Types of hotels

Question 1

Independent hotels

Answer 1

A one-unit business owned by one person (or by a small group of people) that is not required to conform to any corporate policy or procedure.

Question 2

Voluntary chains/ Referral groups

Answer 2

• Independent hotels grouping together for some common purpose.
• Management is still independent however they may adhere to the same service level in order to create a unity among them
  E.g. The Leading hotels of the World, Preferred Hotels and resorts, Design hotels,…

Question 3

Chain hotels

Answer 3

• Owned and/or managed by a centralised management belonging to the same holding company.
• Within the chain the properties may be leased, franchised or operated under a management contract
• The investment in buying the hotels is heavy and therefore becoming more and more rare as a form of expansion

Question 4

Management Contracts

Answer 4

• Management company is hired by the owner to run the hotel.
• Owner retains the financial and legal responsibilities for the property.
• Management company operates the hotel, hires its employees, pays its expenses and receives an agreed upon fee from the owner.
• Some management companies do not have a brand name and therefore operate franchises or independent properties.
  Other management companies arrive with the brand.

Question 5

Franchisee

Answer 5

• Buys in to a business format that has been proven successful
• Gets help with pre-opening
• During operations: Operating and control procedures, information management, purchasing, distribution, marketing, quality control, training….
• Expensive, controlled (needs to be kept up to date by the franchisor)

Question 6

Franchisor

Answer 6

• Rapid way to expand without extensive investments,
• Deals with highly motivated mgrs/owners
• Not receiving high profits

Question 7

Ownership and Management Alternatives

Answer 7

1. Independent hotels
2. Voluntary chains / Referral groups / Membership chains
3. Chain hotels
4. Management contract
5. Franchise
6. Lease

Question 8

Challenges the industry faces today

Answer 8

• Operating Issues
• Marketing
• Technological
• Economic

Question 9

Lease

Answer 9

• Contract where the owner of the property rents out the property for a limited time period.
• Make it possible for hotel chains to managing the activity without having to invest in the property.
• The person renting the property has the right to the profit / loss generated by his activity.