer policy normally says what the hotel is aiming to do in terms of its markets and quality standards of what it provides, includes its concept of good value and its approach to price, discounts and credit; it states its attitude to complaints and refunds. b) An employment or personnel policy covers such matters as recruitment, selection and training; remuneration, conditions of employment, welfare; promotion, retirement, termination; consultation, negotiation and the handling of disputes. c) A shareholder policy defines what the owners are entitled to expect in terms of their rewards, information and participation in the business and what is expected from them. d) A policy towards supplies postulates what is expected from them regarding the quality of supplies, delivery and terms, and how each can expect to be treated by the hotel. On the second level policies dealing with the guidelines of discharging functional responsibilities of the hotel like financial management, marketing and sales and purchasing are decided.
On the third level, policies relating to the hotel product like food and beverages and accommodation are decided. Usually a few policies are set and guidelines are decided in relation to them. These are forwarded to the respective departments so that departmental operational policies can be formulated. Once the policies are formulated, it is necessary to get them written down and be communicated to all the concerned departments and personnel. The hotel policies can be viewed as the objective of the hotel. But to attain these objectives certain plans needs to be followed strategies are these plans. According to Michael Olsen, an organisation’s strategy can be formulated in variety of ways: a) Environmental analysis: an assessment of the organisation’s specific competitive environment, as well as the activities taking place in the more general environment affecting all businesses in an industry. The purpose of this process is to identify the threats and opportunities that present themselves to the organisation over the planning horizon under consideration. b) Analysis of the organisation’s strengths and weaknesses: a thorough analysis of the internal resources (such as human, capital and material) of the organisation for the purpose of determining what the organisation does well and what problems it needs to address. c) Strategic gap analysis: a review of the organisation’s strengths and weaknesses in the context of the threats and opportunities presented by the general and task environment. d) Mission statement development: the preparation of a statement defining what is the present position of the organisation and where it intends to reach? The mission statement identifies the target audience for which the organisation will provide goods and services and clarifies how these will be provided and the standards by which they will be judged. This statement is the result of the analysis of the organisation’s environment, its strengths and weaknesses, and the strategic gap. e) Strategic alternatives analysis: the identification of the types of possible strategies that can be used to achieve the mission of the organisation. f) Evaluation and selection of strategy: a thorough evaluation of the possible strategies available to the organisation and the selection of the one(s) that will best fit its needs. g) Monitoring and follow-up: the establishment of expectations and standards to control the process of strategy implementation and to determine the effectiveness of the chosen strategy. A lot many classification schemes on strategic management are there but only a few are appropriate in regard to the hospitality industry. One such classification is by Schaffer who postulates the following strategy types: a) Do-it-all differentiators: attempts to build an excellent reputation within the industry; attempts to be an innovator in service processes; continuously look for new market opportunities; and seeks high quality of services. b) Internalised resource conserver: strives to develop and refine existing products and services, aims to procure as much as possible in the raw material state. c) Narrow focussed marketing innovator: has a narrow product focus, engages in environmental scanning activities. d) Efficiency/quality controller: relies upon experienced and trained personnel to provide quality service. e) Geographic focussed price leader: seeks stability in operating environments, develops conservative capital structure policy; interested in price leadership, serves only specific geographic markets. Similarly, West and Olsen’s definition of strategy types can also be used in regard to hospitality industry. It consists of the following categories: a) Innovation and development: places major emphasis on innovation in menu design; develops new products and services; serving a specialised market and emphasising efficiency. b) Focus: emphasises services to a specialised market; strongly oriented towards efficiency and differentiation.
c) Image management: emphasises the use of advertising and innovative marketing promotions to achieve market share. d) No strategy: seeks to be everything to everybody with no strong orientation towards any area. e) Differentiation: emphasises the offering of a unique product or service to a specialised market that is insensitive to price, strongly oriented towards the control of operations and market area. f) Control: attempts to exert strong control over operations; an internally oriented organisation. According to M. Olsen the four major components of the implementation process are: a) Successfully performing the recurring administrative tasks associated with strategy implementation. b) Creating a fit between the organisation’s internal processes and the requirements of a strategy. c) Making adjustments for the organisation’s overall situation in which implementation must take place. d) Choosing how to lead the implementation task. It is important to note here that to implement a strategy, the organisation must have in place systems designed to match the resources of the organisation with the chosen strategy. Also leadership is an important ingredient in the successful implementation of the strategy.
