01.00 The Traditional Hotel Industry

02/12/2015
THE TRADITIONAL
HOTEL INDUSTRY
FRONT OFFICE
DHOL02H
THE TRADITIONAL HOTEL INDUSTRY

LECTURE OBJECTIVES
o Appreciate the size and scope of the industry and its products
o Be able to understand and compute: Industry Related Statistical
Data
Occupancy
Average Daily Room Rate (ADR)
Revenue per Available Room (REVPAR)
Double Occupancy
o Understand Hotel Classification Systems

o Start to understand industry terms and jargons
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Lets start by talking about the industry and its speculative
origins.

Throughout known history, whether written or traditionally passed
on by word of mouth.
Hospitality in is essence has consistently traversed boundaries.
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The meaning of the word HOSPITALITY?

Hospitality refers to the relationship between a guest and a host,
wherein the host receives the guest with goodwill, including the
reception and entertainment of guests, visitors, and or strangers.
Louis, chevalier de Jaucourt describes hospitality in the
Encyclopdie as the virtue of a great soul that cares for the whole
universe through the ties of humanity.
Chevalier Louis
de Jaucourt
Chevalier Louis de Jaucourt
(French:
[d
oku];
16
September 1704 3 February
1779) was a French scholar and
the most prolific contributor to
the Encyclopdie. He wrote
about 18,000 articles on subjects
including physiology, chemistry,
botany, pathology, and political
history, or about 25% of the
entire encyclopedia, all done
voluntarily.
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The foundations of HOSPITALITY?

We take a look at the past to gain insight of the what is the
present.
As proof that hospitality traverses cultures, let us appropriately see
excerpts of such examples from FOUR (04) different cultures.

In Ancient Greece, hospitality was a right, with the host being
expected to make sure the needs of his guests were met.
The ancient Greek term xenia, or theoxenia meaning when a god
or when gods were involved, expressed this ritualized guestfriendship relation. In Greek society a person's ability to abide by
the laws of hospitality determined nobility and social standing. The
Stoics regarded hospitality as a duty inspired by Zeus himself.
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In India, hospitality is based on the principle of Atithi Devo Bhava,
meaning "the guest is god".
This principle is shown in a number of stories where a guest is
revealed to be a god who rewards the provider of hospitality. From
this stems the Indian practice of graciousness towards guests at
home and in all social situations.

Judaism praises hospitality to strangers and guests based largely
on the examples of Abraham and Lot in the Book of Genesis
(Genesis 18:18 and 19:18).
In Hebrew, the practice is called hachnasat orchim, or "welcoming
guests wherein a host is expected to provide nourishment,
comfort, and entertainment to their guests, and at the end of the
visit, hosts customarily escort their guests out of their home,
wishing them a safe journey.

One of the main principles of Pashtunwali (Pashtun)is Melmastia.
This is the display of hospitality and profound respect to all visitors
(regardless of race, religion, national affiliation or economic status)
without any hope of remuneration or favor.
Pashtuns (Afghans, et al Taliban) will go to great lengths to show
their hospitality.
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Genesis 18:18
The Three Visitors
The Lord appeared to Abraham near the great trees of Mamre
while he was sitting at the entrance to his tent in the heat of the
day. Abraham looked up and saw three men standing nearby.
When he saw them, he hurried from the entrance of his tent to
meet them and bowed low to the ground.
He said, If I have found favor in your eyes, my lord, do not pass

your servant by.
Let a little water be brought, and then you may all wash your feet
and rest under this tree. Let me get you something to eat, so you
can be refreshed and then go on your waynow that you have
come to your servant.
Very well, they answered, do as you say.
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So Abraham hurried into the tent to Sarah. Quick, he said, get

three seahs of the finest flour and knead it and bake some bread.
Then he ran to the herd and selected a choice, tender calf and gave
it to a servant, who hurried to prepare it.
He then brought some curds and milk and the calf that had been
prepared, and set these before them. While they ate, he stood
near them under a tree.
Genesis 19:18
Sodom and Gomorrah Destroyed
The two angels arrived at Sodom in the evening, and Lot was
sitting in the gateway of the city. When he saw them, he got up to
meet them and bowed down with his face to the ground.
My lords, he said, please turn aside to your servants house. You
can wash your feet and spend the night and then go on your way
early in the morning. No, they answered, we will spend the
night in the square.
But he (Lot) insisted so strongly that they did go with him and
entered his house. He prepared a meal for them, baking bread
without yeast, and they ate. Before they had gone to bed, all the
men from every part of the city of Sodomboth young and old
surrounded the house. They called to Lot, Where are the men
who came to you tonight? Bring them out to us so that we can
have sex with them.
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Lot went outside to meet them and shut the door behind
him and said,
No, my friends. Dont do this wicked thing. Look, I have
two daughters who have never slept with a man. Let me
bring them out to you, and you can do what you like with
them. But dont do anything to these men, for they have
come under the protection of my roof.

Today hospitality is rarely a matter of protection and survival and is
more associated with etiquette, entertainment and profession.
However, it still involves showing respect for one's guests,
providing for their needs, and treating them as equals.
Cultures and subcultures vary in the extent to which one is
expected to show hospitality to strangers, as opposed to personal
friends, acquaintances or members of one's in-group.
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Filipino Hospitality.

