Prepare for the Arrival of Chinese Tourists

Due to rapid economics growth in China, the average standard living has been improved dramatically. Traveling has become the new popular ways of leisure, which people previously couldn’t afford. It is critical to look at Chinese’ travel pattern and capture this market in time.

A study said that “China is poised to become the world’s second-largest tourism market in the next two years. Chinese consumers, thanks to rising incomes and a bustling economy, are powering a travel boom that’s set to catapult China’s tourism market past Japan’s by 2020, the study says. According to BCG’s projections, China’s combined domestic and international tourism revenues are expected to increase 14% annually for the next 9 years — creating a 5.5 trillion-yuan, or roughly $838 billion, tourism market, up from 1.5 trillion yuan last year – with revenues from outbound Chinese tourism alone expected to grow a whopping 381% over that span.”

However, there is a big problem: few companies in or outside the country have equipped themselves to cater to the huge crowds of Chinese travellers. For example, many hotels and restaurants fail to use Chinese characters on signs and menus which are simple gestures that would help them attract China’s international travelers and keep them coming back.

I come from China and I know that Chinese travellers have many differences with other countries’. Chinese rely heavily on travel agents and tour packages and they tend to stick to hotel names they know and restaurants they’ve heard of. If the hotels and restaurants companies can do more advertising in China, they will attract more Chinese travellers. And unlike Western travelers, who think of staying in a hotel as an experience unto itself, Chinese typically see hotels as a place to sleep for the night. So the convenience to other resorts is a very important consideration.

If the hotels or restaurants hire Chinese-speaking staff to help them cater to Chinese travellers, they will be bring the Chinese tourists some homely feeling and of course will attract more Chinese to come in. http://blogs.wsj.com/chinarealtime/2011/03/31/study-prepare-for-the-arrival-of-chinese-tourists/?KEYWORDS=hotels

Intercontinental Hotel Group to Build Holiday Inns in India

Intercontinental Hotel Group has recently announced its plans to join a venture with Duet India to build 19 Holiday Inn Express hotels in India over the next five years. These new hotels are expected to add 3,300 rooms to Intercontinental Hotel Group's current development in India consisting of more than 10,000 rooms in 46 hotels and will be mainly located in major and secondary cities such as New Delhi, Mumbai and Bangalore. These hotels are expected to open by the year 2016 and will add to the 12 hotels IHG already has open in India.

IHG already has 2,075 Holiday Inn Express open hotels worldwide as well as 494 under development. More than 75% of the group's hotel ventures in India are with Holiday Inn, a mid-scale brand that mainly attracts business and leisure travelers.

The Duet Group stated that the mid-scale hotel brand category in India “offers a compelling investment proposition based on high demand and return on investment”. It seems that this venture really is a great investment opportunity, since it is responding to a high demand and need for more hotels in the country and therefore will experience lower risk.

IGH plans to expand its operations in emerging markets such as those of China, India and the Middle East within the next few years as it is taking advantage of the increase in traveling and global economic trends as well as increase in life expectancy, the use of low-cost airlines and Internet access.

Furthermore, Intercontinental Hotel Group will be taking a 24% stake in the India venture for a $30 million cash investment over three years. That is surely an enormous amount, but given that the company has taken all the above into account, it should be looking at great profit margins in the near future.

http://online.wsj.com/article/BT-CO-20110406-703236.html

Security Markets

In general terms, this industry has radically declined during the 2009, but slightly inclined after the global crisis.

One of the global reasons is a drop in overseas visitor arrivals. In 2009, a drop in overseas visitor arrivals exacerbated weak demand for rooms by US residents. Despite the weak dollar, overseas visitors to the United States fell 6% in 2009 to 23.8 million from 25.3 million in 2008, according to the US Department of Commerce’s Office of Travel and Tourism Industries. The United Nations World Tourism Organization (UNWTO) estimates that direct expenditures by all foreign visitors to the US (a category that includes spending on more than lodging and gaming) decreased 23% in 2009.

The other is local reason. On the consumer side, unemployment remains high and demand is bifurcated. High-income earners have continued to spend, but lower-income earners remain stretched and focused on bare necessities. Thus lower discretionary income, tight credit conditions, and a poor employment outlook leaded the declining of this industry growth rate. In 2010, Las Vegas Strip gross gaming revenue grew up to 4.5%. After the global crisis visitors from other countries and cities were increasing. However, this result was high volatility, with declines reported in most of the other months.

On the other hands, Atlantic City’s troubles increased last 3 years. Revenue of the gaming decreased 13.2% in 2009, 7.6% in 2008 and 5.7% in 2007. Also during 2010, Standard & Poor’s says this industry increased the competition from neighboring states. Unsurprisingly, 11 casinos were up for sale and Hilton Casino and Resort defaulted in 2009.

In these reasons, it is important to choose the stock compared with the location of the hotel and gaming facilities. Thus, analysts recommended more of the companies which were located in Las Vegas rather than were leading hotels.

The Rush to Boutique

The hotel industry has a new entrepreneurial aspect to contribute to the diverse hotel market. Recently, hotels in Urban areas have started to have a “boutique” or “chic” feel to them in order to accentuate a mood or feel to attract customers. Ian Schrager, the creator of the “boutique” concept has assisted in the development of the boutique feel to provide customers with the exact experience they are looking for.

Currently, boutique hotels account for approximately 3% of the hotels in the country, but within the next 10-15 years, the number is expected to rise to 10% in urban areas, and 6% amongst all hotels in the United States.

There was a quote in the article that helps to explain why boutique hotels are becoming more popular: “Everybody pays attention to design…People like things a little bit different, offbeat. And they make someone who may have a rather mundane life feel hip.” It was said that the boutique hotel industry may be successful in Europe and Asia as well.

There are also some benefits to operating a boutique hotel as opposed to a generic hotel. There are not nearly as many regulations as far as room size, building structure, and general brand standards. They can charge a higher price for their rooms, which makes it more appealing to an owner to own a boutique hotel as opposed to a generic hotel. While many hotel brands are owned by the powerhouse brands, some boutique hotels are as well.

I hypothesize that boutique hotels are more popular in urban areas than rural and/or small towns because urban lifestyles tend to be more “hip” than no urban lifestyles. The pace of urban areas allows for successful boutique hotels, away from brand name, regular, medium priced hotels. It is important to consider what this will mean for mainstream hotels, and for the hotel industry as a whole in the next ten years. Now that hotels are taking huge strides to differentiate themselves, where will the customers tend to flock to. We live in a time where people want more than the generic good. People enjoy being in places where they feel good, where a mood is being presented, and provides a change from the normal lives they live everyday. http://www.nytimes.com/2011/04/05/business/05boutique.html?_r=1&scp=4&sq=hotel&st=cse

Accounting and Financial Statements

The US lodging industry is the largest in the global hotel industry. In 2009, there were about 13 million hotel rooms globally at some 128,000 hotels. Global revenues were greater than $300 billion. We estimate that more than 450 commercial casinos operate in the US. . This excludes facilities that primarily emphasize bingo, as well as other facilities where casino-type activity is limited to gaming machines.

5 key industry players are InterContinental Hotels Group, Wyndham Worldwide, Marriott International, Hilton Hotels, Accor S.A.

This industry was radically declined during the 2009, because the global crisis dropped in overseas visitor arrivals. In 2009, a drop in overseas visitor arrivals exacerbated weak demand for rooms by US residents. Despite the weak dollar, overseas visitors to the United States fell 6% in 2009 to 23.8 million from 25.3 million in 2008, according to the US Department of Commerce’s Office of Travel and Tourism Industries. The United Nations World Tourism Organization (UNWTO) estimates that direct expenditures by all foreign visitors to the US (a category that includes spending on more than lodging and gaming) decreased 23% in 2009.

Adjusting Check-in & Check-Out Times

We have all experienced the hassles of hotel check-out times being much earlier than the departure of a flight. Often, a guest is left with the worry of where they will spend aimless hours before they have to catch their flight.  How about the scenario when you arrive to the hotel early, yet you are told you have to wait for hours until you can check-in. "Business travelers are very annoyed when they come in in the morning and have to go to a meeting and want to put their stuff down and are told check-in time is 3 p.m.," says Horst H. Schulze, Capella's chief executive and chairman and a former president of Ritz-Carlton.

