The hospitality industry offers a variety of rewarding roles. We encourage people to consider careers beyond servicing and managing rooms, food, and beverage. Completion of an appropriate hospitality education could lead to roles requiring managerial expertise to manage and control the operations in several departments.

There is a complexity of services and managerial effort that sits on top of the direct operating departments. We have an administrative and general department with a manager that oversees all the departments. These departments include marketing, maintenance, housekeeping, finance, human resources, and information and telecommunication services

The marketing department conducts sales and marketing activities to drive business for rooms, food, and beverage. Within this department are roles like marketing managers, marketing coordinators, sales managers, sales coordinators, and reservation agents.

Maintenance departments keep things working and looking their best. Responsibilities include keeping the hotel looking fresh and keeping the landscaping looking attractive. The energy department keeps ensures the air conditioning and heat work well.

The information and telecommunication services department manages a fair amount of hardware and software systems. They make sure charges from guests in the gift shop get properly transferred to their ledger to be paid when the guest checks out.

We hire for a lot of positions in the hotel. The housekeeping department requires room attendants and housemen. We hire public space attendants to look after our lobby, bar, hallways, and other public gathering areas. We also hire front desk agents, bell door attendants, cafeteria attendants, PBX operators, also called guest experience agents. There are roles that support our back-of-house spaces. Managers in food and beverage, front office, and guest experience supervise all staff. All of the openings are within our operations. The restaurant is a separate entity from the hotel, so we do not hire for these positions.

As a business, it’s important that you meet and exceed customer expectations. Consumers need to see value in the products that you offer.

There are two types of loyalty – attitudinal and behavioral.

Attitudinal loyalty is when a customer likes a brand but they don’t necessarily buy from them. Behavioral loyalty involves liking and buying from a brand.

So, how do loyalty programs generate loyalty towards a brand? They do so in two ways. The first is that you give them a reward for buying your products, such as points. The points can add up to provide discounts.

For example, after spending a certain number of nights in a hotel or taking a particular number of flights with an airline, a customer might earn enough points for a free weekend away or a free flight.

Rewards are important, but what’s more important now is recognition. Many customers enjoy surprise rewards, too. For example, if a customer is checking into your hotel and you offer a free wine as part of your loyalty program, it’s a nice surprise for the customer.

Every big hotel company, such as Marriott and Hilton, provide loyalty programs to their customers. Similarly, the big airlines, like United Airlines and American Airlines, also provide great programs.

Companies use something known as Customer Relations Management, shortened to CRM. These are huge databases that use sophisticated data mining, artificial intelligence, and deep learning to figure out the consumer behavior.

If you have lots of data about the purchasing behavior of a consumer across the course of the year, you can use this data to estimate when the consumer is likely to travel throughout the year. You can then adjust your prices and rewards to provide more attractive offers to customers to boost their loyality to your brand.

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.

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.

Dr. Jukka Laitamaki is a clinical professor at New York University SBS Jonathan M. Tisch Center for Hospitality. His background is management consulting and he holds a doctorate from Cornell Hotel School. His expertise is in strategy, branding, and business development.

With his background in management consulting, Dr. Laitamaki was with McKinsey and Company and Service Management Group, and worked in the hospitality industry in several sectors in Europe and the United States. As a professor, he has taught in all six continents in executive programs.

An avid world explorer, Dr. Laitamaki has traveled to a total of 63 countries. He has also spoken at the United Nations. His most recent research is on sustainable tourism and the United Nations Educational, Scientific and Cultural Organization (UNESCO) World Heritage sites. He has focused on Cuba which has 11 sites and four historic city centers.

Sustainable development, especially in tourism hospitality, is very important to Dr. Laitamaki. The principle that we should leave this planet in a better condition than we received it for the future generation is important. UNESCO does wonderful work in preserving many historic, cultural, and natural sites.

Sustainability in the hotel sector is also important because it saves energy. More consumers, especially millennials, are looking for environmentally conscious companies. Companies like Marriott, for instance, has a brand called Element, which is an extended stay brand. Element is very energy efficient and uses recycled materials for their buildings from floor to ceiling.

With this online hospitality education course you will learn about the tourism industry. You will learn about global destinations as well as a lot about New York City. Why do consumers come here? You will learn about hotels and how consumers choose hotels, cruises, and car rental services. You will learn about this growing industry and how it’s transforming.

How do you know what makes a great hotel? Well, consumers can use TripAdvisor. They can look at consumer reports. And they can find out what the most preferred brands are. If you look at the JD Power list, you’ll see all the best hotel companies. These comparison companies use specific criteria to rank hotels. Often it is based on the service, location, loyalty program, and facilities provided. But there could also be other criteria considered.

Think about restaurant ranking lists. For instance, the Zagat survey is a respected publication that ranks and rates restaurants. They look at the food service and decor. And they use a zero-to-five-point scale. Bernardin and other New York restaurants usually top global restaurant rankings. So, these are just some of the ways to set a benchmark and make your restaurant or hotel successful. Similarly, you can use a list like the 6A to help make your destination successful globally.