11.4 FINANCIAL MANAGEMENT
Financial management describes the process through which a firm makes financial decisions within the framework of the firm’s goals by interpreting and analysing financial data. Financial management is a functional responsibility which is required to discharge other functions of the hotel. Without financial management operational functions cannot take place. It is primarily with concerned with two aspects – raising funds and managing funds within the organisation with the help of budgetary control. Funds or capital refers to all of the company’s liabilities and owners’ equity, including short term and long-term capital, preferred stock, common stock and retained earnings. Short-term debts refer to all debts due within a year. Long-term capital debts are funds payable beyond one year. Bonds are another widely known form of long-term debts. The other type of long-term capital is equity funds p rovided by investors who are interested in owning a portion of the business. Once funds are raised they are allocated by budget. Types of Budget According to Raymond S. Schmidgall, budgets can be classified as: 1) Capital Budget: The focus is on the acquis ition of property and equipment. The capital budget includes the list of property and equipment to be obtained over the next several years. 2) Cash Budget: Its focus is to monitor cash flows. Cash budget simply reflects expected cash receipts and cash disbursements for a period of time. 3) Operational Budget: It reflects forecasted revenues and expected expenses for the hospitality business for a period of time. When an organisation “exceeds the budget”, it is almost always the operational budget. The targeted profit is reflected in the operations budget; thus operations budget gets a lot of attention. According to R.S. Schmidgall, major benefits of an operations budget are: a) The budget provides a clearly understood plan for management to follow. It includes targeted prices to be charged, labour rates and expected hours, amounts to be spent on marketing and so on. The plan can be easily followed by managers, even those who join the hospitality enterprise in the middle of the year, when it is reduced to writing and clearly communicated.
b) The budget process requires that managers be involved with its preparation in order to consider alternative courses of action. They must answer a multitude of questions, such as What prices should be charged? What services should be provided? What level of quality of these services should be provided? When the operations budget is adopted, management has decided on what it believes is the best of the many alternative plans. c) Budgeting requires management to examine just what measures are required to generate the desired results – most often a net profit. Certainly managers are dealing with the unknown since the budget pertains to the future; however, they are faced with keeping projected expenses lower than forecasted sales. d) Budgeting provides a standard of comparison, i.e., the budget is the basis for comparing the actual results of the accounting period. Any major differences should be carefully analysed to determine the cause and appropriate action taken to correct the problem. e) Budgeting allows management to look forward and prepare for the future. For example, if new equipment is required for a new menu item, then the equipment should be obtained in plenty of time to have it functioning properly when needed. f) When participative budgeting is used, i.e., when those managers who are to be held responsible are involved in the budget process, then these managers feel they have ownership of their budgets and as a result they will be more motivated to expend energy to achieve their plans. Budgeted numbers forced on managers quite often results in managers blaming the budget preparers for poor budgeting rather than accepting responsibility. g) Finally, the budget process provides a channel of communication whereby the firm’s objectives in numbers are communicated to all management levels. Further, as time passes the actual results are compared to the budget, both of which are furnished periodically to managers who are responsible for the actual results. The following stages would be useful while preparing a budget for the hotel: 1) Establishing Financial Objectives wherein the board of directors of the hospitality organisation decide upon the firm’s financial objectives. 2) Forecasting Revenue wherein revenue generating operation such as rooms and food and beverage department’s revenue is forecasted based on past records and future plans. 3) Estimating Expenses wherein the expense to be incurred by the various department like food and beverages as well as marketing and others are estimated. 4) Determining Net Income where the expected net income for the year is determined. 5) Reviewing and Approving the Budget, it is now that the whole executive reviews the budgets and then forwards it to board of directors for approval. Once the budget is approved, operational budgetary control methods need to be followed for proper financial management by each department.
