Introduction to

Hotel Operations
Management
M AYA I VA N OVA , P H D
H O T E L O P E RAT I O N S
M A N AG E M E N T ,
 Hospitality Industry
Collection of businesses providing accommodation and/or food
and beverages to people who are away from home
Hospitality Industry Tourist Industry

institutional/welfare catering transport services

e.g. hospital catering commercial accommodation
restaurant for local public e.g. hotels
tour operators

commercial F&B operations

other accommodation services
e.g. restaurants
students hostels etc leisure activities
theme parks etc
 Hospitality Industry
•Hospitality belongs to the tertiary sector of economy,
also known as “service sector” or “service industry”
•The secondary sector includes manufacturing
•The primary sector includes agriculture, mining, hunting
and fishing
•Other businesses in tertiary sectors are transport,
education, consulting, real estate, news media, legal
practice, health care
 Hospitality is a segment within the
Tourism Industry
Tourism Industry

Hospitality Intermediaries Transportation Destination

TO and TA Sites and
Activities
Lodging Operations Food/Beverage
Operations

Tourism industry: all business that cater

to the needs of the traveling public
 Close Look at Lodging
Organizations:
Lodging Industry Characteristics
Emphasis on Safety, Cleanliness, and Service
– Guests also consider “intangible” aspects of the purchase
decision.

Inseparability of Manufacture and Sales

– A room exists and is sold at the same site.

Perishability
– If a guest room is not rented on a specific date, the revenue is
lost forever.

Repetitiveness
– Some operating procedures are routine.

Labour Intensive
– Much of a hotel’s daily work involves employees providing
services.
The Pineapple Tradition

Symbol of welcome, friendship and

hospitality
Recognized internationally
Foundation for concept of
“SERVICE”
 Etymology of word
“hotel”
The English spelling of the word “hotel” is derived
from the 17th century French word hotel (some
type of shelter providing overnight lodging). The
word “hotel” is actually derived from the 14th
century Latin word hoste or oste, which evolved
into today’s English version of host ( a person that
provides for a guest).
Words such as hospital, hostice, hospitality and
hostel also derive from the same root
History of Hospitality
1. Ancient Greece
2. Ancient Rome
3. Middle East
4. Medieval Age
5. Renaissance
6. Present Days
 A Brief History of Hotels
Highlights in the Modern History of the U.S. Hotel Industry

1900 Fewer than 10,000 hotels

750,000 to 850,000 rooms

10,000 U.S. hotels

1910
1 million rooms
300,000 employees
Average size: 60–75 rooms

Occupancy: 85%
1920 Hotel construction reaches an all-time peak
as thousands of rooms are added along the
new state and federal highways
 A Brief History of Hotels (cont.)
Highlights in the Modern History of the U.S. Hotel Industry (cont.)
1930 Occupancy: 65%
1930
AHA’s Hotel Red Book lists 20,000 hotels

1940 Occupancy: 64%

Average room rate: $3.21

Occupancy: 80%
1950 Typical hotel: 17 rooms
Average room rate: $5.91

Occupancy: 67%
$3 billion in sales
1960 Total hotel rooms: 2,400,450
Typical hotel: 39 rooms, independent and locally owned
Average room rate: $9.99
 A Brief History of Hotels (cont.)
Highlights in the Modern History of the U.S. Hotel Industry (cont.)

Occupancy: 65%
1970 $8 billion in sales
Total hotel rooms: 1,627,473
Average room rate: $19.83

Occupancy: 70%
1980 $25.9 billion in sales
Total hotel rooms: 2,068,377
Average room rate: $45.44
 A Brief History of Hotels (cont.)
Highlights in the Modern History of the U.S. Hotel Industry (cont.)

Occupancy: 64%
$60.7 billion in sales
1990 Total hotel rooms: 3,065,685
45,020 properties
Average room rate: $58.70

Occupancy: 63%
2000
$97 billion in sales
 Introduction of
technological advances to
the hotel industry (1)
 1846 Central heating
 1859 Elevator
 1881 Electric lights
 1907 In-room telephone
 1927 In-room radio
 1940 Air-conditioning
 1950 Electric elevator
 1958 Free television
 1964 Holiday Inn reservation system with centralized computer
 1965 Message lights on telephone
 Initial front office computer systems introduced followed by room
Sources: American Hotel & Motel Association; Madelin Schneider, “20th Anniversary,” Hotels & Restaurants
status capability
International 20, no. 8 (August 1986): 40 (copyright Hotels magazine, a division of Reed USA); Larry Chervenak,
“Top 10 Tech Trends: 1975–1995,” Hotel & Motel Management 210, no. 14 (August 14, 1995): 45.
 Introduction of technological
advances to the hotel industry (2)

