LESSON 1

OVERVIEW OF THE HOSPITALITY INDUSTRY

It’s no secret that the tourism sector relies on the hospitality sector for both
domestic and international tourism; the tourism industry arranges the likes of travel
for tourists, but necessary services such as accommodation and food are provided by
the hospitality industry.

The Hospitality Industry

Tourism, helps the hospitality sector. A great remote location abroad could be
relatively unknown to begin with, but once its appeal has been discovered by tourists, it
may start to draw attention. The hotels and lodges in the surrounding area would then
grow to accommodate the increase in tourists. More tourists equal more business for
the hospitality industry.
Irrespective of their purpose for travel (business or leisure), all tourists require
basic services. Therefore, first and foremost, the tourism industry needs the hospitality
industry to sustain itself. Simply put, the two go hand in hand, and depend on each
other for survival.

What is the Hospitality Industry?

So, what is the Hospitality industry? After all, it is a broad field and while most
people have a basic idea of the types of businesses that count as hospitality brands, a
far smaller number are able to provide a coherent and satisfactory explanation of what
the industry is, and what it is not.
Put simply, the hospitality industry refers to a variety of businesses and services
linked to leisure and customer satisfaction. A defining aspect of the hospitality industry
is also the fact that it focuses on ideas of luxury, pleasure, enjoyment and experiences,
as opposed to catering for necessities and essentials.
Furthermore, the hospitality industry is a multibillion-dollar industry that
depends on the availability of leisure time, disposable income, and complete customer
satisfaction. Today, there are four segments of the hospitality industry: Food and
beverages, Travel and Tourism, lodging, and recreation.
 1. Lodging- Accommodation
The accommodation sector of the hospitality industry is concerned with
providing customers with a place to stay, on a temporary basis. It is most
commonly associated with the tourism industry, where people book holidays or
trips and require lodgings, but the accommodation sector also caters to local
people seeking a short break from their everyday routine, or those who require
temporary accommodation for almost any other purpose.
Lodging businesses markets to other market segments such as business
travelers, leisure travelers, long-stay travelers, budget travelers, and special
travelers like people working with the government, airlines, and military.
2. Food and Beverages
The food and beverage sector which is professionally known by its initials
as F&B is the largest segment of the hospitality industry. It comprises of
establishments primarily engaged in preparing meals, snacks, and beverages for
immediate consumption on and off the premises. When a restaurant is part of a
hotel, services it renders can enhance the guest experience by providing
excellent food and first-class customer service. It can symbiotically function as
part of other businesses, such as in bowling alleys or movie theaters.
While food and drinks are necessities, most food and drinks services also
fall under the hospitality industry umbrella, due to the fact that they offer people
a way of spending their leisure time and disposable income, as well as an
opportunity to socialize and enjoy an experience. Again, the food and drinks
sector cater to a wide range of customers, including tourists, locals, ex-pats and
passers-by.
3. Travel and Tourism
Travel and tourism deal with services related to moving people from
place to place. Buses, cabs, planes, ships, trains and so on are all part of the
travel industry. Leisure travel is when a person spends money on lodging, food,
and recreation while taking a vacation trip, and business travel is when a person
travels for work and spends money on lodging and food. Some people also spend
on recreation while on a business travel.
The major function of the tourism is to encourage people to travel. When
people travel, either for business or leisure, they spend money on hospitality.
4. Entertainment/Recreation – Casino, Cruise, Gaming
Recreation is any activity that people do for rest, relaxation, and
enjoyment. The goal of recreation is to refresh a person's body and mind. Any
 business that provides activities for rest, relaxation and enjoyment, to refresh a
person's body and mind is in the recreation business.
Entertainment businesses which provide shows such as movie or theater,
attractions which are places of special interest of visits such as zoos and
museums, spectator sports and participatory sports are all parts of the
recreation business.
(xotels.com/en/glossary/accommodation/)
Why Hospitality Matters

