Chapter 3. Accommodation
3.5 Conclusion
The accommodation sector, and the hotel sector in particular, encompasses multiple business models and employs hundreds of thousands of Canadians. A smaller, but important growing segment is that of camping and RV accommodators.
As broader societal trends continue and morph, they will continue to impact the accommodations marketplace and consumer. Owners and operators must stay abreast of these trends, continually altering their business models and services to remain relevant and competitive.
Now that we have a better sense of the accommodation sector, let’s visit the other half of the hospitality industry: food and beverage services. Chapter 4 explores this in more detail.
Key Terms
- Average daily rate (ADR): average guest room income per occupied room in a given time period
- Canadian Camping and RV Council (CCRVC) represents the interests of private campground owners across Canada for the betterment and support of the Camping and RV Industry.
- Competitive set: a marketing term used to identify a group of hotels that include all competitors that a hotel’s guests are likely to consider as an alternative (minimum of three)
- Costs per occupied room (CPOR): all the costs associated with making a room ready for a guest (linens, cleaning costs, guest amenities)
- Fractional ownership: a financing model that developers use to finance hotel builds by selling units in one-eighth to one-quarter shares
- Franchise: enables individuals or investment companies to build or purchase a hotel and then buy or lease a brand name under which to operate; also can include reservation systems and marketing tools
- Franchisee: an individual or company buying or leasing a franchise
- Franchisor: a company that sells franchises
- Hotel Association of Canada (HAC): the national trade organization advocating on behalf of over 8,500 hotels
- Hotel type: a classification determined primarily by the size and location of the building structure, and then by the function, target markets, service level, other amenities, and industry standards
- Motel: a term popular in the last century, combining the words “motor hotel”; typically designed to provide ample parking and easy access to rooms from the parking lot
- Occupancy: the percentage of all guest rooms in the hotel that are occupied at a given time
- Revenue per available room (RevPAR): a calculation that combines both occupancy and ADR in one metric
- Sharing economy: an internet-based economic system in which consumers share their resources, typically with people they don’t know, and typically in exchange for money
- SMERF: an acronym for the social, military, educational, religious, and fraternal segment of the group travel market
Exercises
- On a piece of paper, list as many types of accommodation classifications (e.g., by size) as you can think of. Name at least five. Provide examples of each.
- When researching a franchisor, the cost of the franchise must be carefully considered. What other factors would you consider to determine the value of a franchise fee?
- How should lower-end hotels and hotels that do not cater to business travellers respond to increased competition from rentals enabled by firms like Airbnb?
- A hotel earns $3,000 on 112 rooms. What is its ADR?
- That same hotel has an occupancy of 75%. What is its RevPAR?
- How many independent campgrounds are there across Canada?
- Airbnb enables hosts to rate their guests after a stay. Consider some other types of accommodation and list the pros and cons of rating guests.
- Draw an organizational chart for a 60-room boutique hotel, listing all the staff required to run the operation. Put the most influential people (e.g., the general manager) at the top and work your way down. How would you structure this differently from a larger full-service hotel? What would you keep the same?
- Read Condé Nast Best Hotels and Resorts in the US and Canada for 2020. Now find two other “best of” lists for Canada, or global accommodations. What do the winners have in common? List at least three things. Now try to find at least two differences.
Case Study: Hotel for Dogs – Philanthropy and Media Coverage
In 2014, the media was taken by storm with a story about a hotel in North Carolina that combined philanthropy with their business model. The property expanded on the trend of allowing dogs in hotels by fostering rescues from a nearby shelter and allowing guests to adopt them. Guests appreciated the warm interactions with the animals and several dogs were adopted as a result (Manning, 2014).Not only did the property provide a valuable service and enhance the guest experience, but the story was repeated across multiple media outlets, creating publicity for the hotel.
This is an example of a current trend: allowing pets in hotels. Now choose from one of the following trends, and research it to answer the questions that follow:
- Carbon offset programs
- Personalization
- Reputation management
- Digital concierge
- Smart hotels
- Healthy and organic foods
- Online experiences
- Frictionless touch points
- Sharing economy
- Green certified
- Augmented reality
- Why do you think this trend has emerged? What market is it helping to serve?
- Find an example of a hotel that has responded to your chosen trend and explain how the trend has informed or changed the hotel’s business strategy or practice.
- Are there any trends that are not listed above that you think should be added? Try to name at least two. Why are these important accommodation trends today?
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