Hospitality Management

578 Service types if the maître d’ hôtel assists.) Often, however, a combination of the two techniques can be used. The main food item, e.g. meat, can be portioned onto a plate in the kitchen and served using the plate service method and the accompaniment can then be served at the table using the silver service technique. Interestingly, in formal Chinese dining and many oriental banquets a modified version of silver service is used throughout each of the eight or twelve courses. The correct service technique in this instance is to present the dishes within each course to the guest of honor, other guests, and the host, in that order. Once presented, these are placed in the middle of the table on a carousel also known as a ‘lazy Susan.’ The waiter then portions and serves the food for each guest from the carousel commencing with the guest of honor, then other important guests, proceeding to the remaining guests and the host. Once this is done, the carousel table is cleared of dishes. At less formal banquets, however, once the guests have been served the remaining dishes are left at the carousel and guests are allowed to help themselves from the dishes. This then becomes similar to the family service style (see below). It is worth noting that, traditionally, the plate service method and other forms of table service required food to be served from the left of the guest, and removal of empty plates to be done from the right of the guest. This can still be observed in more traditional restaurants and in formal service situations, e.g. state banquets. However, modern practice increasingly demands that plates be placed and cleared from the guest’s right because it is believed that this method causes least disturbance to the guest. As noted, silver service or service à l’anglaise is a method of transferring food from a service dish to the guest’s plate and serving from the guest’s left by using service gear, which is normally comprised of the serving spoon and fork and at times fish or carving knives. A waiter must be able to master the silver service technique using only one hand to hold the service gear (spoon and fork) while the other hand holds the service dish. It is also worth noting that very few foodservice operations offer full silver service to their guests nowadays. Guéridon service (service à la russe) The actual term ‘guéridon’ denotes a side table or service trolley (in former times, especially in Russia, a guéridon was a sideboard) which is used in the dining room in front of guests for the service and preparation of foods. Normally guéridon service – also referred to as ‘French’ service – requires food to be transferred from a serving dish onto the guest’s plate on the guéridon, which is then served to the guest. In addition, a guéridon is often used to finish off certain dishes, e.g. to flame (flambé) them or to prepare certain desserts, or to dress salads, before being portioned and served to the guests. Family service (service à la française) Family service is a very simple method of serving food in which serving dishes are placed on the dining table (on a carousel in the middle of the table for Chinese service and Chinese dim sum service), allowing guests to select what they wish and to serve themselves. Family service style is predominantly used in Oriental, Middle Eastern, and Mediterranean countries. Buffet service For buffet and smorgasbord service, the food is usually artistically arranged on a display table (possibly more than one) and guests select what they wish from a range of hot and cold foods, soups, roasts, salads, and desserts. A proper buffet service requires service staff to serve the foods, which the guest has selected, using the silver service technique. This differs from the smorgasbord service where guests are allowed to help themselves from the smorgasbord table. It is not unusual, though, for many modern foodservice operations to allow guests to help themselves from the buffet table. Smorgasbord service As already noted, smorgasbord service is similar to buffet service except that the guests are allowed

Site inspection 579 to serve themselves from the smorgasbord. Also, a true smorgasbord is comprised of dishes from Scandinavian countries and features hot and cold seafood delicacies, which are often smoked or pickled. Cafeteria service In cafeteria-style service, guests select their meals from food counters, the full length of which is known as a ‘race,’ and place these on their meal tray. These meals might be pre-bought or paid for at the end of the race at the cash desk prior to sitting down to consume the meal. Usually, cutlery, napkins, additional crockery and beverages are collected at the end of the race before proceeding to the cash desk. Cafeteria-style service can be found in on-site foodservice, which – depending on the venue – may also serve gourmet-style food. Reference Revel, J. (1982) Culture and Cuisine. Garden City, NY: Doubleday. JAKSA KIVELA THE HONG KONG POLYTECHNIC UNIVERSITY, HONG KONG SAR, CHINA Shrinkage Shrinkage is the loss of assets in a foodservice operation, usually food or liquor. As Geller (1992) underscores, this loss is usually the result of inadequate internal controls. Restaurants suffer greater losses associated with shrinkage than other businesses because the majority of assets are consumable and easily usable. For example, food and liquor has demonstrated value to employees. Furthermore, employees can use inedible assets such as plates, silverware, glassware, cleaning supplies, tablecloths, napkins, and candles at home. It is for this reason that shrinkage is the leading cause of business failure for restaurateurs. Shrinkage also results in increased costs for the respective categories on a firm’s income statement. Take, for example, the effect of stolen steaks. Since the food cost for a given period is calculated by assessing what was taken from inventory during the period, it is difficult to distinguish what was sold to guests and what was stolen; both phenomena result in reduction of inventory and an increase in the cost of goods. Operators’ best defense against shrinkage involves eliminating the opportunity for employees to steal. This extends to proper purchasing, receiving, and inventory-management practices. With such practices in place, along with effective internal controls and monitors, shrinkage can be all but eliminated. Reference Geller, A.N. (1992) Internal Control: A Fraud Prevention Handbook. Ithaca, NY: Cornell Campus Store. DAVID BIEL HOUSTON’S RESTAURANTS, USA Site inspection Site inspections are personal, careful investigation of a property, facility or area. A site inspection allows the planner to assess everything from the general condition of the hotel and meeting facilities to the attitudes of the service personnel who manage them. Site inspections should be done at least a year or two in advance for large meetings, although many associations book as far as 10 years in advance of their annual conventions. During the site inspection planners set a time to meet with the hotel sales representative or, if several hotels will be visited, the convention and visitors bureau representative for the destination. Meeting planners determine in advance the parts of the facilities they wish to tour and set a firm schedule. They review the meeting requirements and history with department managers. During their visit they take photographs of the available space from all angles and make sure that the site

580 Site inspection meets the national regulations affecting people with disabilities (i.e. in the United States the Americans with Disabilities Act). To facilitate the process of inspection meeting planners use a checklist and ask questions. The checklist should include the date of the site inspection, the facility name, the facility address, the main phone number, the reservations phone number, the toll free phone number, the website address, info on online reservations capabilities, a phone number for international attendees, information on the confirmation process for reservations, the deposit policy for attendees, when the property was built, when the last renovation was and when is the next planned renovation, what was or will be renovated. The contact information should include the name, direct phone line, fax number, and e-mail address for the primary contact (sales manager), general manager, catering director, convention or conference service manager, electrical services manager, audiovisual set-up department, security, and any other pertinent numbers. Other information to gather includes the distance to the nearest airport, the distance to downtown, the distance to the convention center (if applicable), transportation options and cost from the hotel to the convention center (if applicable), traffic considerations, a listing of local entertainment, shopping centers, stores, and restaurants. Information on parking should include self parking availability on site, availability of valet parking, number of parking spaces, number of accessible spaces for handicapped drivers, cost of self parking, and cost of valet parking. Information on the number of guestrooms should be broken down into single, double, double/double or king with the number of smoking and non-smoking rooms in each category. The same breakdown should be obtained for suites and accessible rooms. In the United States, one should also obtain the FEMA (Federal Emergency Management Agency, which determines the hotel’s compliance with the Fire Safety Act and issues a certifying number) number of the property. Other questions that should be asked include the following: ● What is the hotel’s complimentary room policy? ● What is included in the standard room rate? ● What are the concierge hours? What are check-in and check-out times? ● What amenities are provided in the rooms? ● Are there mini-bars in the rooms? ● Are there irons and ironing boards in the rooms or will attendees have to call housekeeping to have them delivered? ● Does the hotel provide high-speed data ports? ● What is the fee for use of the data ports? ● Are there multiple telephone lines? ● Are there surcharges for toll-free access? ● Is there an in-room safe in every room and is there a fee to use it? ● Can guests control the in-room temperature? ● Is there a resort fee? ● Is there a charge to receive faxes? ● What is the air quality of the hotel and what is the hotel’s schedule of filter cleaning? ● Is there a concierge level and what is included? ● Is there a health club, spa, pool and costs? ● What is the portage fee? ● What other charges may be added to the guest bill? ● What are the capacities, typical menus, and hours of operation of the restaurants? ● Is there room service and what are the hours of operation? ● Is there a newsstand, gift shop, business center or other outlets? ● What is the sales tax on guestrooms? ● What is the sales tax on food? ● Is there a bed tax and how much? ● What is the gratuity or service charge percentage? ● What are the catering menus? ● List of certifications and conditions from catering contracts or Banquet Event Orders. ● How many tables of each type does the hotel have in its inventory (rounds of ten, serpentine, etc)? ● What types and sizes of chairs, number of lecterns, microphones, projectors, podiums, projection stands, easels, screens, etc. are available? ● What are the hotel’s liquor policies and local alcohol laws? ● What decorations are available for use? ● What are the hotel’s cancellation and room attrition policies, standard dates to cut off the room block, its peak and shoulder seasons?