What are hotels doing to better such rigid check-in and check-out policies? Recent hotel loyalty programs now offer an extra few hours after posted check-out times. The catch with the Hilton HHonors and Hyatt Gold Passport program, a late check-out is usually subject to availability. Starwood Hotels & Resorts offer a guaranteed late check-out at 75% of its hotels to gold and platinum members. This occurs because Starwood offers convention and resort properties that have a high demand of hundreds of guests checking in or out at the same time. Vice president of Starwood Preferred Guest claims that “an arriving guest wants to unpack, get into their bathing suit and jump into the pool."

One specific hotel brand, Capella Hotels and Resorts, have done away with set check-in and check-out times entirely. Capella Hotels and Resorts accommodate to guests who want to arrive and leave on their own schedules. After taking a survey of guest who stay in hotel chains, Mr. Schulze noticed the trend that travelers’ biggest pet peeve was the industry standard check-in and check-out times. The brand is a rather small hotel with about 200 rooms or less that keep a staggered cleaning staff in order to work around the guest schedule. Considered as “personal assistants”, the staff contacts each guest in order to learn their expected arrival and departure times. Guenter Richter, a managing director, claims that the hotel is able to adjust to a guest desired schedule “95% of the time.”

The incentive of late check-outs is a form of marketing for many hotels. Guests are attracted to the idea of having adjusted check-in and check-out times; therefore they decide to sign up for a hotel’s customer loyalty program. Accommodating to the guest creates better customer satisfaction and interests the guest to continue to stay at that hotel when traveling. Overall, the hassles of check-in and check-out times are finally being regulated through innovative programs that appeal to the customer.

http://online.wsj.com/article/SB10001424052748704013604576247091927336656.html?mod=googlenews_wsj#articleTabs%3Dcomments

Restaurants Test New Ways to Shop

In the competitive market, a single company does not have the ability to decide a price. In order to own maximum profit, companies should find the best way to control their cost. Those who are bad at controlling cost will obtain nothing from market.

Many restaurants try to use diverse strategies to blunt the impact of higher price of raw material. Starbucks, for example, wants to team up with other companies to buy milk, sugar and other essential food items. Darden Restaurants Inc., owner of the Red Lobster and Olive Garden chains, is moving to a system where it buys only what they knows they needs.

The unfavorable fluctuation prices of grains, meat, sugar and other essential ingredients will be a block for businesses to earn a stable profit and will bring the restaurant industry a financial risk. Especially, in cases such as the recent period of a rising global demand for protein, unfriendly weather in key growing regions, and government mandates to turn corn into ethanol.

There is a very useful strategy called commodity-price hedging to guard against large swings up or down. However, this can only apply for large companies like Starbucks and McDonald's, which have the capital to hedge effectively.

Another strategy, supply-chain management, is much more important and applicable for most companies. For instance, Darden faces similar risks with its plan to automate its supply chain where it buys and ships only what it needs, when it's needed. It might buy and store only the amount of biscuit mix its Red Lobster restaurants are expected to use in a given month.

Moreover, if Darden combine the two strategies together, it will create a bigger benefit. In regards to the biscuit mix Darden purchases for its Red Lobster chain, the company breaks down the cost of each ingredient, such as flour and shortening, as well as the packaging cost, so it understands exactly how much it should pay for a product. The company then hedges the price of the wheat that goes into the flour to avoid price fluctuation and earn a nice profit.

http://online.wsj.com/article/SB10001424052748703461504576230701451425990.html?mod=WSJ_Hospitality_leftHeadlines

No-Smoking Policy

Lyndon Sanders was entrepreneurial in the hotel industry 30 years ago. Given the fact that his father, uncle and 12 close friends had died of smoking, he decided to open a hotel called, “The Non-Smokers Inn” in an attempt to reduce the amount of smoking in hotels for many reasons. First, smokers and non-smokers would often alternate rooms, and in order to keep the quality of the hotel up to the non-smokers standards, they would have to “take the draperies down, shampoo the carpet, strip the beds completely down—even the plaster shower curtains.” He then went on to say, “You should see the yellow nicotine stains on the cleaning rags. I tell you, it would gag a buzzard.”

That being said, the hotel industry was focused on maximum profits and people told him he was “nuts when he announced that he was building a hotel in which guests would not be permitted to smoke.” Even though that idea may have seem farfetched in that time, more recently, hotels have taken huge strides to provide their guests with non-smoking floors, and sometimes even took on Sanders idea of non-smoking hotels all together. There has recently been some legislations passed about smoking in hotels. It was said that now, “more than 12,900 lodgings in the U.S. now allow no smoking at all in any of their rooms—nearly 4,600 than the figure was in 2008.

It seems obvious that Sanders was ahead of his time. It is crazy to see that it took 30 plus years to see significant changes in the hotel industry when it came to smoking, but nonetheless, change did happen. This is a great example of an entrepreneur who saw the need for change in an industry, and took it upon himself to open up the “Non-Smokers Inn.” It will be interesting to see what other changes are made in the hotel industry in the next few years. I would expect the majority of hotels to convert to 100% non-smoking hotels, and require their guests to smoke outside. It seems like it would take a hit on the companies profit if they consistently need to clean the smoking rooms.

http://www.cnn.com/2011/OPINION/03/27/greene.nonsmoking.hotel/index.html?hpt=T2

New Labeling Requirements for Restaurants

The Food and Drug Administration (FDA) has proposed new regulations that all restaurants in the nation should provide menu-labeling; adding calorie counts on menus and menu boards of chain restaurants.

The proposal was released this past Friday with the details of how menu labeling should be implemented in the restaurant industry. The FDA hopes to issue these final rules by the end of 2011 and predicts that they should become effective six months later.

Another detail that has been proposed to be added to the labeling of menus is for them to provide a reference point of appropriate caloric intake for customers. An example of this would be to include phrases such as “A 2,000 calorie diet is used as the basis for general nutrition advice; however, individual calorie needs may vary”.

The FDA proposal added that such guidelines would “help the public understand the significance of the calorie information provided”.

Although many chain restaurants – especially fast food franchises – already post the nutritional information of their menu online and in stores, the new regulations will probably hit the “casual and upscale dining sector” harder since most of them don't already provide nutritional information.

Dawn Sweeney, the President and CEO of The National Restaurant Association stated that “The publication of the proposed regulations in the Federal Register today is the next step forward in providing the industry with consistent, national requirements on how to implement the new uniform nutrition information standard”. It is true that these regulations are a major step in providing people nationwide with guidelines on how to lead a healthy lifestyle and will encourage them to make more educated decisions on their nutritional intake. Furthermore, menu-labeling is sure to induce customer appreciation, because not only does the information help those who want to watch their weight or prefer to eat healthy, but it expresses a certain concern for customers well-being.

The NRA will provide the FDA with details on how to ensure that restaurants are given the appropriate time to comply with the new regulations effectively and on how to present the information to consumers in the most useful and direct way. Furthermore, what with the nation's obesity problems, the new regulations will encourage a more educated and healthier America.

http://online.wsj.com/article/BT-CO-20110401-713541.html

Appealing to the Customer

A secret about the U.S. hotel industry is that every night the industry struggles with an average of 40% of its rooms empty. Surprisingly, this has helped influence the market of the hotel industry tremendously by creating great innovation. Hotels have now adopted online models that have helped create a demand to fill more rooms. For example, getaroom.com displays the lowest published rate for a particular room and then promises to beat it when you phone them. However, the catch is the customer will not know that exact price until Getaroom bills their credit card. The only guarantee is that you will not pay more than the published rate, where Getaroom averages about 25 % below the lowest published rate.

Even though the hotel industry has experienced recent innovation, hotel “shopping” by room numbers has not caught on yet. A new strategy of the hotel industry, an online company called Room 77, where diagrams of the hotel and specifically hotel rooms are available for guest to see. Co-founder of the website made an interesting point, “I found it quite odd that here we are 10 years into online travel … but the room I’m going to be staying in is a complete black box. You just don’t know until that fateful moment that you open that hotel door whether the room they gave you is a good room or a bad room.” The website collects the customer’s preferences and rank each room according to one’s criteria, which the customer is then sent to Orbitz or the hotel’s site to book the room. As of right now, you don’t get to view pictures or select the exact room of your choice on the website. Yet, this option is in the near future if hotels may agree to allow specific room selection for an extra fee.