Very little is written about Hospitality in the Philippines during its
annexation by Spain (1521-1898) but however a few written
documents suggested more often that travelers went to the
nearest house and simply requested if they could spend the night,
Filipinos went to houses of friends, relatives, what is best available,
Spaniards went to the nearest monastery or hospice run by friars.
With a few exception here are just a few early recorded lodging
properties in the Philippines.
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The ENGLISH
HOTEL and LIVERY
STABLES
The ENGLISH HOTEL and Livery
Stables 1898 was an inn that
catered to travelers local and
from abroad, it is basically a
spacious two storey house
opened by its owners to
transients.
The Corriedo
(Carriedo) Hotel
1899 American Commonwealth
of the Philippines, note the
constable standing on the
foreground of the hotels signage.
Hotel Metropole
Hotel Metropole, 1900.
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Hotel Metropole
Business Card of then American
General Manager Tony G. Zorilla
Hotel Metropole
If we have SM today, the late
1800s our Filipino ancestors had
Heacocks and along next to that
G & F Maulini Brothers Hotel
Metropole, a lodging property
located on the banks of the Pasig
river.
Hotel Metropole
Postcard painting of Hotel
Metropole, you can also glimpse
the then Santa Cruz bridge on
the extreme right of the painting.
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Hotel Metropole
Present day location of Hotel
Metropole
The Luneta Hotel

The Luneta Hotel is a historic
hotel in Manila, Philippines.
Named after its location across
from Luneta (Rizal Park) on Kalaw
Avenue in Ermita, it is one of the
remaining
structures
that
survived the Liberation of
Manila in 1945.
The Luneta Hotel

One of the suites of the Luneta
Hotel during its heyday.
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The Luneta Hotel

The Luneta Hotel and the
University Club Apartments
(right), operated by the nearby
Luneta Hotel, served as a
residential
apartment/hotel,
offering 44 rooms complete with
private baths. It became home to
many American families as well
as servicemen.
The Luneta Hotel

The Luneta Hotel and the
University Club Apartments, with
an old model T Ford in the
foreground.
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The Luneta Hotel

The building survived the war
and later began welcoming
tourists as the Shelborne Arms
Hotel. It was renamed Orient or
New Orient Hotel and continued
its operations until the early
1990s when it was demolished
to give way to a skyscraper that is
yet to be built in the year 2000
The Luneta Hotel

Present day location of the
Luneta Hotel and the University
Club Apartments (replaced by
the eton place condominium).
Hotel de Oriente
An old promotional flyer for the
Hotel de Oriente, the first luxury
lodging property in Manila built
in 1889 by Don Manuel Perez
Marqueti, it had three floors
with 83 rooms, stables for 25
horses, an attic, and a broad
entrance floored and roofed in
red clay tiles, complete with
ceiling fans and electricity.
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Hotel de Oriente
Hotels main entrance, show
casing a fountain display and a
string of kalesas ready to pick
guests so much like the hotels
today wherein a queue of taxi
cabs are waiting for their next
fare.
Hotel de Oriente
An American soldier posing next
to the famous fountain.
Hotel de Oriente
The hotels main entrance shown
from another angle with the
same fountain clearly visible on
the left foreground.
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Hotel de Oriente
The fountain marks the modern
day location of the Hotel de
Oriente, where in the back
ground you see the old Binondo
Church.
Hotel de Oriente
Las Casas Filipinas de Acuzar, a
heritage park and hotel specially
constructed to host APEC 2015
delegates located in Bataan.
Here you will find a recreation of
the famous hotel.
Hotel de Oriente
ROOM 22
The hotel is also known for its

most famous guest.
In June 26, 1892, Jose Rizal
arrived in the Philippines from
Hong Kong on board the boat
Don Juan.
After having been inspected by
the custom men, he went to the
Oriente Hotel where he occupied
room No. 22, facing the Binondo
church, Rizal slept here.
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Hotel de Oriente
A fish vendor posing in front of
the hotels main drive driveway.
Hotel de Oriente
Breakfast menu dated 18th of
September 1900.
Written on the menu;
NUMBER 2 Oat Meal Mash
NUMBER 4 Findon Haddock
NUMBER 5 Spanish Omelette
NUMBER 6 Smoked Chipped Beef
in Cream
Hotel de Oriente
Lunch menu dated 18th of
September 1900.
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Hotel de Oriente
There is no lack of ventilation, for
the side of the room facing the
street can be thrown entirely
open.
Hotel de Oriente
The Filipino bed has been
unjustly ridiculed and maligned;
it has been called an instrument
of torture, a rack, an inspirer of
insomnia. It is none of these. It is
a sleeping machine, perfectly
adapted to local conditions, a
bed evolved by centuries of
experience in a moist, hot,
insect-ridden tropic land, and
from the artistic point of view is
not unattractive.
Hotel de Oriente
Before it was destroyed by the
war, Hotel de Oriente served as
the office of the Philippine
Constabulary. It later became the
home of American Circulating
Library, Official Gazette, and the
Commercial Museum.
The lot where the hotel once
stood is now occupied by
Metrobank.
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Cornerstones in history of the International Lodging
Industry.
Individuals who made their mark and influenced the
industry to what it is today.
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Statler Hotel
The Statler Hotel company was
one of the United States' early
chains of hotels catering for
traveling businessmen and
tourists.
It was founded by Ellsworth
Milton (E. M.) Statler in
Buffalo, New York.
Ellsworth Milton (E.M.)

Statler
(October 26, 1863 April 16,
1928) was an american hotel
businessman born in Somerset
County, Pennsylvania.
He is known as the Father of
American Hotels.

