Reading

3. Read the texts and translate them. While reading try to find answers to these questions:

1. What facilities, services, and amenities do full-service hotels offer?

2. What success criteria were developed for a new budget concept called Microtel?

3. Why, in your opinion, has the gambling sector become a very important engine for U.S. economic growth?

Types of hotels (Part 2)

(continued)

Full-Service Hotels

Another way to classify hotels is by the degree of service offered: full-service, economy, extended-stay, and all-suite hotels.

Full-service hotels offer a wide range of facilities, services, and amenities, including many that were mentioned under the luxury hotel category: multiple food and beverage outlets including bars, lounges, and restaurants; both formal and casual dining; and meeting, convention, and catering services. Business features might include a business center, secre­tarial services, fax, in-room computer hook-ups, and so on..

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Most of the major North American cities have hotel chain represen­tation such as Doubletree, Four Seasons, Hilton, Holiday Inn, Hyatt, Mar­riott, Omni, Ramada, Radisson, Ritz-Carlton, Loew's, Le Meridian, Shera­ton, and Westin. Some of these chains are positioning themselves as basic full-service properties. An example of this strategy is Marriott's Courtyard hotels, which have small lobbies and very limited food and beverage of­ferings. The resulting savings are passed on to the guests in the form of more competitive rates. Thus, the full-service market may also be subdi­vided into upscale and midpriced hotels.

Economy/Budget Hotels

An economy or budget hotel offers clean, reasonably sized and fur­nished rooms without the frills of full-service hotels. Chains like Travelodge, Motel 6, Days Inn, and La Quinta became popular by focus­ing on selling beds, but not meals or meetings. This enabled them to offer rates at about 30 percent lower than the midpriced hotels. The average rate for an economy hotel is about $30 to $50 per night.

More recent entrants to this market sector are Promus' Hampton Inns, Marriott’s Fairfield, and Choice'?, Comfort Inns. These properties do not have restaurants or offer substantial food and beverages, but they do offer guests a continental breakfast in the lobby.

Another example of a relatively new budget concept is Microtel. In 1989, despite credit crunch and a weak economy, a group of entrepreneurs developed a new budget concept called Microtel. Success criteria were developed: The group wanted an economy hotel product, the down­side risk had to be limited, and the product would have to demonstrate a competitive advantage over other national budget chains. The result of several months of careful planning and construction was the ninety-nine-room Microtel in Rochester, New York, at a total cost of $2,798,000 or $28,263 per room. The land cost $266,000; construction, interest, taxes, furniture, and equipment cost $2,164,000. The room rates began at $29, and the occupancy was 89.4 percent in the first year. The franchise was sold a year later for a 117 percent return on investment (ROI). This is a remarkable success story that illustrates that entrepreneurs can thrive even in a weak economy.

After enjoying a wave of growth for most of the 1990s, the economy hotel segment may be close to the saturation point. There are about 20,000 properties in this segment with many markets. The economic law of supply and demand rules; if an area has too many similar properties, then price wars usually break out as they try to attract guests. Some will attempt to differentiate themselves and stress value rather than discount­ing. This adds to the fascination of the business.