Hotel Accommodation Management

Roy C. Wood

• Publisher: Routledge
• Year: 2017
• Print ISBN: 9780367825089
• eBook ISBN: 9781351690485
• Topic: Business
• Subtopic: Hospitality, Travel & Tourism Industry
• Index: Business

This book offers students a uniquely concise, accessible and comprehensive introduction to hotel accommodation management that covers the range of managerial subjects and disciplines in the sector.

The book focuses on enduring aspects of the accommodation management function (front office management, housekeeping, revenue management); the changing context of hotel accommodation provision (the move to 'asset light', the supply of accommodation, trends in hotel investment and asset management, the challenges engendered by social media and the collaborative economy to the hotel market); and the role of accommodation in additional and integrated facilities and markets (spas, resorts, MICE markets).

International case studies illustrating examples of practice in the industry are integrated throughout, along with study questions and other features to aid understanding and problem solving. This is essential reading for all hospitality and hotel management students.

Chapter 1
Introduction: managing hotel accommodation: an overview

Roy C. Wood

Learning outcomes

At the end of this chapter, readers should:

• understand the status and scope of accommodation management within the hotel industry;
• be clear as to how the structure and content of this book relates to the scope of accommodation management in hotels;
• describe some recent and current trends influencing the supply of accommodation in the hotel industry; and
• appreciate key effects on the management of hotels resulting from these trends.

Introduction: the nature and status of hotel accommodation management

The provision of accommodation and food and beverage services are the two principal features of the hospitality industry that distinguish it from (most) other industries. Hotels are but one sector of the hospitality industry and not the only one to provide accommodation. However, hotels are arguably the most economically significant of these sectors (Slattery, 2012).

It is almost certainly the case that in the majority of the world's hotels it is the sale of accommodation – guest rooms – that is responsible for the largest revenues (Hunter Powell and Watson, 2006: 297, cite data from the British Hospitality Association suggesting that 55 per cent of total hotel revenue in the UK is derived from rooms, 23 per cent from food and 10 per cent from beverages). Yet the history of hotel management education demonstrates that, in the main, it is food and beverage management that has been given greater emphasis in the curriculum. This is perhaps understandable in the sense that the effective management of food and beverages is essential to many sectors of the hospitality industry – it has wider applications than the management of accommodation. Also, and most notably in hotels, research suggests that successful leadership and management of the food and beverage department is essential to any individual manager's career progression to the position of General Manager (Wood, 2015).

A further reason for the importance invested in food and beverage management is encapsulated in a remark by Riley (2005: 92) with which many in the hotel industry would undoubtedly agree: ‘Managing food and beverage’, he writes, ‘is more complex than managing rooms and it demands a greater range of knowledge and a degree of creativity, which room management does not’. The evidence for such an assertion is, at best, tenuous. The oft-heard remark that the hotel industry is a service industry, while not untrue, disguises the capital intensivity of the sector in terms of the high cost of land, buildings and (physical) structural maintenance. Put simply, it is the sale of hotel accommodation that in the main makes money. ‘Food and beverage led’ hotels (that is, hotels that secure the majority of their revenues from food and beverage sales) and integrated resorts that rely, for example, on gaming for their revenues are a smaller sub-sector of the whole. Though a rather obvious statement, a hotel without accommodation is not a hotel, but a hotel of sorts can profitably offer minimal or even no food and beverage facilities, as many ‘road lodge’ and budget hotels testify. Indeed, as Rushmore (2003: 30 – see also Mansbach, 2010) has noted with some acerbity:

Most hotel food and beverage departments are big money losers when all expenses are properly accounted for. Hoteliers tend to regard foodservice as an amenity – a necessary evil that must be available to guests to be competitive. Very few hotel operators have been able to … run the foodservice businesses like a real restaurateur.

Rushmore's argument is, in essence, that food and beverage expenses (for example, the costs of heat, light, power) are rarely properly accounted for – if they were, food and beverage operations would almost always show a loss.

As to complexity, accommodation management is often rather simplistically equated with ‘cleaning’ – the housekeeping function – which is one further possible reason why it has not attracted, as a subject, the same kudos as food and beverage (except, perhaps, in the case of the front office and associated information technology systems). Should one require evidence of the complexity of accommodation management, whether in general or in hotels specifically (and without committing to the view of whether it is more or less complex than food and beverage management), then consideration of the contents of this book should at least furnish some ammunition.