Statler
He
had
developed
a
fascination with the Mc Lure
Hotel in Wheeling, West
Virginia, USA and by his 13th
year he had obtained a job
there as a bellboy, thus began
a life in the hotel industry.
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Statler
He liked to try new ideas,
experimented and developed
these to improve hotel service
and efficiency, later he began
to test these with business
ventures.

Statler
In 1901 he opened a massive
temporary hotel for Buffalo's
Pan-American
Exposition,
a
simple
structure
with
an
inventory of about FIFTY (50)
rooms, movable units which are
actually designed to be easily
torn down after the fair was over,
put up and reconstructed again
elsewhere.

Statler
Despite
the
less
than
glamorous results of his first
movable hotel Statler moved
on to build the Innside Inn for
the 1904 St. Louis Louisiana
Purchase Exposition.
This time the fair and hotel
was a success.
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Statler
Come the end of the St. Louis
fair, Statler was now prepared
to build his first permanent
hotel. This hotel, the Buffalo
Statler, quickly became famous
and successful (it being the
first major hotel to have a
private bath, shower and
running water in every room).

Statler
Statler was only able to build
seven hotels during his
lifetime. He died on April 16,
1928.
The hotel company he
founded lasted until 1954
when then it was bought by a
man by the name of Conrad
Nicholson Hilton.

Statler
Life is service. The one who
progresses is the one who
gives his fellow human beings
a little more, a little better
service.
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Statler
A room and a bath for a dollar
and a half!

Statler
"The Guest is Always Right."
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Conrad Hotels & Resorts

Conrad Hotels & Resorts is an
international brand of luxury
hotels and resorts owned and
operated by Hilton Worldwide,
named after company founder
Conrad Hilton.
Conrad Nicholson Hilton

Conrad
Nicholson
Hilton
(December 25, 1887 January
3, 1979) was an American
businessman and investor.
He is well known for being the
founder of the Hilton Hotels
chain.

He bought his first hotel in
1919, the 40-room Mobley
Hotel in Cisco, Texas, in 1919.
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The first high rise hotel he
built was the Dallas Hilton,
which opened in 1925. This
was followed by the Abilene
Hilton in 1927, Waco Hilton in
1928, and El Paso Hilton in
1930.

He built his first hotel outside
of
Texas
in
1939
in
Albuquerque, New Mexico. It
is today known as the Andaluz
Hotel.

During the Great Depression,
Hilton was nearly forced into
bankruptcy and lost several of
his hotels. He was retained as
manager and eventually made
a comeback and bought them
all back.
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He formed the Hilton Hotels
Corporation in 1946 followed
by the Hilton International
Company in 1948.
Waldorf Astoria Hotels &

Resorts
Waldorf Astoria Hotels &
Resorts, formerly The WaldorfAstoria Collection, is a Hilton
Worldwide luxury hotel and
resort brand. It is a flagship
brand within Hilton's portfolio,
being used on hotels which
offer the highest standards of
facilities and service.
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William Waldorf Astor,

1st Viscount Astor
William Waldorf Astor, 1st
Viscount Astor (31 March 1848
18 October 1919) was a very
wealthy
American
who
became a British nobleman.
He was a member of the
prominent Astor family.
William Waldorf Astor,

1st Viscount Astor
William Waldorf Astor inherited a
personal fortune that made him
the richest man in America, in
1890, he began construction of
the luxurious Waldorf Hotel on
the site of his former residence.
(His cousin, John Jacob Astor IV
built the adjoining Astoria Hotel
in 1897, and the complex then
became the Waldorf=Astoria
Hotel.
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John Jacob Astor IV

John Jacob Astor IV (July 13,
1864 April 15, 1912) was an
American businessman, real
estate
builder,
investor,
inventor, writer, lieutenant
colonel in the SpanishAmerican War and a member
of the prominent Astor family.
John Jacob Astor IV

John Jacob Astor IV made
millions in real estate. In 1897,
Astor built the Astoria Hotel,
"the worlds most luxurious
hotel", in New York City,
adjoining the Waldorf Hotel
owned by Colonel Astors
cousin, William Waldorf Astor.
John Jacob Astor IV

He was presumed lost at sea
on the 15th of April 1912 while
on a cruise on the RMS
TITANIC.
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The Ritz-Carlton Hotel