Site selection 581 ● What is the hotel’s preferred group patterns (Sunday through Wednesday, Thursday through Sunday, etc.)? ● Does the hotel provide any promotional assistance and in what quantities (reservation cards, logo/artwork for your publications and web site, rack brochures, etc)? ● Is information available about local doctors and hospitals and the availability of child care providers? ● What sports and recreation are available on-site, nearby (such as golf courses), and what is the costs to attendees? ● Are there any local holidays or regional celebrations and festivals on the dates that are being considered? ● Will any other group be in the hotel over the same dates and if so, who are they and how many attendees do they expect? ● Is there Internet access in the guest and meeting rooms and what is the cost? ● What is the drayage policy? How good are the freight access (including the number and size of loading docks, type of loading area, truck clearance space), lift gates (number), and freight elevators (number, dimensions, weight limit). Are pads required, and what is the maximum truck size and height limit. ● Which union performs which duties? ● When is the union’s contract expiration dates (to avoid potential union strikes during the meeting). ● What are the local labor jurisdictions? ● What are interior and exterior rules on signage, including sizes and locations? ● What hotels are adjacent (including the name of the hotel, the walking distance and the number of rooms available for overflow guests)? ● What client references are available, including groups of similar size, time period and market segment? ● Is there information on any anticipated ownership/franchise changes, current owners and managers of the facility, and staff turnover statistics. In addition to asking those questions, meeting planners obtain the following documents: ● A billing application for credit or deposit arrangements for guests and group ● The hotel function room floor plan that also indicates the location of windows, doorways (dimensions), column sizes and locations, built-in screens, stages and podiums, temperature controls, air walls, storage rooms, computer hook-ups, rest rooms (number of each), and telephones (number of each) ● List of available meeting rooms with dimensions (including ceiling height), capacities in various configurations (auditorium set, classroom set, banquet set, etc.), lighting (dimmable?) ● List of rental costs, floor load capacity, type of flooring, location of electrical outlets (overhead, floor, columns), and plumbing ● List of available equipment, including forklifts, dollies, hand trucks, etc. References Krug, S., Chatfield-Taylor, C., and Collins, M. (eds) (1994) The Convention Industry Council Manual, 7th edn. McLean, VA: The Convention Industry Council. Connell, B., Chatfield-Taylor, C., and Collins, M. (eds) (2002) Professional Meeting Management, 4th edn. Chicago: Professional Conference Management Association Education Foundation. M.T. HICKMAN RICHLAND COLLEGE, USA Site selection First the destination is chosen, and then a facility in that destination can be selected. The destination for a meeting must be carefully considered, looking at factors including geographic regions, accessibility, affordability, urban or suburban, resort destination, gaming destination. It is important to prepare the meeting specifications prior to opening discussions with prospective destinations. Meeting specifications include requirements for space, dates, rates, and services. Space would include sleeping rooms, suites, number of complimentary rooms per paid occupied room, number and size of meeting rooms, exhibit space, registration area, audiovisual requirements, computer and technology requirements, suitable

582 Smart card storage space, office space, meeting dates and types of events requiring banquet space. Dates would include the meeting pattern, such as Sunday through Wednesday or Wednesday through Saturday, and required or preferred month or week of the year. Historical data from previous meetings are important to show the type of attendance expected. First-time events have the most difficulty booking space. Location specifications take into consideration the accessibility of the location by plane, train, bus and/or automobile, as well as the number of seats on all planes flying into a destination per day, month or year. Meeting planners need to know if the attendees prefer affordable or luxury accommodations, if they want 24 hour room service, valet parking, shops, on-site business center, airport shuttle service. They must also consider the number of available hotel rooms in the city for citywide conventions or the largest number available in a single hotel for meetings that want to keep attendees together. Convention and visitors bureaus are designed to assist planners, and have specific knowledge of the destinations they represent, as well as the hotels, conference, and convention centers, non-traditional venues, and suppliers that are needed to service a meeting. Other items that affect the site selection include room rates, the number of complimentary (comp) rooms, suites and upgrades, food and beverage, meeting/function space rental rates, and 24-hour hold. Reference Krug, S., Chatfield-Taylor, C., and Collins, M. (eds) (1994) The Convention Industry Council Manual, 7th edn. McLean, VA: The Convention Industry Council. CYNTHIA VANNUCCI METROPOLITAN COLLEGE, USA Small business entrepreneurship The majority of businesses in the hospitality industry are small. Establishment of small business is often related to the social and personal context as well as considerations of the entrepreneur. In fact, hospitality small business entrepreneurship has been identified as a vehicle through which entrepreneurs can achieve personal goals such as having fun, enriching their social life, generating jobs for family members, and educating their children. Several forms of small hospitality businesses exist including: ● Lifestyle businesses established to maintain sufficient income to ensure that the business provides the entrepreneur and his/her family with a satisfactory level of funds to enable them to enjoy their chosen lifestyle, e.g., small motels ● Self-employment businesses, such as bed and breakfasts, in which entrepreneurs express their talents and skills through serving a specific niche of customers ● Ethnic entrepreneurship, which helps overcome disadvantages of immigrants and minorities in their new environment. This can be seen in the establishment of specialty ethnic restaurants in ‘ethnic enclaves’ (Gold, 1992). The aforementioned forms of hospitality small businesses are not necessarily profit-motivated and may also be established to generate a secondary source of income for the entrepreneurs. Furthermore, these forms of small businesses are characterized by a relatively high level of female entrepreneurs who combine career and home duties (Haber and Reichel, 2004). References Gold, S.J. (1992) Self-employment and refugee communities. In S.J. Gold, Refugee Communities. Newbury Park, CA: Sage Publications, pp. 167–197. Haber, S. and Reichel, A. (2004) Identifying performance measures of small ventures – the case of the tourism industry. Journal of Small Business Management. (forthcoming). SIGAL HABER TEL-AVIV UNIVERSITY, ISRAEL Smart card The first smart card was developed in 1974 by independent inventor Roland Moreno. In year

Social influence 583 2004, almost 1 billion smart cards will be produced worldwide by several large manufacturers. Smart cards are among the newest and most exciting tools in the world of information technology. The size and shape of a credit card, smart cards have many of the attributes of a miniature computer. A single card can contain multiple applications and functions that are protected by advanced security features to prevent unauthorized use. A smart card is a card that is embedded with either a microprocessor and a memory chip or only a memory chip with non-programmable logic. The microprocessor card can add, delete, and otherwise manipulate information on the card, while a memory-chip card can only undertake a pre-defined operation. Smart cards, unlike magnetic stripe cards, can carry all necessary functions and information on the card. Therefore, they do not require access to remote databases at the time of the transaction. Today, there are three categories of smart cards, all of which are evolving rapidly into markets and applications: ● Integrated circuit (IC) microprocessor cards ● Integrated circuit (IC) memory cards ● Optical memory cards. References http://java.sun.com/products/javacard/ smartcards.html. http://impactsolutions.cc/smartcard/ smrtcard.htm. BENNY CHAN THE HONG KONG POLYTECHNIC UNIVERSITY, HONG KONG SAR, CHINA Smoke detectors Smoke detectors react to the solid and liquid aerosols created by a fire. Each of the four types reacts to a specific aspect of smoke. The four major types of smoke detectors are: ● Spot-type ionization ● Spot-type, light scattering ● Line projected beam ● Air sampling. Ionization smoke detectors have two electrically charged plates arranged in a parallel manner with an air gap between. The air is ionized by a small, low-strength radioactive source, creating a small electrical current. Smoke particles slow down the ionized air and the detector measures this change. Spot-type photoelectric smoke detectors contain a small light source that shines into the detection chamber. A light-sensitive receiver is placed at an angle to the light source so only a small amount of light is normally received. Smoke particles entering the detector chamber cause additional light to be scattered so more reaches the photosensitive receiver. Projected beam detectors contain a light source that projects a beam through a space to a receiver. When smoke crosses the beam, the amount of light reaching the receiver is reduced. When the percentage of light obscured reaches a preset threshold, an alarm sounds. Air-sampling detectors use separate detection chambers to sample air from a room. The detection chamber may use a cloud chamber to detect minute particles in the air. A second type of air-sampling detector uses a sensitive photoelectric light-scattering detector. This system uses a high-power strobe light or laser beam to detect submicro-sized particles in small concentrations. Reference Schifiliti, R.P. (2000) Fire alarm systems for Life Safety Code users. In R. Cote (ed.) Life Safety Code Handbook. Quincy, MA: National Fire Protection Association, pp. 943–966. CAROLYN LAMBERT PENNSYLVANIA STATE UNIVERSITY, USA Social influence Broadly, social influence is a change in behavior due to the real or imagined influence of other people. There are three types of social influence: informational, normative and interpersonal.