Such innovation in the technology environment is necessary to the hotel industry in order to advance its influence in modern business. Such websites accommodate to the customer and appeal to the preferences of their clientele, making one’s experience more personal.

http://www.businessweek.com/lifestyle/travelers_check/archives/2011/02/new_efforts_to_sell_empty_hotels.html

A New Side to Marketing

This article is really interesting because it introduces a new side of marketing to the restaurant industry. In our innovative world today the restaurant industry is now taking advantage of the social media in order to market their restaurants. No longer is the industry using the traditional methods of advertising in local newspapers or relying on word-of-mouth throughout the neighborhood. Now, social media such as Facebook or Twitter allows restaurant’s to have an accelerated growth in its customer base. The use of the internet allows businesses, whether big, small, or local, to market with unlimited ad space and airtime.

“Today, 70 percent of local businesses are marketing through Facebook—more than anywhere else on the Internet.” Luckily, Facebook is an easy site to manage correctly if a company performs proper maintenance and pays attention to always updating at a steady pace. “With this in mind, social media-savvy restaurant owners are acquiring and retaining new customers at a fraction of the cost of traditional advertising.” Most importantly, businesses can differentiate through creative and attentive marketing in social media.

A restaurant in Manhattan, Zengo, believes that “Facebook is a platform for two-way communication between a restaurant and its clientele.” Through Facebook, Zengo retains their customers by actively posting events, recipes, interesting stories and Facebook-specific specials for their fans. Even through Facebook, Zengo customers can make reservations and sign up for Zengo's mailing list. Since there are over 500 million active Facebook users where 50 percent are logging in everyday, restaurant owners must realize that engaging the users is crucial for their business.

Other businesses such as The Burger Shoppe in NYC offer a free side of fries or onion rings to loyal customers who have checked in via Foursquare. This form of marketing allows an increase in clientele by a word-of-mouth buzz, drawing new customers, and most importantly retaining current ones.

Such forms of marketing are essential to a business because of the influence of the technological environment. Advances in communication through Facebook, Twitter, or Foursquare may be one of the most influential factors affecting modern business. It allows small businesses to compete with large corporations around the world by marketing to keep a loyal clientele. Most likely, many people customers are already using such social media daily therefore businesses should take advantage of the innovative marketing approach.

http://www.huffingtonpost.com/wiley-cerilli/social-media-marketing-5-_b_835294.html#s253224&title=Nombe

100 of 900 Starbucks Stores Closed in Japan

Japan is Starbucks' biggest market in Asia, and Tokyo was actually the first location where the company opened a store outside the United States back in 1996.

However, in the aftermath of the tragic earthquake and tsunami, Starbucks Corp. closed 100 of its 900 stores in the country. The company stated that “preliminary reports indicate that several Starbucks stores in the affected areas in the east have sustained from moderate to significant damage”.

All of Starbucks' coffee shops in Japan not company-owned, but licensed, and all stores in Western Japan are still open. However, because of the company's decision to close a large number of its stores in the country, Starbucks shares fell 2.5% in the past week.

Starbucks said it is still trying to verify the safety of its employees. It is good to know that the company is still a loyal practicer of CSR and gives social and environmental concequences priority over maximizing profit and raising the price of its shares. Starbucks is one of the few large corporations that has been able to restore consumer confidence in financial markets.

http://online.wsj.com/article/BT-CO-20110314-710056.html

The Differentiation Game

This article showed about the luxury hotel business is down. But there were still plenty of customers who wanted luxury services.

According to the Buyer Interactive Trade Alliance and Conference(BITAC), 42% of the attendees agreed the recover about hotel industry and additional 32% agreed the luxury market has already stabilized.

Thus, the hotel’s differentiation strategy is changed from seeking potential customers to offering the right services to customers to come. Although this strategy is hard question for CEO to execute, but offering the highly differentiated services combined with unique experiences became important.

Christophe Vallet, Founder & Managing Director of Authentic Hotels, said “My guests are looking for a good experience. But they also want you to be able to personalize experiences to excite them.” He thought this trend was the changed meaning of the ‘true luxe.’ For example, it is more crucial to deliver the customers natural materials such as fresh tomatoes with bio olive oil and bio wine rather than offering them luxury rooms decorated with gold and diamonds and marble. Also he thought plenty of clients wanted "bio" luxe.

Looking this article, we can summarize this with the Meg Prendergast’s word who is Senior Vice President of the Gettys Group, a hospitality design firm. He said “You can create the most beautiful property, but you have to have the service to differentiate you,” said Prendergast. This means that each hotel must be focused their service based on their experience because in the long run, all of hotels might offer the similar services with the best labors. Thus, they didn’t differentiate with others by focusing the better services without experience.

http://apps.netbiscuits.com/178809/HIMobile/articleDetail.aspx;jsessionid=m9e03+9culvbJGj0k6dTNw**?articleid=16513

Taiwan Hotels Benefit from Japan Disaster

Taiwan hotel shares were up sharply on Friday with expectations of droves of people arriving in Taiwan from Japan.

The heavily increased profit in Taiwan hotels is so different from the reverse movements in global economic due to an earthquake and a tsunami in Japan. Not only is the stock market affected but even food markets are shocked. However, many people who had toured in Japan or who are relatives of government workers fly to Taiwan to avoid the unsafe aftermath accompanying the earthquake.

“Taiwanese media reported Friday that the U.S. had evacuated some citizens from Japan to Taiwan, leading investors to buy Taiwan hotel shares in anticipation that more would be coming.”

There will be more and more people from all over the world leaving Japan and arriving in Taiwan. Some people think that the refuges will give a lift to hotel business in Taiwan and will help Taiwan hotel make a great profit. “Some local hotels also have plans to launch special packages for Japanese planning extended stays in Taiwan. Japan has long been a crucial source of revenue for Taiwan’s hospitality industry.” The refuges from Japan looks like a gift for Taiwan.

However, I don’t think the business should consider their profit in the first place in such a terrible disaster. The disaster brings the refuges not only physical strike but also mental strike. In my opinion, the Taiwan hotel should focus on pacifying the refuges and helping them recover from the terrible nightmare. The ethic should play a more vital place than profit in this special situation.

http://blogs.wsj.com/exchange/2011/03/18/taiwan-hotels-prepare-for-u-s-flight-from-japan/

Tsunami affects Restaurant Industry

Like the BP oil spill in the Caribbean, the tsunami in Japan has impacted the restaurant and food industry significantly. Given the specific market Japan has to offer (seafood, seaweed, kobe beef, etc.), many restaurants and markets have been impacted. The earthquake that set off the nuclear reactors resulted in “elevated levels of radiation in spinach and milk at farms up to 90 miles away…”.

It was said that the Tsukiji fish market in central Tokyo (largest in the world) was not impacted directly by the earthquake, but was impacted by the source of their food. Tohoku (coastal epicenter of the earthquake) was severely damaged, and the Tsukiji market will be closed down for a while.

A chef named Tomohito Narasaki who works at a restaurant called Sushizanmai stated that “scallops, sardines and oysters from Tohoku are no longer available… Millions of dollars’ worth of bluefin tuna, red snapper and yellowtail farmed off Tohoku was instantly destroyed.”

Given the fact that sushi is now produced world-wide and not just in Japan, fish and sushi supplies can be shipped to Japan until the damage is gone, but the overall food source for the majority of restaurants in Japan is momentarily depleted.

It will be interesting to see how Japan copes with this set back as the fish is the peoples’ primary food source. Restaurants tend to pride themselves on having the highest quality food, and when their source of food no longer exists, it puts the restaurant in a difficult situation. I found it to be very interesting that a natural disaster has the ability to cripple the food and restaurant industry to the degree that it has in Japan.

http://www.nytimes.com/2011/03/20/world/asia/20food.html?_r=1&scp=4&sq=restaurant%20industry&st=cse

Informational Interview

Company: Hilton Hotel, South Korea
Position: PR Manager
Sector: PR
Email: skincare03@nate.com
Phone: 82-10-5522-0640

1. Tell the contact about your assignment. Inquire about their thoughts about investment opportunities in the industry.
Food industry becomes important. Hotel opened another restaurant outside under the hotel brand. For example, Chosun hotel opened Opkins beer restaurants in the in COEX and W Hotel opened Pizzahill restaurant. In addition, raising Wedding Business becomes important business in the Hotel industry.