Tourists are now looking at factors such as the quality of food, the comfort of
their stay and the attentiveness of staff as the main reasons for selecting a tour or travel
operator for their time abroad.
There are a number of ways tourists weigh up these factors, but word of mouth
and online reviews are a popular method of choosing a particular operator. You may
want to visit the most beautiful beach in Bali, but if all the hotels surrounding the area
have a host of negative reviews, you’re likely to think twice. Reviews usually include
comfort, cleanliness and food as measures.
The Interrelated Nature of Hospitality and Tourism
 In managed services, foodservices are provided for airlines, military facilities,
schools, health care operations, business and industry–These foodservice
operations have the dual challenge of meeting the needs and wants of both the
guests and the client (i.e., the institution itself)
 The hotel business provides career opportunities to associates who help make
reservations, greet, assist, and serve guests
 The restaurant business fulfills guests’ diverse needs and wants –Eating is a
biological need that restaurants accommodate–Restaurants also fulfill other
human desires (i.e., the need for socialization and to be entertained)
Characteristics of the Hospitality Industry
 Our services are mostly intangible—the guest cannot “test-drive” a night’s stay
or “taste the steak” before dining–The products are for use, not possession
 There is inseparability of production and consumption of the service product,
due to each guest’s unique demands
 There is also the perishability of our product–For example, we have 1,400
rooms in inventory, but we sell only 1,200 rooms. What do we do with the 200
unsold rooms? Nothing—we lose 200 room nights and the revenue. If we can’t
sell the food it is wasted.
  Much of the hospitality industry is open 365 days 24 hours a day.
 The industry relies heavily on shift work and sometimes hours extend beyond
the normal work day
 There are four basic shifts:
— 7:00AM to 3:00PM
— 10:00AM to 6:00PM
— 3:00PM to 11:00PM
— 11:00PM to 7:00AM
The Hotel Industry
So you have learned the definition of hospitality industry and its difference to
travel/tourism industry. So what about the hotel industry? Does hotel industry only
mean a structure that guest or tourist stay? Let us all find out together. And let me take
you a minute tour to how hotel all begun and the heights it has attained as of today.

What is a Hotel?
Broadly speaking, a hotel is a managed building or establishment, which
provides guests with a place to stay overnight – on a short-term basis – in exchange for
money. The precise features and services provided to guests can vary quite drastically
from one hotel to another, and hotel owners generally aim to attract a particular type of
customer through their pricing model and marketing strategy, or via the range of
services they offer.

What is The Hotel Industry?

Next, it is important to answer the question: what is the hotel industry? Put
simply, the hotel industry is the section of the service industry that deals with guest
accommodation or lodgings. By most definitions, the hotel industry refers not only to
hotels, but also to many other forms of overnight accommodation, including hostels,
motels, inns and guest houses. However, it does not usually include long-term or
permanent forms of accommodation.
Due to the nature of hotel services, it is closely associated with the travel and
tourism industry.
Milestones of the Hotel Industry
From caves to skyscrapers
The Lascaux caves that are
part of the UNESCO World
Cultural Heritage are
considered to be the first shelter where both an artistic cultural background as
well as the accommodation of people of a different tribe can be proven. The exact
dating of the caves is disputed, but they are said to be as old as 38,000 to 15,000
BCE.
It gets a little more concrete in classical Pompeii; hard evidence of a
Lupanar, a bordello dating back to the year 69 BCE was found. This bordello
is considered to be the first proven hospitality establishment that also
charged for lodging.
The first real guesthouses can be traced back to the early eighth century in
Japan. The Nishiyama OnsenKeiunkan and
Hoshi Ryokan are the first hotels in
human history: 47 generations later, the
latter establishment is still owned by the
original family.
It took another millennium for the first
establishment to call itself a hotel. The Grand Hotel opened its doors in London on
25th January 1774.
Today, just 250 years later, there are countless (according
to estimates, over 500,000) hotels and gastronomical
establishments around the world.
According to the Guinness Book of Records, the biggest
hotel in the world with 7351 rooms is the First World Hotel in Pahang,
Malaysia.
The 356-meter (1,168 feet) Gevora Hotel in
Dubai became the tallest hotel in the world,
complete with certification as a Guinness World Record. But
the Gevora's reign will be short-lived. The Ciel Tower will
reach 360.4 meters upon completion, which is scheduled to open in late 2022 or
early 2023.
The record holder for the all-time most expensive hotel to be
sold is the Waldorf Astoria New York in Manhattan. It was sold
to the Chinese Anbang Insurance Group for 1,95 billion US
dollars in 2014.
Hotel Industry Segments
When we discuss the hotel industry overview, it is equally important to discuss
its segments which are listed below.
1. Full-Service Hotels – These include the Resort hotels and 4* and 5* hotels.
2. Select Service Hotels – These include several 3* and 4* hotels, Bread &
Breakfasts, Inns, Airport Hotels etc.
3. Limited Service Hotels – These include Hostels, Capsule hotels. Motels, 1* and 2*
Hotels etc.
4. Boutique and Themed Hotels- These include Boutique Hotels, Cruise Hotels,
Theme Park Hotels, Casino hotels etc.
So, we have defined a few segments to get to a clear definition of the Hotel. But,
while exploring the segments we have noticed that there are several hotel types within
each segment.
So, it’s also worthwhile to quickly mention the various hotel types. Isn’t it?