To understand what makes a hotel successful, you need to follow and understand your customer’s journey. Firstly, they dream about staying in a destination and hotel. Then they do their research. Following this, they choose the hotel, make the reservation, travel to the hotel, check-in, stay and check out. Finally, the hotel keeps in touch with them by asking them to review their stay and persuade them to sign up for their loyalty program.

During their stay, the room experience is essential. Rooms don’t have to be big to be good. A small room can have efficient service. If you are in a luxury hotel, the room has more amenities. So, again, the room is important. As is the food and beverage service. What services does the hotel provide? Remember, overall service quality is also critical.

Administrative processes are also vital to making your hotel successful. The check-in process, the check-out process, and overall customer satisfaction. Not to mention the cost and the fees. How much do you pay for a hotel? Because above all else, it’s always about value for money.
Yes, people in New York City pay over $1,000 for a room at the Mandarin Oriental, Four Seasons, Ritz Carlton, St. Regis, or Peninsula. And that’s because they offer value for the price, and they feel it’s a reasonable, fair rate.

However, in comparison, at independent hotels like Moxy and Lifestyle hotels, people may pay $200-300 for a night’s stay. So you’re likely not expecting as much. However, it is still good value for money as although what you get in those hotels is less than the more expensive hotels above, it’s relatively competitive for the rate you pay.

When you consider all the criteria above, you will understand precisely what it takes to have a successful hotel that people want to stay at.

New York City competes against Paris and London. These are all known cities.
But if you want to start a tourism destination, there are six things that need to happen. I have developed this framework called the Six As.

The first is awareness. You need to build it. How do you do that? You may want to have some world-class events taking place in your destination. For instance, Finland organizes crazy competitions like marsh football. Teams play football in a marsh and then in a swamp. They also organize a wife-carrying competition. You carry your wife, and you have to be legally wedded.

In addition, they organize throwing cell phones and rubber boards, which gets the country publicity — global publicity. So, that would be one of many ways to create buzz and awareness.

Then, you need attractions. New York City has an amazing set of attractions, from Central Park to museums.

Then, you need activities. In New York, you have a fashion week, a lot of trade shows, and the New York City Marathon. So these are world-class activities, that also bring awareness to the destination. More often than not, they’re the reason to visit New York City.

Out of those attractions and activities, you can form associations or consumer forums associations, which is basically their perception of the destination. When you hear the word New York City, what comes to mind? It could be the New York City Marathon; it could be some of the movies (e.g., When Harry Met Sally).

So, New York City is a place for movie making, which helps put the destination on the map. And there are actual tours; people go around New York City to hunt down the places where the movies were made. That’s a great way to create associations.

Then, you need access. Access is, especially for international tourists, the flights. How many direct flights from your home country come to JFK or Newark? And then how do you get to the hotel? How is ground transportation organized? In this case, airports — like LaGuardia — are behind the many international airports. But they are investing in this. So, we need to have very good access from the airport to the city and back.

Finally, it’s affordability. That’s the A number six. How much does it cost?

I benchmarked places like Arctic destinations in Finland, Sweden, Norway, Iceland, Greenland, and Alaska. I measured all these items, including affordability. Of course, you take a perspective. In my case, I studied a tourist from New York City who wants to go on an arctic holiday.

The most competitive was Iceland. Alaska was the most known. But when it came to activities and attractions, Finland offered the best. So, this is the way to do it.
You can calculate the actual cost using search engines like Kayak, which gives you the airfares and four-star hotel rates.

I did one about jazz festivals around the world. You have to factor in how much it costs for five days to attend a jazz festival in Havana, Montreal.

These are the necessary things. In summary, the six A’s you need are awareness, attractions, activities, associations, access, and affordability.

Hotels have begun to view the home-sharing industry as an alternative and a competitor. They’re also making sure guests know many of the desirable hotel amenities. Security, housekeeping, and round-the-clock service are not available at many home-sharing services.

Hotels offer a wide range of services. They also employ a large number of people. Home-sharing services began as a fee-based online matchmaking service for tourists seeking lodging. A local host with a spare bedroom or apartment wanted to rent it out for a few dollars.

Airbnb can scale extremely quickly because it doesn’t need a lot of host-owned and managed real estate. Home-sharing doesn’t need a massive network of housekeeping, maintenance, sales, and marketing services. Airbnb has grown to be larger than many hotel companies. This is due to the number of units available and the number of guests they can accommodate.

When you consider the hotel industry from the perspective of ownership, corporations like LaSalle and Sunstone aim to buy hotel assets, have them properly operated, and profit from them. In contrast, an apartment owner might list a unit on Airbnb or a similar service to rent for a night. Yet, that individual is unlikely to buy a property to turn it into an Airbnb investment.

A hotel ownership company wants to create an attractive real estate return. An Airbnb host usually wants to reduce part of their monthly ownership expenditures. There was no incentive to earn a real estate return like there is in the hotel investment market. This trait alone aided the expansion of the house-sharing companies.

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.

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.