 1970s Electric cash register; POS (point of sale) systems and keyless
locks; Colour television standard
 1973 Free in-room movies (Sheraton)
 1980s Property management systems; In-room guest checkout
 1983 In-room personal computers; Call accounting
 1990s On Command Video (on-demand movies); LodgeNet
Entertainment (interactive video games); Interactive guest room
shopping, interactive visitor’s guide, fax delivery on TV, interactive guide
to hotel’s facilities and activities, reservations from the guest room for
other hotels within the same organization, and interactive weather
reports Internet reservations; Introduction of legislation that monitored
hotel ownership through real estate investment trusts (REITs)
Sources: American Hotel & Motel Association; Madelin Schneider, “20th Anniversary,” Hotels & Restaurants
International 20, no. 8 (August 1986): 40 (copyright Hotels magazine, a division of Reed USA); Larry Chervenak,
“Top 10 Tech Trends: 1975–1995,” Hotel & Motel Management 210, no. 14 (August 14, 1995): 45.
 Introduction of technological
advances to the hotel industry (3)

 2000s Wireless Technology—Wireless Technology VIP Check-

In, Housekeeping Guestroom Clean and Release Status,
Marketing Guest Profile, Bell Staff Baggage Handling; Guest
“hot spot” centers in hotels for wireless transmission and
reception of emails and documents.
 2010s Revenue management software; Hotel own booking
engine; Software for channel management; Keyless room
open (bar-code or mobile apps); Online communication with
the guests; Mobile technologies rising up
 2020s – share your forecast!
Sources: American Hotel & Motel Association; Madelin Schneider, “20th Anniversary,” Hotels & Restaurants
International 20, no. 8 (August 1986): 40 (copyright Hotels magazine, a division of Reed USA); Larry Chervenak,
“Top 10 Tech Trends: 1975–1995,” Hotel & Motel Management 210, no. 14 (August 14, 1995): 45.
 Hotel Classification
According to the range of services provided on
place:
 limited service hotel (provides only lodging
services, sometimes also breakfast is included
but the hotel does not possess table service
restaurant)
 full service hotel (provides lodging, food and
beverage services as well as additional services)
 Hotel Classification
According to the location
and product:
Center city hotels
Resort hotels
Airport hotels
Freeway hotels
Casino hotels
Convention hotels
All-suite hotels
 Hotel Classification
According to the size of the lodging property

 small hotels (≤ 50 rooms)

 medium hotels (50-200 rooms)
 large hotels (200-500 rooms)
 mega hotels (over 500 rooms)
 Hotel Classification
According to
categorization/
ranking
• Tourist hotel Budget
-one star hotel
-two stars hotel
• Superior tourist Economy
Mid-price
-three stars hotel
• First hotel
Up scale
-four stars hotel • Superior first
Luxury
-five stars hotel • Deluxe hotel
Hotel Rating Guide
 Hotel classification
According to the type of property:
Hotels, motels, family hotels
Holiday villages, resort complexes
Farm houses (Guest houses), bed and breakfast (BB),
Inns
Self catering accommodations – apartments,
cottages, gites, chalets
Campus accommodation
Time share (period constrained type of ownership)
 Resort Hotels
 Hotel Classification
Other types of accommodation establishments
Youth accommodation – hostels
Camping and caravan sites
Medical facility accommodation
Cruise line and ferries
Trains and aircrafts
Visiting friends and relatives (VFR)
 Lodging properties according
to Bulgarian legislation are:
 Hotels (seasonal, all year round, spa, wellness, residence, club, balneal, sea
side, mountain etc) – 1-5 stars
 Motels- 1-3 stars
 Tourist villages 1-4 stars
 Hostels – 1-3 stars
 Family hotels – 1-3 stars
 Rooms 1-3 stars
 Villas – 3-5 stars
 Houses – 1-3 stars
 Bungalows – 1-3 stars
 Camping and caravan sites – 1-2 stars
 Discussion
1. Compare a typical convention and typical spa and
wellness hotel. What are the resemblances and
differences between them?
2. What kind of activities will you undertake to prolong the
high season of a resort hotel?
3. Analyze the advantages and disadvantages of small
family and large city hotel. In which of them would you
like to work and why?
4. What type of accommodations will develop when
targeting one or another cultural group?
 TOURISM