11.5 PRODUCT DESIGN
While managing hospitality operations in organised sector you must have complete knowledge of product(s) combinations you may design for different market segments. For example, for up-market you can design deluxe hotels and for budget class tourist you can even design motels, guesthouse accommodation, camping sites or even bed and breakfast units. For religious tourists you can think of yatrikas, dharmshalas or sarais in their revised forms while retaining some of their traditional elements. In this Section we aim to familiarise you with some of the guidelines which will be useful for you while designing these products. Table 1 displays requirements related to personalised minimum carpet area for different classes of hotels:
Sl. No. 1
Table 1: Minimum Carpet Area Required for Different Classes of Hotels Type of Star U Single Room Double Room Attached Bathroom Hotel (in Sq. ft.) (in Sq. ft.) (in Sq. ft.) City Hotel 5-Star Deluxe 5-Star 4-Star 3-Star 2-Star 1-Star 180 180 120 AC and Non -AC 100 AC and Non -AC 180 120 200 200 140 AC and Non -AC 120 AC and Non -AC 200 140 45 36 30 45 45 36
(Source: “ Indian Tourism Business – A Legal Perspective” by Dr. Manohar Sajnani )
Various services/facilities of different classes of hotels required to provide for their guests are as below (Source: “Indian Tourism Business – A Legal Perspective” by Dr. Manohar Sajnani): FIVE STAR CATEGORY a) General Features The facade, architectural features and general construction of the hotel building should have the distinctive qualities of a luxury hotel in this category. The locality, including the immediate approach and environs should be suitable for a luxury hotel of this category, and there should be adequate parking space for cars. The hotel should have at least 25 lettable bedrooms, all with attached bathrooms with long baths or the most modern shower chambers. All public rooms and private rooms should be fully air-conditioned and should be well-equipped with superior quality carpets, curtains, furniture, fittings, etc. in good taste. It would be advisable to employ the services of professionally qualified and experienced interior designers of repute for this purpose. There should be an adequate number of efficient lifts in the building of more than two stories (including the ground floor) with 24-hour services. There should be a well-designed and properly equipped swimming pool. There should be a well-appointed lobby and ladies and gentlemen cloakroom equipped with fittings and furniture of the highest standards. b) Facilities There should be a reception, cash and information counter attended by highly qualified trained and experienced personnel and conference facilities in the form of one each or more of the conference rooms and banquet halls, and private dining rooms. There should be a bookstall, a beauty parlour, a barber shop, recognised travel agency, money changing and safe deposit facilities, left luggage room, a florist and a shop for toilet requisites and medicines on the premises. There should be a telephone in each room for the use of guests and visitors and provision for a radio or relayed music in each room. There should be a well-equipped wellfurnished and well-maintained dining room/restaurant on the premises and wherever permissible by law, there should be an elegant, well-equipped bar/permit room. The pantry and cold storage should be professionally designed to ensure efficiency of operation and should be well equipped. c) Services The hotel should offer both international and Indian cuisine and the food, and beverage services should be of the highest standard. There should be professi nally qualified, highly trained, o experienced, efficient and courteous staff in smart, clean uniforms and the staff coming in contact with guests should be flare and fluent in English and Hindi. The supervisory and senior staff knowing at least one continental language should be rotated on duty at all times. There should be 24-hours service for reception, information and telephones. There should be provision for reliable laundry and dry-cleaning services. Housekeeping at the hotel should be of the highest p ossible standards and there should be plentiful supply of linen, blankets quality available. Each bedroom should be provided with a good vacuum jug/thermos-flask with ice cold, boiled drinking water except where centrally chilled purified drinking water is provided. There should be special restaurant/dining room where facilities for dancing, orchestra are provided.