Company, L.L.C.
The Ritz-Carlton Hotel Company, L.L.C. is the
parent company to the luxury hotel chain, The
Ritz-Carlton Hotels. Ritz-Carlton operates 87
luxury hotels and resorts in major cities and
resorts in 29 countries and territories.
Csar Ritz
Csar Ritz (23 February 1850
24 October 1918) was a Swiss
hotelier and founder of several
hotels, most famously the
Htel Ritz, in Paris and The Ritz
Hotel in London.
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Csar Ritz
His nickname was "king of
hoteliers, and hotelier to
kings," and it is from his name
and that of his hotels that the
term ritzy derives, he placed
the word luxury in hotels.
Holiday Inn
Holiday Inn is a multinational
brand of hotels, under the
InterContinental Hotels Group.
Originally a U.S. motel chain,
today it is one of the world's
largest hotel chains, with
435,299 bedrooms in 3,463
hotels globally.
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Charles Kemmons
Wilson
Charles Kemmons Wilson
(January 5, 1913 February
12, 2003) was the founder of
the Holiday Inn chain of
hotels.
Charles Kemmons
Wilson
Your Host From Coast To
Coast, Wilson initially came up
with the idea after a family
road trip to Washington, D.C.,
during
which
he
was
disappointed by the quality
and consistency provided by
the roadside motels of that
era.
Charles Kemmons
Wilson
The name Holiday Inn was
given to the original hotel by
his architect Eddie Bluestein as
a joke, in reference to the
1942 Bing Crosby movie.
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Charles Kemmons
Wilson
He opened the first Holiday
Inn motel in Memphis in 1952,
and quickly added others to
create an entire hotel chain.
Charles Kemmons
Wilson
In 1957, Wilson franchised the
chain as Holiday Inn of
America growing dramatically,
it followed Wilson's original
tenet that the properties
should be standardized, clean,
predictable,
family-friendly
and readily accessible to road
travelers.
Charles Kemmons
Wilson
By 1958, there were 50
locations across the country,
100 by 1959, 500 by 1964, and
the 1000th Holiday Inn
opened in San Antonio, Texas,
in 1968.
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Charles Kemmons
Wilson
Holiday Inn went international
in 1960.
Charles Kemmons
Wilson
The chain dominated the
motel market, leveraged its
innovative Holidex reservation
system, and placed financial
pressure on traditional hotels
setting the standard for its
competitors.
Charles Kemmons
Wilson
Today, Holiday Inn is one of
the world's largest hotel
chains with 238,440 bedrooms
and 1,301 hotels globally with
more than 100 million guest
nights each year, globally.
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Hampton by Hilton
Hampton by Hilton, formerly
known as Hampton Hotels, is a
brand of hotels trademarked
by Hilton Worldwide. The
Hampton hotel brand is a
chain of moderately priced,
upper midscale hotels with
limited food and beverage
facilities.
Raymond E. Schultz
Raymond E. Schultz, a protg
of Kemmons Wilson, started
the Hampton Inn in 1984.
Showcasing limited service
and taking into account the
cost conscious guest.
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Raymond E. Schultz
In the early 1980s, Ray Schultz
founded the Hampton Inn
hotels, a company in the
Holiday Inn Corporation.
Hampton
Hotels
are
characterized by its 100%
Satisfaction Guarantee.
Raymond E. Schultz
In 1989, Hampton became the
first national hotel brand to offer
such a promise.
It states: "Friendly service, clean
rooms
and
comfortable
surroundings every time. If
youre not satisfied, we dont
expect you to pay. Thats our
commitment & your guarantee.
Thats 100% Hampton."
Raymond E. Schultz
The first Hampton Inn opened in
Memphis in the summer of 1984.
It was a two-story, exterior
entrance building with 128 guest
rooms. This hotel was located at
1585 Sycamore View Road. The
hotel remained "The World's First
Hampton Inn" until it closed in
August 2005. At that time, the
hotel was sold by its current
owner.
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Raymond E. Schultz
These hotels were tagged as
limited-service, meeting the
needs of cost-conscious business
travelers and pleasure travelers
alike. Schultzs pioneering efforts
in developing a product and
service
for
these
market
segments
have
proved
a
substantial contribution to the
history of the hotel industry.
Marriott Hotels &

Resorts
Marriott Hotels & Resorts is
the international flagship
brand of Marriott, it is the only
hotel
chain
repeatedly
included on the Forbes Best
Companies to Work for list,
and was voted the fourth best
company to work for in the UK
by The Times in 2009.
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John Willard Marriott

John
Willard
Marriott
(September 17, 1900 August
13, 1985) was an American
entrepreneur, businessman,
founder of the Marriott
Corporation (which became
Marriott
International
in
1993).

Marriott was founded by J.
Willard Marriott in 1927 when
he and his wife opened a root
beer
stand
(A&W)
in
Washington D.C. and in 1957,
opened the first Marriott
hotelactually a motel, the
Twin Bridges Motor Hotel in
Arlington, Virginia.

Marriott was an energetic
worker and rarely rested,
preferring to run his company.
Many attested to the fact that
he ate, lived, breathed and
dreamed about how to run
and improve his company.
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He was a perfectionist, his
managers never knew what
time of day or night hed show
up at the door.

He wanted everything right for
his guests, from the lowest to
the highest part of his hotel,
even sampling the root beer,
and raising hell if everything
wasnt spotless, neat, clean,
bright,
polished,
done
efficiently, and done well.

Even after the company grew
to include hundreds of
restaurants
and
hotels,
Marriott vowed to personally
inspect every establishment at
least four times a year.
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Marriott tempered his rigid
demands for perfection with
devotion to his employees.
He treated everyone like
family.

In establishing the culture of
the company, there was a lot
of attention and tender loving
care paid to the hourly
workers. When they were sick,
he went to see them. When
they were in trouble, he got
them out of trouble. He
created a family loyalty.

His slogan rang on for decades
even after his death.
"Youve got to make your
employees happy. If the
employees are happy, they are
going to make the customers
happy."
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Sheraton Hotels and

Resorts
Sheraton Hotels and Resorts is
Starwood Hotels and Resorts
Worldwide's
largest
and
second oldest brand (Westin
being the oldest).
Ernest Henderson
Ernest Henderson (1897-1967)
Mr Sheraton as he is aptly
called was the co-founder of
SHERATON HOTELS.
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Ernest Henderson
In
1967,
Moore
and
Henderson began negotiations
with International Telephone
& Telegraph Corp., which
bought Sheraton in 1968.
Henderson died during the
negotiations.
Robert Lowell Moore

Robert Lowell Moore (1896
1986) was the co-founder of
SHERATON HOTELS.
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Robert Lowell Moore

Ernest Henderson and Robert
Moore
were
Harvard
Classmates
(1918),
with
Ernest's
brother
George
Henderson using their WWII
bonuses of $1000 each to
begin a real estate company
which owned 3 hotels.
Robert Lowell Moore