LEISURE TOURISM BUSINESS TOURISM

Types of hotel guests
Domestic tourists (locals)
FIT (Free independent travelers)
GIT (Group inclusive tours)
SIT (Special interests tourists)
MICE (Meetings, incentive, conferences, events)
VFR (visiting friends and relatives)
VIP (very important person)
 Areas in the hotel
1. Main entrance
2. Lobby – reception desk, information, concierge, change,
lobby bar
3. Guest rooms
4. Common areas (saloons, stairs, bars, fitness, pools, libraries,
lobby, floors, restaurants, spa, conference rooms etc )
5. Staff offices and working areas (kitchen, laundry, storage
rooms, staff rooms etc)
6. Garages and parking lots
7. Others (playgrounds, gardens etc)
 Hotel Departments
Front Office - FO
House Keeping – HK
Food and Beverage – F&B
Maintenance and Engineering – ME
Human Resource – HR
Accounting and Finance – A&F
Marketing and Sales – M&S
Types of guest rooms
Single
Double
Twin bed room
Family room
Interconnected rooms
Adjoining rooms
Studio
Room for persons with disabilities
Queen’s bed, king’s bed, grand lit room
Suite
Apartment
Types of guest rooms
Studio – could be used for business meetings
Standard (single/double)
Superior (single/double)
Deluxe (single/double)
Park view (Town View) – Sea View (Mountain
View)
smoking – non smoking
Suites/ Apartments
junior suite
corner
executive suite
bridal suite
presidential apartment
Executive floors
 Types of beds
Size in Inches Size in Centemter
Bed Type
( Width X Length ) ( Width X Length )

Crib/Baby cot 28 X 52 71.12 X 132.08

Rollaway / Extra bed 39 X 75 99.06 X 190.5

Modern Cot 30 X 74 76 X 188

Single/Twin Bed 39 X 76 99.06 X 193.04

Standard Double 54 X 76 137.16 X 193.04

Queen Bed 60 X 80 152.4 X 203.2

Olympic Queen 66 X 80 168 X 203

King Bed 78 X 80 198.12 X 203.2

Super King 76 X 80 193 × 203

Grand King 80 X 98 203 X 249

Types of beds
 Room rates
The price at which a hotel sell its rooms
Rack rate The standard rate for the room with no meals,
discounts or reductions
Corporate rate The standard rate charged for executive personnel
from businesses and industrial corporations who are
regular guests

Airline rate The rate negotiated between the individual airline

and the hotel, based on volume of business the hotel
gets from the airline

Children's rate Each hotel has an agreed limit for the child up to
which this rate applies

Flat/group rate Rate for group, agreed by a hotel ad group in advance

Tour operator rate The rate is negotiated previously with the TO
 Pricing options
Rate (UK) Rate (US) Rate Explanation
(France)
Room only European OB The rate quoted is for the
plan room only (per room or
per person)
Room and Continental BB This rate includes
breakfast plan breakfast and
accommodation
Half board Modified Demi – HB Rate includes room,
American pension breakfast and one meal
plan usually dinner
Full board American En FB All meals are included
plan pension with the accommodation.
 Hotel virtual tour

How a mega hotel operates -

https://www.youtube.com/watch?v=PFpjhgtv66g
 Current Issues Confronting
Hoteliers: Operating Issues
Labour Shortages

Managers should implement procedures to a) reduce turnover levels, b)

increase productivity levels, and
c) recruit from nontraditional employee labor markets.

Cost Containment

Hoteliers should examine ways to reduce costs without impacting

quality.
An excessive emphasis on cutting service or product quality will
ultimately result in reduced hotel revenue.

Increased Competition

Problem of hotel community being overbuilt.

 Current Issues Confronting
Hoteliers: Marketing Issues
Increased Market Segmentation
Efforts to focus on a highly defined, smaller group of travelers.

Brands Overlap
The more the number of brands increase, the harder consumers find it
to differentiate among them.

Increased Sophistication of Consumers

Results in a more competitive selling environment for hoteliers (e.g.,
online room booking).

Increased Number of Amenities

Various amenities (e.g., business centers) increase costs for hotel
owners yet sometimes appeal to only a small segment of the hotel’s
market.
 Current Issues Confronting
Hoteliers: Technological Issues
Recent technological innovations include:

Interactive Reservation Systems

– Allow potential guests to make reservations at preferred
room rates in reduced time

Guest Room Innovations

– Two (or more) telephone lines enabling Internet access,
interactive menu ordering for room service, electronic games,
and guest room checkout

Data Mining Technology

– Analyzing guest- (and other) related data to make better
marketing decisions

Yield Management
– Matching guest demand with room rates
 Current Issues Confronting
Hoteliers: Economic Issues
“As goes the economy, so goes the lodging industry”

Impact of globalization on the lodging industry

Lodging industry is an integral part of the tourism industry.

– It is affected by the extent to which travelers, both within
the country and worldwide, travel.

