A lot of events—like sports events or art events—really wouldn’t be possible without sponsorship. What we see is that private companies will invest to have their brand logo displayed or to have advertisements during the event so that their brand is connected to the brand, or the event itself.
At the Olympic games, major sponsors might be, for example, McDonald’s or Samsung. They invest a lot of money so that their product is aligned with the value of the event itself.
This can also happen in much smaller events. For example, there might be a local food festival where you live, and there might be local restaurants or food companies that sponsor that. Ticket sales, of course, are a major factor. Hopefully, you can sell enough tickets to raise the money that you have invested into staging the event.
There are other ways, particularly if you work in the arts. You could tap into government funds. There might be an application process so that you can host your event for the sake of the greater good of the community. That’s where local governments often invest.
They often do that because of the tourism impact it might have. You might attract people to the event that will spend money and thus bring benefits to the community. Maybe your event has other benefits. Maybe you have a community sports event that promotes healthy living or healthy eating, and the government wants to support it.
If we think of the venues where these events might take place, some of the main stadia in New York City you might well be familiar with. Think of Madison Square Garden or Radio City or the Barclays Center, but don’t forget that a lot of events also take place outdoors. For example, the New York City Marathon ends at Central Park, or the US Open, a tennis tournament, takes place at Flushing Meadows. Other famous examples would include Yankee Stadium and MetLife Stadium.

Hotels have a high degree of operating leverage, a relatively high level of fixed costs, and a relatively low level of variable costs. This level of operating leverage makes the business volatile. When a hotel is below the break-even point, it can lose money very quickly. But once it gets over the break-even point, the marginal cost of filling one more room and servicing one more guest is insignificant. Profits increase dramatically.
The hotel industry is much more volatile than other real estate industries, like office buildings and shopping centers. It is much more similar to the airline industry, which has comparable operating leverage.
If a plane has 100 seats and has sold 99 seats, the marginal cost of selling the last seat is a few cents. The passenger gets half a can of soda and some pretzels. But the plane neither hires any more flight attendants nor another pilot. So, the marginal profitability of selling that last seat is pretty close to 100%.
The hotel industry is similar in that the marginal profitability of selling each additional room after crossing the break-even point is remarkably high. So, its profits increase quickly. On the flip side, when business deteriorates, the economy weakens, a hurricane comes, or there’s a health or other momentous event that affects people’s travel plans and disrupts the travel cycle, hotels can suffer drastically. It is very challenging for the industry to tighten its expenses to cut losses.
Hotels are always trying to be nimble, but they’re working against the structural aspects of the industry. It is hard to be efficient. When the hotel industry is doing well, profits rise dramatically. But when the industry is suffering, profits can erode rapidly.

Entrepreneur is a French word taken from entreprendre, which means “adventurer” or “one who undertakes.” Entrepreneurs look for and recognize opportunities. They also take an enormous amount of risk to move on to these opportunities and create value for their industries.
An entrepreneur is a risk-taker because success is rarely guaranteed. But, as Edison says: “I didn’t fall a thousand times. I learned many new things.”
Entrepreneurs try to solve problems in either the product or service industry. Products are more tangible items, whereas services are more like hotel, legal, and financial services. #
Lauren Grench details her journey into entrepreneurship, and what it means to blend all these services into a cohesive, memorable experience:
“So LLG is an event management and design firm that specializes in luxury destination weddings. We plan and design luxury destination weddings. That encompasses planning the guest experience. It also includes all the budgeting, vendor negotiations, and contract negotiations.
“Anything with destination planning means complex logistics, [which means] understanding international law, international relations, socioeconomics, understanding what’s going on within our political atmosphere with all the different countries that we’re working with.”
According to Grench, the customer experience defines the industry.
“Hospitality is at the epicenter of event management. You need phenomenal customer relations. You need to make sure that your guest experience is also just as important as your client experience and your vendor experience and your venue experience.”
Each of these areas is vital to the success of any event. Optimizing customer service, customer relations, and the guest experience is about getting them all to work together and ensure the proper execution of the event.
“A common thread for entrepreneurs is that they tend to be really creative, innovative individuals,” Grench says. “They’re always looking after something new, something that would solve an existing problem for the industry. This could be a hospitality industry, financial industry, even a regular taxi industry just like Uber did.”

