Hotel Industry/Marriott Analysis Analysis of the Hotel Industry Industry Profile The need for lodging for individuals after traveling a great distance from home has been around since mankind began living inside of dwellings. To serve this need, hotels, or as they were more commonly referred to, inns, were created as a means to accommodate these travelers. In fact, the first recorded inn in America opened in 1607. Since their introduction they have grown in complexity, amenities, price, and number, however, their purpose has remained to provide paid lodging typically on a short-term basis.
Despite a common purpose, it is said that “hotels are as different as the many family and business travelers they accommodate. ” Today there are several categories of hotels, each of which serves a slightly unique purpose. They include upscale luxury, full service, select service, limited service, motel, extended stay, timeshare, casino hotel, and destination club. Depending on which category a hotel belongs to, it may provide a refrigerator, oven, stove, microwave, mini-bar, coffee maker, bathrobes, and Jacuzzi bathtubs, along with access to a swimming pool, fitness center, business center, and conference facility.
Nevertheless, despite its category, it is customary for hotels in each of the categories to provide guests with a bed, bathroom, television, telephone, and alarm clock. The hotel Industry is a sub industry within the travel and hospitality industry. According to the bureau of labor statistics, there were 64,300 establishments that provided accommodations to suit travelers’ different needs and budgets as of 2008. Over the last few decades, a few large national hotel chains have dominated the hotel industry; many of which have hotels that fall in several of the categories of hotels in hopes of appeasing different groups of travelers.
This has been supported by guests who are loyal to particular brands due to their dependability, known quality, and familiarity. These “brand named” hotels are at times owned by the national corporation but most are franchised to independent owners. The trend, however, is moving towards companies managing the chain and franchising the individual hotels. In regards to size, the hotel industry is fairly large. In the U. S. , the hotel industry ended 2010 with a $127. 7 billion in total revenue, which was a . 4 percent increase over 2009’s earnings. This increase in total revenue is attributed to operating expenses reduction practices that began in 2009 as well as an increase in demand due to an improvement in the economy. This industry employed 1. 9 million employees in 2008, with the majority of the employment occurring in cities and resort areas. Also, about 74% of the companies in this industry employed less than 20 workers, whereas most of the employees belong to larger hotels.
In addition, it is important to note that due to the simplicity of many of the jobs in this industry-which include front desk clerks, security guards, cooks, janitors, maids and housekeeping staffs, and grounds maintenance workers-19 percent of the workers in this industry are younger than 25 years old. Though this industry has a multitude of companies, the market leader is Marriott International Inc. , which has 3,150 locations in the U. S. and within 68 other countries. It is headquartered in Washington D. C. nd includes several popular brands of hotels such as the Courtyard, Fairfield, Spring Hill, and Residence Inn. Another popular hotel chain is the Global Hyatt Corporation headquartered in Chicago. Hyatt has over 200 branded hotels and resorts and offers accommodations in 43 countries. Its brands include, the Hyatt, Grand Hyatt, Hyatt Regency, and Park Hyatt. Starwood Hotels and Resorts Worldwide is yet another major player in this industry. Based in White Plains, New York, this hotel is the parent of the Westin, Sheraton, Aloft, and several other brands.
One of the more renowned brands is the Hilton Hotels Corporation of Beverly Hills, California. Its family of hotels includes the Hilton, Doubletree, Embassy Suites, and Hampton Inn. Lastly, one of the world’s largest chains is the Choice Hotels International, Inc. Its 4,200 independently owned and operated locations include the Comfort Inn, Comfort Suites, Quality Inn, and Econo Lodge. As is true in nearly every industry due to the recent economic downfall, the hospitality industry is in the midst of making changes that will increase efficiency in hopes of cutting costs.
