Hotel Industry Analytical Foundations Flashcards
Parent Company
- Parent companies consist of multiple chains.
- Often the parent company will have a variety of different types of chains.
- A parent company may have a range of high-end, middle, and low-end chains; or they may concentrate in one area.
Operation: Corporate, Franchise or Independent
- A corporate hotel is a chain hotel owned/managed by the chain/parent company.
- A franchise hotel is a chain hotel run by a third party where the chain receives some sort of franchise fee.
- An independent hotel is not affiliated with a chain or parent company.
Independent Hotels
Independent hotels are not affiliated with a specific brand. They may be managed or owned by companies listed on preceding pages.
Independent hotels vary considerably in size, price level, location, amenities and other attributes.
Management Company
A management company operates a hotel for another party.
The company has a management contract where it receives payment and/or some portion of profits.
Some chains or parent companies manage their own hotels.
Management companies may manage a variety of different brands.
Owner Companies
- There are many companies that own multiple hotels.
- Some chains or parent companies own their own hotels.
- Owners may own hotels from a variety of different brands .
REIT - Real Estate Investment Trust
A REIT is a company that owns, and in most cases operates, income-producing real estate assets. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks.
The purpose of this designation is to reduce or eliminate corporate tax. In return, REITs are required to distribute at least 90% of their taxable income to their investors.
STR includes REITs with Owner Companies.
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Asset Management Company
- An Asset Management Company represents the owner in the operation of a hotel.
- A hotel may have both a Management Company and an Asset Management Company.
Membership and Marketing Groups
- Hotels can be members of various organizations that provide additional benefits.
- These groups may provide marketing assistance.
- They may provide reservation services.
- They may have a focus on certain types of hotels.
- There are several memberships groups that STR currently tracks.
Other Players in the Hotel Industry - Summary
There are many additional companies and organizations that are related to the hotel industry:
- Convention & Visitor Bureaus, Tourism and Travel
- Organizations
- Hotel Associations (AHLA, US Travel, Germany, Swiss, Austria)
- Developers, Consultants, Appraisers
- Wall Street, Accounting, Financial firms
- Media
- National & international hotel conferences
- Educational Community
- Governments (US, Australia)
- Hotel vendors (Starbucks, Samsung, …)
The major geographic categories are:
- World
- Continent
- Sub-Continent
- Country
- Market
- Tract or Submarket
Countries
STR uses the UNWTO definition when it comes to recognizing countries.
Territories such as the Virgin Islands would appear as separate countries.
There are 211 countries with one or more hotels. There are a small handful of countries without any hotels.
There are 40 countries with 50,000 rooms or more.
Other Geographic Categories
U.S. Counties (or WW comparables i.e.: Districts)
Zip Codes (or WW Postal Codes)
MSAs (Metropolitan Statistical Areas)
Scale
The Scale category is one of the most popular ways the industry looks at different hotels.
There are seven Scale categories, six for chain hotels ranging from Luxury to Economy, and one Scale category for all Independent hotels.
Hotel Types
STR tracks several special types of hotels
The types are not exclusive, so a single hotel can be categorized as multiple types
Type categories used by STR are: All Inclusive, All Suite, B&B/Inn, Boutique, Condo, Conference, Convention, Corporate Housing, and Timeshare
It is important to note that STR does not track in its database “pure” condo and timeshare properties. Only those properties with rooms in a rental pool are included. Rooms Available for the rental pool are based upon an annual average from the prior year.