584 Social influence Informational social influence occurs because of people’s desire to be correct and to know how best to behave in a given situation. Persuasion is the most common type of informational social influence. Normative social influence occurs because of people’s desire to conform to social norms in order to be liked and accepted. Normative social influence occurs when people adopt the behaviors, attitudes, and values of members of a reference group. Interpersonal social influence occurs as the result of direct pressure from another person. Two types of interpersonal social influence are obedience and compliance. While persuasion is the most common type of informational social influence, another example found in marketing is references to authorities. When a wine, for example, is marketed as having been rated highly by expert wine tasters, the hope is that the expert opinion will change consumer behavior. Another information technique is called the ‘foot-in-the-door’. In the foot-in-the-door, consumers are presented with a small request (to which they are expected to acquiesce). Then they are presented with a large request, to which the marketer hopes they will also acquiesce. Marketers use this technique by presenting consumers with incrementally increasing requests. Soon, a casual customer becomes a regular guest. Foot-in-thedoor is considered informational social influence because by complying with a small request the consumer begins to view him- or herself as the type of person who uses the product or service and this information produces subsequent behavior changes. Normative social influence occurs when consumers are concerned with being accepted and liked by others. This type of social influence typically results in public compliance with the group’s beliefs and behaviors, but not necessarily private acceptance. The likelihood that a consumer will respond to normative social influences seems to depend upon three factors: the strength, immediacy, and the number of people applying influence. Strength refers to how important the people in the group are to the consumer. Immediacy is how close the group is in time and space to the consumer. Number is simply the number of people in the group. Conformity to normative social influence increases as strength and immediacy increase. Number operates differently. Conformity to social influence levels out once the consumer perceives unanimity in the group; beyond that number, adding members to the group does not increase conformity. Compliance is the type of interpersonal social influence most relevant to sales and other negotiation situations. Compliance is a change in behavior due to a direct request from another person. Compliance techniques rely upon consumers behaving without deliberating about their actions. Some compliance techniques rely upon unobtrusively reminding consumers of social norms. For example, tips to servers increase when the server signs his or her name to the check. This may make the server seem more personal, and remind the customer of the norm to tip. Compliance can also be achieved using various ingratiation techniques. These are tactics that increase the requester’s attractiveness to the consumer. Ingratiation techniques include appearing similar, helpful, and physically attractive to customers. Reciprocity is another interpersonal social influence technique. All cultures have a norm of reciprocity – that receiving anything positive from another person requires a similar response. This norm can be used by simply giving customers token gifts such as candy. It can also be by applying the ‘door-in-the face’ technique. In the door-in-the-face, customers are presented by a large and unreasonable request. Then, after the customer refuses, the marketer responds with a smaller request (to which the consumer is expected to acquiesce). The reciprocity norm in this situation is invoked when the marketer backs down from an extreme request to a reasonable request. This puts pressure on the consumer to reciprocate with compliance. Of the three types of social influence, information social influence results in long-lasting attitude and behavior change and is the type most sought after by marketers. Normative and interpersonal social influence techniques are effective at changing behavior, but their effects persist as long as the agents of the social influence are salient.

Socialization 585 Reference Cialdini, R.B. (2001) Influence: Science and Practice, 4th edn. Boston, MA: Allyn & Bacon. ANN LYNN ITHACA COLLEGE, USA Socialization Socialization is the process whereby new employees are inducted into the culture of an organization (Schultz and Schultz, 2002); norms may be regarded as those implicit standards of behavior that are accepted and shared by members of a work group. Within the hospitality context, the socialization process involves the transmission of values, beliefs, and attitudes embraced by individuals already within an organization, particularly those holding positions of power, influence, and salience. Such individuals would include hotel general managers, human resource managers, and also divisional managers. The concept of person–environment fit holds considerable explanatory power in the understanding of how employees take on their new hospitality work culture and the norms embedded within it. Socialization is regarded as the process that seeks to make this fit as precise as possible, comfortable for all, and generally enduring for the newly employed. It may also be understood as a continuous process that will periodically occur throughout a person’s career in hospitality; employees are regularly required to adapt to change, whether it involves a new position in the existing organization or a new job in another hospitality organization; it can also involve organizational restructuring, or even physical relocation. In many industries such as hospitality, resocialization of some type will necessarily confront an employee. Pizam (1999) has noted that hotel jobs of the future may well become linked together in career ladders; in such a situation resocialization practices would be more efficient and smoother, and could result in less stressful experiences. Upon entry to any hospitality organization, there is a considerable amount of detail that an individual needs to learn; this typically includes expected performance levels, recognition of superiors and codes of appropriate conduct. The notion of role as an explanatory idea is generally deemed to be of some value here, with roles regarded as the expectations of others regarding appropriate hospitality workplace behavior. These roles are invariably multifaceted: They are impersonal in that the position generally determines the role expectation and not the person; they tend to focus on task, with the requirements of the position setting role parameters; they may have a subjective and even evanescent aspect to them, with various individuals in the organization taking differing perspectives as to a new staff member’s work role; they present basic facts and procedures to the newly employed that are usually required to be learned quickly, often producing major change in the individual over a short space of time; finally, a distinction is often made between a position or job, and a role, with most workers having multiple roles in any job. An individual, for instance, may be designated as hotel human resource manager, and have a responsibility for a wide range of activities including staff selection, promotion, and dismissal, for the implementation of current industrial statutes, for occupational health and safety within the hotel, as well as having a general responsibility for staff motivation, retention, and productivity. A number of commentators (e.g. Wanous 1992) have developed schemas that suggest various stages within the socialization process, such as that of anticipatory socialization, accommodation, and then role management. Anticipatory socialization involves those many experiences encountered prior to taking up a hospitality position, yet having the effect of preparing a person for the position. A primary purpose of activities at this point involves the acquisition of both information and attitudes about the new position and its industry context. Individuals generally desire to know as much as possible about the hospitality organization and industry in which they will work. It is suggested that people in this phase are constantly monitoring their perceived suitability for the intended position; individuals often seek out information and then translate it to their circumstances, though not always accurately or

586 Socialization thoroughly. This is a process that regularly reoccurs in any hospitality career, such as at major decision-points like promotion, transfer, organizational restructuring or redundancy. Organizational recruitment programs can play a vital role in socialization; Woods (1999) suggests that hospitality organizations need to sell to prospective employees the many advantages of working for their organization in the same way that they might market their product. If such programs are effective, new hospitality employees are more likely to experience feelings of realism and congruence. Accurate expectations about a job are held much more likely to lead to realism and congruence among new hospitality workers after their appointment. The second stage of socialization is encountered when the person becomes a new member of the hospitality organization; it is at this point that the job may be seen in a fresh and more realistic light. A variety of activities are typically employed so as to encourage the individual to become an energetic participant in the functioning of the hotel or resort, as well as a competent and loyal member of the workgroup. In this stage stress can often be experienced by the new recruit; anxiety, engendered by the uncertainty and novelty of the context, can play a major role. Those individuals experiencing realism and congruence as a result of their anticipatory stage experiences are said to suffer less stress at this point in the process. It is, however, the case that stress, albeit at a moderate level, is rarely absent from any new staff member; the demands of a new role in the hospitality industry do present previously unencumbered situations and challenges that evoke strain in many. Within the accommodation stage individuals are expected to establish new relationships with both co-workers and superiors. They are required to learn the various tasks associated with their role. They are, moreover, expected to develop an understanding of the hospitality organization in which they are employed, including their place and function vis-à-vis the various elements of the organization. Finally, there is an expectation that a self-monitoring of process will occur, and that the individual will readily seek out assistance when required. If these challenges are successfully negotiated, the individual is likely to perceive approval and acceptance on the part of their supervisors; they will also likely perceive a level of personal competence in the performance of their new job. Other positive outcomes of a successful negotiation of this stage include the clarification of role definitions and the perceived congruence as between themselves and co-workers in respect of the person–environment fit estimation. Thus a new hospitality industry employee may perceive a growing understanding of their designated function within the hotel, and also have a sense of the degree to which other more experienced employees recognize their successful socialization into the hotel’s workforce. Role management, according to commentators such as Payne and Cooper (2001), sees the individual confronting a broader set of issues, often involving a set of potential conflict situations which might exist within any hospitality organization. Two conflict situations in particular may present themselves: Conflict between the demands of work life and home life, and conflict between the new employee’s workgroup and other workgroups within the hospitality organization. A major source of potential conflict is between the person’s work and home life, with judgments constantly being made regarding the apportionment of time and energy devoted to the job and to the family. Both contexts may actively press their claim for a major share of the person’s time. New hospitality industry employees who are unable to resolve this situation in some satisfactory manner risk conflict and distress arising, particularly at times such as the early socialization phase of a job wherein long and stressful hours may be required. Long-term conflicts in this phase may even force the person to leave the position, or indeed the hospitality industry altogether. Conflict in the role management stage involving the new person’s workgroup and also other workgroups within an organization will see competing demands of loyalty, of time, of resources, and of effort placed upon the new hospitality worker; if not resolved, this source of conflict can also lead to chronic work stress later in the socialization process which, if not minimized or reduced to manageable proportions, could render the new hospitality employee less than productive and contented.

