Hotel industry is currently in the middle of its economic cycle. The industry tends to be strongly affected by macroeconomic conditions. When the U.S. slipped into recession in 2008-2009, the hotel industry slumped as well. As Turner (2010) notes, "trading volume fell sharply…lodging operating metrics of RevPAR and ADR deteriorated accordingly." While the economy recovery somewhat over the past couple of years, there are signs now that growth is slowing again. In particular, RevPAR declined in September (De Lollis, 2012). After an optimistic start to the year, the slow pace of economic recovery appears to be weighing on the industry. That said, because the economy is at a key juncture where it could begin to improve rapidly or it could slip back into recession, the hotel industry finds itself in roughly the same position.
Choosing the right type of hotel is important to its success. If the brand is going to be a national chain, one might assume that the national demographics and economic conditions are key. However, for the local conditions it has been decided that the hotel will be located in New Orleans. The local economic conditions are generally unfavorable -- Louisiana has a low per capita income and the state has only a moderate population density. However, a mitigating factor is that the city draws tourists from across the globe. The local tourism industry has recovered strongly since it was devastated by Hurricane Katrina. Civic leaders have promoted conventions and a series of major events to boost occupancy rates and to bring more attention to the city, all as part of the long-term recovery plan. The tourism industry is reported to be thriving in recent months, as these efforts have resulted in bringing in more big events (Eggler, 2012).
Travelers to the city typically stay in large chain hotels, although there...
Most visitors are of medium income or higher, and because they are traveling for pleasure they bring with them a high amount of disposable income. Due to a number of factors, most stay in the French Quarter or adjacent areas -- many cite safety concerns for avoiding large parts of the city. There is room, however, in the luxury segment. A large number of visitors to the city are retired, and others are wealthy. The luxury segment is not as well served as the mass market. Yet, luxury attracts visitors to the city, as evidenced by a number of highly-successful high-end restaurants. This hotel should be a medium-sized luxury facility, in the range of 100-120 rooms. The target market should be 45 years and older, mainly couples, and with a mix of American and European. This market will be mainly those on holiday, staying between 2-5 days. A couple will probably budget $500 a day for the trip, not including airfare.
3. The hotel's organizational chart will feature the following organizational chart. . The Front Office will head the hotel, with the General Manager in charge of the Front Office. There are going to be seven different units: food & beverage, front office, human resources, operations, facilities, sales, and accounting. Each of these divisions will have ahead that reports back to the General Manager. Each unit head will have a staff under him or her, and the larger staffs will have other hierarchical layers. For example, the Executive Chef will control the kitchen, and work at an equal level to the Bar Manager, who is in charge of the bar staff.
The reporting relationships will be kept simple. The Front Office will oversee each unit, and within the units the organization should be flat. There will not be a direct reporting relationship between the Front Office and the…