FOUR STAR CATEGORY a) General Features The facade, architectural features and general construction of the building should be distinctive and th e locality, including the immediate approach and environs should be suitable for a hotel of this category. There should be adequate parking facilities for cars. The hotel should have at least 25 lettable bedrooms, all with attached bathrooms. At least 50 p cent of the bathrooms must er have long baths or the most modern shower chambers, with 24-hours service of hot and cold running water. All public rooms and private rooms should be fully air-conditioned and should be well-furnished with carpets, curtains, furniture, fittings, etc. in good taste. It would be advisable to employ the services of professionally qualified and experienced interior designers of repute for this purpose. There should be an adequate number of efficient lifts in the building of more th an two stories (including the ground floor). There should be a well-appointed lobby and ladies and gentlemen’s cloakroom equipped with fittings of a standard befitting a hotel of this category. b) Facilities There should be a reception, cash and information counter attended by highly qualified trained and experienced personnel. There should be a bookstall, recognised travel agency, money changing and safe deposit facilities and a left luggage room on the premises. There should be a telephone in each room for the use of guests and visitors and provision for a radio or relayed music in each room. There should be a well-equipped, well-furnished and well-maintained dining room/restaurant on the premises and wherever permissible by law, there should be an elegant, well-equipped bar/permit room. The kitchen, pantry and cold storage should be professionally designed to ensure efficiency of operation and should be well equipped. c) Services The hotel should offer both international and Indian cuisine and the food, and beverage services should be of the highest standard. There should be professionally qualified, highly trained, experienced, efficient and courteous staff in smart, clean uniforms and the staff coming in contact with guests should be flare and fluent in English. It will be desirable for some of the staff to possess knowledge of a foreign language and staff knowing at least one continental language should be rotated on duty at all times. There should be provision for reliable laundry and drycleaning services. Housekeeping at the hotel should be of the highest possible standard and there should be plentiful supply of linen, blankets, towels, etc., which should be of the highest quality available. Each bedroom should be provided with a good vacuum jug/flask with ice cold, boiled drinking water. There should be special restaurant/dining room where facilities for dancing, orchestra are provided. THREE STAR CATEGORY a) General Features The architectural features and general construction of the hotel building should be of a very good standard and the locality, including the immediate approach and environs should be suitable for a very good hotel and there should be adequate parking space for cars. The hotel should have at least 20 lettable bedrooms, all with attached bathrooms having bath tubs and/or showers which should be modern in design and equipped with fittings of a good standard, with hot and cold running water. At least 50 per cent of the rooms should be air-conditioned and the furniture and furnishings such as carpets, curtains, etc. should be of a very good standard and design. There should be adequate number of lifts in buildings with more than two stories (including the ground floor). There should be a well-appointed lounge and a separate ladies and gentlemen’s cloakroom equipped with fittings of a good standard. b) Facilities There should be a reception and information counter attended by qualified and experienced staff, and a bookstall, a recognised travel agency, money changing and safe deposit fac ilities on the premises. There should be a telephone in each room (except in seasonal hotels where there should
be a call bell in each room and telephone on each floor for the use of hotel guests) and a telephone for the use of guests and visitors to the hotel. There should be a well-equipped and wellmaintained air-conditioned dining room/restaurant and wherever permissible by law, there should be a bar/permit room. The kitchen, pantry and cold storage should be clean and organised for orderliness and efficiency. c) Services The hotel should offer good quality cuisine both Indian as well as continental and food and beverage services should be of good standard. There should be qualified, trained, experienced, efficient and courteous staff in smart, clean un iforms and the supervisory staff coming in contact with guests should understand English. There should be provision for laundry and dry-cleaning services. Housekeeping at the hotel should be of very good standard and there should be adequate supply of linen, blankets, towels, etc., of good quality. Similarly, cutlery, crockery and glassware should be of a good quality. Each bedroom should be provided with a good vacuum jug/thermosflask with ice cold, boiled drinking water. The hotel should provide orchestra and ballroom facilities and should attempt to present specially choreographed Indian cabaret. TWO STAR CATEGORY a) General Features The building should be well constructed and the locality and environs including the immediate approach should be suitable for a hotel. The hotel should have at least 10 lettable bedrooms of which at least 75 per cent should have attached bathrooms with showers and a bathroom for every four remaining rooms. All bathrooms should have modern sanitation with running cold water and adequate supply of hot water, soap and toilet paper. At least 25 per cent of the rooms should be air-conditioned and all rooms should be properly ventilated, clean and comfortable with all necessary items of the furniture. There should be well-furnished tongs. b) Facilities There should be a reception counter with a telephone. There should be a telephone or a call bell in each room and a telephone on each floor unless each room has a separate telephone. There should be a well equipped and well-maintain ed dining room/restaurant serving good, clean wholesome food, there should be a clean, hygienic and well-equipped kitchen and pantry. c) Services There should be experienced, efficient and courteous staff in smart and clean uniforms. The supervisory staff coming in contact with guests should understand English. There should be provision for laundry and dry-cleaning services. Housekeeping at the hotel should be of a good standard and clean and good quality linen blankets, towels, etc., should be provided. Similarly, cutlery, crockery and glassware should be of a good quality. ONE STAR CATEGORY a) General Features The general construction of the building should be good and the locality and environs including the immediate approach should be suitable. The hotel should have at least 10 lettable bedrooms of which at least 25 per cent of the bathrooms should have western style WCs. All bathrooms should have modern sanitation with running cold water and adequate supply of hot water, soap and toilet paper. The rooms should be properly ventilated, and should have clean and comfortable bed and furniture. b) Facilities There should be a reception counter with a telephone and a separate telephone for the use of guest and visitors. There should be a clean and moderately well equipped dining room/restaurant serving clean wholesome food, there should be a clean and well-equipped kitchen and pantry.
