Accomodation

Segmentation hospitality

hospitality (Primary company goal)Profit-orientated, main source of income, open to everybody, for longer

period

Pub (Schankwirtschaft) Restaurant (Speisewirtschaft)

Accomodation company (Hotel, Pension, B&B etc.)

Drinks are offered and are consumed on the

premises

Food is offered and consumed on the

premises

Guests are accomodated

hospitality (Secondary company goal)Hospitality part of a non-hospitality company, or non-profit hospitality company, offering services for social, political or religios purposes, not necessarily open for everybody

Railroad workers holiday home

Union home „Müttergenesungswerk“

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Segmentation Accomodation companiesHotellerie = Traditional Accomodation

companiesParahotellerie = Additional Accomodation companies

– Hotel (Individual, Chain)– Hotel Garni– Hotel pension– Pension– Road side hotel (Rasthof)– Rural hotel (Gasthof)– Motel– Motorway hotel– Wellness hotel– Aparthotel / Boardinghouse– Hospiz

– Appartement– Holiday resorts– Holiday flats / houses– Youth Hostels– Farm– Camping, Caravaning– Holiday camp– Homes of Associations

(Vereinsheime) – Guest houses– Recuperation institutions (Sanatorien)– Bed & Breakfast– Private rooms– Collective forms of accomodation like

hay hotels– Ski and hiking huts

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Definition Accomodation companies • In Germany: „Ein Hotel ist ein Beherbergungsbetrieb mit angeschlossenem

Verpflegungsbetrieb für Hausgäste und Passanten. Er zeichnet sich durch einen angemessenen Standard seines Angebotes und durch entsprechende Dienstleistungen aus.“ (DeHoGA und DTV)

• Necessary conditions:– At least nine guest beds – Majority of rooms with en suite bath and toilet– Reception existing

• Parahotellerie– Others form of accomodation (can be commercial or non-commercial)

• Commercial accomodation companies have to be– Profit-orientated, main source of income, open to everybody, for longer period

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Actors in the accomodation market • Structural forms in accomodation market

– Individual hotels– Chain hotels– Franchise hotels– Management hotels– Leased hotels– Cooperation hotels

• Cooperations – For instance Best Western, Ringhotel, Romantic-Hotel

• Reservation service companies– For instance Utell, HRS, hotel.com

• Marketing rings– For instance Summit Int., Preferred Hotels, Relais & Châteaux, Four Seasons,

Leading Hotels of the World

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Systematic view on company forms

Hotelunternehmungen

Individual hotels

Branded hotels

Hotel Cooperation

Chain hotels

Branch system

Franchise system

Conglomerate

One unit Several units

Legally and commercially independent hotel company

Horizontal cooperation of legally and commercially independent hotel companies

Unified company with several non-independent branch hotels

Vertical association of legally and commercially independent hotel companies

Legally independent hotel companies under unified leadership

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Forms of segmentation of hotels• Completeness of services offered

– Hotel, Hotel Garni, Full hotel

• Location– City, Resort etc.

• Connection to transport infrastructure– Motel, Airport hotel

• Quality– Star rated, other categories

• Duration of stay– Hours, days, weeks, seasons

• Legal form of company– Single company, Limited, etc.

• Size of company– Individual hotel, family hotel, chain hotel, major hotel

• Profit orientation– Profit-orientated, non-profit-orientated, communal, social institution, learning hotel, minor

part of company 7

Different types of accomodation• Class L – Luxury hotels

– Hotel, Congress hotel, All-Suite-Hotel– Accomodation, breakfast, food and beverages offered – International Standard, luxurious, modern– Greetings of guests in front of the house – High level of technical and personal services– Meeting point, modern communication equipment– Outside Germany often big shopping center included – Price high

• Class 1 – First Class Hotel – Convention hotel– Accomodation, breakfast, food and beverages offered – High Standard of comfort – Good level of technical and personal services– Price medium to high– Mostly large number of beds, chain hotels

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• Class 2 – Middle class hotel, Aparthotel– Accomodation, breakfast, food and beverages offered – Practical, solid level of basic services– Price medium

