Conditions of Competition

1
Conditions of Competition

• Fragmented ownership
• Cyclical industry
• Low variable cost/high fixed-cost structure
• Growth in securitization
• Technological revolution

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2
Upstairs Guests vs. Downstairs Guests

• Upstairs Guests
• Comfortable rooms
• Reduced service
• Lower prices
• Downstairs Guests
• Comfortable rooms
• Full service
• Higher prices

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Hotel Service TrendsBy Segment

• Luxury hotels Many opening European-style
  bistros and brasseries
• Upscale hotels Most always include a
  top-of-the-line luxury restaurant
• Economy hotels Offer greatly simplified service
• Midscale hotels Often de-emphasize or lease out
  food service

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4
Service and Amenities Used to Differentiate One
Property from Another

• Concierge
• Superfloor
• Fitness/exercise facilities
• Spa
• Business center
• Food service
• Excellence in service

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5
Services Provided by Lodging Franchisers

• Design of basic business system
• Quality assurance
• Reservation system
• Brand name

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Ground Rules for Implementing Yield Management

• Disclosure of rate structure and concessions
  offered should be available to customers.
• Cancellation restrictions can be offered with a
  reduced rate, matching the customers benefit
  with the hotels.
• Other reasonable restrictions can be offered in
  exchange for a favorable rate.
• Different prices should be offered for products
  perceived to be different.

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