Other Lodging Facilities

Lodging means accommodation a wide range of accommodation types which
provide shelter or a place to stay overnight. It is used to describe locations away from
home and the quality of the place can vary from a small island hut or a tent to a five star
all-inclusive resort. Fancy hotels, youth hostels, elder hostels, campgrounds, motels and
other businesses that provide a place for people to sleep overnight are all in the lodging
industry.

Types of Hotels
As I have mentioned above it is just wort it to mention the various hotel types.
There are numerous types of hotels in the world. You would be amazed by the variety
that this industry provides to all the travellers. Have a look!
 Business Hotels  Boutique Hotel
 Extended Stay Hotels
 Apartment Hotels

 Casino Hotels  Resorts

 Cruise (Hotels) – Hotels and  Motels

accommodation on Cruise Ships

 Bed & Breakfasts  Airport Hotels

 Luxury Hotel  Tree House Hotel

  Ice Hotels  Capsule Hotels

 Bubble Hotel  Cave hotel

  All Suite Hotels

 Condo Hotels
 Hostels
 Various Star Hotels (5 Star to 1
Star)
 Inns
And the list goes on and on.
The expanse of the Hotel industry is limitless. It can be categorized depending
upon their size, location, target market, and ownership.
1. Hotel Types by Size
Hotels are categorized by the number of rooms to which service is provided.
For example −
 Below 200 rooms – Very Small
 Up to 200 rooms – Small
 200 to 399 rooms – Medium
 400 to 700 rooms – Large
 More than 700 rooms – Mega
This category is useful if the management needs to compare different hotels within
the same size.

2. Hotel Types by Location

They are categorized by considering their location with respect to city.
 Airport Hotels − They are located near airport. The guests in transit use them for
short stay.
 Boatels − They are on the houseboats such as Shikara in Kashmir.
 City Center − Located in the heart of the city near commercial area.
 Motel − They are small hotels usually located on highways. Transit guests use
them.
 Suburb Hotels − They are located near urban area. Budget guests use them.
 Floating Hotels − They are on the cruise ships, large lakes, or rivers.
 Resorts − They are on the beaches, mountains, islands, or on the river banks.
 Rotels − They are hotels on wheels such as Deccan Odyssey train.
 Self-Catering Hotels − They are located at the same premises where the owner
stays.

3. Hotel Types by Target Market

Here, the hotels are categorized depending upon the target market they
serve.
 Airport Hotels − They target the business clientele, airline passengers, or any
guests with cancelled or delayed flights.
 Business Hotels − They primarily cater for the guests who are on business travel.
 Bed and Breakfast (B&B) − They are small hotels who target guests in transit or
on leisure tour. The owner of B&B usually stays in the same premises and is
responsible for serving breakfast to the guests.
 Casino Hotels − They target the guests interested in gambling. Their functions of
housekeeping are primary but food and beverage functions are just supportive.
 Resorts − They target high-income busy professionals who wish to spend time
away from city, noise, and crowd. They offer facilities such as spa, tennis court,
fitness and center, sailing, snorkeling, and swimming.
 Self-Catering Hotels − They target long stayers who prefer to cook themselves.
They offer a small kitchen and kitchen amenities with the guest room.
 Service Apartments − They are located in residential colonies. They provide long-
term accommodation for guests. They need to execute an agreement with the
guests for the stay of at least one month. All basic amenities such as kitchen,
washing machine, dish washer, and beds are provided with once-a-week
housekeeping service.
 Suite Hotels − These hotels offer a living room and an en suite bedroom. The
professionals who need to interact with their clients/customers find these hotels
a good choice because they can interact with their guests in small meetings
without any interruption and sacrificing privacy.
 4. Hotel Types by Ownership
B&B and Self-catering hotels are generally family owned hotels and are not
governed or run by corporate policies and procedures.
A chain of hotels or group of hotels such as Taj, Ramada, can have
management affiliation with their other properties in the same group. They strictly
are governed by predetermined policies.
 Privately Owned Hotels
 Leased Hotels
 Managed Hotels
 Franchises