2. In which companies, sectors, segments do they see the greatest potential for growth?
W Hotel introduces Long-Term-Guest Program. At first, it was program for the businessman, it became for the children’s of top 1% the rich. Hotel focused on lots of entertainments such as clubs, innovative designed room.

3. Tell me about your job at Hilton Hotel. What are your responsibilities?
Actually, my job includes News release, Press Officer, Public Relationship preparation, Making internal / external hotel Magazine, and Press Relation (promoting hotel events)

4. What types of entry-level jobs does your organization offer?
There are lots of entry-level jobs. PR / Sales department promotes hotel rooms for large groups of foreign companies. Marketing department induces guests to pay for the services hotel offered. Banquet department only managed conventional events. Engineering department serves facilities management. F&O (front-officer) directly meets the guest and give information to the guests.

5. What skills sets do you look for in potential candidates?
Of course, personal service mind and the professional attitude is the most basic elements for this industry. Also, they must be fluent in foreign language especially English and Japanese.

6. Are there particular jobs in your company where you have seen an increase and/or decline in recent years? What was the cause?
House-keeping and Engineering fields have been decreased because of outsourcing. Also Secretarial Jobs who serves basic simple tasks decreased because of outsourcing. However, the demand for personalize service such as customer-facing business increased regardless of the IT development.

7. How do companies in your industry differentiate themselves?
Internationally Hilton hotel is leading Convention Business. There are not many hotels to offered convention business services because these services needs banquet rooms and lots of audio and light facilities. Also, they offers well-established translational technologies

Informational Interview

Interviewed:
Marty Grims (White Dog Café)
Phone #: (610) 296-1896
Email Address: wayne@whitedog.com
Address: White Dog Cafe
200 West Lancaster Avenue
Wayne, PA 19087

The restaurant industry has many relevant aspects of business to take into consideration, therefore, I decided to ask general questions to develop a strong understanding of the restaurant industry as a whole. Martin Grims is the owner of nine very successful restaurants in the Philadelphia area.

Mr. Grims stated that there are a few areas in the restaurant industry that are likely to become more popular in time. Mr. Grims stated that the most significant change in the industry is the use of organic and locally grown food. He stated that he has started using ingredients of these sorts to provide a more healthy diet for his customers and to maintain competitive with other restaurants who are doing the same thing.

When asked about what Mr. Grims personally does as a business owner, he stated that he sees himself as the “overseer of quality and enforcer of standards.” He thinks that it is his job to ensure that the food is of high quality and to operate the financial side of the business.

Mr. Grims offers entry-level jobs as a dishwasher, food runner, busboy, and preparatory cook. He said it is easy for entry level workers to work their way up if they are efficient and work well with people. When looking for new employees, he stated that he looks for people to be “outgoing, warm and full of personality.” He suggested that customer/employee relations are in some ways just as important as the quality of the food, so it is important to be balanced.

From an economic standpoint, Mr. Grims reports that there is an abundance of people looking for jobs at his restaurants due to the state of the economy forcing many large companies to lay off their employees. He then went on to say that his restaurants have not taken much of a hit due to the economy, but is aware of the situation many other restaurants and companies are currently facing. Mr. Grims expects that in the next few years, it will be even more important to hire people based on their personality, as customer/employee relations are becoming more and more important. Due to the economy, he stated, more people are “open minded and willing to work for entrepreneurial enterprises.”

Lastly, when asked about how restaurants differentiate themselves from one another, Mr. Grims said that the quality of food, service, ambiance, location, and price are the primary factors that determine success. Successful restaurants embody all of these qualities at a high level, and that is what sets restaurants apart from one another.

In conclusion, I developed a stronger sense of the restaurant industry as a whole. I personally was not aware of the necessity to incorporate organic and locally grown foods into recipes, and how important personality and the ability to relate to many different types of people truly are. While I was not looking for a job during the interview, I learned about many crucial tactics restaurant owners partake in to make their restaurant successful.

Informational Interview

Informational interview with Malcolm Petersen, Customer Relations Manager for Princess Cruises.

How he came to be in the position of Customer Relations Manager:
When he was younger, he would watch the TV show “The Loveboat”, which inspired him to work for a cruise line. He wanted “to work with people instead of machines”. Therefore, he studied Hotel Management for three years in South Africa and then worked in various hotels for four years. Finally, he has been working for Princess Cruises for the past ten years.

Interview:
Are there any changes you would suggest in order to improve the Hotel and Leisure industry?
I would implement more training. To make employee recruiting a more selective and strict process, so that we get people who genuinely want to work with people. Also, I think the staff needs to be paid more. If the staff is happy, the customers will be happy.

Have you noticed any trends in the Cruise industry in the past few years?
Actually, in the past five years, most cruise lines and especially Princess Cruises, have increased customer services. Especially since competitors started offering the same facilities and similar packages as us, we tried even harder to offer excellent services. This is because our services is something that competitors cannot copy or take away.

Has the economy affected the cruise industry in the past few years?
Two years ago there was a big drop in booking. Some companies even had to sell some of their ships. Princess Cruises, however, managed to hold on to its customer base by dropping rates. It was more important to us to maintain a full ship, because you can't sail with an empty ship. For instance, we managed to somewhat maintain our revenue by implementing new conditions for passengers, such as requiring them to buy beverages, in order to make up for the reduced rates of our packages. This drop lasted for about two years. Other cruise lines couldn't afford to drop their rates because the salaries of the staff were of a higher standard. Princess hired people from third world countries who didn't have high demands, and who were in need of a job. Therefore, for example, an Indian would not have the same demands as a European and therefore there was no difficulty reducing our rates.

Do you think the Cruise industry is rising?
Yes, cruises are now in great demand. Even for those who are not wealthy, or when the economy is not at its best, people choose to go on cruises now. The ship has all the facilities one would need, our passengers travel to various locations and they prefer cruises because they are much cheaper than flights and staying at hotels and other resorts.

Has Princess Cruises used any specific marketing campaigns to attract more customers?
We employ a large number of travel agents, and that's how we get most of our customers. We haven't used any specific marketing campaigns; people often hear about us through word of mouth.

Does Princess Cruises practice Corporate Social Responsibility?
We usually donate money to natural disasters. We generate revenue for reliefs by advertising it on board for the passengers to donate, and the crew generates donations as well. Oftentimes, when we need to renew mattresses or pillows etc, we offload our previous ones on to poor islands that we pass so that they can be given to the inhabitants.
In addition, Princess really looks after its staff. We are very sensitive to the needs of our crew, and this makes for a happier work environment.

Does the Cruise Line intend to expand internationally?
Princess plans to build two new ships in 2013 and 2014. This will expand the business and cover new and different ports of course. The good thing is it will create new positions for the already existing crew, and will offer new job opportunities, since an average ship has a crew of about 1,100 people.

Informational Interview

Last week, I interviewed Peter Wang, the general manage of Jingmin North Bay Hotel of Xiamen. I am very interested in finding a hotel management position so I asked most about the current challenges and future growth about the hotel industry. First, Mr. Wang told me a little bit about himself and how he got involved in hotel business. He graduated from Xiamen University, and majored in business. He worked as an entry-level human resource assistant and gradually climbed up the ladder became the branch manager of the Xiamen location. Right now, he is working as an operational controller and supervising the daily hotel operation. He has five assistant managers reporting to him from different departments such as restaurant, and resort services.

