Text4 Marketing in Hotel Business

The hospitality industry consists of broad category of fields within the service industry that includes lodging, restaurants, event planning, theme parks, transportation, cruise line, and additional fields within the tourism industry. The hospitality industry is a several billion dollar industry that mostly depends on the availability of leisure time and disposable income. A hospitality unit such as a restaurant, hotel, or even an amusement park consists of multiple groups such as facility maintenance, direct operations (servers, housekeepers, porters, kitchen workers, bartenders, etc.), management, marketing, and human resources. The hospitality industry covers a wide range of organizations offering food service and accommodation. The industry is divided into sectors according to the skill-sets required for the work involved. Sectors include accommodation, food and beverage, meeting and events, gaming, entertainment and recreation, tourism services, and visitor information. Today the market of hotel services is one of the most dynamic market areas. The development of marketing in the hotel business is determined as a priority of companies’ business. A rapid improvement of the competition in the hotel sector of economy requires the development of marketing activity in the area of hospitality. The hotel business has its own peculiarities and methods of the development of marketing activity. The marketing term HoReCa connected with the hotel business has been used by Russian businessmen involved into the hotel business quite recently. The abbreviation HoReCa, the first letters of the English words Hotel-Restaurant-Café, is usually used for restaurant-hotel businesses. HoReCa is a specific services market and its marketing-mix has specific features. First of all, the specific nature of the hotel marketing is caused by the hotel product specificity. The hotel marketing product is a complex of services and accommodation, hotel service and food are staple products. Marketing-mix in the hotel business is the complex of instruments which help a market entity (a hotel) has effect on the target market. The most important instrument is hotel product – a service with the following peculiarities: the simultaneousness of production and consumption; the production is not for future use, its storage is impossible; quality volatility; seasonability; interdependency of hotel service and traveling aims. The specific features of the main hotel product – a hotel room – are its time and space fixity. Hotel services are considered the specific hotel product being bought by exchanged deals that means not possession but only a possibility of use at definite time and place. For hotel services it is very important to be quick in solving of problems. Nowadays the clients need prompt and quality services. The scheme of promotion in hotel business is the way of the customer to the product but not the product to the customer, because the product is rooms, restaurants and other services. The channels of distributing in the hotel business can be divided into direct and indirect ones. The direct channels are mail, e-mail, telephone and fax. The indirect channels are resellers, tourist agents, operators and independent hotel agents. Communication is one of the most important elements of marketing-mix in the modern hotel business. The communication in the hotel business is a process of informational exchange between clients and a hotel. The means of communication make interconnection with clients and form the hotel image. Advertising, sale promotion, public relation, personal sale are the most cardinal means of communication. The advertisements in mass media and in the Internet are widely used in the hotel business. The advertisement informs people about hotels and their services. Promotional activity is marketing practice of hotel businesses which motivate clients and resellers by discounts, special actions, different shows and demonstrations. Personal salesmanship in the hotel business is sharing the most important information with one or several clients to motivate customers to buy hotel services. The public relations of a restaurant-hotel complex are aimed at the development of bilateral connections with general public and the formation of a positive attitude to its activity. The pricing policy in the hotel business depends on representatives of several market segments. In some cases a client can refuse a hotel service because of its price. The hotel business is often a seasonal business and its pricing policy is under the influence of the number of clients in different seasons: 1) the prices rise when hotel services demand grows (summer time, holidays and important events); 2) the prices drop when the demand is the lowest; 3) shoulder season is characterized by an average demand and variation of prices. Marketing in hotel business has own specific peculiarities which are marked by special feature of hotel product. Specific peculiarities of marketing-mix are pointed out in following elements: hotel service, pricing, promotion and communication between the hotel and the client. There are also special elements of hotel business: staff, surrounding and process of service. These instruments give the possibility to put into practice marketing activity of enterprises in hotel sphere successful and form positive image of the hotel. That is why a hotel becomes competitive.

Questions:

1. What does the hospitality industry consist of?

2. What does the hospitality industry cover?

3. Is the market of hotel services one of the most dynamic market areas?

4. What does the marketing term HoReCa mean?

5. What is marketing-mix in the hotel business?

6. What is hotel product?

7. What is the scheme of promotion in hotel business?

8. What are the channels of distributing in the hotel business?

9. What does the pricing policy in the hotel business depend on?

10. In what way are specific peculiarities of marketing-mix pointed out?