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The business of hotels 2000[h ingram, s medlik](dadich)
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The Business of Hotels
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By the same authors
S. Medlik
Britain – Workshop or Service Centre to the World?
The British Hotel and Catering Industry
Dictionary of Travel, Tourism and Hospitality
Europeans on Holiday
Higher Education and Research in Tourism in Western Europe
Historical Development of Tourism (with A.J. Burkart)
Holiday Surveys Examined
The Management of Tourism (with A.J. Burkart eds)
Managing Tourism (ed.)
A Manual of Hotel Reception (with J.R.S. Beavis)
Paying Guests
Profile of the Hotel and Catering Industry (with D.W. Airey)
Tourism and Productivity
Tourism Employment in Wales
Tourism: Past, Present and Future (with A.J. Burkart)
Trends in Tourism: World Experience and England’s Prospects
Trends in World Tourism
Understanding Tourism
Your Manpower (with J. Denton)
H. Ingram
Developing Hospitality Properties and Facilities (with J. Ransley eds)
Operational Techniques for the Hospitality Industry (with N. Johns and
D. Lee-Ross)
Strategic Management (with R.Teare)
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The Business of Hotels
Fourth Edition
S. Medlik and H. Ingram
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41111 OXFORD AUCKLAND BOSTON JOHANNESBURG MELBOURNE NEW DELHI
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Butterworth-Heinemann
Linacre House, Jordan Hill, Oxford OX2 8DP
225 Wildwood Avenue, Woburn, MA 01801-2041
A division of Reed Educational and Professional Publishing Ltd
First published 1980
Reprinted 1985, 1986, 1987 (twice)
Second edition 1989
Reprinted 1990, 1991, 1993
Third edition 1994
Reprinted 1995, 1996, 1997, 1998, 1999, 2000
Fourth edition 2000
© S. Medlik 1980, 1989, 1994
© S. Medlik and H. Ingram 2000
All rights reserved. No part of this publication may be reproduced in
any material form (including photocopying or storing in any medium by
electronic means and whether or not transiently or incidentally to some
other use of this publication) without the written permission of the
copyright holder except in accordance with the provisions of the
Copyright, Designs and Patents Act 1988 or under the terms of a licence
issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court
Road, London, England W1P 0LP. Applications for the copyright
holder’s written permission to reproduce any part of this publication
should be addressed to the publishers
British Library Cataloguing in Publication Data
Medlik, S. (Slavoj), 1928–
The business of hotels. – 4th ed.
1. Hotel management
I. Title II. Ingram, Hadyn
647.9´4´068
ISBN 0 7506 4115 0
Printed and bound in Great Britain
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Contents
List of Tables ix
List of Figures xi
Preface to the First Edition xiii
Preface to the Fourth Edition xvii
PART I THE CONCEPTS OF HOTELS AND
HOSPITALITY 1
1 Staying Away from Home 3
The Importance of Hotels – Travel and Hotels – Two Centuries of
Hotelkeeping – Hotels in the Total Accommodation Market – Hotel
Location – Types of Hotels – A Review So Far
2 Hotel Products and Markets 13
The Hotel as a Total Market Concept – Hotel Facilities and Services
as Products – Hotel Accommodation Markets – Hotel Catering Markets
– Sources of Hotel Demand – Hotel Market Areas – Hotel Market
Segmentation – Buying and Paying for Hotel Services – Hotel
Marketing Orientation
3 Hotel Policies, Philosophies and Strategies 25
Objectives and Policies – General and Sectional Policies – Policy
Formulation, Communication and Review – Hotel Philosophies – Hotel
Plans and Strategies – The Framework of Hotel Management
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PART II THE STRUCTURE OF THE HOTEL
INDUSTRY 37
4 The Small Hotel 39
Products and Markets – Ownership and Finance – Organization and
Staffing – Accounting and Control – The Future of the Small Hotel –
Consortia
5 Hotel Groups 50
Hotel Group Operations – Advantages of Groups – Problems of Groups
– Scope for Centralization – A Concentrated Hotel Group: an Illustration
– A Dispersed Hotel Group: an Illustration
6 International Hotel Operations 63
Products – Markets – Ownership and Finance – Organization and
General Approach
PART III THE HOTEL AND ITS FUNCTIONS: GUEST
SERVICES 77
7 Rooms and Beds 79
Room Sales – Mail and Other Guest Services – Uniformed Services
– Hotel Housekeeping – Organization and Staffing – Accounting and
Control
8 Food and Drink 89
The Food Cycle – The Beverage Cycle – Hotel Restaurants – Hotel
Bars – Room Service – Functions – Food and Beverage Support
Services – Organization and Staffing – Accounting and Control
9 Miscellaneous Guest Services 102
Guest Telephones – Guest Laundry – Rentals and Concessions – Other
Sources of Income – Accounting and Control
PART IV HOTEL SUPPORT SERVICES 111
10 Marketing 113
From Production to Sales to Marketing – The Marketing Concept –
Special Features of Hotel Marketing – The Marketing Cycle – Marketing
Resources – Yield and Quality Management – Hotels in the Total Tourist
Product
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vi
Contents
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11 Property Ownership and Management 127
Property Ownership – Property Operation and Maintenance – Facilities
Management – Energy – Hotels and the Environment
12 Finance and Accounts 135
The Hotel Balance Sheet – Balance Sheet Ratios and Analysis – The