Sheraton got its name from a
hotel located in Back Bay of
Boston (later part of Boston
University) which was named
after the English Cabinetmaker
Sheraton. (Sheraton and Sons)
Robert Lowell Moore

To remove it's enormous
Sheraton sign would have cost,
according to Henderson family
legend, $10,000 to remove,
which was a king's ransom.
Thus the three hotels became
Sheraton and an international
American corporation was
begun.
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Sheraton Hotels and

Resorts
The origins of Sheraton date
back to 1937 when the
company's founders, Ernest
Henderson and Robert Moore,
acquired their first hotel, the
Stonehaven, in Springfield,
Massachusetts.
Sheraton Hotels and

Resorts
1947, Sheraton Corporation of
America becomes the first
hotel chain to be listed on the
New York Stock Exchange.
Sheraton Hotels and

Resorts
1958, The company launches
"Reservatron," the industry's
earliest automated electronic
reservation system, which
made Sheraton the first hotel
chain to centralize and
computerize reservations.
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Sheraton Hotels and

Resorts
1965, Sheraton opens the
doors to its 100th hotel - The
Sheraton Boston.
Sheraton Hotels and

Resorts
1968, The company is acquired
by
ITT
(International
Telephone & Telegraph Corp.)
to become ITT Sheraton.
Sheraton Hotels and

Resorts
1970, The company is the first
hotel chain with a toll-free
800-number for direct guest
access (1-800-325-3535) which
is still in use today.
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Sheraton Hotels and

Resorts
1985, Sheraton achieves an
important milestone becoming
the first international hotel
chain to operate a hotel in the
People's Republic of China.
Sheraton Hotels and

Resorts
1998, Starwood Hotels &
Resorts
Worldwide,
Inc.
acquires Sheraton
Sheraton Hotels and

Resorts
1998, Starwood Hotels &
Resorts
Worldwide,
Inc.
acquires Sheraton
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TECHNOLOGICAL ADVANCES
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1846, Central Heating

A form of early HVAC systems
used low pressure water
systems, which required very
large pipes. A then modern
hot water central heating
system was installed by Angier
March Perkins in London in
the 1830s which used steam to
heat the hotel during winter.
1846, Central Heating

The Goring Hotel was opened
by Otto Richard Goring on 2
March 1910 and professed to
be the first hotel in the world
in which every room had a
private bathroom and central
heating.
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1859, The Elevator

Otis Tufts (February 14, 1804 November 5, 1869) was a
machinist and inventor who
built the "vertical screw
railway" the first passenger
elevator installed in a hotel in
the United States.
1859, The Elevator

In 1852, Elisha Otis introduced
the first safety elevator, which
prevented the fall of the cab if
the cable broke.
1859, The Elevator

The Fifth Avenue Hotel (five
storeys) was the first hotel in
the United States that had an
elevator, invented by Otis Tuft,
it was then called the "vertical
screw railway, a notable but
cumbersome feature powered
by a stationary steam engine.
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1881, Electric lights

Thomas Alva Edison (February
11, 1847 October 18, 1931)
was an American inventor and
businessman. He developed
many devices that greatly
influenced life around the
world.

Edison invented the phonograph, the motion
picture camera, and a long-lasting, practical
electric light bulb.
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Hotel del Coronado (also
known as The Del and Hotel
Del) is a historic beachfront
399 room hotel in the city of
Coronado, just across the San
Diego Bay from San Diego,
California.

When it opened in 1888, it
was the largest resort hotel in
the world. Electric lighting in a
hotel was also a world first.
Thomas
Edison
himself
oversaw the installation.

Thomas
Edison
after
completing the installation,
returned in 1904 to oversee
the world's first electricallylighted outdoor Christmas
tree, which was placed on the
hotel's lawn.
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1907, In-room
telephone
Alexander Graham Bell is
commonly credited as the
inventor of the first practical
telephone.
The first telephone call was
made on March 10, 1876 by
Alexander Graham Bell.
1907, In-room
telephone
The first telephones in the
1870s were rented in pairs
which
were
limited
to
conversation between those
two instruments. The Western
Electric Model 20 Desk Stand
or candlestick, was the first
in-room telephone used in
hotels.
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1907, In-room
telephone
The Empire Hotel (1909) in
Chicago can call only from
within the property, it was not
until the invention of the
switchboard that calling to
other locations was made
possible.
1927, In-room radio

The Radio Act of 1927 ushered
the birth of the radio industry,
this media which was still in its
infancy at the time became
the hub of entertainment in
the United States.
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1927, In-room radio

In 1927 The Hotel Statler in
Boston becomes the first hotel
with radio reception; rooms
are equipped with individual
headsets to receive broadcasts
from a central control room.
1940, Air-conditioning
In 1902, the first modern
electrical air conditioning unit
was invented by Willis Carrier
in Buffalo, New York. After
graduating
from
Cornell
University, Carrier, a native of
Angola, New York, found a job
at the Buffalo Forge Company.
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1940, Air-conditioning
In 1934, The Hotel Statler in
Detroit is the first to have a
central
system
to
"air
condition" every public room
but it was not until 1940 that
air conditioning and "air
cooling" become prevalent
this time to every room.
1958, Television
In 1927, Philo Farnsworth
made the world's first working
television
system
with
electronic scanning of both
the pickup and display devices,
which he first demonstrated to
the press on 1 September
1928 he called the Farnsworth.
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1958, Television
In 1951, Hilton is the first
chain to install television sets
in all guestrooms but charged
a premium, it was not until
1958 that it was declared as
part of each hotel room
amenity.
1965, Message Lights on