• Class 3 – Hotel Garni– Accomodation and breakfast, only some food and beverages only for guests– Little city hotels, not much staff, often family run– Price lower medium

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• Class 4 – Pensions, Hotel pensions– Accomodation and breakfast for longer stay guests, fixed menu food at specific

times – Simple, no special comfort, often close to spa institutions– Without special services– Prices dependent on length of stay

• Class 5 – Rural hotel „Gasthof“– Mainly restaurant, few beds mainly for restaurant guests– Simple, rural, no special comfort– Often family run with own butcher or fish farm – Price low, except Star-restaurant places

• Others – Motels, Resorts, Highway hotels, holiday homes etc.

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DeHoGa German Hotel Association

• DeHoGa Association = Deutscher Hotel- und Gaststättenverband • 17 Provincial associations (HoGa‘s)• 3 special associations

– IHA-Hotelverband Deutschland– UNIPAS-Union der Pächter von Autobahn-Service-Betrieben– VIC-Verband der Internationalen Caterer in Deutschland

• 4 special departments– Systemgastronomie– Gemeinschaftsgastronomie– Bahnhofsgastronomie– Diskotheken

• 80.000 members in Germany

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System of German hotel classification • Why Classification?

– Better sales, better product positioning – Reliable quantitative indicator for potential guests– Better categorization of services offered (not: quality of services)

• German hotel classification of DeHoGa– Since 1996 unified German system – Evaluation of objective, not subjective criteria– Enjoys legal brand protection

• Development of criteria– By sub-group hotels of DeHoGa

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• Categories– Five star categories

• Tourist * (Garni)• Standard * * (Garni)• Komfort * * * (Garni)• First Class * * * * (Garni)• Luxus * * * * * (Superior)

• Evaluation process – HoGa‘s on provincial level themselves or by other organisations like CoCs)– Regular random controls – Classification by document and representative sign

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The ten biggest hotel groups in the world (rooms, 2005)

Rooms Hotels

InterContinental Hotels Group 534.202 3.540

Cendant 520.860 6.396

Marriott International 478.000 2.600

Accor 463.427 3.973

Choice 403.806 4.977

Hilton Corporation 358.408 2.259

Best Western 309.236 4.114

Starwood 230.667 733

Carlson Hospitality Worldwide 147.093 890

Global Hyatt 111.474 356

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Hotel groups and their brands (examples)

Company Economy MidscaleUpscale / Luxury

No. of brands Marken

Accor Ibis

Formule 1

Etap

Red Roof Inn

Motel 6

Novotel

Mercure

Suite Hotel

Sofitel 9

Marriott Courtyard by Marriott

Ramada

Ritz Carlton

Renaissance

Marriott

5

Sol Melia Sol Inn Hotels

Sol Hotels

Melia Comfort

Sol Elite

Gran Melia

Melia Hoteles

6

Maritim Maritim 1

Best Western Best Western 1

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Contract forms • Rent

– User pays monthly or yearly rent to investor– Based on RoI of investor – Different levels of risk and profit sharing:- Fixed rent: Fixed amount (plus inflation index) regardless of results, long-term

contract- Fixed rent with reduction in first years, or main part fixed rent, minor part tied to

economic result- Turnover based rent with minimum guarantee- Risk and profit sharing rent, balance sheets accessible for investor

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Contract forms Franchise

• Franchise grantor provides for a fee brand and know-how to franchisee• Franchisee is independent company acting in own name but has to keep the agreed

standards of grantor

• Grantor gets RoI of brand and know-how development• Franchisee gets material and immaterial support of grantor, however is dependent on

policy of grantor while having the complete risk of his business• Franchisee pay Entrance fee, royalties, marketing fees

• Franchise most common form of contract in USA, in Europe only 25%• Different forms of franchise agreements in hotel business: real estate developed by

grantor or franchisee, franchise to existing hotel etc.• Closer connection compared to cooperation of independent hotels• Example: http://www.accorhotels.com/de/franchise/index.shtml

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