Economies of the world, the country, the state, and the community have a
significant influence on the financial success of a lodging organization and the
individual properties that comprise it. & Maintenance
Facility Engineering
 Newest Trends in the
Hospitality Industry
1. The Invasion of Business Analytics
Analytics are more pervasive than we ever imagined. Utilize the power of good data analysis and
you’ll be able to tell just which ads, websites, hotel features and rooms are fetching you the
maximum profits. Employing analytics in your marketing campaigns, for instance, gives you a clear
picture of what does and what does not work towards attracting potential customers. Therefore,
you can streamline your investments based on the knowledge collected through data analysis.
2. Rise in Large Scale Consolidations
The headlines in 2016 will be dominated by news of acquisitions in the hospitality industry. Experts
opine that the acquisitions of Orbitz by Expedia and of Starwood by Marriott were only the
beginnings of a trend that is here to stay. When the economy is in a mature stage, such as it is now,
the trend of consolidation walks in almost unexceptionably.
3. Bigger Investments in Renovations
When the inflow of money of not restricted, a smart business person takes the opportunity to
invest in upgrades and improvements. This year of flourishing hotel business will offer just the same
opportunity for investment in renovations. Those who renovate now, shall certainly fare better than
others when business gets slower in the years to come. And the implementation needs to be quick,
as 2017, the year just after the coming one, may witness a reversal in trends for the industry.
 Newest Trends in the
Hospitality Industry
4. Marketing Efforts Inclining Fiercely Towards Digital
Digital marketing and more specifically, mobile video-based marketing will reign supreme in 2016. As the
average consumer begins to feed more and more on the information made available to her on the mobile
phone in the form of smart and engaging videos, hoteliers will have to gear up to strategize towards creating
videos that are easy to share, interesting and communicative.
5. No Substitute to Marvelous Customer Service
Each customer has the means to make or mar your reputation at their fingertips. Posting reviews is more
quick and easy now than ever before. However sophisticated your digital machinery is, a lapse in hospitality
may cost your dearly. Great customer service on the other hand will help you win more and more customers
through word of mouth publicity on digital platforms. So going modern while retaining the same old values
of warmth and thoughtfulness towards guests is the way to go for making the most of the golden year 2016.
6. The Age of Reaching Out through Online Travel Agencies
Online Travel Agencies, or OTAs, have a powerful reach. Innumerable people invariably log on to travel
websites for finding the best deals on air travel and lodgings. Therefore, arriving at good deals with OTAs can
get you a significant amount of traffic. However, these make for one expensive channel and no one would
advise you to rely completely on it. Your focus should still be on getting direct customers on to your website.
A smart balance between OTAs and direct traffic will help you fetch an optimum return on investment.
 Newest Trends in the
Hospitality Industry
7. Personal Engagement on Social Media and Apps
It helps significantly to connect with your intrinsically technilicious young customers. A social
media platform or an app for your hotel where the guests can not only learn about your brand
identity but can also get live information on their booking statuses etc will be an excellent way
to stay connected with clients. It will also help you know about your own shortcomings so that
you can work towards creating an even better experience for people staying at your property.
8. Taking Cues from Popular Booking Engines
Hotel booking websites offer powerful insight into what works in favour of enhancing your
hotel’s ratings. Certain facilities, like free Wi-Fi and digital check-ins get brownie points.
Booking channels are a good source of getting information on what more you need to do in
order to enhance your rankings among hotels of the same category.
9. Focus on Professional Revenue Management
Finance software especially suited for the hotel industry will find an even bigger set of patrons
as the industry gets increasingly professional and modernized. Besides working on improving
services, getting excellent technical support and training front-end staff, expending time and
resources on organizing revenue management should be on your priority list.
 Literature
1.Hayes, D.K. & Ninemeier, J. D. (2005) Hotel Operations Management. Pearson Prentice
Hall
2.Jones, P and Lockwood, A. (2002) Management of Hotel Operations. London:
Continuum.
3.Jones, T.J. (2007) Professional Management of Housekeeping Operations, 5 th edition,
John Wiley & Sons
4.Bardi, J. (2007) Hotel Front Office Management. Hoboken, NJ: John Wiley & Sons
5.Kulsuvan, S. (2003) Managing Employee Attitudes and Behaviors in the Tourism and
Hospitality Industry, Nova Science Publishers Inc, USA
6.Mullins, L. J. (2001) Hospitality Management and Organizational Behaviour, 4th Edition,
Chapter 9, Pearson Education Ltd, UK
7.Walker, J. and Walker, J.T. (2012) Exploring the Hospitality Industry, 2 nd edition, Prentice
Hall
8.Dimitrova, M. (2013) Hotel Operations Management. Course Materials. Varna University
of Management.
9.Erbakanova, I. (2014) Hotel Operations Management. Course Materials. Varna
University of Management.