Then I asked about what challenges he was facing every day. Mr. Wang consistently looked for new talents to join the company and he believed the entry-level people are the future of the company. However, he said, “I faces challenges of developing subordinates. It is extremely difficult to formulate plans and to bring the hotel’s operation to next level. We want to fine-tune the hotel’s service, organize efficiently and provide the best for the customer.” Since he started as an HR assistant, I asked him about the criteria of the HR manager. He said, “Well, HR manager is one of most important position. The candidate must be excellent at selecting the best employees for our hotel and be able to read people. They also need train those employees about company value and provide benefits for the employees for retention purpose.” The HR manager needs to find the right talents who have the required skills and fit the company culture very well. I asked what set him apart from other HR assistant and promoted him to his current position. He smiled and answered with ease, “I was a friend to all the employees instead of a boss. I lead forward. I am always on time for all the meetings and act out the company value. I look at the positive things the employee did for the company and praises them instead of searching for the negatives. Thus, our team is more synthesized instead just clock-in and clock-out.”

Furthermore, Mr. Wang consistently wants to improve the hotel service. He said, “Service is core to the success of a hotel. So generally companies in the hotel industry differentiate themselves or develop their competitive advantages by offering better service experience to customers than their competitors. For example, many of our loyal customers choose to stay in our hotel because we offer services that other hotels don’t have such as Zip-in and Express Check-out Service, 24-hour free airport pickup service, free choice of eleven different pillows and etc.”

Last, I asked about how Mr. Wang viewed the future of Chinese hotel industry. He saw a huge opportunity in the industry because now Chinese people concentrate more about leisure due to the economic prosperity. For example, the spa service in hotel becomes the fourth income of their hotel. Chinese people now focus on the wellness of body and mind. There will be always growth opportunity for hotel business.

Informational Interview

I had the opportunity to interview with Chris Richards who is a general manager of a newly established restaurant called Relish. Throughout the interview I learned key aspects of the restaurant industry that could help with the final paper. To start off, Chris operates a fine-dining restaurant in Philadelphia, Pa whose concept is based around traditional and contemporary mixes of southern cuisine. What makes the restaurant stand out from the rest is that it offers the “gateway to stylish dining, arts, culture and lifestyle” by offering live jazz and other specials every day. As a general manager, Chris is in charge of overseeing and running the restaurant at its best which consist of multiple factors such as finances, staffing, guest relations, or minor issues such as a repair.

Chris explained to me that a crucial element in maintaining success within the restaurant industry is having a flowing clientele that is pleased and satisfied with their service. It is within his responsibility to create and maintain successful relationships with guest and even many musicians, in order to secure profitable outcomes that are beneficial to the restaurant. “Within the restaurant industry, one must understand how to adapt to change because without change you are no longer beneficial to the industry. With the world around us always changing with the economy, innovation and technology, we must change with it so that we don’t fall behind.” Therefore, Chris is always enhancing his restaurant with innovative ideas that will please guests and attract more customers. For example, Relish now host recent events such as karaoke night on Friday’s and even speed-dating and relationship forums for the younger generation. Also, Chris oversees local talent searches and have independent artist from around the Philadelphia area that perform a small tour at the restaurant.

In regards to staffing, Chris stated that the restaurant has been hiring more people across all departments because the restaurant has seen growth in recent years. Relish offers entry-level jobs where employees are exposed to many different projects and tasks that enhance their ambition and skills. A valuable trait he looks for in potential candidates is the drive to succeed, he stressed the fact that he wants employees who are driven and determined. Chris is responsible for staffing the restaurant’s “back house” which includes dishwashers and chefs who need experience in preparing quality food in as little time as possible. He also hires “front house” which includes waiters, bartenders, host, and bussers in which Chris elaborates that his restaurant success relies on the staff. “Personality is key for the front house of Relish. A naturally out-going and friendly staff is ideal because guest interactions always need to be positive in order to satisfy their experience at Relish. The restaurant industry consists of all word of mouth, without customer satisfaction we wouldn’t have a successful business.” With all of his employees, Chris looks to hire applicants with the ability to multitask and willingness to adapt to the fast-paced changes and spontaneous situations in the restaurant industry.

            Most importantly, as general manager Chris created an abundance of growth throughout the restaurant after cleaning up the mess of the original owners. Unfortunately, when Relish was first created the restaurant was mismanaged and received little clientele because of poor customer service. Yet, Chris took over management and added his personal touches with a very nice and immaculate ambience, an intimate jazz club approach of the 50’s, and professional service with charm. With the success of Relish I ended the interview with asking Chris if expansion was possible in the future, “of course establishing a new restaurant would be essential to our business but it is often difficult to create a restaurant with the same quality and control with a new staff and management.” Before hanging up the phone, I quickly asked Chris where the name Relish was established. Relish: verb to eat and drink with pleasure, “Relish the food,  Relish the music, sit back and Relish the experience."

Famous leaders in hotel industry

Conrad Hilton
Hilton Hotels Corporation is a leading hospitality company because it has over 2,000 hotels across the country. Conrad Hotel is the founder of the Hilton company and is a key tool in helping Hilton Hotels become international. The Hilton Hotel has locations in many other countries such as Australia, England, Turkey and Singapore. In 1919, the founder Conrad Hilton owned his first hotel. Until the late 1940s, Hilton owned a worldwide chain of premium hotels. However, in the 1960s, Hilton transferred its interest of international operations to management contracts and franchising. The most successful factor of Hilton Hotels is that it created innovative joint-venture arrangements which became standard industry practice. Conrad Hilton’s idea of innovation kept the Hilton company developing in different areas ceaselessly. Also, the Hilton corporation developed casino-hotels which becomes a prime source of revenue for the company. Actually, gaming provided about 50 percent of the company's income by the following years.

Steve Wynn
Stephen Alan Wynn was born on the 27th January, 1942 in Connecticut. He was raised in Utica, New York with a younger brother. His idea of beginning business of gambling had big influence from his father who owned a chain of Bingo parlors in his early age. Durning the lifetime, he played a very important role in the development of the Las Vegas gambling oasis in Nevada, USA. His casino industry in Las Vegas continue to grow in size, ambition, lavishness, and even excess.

Steve graduated from the University of Pennsylvania and then took control of his father's bingo enterprise. This important step seemed to be the headstream of a continually expanding gambling and entertainment empire. Wynn bought some stakes in the Frontier Hotel and Casino in Las Vegas using the revenue from the bingo business. After moving to Las Vegas with his wife, fortunately , each new investment brought Wynn greater profits, allowing his casinos and hotels to expand in size and reputation.

"Wynn Las Vegas" which seems to be his most impressive building to date was opened in Aril ,2005. The Wynn Las Vegas is perched upon the famous Las Vegas Strip and stands 50 stories high, making it one of the tallest buildings in Las Vegas. There are 2,716 rooms and more than 111,000 square foot of gaming area. To be different from the previous tactic, Wynn spent 2.7 billion in a more elegent and subtle way. The Wynn Las Vegas is relatively understated from the outside, however, it encourages visitors or punters to enter the building to experience something extraordinary such as The Wynn Art Collection and the Lake of Dreams.

http://www.answers.com/topic/hilton-hotels-corporation
http://www.woopidoo.com/biography/steve-wynn/index.htm

Witness History in the Making

Could you be convinced to travel to Egypt or Tunisia after hearing the continuous news of many violent protesters taking over the country? Surprisingly, Bahrain, a major internet cruise agency, is taking the bold risk of promoting a cruise that will visit ports in Egypt, Israel, and Jordan.

Classified as “Freedom Evolution”, the cruise is determined to promote “history in the making” by hosting regional experts as lecturers to enhance the experience. "We believe that many people want to witness a piece of modern history in the making. This region of the world has already been a witness to some of the greatest events in ancient history," said Anthony Hamawy, president of the online retail giant Cruise.com.

The voyage will consist of ten lavish days in different cities, where guest will have the opportunity to stay overnight in order to experience the unique culture and ventures. "The fact is it's an incredible region of the world. These are truly historic changes going on," Hamawy describes the vast Middle East. Yet, the most important factor of exploring such cultures is most importantly the security and safety of the passengers. "Safety of our loyal guests and employees always comes first. We will continue to monitor the climate in that part of the world and take whatever security measures will be needed," said Edie Bornstein, vice president of sales and marketing for the cruise line.