The scope of hotel accommodation management

Broadly defined, hotel accommodation management entails the protection and management of a hotel's assets – and particularly fixed assets – with a view to generating profit (Schneider, Tucker and Scoviak, 1999). A statement as compact as this perhaps encourages a view of hotel accommodation management as lacking complexity, and may be one reason explaining why, for many educators, practitioners and students, the field lacks allure. Many schools of hotel management offer programmes that entail education and training in their own restaurant and kitchen facilities. Few, however, offer similar opportunities in the practice of the various disciplines that make up accommodation management (although a small number of leading global institutes operate their own campus hotels). Food and beverage management is somehow ‘sexier’ despite the increasingly diminishing role it plays within the hotel sector. The relative neglect of the accommodation function in the curricula of hospitality education courses is a relatively recent phenomenon. As Frapin-Beaugé, Verginis and Wood (2008: 383) note:

Thirty years ago in the UK and elsewhere, it was hardly possible to study for a qualification in hospitality management without touching on all these subjects. Changes in the industry, not least the increasing utilization of external experts (whether lawyers, architects, or interior designers); the increasing limitation of resources in many (especially state-funded) higher education institutes offering hospitality programmes; and a switch from technology based approaches to hospitality to managerially based approaches now make it much less likely that students will encounter these areas in much depth… [.]

One purpose of this book is, therefore, to offer a positive account of hotel accommodation management in its many complexities. After some 35 years in hotel management education and training and, albeit briefly, the hotel industry (at both ends of the spectrum, as what the French call a plongeur – more euphoniously called ‘pan man’ in 1980s Manchester – and, in the first decade of this century, as the senior executive responsible for management training and developing in what is regarded as one of the world's leading deluxe hotel companies), this writer has seen little change in the basic attitudes of the hotel industry until comparatively recently. Over the last ten years, however, change has come, is ongoing, and is almost exclusively centred on the accommodation function. Strategic hotel management and the operational management of hotels have increasingly been influenced by the transformation of much of the sector into one governed by real-estate considerations. A manager of hotels should not, and cannot, be expected to be an expert in all of the areas of accommodation management, but it is the case, as it always has been, that in dealing with numerous external specialists a reasonable working knowledge of such areas has value. That said, there is always a need to recognize that some developments are unforeseeable, or very nearly so. For example, an earlier collection of essays on aspects of accommodation management could not have foreseen the many technological and other changes that have since taken place, not least in terms of the role of the internet and personal technologies (Verginis and Wood, 1999).

Curricula change occurs very slowly in many areas of the academic world, and this is certainly true of hospitality management. The ‘traditional’ model of hospitality management education – with its emphasis on cooking and serving food as a surrogate for managing food and beverage outlets, together with a smattering of functional management subjects (marketing, human resource management, accounting and finance and so on) – has much life left in it (Wood, 2015). Why? Because the hospitality industry has an almost insatiable demand for graduates from these courses, graduates who are then misused and rapidly leave the sector – hence the continuing demand. The industry as a whole fails to adequately distinguish between competence and experience. There are few jobs in the industry that averagely intelligent graduates of hotel/hospitality management courses could not/cannot cope with. What graduates lack is, evidently, experience, and many are compelled to ‘serve their time’ acquiring this experience far too slowly – during which the appeal of alternative careers devoid of such occupational ritualism increases with each day that passes.

The scope of this book

Despite there being life left in the prevailing model of hospitality management education, we should not err in believing that it will be ever thus. Indeed, as has already been implied, change has happened, and continues to happen, in quite fundamental ways even though many in the industry, and certainly education, have yet to catch up. For those aspiring to senior management roles in hotels (until the level of General and Deputy General Manager, or whatever the latter is termed), an understanding of the principles of real-estate and property management, of finance and accounting, of negotiation and mediating and of sales and revenue management are already becoming the distinguishing skills required. This book, in the manner of all introductory texts, seeks to capture these and other areas of related significance.

Undoubtedly the most important development in the corporate sector of the hotel industry in recent years has been the increasing move to ‘asset light’, considered expertly by Rob van Ginneken in Chapter 2. Chapter 3, by Michael Schwarz, offers a short introduction to the role of hotels as (real-estate) investment vehicles via the issue of hotel property valuation. At both the strategic and operational level, hotel accommodation management embraces the increasingly important brand functions of design (principally interior design) (Roy C. Wood, Chapter 4). The front office (Andy Heyes, Chapter 5), together with housekeeping and related accommodation services (Roy C. Wood, Chapter 6), now arguably represent the most important functional departments of a hotel, and the breadth of their responsibilities are considered here. A more recent development in hotels is the growth of spa and wellness facilities, which Heyes (Chapter 7) has made his special study.

