Matakuliah : G0424 – Hotel and Restaurant Management
Tahun
: 2008
Konsep Pengelolaan Hotel
Pertemuan 3-4
Topics
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•
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Sole prorietor
Partnership
Franchising and licensing
Hotel management
Learning Objectives
Students are able
• To identify hotel
structures
• To understand the
differences between
division
• To identify the hotel
management concept
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Hotel Management
• One corporation owning several
hotels
• Parent company with individual
subsidiary owning each hotel
• Joint venture & partnerships]
• Leasing, Profit sharing lease,
Sale & leaseback
• Management contract
• Franchise & Licensing agreement
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Sole Proprietor
• Sole proprietorship is the same as one company owning
several hotels.
• Some use the term of corporation, ie. PT, Ltd., Inc, Plc.
• Hotels are owned and operated by a single company and
act as an independent enterprise.
• The company may use its own expertise in managing the
property, start from site selection, hotel developemt,
marketing and operation.
• It may use the chain's reservation system.
• Examples: PT. Sofyan Hotel owns Sofyan Cikini, Sofyan
Menteng and Sofyan Tebet.
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The advantages and disadvantages of Sole
Proprietorship
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It doesn't pay corporate
taxes but pays personal
income taxes on the profit
made.
The accounting system is
much simpler.
Can have total control over
the company
Decision can be made
quickly without having to
consult others.
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Single owner takes all the
risks.
A hard time raising the
capital.
Limited liability company.
Hiring employees may be
difficult.
All debts are debts of the
owner.
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Holding company
• Holding company is the term used for parent company with individual
subsidiary owning each hotel.
• It is a corporation that owns enough voting stock in another firms to
control management and operation by influencing or electing its board
of directors.
• It may operate hotel chains either using the same name or different
brands.
Upper upscale
• Examples: Accor group
Sofitel
Mercure
Pullman
Novotel
Suite Hotel Adagio
Allseasons
Motel 6
Etap
Ibis
Formule 1
Upscale
and
midscale
Economy
Budget8
Advantage and disadvantage of Holding
company
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Possible to obtain control
of another company with
less investment.
Easily to get additional
debt financing from other
SBU.
Allows for decentralized
management
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Complexity and
complicated in
management and
operation.
Growth of monopoly over
the companies.
Chance of fraud – double
tax report.
Joint venture and Partnership
• Joint venture is a contractual agreement joining together
two or more parties for the purpose of executing a
particular business undertaking.
• All parties agree to share in the profits and losses of the
enterprise.
• In partnership, the companies are joined together to run "a
business in common".
• A partnership is a type of business entity in which partners
(owners) share with each other the profits or losses of the
business undertaking in which all have invested.
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Advantages and disadvantages of joint
venture
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Opportunity to gain new
capacity and expertise
Enter geographic markets
or new technological
Access to greater
resources,
Sharing of risks with a
venture partner
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Takes time and effort to
build the right relationship.
Objectives of venture are
not 100% clear and
communicated.
Different cultures result in
poor integration and cooperation.
The partners don't provide
enough leadership.
Leasing, Profit Sharing Lease, Sale and
Lease Back
• Leasing is the way of one person (called a tenant or
lessee) to possess property belonging to another person
(called a landlord or lessor) to be managed and operated.
• Profit sharing lease is one type of leasing where the
lessee and the lessor are shared the profit earn from the
management and operation.
• Sale and lease back is a common type of leasing in hotel
industry where the lessor 'sells' the property, the lessee
operates and the property will be returned back to the
owner after a period of time.
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Advantages and disadvantages of leasing
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Less capital-intensive
The company grows more
rapidly.
Leasing shifts risks to the
lessor
Leasing may provide more
flexibility to a business.
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If a business must change
its operations significantly,
it may be expensive or
otherwise difficult to
terminate a lease before
the end of the term.
If the business is
successful, lessors may
demand higher rental
payments when leases
come up for renewal.
Management Contract
• A management contract is a contract arrangements to
more easily obtain economies of scale, a global
reservation systems, brand recognition etc.
• It is used when the company is lack of local skills to run an
operation.
• A management contract can involve a wide range of
functions, such as technical operation of a production
facility, management of personnel, accounting, marketing
services and training.
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Advantages and disadvantages of
management contract
 It is an alternative to
foreign direct investment.
 It doesn't involve high risk
 High yield return on
investment
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 It has limitation of contract
time periods.
 There is restriction on
entry arrangement.
 Fee of 3.5% of total
revenues and 6-10% of
gross operating profit
should be paid to 'brand'.
Franchising and Licensing
• Franchising refers to the method of practicing and using
another person's philosophy of business. The
"franchisors" authorize the proven methods and
trademarks of their businesses to "franchisees" for a fee
and a percentage of gross monthly sales.
• The verb license means to give permission. License may
be granted by a party ("licensor") to another party
("licensee") as an element of an agreement between
those parties. A shorthand definition of a license is "a
promise (by the licensor) not to sue (the licensee)."
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Advantages and disadvantages of
franchising
 A well run franchise would offer
a turnkey business: from site
selection to lease negotiation,
training, mentoring and ongoing
support as well as statutory
requirements and
troubleshooting
 Franchisors are able to expand
rapidly across countries and
continents
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 For franchisees, the main
disadvantage of franchising is a
loss of control.
 Starting and operating a
franchise business carries
expenses.
 The franchisor/franchisee
relationship can easily cause
conflict if either side is
incompetent (or acting in bad
faith).
Advantages and disadvantages of
licensing
 The possibility of local company
to product and market the
product.
 Licensor get a royalty.
 Such agreements usually
involve the use of the
trademarks, patents technical
know-how, specialized
equipment, training, etc.
 Earn some money without many
hesitation
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 It may be difficult to find a
suitable local firm.
 Lose control of your technical
"know-how".
 Local partner may not fulfill his
part of the agreement.
 The licenses may become an
eventual competitor.
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Hotel Operation Examples
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Conclusion
• Hotel can be managed with various kinds of concept.
• It can be in a single or mixed concept.
• Each concept has its own benefits and costs.
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