Hotel Profit and Loss Statement – Profit and Loss Ratios and Analysis
– Hotel Operating Profit – Balance Sheet and Profit and Loss
Relationships
PART V PEOPLE AND PROCEDURES 147
13 Hotel Organization 149
Rooms – Food and Beverages – Miscellaneous Guest Services – Hotel
Support Services – The Management Structure – Organization Structure
of a Large Hotel: an Illustration – Accounting and Control – Information
Technology in Hotels
14 Hotel Staffing 163
Determinants of Hotel Staffing – Hotel Products and Staffing –
Organization of the Human Resource Function – Organization of
Training – Functions of the Training Division
15 Performance in Hotels 171
Criteria of Performance – Financial Perspective – Internal Business
Perspective – Innovation and Learning Perspective – Customer
Perspective – Some Ways to Higher Productivity
APPENDICES 183
A Travel and Hotels in the United Kingdom in the 1990s 185
B Travel and Hotels in America in the 1990s 187
C Global Capacity of Hotels and Similar Establishments, 1995 189
D Hotel Occupancies in Selected Countries 1994, 1995, 1996 191
E Leading Hotel Groups World-wide 192
F Leading Hotel Groups in Europe 194
G Leading Hotel Consortia 196
H Horwath International Reports 197
I Select List of Hotel and Related Organizations 199
J Select List of Hotel Periodicals 202
K Suggested Further Reading 205
Select Bibliography 209
Index 214
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Contents
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Tables
1 Accommodation profile of selected European
countries, 1995 8
2 Social grade definitions 21
3 Leading hotel management companies 52
4 Leading hotel franchising companies 53
5 Composition of hotel revenue in main regions 66
6 Composition of hotel revenue in selected European
countries 67
7 Composition of hotel markets in main regions 67
8 Advance reservations in hotels in main regions 68
9 Method of payment for hotel services in main regions 68
10 Charge/credit card hotel sales in main regions 69
11 Room sales as a ratio of hotel revenue in main regions 80
12 Rooms payroll and related expenses ratios to sales in
Europe and Africa 86
13 Room sales, expenses and profit ratios in selected
European countries 86
14 Room occupancies and average rates in selected European
countries 87
15 Double occupancies in selected cities and regions 88
16 Food and beverage sales as a ratio of hotel revenue in
main regions 90
17 Food and beverage payroll and related expenses ratios
to sales in Europe and Africa 99
18 Food and beverage sales, expenses and profit ratios in
selected European countries 100
19 Miscellaneous sales and income as a ratio of hotel
revenue in selected regions 104
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20 Telecommunications income, expenses and profit ratios in
hotels in selected European countries 109
21 Guest services offered by hotels in main regions 118
22 Use of promotional tools by hotels in main regions 120
23 Marketing expenses as a ratio of hotel sales in main
regions 121
24 Marketing expenses as a ratio of hotel sales in selected
European countries 122
25 Room occupancies, discounts and yield in selected cities 124
26 Property operation and maintenance costs as a ratio of
hotel sales in main regions 130
27 Property operation and maintenance expenses as a ratio
of hotel sales in selected European countries 130
28 Energy costs as a ratio of hotel sales in selected areas of
Europe 132
29 Energy costs as a ratio of hotel sales in selected countries
and regions 132
30 Balance sheet as at 31 December 0000 136
31 Profit and loss summary operating statement for the year to
31 December 0000 139
32 Profit and loss summary operating statement for the year to
31 December 0000 showing profit levels 141
33 Ratios of costs, expenses and profit margins to departmental
sales and to hotel revenue 142
34 Hotel operating profit as a ratio of hotel sales in main
regions 143
35 Hotel operating profit as a ratio of hotel sales in selected
countries 144
36 Administrative and general expenses as a ratio of hotel
sales in main regions 160
37 Administrative and general expenses as a ratio of hotel
sales in selected European countries 161
38 Schedule of human resource responsibilities in a group
of hotels 167
39 Schedule of training responsibilities in a group of hotels 169
40 Employees per room in hotels in selected European cities 175
41 Employees per room in hotels in selected African and
Middle Eastern cities 175
42 Sales and payroll in hotels in main regions 176
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Tables
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Figures
1 Three phases of travel 5
2 The hotel as a market concept 14
3 Principal parties in the hotel business 27
4 Organization chart of a small hotel 44
5 Leading European hotel groups by country of head office 51
6 Organization chart of a concentrated hotel group 60
7 Organization chart of a dispersed hotel group 61
8 World’s leading hotel groups by extent of international
coverage 64
9 Organization chart of Marriott International Lodging, June
1999 73
10 Organization chart of Le Méridien Hotels & Resorts, June 1999 74
11 The food cycle 91
12 Food and beverage ratios in European hotels, 1997 100
13 Miscellaneous sales and income in hotels, 1997 103
14 The marketing cycle 120
15 Marketing expenses in hotels, 1997 122
16 Property operation and maintenance costs in hotels, 1997 131
17 Hotel operating profit, 1997 144
18 Organization chart of a large hotel 159
19 Organization of the human resource function of a group