5. Hotel Types by Star Rating

The star rating system is a guideline for a customer that denotes what to
expect from the hotel service at the time of booking. However, there is no clear
distinguishing method to divide hotels into various star rating categories till today;
but a guest can assume that more the number of stars, more is the luxury provided
by the hotel.
(https://www.besthospitalitydegrees.com/faq/what-are-the-different-types-of-
hotel-ownership/)
Types of Hotel Rooms
There are a lot of different types of rooms, the condition of guest rooms
maintained by housekeeping is the most vital factor as far as the customer satisfaction
in the hotel business is concerned.

Finally, to have an all-round overview of the Hotel industry, it is also important to have a
look at the various aspects that make the hotel industry.

Various Aspects of the Hotel industry

The hotel industry
— Large in size; include broad categories that has unique
characteristics.
— customer service remains to this day the backbone of the entire
hospitality industry.
— All the important segments of the hotel industry such as food
delivery and care are also driven primarily by customer support.
 — Careers in the hotel industry can be extremely rewarding,
however, they are also challenging and fast-paced, which can be
overwhelming for most people.
— This industry is a lot broader than other industries, and it is
related to nearly every other profession on earth.

While this industry is very broadly classified, it has some defining aspects that
are very important.
 Customer Service holds the Key

As mentioned earlier, the most vital aspect of the hotel industry revolves
around customer satisfaction. the success of the hospitality industry relies solely on
whether the customer is happy or not. In this age of the Internet, an unhappy
customer can be the source of an unnecessary headache.
To prevent bad reviews, which could kill your business, the hotel industry
must do everything to ensure satisfaction.

 Healthy Consumer spending

As the economy continues to get stronger and stronger, individuals are
also starting to enjoy increased salaries that are enabling them to make wise
spending decisions. The hotel industry is one sector that is benefiting heavily
since it is at the heart of the growth.

 Competition within the Airline sector

Air travel has become cheaper thanks to competing airlines which has
enabled a lot more individuals to travel to various destinations across the world.
International competition, low fuel prices and low-cost entrants in the airline
industry will only help to make flights more accessible even to the budget
traveller.

 Advancement in Technology
Advances in technology have completely reshaped the way that the hotel
industry operates. Thus, it is a must to include in a holistic analysis of the hotel
industry. Thanks to social platforms, people are now more informed than ever about
the places that they want to visit, as well as how they want to get there and where
they want to stay.
 Apart from making it easier for the customer, technology has increased the
efficiency of the hotel industry and it has helped greatly to improve the customer
experience. Quality customer experience is gold and it is what will help to push
business activity in the hotel industry.

 Reliance on Disposable income and time

Another vital aspect that defines the hotel and the hospitality industry is the
reliance on other people’s disposable income and free time. Because of this, a lot of
businesses in the hotel industry, whether they have to do with accommodation or
transport, are targeted towards people that have extra income to spare, rich patrons
or people that have free time for rest and relaxation.
During economic downtimes such as the recession, the hotel industry
typically suffers because patrons are forced to redirect their income to other central
issues.

 Themes are a key aspect of the Hotel industry

Lastly, the hotel industry is also characterized by themes.
Many hotels, especially the smaller variety opt to stick to a theme that can
help to attract customers. For instance, a hotel can have a Mediterranean theme
as a way of appealing to customers that prefer that type of food. Not only do
different and unique themes help to attract more business, but they also help to
set one business apart from another.
To survive and excel in the hotel industry, a hotel must have an authentic
theme.
https://www.soegjobs.com/overview-hotel-industry-sectors-segments-aspects/

Other Specialty Hotel (https://www.slideshare.net/beansomoray/chapter-2-38561656)