Overview of Lodging Business and

General Manager
Why?
What?
How?
 Learning Objectives
By the end of the class, students will be able to:
• Explain how individual hotel properties in the lodging
industry are classified;
• Describe how the lodging industry is related to the larger
hospitality and travel and tourism industries;
• Explain how the lodging industry measures its success;
• Identify a conceptual framework of the hotel general
manager’s job and roles.
An Overview of the Lodging Business

First…what are the lodging facilities we are

managing?
Segments in Lodging Industry
 Segments in Lodging Industry
• Full-Service Hotel: A lodging facility that offers complete
food and beverage services.
• Limited-Service Hotel: A lodging facility that offers few, if
any, food and beverage services.
• Extended–Stay Hotel: A mid-priced, limited-service hotel
marketing to guests desiring accommodation for extended
time periods.
• Convention Hotel: A lodging property with extensive and
flexible meeting and exhibition spaces.
• Conference Center: A specialized hospitality operation
specifically designed for and dedicated to the needs of small-
and medium-sized meetings of 20 to 100 persons.
 Segments in Lodging Industry
• Resort: A full-service hotel with additional attractions that
make it a primary destination for travelers.
• Timeshare: A lodging property that sells its rooms to guests
for use during a specific time period each year; also called
vacation ownership property.
• Bed and Breakfast Inns: Very small (one to several guest
rooms) properties owned or managed by persons living on-
site; these businesses typically offer one meal a day; also
called B&B.
• Camps/Park Lodges: Sleeping facilities in national, state, or
other parks and recreational areas that accommodate visitors
to these areas.
 Segments in Lodging Industry
• Private Club: Membership organizations not open to the
public that exist for persons enjoying common interests.

• Cruise Ship: A passenger vessel designed to provide leisure

experiences for persons on vacation.

• Casino: A business operation that offers table and card

games along with (usually) slot operations and other games
of skill or chance and amenities that are marketed to
customers seeking gaming activities and entertainment.
Review
Classification of Hotels
• The classification of hotels can be upon the basis of the
following factors: Location, size, levels of service, length of
stay, theme, target market.
Review
Classification of Hotels
AAA Diamond Awards
• Inspecting and rating the nation’s hotels since 1977.
• Less than 2% are 5 Diamond.
• AAA uses descriptive criteria to evaluate the hotels (e.g. US,
Canada, Mexico, and the Caribbean.)
 Quality Indicators
• Hotel classification systems and online guest reviews.
• User-generated content (UGC) is influencing consumers
purchase behaviour.
• Before making an online hotel reservation, consumers visit
approximately 14 different travel-related sites with about
three visits per site combined with almost nine travel-related
searches.
• Most consumers and hoteliers support the idea of closer
integration of hotel classifications and guest reviews
• On average, a 1% gain in guest review score translates to a 1%
gain in REVPAR
Second…who are the customers of the
lodging facilities we are managing?
• How different can customers be?

• How do we classify/segment customers?

• Why do we need to classify/segment customers?

• Traditionalists (Born 1925-1945): Adhere to
rules/formal/self-worth/loyalty/personal contact/lifetime
career
• Baby boomers (Born 1946—1964): Big picture/high-end
business casual/salary/telephone/build a perfect career
• Gen X (Born 1965-1980): Goal oriented/low-end business
casual/security/email/build a transferable career
• Gen Y/Millennials (Born 1981 and after) and Gen
Z/Nexters (Born after 2000): Collective action/whatever
feels comfortable/personal relationship/email + text +
IM/build several parallel careers
 FITs
Groups

Business travellers
Leisure travelers (Tourists !)
 Transient
Retail / Discount / Negotiated / Qualified / Wholesale

Group
Association & Convention / Corporate / Government /
Tour & Wholesale

Contract
The concept of market segmentation, or every-increasingly finely
tuned market definitions, will dictate hotel structures and
organizations. In addition, management tactics designed to address
those market segments have become even more important to the
management of hospitality service businesses. With the increased
power in the information and data manipulation realm, hotels have
available to them ever-expanding data bases about guests and are
creating new products to attract those markets.

(Hotel Management and Operations)

 Hyatt Hotels Corporation
An American multinational owner, operator, and franchiser of hotels,
resorts, and vacation properties.

Luxury Wellness Premium Modern

Lifestyle All Inclusive
Essential
 How do we set up the organization to
manage the lodging facilities?

