Intro to Tourism & HospitalityChapter 3

Copyright

Introduction to Tourism and Hospitality in BC by Morgan Westcott, Editor, (c) Capilano University is used under a CC-BY 4.0 International license.

This chapter is by Rebecca Wilson-Mah and is used under a CC-BY 4.0 International license.

Learning Outcomes

Explain the contribution the accommodations sector makes to Canada’s economy

Identify how a hotel category is determined, and describe different hotel categories in Canada

Explain the meaning and structure of independent ownership, franchise agreements, and management contracts

Summarize current accommodation trends

Discuss the structure of hotel operations

Canadian Hotel Stats

Accommodations account for 25%-35% of visitor spending

8090 hotels with a total of 440, 123 rooms

$16.7 billion in spending

Average occupancy of 64%

Employed 287,000 people

(Hotel Assoc. of Canada, 2014)

Figure 3.1: Balcony view from Vancouver’s Westin Bayshore Hotel

History of Hotels in Canada

Railways = hotels for tourists (late 1800s)

CP hotels, CN hotels

Glacier House

William Van Horne: “If we can’t export the scenery, we’ll import the tourists”

(Canada History, 2013)

Figure 3.2: The Banff Springs Hotel, present day

Hotel Types

Size

Location

Level of Service

Market and function

Ownership and affiliation

Amenities

Industry standards

Brand standardsFigure 3.3.: A wedding at the Pan Pacific

Characteristics Based on Market Type

Market Segment Traveller Type Characteristics

Commercial Business High-volume; stronger demand on weekdays; more recession-proof; lower ADR

Leisure Leisure Stronger demand Friday and Saturday, during holidays; includes groups

MCIT Corporate groups, associations, SMERF

Peak convention demand is spring or fall; close to a conference centre/event space importance

Extended Stay Business and leisure Often features kitchen facilities; more than five nights (includes snowbirds)

Specific Hotel Types for Niche Markets

Budget hotels (Holiday Inn, Accor)

Boutique hotels (Magnolia Hotel and Spa)

Resorts (recreation facilities and amenities)

Figure 3.4: A note welcomes a return guest at the Magnolia in Victoria

Ownership - Independent

Financed by one person or a small group

Managed directly by owners or third-party operators they employ

Management system free from outside control

Figure 3.5: The Wedgewood in Vancouver

Ownership – Management Contract

Owners of the property contract out the management

Can be a franchise agreement

Can be a contract with a corporation to provide the brand and management expertise (e.g. Fairmont Hotels)

Figure 3.6: The Fairmont Empress

Ownership – Chains and Franchise Agreements

Owners build or purchase a hotel

Buy or lease a brand name and operations style (e.g. image, goodwill, procedures, controls, marketing, reservations systems)

(e.g. Coast Hotels)

Figure 3.7: The Coast Bastion in Nanaimo

Ownership – Fractional

Developers finance the build by selling units in up to ¼ shares

Very popular in BC from the late 1990s to 2008 (Western Investor)

Owners place units in a rental pool managed by a company (each unit has up to 8 owners) – can be very challenging, falling out of favour

Figure 3.8: The Sun Peaks Resort Hotel

Ownership – Full Ownership Strata

Developers finance the build by selling whole condo units

Units make up part of the building

Rest of building is a hotel, developed with funds from the condo sales

Figure 3.9: The Rosewood Hotel Georgia

Financial Performance

Occupancy (how full the hotel is at any given time)

ADR (Average Daily Rate)

RevPAR (ADR x Occupancy)

COPR (Costs per occupied room)

Top earners in Canada, 2013: Four Seasons, Fairmont Raffles Hotels, Starwood Hotels and Resorts, Marriott Hotels of Canada, Wyndham Hotel Group

Camping and RV Accommodation

Canada and BC’s brand are closely tied to the outdoors

14% of Canadian households owned an RV in 2011, over 1 million RVs on the road

3000 independently owned campgrounds across Canada, roughly 900 of these are in BC

(CNW, 2014)

