Lesson 2 - Lesson 2 1 The definition of management contract...

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Lesson 2 1. The definition of management contract from our book is “a written agreement between an owner and an operator of a hotel… by which the owner employs the operator as an agent to assume full responsibility for operation and managing the property.” Management contracts are an advantage to because the owners typically have no desire in running the company and can leave that up to the management companies who have the expertise in the field of operating a hotel. It’s an advantage because it works out in the benefit of everyone in the partnership. Recently, contracts have called for more equity commitment from the management company and managers have increased responsibility to owners. Management contracts were the reason for the hotel’s industry boom and still continue to further the hotel industry today. Franchise is a concept in which a company uses someone else’s money to further their business that they could do with their own funding. It is an advantage to both the company (the franchisor) and the financial backer to the company (the franchisee). The franchisor or franchise company gets increased market share and recognition and up-front fees. The franchisee gets a set of plans from which to build, national advertising, listing in the franchisor’s directory, and low-fee percentage charged by credit card companies. It works out to everyone’s advantage with a few downfalls. Today, franchising continues to allow expansion in the hotel industry in America along with the rest of the world. 2. Trends in globalization impact the hotel industry because it influences the amount to which people travel both within the country and around the world. A number of American and Canadian chain resorts and hotels have developed and are continuing to develop hotels in other countries around the world. International companies are investing in our countries industry too. Therefore, it is not only impacts the economy of our nation but also the economies of other countries. To compete, each hotel property must pay closer attention to the trends of globalization. The industry must reflect the requirements of the global village in many areas of its operations (food, services, amenities and training for staff.)
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3. Resorts are often thought of as a pleasure experience, a luxury;
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Lesson 2 - Lesson 2 1 The definition of management contract...

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