Socialization 587 The idea of norms has been regarded as pivotal in the understanding of work socialization. Norms are shared group expectations in respect of desirable work behavior. Whilst roles may define what is expected in any position, norms define what is acceptable individual, group, sectional or even organizational conduct within the hospitality industry; roles thus may be seen to differentiate jobs, whereas norms serve to maintain that conduct deemed appropriate in any aggregate within an organization. Norms, moreover, are generally unwritten dicta that strongly regulate hospitality workplace conduct. Schultz and Schultz (2002), and Payne and Cooper (2001) are among those who suggest that norms have several essential components. First, there is an ‘oughtness’ about them, a quality similar to that of an ethical precept. Norms also encapsulate desirable behavior for an aggregation of people, as compared to individual conduct not primarily regarded as social or organizational in nature, and individual conduct regulated by law, formal codes of conduct or private ethical values. Norms are generally regulated and enforced at group level; expected hospitality workplace behavior within the group domain is often closely monitored, particularly among newer members, with implementation sanctioned by work group agreement. The communication and establishment of norms is said to follow a multi-phase process (Dipboye et al., 1994). The first step involves the articulation of the norm to the new hospitality employee in the socialization process; this is usually achieved within the context of the verbal interaction, and also by story telling and by modeling through behavior-display. An example of this may be observed in the recounting of stories by more experienced staff concerning the successful handling of problematic or angry guests. Monitoring of the newly employed is the second step; this is done so that longstanding members of the organization are able to make a judgment as to the effectiveness of the socialization process in the internalization of norms. Finally, the group of more experienced hospitality workers dispenses or withholds rewards for successful socialization and incorporation of norms. Conformity to the norms may be rewarded by way of both psychological and physical means, and will often include the expression of approval and friendship, as well as the sharing of more tangible benefits that might be at the disposal of the group of more senior hospitality industry employees. Punishments can also be administered if a new employee is judged to have offered resistance in the adoption of group norms, and may take the form of exclusion from communications, of insulting or hostile remarks, and even by means of physical aggression in some cases. An increasingly important issue within the socialization process, particularly for industries such as hospitality, is that of employee diversity. The idea of diversity may be understood as that considerable array of physical and cultural variety constituting the spectrum of human difference; a number of core dimensions of diversity are recognized, including age, ethnicity, gender, physical attribute, and sexual orientation. Such core human attributes can have a lifelong positive impact upon behavior and work styles. Valuing diversity, from a hospitality management perspective, can mean understanding and utilizing those dimensions different to oneself. In a globalized industry such as hospitality, an increasingly important goal ought to be the understanding, appreciation, and incorporation of a diversity of individuals within the future hospitality industry (Woods, 1999). The socializations process, as it involves an ethnically diverse workforce, may be viewed as reciprocal; not only must the hospitality manager learn about the employee’s cultural background, but the new employee has a need to learn about the customs, the rituals, and the values of the organization within which he or she now works. The provision of awareness workshops and also orientation sessions is regarded as vital for new employees and also for those who are managers and co-workers. Global competition in hospitality demands of managers that they learn more about unfamiliar cultures, customs, and countries from which new employees come. An awareness of and pride in cultural heritage is now regarded as an advantage, both to the worker and also to the organization; it is thus not indicative of a failure of the socialization process, but rather a sign of the encompassing breadth of the workforce that will meet the needs of an

588 Soft branding industry whose clientele is more diverse and international that ever before. Commentators such as Holjevac (1999), Pizam (1999), and Woods (1999) have all suggested that an appropriately trained and productively functioning workforce will be a principal determinant of success for the hospitality industry of the future. A socialization process that is inclusive of diversity (Woods, 1999; Pizam, 1999), comprehensively educates (Sigala and Baum, 2003), evokes commitment and empowers (Hancer and George, 2003), and embraces quality of life dimensions (Pizam, 1999) will optimally serve the hospitality industry and its employees. References Dipboye, R.L., Smith, C.A., and Howell, W.C. (1994) Understanding Industrial and Organizational Psychology. Fort Worth, TX: Harcourt Brace College Publishers. Hancer, M. and George, R.T. (2003) Psychological empowerment of non-supervisory employees working in full-service restaurants. Hospitality Management, 22 (1), 3–16. Holjevac, I.A. (2003) A vision of tourism and the hotel industry in the 21st century. Hospitality Management, 22 (2), 129–134. Payne, R.L. and Cooper, C.L. (2001) Emotions at Work. Chichester: John Wiley & Sons. Pizam, A. (1999) Life and tourism in the year 2050. Hospitality Management, 18 (4), 331–343. Schultz, D. and Schultz, S.E. (2002) Psychology and Work Today. Upper Saddle River, NJ: Pearson Education. Sigala, M. and Baum, T. (2003) Trends and issues in tourism and hospitality higher education: visioning the future. Tourism and Hospitality Research, 4 (4), 367–376. Wanous, J. (1992) Organizational Entry: Recruitment, Selection, Orientation and Socialization of Newcomers. Reading, MA: Addison-Wesley. Woods, R.H. (1999) Predicting is difficult, especially about the future: human resources in the new millennium. Hospitality Management, 18 (4), 443–456. GLENN ROSS JAMES COOK UNIVERSITY, AUSTRALIA Soft branding The term ‘soft branding’ in the hotel industry refers to a branding strategy of independent hoteliers who wish to maintain their uniqueness, yet also wish to gain immediate positioning and credibility through a branded affiliation. They are able to deepen relationships with their existing customers, acquire new markets through the ‘soft’ brand’s global distribution systems, as well as benefit from other marketing services that are normally only enjoyed by hotels that are part of larger, more standardized hotel groups. The Leading Hotels of the World, Steigenberger Reservations Service (SRS), Preferred Hotels and Resorts, Small Luxury Hotels, and Relais and Chateau all are considered ‘soft brands.’ These brands all have standards for membership, connectivity to electronic channels of distribution, sales initiatives, marketing programs, and participation in trade shows. The term soft branding was first used in 1991 by Slattery (Connell, 1992) to refer to middle-ofthe-road branding strategies of large hotel chain companies that found it difficult to achieve a strong consistent brand offer across all of their properties. This initial usage of this term ‘soft branding,’ which again referred to lower levels of product and service consistency within the same hotel company, was in contrast to ‘hard branding’ that referred to those hotel chains that had very consistent and highly standardized products and services. This was especially the case with those hotel chains in the US with new buildings and centralized purchasing as well as access to a fairly homogeneous workforce. However, unlike the more pejorative term ‘soft branding’ of 1991, the term today refers to a certain desired inconsistency that is a common attribute promoted as individuality by the affiliation companies. These companies, however, still have specific brand identities with which an independent hotel can match its offer as well as controlled quality standards to ensure credibility for the hotelier. All this is important because to reach optimal levels of standardization is a challenge due to the unique nature of providing a satisfying hotel

Solvency ratios 589 experience that is oftentimes a high involvement and emotional purchase with intense and unpredictable human interactions. In Europe, for example, the challenge of achieving consistency in a chain hotel offer is even more formidable where many existing hotels are located in historical areas restricted by building codes, impacted by local economies, and constrained by regulations concerning standards for official hotel categories. This can be further complicated by cultural differences between the staff as well as within the customer segments. In contrast to the US, the hotel market in Europe is still dominated by small and medium-sized independent hotels within a fragmented market with customers that are not always seeking standardization. Therefore, more and more independent European hoteliers have been joining third party affiliations, consortia, and branded distribution companies which are again oftentimes referred to as ‘soft branding’ companies. ‘Hard branding’ still refers to large hotel chains that have highly standardized products. From the point of view of independent hoteliers who are less interested in maintaining their individuality, ‘hard branding,’ in the form of franchising or management contracts, also provides an opportunity for a competitive advantage in an increasingly more branded industry worldwide. References Connell, J. (1992) Branding hotel portfolios. International Journal of Contemporary Hospitality Management, 4 (1), 26. Swig, R. (2000) Independent Hotels: The New Brand Alternative. Retrieved from http://www.hotelonline.com/Trends/Swig/Swig_Independent Brand.html. SONJA HOLVERSON ECOLE HÔTELIÈRE DE LAUSANNE (EHL), SWITZERLAND Software Software is the general collective term used to describe the methods of using and controlling computers. The four main task-related categories based on the type of operating instructions provided are language software, system software, applications software, and network software. Language software provides computer programmers with a set of commands to write programs. System software includes operating systems and programs that support applications software. It controls the allocation and use of hardware resources such as memory, central processing unit (CPU) time, and disk space. Applications software comprises the programs that perform tasks computer users want to do, such as hotel reservations or client billing. Network software enables computers to communicate with each other to perform tasks such as program and data sharing or interpersonal message transmissions; this allows personnel from different departments to work together more effectively. Integrated hospitality systems which combine reservation systems (CRS), property management systems (PMS), catering information systems (CIS), back office systems, and ancillary systems for example, telephone or energy management systems, are widely used effectively to satisfy the needs of guests and hotel management. References Buhalis, D. (2003) eTourism. Harlow: Pearson. Buhalis, D. and Schertler, W. (eds) (1999) Information and Communication Technologies in Tourism. New York/Vienna: Springer. O’Connor, P. (1999) Electronic Information Distribution in Tourism and Hospitality. New York: CAB International. PETER SCHOFIELD UNIVERSITY OF SALFORD, UK Solvency ratios Solvency is the ability of a business to pay its debt. While liquidity ratios measure a business’s ability to deal with short-term obligations, solvency ratios, therefore, measure a business’s ability to pay its long-term debt. Long-term solvency