Figure 3.10: Campers in the distance

Operations

GM/Director of Ops

Maintenance/Engineering

Food & Beverage

Sales and Marketing Catering and Conference Sales

HR

Rooms Division Front Office Housekeeping Reservations

Figure 3.11: Vicky works the front desk

Trends and Issues

The sharing economy (e.g. Airbnb)

Distribution through Online Travel Agents (OTAs)

Online Bookings and Mobile Devices

Figure 3.12: the homepage of Airbnb

Conclusion

Multiple business models from franchise hotels to campgrounds

Operators and owners have to stay on top of industry and consumer trends to remain competitive

Figure 3.13: Room service at the Pan Pacific

References

Airbnb. (2015). How to host. Retrieved from www.airbnb.ca/help/getting-started/how-to-host

Canada History. (2013). The railroad. Retrieved from www.canadahistory.com/sections/eras/nation%20building/Railroad.html

CNW. (2014, May 1). Canadian RV and camping industry urges government to address critical infrastructure needs. Retrieved from www.newswire.ca/en/story/1347701/canadian-rv-and-camping-industry-urges-government-to-address-critical-infrastructure-needs

Economist, The. (2013). Silverstein, B. The rise of the sharing economy. Retrieved from www.economist.com/news/leaders/21573104-internet-everything-hire-rise-sharing-economy

Fast Company. (2012). Airbnb – Most innovative companies 2012. Retrieved from www.fastcompany.com/3017358/most-innovative-companies-2012/19airbnb

References

Hotel Association of Canada. (2014). Hotel industry fact sheet. Retrieved from www.hotelassociation.ca/forms/Hotel%20Industry%20Facts%20Sheet.pdf

Inversini, A., Masiero, L. (2014). Selling rooms online: the use of social media and online travel agents. International Journal of Contemporary Hospitality Management, 26 (2), 272-292

Melloy, J. (2015, February 2). Airbnb guests triple hurting Priceline, HomeAway. CNBC. Retrieved from www.cnbc.com/id/102389442

Then Hospitality. (2014, April 15). The benefits of using online travel agencies (OTAs). Retrieved from www.thenhospitality.com/blog/the-benefits-of-using-online-travel-agencies-otas

Travel Click. (2014). Business and leisure travelers continue to book more hotel reservations online. Retrieved from www.travelclick.com/en/news-events/press-releases/business-and-leisure-travelers-continue-book-more-hotel-reservations-online

Attributions

Figure 3.1 Shot from balconey by Alan Wolf is used under a CC BY-NC 2.0 license.

Figure 3.2 Banff Springs Hotel by Evan Leeson is used under a CC BY-NC-SA 2.0 license.

Figure 3.3 JONETSUpanpac07 by Jonetsu.ca is used under a CC BY 2.0 license.

Figure 3.4 The Magnolia Hotel (Victoria) 2013 by Raul Pacheco-Vega is used under a CC BY-NC-ND 2.0 license.

Figure 3.5 Wedgewood Hotel by Stewart Marshall is used under a CC BY-NC-ND 2.0 license.

Figure 3.6 The Empress by 3dpete is used under a CC BY ND 2.0 license.

Attributions

Figure 3.7 Coast Bastion Hotel (Nanaimo) by Raul Pacheco-Vega is used under a CC BY-NC-ND 2.0 license.

Figure 3.8 Delta Sun Peaks Hotel by jhopkins is used under a CC BY 2.0 license.

Figure 3.9 Hotel Georgia, Rosewood Hotel Vancouver by Rishad Daroowala is used under a CC BY-ND 2.0 license.

Figure 3.10 Night Neighbours by James Wheeler is used under a CC BY-NC-SA 2.0 license.

Figure 3.11 Vicky Lee at Delta Burnaby Hotel by LinkBC is used under a CC BY 2.0 license.

Figure 3.12 Scott and Tina Visit the Pan Pacific Vancouver by Pan Pacific Hotel is used under a CC BY 2.0 license.

Figure 3.13 Airbnb by Gustavo da Cunha Pimenta is used under a CC BY-SA 2.0 license.