The most important issue of the cruise is to reinsure that the cruise will not be political in nature. The focus is to experience history in the making, yet the cruise is also to provide leisure, pleasure, and pure fun. Although the excursion is not official yet, depending on security conditions at the time, passengers now have the chance to book their occupancy on “Freedom Evolution.”

http://travel.usatoday.com/cruises/post/2011/02/egypt-cruise-freedom-evolution-azamara/143636/1

InterContinental Sees Growth

InterContinental Hotel Group PLC (IHG), which is the world's leading hotel operator by number of rooms is considering extending its growth through possible acquisitions to come in the next few years. Chief Financial Officer Richard Solomons said “The sky is the limit. We have around 4% to 5% of the world's hotel rooms and 18% of the global pipeline. The sector is in a very fragmented position and we are in a very good place”. He also stated that 2010 recovery trends have been leading to continued growth this year, “as business and leisure travel continues to revitalize”. The prestigious hotel group has seen tremendous growth around the world, and is expecting even more this year at a rapid rate, which is very impressive considering today's economy and the decline in demand for luxury goods.

The hotel group's strong financial position has encouraged the consideration of acquisitions, including possible brands in North America and China. InterContinental's existing brands include Holiday Inn, Intercontinental and Crowne Plaza.

The groups runs over 4,500 hotels and 657,000 rooms world wide and has been benefiting from a significant recovery since 2009, in its more established markets in the U.S. and Europe.
The company has been seeing a substantial rise in revenue since, and future growth seems to be a very realistic goal for InterContinental.

http://online.wsj.com/article/BT-CO-20110215-703410.html

Hospitality Industry: Hotel Business HR Trends & Influential Leader

The hotel industry provides employment to a very large proportion of part time workers, who after gaining substantial experience, leave for other lucrative jobs. Low wages in the hotel industry is one of the primary reasons for low retention rates.

Hotel industry Gurus are already thinking of ways to attract and retain qualified workers by increasing the pay scales and by reducing the long working hours. The top management is now devising constructive methods that will retain the existing workers by sponsoring education and creating attractive career paths.

One of the influential leaders in the hospitality industry is Arne Sorenson President/COO of Marriott International. Arne Sorenson changed a way on the technology business. Hotel‘s CEOs watched remote conferencing technology as a lucrative for group business. However Marriott chose to embrace it rather than fight with them. Sorenson said "If the threat's there, we can make sure we're participating in that space. Personally, I believe these technologies allow for more travel rather than less."

http://hotel-management.bestmanagementarticles.com/a-31975-hospitality-industry-hotel-business-current-and-future-trends.aspx

http://www.businesstravelnews.com/Research/The-25-Most-Influential-Executives-Of-The-Business-Travel-Industry-Of-2010/

A New "Green" Company

Courtyard by Marriott has started using an LEED-design on some newer hotels in an attempt to cut down energy costs and develop a strong reputation as being a “green” company. They are currently building a hotel using the LEED-design in a Pittsburgh suburb, and if that is as successful as the LEED-design hotel in Settler’s Ridge, Pennsylvania, they will consider making the design standard. The stated advantages of the LEED-design are:

· More energy-efficient light fixtures and water-saving showers, lavatories and toilet fixtures

· Enhanced heat recovery energy system, which reclaims building exhaust air to pre-heat the building’s fresh air system

· More effective energy management system that further reduces unnecessary heating and cooling run times in unoccupied guest rooms

As you can see, Courtyard by Marriott is taking the necessary strides to have a strong Corporate Social Responsibility in which people will acknowledge them as being entrepreneurial in the amount of energy needed to run a hotel. Courtyard by Marriott is ok with the investment because they “will save some 30 percent in related costs, enough to pay back the investment in approximately five years,” according to the article. It will be interesting to see if other hotel companies upgrade their current hotels and build their new hotels using this LEED-design. Five years does not seem like that long of a time to make the money back from the investment. This investment makes sense from an economic, green, and CSR standpoint, so it seems like a no-brainer to me. It is also possible that the hotels can receive some funding from the government, to make the investment even cheaper.

http://www.hotelinteractive.com/article.aspx?articleID=19830

Innovation Areas of the Hotel Industry

Innovation is one of the main determinants of competitiveness. Management, external communication, service scope and back-office are four types of representative of innovation in the hotel industry.

1."The management innovation type refers to the quality of management processes, to the ICT (information and communication technologies) applications for management, and to improvements of the organizational structure.” In the concept of management innovation, the environmental quality play an important role in the hotel's competitiveness .The information and communication technologies applications are also vital in making management processes efficient. Furthermore, the changes in the organizational structure capture the organizational innovation that is relevant in services .
2. “Innovation in external communications depicts the high information-intangible content of services products and processes in the hotel industry.” Definitely, the ICT plays an crucial role, both in generating opportunities and new services, and in revolutionizing the ways in which most of the traditional services are provided . The use of ICT is a very relevant innovation that helps increasing the competitiveness of firms because it facilitates the management of relationships with customers, through better and easier information exchange. Further, ICT can improve the efficiency of the relationships between the firm and intermediaries, suppliers and public administrations.
3. “The service scope innovation is relevant due to the importance of the service delivery for the competitiveness of hotels as in other service sectors”. Service scope innovation advises changes in the service output and the incorporation of technological assets which improve the service output and the tangible aspects of service delivery.
4. “The back-office innovation consists of the incorporation of new technological assets for the improvement in productivity and for achieving more efficient service delivery.” The process and system design and testing of a new service encompass the whole delivery process, not just the element experienced by the customer, but also often involves back-office process re-engineering.

http://www.sciencedirect.com/science/article/B6VC4-4NMWRGX-2/2/f9346dd3e308beedbb6ec018ed605d4a

A Fee to be Healthy

In most places today, smoking in public places has become a major issue to the population. Non-smokers argue that second-hand smoke affects their health, therefore, smokers should be prohibited to smoke in all public places. New laws have been created to ban smoking in certain restaurants and create non-smoking rooms in many hotels. This accommodation in hotels has allowed non-smoking guests to enjoy their stay smoke-free. Yet, recently the MGM Grand hotel in Las Vegas has created a $20 a day fee for guest who requests a non-smoking room. This fee is quite surprising because it doesn’t leave much option for hotel guest who prefer to avoid the effects of smoking. If guest don’t want to pay the $20 fee then they are expected to deal with a sour-smelling smoking room that could extremely affect their health. This fee could be a huge detriment to the MGM Grand hotel and cause many non-smoking customers to go to another hotel.

Thanks to the impact of the anti-tobacco advocacy group, MGM Grand was pressured to rescind the fee and instead caused the price of a guaranteed smoking room to increase. Also joining the advocacy group in protesting against the hotel was The Campaign for Tobacco-Free Kids, believing that hotels shouldn’t punish guest for wanting to be healthy. A statement from the group said “no one should have to pay extra to avoid exposure to a harmful substance that causes lung cancer, heart disease and other serious illnesses. What will MGM charge for next? A room without asbestos? One with a sprinkler system or fire alarm? One without bed bugs?”

Rather than the MGM Grand Hotel enforcing a fee for non-smoking rooms, they should instead follow the trend of making their hotel smoke-free. Many hotels such as the Marriott or Hilton already enforce non-smoking rooms throughout, therefore, MGM should follow such policies. With an absurd fee, customers could definitely take their business elsewhere, causing MGM Grand Hotel to suffer.

http://travel.usatoday.com/hotels/post/2011/02/mgm-grand-hotel-las-vegas-non-smoking-room-guarantee-fee/143431/1

Panera Bread Co. enforces new Customer-Loyalty Program

Panera Bread Co. is implementing a new loyalty program and adding new items to its menu as a way of maintaining high profit and sales growth. While launching its customer-loyalty program, Panera will be adding steak to its sandwiches as a new source of protein for its customers, with extra marketing to accompany its addition to the menu. However, this addition will be putting high commodity pressure on Panera, since beef prices are now at an all-time high. Instead of being reactive to this year's underlying inflation, Panera “stayed true to doing what it did well. And steak is simply a manifestation of that.”