the Telephone
Non invasive means of service
delivery by creating a message
alert light integrated with the
telephone unit in the guest
room.
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1965, Computers
In the year 1965 hotels started
using the business machine
computers like the OLIVETTI
PROGRAMA 101 the first initial
front office computer system,
which introduced room status
capability.
1965, Computers
The OLIVETTI PROGRAMA 101
showed read out not thru a
computer screen but thru
computer punch cards.
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1965, Computers
The Regent Palace together
with its sister hotel the Strand
Palace was one of the first
hotels to use a computer, and
around 1970 the first to use
electronic billing.
1970s Electric cash register,

i.e. point of sale system.
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1970s, keyless locks
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1970s, Color television

standard
1973 Free in-room

movies
The Sheraton Anaheim is the first lodging
property to offer free in room movies.
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1980s Property
management systems
In the advent of business
machines ( a.k.a. computers),
following its wake are new
programs designed to fast
forward hospitality efficiency
to the next century.
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1980s, In-room guest

checkout
Westin innovates the express check out system,
wherein guest can now automatically send for
their latest billing statement and settle it right in
the convenience of their own room
1983, In-room personal

computers
Catered for the use of the
travelling business man.
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1990s, LodgeNet
Entertainment (interactive
video games)
ATARI and NINTENDO launches
the video game, hotels
(WESTIN) were fast to catch
with this trend for the average
family with kids, games like
pac man and the Mario
brothers were introduced.
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1990, Internet
reservations
Choice Hotels International
and Promus become the first
companies to offer guests
"real-time" access to its
central reservations system.
Choice and Holiday Inn are the
first to introduce online
booking capability.
2000s, Wireless
Technology
In the wake of this technology
innovations such as Wi-Fi
CHECK IN FOR VIPs, FREE WEB
BROWSING, Guest hot spot
centres in hotels for wireless
transmission and reception of
emails and documents.
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LPU
L Y C EUM O F TH E P H I LI PP I N ES UN IV ERSI TY
MANI L A M AK ATI B ATAN GAS LAGUN A C AVI TE

HOTEL CLASSIFICATIONS
LPU
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LPU

The Lodging Industry Throughout the Centuries
o 18th Century, Agriculture Age
o 19th Century, Industrial Age
o 20th Century, Service Age
o 21st Century, Technological Age
LPU

Today the Hotel Industry is a Cyclical Industry.
o Hotels follow a rollercoaster economy
o Build during good times
o Overbuild into the downturn
o Worlds resource (energy, oil et al) supply impacts travel and occupancy
LPU

HOTEL CLASSIFICATIONS
Based on an international pool of definitions a hotel may be classified by or
through the following dimensions:
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LPU

1)
2)
3)
4)
5)
6)
7)
SIZE
TYPE
MARKET ORIENTATION/LOCATION
SALES INDICATOR
LEVELS OF SERVICE
AFFILIATION/COUNTRY
CLASS
LPU

1)
SIZE
2)
The number of room capacity in its overall inventory
TYPE
Hotels
Motels
All-suites
Limited-service hotels
Extended-stay hotels
LPU

3) MARKET ORIENTATION/LOCATION
Residential, i.e., centre city, suburban

Commercial, i.e., centre city, suburban
Airport
Highway
Resort
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LPU

4) SALES INDICATOR
Occupancy
Average daily rate (ADR)
Yield percentage
Revenue per available room (RevPAR)
LPU

5) LEVELS OF SERVICE
Full-service
All-suites
Limited-service
Extended-stay
LPU

In some countries in Europe hotels are classified by the kind of
PLAN or SERVICE PACKAGE that they can extend.
A European Plan may mean room accommodations only for a
guest.
A Continental Plan may mean ROOM PLUS A LIGHT BREAKFAST
such as juice, rolls or tea/coffee.
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LPU

An American Plan may be expected to include ROOM +
BREAKFAST + LUNCH + DINNER, there are some cases
wherein this could be modified by packaging it as ROOM +
BREAKFAST with only either LUNCH or DINNER, whereas
the guest can only choose one.
LPU

6)
AFFILIATION/COUNTRY
Chain
Franchise
Company-owned
Referral
Management contract
Independent
Country bound Rating System <<see article: rules and regulations, DOT-PHIL>>, i.e., STARS,
DIAMONDS, etc.
LPU

7) CLASS
Most hotels by way of promotion affiliate themselves to a class of their

own creation, a hotel in Australia for instance can get a SIX (06) STAR
RATING by complying to its countrys environmental standards
The Burj Al Arab (Arabic: ,Tower of the Arabs) for instance is in a
class on its own for having guests amenities un-equalled by other
properties, i.e. solid gold water spigots.
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LPU

CYCLICAL INDUSTRY
LPU

CYCLICAL INDUSTRY
Hotels follow a roller coaster economy

Build during good times
Overbuild into the downturn
Worlds primary energy source impacts the lodging industry
LPU

SPECIAL CHARACTERISTICS OF THE LODGING INDUSTRY
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LPU

PERISHABILITY
LOCATION
FIXED SUPPLY, BUT VARYING DEMAND
HIGH OPERATING COSTS
SEASONALITY
LPU

PERISHABILITY
At midnight, value of unsold inventory is $0
Tomorrow we are selling tomorrows inventory, increases
the pressure to sell NOW
LPU

LOCATION
FIXED
One cannot move to deliver to high demand areas
CHANGING VALUE OF FIXED LOCATION
Demand for a particular location may drop
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LPU