Individual hotels are usually organized along functional lines

with departments grouped according to the particular work
activity in which they are engaged.
Specialist

Generalist
 Director of Rooms
Director of Food & Beverage
Director of Sales & Marketing
Executive Chef (Culinary)
Director of Finance
Director of POMEC/Engineering
Director of Human Resources

General Manager
Leadership Committee Member
Manager
Assistant Manager
Team Leader
General Associate
How do we become successful in managing
the lodging facilities, in managing the
business?
 Vision Statement
- What do we want to be?

Mission Statement
- How do we get there?
Have a Purpose that aligns the
organization around a common
goal

Set a Goal
Share Values
 PURPOSE
WHY DO WE EXIST?
A definitive statement about the difference you are trying to make in the world

MISSION
HOW WILL WE ACCOMPLISH OUR PURPOSE?
How we are going to accomplish or fulfill our purpose

VISION
WHAT DOES THE WORLD LOOK LIKE IF YOU ARE
SUCCESSFUL?
View of the world once purpose is fulfilled.
Purpose
We care for people so they can be their best.

Goal
Becomes the most preferred hospitality brand – loved and respected by
colleagues, guests, owners, operators, community members and
shareholders.

Values
Respect, Integrity, Humility, Empathy, Creativity, Fun
Measuring Hotel Performance
ADR, Occupancy Rate, RevPAR and
GOPPAR are terms all lodging
managers must know and
understand.
Review
Measuring Hotel Performance
• Average Daily Rate (ADR): The average (mean) selling price of all
guest rooms in a hotel, city, or country for a specific period of time.

• Hotels can be classified by their rate structures. For example, some

hotels are very elegant and can charge high rates. Other hotels offer
more modest accommodations for budget-minded travelers. As a
result, hotels are sometimes classified as budget or economy (very
low ADR), midscale (moderate ADR), or luxury (very high ADR).
• ADR can be calculated for a specific hotel, but it can also be
computed for a town or other geographic area.
Review
Measuring Hotel Performance
• Occupancy Rate: The ratio of guest rooms sold (or given away) to
guest rooms available for sale in a given time period. It is always
expressed as a percentage.

• Hoteliers can compute the occupancy rate for a hotel, a city, or a

larger region. It is also possible to compute an occupancy
percentage for a period longer than one day.
Review
Measuring Hotel Performance
• Revenue Per Available Room (RevPar): The average revenue
generated by each guest room available during a given time
period.

• Like ADR and occupancy rate, hoteliers can compute RevPAR

for a hotel, a city, or a larger region. It is also possible to
compute RevPAR for a period longer than one day.
• Most hoteliers would agree that an assessment of RevPAR
gives a clearer picture of the success of a hotel than does ADR
or occupancy rate alone.
Review
Measuring Hotel Performance
• GOPPAR: The amount of profit made from room sales divided
by the number of rooms available to sell.
• Why? Selling hotel rooms is not the same thing as selling hotel
rooms in a profitable way. For that reason, hoteliers also
regularly calculate their GOPPAR.

The amount of
revenue generated in a
defined time period
minus its management
controllable expenses
for that same period.
 When business is good, ADR,
occupancy rate, and RevPAR are
high.
When hotels are managed well,
GOPPARs are high as well.
General Manager:
A View at the Top
 Starwood Hotels & Resorts
The General Manager and Hotel Manager positions are key to the success of
Starwood’s Hotels & Resorts Worldwide, Inc.

The ideal candidate for a General Manager or a Hotel Manager position is one
who can lead with a passion that inspires his or her staff and attracts the
industry’s best talent. Successful candidates also provide strategic leadership
expertise that ensures the effective and efficient operation of the hotel while
improving on the current model, and in doing so, helps their property and our
business thrive.

General Managers and Hotel Managers who elicit superior performance from
their staff, exhibit excellence in cultivating the guest experience, and succeed
in the translation of their vision for future business have unlimited
opportunities within Starwood and among the brands that compose our
continually growing portfolio of hospitality experiences.
 Crown Plaza Hotels & Resorts
What We Look For….