590 Solvency ratios is normally measured by four ratios: debt ratio, debt–equity ratio, capital gearing ratio, and interest coverage ratio. The debt ratio is expressed in a percentage form of a business’s total debt over its total assets: It is generally preferable to have this number in the region of 40–50%. The reason is that there are only two main methods to finance the assets of a business: If the assets are not financed by debt, they must be financed through equity. Consider the following: Thus, if the debt ratio is 45%, the equity portion of the business must be 55%. This means for every $0.45 of assets that is financed through debt, the business has $0.55 of equity to pay off the debt. This leads to the second solvency ratio, the debt–equity ratio, which is expressed as a multiple: If there is less debt than equity, the ratio will be less than one. If there is more debt than equity, the ratio will be larger than 1.0. It is better to have a debt-equity ratio of less than 1.0. Using the previous 45% debt example, the result of the debt-equity ratio will be 0.45/0.55 or 9/11 or 0.82. If a debt–equity ratio is 1.0 that means for every dollar of debt there is a dollar (equal amount) of equity to cover such debt. The capital gearing ratio is also known as the capital structure or leverage ratio. A business obtains capital through debt or equity and these two numbers are reported distinctly on the balance Debt–equity ratio Total debt Total equity 45 or 45% 45,000 100,000 Debt ratio Total debt Total assets $100,000 $45,000  $55,000 Total assets Total liabilities  Total equity Debt ratio Total debt Total assets sheet. Long-term debt is a liability while equity represents the investment of the owners. The capital structure ratio is therefore obtained by dividing long-term debt by the total capitalization of the business (owner’s equity and longterm debt). This ratio measures the degree to which a business depends on borrowed capital as compared to total capital. Generally, when the long-term debt exceeds 40% of total capital, the structure may become unsatisfactory. As the level of debt increases, the probability of obtaining future loans diminishes as the risk to lenders increases. Capital gearing ratio Current liabilities Accounts payable $1,000,000 Accrued payable 1,500,000 Notes payable 500,000 Income tax payable 2,000,000 Current portion of long-term debt 5,000,000 Total current liabilities $10,000,000 Plus Deferred income taxes $ 5,000,000 Long-term liabilities 25,000,000 Total liabilities $40,000,000 Stockholder’s equity Common stock $3,800,000 Paid-in-capital 41,200,000 Retained earnings 15,000,000 Total equity $60,000,000 Total liabilities and equity $100,000,000 The interest cover ratio, also known as interest coverage or times-interest-earned, indicates how adequate the earnings of a business are to cover the obligations of bond/debt/loan interest. 40% Capital gearing ratio 40,000,000 100,000,000 Long-term debt Total capitalization Long-term debt Owner's equity  Long-term debt

Speaker 591 The higher this ratio, the better the business is able to meet its interest payment. or: or: If Hotel A has earnings before interest and tax for the past period at $10,000,000 and its interest expense was $1,000,000, then the interest cover ratio would be: This ratio is expressed as a multiple form. In this case, Hotel A has a TIE of 10 times; that means it can pay its interests 10 times over with earnings before interest and tax. References Coltman, M.C. and Jagels, M. (2001) Hospitality Management Accounting, 7th edn. New York: John Wiley & Sons. Harris, P. J. and Hazzard, P.A. (1992) Managerial Accounting in the Hospitality Industry, 5th edn. Cheltenham: Stanley Thornes. Kotas, R. and Conlan, M. (1997) Hospitality Accounting, 5th edn. London: International Thomson Business Press. Owen, G. (1998) Accounting for Hospitality, Tourism and Leisure, 2nd edn. London: Longman. Schmidgall, R.S. (2002) Hospitality Industry Managerial Accounting, 5th edn. Lansing, MI: Educational Institute of the American Hotel and Lodging Association. AGNES LEE DEFRANCO UNIVERSITY OF HOUSTON, USA 10 times TIE 10,000,000 1,000,000 EBIT I Earnings before Interest  Tax Interest Interest cover ratio Income from operations Interest Speaker A person described as a speaker may be: an individual of interest or stature who can speak to the theme of the event and who presents a session on a specific topic or topics, including a convention keynote address; a general session or seminar leader, who is a topic specialist; or a trainer or workshop leader, who facilitates for group participation and interaction. A change of pace speaker may be a humorist, entertainer, sports figure, or industry insider, whose speech may be educational or interactive. Types of speakers best suited for meeting audiences include humorists, athletes, futurists, economists, local executives, politicians, media personalities, authors, etc. When selecting a speaker the most important factors to keep in mind are the purpose and/or objective of the meeting, the message that is to be communicated, the audience mix (gender, age, socio-economic background), and the audience interest. Other factors to be considered are date, time, budget, and approximate attendance. Speakers should be invited based on their expertise on the subject, their contribution to the program, and appropriateness for the audience, and because the person is an accomplished orator. There are several methods that can be used for finding speakers. Speakers’ bureaus, which are professional brokers or agents that represent many speakers, are one of the most important sources. Agents and speakers’ bureaus have very extensive databases. Other sources include volunteer speakers, who may be members of the organization, word of mouth, other conferences and meetings, professional journals, unsolicited proposals from speakers and the Internet – online database, searchable by name, topic, location and fee structure. How are speakers selected? By calling people whose opinion is respected, looking up biographies on the Internet or in Who’s Who or by calling someone who knows the speaker or has a business relationship with him/her. Before booking, one should preview the speaker in person either by seeing him/her in action at another conference or by requesting a videotape of a recent live presentation. Other information that should be obtained

592 Special events management from potential speakers includes: the extent to which they have addressed similar groups, the names of recent sponsoring organizations, biographical information, and photographs. The speaker should be given notice in writing (with a copy to be initialed and returned) of the date, time, and place of the engagement. It is imperative to specify in writing whether the speaker should attend any function before or after the presentation, such as photo opportunities, interviews, and to make sure that this expectation is within the parameters of the fee and the travel schedule. Other items that should be communicated in writing to the speaker are: ● The meeting’s theme ● What is expected of them ● The terms of the honorarium and expenses (including what if any expenses will be paid to the spouse or assistant if they attend the meeting). Meeting planners should request from the speaker – in writing – a list of audiovisual equipment or other items the speaker may need and how the room should be set up. One should keep in mind that all technical or audiovisual requirements add extra costs. In introducing the speaker, it is very important to pronounce the speaker’s name correctly. This can be achieved by providing the phonetic pronunciation of the name to whoever is making the introduction. It is also important to spell the speaker’s name correctly in the program and to read the introduction as written. References Connell, Barbara, Chatfield-Taylor, Cathy, and Collins, Martha C. (2002) Professional Meeting Management, 4th edn. Chicago: Professional Convention Management Association Foundation. Goldblatt, Joe and Nelson, Kathleen (2001) The International Dictionary of Event Management, 2nd edn. New York: John Wiley & Sons. Krug, Susan, Chatfield-Taylor, Cathy, and Collins, Martha C. (1994) Convention Industry Council Manual, 7th edn. McClean, VA: Convention Industry Council. SUZETTE EADDY NATIONAL MINORITY SUPPLIER DEVELOPMENT COUNCIL, USA Special events management The special events management field is an exciting, growing industry throughout the world. It attracts professionals who possess creative talents as well as organizational skills. As long as there have been groups of people, there have probably been special events. Events celebrate human triumphs and milestones. Events celebrate past, present, and future lives and all of the accomplishments and bittersweet moments that accent life’s journey. The event management profession descended from the field of public relations. Public relations are a major part of the marketing mix. And, according to the Public Relations Society of America (PRSA), event management is one of the fastest-growing and most important trends in the public relations profession. Event management is a profession that requires public assembly for the purpose of celebration, education, marketing, and reunion (Goldblatt, 2002). The event management process includes the research, design, planning, coordination, and evaluation of events. Event management is a multidisciplinary profession. The elements of most events are basically the same: entertainment, decorations, lighting, sound, special effects, catering and, quite often, transportation. Therefore, employment in the field of special events management crosses over into many hospitality positions in hotels, food and beverage, tourism, and meetings and conventions. Event professionals enjoy a work environment where no two days are ever the same. They are in the business of creating and customizing events for clients who are in search of an interesting, unique, and memorable experience (Allen, 2000). Events also have the ability to reflect and mold our society. Hallmark events (sustainable, revivable events) such as the Olympics and the football