Depending on the nature of the hotel and the markets it serves, accommodation management can extend to the wider aspects of the meeting, incentive, conference/convention and events business (Glenn McCartney, Chapter 8), as well as enjoying a prominent role in integrated resorts and their management, of which one or more hotels might be part (McCartney, Chapter 9). In terms of management techniques, accommodation management activities involve an ever-increasing interface with the sales and marketing function through the medium of revenue management (Stan Josephi and Frans Melissen, Chapter 10). The accommodation management function also bears much of the pressure generated by social media (Peter O'Connor, Chapter 11), demands for more sustainable business practices (Melissen, Chapter 12) as well as confronting trends in competition, most recently in the form of the so-called ‘collaborative’ or ‘sharing’ economy (Jörn Fricke, Chapter 13). There are also periodic debates as to the relevance of a ‘new’ discipline, facilities management, to hotel accommodation management (Wood, Chapter 14) as well as increasing speculation about the future of the hotel accommodation sector (Wood, Chapter 15).

This is an introductory text and therefore the emphasis is on breadth, to sensitize readers to some of the issues of the day in accommodation management. The remainder of this chapter is devoted to a brief examination of some of the key contextual issues that need to be kept in mind when exploring the various topics presented in this book.

The supply of hotel accommodation

To state that the hospitality industry is mostly made up of small and medium-sized enterprises (SMEs) that numerically dominate the sector is to articulate a truism. Different countries define ‘small businesses’ and ‘medium-sized’ businesses differently but, nevertheless, the International Labour Organization (2010: 8) optimistically asserts that more than 2.5 million SMEs are involved in the European hospitality sector. A European Union agency, the European Foundation for the Improvement of Living and Working Conditions (Eurofound) (2009: 1), noted that, in the first decade of this century, half of all hospitality workers were employed in organizations of two to nine employees, compared with 27.5 per cent in all sectors. Not all of these businesses are hotels of course. Indeed, it would be a brave analyst who sought to calculate the number of hotels (or many other types of business) in a particular country or region. Nevertheless, the much-respected industry consultancy Smith Travel Research (STR) has estimated a total of 187,000 hotels and 13,443,014 hotel rooms globally (see Wood, 2015).

Small and medium-sized hotels are often said to numerically dominate the hotel industry, which, while almost certainly true, does not necessarily mean they are the most important operators either entrepreneurially or economically. It is easy – and mistaken – to equate the size of the hotel SME sector with evidence of entrepreneurship, but many operators of SME businesses are ‘lifestyle’ owners with little interest in growing their business. Indeed, these businesses often operate at the economic margins, which may (but only may) explain the relatively high rate of business failure in this industry (Heller, 2011). In economic terms, Thomas, Shaw and Page (2011) point out that large firms in the tourism industries play a disproportionately important role in terms of the number of people employed. Some commentators assert that the corporate hotel sector provides more rooms than the SME sub-sector with, for example, chain hotel groups holding around 60 per cent of UK room stock (Slattery, 2010: 11).

It is therefore critically important to remember that, despite the apparent ‘smallness’ of the corporate hotel sector, its economic significance is almost certainly greater than SMEs in the industry. Certainly, until recently at least, it is safe to say that commentators thought there would always be a market for the small independent hotel or guest house. In some parts of the world this will remain true for the foreseeable future, but SMEs have been challenged for many years by corporately owned budget hotels and face a new challenge (as indeed do the corporate budget hotels) from the sharing economy and ventures such as Airbnb. It is also worth remembering that in the SME segment of the market, hotel consortia, whereby independent hotels group together to share resources and enhance their marketing and purchasing power, remain a considerable force.

Asset light, corporations and implications for hotel accommodation supply

In 2010 The Economist (2010: 71) reported that Marriott owned only six of the 3,400 hotels carrying ...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• List of figures
• List of tables
• Notes on contributors
• Foreword
• Acknowledgements
• 1. Introduction: managing hotel accommodation: an overview
• 2. Trends and issues in hotel ownership and control
• 3. Valuation of hotel assets
• 4. Hotel accommodation design
• 5. Hotel front office management
• 6. Housekeeping and related accommodation services
• 7. Hotel spa and wellness management
• 8. Accommodation and MICE
• 9. Managing accommodation in integrated resorts
• 10. Hotel revenue management
• 11. Hotels and social media
• 12. Hotels and sustainability
• 13. Co-creation and the sharing economy in hospitality and tourism
• 14. Facilities management
• 15. The future(s) of hotel accommodation management
• Index