Professor Richie Karaburun is originally from Turkey and is currently a Clinical Assistant Professor at New York University’s School of Professional Studies Center of Hospitality.

Professor Karaburun has been in the hospitality industry about 25 years. He started as a management trainee in Los Angeles, then climbed up the ranks. When he left the company, he was the Vice President of Product Development and Contracting.

He was then recruited to be a president of Gulliver’s Travel, which was one of the largest wholesale travel business at the time. After they sold the company, Professor Karaburun joined The Radius, which was one of the largest corporate travel companies at the time.

Here, says Professor Karaburun, “I had my entrepreneurial ideas come up and we founded a company called Roomer Travel. And we raised money. Roomer was an online travel agency similar to Stop Hub.”

Currently, Karaburun is studying marketing and consumer behavior. His research interest is all about social connectedness and its impact on consumer behavior.

He is considered to be a hospitality guru. After 25 years in different aspects of hospitality, he is now proud to teach at NYU Tisch Center of Hospitality, predominantly business development, entrepreneurship, and hospitality marketing.

In this course, you will learn about entrepreneurship and innovation: what does it take to be an entrepreneur? You will also learn whether you are a true entrepreneur.

You will explore hospitality industry disruptors such as Airbnb, and what it takes to create a company from an idea. You will learn how to draft a proper business plan, get funding, hire a team, and manage the team.

Finally, you’ll examine how to create value for the industry you are in, and how you can plan an exit strategy for your business.

In terms of hospitality services — hotels, airlines, cruises — Google is a significant power, simply because so many people start their planning at the search engine. As a result, you need to have Google Ads.

In other words, you need to pay to get your brand in front of searching customers.

For example, search “Times Square hotel” in Google and see what comes up. First off, search engine optimization (SEO) plays a part in which brands appear in the first few pages of results. But there are hotel companies that have paid to have their name at the very top. You have to pay for Google Ads to get your name out there.

Say you’re a Moxy Hotel, a Marriott brand targeted at Millennials. You want to make sure that when a consumer in this demographic searches for ‘Moxy Hotel New York City,’ you’re at the top of the first Google page.

The advantage of sites like TripAdvisor, Expedia, and Booking.com is that they can compare rates for several hotels.

If you go directly to the website for a Moxy location, you’re not comparing rates with other properties. There’s more information comparison — and maybe transparency — happening on Expedia, Kayak, etc., than at the hotel’s specific site. But it’s more costly. For example, if the customer books on Expedia, they could pay 10-20% more.

Simply put, hotel brands want consumers to visit their sites directly. How do they do this? For starters, they offer price matching. If you find a lower price than on their site, they’ll match it.

Hotel brands also say that you won’t collect loyalty points if you book through external channels like Expedia or Booking.com. Booking directly gives you loyalty points, and you’ll also get preferred treatment at the hotel.

Finally, in some cases, inventory — not the desired rooms — shows up in search results of external booking sites. Instead of offering a garden or ocean view, these could be on a lower level, windowless, or facing a busy highway.

Ultimately, hotel brands show a preference for consumers who book directly on their site. Having your hospitality brand at the top of Google search results means you’re more likely to have direct bookings.

Suggested Image (if needed): https://unsplash.com/photos/cwr02zo0gP8

The hospitality industry is part of the service industry. That makes it challenging since it’s an intangible service, and it isn’t easy to know what to expect beforehand. Also, if you don’t sell the room, the seat, or the berth on a cruise ship before it departs—it’s gone.

These are companies that have a high fixed cost. To make money, you must first establish a specific level of use and demand. For airlines, it may be that to make money, 85% of seats on a given customer flight or a particular type of plane must sell at specific prices. The occupancy rate for cruise ships is 105%. That means there are more than two people in every berth and cabin.