LOCATION
MARKETING AND SALES PROMOTION
Inability or ability to bring home the bacon or bring guests
to the property.
LPU

FIXED SUPPLY, VARYING DEMAND

EXAMPLE: Your property has only 100 rooms.
Today on 50 are sold, revenue is lost
LPU

Tomorrow, the AZKALS championship game will take place in
Manila, with a demand of over 100 rooms but I can sell only
50, you have no way to make up for lost revenue, no way to
increase inventory.
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LPU


CAPITAL INTENSIVE
COST OF CREATING / RENOVATING ROOMS CAN BE EITHER
BETWEEN USD$50, 000 TO $ 1 MILLION
LPU


LABOUR INTENSIVE
Complications, issues and costs when dealing with labour.
LPU


HIGH FIXED COSTLOW VARIABLE COST
Even at LOW/NO OCC we incur fixed costs i.e. mortgage,
utilities, salaries, marketing, etc.
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LPU


Variable cost per occupied room is relatively LOW i.e. the
cost of cleaning, replacing linen, etc.
LPU


The need to make or exceed BREAK EVEN POINT, if a
property exceeds its revenue target by a high margin.
LPU

SEASONALITY
Within a YEAR
Business fluctuates from PEAK season to LOW season and
holidays (RED LETTER DAYS)
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LPU

Properties usually deal with this problem by piggy backing on
new activities and launching new sales promotions, before
and even after the traditional season to just simply extend it,
i.e., a post Christmas holiday promo.
LPU

Within a MONTH
Business fluctuates, high business is usually from the MIDDLE PEAK to the
late part or MONTH END.
LPU

Within a WEEK
Business fluctuates from WEEK DAYS to WEEK ENDS
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LPU

HOW HOTELS COUNT AND MEASURE
LPU

THE THREE MOST COMMON STATISTICAL DATA USED IN LODGING PROPERTIES TO
MEASURE OPERATIONAL SUCCESS
OCC
OCCUPANCY
ADR
AVERAGE DAILY RATE
revPAR REVENUE PER AVAILABLE ROOM
LPU

To ascertain this, one must be familiar with the following statistical data.
of rooms available for sale
of rooms sold
of guests
of guests per room
Total room revenue
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LPU

Statistical data is comprised of the following:
OCC
Occupancy
ADR
Average Daily Rate
revPAR
Revenue Per Available Room
DBL OCC Double Occupancy
YIELD
Realized Revenue
LPU

CALCULATING DAILY STATISTICS
OCCUPANCY
Hotel occupancy refers to the percentage of rooms occupied in a hotel at
a given time. The occupancy rate helps a hotel's administrators evaluate
their business and determine whether the hotel has a vacancy for letting
out rooms to walk-in guests.
LPU

OCCUPANCY
As a tool, OCCUPANCY, measures the success of the FRONT OFFICE in
selling is primary product: its rooms.
A hotel front-desk clerk or manager should thoroughly know this
information.
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LPU

OCCUPANCY
OCCUPANCY
O F
R O O M S
O C C U P I E D
--------------------------------------------------------------------------------------
OF
ROOMS
IN
HOTELS
INVENTORY
LPU

AVERAGE DAILY RATE

Average Daily Rate (commonly referred to as ADR) is a statistical unit that are
often used in the lodging industry. The number represents the average rental
income per occupied room in a given time period. ADR along with the
property's occupancy are the foundations for the property's financial
performance.
LPU

AVERAGE DAILY RATE

AVERAGE DAILY RATE
T O T A L
H O T E L
R E V E N U E
D E R I V E D F R O M T O TA L O F R O O M S S O L D
A N D
C H A R G E D
F O R
T H E
D A Y
=
--------------------------------------------------------------------------------------THE TOTAL OF ROOMS SOLD AND CHARGED FROM THE

H O T E L S
I N V E N T O R Y
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LPU

revPAR
revPAR, or revenue per available room, is a performance metric in
the hotel industry, which is calculated by multiplying a hotel's
average daily room rate (ADR) by its occupancy rate.
LPU

revPAR
revPAR
( A DR - Av e r a ge D a i l y R at e ) X ( OC C - Oc c u p a n c y )
revPAR
-----------------------------------------------------------
TOTAL ROOM REVENUE
NUMBER OF ROOMS AVAILABLE FOR SALE
LPU

revPAR
It may also be calculated by dividing a hotel's total guestroom
revenue by the room count and the number of days in the period
being measured.
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LPU

Double Occupancy
This statistical data is used to determine projections of clean linen
requirements in HSKP OPERATIONS.
LPU

Double Occupancy
O F
R O O M S
O C C U P I E D
W I T H
M O R E
T H A N
O N E
G U E S T
DBL OCC
--------------------------------------------------------------------------------------O V E R A L L
O F
R O O M S
O C C UP I E D
LPU

YIELD
This statistical data of realized revenue against projected revenue.
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LPU

YIELD
A
YIELD
--------------------------------------------------------------------------------------P
LPU

GIVEN
ITEM
HOTEL (A)
(A)
OF RMS AVAIL FOR SALE
1, 000
(B)
OF ROOMS IN THE PROPERTY
1, 050
(C)
OF ROOMS SOLD
(D)
TOTAL REVENUE
(E)
(F)
HOTEL (B)
2, 000
2, 100
750
1, 400
$75, 000
$280, 000
STAFF FOR OPS
650
3, 000
OF GUESTS
850
1, 800
LPU