c) Services There should be experienced, courteous and efficient staff in smart and clean uniforms and the senior staff coming in contact with guests should possess a working knowledge of English. Housekeeping at the hotel should be of a good standard and clean and good quality linen, blankets, towels, etc., should be supplied. Similarly, crockery, cutlery and glassware should be of a good quality. Table 2 outlines the fees slabs every product designer is required to pay for getting one’s hotel classified by Department of Tourism, Govt. of India.
Table 2: Classification Fees for Hotels 1 Star 2 Star 3 Star 4 Star 5 Star 5 Star Deluxe Rs. 2,000.00 Rs. 3,000.00 Rs. 4,000.00 Rs. 6,000.00 Rs. 8,000.00 Rs.10,000.00
(Source: “Indian Tourism Business – A Legal Perspective” by Dr. Manohar Sajnani)
In short, when you decide to design your hospitality product, you must ensure that you don’t fall short of any of these guidelines for smooth launch and operation of your product. Moreover, while marketing your products such a classification or grading will facilitate your task a lot. Marketing techniques or strategies are discussed in subsequent Sections of this Unit.
11.6 MARKETING MANAGEMENT
To run a hospitality organisation successfully, effective marketing of the product is necessary. Marketing management is defined as the planning, organising, leading and controlling of marketing activities. An understanding of the hospitality marketing mix is necessary for the successful marketing management. Marketing theorists in the hospitality industry have attempted to modify the way in which the marketing mix is viewed in order to make it more specific for the hospitality marketer. Renaghan (1981) suggested that the hospitality marketing mix is made up of three sub-mixes: a) the product services mix, which is defined as a combination of products (tangibles) and services (intangibles); b) the presentation mix, which includes all of those activities that a firm uses “to increase the tangibility of the product-service mix in the perception of the target market at the right place and time”; and c) the communications mix, which is basically the totalit y of communications between the firm and its target market. To these three sub-mixes, Lewis and Chambers (1989) added the distribution mix, which they define as “all channels available between the firm and the target market that increase the probability of getting the customer to the product”. This definition of distribution is different than the definition for tangible products. In marketing tangible products we are concerned with getting the product to the customers in their own homes. For most hospitalit y products we are more concerned with how to get customers to the hotel or restaurant so that they can consume our services. Here comes the marketing department of the hotel. A typical organisation chart for the marketing effort of a large convention hotel is given in Figure I.
Convention Services Manager
Advertising and Public Relations Manager
Director of Market Research
Account Executive, Corporate
Account Executive, Associations
Account Executive, Tours and Travels
Banquet Sales Manager
Figure I: Typical Organisation Chart for the Marketing Effort of a Large Convention Hotel.
The job for the marketing department becomes a little tough since here the production and consumption of product takes place simultaneously. Also the intangibility factor of the product creates unique problems. Therefore, before using the marketing mix – market research and selection of target market is necessary. Only then marketing mix comes into action. First, Hospitality Product Mix is decided where good and services are both integral part of the servic es. So F and B means both the food as well as the services of the people concerned. Hospitality Communication Mix or promotion consists of all the activities a hospitality firm uses to reach its target consumers. At least three books list a wide variety of techniques available for hospitality industry communications (Source: Coffman, 1975; Gottlieb, 1982; Powers, 1990). Hospitality Pricing Mix depends on the demand as the room rate for a similar kind of room at different location vary as there is a lack of demand. Second is competition which can be either indirect as the various options available to the traveller or direct, i.e., from the various hotels of similar standard vying for the same target market. Third is the cost. a) The inherent fixed costs associated with “being” in business, i.e., those costs that remain the same regardless of business volume (depreciation, administrative salaries and so forth). b) The variable costs associated with “doing” business, i.e., those costs that vary with business volume (materials, direct labour and so forth). The market positioning is, in other words, customer perception. The rate would be too high or low to customer depending upon how they perceive the product. The menu pricing, however, take various other methods of sett ing menu prices. Finally, Hospitality Distribution Mix entails the use of various channels of distribution. The marketing department has to ascertain which channel to use.
