Lecture 3 - Lecture 3 US Lodging Industry Overview The...

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Lecture 3 US Lodging Industry Overview : The Cyclical Nature of the Hotel Business Where Are We in the Development Cycle? Fundamental Drivers: Demand and Supply Basic Structure of the Hotel Business Who’s Who in Brands?
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Mobil Stars: Lodging Star Definitions Do you know the defining characteristics for each of the service orientations?
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Lodging Star Definitions
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How Many Mobil Stars can each service orientation earn? High-End Full-Service Basic Full-Service Limited-Service Extended Stay Service orientations generally differentiate one brand from another.
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Bear Stearns “Corporate Structure” Lecture 4 Reading
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Know the defining characteristics for each of the service orientations High-End Full-Service Basic Full-Service Limited-Service Extended Stay Service orientations generally differentiate one brand from another. 4 or 5 Star
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Lodging Star Definitions
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Know the defining characteristics for each of the service orientations High-End Full-Service Basic Full-Service Limited-Service Extended Stay Service orientations generally differentiate one brand from another. 4 or 5 Star 2 or 3 Stars 1 - 2 Star
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The 2007 Mobil Five-Stars Awarded to… 5 Star – Mandarin Oriental NY, The Peninsula Beverly Hills, Four Seasons Chicago, Ritz Carlton San Francisco… The Tower Suites at Wynn (first Vegas hotel) 4 Star – Mandarin Oriental Miami, Four Seasons Las Vegas, Ritz-Carlton Half Moon Bay, Trump Intl Tower NY, Four Seasons Silicon Valley 3 Star – The Beverly Hilton The Millennium Hilton, MGM Grand, Crowne Plaza Times Square… what else? 2 Star – Holiday Inn Ithaca, CYD Times Square, Days Inn NYC 1 Star – Best Western Ithaca (only four properties rated in ITH) Hampton Inn Manhattan Chelsea, Holiday Inn Exp 5 th Ave
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Product Differentiation and Market Segmentation Service Orientation Segmentation Chain Scale Segmentation Market Share by Chain Scale Segment Customer Base and Clientele How do service orientations differentiate one brand from another?
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Merrill Lynch Lodging Primer Lecture 2 Reading
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Readings 1. Historical Development of the Lodging Industry —Yellow sheet questions and supplemental slides ---------------------------------------------------------------- 1. Westin Lifestyle Brand case Sternlicht and Marriott 2. Corporate Structure and Operating Leverage “There are essentially three major activities in the lodging industry: owning, managing and franchising.” .
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Merrill Lynch Lodging Primer 1. Size of the US lodging industry 1. A typical lodging cycle 2. Fundamental drivers: changes in room demand and supply 3. Industry overview and primary business models
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US Lodging Industry: The Numbers ~ 49,000 hotels 4.5 million rooms Revenues $133.4 billion GOP 34.3% GOP Profit $26.6 billion (~20% pre-tax income) FS GOP 34.4% Pre-Tax Inc. 16.1% LS GOP 55.4% Pre-Tax Inc. 32.8%
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1997-2006
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Total United States Estimated Revenues and Profits in Billions $ 1995 – 2004
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GOP Pre-Tax Income or Profits
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