of hotels 166
20 Organization of the training function in a group of hotels 168
21 The hotel as a systems model 172
22 Kaplan and Norton’s (1992) balanced scorecard 173
23 Forte Hotels comment slip, 1999 178
24 Extract from a guest satisfaction survey from Marriott Hotels,
1999 179
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Preface to the First Edition
In business and management literature some authors have approached their
subject through the study of work, notably Frederick Winslow Taylor and the
Gilbreths. Others, for example, Henri Fayol and Peter Drucker, did so through
the analysis of managerial experience. The third and most recent influence has
been writers such as Frederick Herzberg and Douglas McGregor who brought
knowledge to bear from behavioural sciences on management thought. There
are few examples of these three schools in the literature of hotel management.
Hotels have been seen by most as a rather specialized type of business.
They attracted many successful entrepreneurs and managers, but both have
been too busy making a success of their hotels to write about them. The
academics and consultants concerned with hotels rarely took on the task of
explaining the hotel business to a wider public other than lecturing about it,
writing articles in the press or reports for their clients.
The large and growing volume of books on hotels appears to have taken
several distinct directions. There are books devoted to the skills and techniques
of particular hotel activities such as hotel reception, housekeeping, food and drink
service and especially food preparation. Others are concerned with accounting,
marketing, personnel management, maintenance and other specialist functions of
the hotel. There are also several economic and historical studies of the industry.
Most of these and the few dealing more or less comprehensively with the hotel as
a whole almost invariably embrace catering activities outside hotels, rather than
concentrating on hotels. Indeed few books on hotel management have been
published anywhere since Lucius Boomer’s classic Hotel Management* first
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*Boomer, L. (1925) Hotel Management – Principles and Practice, Harper & Brothers,
New York and London. In this author’s view subsequent revised editions in 1931 and
1938 did not match what the President of the Hotel Waldorf Astoria Corporation, New
York, wrote himself for the first edition.
2709 HOTELS 00 prelims C/PT/ck 7/4/00 10:00 am Page xiii
appeared more than fifty years ago. In the same period only limited progress has
been made in the translation of business and management theory from manufacturing to service industries generally and to hotels in particular. This is particularly striking in view of the growth of hotels and of education and training for
hotel management in the intervening decades.
An hotel is a business with its own products and markets, technology and
methods, which does not lend itself to easy analysis. It offers several distinct
products in varying combinations for sale to many markets. It combines
production and sale under one roof. It is in close and intimate contact with
its customers who consume hotel products at the point of sale. It has a high
capital to sales ratio, yet it tends to be labour-intensive. Therefore, in many
respects a meaningful treatment of hotel activity calls for recognition and
explanation of these and other realities, rather than an adaptation of general
theories to the hotel business.
This book has no ambitions to replace general business and management
reading for the hotelier nor to include between two covers all that enters into
the business of hotelkeeping. It is an attempt to fill a gap felt for some time
by students, teachers and practitioners, for a book describing the hotel as a
business. In this the approach has been to provide a simple and reasonably
comprehensive outline rather than a detailed treatment of some or all aspects
of the hotel business in depth. Suggestions for further reading on particular
aspects are made for each of the fifteen chapters of the book; material used
in writing it and other relevant literature is listed in the bibliography.
The supporting reading suggested for use as an extension of this book and
the bibliography are confined to one hundred sources, in the main to those
available as separate publications, and, with some exceptions, published in
Britain. Much more reading material related to each chapter of the book is
available in the form of articles in journals, papers presented at conferences,
and in what has been published otherwise in one form or another both in
Britain and elsewhere. It is suggested that teachers are in the best position
to produce their own collateral reading lists with the desired focus and
emphasis for their own courses and students. Likewise, those in other countries can decide whether to draw on the suggested further reading and
bibliography included in this book, or to substitute material known to them,
or perhaps adopt a combination of the two approaches.
For the student and teacher of hotel management the whole book and each
of its chapters is, therefore, intended to provide a framework, within which
the hotel business may be examined in such depth as may be required by
particular courses, with or without the use of other supporting material. For
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xiv
Preface to the First Edition
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