SAFETY AND SECURITY
Safety and security nowadays are a top priority concern of hospitality industry. These programmes require management support and constant supervision. Safety standards and requirements should be maintained like fire escape, etc. The safety occurs in spite of supervision or not at all. Cutting corners on issues of safety should not be overlooked. Also the work order may have an overprint Hazard Alert to implement a quick response from repair and maintenance services. The security measures involve the protection of both the life and the property of the guest, the staff and the hotel itself. Security measures should also take care of the fact that inappropriate or unreasonable activity should not take place in the hotel premises. Often the security organisations of the hotel are private organisation which takes their cue from the executive and general policies
established for the hotel itself. One of the primary functions is to assess the possible risks and prepare plans to handle such emergencies. Also proper disaster control and emergency action plans are a part of the security measure.
11.8 ORGANISATION OF A HOTEL
According to David W. Howell, the organisational structure of a hotel comprises of six major departments. a) Administration: Every hotel needs a manager, assistant manager, and a group of people to handle the business aspects of the hotel’s operations. The people who work in the administration department include book-keepers and other financial staff, and purchasing, sales, and marketing personnel. An important function of the administration department is to interview and select the hotel’s employees. b) Front Office: The front office is the most visible department in all hotels and motels. Employees are in direct contact with the public, handling reservations, room assignments, mail, and baggage, and providing information about activities in the hotel and surrounding area. A well-organised front office is essential to the smooth running of any lodging place. c) Housekeeping: Guest comfort is a total priority. Most hotels employ a large housekeeping (or rooms) department staff to ensure the cleanliness and neat appearance of guest rooms and public areas. d) Food and Beverages: If hotels have restaurants, banquet rooms, and cocktail lounges, the preparation and serving of food and beverages will be a major part of the hotel’s operations. More than half of the total hotel staff can be employed in this department. e) Engineering: The engineering staff has little or no contact with guests, but they play an important role in the day-to-day running of the hotel. It is the engineering staff’s responsibility to maintain and repair all mechanical and electrical equipment in the hotel. f) Security: Few hotels felt the need to employ security staff until recent years, but for many large hotels (particularly in downtown areas) a security department is now essential. Security personnel work not only to protect hotel guests and their property, but also to protect hotel property. You will read in details about the functional and managerial aspects of the three profit generating departments with maximum guest contact, i.e., front office, housekeeping and food and beverage management in the subsequent Units.
Check Your Progress 1) Classify hotels in to different categories. ………………………………………………………………………………………………………. ………………………………………………………………………………………………………. ………………………………………………………………………………………………………. ………………………………………………………………………………………………………. 2) What are the various forms of hotel ownerships? ………………………………………………………………………………………………………. ………………………………………………………………………………………………………. ………………………………………………………………………………………………………. ……………………………………………………………………………………………………….
3) Enlist major benefits of operational budget. ………………………………………………………………………………………………………. ………………………………………………………………………………………………………. ………………………………………………………………………………………………………. ……………………………………………………………………………………………………….
11.9 LET US SUM UP
The term “tourist accommodation” is used in both organised and unorganised sector. Organised sector though comprises a small number of hotel rooms, plays crucial role in establishing image of a destination either favourable or unfavourable. This sector consists of hotels and other supplementary form of recognised mode of accommodation this may include resorts, timeshare apartments, condominium which by and large are part of multinationals, operating from different countries. Hotels can be, however, classified into different categories on the basis of their location, style of functioning, season of operation and on the basis of many more criteria for your understanding.
11.10 CLUES TO ANSWERS
Check Your Progress 1) Refer Sec. 11.2. 2) Refer Sec. 11.3. 3) Refer Sec. 11.4.
1) Collect information on packages (both domestic and international) from some leading distributors. Try to analyse important consideration while costing different tours for different market segments. 2) Try to access various travel websites marketing tourist attraction and other products. How they are different from Indian travel portals? Prepare a suggestion box for improvement.