Panera is launching MyPanera cards as part of its loyalty program, which will surely be a factor of great traffic growth. The card allows the company to track its customers' preferences as well as when they buy and how much they spend. This free program presents customers with “soft rewards” such as complimentary items that match their buying habits. Panera has been working on this program for years and states that it is about building a deeper relationship with its customer base. “It lets us talk to them individually and get to know what they like, and what they do, and that is hugely powerful”. Such an incentive is indeed very powerful and is sure to ensure Panera vastly growing sales and profit.

Analysts point out that this kind of insight will be used to make marketing for the company far more effective and influential. Rewards as simple as giving a free bakery item to a customer who usually just orders coffee, Panera is creating the opportunity to establish a long-term relationship with its customers. For instance, it could bring breakfast frequenters in more regularly for lunch and dinner as well.

Adding steak to its menu as well as implementing a new and more powerful loyalty program is sure to attract more customers to Panera in the long run, and will make itself appealing for all three meals of the day. Attempting to create a long lasting relationship with its customer base, Panera is sure to see long-lasting success in the very near future.
http://online.wsj.com/article/BT-CO-20110211-712481.html?mod=WSJ_Hospitality_middleHeadlines

Sustainability in the Hotel Industry

In these days, the green economic revolution is a big issue of the U.S. hotel industry. One innovative leader is Ashley Carroll who directs the Environment program at the Ritz-Carlton, Kapalua in Hawaii. They offered the experiences to guests such as they can travel to see Maui’s native forests, gardens growing crops, and hear about Maui’s primitive culture and environment. This kind of trend is connected with current trends concerning the environment and how it can increase hotel’s revenue due to competitiveness of unique experience.

In addition, food grown in the hotel's native garden provides hotel guests with a healthy dining experience. In fact, the hotel's adoption of native gardening also gives guests a motivation to eat at the hotel and accounts for 15 percent of hotel’s revenue.

In this reason, while the hotel industry is down because of the recession and high fares of traveling, a hotel can make enough profit by procuring competitive advantage.

Three lessons from the green revolution's impact on the hotel industry:
1. Cost-competitive advantage: Saving green by going green is where most of today's business focus is directed. In these recessionary times, going green can make the difference in being able to compete on price.
2. Green revenue growth: This is where the green economic revolution is heading, growing revenue by going green. This is a multi-trillion-dollar global opportunity for building or cementing customer loyalty as consumers focus increasingly upon sustainability and wellness.
3. Green entrepreneurship: In every economic revolution, there is opportunity for the entrepreneur as the traditional big players struggle to adopt their legacy systems and business practices. Customers are looking for businesses that offer fresh solutions that support their quest for "going green."

http://www.entrepreneur.com/management/greencolumnistbillroth/article201838.html

Aloft and InterContinental Emerge

It is currently a relatively difficult time for the hotel industry due to the status of the economy. That being said, one particular group of entrepreneurs have worked hard to promote their “no-name” hotels in an attempt to compete with the major hotel chains such as Marriott, Westin and Hilton. These entrepreneurs strategized as to how they could compete with these well-established hotels, and decided to base their strategy on having their hotels be cheaper than hotels like the Marriott, Westin and Hilton. They also try to emphasize music and local culture, have new and up-to-date hotels, and have “the consistency, reliability and accessibility of a branded hotel.” Starwood executive, Brian McGuinness, thinks that one particular group, Aloft is so successful because they suggest to their customers that they will get “style at a steal” for their money.

Aloft currently has 42 locations and InterContinental Hotel Group's boutique-style Hotel Indigo has 36, while Hyatt has 156. Aloft and InterContinental have some work to do in order to promote their name, but it seems like they are off to a great start. In order to be a successful entrepreneur, you need to be innovative and have something that your competitors do not offer. While many hotel chains have recently renovated their existing hotels and built new ones to provide a similar experience no matter where you are, Aloft thinks that their hotels should reflect where they are located. In order to present their customers with the local feel, while still having necessary attributes like loyalty points in which the customer can develop a relationship with the chain.

The competitive landscape for the hotel industry has inevitably changed now that these entrepreneurial hotel chains are entering the industry. These hotels have taken a new stance on the hotel industry, and appear to be successful. Aloft and InterContinental need to be smart in order to maintain an edge on hotels like Marriott, Westin and Hilton, but they seem to be on the right track.
http://travel.usatoday.com/hotels/2010-07-29-newhotels29_ST_N.htm

Hotel Economics

Hotels have four main departments to make profits, room revenues, food & beverages revenues, telephone revenues, and miscellaneous incomes. Room and food & beverage revenues are the main drivers for the profit, while the other revenues are minor drivers. In the hotel industry, room and F&B service is very important and crucial in order to make profits. Thus increasing the customers who stayed in the hotel is also important to increase their profits. TO determine profits, main size and performance measures are used to check and maximize the profit. Examples of this are occupancy rate, annual sleepers, GUR (number of sleepers per available bed) ARR (Average Room Rate), Revenues PAR (per available room), Revenues POR (Per Occupied Room).

The cost factor are divided by elements such as administration & general, marketing, repairs and maintenance, energy costs, etc. Also fixed charges include equipment, other rent/lease, real Estate and taxes, and various types of insurance.

Recently there are new factors to make the profit such as internet based booking and the new real estate financial structures. Internet based booking can reduce the costs of booking and also increase marketing for hotels. Therefore, the result is an increase in the overall hotel occupancy rate with no decrease in the Average Room Rate. The other factor is new real estate ownership, where the trend is changing that financial investors increasingly owned ownerships of the hotel real estate. They consider more for the financial cash flow and profits like stockholders than the characteristic of the industry’s professional manager. In fact they want a large profit by taking the risk of the long term investments.

In this hotel industry, supply and demand is increasing. For example, JW Marriott plans to build 40 hotels in India by 2013 and Ritz-Carlton President Simon Cooper gives insight into new hotels emerging in Asia and the Middle East. Also hotel, room prices in Europe from Trivago (a booking website), rooms are selling for increased rates, which means both the demand of the hotel room and the supply of the hotel room increases together - a good sign for a hotel industry.

http://www.gadling.com/2010/04/15/hotel-economics-more-hotel-groups-plan-global-expansion-at-the
http://www.articlesbase.com/management-articles/hotel-financial-control-how-to-improve-your-hotel-pl-structure-based-on-new-revenues-and-costs-816287.html

Economics Impacting the Casino Industry

Las Vegas has always had the reputation as being a vibrant and unique city. When people go to visit Las Vegas, they often leave saying, “What happens in Vegas, stays in Vegas,” for a reason. This phrase stems primarily from the gambling scene, when people spend lots of money hoping to leave rich. This is the foundation of the gambling business, and there are many factors that play into the economics of a successful Casino.

In a place like Las Vegas, where everything is expensive, the casinos are able to charge what they want to play games because they know that the casinos are one of the attractions for tourists to partake in. The casino’s have to upkeep their buildings and appear to be professional, so that people want to come back and develop new clients.

There are not very many costs that casino’s have to bear. They simply have to keep their casinos modern, and pay their employees. More significantly, however, they have to pay a certain amount of money to the government. Since casino’s do not “manufacture” goods, they do not have to bear that cost. Casinos work in many ways like an insurance company. The casino relies on the fact that most people will not win big money, so when someone does win, they can afford to pay them out. It is an industry based on odds. When there are enough people (supply) to pay money at the casinos, the more money they have to give out to people, and the better the reputation the casino has.

A poor economy, however, has the potential to impact the revenue casino’s make. When the economy is in the middle of a recession, people are less likely to gamble their money, because they are unsure about when they will be able to make the money back. According to an article from the New York Times called, “Lost in Las Vegas,” Las Vegas was impacted severely due to the economy. It said, “Then, about two and a half years ago, as you may recall, the entire American economy collapsed. And with it went Las Vegas: those mega-hotels, where millions of people gambled away money they didn’t have, were suddenly empty; so were the newly built, now foreclosed-upon McMansions. Today the city’s unemployment rate is 14.9 percent, possibly the highest in the nation. Las Vegas had been humbled.” When there aren’t enough people going to the casinos, they cant afford to give out that much money. It is an ongoing cycle; whenever the economy is doing well, the casinos do well.