New York City’s hotels are in high demand. The occupancy rate is now hovering around 90%. In the United States, the average occupancy—the percentage of occupied rooms each night—is roughly 65%.

Another variable is the average daily rate. For example, New York City hotel rooms can range from $300 to $500, depending on the market. It could cost around $300 for select service or lifestyle hotels. The average daily charge for a luxury hotel room might be $1,000.

The same is true for airlines and cruise ships. The cruise ship’s average charge per seat determines the average cost of a five-day cruise. All of these businesses are in the business of managing yield. It’s referred to as “yield management.” You want to maximize revenue from a purchase made by a hotel guest, airline passenger, or cruise passenger.

Some of these companies have revenue-generating opportunities when customers use their services. For instance, hotels may sell guests food and beverages, wifi, and spa treatments. Cruise lines sell additional services like retail, restaurants, excursions, and various other onboard activities. Airlines have some limitations. Food is available for purchase onboard, but the selection is minimal. Tax-free purchasing is sometimes available on international flights.

To summarize, when a customer buys a ticket, you want to maximize the yield per ticket. Once they’re on board, you’ll want to maximize the revenue. This is called ticket net yield, or yield, followed by an onboard spending yield.

One of the biggest challenges for a service and hospitality business is intangibility. Another is disappearing inventory – if you don’t sell it tonight, it’s gone.

More importantly, you want your customers to dream about staying onboard your cruise and coming to your hotel. With social media and electronic marketing tools, you can actually cost-effectively reach more customers.

But, there’s an overabundance of information. How do you get your information across? When does the consumer use their cell phone? When are they on their desktop? When is the best time to reach them? When are they dreaming? When do they make decisions?

For example, March. January, February, March are the heavy booking times for summer cruises. That’s the time to promote and reach your customers. You can do this through traditional advertising too!

Carnival Cruise Line is involved with many TV shows. They use the old love boat method where consumers see a mini-series happening on a cruise ship. As a result, they get the desire to travel.

Many cruise lines still heavily rely on travel agents. Why?

Because the market penetration of cruise lines in the United States is 13%. Only 13% of the population has taken a cruise. Globally it’s 2% – only 2% of the global population has taken a cruise. In China, it’s only 1%. There is a lot that needs to be done in those markets to build awareness. In many cases, travel agents are still the best way to reach customers. But then if you look at airlines, nobody goes to a travel agent to book a flight.

Customers often use distribution channels, like Expedia and Kayak, which consolidate all the information from various websites. The distribution challenge for airlines is to make sure that if you check through Kayak, the best rate for a flight is on your own site.

If a person books through Expedia, the airline may have to pay 10% to 20% to Expedia. The same goes for hotels. They may have to pay 10% to 20% per booking to booking.com, hotels.com, or Expedia. So you want these customers to book directly with you on the Marriott site or the American Airlines site.

But if you are a small or independent hotel, then you don’t have the marketing power. You don’t have the budget. So often, you may need Expedia to build awareness. It’s a trade-off. You may pay 20% for Expedia to get the booking, but if you don’t do that, you might get no business.

But slowly and by going through consortiums, like Leading Hotels of the World, you can get distribution power behind your brand. You’ll also get access to the consumer. With the exception of grocery stores, many of the hospitality services – car rentals, airlines, hotels, restaurants, are all booked electronically. You can generate demand by taking advantage of these platforms.

Hosting a successful business event or convention is an important part of hospitality management. There are a variety of types of venues, including the following:
Convention Centers
Convention centers are typically larger in size, allowing them to host very large meetings and conventions. A good example is the Jacob Javits Center in New York City.
These spaces are generally a bare boned concrete space that can be set up the way you want to bring your event to life. A stage can be brought in, and very often there’s roll out seating that can be tiered, in rows, or with round tables.
Hotels
Some business events or conventions don’t require the amount of space that a traditional convention center holds. Hotels come in all shapes and sizes, different star ratings, and different styles from traditional to very modern. They generate revenue from renting out event space in either a ballroom or smaller meeting rooms. The ballroom can be divided up into smaller areas or can be fully used and set up with staging, lighting, and production elements.
Guests for the event may also need a room to sleep in and need to eat during the day. This is a great way for the hotel to market and maximize revenues by selling other services that it’s already offering.
Unusual venues
Event organizers sometimes choose unusual venues to make sure their event stands out from the competition. Examples would be a museum, a zoo, or a theme park. These unusual venues provide a surprise and something that will make people take note. These different atmospheres and décor can provide a more personal venue for your event.
Cruise ships are another notable example. In the wintertime they may be docked at the harbor. You now have everything you need for a large convention including rooms, big spaces, big theaters and meeting rooms. The ship also doesn’t have to leave the harbor.