COMPUTE FOR THE FF.
FORMULA
HOTEL (A)
HOTEL (B)
OCC
ADR
revPAR (A)
revPAR (B)
STAFF OPS per guest room
DBL OCC
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LPU

COMPUTE FOR THE FF.
FORMULA
OCC
(C) (A)
ADR
(D) (C)
revPAR (A)
(D) (A)
revPAR (B)
(ADR) x (OCC)
(E) (A)
DBL OCC
[(F) - (C)] (C)
HOTEL (A)
HOTEL (B)
LPU

COMPUTE FOR THE FF.
FORMULA
OCC
(C) (A)
ADR
(D) (C)
revPAR (A)
(D) (A)
revPAR (B)
(ADR) x (OCC)
(E) (A)
DBL OCC
[(F) - (C)] (C)
HOTEL (A)
HOTEL (B)
75.00%
70.00%
LPU

COMPUTE FOR THE FF.
FORMULA
OCC
(C) (A)
HOTEL (A)
75.00%
HOTEL (B)
70.00%
ADR
(D) (C)
$100.00
$200.00
revPAR (A)
(D) (A)
revPAR (B)
(ADR) x (OCC)
(E) (A)
DBL OCC
[(F) - (C)] (C)
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LPU

COMPUTE FOR THE FF.
FORMULA
OCC
(C) (A)
75.00%
70.00%
ADR
(D) (C)
HOTEL (A)
$100.00
HOTEL (B)
$200.00
revPAR (A)
(D) (A)
$75.00
$140.00
revPAR (B)
(ADR) x (OCC)
(E) (A)
DBL OCC
[(F) - (C)] (C)
LPU

COMPUTE FOR THE FF.
FORMULA
OCC
(C) (A)
HOTEL (A)
75.00%
HOTEL (B)
70.00%
ADR
(D) (C)
$100.00
$200.00
revPAR (A)
(D) (A)
$75.00
$140.00
revPAR (B)
(ADR) x (OCC)
$75.00
$140.00
(E) (A)
DBL OCC
[(F) - (C)] (C)
LPU

COMPUTE FOR THE FF.
FORMULA
OCC
(C) (A)
HOTEL (A)
75.00%
HOTEL (B)
70.00%
ADR
(D) (C)
$100.00
$200.00
revPAR (A)
(D) (A)
$75.00
$140.00
revPAR (B)
(ADR) x (OCC)
$75.00
$140.00
(E) (A)
65.00%
150.00%
DBL OCC
[(F) - (C)] (C)
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LPU

COMPUTE FOR THE FF.
FORMULA
OCC
(C) (A)
75.00%
70.00%
ADR
(D) (C)
HOTEL (A)
$100.00
HOTEL (B)
$200.00
revPAR (A)
(D) (A)
$75.00
$140.00
revPAR (B)
(ADR) x (OCC)
$75.00
$140.00
(E) (A)
65.00%
150.00%
DBL OCC
[(F) - (C)] (C)
13.33%
28.57%
LPU
Hotel Front Office Management, 5th Edition, John Wiley & Sons, Inc., Author
James A. Bardi
86

01.00 The Traditional Hotel Industry

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02/12/2015

THE TRADITIONAL HOTEL INDUSTRY

o Understand Hotel Classification Systems

THE TRADITIONAL HOTEL INDUSTRY

THE TRADITIONAL HOTEL INDUSTRY

THE TRADITIONAL HOTEL INDUSTRY

THE TRADITIONAL HOTEL INDUSTRY

THE TRADITIONAL HOTEL INDUSTRY

THE TRADITIONAL HOTEL INDUSTRY

THE TRADITIONAL HOTEL INDUSTRY

THE TRADITIONAL HOTEL INDUSTRY

THE TRADITIONAL HOTEL INDUSTRY

THE TRADITIONAL HOTEL INDUSTRY

THE TRADITIONAL HOTEL INDUSTRY

He said, If I have found favor in your eyes, my lord, do not pass

So Abraham hurried into the tent to Sarah. Quick, he said, get

THE TRADITIONAL HOTEL INDUSTRY

THE TRADITIONAL HOTEL INDUSTRY

THE TRADITIONAL HOTEL INDUSTRY

The Luneta Hotel

The Luneta Hotel

The Luneta Hotel

The Luneta Hotel

The Luneta Hotel

The Luneta Hotel

The hotel is also known for its

THE TRADITIONAL HOTEL INDUSTRY

Ellsworth Milton (E.M.)

Ellsworth Milton (E.M.)

Ellsworth Milton (E.M.)

Ellsworth Milton (E.M.)

Ellsworth Milton (E.M.)

Ellsworth Milton (E.M.)

Ellsworth Milton (E.M.)

Ellsworth Milton (E.M.)

Ellsworth Milton (E.M.)

Ellsworth Milton (E.M.)

Conrad Hotels & Resorts

Conrad Nicholson Hilton

Conrad Nicholson Hilton

Conrad Nicholson Hilton

Conrad Nicholson Hilton

Conrad Nicholson Hilton

Conrad Nicholson Hilton

Waldorf Astoria Hotels &

William Waldorf Astor,

William Waldorf Astor,

John Jacob Astor IV

John Jacob Astor IV

John Jacob Astor IV

The Ritz-Carlton Hotel

Marriott Hotels &

John Willard Marriott

John Willard Marriott

John Willard Marriott

John Willard Marriott

John Willard Marriott

John Willard Marriott

John Willard Marriott

John Willard Marriott

John Willard Marriott

Sheraton Hotels and

Robert Lowell Moore