Special events management 593 World Cup have become important milestones in shaping cultures around the globe. Many event planners/producers are small business owners and, therefore, categorize events according to markets. Classifying events in this manner helps entrepreneurs focus on niche markets. The most common event markets are association, corporate, casino, cause-related, fairs, festivals and parades, retail, social, sporting, and tourism. Corporations typically spend the most money on events, but the largest market, by far, is the social market. This is because it encompasses life cycle events such as birthdays, bar/bat mitzvahs, weddings, anniversaries, and funerals. Association events Associations are incubators for events of all types, serving the myriad purposes for which associations exist, including leading the way for other types of event planners towards attracting participation and public awareness (Hoyle, 2002). Examples of association events are awards presentations, political rallies, community service, as well as the installation of officers/leaders, training programs, conventions, expositions, and seminars. Corporate events Corporate events are sponsored by a corporation for the purpose of achieving specific goals and objectives and include celebratory events such as product introductions, customer appreciation, grand openings, topping off parties, and incentive programs. The international corporate event market is the fastest-growing arena in the event industry (O’Toole and Mikolaitis, 2002). Casino events Special events are a huge part of the marketing that takes place in casino/hotels today. In addition to corporate events that occur on the property such as topping off parties, grand openings, and anniversaries, special events are used to attract and reward casino players. Events such as boxing matches and rock concerts are used to attract the highest level of VIP players, while high roller parties are often utilized as a customer appreciation tool. Slot clubs and tournaments help to increase revenue during slow periods, build customer loyalty, and develop a customer database. Slot tournaments are a perfect example of how the casino uses special events as a marketing tool. Players are encouraged to join slot clubs, where they are given a membership card. This card is used to track each member’s play – number of hours and dollars spent playing the slots on the casino’s property. It also has a built-in reward system that allows the customer to earn points towards meals, shows and hotel rooms, as well as receive VIP treatment. Casino club members are invited to participate in slot tournaments, which are held monthly at most casino properties. The tournaments are highly themed, with a high-ticket prize at the end of the tournament. The tournaments have become highly competitive between casino properties, relying on the ‘next’ creative theme to attract players to the tournaments. The tournament ends with an awards banquet that includes themed entertainment and food. Harrah’s casinos are known for having the most sophisticated rewards program in the gaming industry because its database is linked to all Harrah’s Entertainment properties nationwide. Harrah’s Total Rewards card offers three levels of membership: Total Gold, Total Platinum, and Total Diamond. Cause-related events Many nonprofit organizations raise a huge portion of their monies from fundraising events. The Association of Fundraising Professionals (AFP) represents 26,000 members in 167 chapters throughout the United States, Canada and Mexico. The AFP has educated fundraisers for more than 40 years, while promoting philanthropy and ethical fundraising. Make-A-Wish Foundation grants the wishes of children with life-threatening illnesses to enrich the human experience. Ronald McDonald

594 Special events management House Charities have awarded more than $320 million in grants worldwide. Their mission is to make an immediate and positive impact on as many children as possible by creating, funding, and supporting programs that directly improve the health and well-being of children. Retail events The main purpose of retail events is to introduce/ sell merchandise to prospective customers. Promotions are used to attract buyers and increase sales. During the 1960s and 1970s, retail establishments could attract thousands of consumers to their stores via one-day events that included the appearance of soap opera stars and athletes. Today, retailers rely on marketing research to design long-range promotional events that use an integrated approach to attract consumers on a steady basis. Theme-restaurants are experiencing a tremendous growth. Diners in Las Vegas, New York, Orlando, and Los Angeles have as many as ten theme-restaurants from which guests can choose when visiting these destinations. Retail establishments are utilizing special events and entertainment techniques not only to attract, but also to keep customers shopping in their stores. A well-conceived store with an entertainment focus typically sells 60% more merchandise (Miller & Associates, 2002). Recent developments include the Sony Metreon complex in San Francisco where shoppers can enjoy the maximum of entertainment and events with 15 movie screens, an Imax theater, eight restaurants, a large number of retail stores and attractions that would rival any amusement park; and The Mall of America, the first to develop the concept. The $625 million, 4.2 million square foot complex was designed to resemble a flattened ‘X,’ with the theme park in the center of the complex. Sporting events Sporting events have the ability to bring lots of visitors, and, therefore, lots of money into a community. According to the Metro Atlanta Chamber of Commerce, the total economic impact of the 1996 Olympic Games was $5.1 billion, with total out-of-state visitor spending being approximately $1.15 billion (Miller & Associates, 2000). Sporting events are a perfect platform for corporate sponsorship. However, no other single event in the United States is more attractive to corporate America as the Super Bowl. In fact, Las Vegas shares the economic impact of the Super Bowl each year. In 1999, Las Vegas attracted 250,000 visitors for the Super Bowl compared to 150,000 out-of-towners in Miami, where the Super Bowl was hosted. Fairs, festivals, and parades Fairs, festivals, and parades provide many opportunities to bring communities together to celebrate various cultures and interests through performances, arts, crafts, and socializing. These events are often used to boost tourism dollars. The Kentucky Derby Festival attracts 1.5 million visitors, while the Rose Bowl Parade attracts 1 million visitors for that one-day event. New York’s largest street festival, the San Gennaro Feast, featuring sausage sandwiches, calamari, pasta, to name but a few, takes place in Little Italy every September. The Travel Industry of America (TIA) reports that more than 31 million adults attended a festival while on a trip away from home. Additionally, the Ohio Department of Tourism reports that special events are the leading motivator for Ohio day-trip tourists and overnight travelers. The TIA study revealed that event travelers traditionally travel as families, are college graduates, and have two or more wage earners in the household. Social events The social or life cycle market continues to grow as health conditions improve and people live longer. There was a time when celebrating a fiftieth wedding anniversary was quite rare, and

Special markets 595 today it is almost commonplace. Celebratory events such as ones that recognize the passage of time are usually ritualistic in nature. These life cycle events are so important to clients. Today, many weddings are becoming up-scale themed events that may last for days. In 2001, an award-winning wedding was produced at a Las Vegas casino resort property that utilized 32 florists, and a 4000 man-hour set-up crew to carefully attend to the bridal couple’s every wish at a cost that exceeded one million dollars. Tourism events Communities that do not have the facilities to attract larger events are turning to tourism events to attract visitors. Redevelopment projects are reviving many of the downtown areas of American cities after the four-decade exodus of businesses to suburban shopping centers and malls. With the redevelopment projects and funding, comes the opportunity for creating tourism events. According to the 1999 study by the Travel Industry Association of America, one-fifth of adults visited a special event (fair, festival, other) while on vacation. One of the biggest trends in the event industry today is the merging of corporate and public events. This is accomplished through many forms of sponsorship. Sponsorship dollars, goods, or services are rendered in exchange for a return on investment (ROI). In an era of dwindling public funding for the arts, corporate sponsorship of museums is rising rapidly. In addition to the arts, corporate sponsorship plays an increasingly important role in public events. Corporate sponsorship of festivals was approximately $777 million in 2001. According to the International Events Group (IEG) sponsorship is the fastest growing form of marketing. References Allen, S. (2000) The future of event marketing. Event Solutions. September. Goldblatt, J. (2002) Special Events: Twenty-first Century Global Event Management. New York: John Wiley & Sons, pp. 5–6. Hoyle, L.H. (2002) Event Marketing: How to Successfully Promote Events, Festivals, Conventions and Expositions. New York: John Wiley & Sons, pp. 130–133. Miller, R.K. and Associates (2002) The 2002 Entertainment Cultural and Leisure Market Research Handbook. Norcross, GA. Richard K. Miller & Associates, Inc. O’Toole, W. and Mikolaitis, P. (2002) Corporate Event Project Management. New York: John Wiley & Sons, p. 1. KATHY NELSON UNIVERSITY OF NEVADA, LAS VEGAS, USA Special markets Special or niche markets have always had a prominent place in the meetings industry. These markets consist of two primary categories – government and SMERF (defined below). When combined with the two most prominent market segments – corporate and association – they make up the total mix of the meetings industry. For clarification, a market segment is the ‘categorization of people, organizations or businesses by professional discipline or primary areas of interest for the purposes of sales analysis or assignment’ (APEX Industry Glossary). The term ‘special market’ in this case should not be confused with the same meetings industry term identifying ‘Foreign countries with high potential for US travel, but without a USTTA office. US promotional activities under the guidance of Visit USA Committees. Often with the cooperation of the U.S. and Foreign Commercial Service, an agency of the US Commerce Department’ (APEX Industry Glossary). Specifically, special markets include government meetings as well as the components of a meetings industry acronym SMERF, identifying the category of meeting marketing segments consisting of social, military, education, religious, and fraternal. It is clear from the type of segments involved, this market encompasses much of the nonprofit sector. In general these groups hold meetings and

596 Special markets events that are very similar to those of trade and professional associations – conventions, board and committee meetings, training and educational seminars. ● Social meetings are defined as ‘life cycle celebrations such as weddings, bar/bat mitzvahs, anniversaries, birthdays’ (APEX Industry Glossary) and class or family reunions. In addition, social clubs, fundraisers or society events also comprise this category. In many cases, volunteers, or friends and members of the family, plan most of these events with a growing number of professional of planners specializing in fundraising, family, and class reunions. ● Military meetings attract attendees who are affiliated with one of the armed services, or are suppliers to the armed forces. The fastest growing component of this segment is the military reunion held for the veterans of various divisions, companies or crews of the armed forces. In many cases these events are held in the towns and cities of the military bases nearby. ● Education meetings are those events designed for elementary, high school, and college faculty and administrators, education supporters and vendors, school sports groups, and academic disciplines where original research and opinions are shared on a given area of study and interest. Every state in the United States has a teachers’ or education association holding oneday or weekend conferences, and in most cases educators are required to obtain continuing education credit by attending various classes. ● Religious meetings are so prominent a market segment that the industry has an association solely for religious meeting planners. The inter-faith Religious Conference Management Association (RCMA) was founded in 1972, and has over 3000 members (http://www.rcmaweb.org/). With international, national, state-wide, and district-wide organizational structures and memberships, this segment requires a wide variety of venues – from 40,000 seat arenas to small break-out rooms. Religious organizations may require their meeting planners to have a familiarity with the faith and an understanding of specific rituals and rites. ● Fraternal is defined as those groups where membership is based on common personal interests rather than common job or career responsibilities. Such groups as Rotary International, Lions or Elks Clubs, college fraternities and sororities, or socio-political groups such as the National Organization for Women, the National Rifle Association or the World Wildlife Federation help train their members and volunteers, build a sense of community and help to further their cause, issue or concern. The SMERF market is much like the association market with their marketing approach to potential attendees. Attendees are often members of the organization and also non-members and/or persons with close relationships to the organization. In addition, the trade press and students and families involved in the concern or interest of the organization may be involved. In nearly all cases, attendance to the event is voluntary. Because of this, SMERF groups must provide an appealing program to attract registration. Advance notice of dates, locations, topics, program, speakers, and special events must be provided a number of times prior to the event through direct mail, advertisements, broadcast fax, email, and websites. Registration fees and procedures must be established and communicated while costs are kept low. While each of the SMERF groups are unique to themselves, they all have three things in common: ● They tend to be very price conscious and sensitive. ● They often book meetings during the ‘low’ or off-season (over weekends, holidays or when demand by corporations and associations is not at its peak). ● Their meetings are often managed by volunteers who change from year to year, or from location to location of the event. However, SMERF organizations with larger and/or complex events are increasingly turning to professional planners for their logistical and contractual expertise. Today many hotel groups now refer to the SMERF market as a primary or special market since they fill in those dates with business not usually booked by associations or corporations. To capture this business, many hotels have sales