We are going to talk about the seven rules of building a successful business. We’re also going to use an example company that everyone knows: Airbnb.

The number-one rule for building a successful business is to recognize an opportunity. Airbnb founders, when they were starving students in San Francisco, realized that there are many citywide combinations where people cannot get hotel rooms. So, they came up with an idea.

They bought an air mattress for their apartment and made money off of it. That’s why it’s called Airbnb.

The number-two business rule to creating a successful business is to evaluate said business with critical thinking. Airbnb’s founders — one is an artist, another is an engineer — evaluated the offers after they got their first customers for a citywide convention. They thought “Hey, wait a minute! This might be an opportunity. How can we make it bigger and better for everyone?”.

Number three is building a team. It is one of the most important things in business because, as a leader, you’re as successful as your team. So, Airbnb owners started hiring older and talented individuals in the San Francisco area.

Number four is to write the business plan. It is the roadmap to success. So you have to write it with its components to show your company’s mission and idea’s vision.

Number five is gathering resources, and one of the most important resources is financial. They are what you need to create your company; anywhere from human to material resources.

Number six is to decide the ownership. Airbnb founders didn’t start the company by themselves. They had different partners. So, you have to decide the owner, the ownership structure, and the main shareholders. This is important, especially when you start with a friend or a colleague.

The last rule is to create wealth. Once you start creating value for any industry, people will recognize that you and your company are solving an existing problem and that you’re creating solutions with your ideas. Consequently, you’re going to create wealth, not only for yourself but for society as well.

To summarize the seven rules for creating a successful business: Start with an idea; recognize the problem, how to solve it; who can help you solve this problem, and then, write a business plan. Once decided, look for resources; anywhere from financial to human resources. Lastly, create wealth and value for your market and your society.

Everyone knows Airbnb.

Founded in a one-bedroom San Francisco apartment, Airbnb is now valued at more than $22 billion.

The great opportunity for a hotel alternative was recognized by the Airbnb founders when they realized that San Francisco needed more hotel rooms. With insufficient availability, the founders believed that alternative accommodations should be available for anyone travelling, whether for business or for leisure.

The founders thought “Wouldn’t it be nice if people shared their homes with travelers? Wouldn’t it be nice if we had a platform, or a marketplace, for renters and travellers to meet?”. With these questions, Airbnb was born.

The founders started by creating a basic platform where people could post their couch or bedroom for rent to travellers coming to San Francisco at a busy time. They created a value proposition of alternative accommodations that were not only easy to book but also much cheaper than hotels. Over time, the experiential aspect was added with the notion of living like locals, staying with locals, and meeting locals. It was this experiential aspect that really helped Airbnb overall.

Starting in San Francisco, Airbnb eventually grew and expanded into other key American states, and eventually they achieved globalization and entered Europe and Asia. As Airbnb grew so did their offering, with different services, experiences, and attractions added to the platform. They also started hiring hospitality executives to train Airbnb employees and hosts on how to act and think so they could compete with hotels. This was one of their key differentiators. Now, Airbnb is regarded as one of the most well-known alternative accommodation platforms.

The key to Airbnb’s success? Persistency. The founders truly believed in their idea, and they never gave up pursing it. In the beginning, the founder’s received 150 rejection letters when seeking funding money. But these rejections never stopped them for pursuing their ideas, and eventually they received the funding. Persistency was their key to success.