One technological trend that hotels are benefitting, as well as being hurt by, is the increasing popularity and use of the internet, in particular sites like hotels. com, orbitz. com, and priceline. com. The hotels are achieving a higher level of efficiency due to the booking being done by third party vendors without having to occupy their staff. It has decreased the number of phone calls that hotel front desk staffs received drastically. Furthermore, customers tend to believe that the process is easier and more satisfying since they are in control. However, this trend has also brought about a drop in hotel prices.
Due to the ease of comparison made possible by these sites, hotels are finding themselves competing very heavily on prices. Before the emergence of these sites customers’ price comparison of hotels was very limited. However, today, customers can simply press the “Sort by: Price (Lowest to Highest)” button and instantly compare hundreds of hotels in an area. Therefore, hotels are trying to achieve efficiencies in other ways. For instance, in the newer hotels and those currently under construction 75% of the rooms are expected to have showers only, while 25% of the rooms will have the bath or shower/bath combination.
This is a result of the observation that most guests do not utilize the tubs, which are often more expensive and require more space than showers. As a result, baths may soon become an option in many hotels, as are smoking or non-smoking and king size or two queen size beds. Yet another way hotels are attempting to improve efficiency is by ceasing to use the personal size bottles of lotion, shampoo, conditioner, etc. , and instead, insert pumps in the rooms which are available for use if needed, but that will prevent guests from throwing away unused bottles or taking bottles home for later use.
Lastly, hotels are looking to re-image their lobbies as destination places and social hubs. In other words, many are including restaurants, bars, lounges, and other features so that non-hotel guests have a reason to visit the hotel and spend money. It not only creates a new revenue stream, but it also stimulates brand awareness, brand loyalty, and word-of-mouth advertising. Aloft hotels have been very successful in doing this lately. Information systems play a critical role in the hotel industry. It is vital that the systems are accurate, and secure.
These systems are needed to input reservation information, adjust rates and ensure maximum room occupancy, access availability based on guest’s needs and preferences, issue confirmation emails, capture and store guest’s personal and billing information, code electronic key cards, maintain and continually update waiting lists, provide flexible package offerings. Despite the extensive needs of this industry, there have emerged four systems that seem to be capable of addressing the needs of this industry. One of the systems is called the LodgingTouch Property Management System, his system makes life easier for the front desk by integrating their daily needs, with a record of guests’ history, group package offerings, accounts receivable, and coordinating information with travel agencies. Furthermore, it allows staff to access guest information based on a number of fields. Another system, the Paragon AS/400 Front Office System, offers many of the same services as did the first system, however, it also provides assistance in aggressive pricing, marketing, forecasting, and implementing reporting controls.
This system is capable of managing all of the needs of a hospital, while contributing to customer service, efficient internal operations, and control over financial data integrity. CLS Software Property Management System is yet another system that addresses many of the needs of hotel chains. The system claims to be able to provide a comprehensive integrated modular system to hotels of any size. This company holds as a strength that its product is very easy to use, and that the company has been around for 25 years and offers 24 hour/7days a week technical support.
Lastly, Hotel Information Systems’ epitome® Project Management System for UNIX is simply an additional system that can be used as a complement since it is highly adaptable to the hotel’s existing IT system. Firm Profile As mentioned in the Industry Profile, Marriott International Inc. is one of the industry’s largest companies. Marriott has 3,150 locations in the U. S. and within 68 other countries. It is based out of Washington D. C. and includes several popular brands such as the Courtyard, Fairfield, Spring Hill, and Residence Inn.
Its operations are segmented into five segments: full-service lodging (65%), select-service lodging (11%), extended-stay lodging (5%), timeshare (15%), and synthetic fuel (4%). With the exception of the synthetic fuel, which is used primarily as a tax shelter, it is evident that Marriott has adopted the common approach of having a presence in several of the hotel sub-sectors. In 2008, the company achieved $13. 3 billion in revenue, with a net income of $696 million. In that same year, it employed 151,000 people.