Staging guide 597 personnel designated to sell specifically to these particular markets. In a category unto itself, and separate from the SMERF market, is the government market segment. Government meetings bring together attendees who are civil servants, elected officials or service providers to governmental entities. (APEX Industry Glossary). These meetings are held by the agencies or departments of city, county, state or province, national or international governments. It is in this category that quasi-government meetings, such as political party conventions or lobbying groups, can also be found. A variety of government meetings are held for the purpose of employee training, interdepartmental or inter-agency operations and programs, agency meetings with the public, legislative hearings, and retreats. Government agencies might also be involved in legislative or policy-making events. One aspect of government meetings are ‘governmental conferences,’ defined as technical or political events between governments with the aim of discussing national or international topics (APEX Industry Glossary). As with the religious groups, government meetings are such a specialty that planners of government meetings have formed their own professional society – Society of Government Meeting Professionals (SGMP). Founded in 1981, the organization has over 2700 members (http://www.sgmp.org) and is primarily a US-based organization. SMERF and government meetings remain a critical component of the hotels’ marketing mix. While these groups tend to spend less overall than the corporate or association markets, these ‘special markets’ fill in the gap over holidays, during a soft season, and on weekends, providing properties with much needed revenue, and hotel employees with work during a downtime. References APEX (Accepted Practices Exchange) Industry Glossary of the Convention Industry Council. Retrieved 27 July 2004 from http://glossary.convention industry.org/alphSearch.asp?term s. Astroff, M.T. and Abbey, J.R. (2002) Convention Management and Service, 6th edn. Lansing, MI: Educational Institute of the American Hotel and Lodging Association. Feiertag, H. (2003) Hotels need to get a share of the SMERF market. Hotel and Motel Management, 218 (9), 12. Fenich, G.G. (2004) Meetings, Expositions, Events, and Conventions: An Introduction to the Industry. Upper Saddle River, NJ: Pearson/Prentice-Hall. McGee, R. (2004) Getting a fix on SMERF. Association Meetings, 16 (2). WILLIAM R. HOST ROOSEVELT UNIVERSITY, USA Staging guide A ‘compilation of all function sheets, scripts, instructions, room set-up diagrams, directory of key personnel, forms, and other material relating to the event’ is the definition of a staging guide provided by the Convention Industry Council’s Accepted Practices Exchange (APEX) Terminology Panel. A Meeting and Exhibition Specification Guide is a key component of the staging guide and is comprised of three sections: ● The narrative, a general overview of the meeting ● Schedule of events, a timetable outlining all functions that compose the overall meeting ● Meeting event orders (function sheets) detailing the requirements for each specific event within the meeting. These specifications are sent to the facility 30 days prior to the meeting so the facility’s convention service manager can communicate the meeting’s needs to their staff. While some planners design staging guides to be as simple as a series of check-off sheets (one for each function), others add components such as: ● Scripts that provide the written text of speakers’ presentations ● Room set-up diagrams that illustrate the visual plan of each room’s layout and equipment ● A directory of personnel, which will include the contact information for the organization’s staff and volunteers, the facility staff and suppliers

598 Standard cost accounting in foodservice ● Forms used for the event, which might include registration form and schedule of fees; attendance history; an audiovisual flow chart showing the use of equipment throughout the day in various meeting rooms; budget; packing and shipping lists; VIP information and schedules; etc. ● A production schedule that provides a minuteby-minute timetable of the actions to be taken by various staff during the event. The meeting planner uses the staging guide to maintain the smooth flow of the logistical and programmatic aspects of the meeting. Some planners refer to this collection of documents as their Bible or as the Production Manual. References Connell, B., Chatfield-Taylor, C., and Collins, M.C. (eds) (2002) Professional Meeting Management. Chicago: Professional Convention Management Association. Convention Industry Council (2001) Preliminary Report of the APEX Terminology Panel. Retrieved from Convention Industry Council, Accepted Practices Exchange, website: http://www. conventionindustry.org/apex/Panels/Termin ology_Prelim_Report.htm. WILLIAM R. HOST ROOSEVELT UNIVERSITY, USA Standard cost accounting in foodservice Cost accounting relates the expenditure of a foodservice organization to its food and beverage sales. Cost accounts, while they can be directly related to financial accounts, are concerned with the detailed make-up of cost in identifiable output for purposes of pricing, budgeting, control of food and beverage production and service, purchasing and control of food and beverage materials, and control of labor expenditure, rather than the overall financial results of the foodservice operation. In a standard cost system, the following accounts are always recorded at budgeted cost: food and beverage held in inventory, finished food and beverage inventory, and cost of food and beverage sold. Hence, if actual costs exceed budgeted costs the variance is unfavorable, while if actual costs are less than budgeted costs, the variance is said to be favorable. The calculation and entry of variances can be as follows: 1. Direct food and beverage materials variance equals actual direct food and beverage materials cost minus budgeted direct food and beverage materials cost. 2. Direct food and beverage materials quantity variance equals (actual quantity minus standard quantity) times standard cost. 3. Direct food and beverage materials price variance equals (standard price minus actual price) times actual quantity. 4. Show the journal entry to record the direct food and beverage materials variances. 5. Direct labor cost variance equals actual direct labor cost minus standard direct labor cost. 6. Direct labor time variance equals (actual hours minus standard hours) times standard rate. 7. Direct labor rate variance equals (actual cost per hour minus standard cost per hour) times actual hours. 8. Show the journal entry to record the direct labor variances. 9. Foodservice overhead variance equals actual foodservice overhead costs minus budgeted foodservice overhead costs. 10. Show the journal entry to record the foodservice overhead variance. 11. Show the entries to complete the standard cost accounting cycle, e.g. to record finished food and beverage goods or to record cost of food and beverage sold. Variance accounts are closed to the Cost of Goods Sold account. Standard cost accounting has its opponents. Like most other business enterprises, foodservice operators aspire to run lean and efficient operations; however, in order to identify how lean a foodservice operation is or must be, the foodservice manager’s reporting needs to move away from cost accounting, which has over the years evolved to measure profitability across a range of food

Storage 599 and beverage products or outlets within a foodservice organization. For example, in a batchand-serve production environment such as some quick service restaurants, cost accounting tracks food and beverage inventory transactions as large batches of food and beverage goods move from the production process to the production/service process. It identifies the value added to these food and beverage materials and attempts to quantify budgeted rates as to how much labor and overhead should be absorbed into the financial statement, recording unfavorable variances when production is under-utilized. There are instances, for example in large catering operations, where overproduction occurs in response to under-utilized production, and this is what a leaner approach to running foodservice operations attempts to eradicate. As the organization becomes more lean and costefficient, one can say that it should produce food reasonably closely to its occupancy or customer demand. Food production areas, which complete and serve all food-in-production batches, can greatly reduce inventory to the quantities of food and beverage moving through production and service to customers. In such a case, complex tracking and valuation mechanisms may no longer be necessary. Even though one has to have an inventory valuation, this can be done in a much simpler way. Once the foodservice operation becomes lean, the inventory of food and beverage and non-food and beverage products can be reduced to their most optimum levels, which greatly reduces the need for tracking transactions. In addition, cost accounting does not always clearly show the tangible benefits of lean strategies such as improved production and labor planning, additional production capacity, better cash flow, and reduced storage space. Reference Epstein, M.J. (1978) The Effect of Scientific Management on the Development of the Standard Cost System. Manchester, NH: Ayer Company Publishing. JAKSA KIVELA THE HONG KONG POLYTECHNIC UNIVERSITY, HONG KONG SAR, CHINA Storage Protecting a foodservice organization’s investment in inventory depends on its having effective and efficient storage facilities. Storage is a vital function that is given too little attention: Wellplanned and well-managed storage areas encourage employee productivity, reduce product loss, and improve food safety. Storage needs vary depending on the scope and size of an operation, its menu offerings and level of service, anticipated meal volumes, the frequency of deliveries, and the configuration of the building. A small, chef-run restaurant in a busy urban area may require only modest refrigerated and ambient temperature storage rooms off the kitchen, while a large resort hotel in a remote location may need thousands of square meters of temperature-controlled and ambient storage for a wide range of food, beverage, service, and support products. For this reason, storage requirements for an individual operation should be determined by that facility’s distinctive characteristics. In general, storage for foodservice operations can be classified into three distinct groups: temperature-controlled storage such as refrigerators, freezers, and wine rooms; ambient temperature (or ‘dry’) food storage for bulk goods and packaged items that do not require refrigeration; and non-food storage, typically for service ware, utensils and cookware, paper goods, linens, and cleaning supplies. The wise foodservice operator keeps food storage separate from non-food storage to ensure food safety and control access to valuable inventory. Temperature-controlled storage may take the form of reach-in refrigerators and freezers located near the point of use, or a chilled room commonly called a walk-in. For storing most food products, a temperature of 36–40 F (2–4 C) is typical, although the amount of humidity required for optimal storage of items such as fresh fish or produce varies and thus operations with large volumes of these ingredients tend to have dedicated refrigeration for each product type. Frozen items must of course be stored at temperatures well below 32 F (0 C), requiring a separate storage area. It is common, particularly

