Hotel Front Office Management, 3rd Edition

HISTORICAL DEVELOPMENTS 7Marketing EmphasisAn emphasis on marketing to guest niches was the theme in the 1970s era. This techniquesurveyed potential guest markets and built systems around guests’ needs.The larger hotel-management and franchise companies also were discovering theadvantages of forging strong reservations and marketing systems. For a guest, thismeant that by calling a single phone number, he or she could be assured of areservation and feel confident of the quality of accommodations expected. 12Total Quality ManagementTotal quality management (TQM), a management technique that helps managers tolook at processes used to create products and services with a critical eye on improvingthose processes, is being practiced in many hotels today. This emphasis on analysis of thedelivery of services and products with decision making at the front lines has created atrend in the 1990s. This concept will be discussed in more detail in chapter 11.Major Reorganization 1987–1988The economic period of 1987–1988 saw a major reorganization of the hotel industry.1986 Congress unravelled what it had stitched together in 1981. The revised TaxAct made it clear that passive losses on real estate were no longer deductible. Hotelsthat were previously economically viable suddenly were not. At this time, therewere plenty of Japanese who seemed intent on buying up, at astronomical prices,any piece of U.S. property with a hotel or golf course on it. As a result, the valueof American hotel properties continued to increase. Between 1990 and 1995, therecession began and ended, and the full impact of the 1986 law and overbuildingwere experienced. Some investors who had built properties in the early 1980s foundtheir properties sales or replacement value had fallen to 50 percent or less of originalcost. Some owners simply abandoned their properties to their mortgage holders—which in many cases turned out to be Uncle Sam, because of the simultaneous S&Ldebacle. 13Hotel InvestmentReal estate investment trusts (REITs) have provided an investment opportunity forhoteliers. In the spring 2000 Virginia Hospitality and Leisure Executive Report, P. AnthonyBrown of Arthur Andersen writes the following about the U.S. Tax Relief ExtensionAct of 1999. It is important to note that this information is useful as you plan your careerdirection.TLFeBOOK