The company utilizes a hierarchical structure with J. W. “Bill” Marriott, Jr. (Chairman and CEO), William J. Shaw (Vice Chairman), Arne M. Sorenson (President and COO), Bruce Hoffmeister (Global CIO), and Carl T. Berquist (Executive Vice President and CFO). In addition, Marriott is a company that strives to serve and improve the lives of its employees, guests, and the hotels surrounding community. The company’s culture is based on fairness and is centered on the guests. As for its publicity, Marriott has experienced both favorable and alarming headlines.
On the one hand, it has been ranked 48th among the top technology innovators in the U. S. by InformationWeek Magazine. In addition, Working Mother Magazine ranked it as one of the 2011 Working Mother 100 Best Companies. Also in 2011, Marriott announced that it would be collaborating with the International Tourism Partnership (ITP) and the World Travel & Tourism Council (WTTC) on a groundbreaking initiative to unite hotel industry efforts to calculate and communicate carbon impact. However, despite receiving several awards, Marriott has also been involved in some negative news.
On September 20, 2008, Islamabad Marriott Hotel bombing occurred in the Pakistani capital Islamabad, killing at least 54 people and injuring at least 266. On the 17th of July 2009, the JW Marriott and Ritz-Carlton Hotels in Jakarta, Indonesia, were hit by separate bombings five minutes apart. The result was the death of seven individuals and the injuring of more than 50 people in the blasts. IT plays a major role in Marriott International, and its effectiveness has become a key success factor for the company. In fact, the company is following the new industry trend of using social networks for stimulating brand awareness.
In June 2011, the company released a Facebook game in which players have to serve the role of a front desk clerk. This game has also been useful in recruiting, for it allows potential front desk employees to experience what their job will pertain and to decide whether they are comfortable with the workload. In addition, in an effort to improve efficiency, the company has embraced the use of virtualization software, which has helped the company reduce its server population by over one-third over the last few years. As a result, energy costs are down by more than 50%.
Furthermore, one of the larger projects that the company is undergoing is the creation of a second data center in a former Pennsylvania mine, 300 feet below ground. The mine maintains a 53 degrees Fahrenheit temperature, conducive to a data center that will allow the company to lower its power consumption due to the lack of need for various cooling units. In addition, in 2007 Marriott replaced 5,000 desktops with thin clients and replaced 38 public printers with more efficient Energy Star devices. The switch from PCs helped reduce power onsumption by 50%; by removing the less efficient printers, the company was able to reduce its carbon footprint by nearly 36 tons annually. Lastly, Marriott has introduced GoThere Virtual Meetings by Marriott, which is supported by AT&T and Cisco Telepresence. Marriott’s goal by doing so is to meet an emerging need of businessmen and women. By being the first hotel chain to offer such services Marriott is trying to confirm its position as the most innovative hotel chain, maintain a competitive edge, and create a new revenue stream for itself.
Its announcement of the GoThere Virtual Meetings is simply another way in which Marriott acknowledges the importance that technology plays in today’s world. Reference Page http://www. informationweek. com/news/6506964 http://www. bls. gov/oco/cg/cgs036. htm http://news. marriott. com/fact-sheet-global-business-trends-in-the-third-millennium-. html http://www. hsyndicate. org/news/4051618. html http://money. cnn. com/magazines/fortune/fortune500/2011/industries/176/index. html Htttp://today. msnbc. msn. om/id/44652172/ns/today-travel/t/trends-changing-hotel-industry/ http://www. bls. gov/iag/tgs/iag721. htm http://www. findouter. com/NorthAmerica/USA/Travel-and-Tourism/Hotel-Chains http://www. irs. gov/businesses/article/0,,id=174498,00. html http://news. marriott. com/our-leadership. html http://www. computerworld. com/s/article/310623/Marriott_International_Inc. http://www. prnewswire. com/news-releases/marriott-announces-gothere-virtual-meetings-by-marriott-with-att-and-cisco-telepresence-rooms-in-new-york–washington-dc-area-hotels-go-live-82809882. html