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Hospitality Property Management

Introduction

For one to succeed in running the hospitality industry there is a need for him or her to come up with good management of the hospitality buildings and other properties that comprise the hospitality sector. For people to decide whether to visit a hospitality premise, they first consider the layout of its buildings. Well-maintained buildings create an impression of good services in visitors’ minds. This leads them to decide to discover more by visiting the premises. Managing hospitality property requires one to have a clear understanding of the various forces that act on the industry. Understanding visitors’ behavior and preference are also important to ensure that the buildings meet customers’ expectations. Some of the factors that affect hospitality building management include the physical environment, atmosphere, and sustainability. As the physical environment change, there is a need for the buildings to be altered in a way that ensures the security of the visitors. Ensuring sustainability in the buildings leads to repeated business with the customers. Sustainability can be guaranteed through the provision of well-lit and furnished rooms. Depending on the atmospheric conditions of where the hospitality premise is located, there is a need for the management team to ensure that they have provided proper ventilation systems in their buildings (Gee 1994, p. 79). This discussion will look at hospitality property management, paying special attention to the effects of ownership, franchising issues, impacts of servicescape, and sustainability on the hospitality industry. It will also go further and try to analyze McDonald’s brand performance within the given context.

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Ownership issues

Acquisition of hospitality property can be through ownership or franchising. A person may fully own a hospitality premise or own a fraction of the property. There are various issues that are associated with both ownership and franchising of hospitality property. As the current trend in ownership of the property shows, in the future to own a hospitality property will depend on the returns accrued from the property, capital required to establish it, and liquidity terms. In fractional ownership of the hospitality property, one looks for willing partners then they come up with an agreement to pool together resources and establish a hospitality business. Issues that arise from fractional ownership of the property are mainly inclined to operations. The ownership rules are required to give clear information on who controls the business and when. Based on the contribution made by each member, there is a need for the establishment of rules and guidelines showing the control each person has in the business. This becomes difficult as each person owning the premise would like to feel in control (Beals 2009, p. 32). The biggest problem arises in convincing people willing to co-own the premise that they will be treated equally in the business. Based on the amount of income that the operator agrees to share with those they share property ownership with, people might decide to engage in its ownership or not. Other problems arise when there is a need for a change in the method of operations within the business to suit all the partners.

Franchising issues

Franchising hospitality property is a situation where one is granted permission to use the hospitality property of another organization in conducting his or her business. One may continue using the brand name of the franchiser or change the brand name depending on the agreed terms. In the case where the franchisor does not allow a change of the brand name, he or she assumes control of the quality and marketing stands of the hospitality business. A franchise agreement has to be signed before one embarks on using franchised hospitality property (Turke 2008, para. 3). This is because there are numerous legal requirements and implications that can result if the franchisee tries to sell or lease the property. Some of the issues that arise when franchising hospitality property are terms, fees and royalties, territorial protection, termination, and liquidated damages and property improvement programs. At times the franchised brand may not work as per the franchisee’s expectations (Birchfield & Sparrowe 2003, pp. 27-38). This may require one to have shorter terms to allow reposition of the brand. One also needs to consider the terms of extending the contract in the case where the brand is found to work effectively. Depending on the performance of the franchised property, the franchise may require to alter the normal fee structure or cut down on the royalties. Sometimes a case may arise where the franchisor may open a similar business in the area leading to competition. This requires the franchisee to ensure that there are regulations prohibiting the franchisor from owning or licensing competing businesses bearing the same brand as well as other competing brands. This is because the act may have adverse effects on the franchisee’s business (Hassanien 2006, pp. 41-64).

At times the franchised property may require to be improved. This may arise in a case where the property changes its brand. For adjustments to be made, expenses have to be incurred in the process. It is imperative for one to consider the terms and costs associated with such moves before deciding to franchise a hospitality property. Franchisees need to ensure that their franchise agreement allows for early termination. This is because sometimes the franchised property may fail to be productive to the franchisee. In such cases, franchisors seek to be paid liquidated damages. This is aimed at discouraging franchisees from terminating their contracts before the agreed period. Before one accepting to come into an agreement with the franchisor, it is imperative to consider some of these provisions in the franchise agreement to ensure that there will be no inconveniences in the future (Turke 2008, para. 5).

Impacts of service capes and sustainability on hospitality property

Services capes and sustainability have numerous impacts on hospitality properties. Service capes refer to the physical environment where hospitality property is sited. The physical environment is seen to greatly influence the manner in which hospitality properties are located and erected. It leads to the management team ensuring that the property is maintained in a way that ensures the safety and security of all those who visit the premises. The physical environment can have a significant effect on the comfort of the property, atmosphere as well as physical safety. Requirement of fire safety in the premises lead hospitality management team ensuring that their properties have all fire protection safeties such as fire assembly, inclusion of fire detectives and alarms. This is in order to guarantee the security of all those who visit the premise. Visitors will not be willing to visit a hospitality property if they are not guaranteed that they will be comfortable in the premise. Areas with high or low temperatures may lead to dissatisfaction of visitors (Bridge & de Haast 2004, p. 86). As a result, property located in such areas has to ensure that it has heating and ventilation systems to regulate the temperature in the rooms. People visiting hospitality buildings have expectations of having an experience similar to what they get at their homes. This leads property owners ensuring that their property contains facilities that will make the visitors feel at home. They ensure that every room in the building contains window covering as well as nice finishes. Rooms set for conferences or meetings are also furnished with decorated walls and window coverings for visitors to have a home-like environment. Security of the visitors needs to be guaranteed always whenever they walk around the hospitality premise. To achieve this, operators ensures that the facility is always in good condition by regularly repairing stair ways, hall ways as well as ensuring that corridors and exits are well lit and free of objects that might obstruct visitors (Huffadine 1999, p. 235).