Overall, the economics of the casino industry are much more complex that many other industries. The casino industry is a high risk, high reward industry for both the customers, and the employees of the casino. When a casino is doing poorly, the casino will most likely lay more employees off. Casinos have such a crucial part in making money for the state, so often times the government will help them out when times are bad, but the economics of the casino industry are very shaky as a whole.
http://travel.nytimes.com/2011/02/06/travel/06lasvegas.html?pagewanted=1&sq=hotels&st=cse&scp=7

The cost of opening a restaurant in USA

The material is about the cost of opening a restaurant in San Francisco, but it is also applied to other places in USA.

One huge part of the cost is renting the space and building out the restaurant itself. For the sake of simplicity, let’s use the number of $900 a square foot to build out your kitchen and dining room. For 2,500 square feet the build out will cost you $2,250,000. (Remember these are just theoretical numbers, for a high-end place.) For your space, take improvement and upgrades you intend to make and divide by the total square footage. Plus, your rent on a space in the city — maybe as much as $6 per square foot — on 2,500 square feet could be as much as $15,500 per month. Of course, If you want to buy a space instead of renting, it will be much more expensive.

Another big part of the cost is the liquor license. A full liquor license in San Francisco will cost you as much as $250,000. In other cities of USA, it is quite expensive too. Furthermore, you will need a contingency fund in case you run into some problems and delays throughout your investment.

What delays could there be:
• Certificate of occupancy on your restaurant from the City
• Construction delays
• Delay in approval of a liquor license
• Construction delays
• Health department sign off
• Fire department sign off

There are many other aspects in which you need to spend money when opening a restaurant:

• A restaurant designer
• A public relations firm
• A lawyer to put together your partnership and operating
agreements.
• Liquor and wine inventory
• Food inventory
• China glass and silverware
• Music system
• Two weeks of staff training before you open the doors

Operating a restaurant need the following costs:
1. direct cost : insurance, direct labor (salary and bonus of service stuffs), direct material ( food, liquor, napkin)

2. indirect cost (include overhead and period cost) : insurance, depreciation on the equipment, advertising fee, salary and bonus of stuffs and managers , utilities

The cost of opening and operating a restaurant has a close connection with the gross profit. So if the managers of restaurant can find some legal ways to low the cost, it will be a significant increase in profit even the revenue is stay the same.
http://insidescoopsf.sfgate.com/tjjacobberger/2011/01/21/the-cost-of-opening-a-restaurant/

UK FOOD AND DRINK COMPANIES TAKE MEASURES AGAINST INFLATION

Many food and drink companies in the United Kingdom have been raising prices by attempting to persuade customers to use more costly products in order to protect their profit margins from high inflation.

Mitchells & Butlers, a UK based restaurant and pub chain, was deemed “the best-placed pub operator to pass through price inflation of both food and whet sales”. According the the company's Chief Executive, Adam Fowle, steps taken in order to protect their margins include persuading customers to invest in higher quality products, as simple as investing in more expensive dishes.

As a result, the market predicts a small rise in Mitchells & Butlers net operating profit margin this year.

Similarly, Britvic, a leading UK soft drinks group, is following the trend at a slower pace, since it will have to wait until the second half of the year to pass on the costs of higher commodity prices. Britvic stated that “it expects to grow its earnings before profit, taxes, depreciation and amortization margin by 50 basis points a year over the medium term”.

Even though the U.K. Economy is in a fragile state, and is putting a significant amount of pressure on these food and drink companies, their profits are predicted to be rising at a slow yet steady pace.

http://online.wsj.com/article/BT-CO-20110127-705613.html

STARBUCKS CARES ABOUT THE ENVIRONMENT

Starbucks is one of the leading Fair Trade certified companies in the United States, as well as in the world. Their mission statement expresses high ethical values; one of their most respectable statements being: “It's our goal for all of our coffee to be grown under the highest standards of quality, using ethical trading and responsible growing practices. We think it's a better cup of coffee that also helps create a better future for farmers and a more stable climate for the planet.”

Starbucks raises relevant environmental concerns, and aspires to provide farmers with incentives to reduce the environmental impact of coffee production while simultaneously providing support centers and loan programs to their farmers in such countries as Costa Rica and Rwanda.

In addition, Starbucks is “committed to significantly reducing the waste [their] stores generate-especially when it comes to recycling”.

In 2010, 70% of Starbucks stores recycled at least one type of waste. Also, in 1997, they developed a recycled-content cup sleeve in order to prevent customers from “double-cupping” as well as to keep their hands from getting burned by their hot beverages. In 2006, they launched their first paper cups for hot beverages with 10% post-consumer fiber. Starbucks aspires to have recycling available in all of its stores as well as serve 25% of its beverages in reusable cups by 2015.

Seems like a realistic goal, judging by the company's previous accomplishments!
Apparently, Starbucks serves a great cup of coffee along with a strong commitment to maintaining corporate social responsibility- can't beat that!

http://www.starbucks.com/responsibility

Today’s Leader of Corporate Responsibility: McDonald's

Every day, large companies, such as McDonald’s, must make corporate decisions regarding corporate social responsible. As a multi-million dollar international company, it is McDonald’s responsibility to establish development economically, socially, and environmentally. McDonald’s believes that “corporate responsibility is about living our values each and every day. It’s about taking action, achieving results and always maintaining open lines of communication with our customers and other key stakeholders.”

So how does a major company like McDonald’s uphold their commitment to being socially responsible?

1. Most importantly, McDonald’s has a Code of Conduct for Suppliers that specifically explains how suppliers should treat their employees. Demonstrating respect and care for its employees proves that the company values employment standards in the workplace.

2. Being the leader of the fast-food industry, McDonalds must face decisions every day that affects the environment and sometimes the safety of their workers. Recently McDonald’s created a sustainability project in order to promote ethical environmental practices in agriculture. A common tomato farm supplier that McDonald's purchases from underwent specific adjustments that improved the conditions of the farm and its workers in order to create a more sustainable business.

3. In today’s global marketplace McDonald’s must find a source for raw materials, which is often an international supplier. This ties the company to many environmental, ethical, and social concerns within the international area. By generating a sustainability program called Sustainable Fisheries Program that partners with others around the world in order to create ethical standards for wildlife. Their focus is to correctly guide and influence all worldwide purchases of wild-caught fish that contributes to the making of Fillet-o-Fish.

4. Finally, a large part to McDonald’s CSR is the concern with how the company affects the surrounding community. McDonald often views charitable activity as a marketing investment that builds stronger relationships with the community. Therefore, McDonald’s makes an enormous impact on the Ronald McDonald House by donating charitable contributions in order to support the health and well-being of children.

McDonald’s strong representation of corporate social responsibility allows the company to serve the local and global community very well. It also benefits the corporation as a whole, forcing the company to balance their moral and ethical obligations to not only their but employees but also the consumers.

http://www.suite101.com/content/corporate-social-responsibility-at-mcdonalds-a211782

Bennigan’s Assisting Families in Need

In many situations around the world, people are in need of assistance both financially and medically. Certain businesses and franchises like to reach out to these people because they know that they can make a difference. Throughout the world, there are many businesses and organizations that demonstrate good corporate social responsibility. A popular restaurant, Bennigan’s, is an example of this type of franchise.

In Saginaw Township, there have been an abnormal amount of homicides in 2010. Bennigan’s decided to support a fundraiser by donating 20% of the food and alcohol sales to the Stennett family (one of the families who was impacted by a homicide). The manager asked the employees of the Bennigans to ask their customers if they would like to donate to the fundraiser, in an attempt to raise even more money. This business had no connection to the Stennett family, but offered to help a family in need in their community, which is admirable.

These types of actions help promote a strong corporate social responsibility across the business world as a whole. When organizations see other businesses donating to good causes, it often causes a ripple effect, and businesses give back to their communities when in need.

A business having a strong reputation of consistently helping others in need can benefit to a more successful business. There are also many other restaurants that donate extra food to salvation armies. It is important for businesses to realize that they do have a responsibility to serve the community, given the amount of money many of them seem to profit. In the end, it is an ethical decision to donate. Is it more important to make more money, or to help people in need? When businesses donate, it makes the community feel more close-knit, which can result in a strong relationship amongst a business and it’s customers.


http://www.mlive.com/news/saginaw/index.ssf/2011/01/bennigans_restaurant_in_sagina.html