We are seeking an experienced manager to oversee, direct and

manage property operations of a single property to assure
optimum performance and continual improvement in the five
Key Result Areas: Gust service, employees, sales/marketing,
property appearance, and profit/financial control. Coordinates,
directs and manages the staff and everyday hotel operations to
achieve profitability, guest satisfaction and efficiency while
maintaining standards set by the company assuring 100% guest
satisfaction.
 Renaissance Hotels & Resorts
You were always one of those curious kids who opened every
cabinet, peeked behind every door, and ever ceased to ask
“why” when given an explanation. Today, you bring your
personal style to every experience. You live life to discover. You
are passionate about your neighborhood, always looking to
explore the places one wouldn’t find in a travel guide. If this
sounds like you, you are in the right place. You’ve got authentic
style, natural curiosity and a warm way with people. Renaissance
is not just a place to spend the night, it’s a place to discover, a
place in the world with style like yours. That’s why we are not
just looking for anyone. We’re looking for someone like you.
The Role of General Manager
Life of a General Manager?
Hotel Manager?
Hotel Manager’s Job
The two major contextual elements that
influence the job are deemed to be JOB
DEMANDS and RELATIONSHIP ISSUES.

They differ depending on the time frame

(short-run, intermediate-run or long-run) under
consideration.
 Job Demands and Relationship Issues
The Short Run
• The short-run demands on hotel GMs revolve around
the daily, ongoing, operational issues of providing
quality guest service, controlling costs, and
maximizing revenues.
• GMs must engage in intense, verbal communication
and interact frequently with team members.
• Can be said to be performing the job function of
operational controller.
 Job Demands and Relationship Issues
The Intermediate Run
• Effective GMs must train and develop team members as
well as formulate plans and programmes that
systematically improve their operational control over the
hotel.
• Concerned with putting into place a hotel’s
organizational structure, systems, and people.
• Require the GM to develop communication channels and
to nurture relationships that extend beyond the specific
domain of the hotel.
• Referred to as that of organizational developer.
 Job Demands and Relationship Issues
The Long Run
• Demands relate to seeing to the capital needs and the
organizational stability of the hotel.
• The key relationship issues for long-run capital
expenditure decisions are communications upward with
corporate executives and owners and laterally with an
assortment of industry and community contacts.
• Described as that of business maintainer.
Roles Played by a GM
• Interpersonal work roles: Figurehead, leader,
liaison
• Informational work roles: Monitor,
disseminator, and spokesman
• Decisional work roles: Disturbance handler,
entrepreneur, resource allocator, and
negotiator
Managerial Work Roles as Operational
Controller
• Characterized by a high degree of involvement
in the daily operations of the hotel.
• GMs must: constantly monitor and
disseminate detailed information, must be
able to effectively and quickly handle
disturbances, act as a resource allocator, and
perform the leader role.
Managerial Work Roles as Organizational
Developer
• The managerial work roles of GMs extend
beyond the immediate confines of the hotel.
• GMs need to: monitor information,
disseminate information, play the work role of
entrepreneur, play the decisional work role of
resource allocator, and continue to perform
the leader role.
Managerial Work Roles as Business
Maintainer
• Requires the GM to see to the long-run capital
requirements and organizational stability and
vitality of the hotel.
• In so doing, they must perform the roles of:
liaison, monitor, disseminator, resource
allocator, entrepreneur, and leader.
Competencies
• A competency model is a descriptive tool that identifies the
knowledge, skills, abilities, and behavior needed to perform
effectively in an organization.
• Competency models focus on behavior rather than on
personality traits.
• Most competency models express traits and characteristics
in behavioral terms on the grounds that behavior is the
observable manifestation of personality traits and
characteristics.
• Competency models provide a common language for
discussing capabilities and performance.
Solid Foundation
+
Diversity
 Owner
Guests
Associates
 General vs. Specialized
• General Manager
• Hotel Managers
• Director of Rooms
• Director of Food & Beverage
• Director of Sales & Marketing
• Executive Chef (Culinary)
• Director of Finance
• Director of POMEC/Engineering
• Director of Human Resources
Travel and Learn
We own the business
Be a leader
 For Discussion
• Make a list of several hotels in your area. What different types
of travelers is each of these properties trying to attract?
Justify your answer!
 For Discussion
1. Different brands enforce difference brand standards.
Name three brand standards that would likely vary
significantly based upon the system-wide ADR of a
brand.
2. In the past, brand names helped travelers feel confident
about the quality of hotels they chose. Today, hotel web
sites provide the same type of help. Visit the web site of
one higher and one lower-priced hotel. Do you think
the Internet has helped lower-cost brands compete
more equally for guests? Explain your answer.