Currently, people who visit hospitality property are well aware of the various available lodging alternatives. Before they accept to checked-in, in any premise, visitors first analyze the facilities of the hospitality business and services offered and compare them with those of other premises. They ensure that they have checked-in to places that will meet their expectations. The main aim of hospitality is to ensure that your visitors keep on remembering the experience they had in your property and keep them willing to come again. To ensure the sustainability of a hospitality premise, various changes are effected on its property. This includes introduction of recreation facilities in the business to satisfy all the visitors’ needs. Lighting of hospitality rooms can greatly contribute to sustainability. Most customers who visit hospitality property complain of poor lighting in the premises. This makes them fail to return to the premises next time they visit the same area. As a result, most hospitality operators ensure that their properties are well lit with the right color to ensure that customers are satisfied (Enz & Harrison 2008, pp. 124-143).

Critique of McDonald’s Golden Arch Hotels

Growth of any hospitality business depends mostly on its brand name. The brand name of any organization reflects the quality of services offered by the organization. McDonald’ corporation has been in the market for a long time. Its business has been established in many countries offering hospitality services. For many years it has been trusted for its cleanliness and quality services. This has greatly strengthened its brand name in the world. Having a great brand name that is known throughout the world, McDonald’s venture into hotel industry in Switzerland is likely to be successful since the company does not have to concentrate on marketing its brand name to the country. This venture has a high probability of growth as everybody in the country would wish to be associated with the brand name (Michel 2008, para. 2) Having the knowledge in hotel operations from other countries that its offers its services, McDonald has the option of opening more restaurants in Switzerland since they seem to do well than hotel or to improve its services in the hotel. Its service capes make it more likely to grow. Being located near an airport, the hotel is guarantee of regular visitors who are in need of its services. This means that the hotel will be in operational throughout the year. The fact that Zurich has a high population means that Golden Arch Hotel will never lack visitors.

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Despite the hotel being located in an area that guarantees regular flow of customers, the hotel facilities need to be improved for it to win more customers. For instance, the use of transparent showers compromises the privacy of hotel users for those sharing bedrooms. This can be one of the reasons that can make some visitors fail to use the hotel. In addition lack of sizable meeting space in the hotel discourages lager group of visitors who wish to hold meetings from coming to the hotel. Therefore the firm needs to address these shortcomings so as to expand its market base to realize higher profits.

Based on the target market, the sustainability of Golden Arch Hotel greatly depends on the services it offers. Its located in Zurich which is a town with diverse population guaranteeing regular flow of visitors. This means that the hotel can not be closed due to lack of customers. As a lot of people visits Switzerland throughout the year, it is assured that all-year market. The future of hospitality trend in Australia is promising. Most of tourism and hospitality industries in the country are struggling to expand their services. This implies that there is hope for a brighter future in the industry. As the country experiences a drastic change in working pattern and more people growing old, it means that there will be an increase in need for leisure facilities. This assures McDonald’s corporation that Australia is a potential country where they can establish their hotels (Michel 2008, para. 4).

Conclusion

The success of hospitality property industry depends on proper management of hospitality property. There is need for hospitality operators to ensure that they have considered all the factors that would determine customer satisfaction in the facility. These include the service capes of the hospitality property in order to be able to provide every requirement in the property (Stipanuk 2002, p. 148). For operators who wish to franchise the property, they need to ensure that they have clearly understood implications of franchise agreement before they decide to sign the agreement.

Reference

Beals, P., 2009. Hotel Real Estate Finance and Investments. London: SAGE.

Birchfield, L. C., & Sparrowe, R. T., 2003. Design and Layout of Foodservice Facilities, 2nd ed. New Jersey: Willy.

Bridge, D. & de Haast, A., 2004. Asset Management’ in Ransley, J & Ingram, H Developing Hospitality Properties & Facilities, 2nd ed. Oxford: Elsevier.

Enz, C., & Harrison, J., 2008. SAGE Handbook of Hospitality Management. London: SAGE.

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Gee, C. Y., 1994. International Hotels: Development and Management. East Lansing: Education Institute of the American Hotel & Motel Association.

Hassanien, A., 2006. Exploring Hotel Renovation in Large Hotels: A Multiple Case Study. Structural Survey, 24(1), pp. 41-64

Huffadine, M., 1999. Resort Design: Planning, Architecture and Interiors. New York: McGraw Hill.

Michel, S., 2008. McDonald’s failed venture in hotels. Web.

Stipanuk, D. M., 2002. Lodging Planning and Design in Hospitality Facilities Management and Design, 2nd ed. Michigan: American Hotel & Lodging Association.

Turke, S., 2008. Hotel Franchisor Companies Ignoring Critical Franchising Issues. Web.

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