600 Strategic choice in smaller operations, for a frozen storage walk-in to be connected to and accessed from a refrigerated walk-in as a way of saving energy. Chilled storage rooms at temperatures of 50–60 F (10–15 C) may also be employed for storing wines, or for aging specialty cheeses or meats. Dry storage areas for food and non-food items are best positioned near the point of use, which unfortunately is impractical when space is at a premium. Many operations divide these storage areas in two, with a small ‘day use’ storage area in the kitchen and larger storage facilities elsewhere in the building that are ideally accessed only once or twice a day. Within the scope of the entire space of an operation, storage areas should be carefully integrated with employee work stations whenever possible as a way of increasing productivity and reducing fatigue. The ideal foodservice storage area is readily accessible from both the receiving area and the kitchen. In large operations, designers try to adopt a ‘forward-flow’ model (Kotschevar and Terrell, 1986) that allows supplies to move into storage at one end and out the other, into preparation and cooking areas, and from there to customers. This approach keeps kitchen staff separated from non-kitchen areas, limiting the potential for cross-contamination. Important features of an effective storage area include sturdy shelving that makes optimal use of the volume of space available. The best storage shelving is adjustable, wheeled for easy removal for cleaning, and, if located in humid areas, resistant to corrosion. Good shelving also allows airflow around the products being stored, which is why many operations choose wire or slatted shelf units. Foodservice shelving may be purchased in a variety of lengths and heights, typically in some multiple of 15 cm, and in a range of widths, although for many operations a width of 60 cm (24 in.) is optimal as it readily accommodates typical pan sizes as well as cases or loose packaged products. Most health codes require that all food products and food contact materials be stored a minimum of 15 cm (6 in.) off the floor, favoring low racks for large, bulky items as well as more traditional storage shelves. Lighting in storage areas needs to be bright and uniform, and should be shielded to protect products in case of a damaged lamp or bulb. In all storage areas, adequate airflow and protection from extremes of temperature or humidity need to be provided. Choosing the right floor and wall finishes will make storage areas easier to clean; tile or industrial composite floors are ideal in most storage areas, while epoxy paint is appropriate for dry storage area walls. Refrigerated storage space is typically pre-fabricated from panels, which may be steel-coated at the factory with enamel or made of stainless steel, an expensive but long-lasting and effective choice. Lastly, many operators choose to control access to storage areas, particular those areas holding valuable inventory such as alcohol or meats. When planning a foodservice operation, management should consider storage not only for food, beverages, and service ware, but also for items that are rarely considered but are inevitably required in the course of business. These might include parts and supplies for kitchen equipment, media and receipt tapes for point-of-sale systems, festive decorations, soiled linens, or surplus furniture. Storage areas for such items are often created out of ‘found space,’ which may be functional but is rarely optimal. Reference Kotschevar, L.H. and Terrell, M.E. (1986) Foodservice Planning: Layout and Equipment. New York: Macmillan. STEPHANI K.A. ROBSON CORNELL UNIVERSITY, USA Strategic choice Strategic choices relate to decisions about the future of an organization and how it should respond to environmental pressures and influences ( Johnson and Scholes, 2002). According to Evans, Campbell and Stonehouse (2003), strategic choice involves three stages: 1. Formulating options for future development 2. Evaluating available options 3. Selecting which options should be chosen.

Strategic direction 601 As a result of the complexity of the environment, scope and scale of many hospitality and travel and tourism organizations, it is common to distinguish between various levels of strategic choices: corporate level, business level, and operational (or functional) levels. Accordingly, there are numerous strategic options to consider. For example, at the business level, i.e. staying within the realm of hospitality, it is possible to consider cost leadership, differentiation or focus strategies. A multibrand or segment hospitality organization may choose among strategies such as diversification, vertical integration or merger and acquisition. Clearly, it may choose to concentrate within the hospitality business. Most normative approaches to strategic choice emphasize the requirement that the chosen strategy take advantage of environmental opportunities, while attempting to avoid threats. At the same time, the choice should be based on organizational strengths and unique resources that will result in a sustainable competitive position. References Evans, N., Campbell, D., and Stonehouse, G. (2003) Strategic Management for Travel and Tourism. Amsterdam: Butterworth-Heinemann. Johnson, G. and Scholes, K. (2002) Exploring Corporate Strategy, 6th edn. Harlow: Pearson Education. ARIE REICHEL BEN-GURION UNIVERSITY, ISRAEL Strategic configurations The theme in configurations is that organizational effectiveness is not attributable to a single factor, but the intercorrelation between a number of factors. Performance is thus seen as dependent upon the development of a compatible mix of organizational characteristics – a configuration – for example, a particular blend of structure, culture, and management style. The researcher most closely associated with configurations is Miller, who focused upon developing archetypes of strategy formation based on published studies (see Miller and Friesen, 1984). Later work, introduced the argument that change in organizations is not an incremental process, but a quantum one whereby many elements are changed concurrently – a strategic revolution. This ‘quantum theory of change’ is a sharp contrast to the idea of the learning organization and its view that change is a continuous process involving small incremental adjustments. This is a controversial area in strategic management and can be paralleled with the debate in biology between Stephen Jay Gould’s theory of punctuated equilibrium and the orthodoxy as represented by Charles Darwin’s concept of evolutionary change. Lashley and Taylor (1998) developed a series of configurations, or ‘ideal types’ for matches between the style of human resources management (HRM) in hospitality organizations and the specific nature of the service offer. This research was later extended to include operations and marketing in addition to HRM. It therefore highlights the general focus by looking for identifying compatibilities across a broad range of organizational characteristics. References Lashley, C. and Taylor, S. (1998) Hospitality retail operations types and styles in the management of human resources. Journal of Retailing and Consumer Services, 5 (3), 153–165. Miller, D. and Friesen, P.H. (1984) Organizations: A Quantum View. Englewood Cliffs, NJ: Prentice-Hall. J. STEPHEN TAYLOR UNIVERSITY OF STRATHCLYDE, UK Strategic direction A strategic direction is essentially those policies required to provide a clear mandate for action, whether at the individual firm or at the community

602 Strategic direction and government level. For example: a hotel may require a business strategy for investment, comprising of options identification and project requirements definition; while an industry organization may need to seek stakeholder consensus on issues and opportunities in order to set direction and define a framework for resolution in a policy/strategy document. Equally, a government, region, or city may wish to create a master plan for development of the hospitality industry within its territory. A strategy will be embodied in an existing business approach (to customers or to suppliers), or may be developed in response to issues identified in relation to the development of a new approach to the management of the hospitality industry. Simply put, a strategic direction determines where an organization is going over the next year or more, how it is going to get there and how it will know if it got there or not. The focus is usually on the entire organization, while the focus of a business plan is usually on a particular product, service or program. There are a variety of perspectives, models, and approaches used to create strategic directions. The way that these are developed depends on the nature of the organization’s leadership, its culture, the complexity of its environment, its size, and/or the expertise of planners and the other human resources it can call upon (Ansoff, 1987). For example, there are goals-based, issues-based, organic, and scenario modeling methods. Goals-based strategy development is probably the most common and starts with focus on the organization’s mission (and vision/values), goals, strategies to achieve those goals, and actions (who will do what and by when). Issues-based strategy development often starts by examining issues facing the organization, strategies to address those issues, and possible action plans to address them. Organic strategy development might start by articulating the organization’s vision and values and then developing action plans to achieve the vision while adhering to those values. Some strategies are scoped to one year, many to three years, and some to five to ten years into the future. Some include only top-level information and no action plans. Quite often, an organization’s strategic planners already know much of what will go into a strategic plan (this is true for business planning, too). However, development of the strategic direction greatly helps to clarify an organization’s plans and to ensure that key leaders are all ‘on the same wavelength.’ Thus often far more important than the strategic direction, is the strategic planning process itself (Tourism Council of Australia, 1998; McNamara, 2004). Nevertheless, a good strategic direction is one that has a real impact on day-to-day decisionmaking and ultimately leads to business success. The criterion of business success, however, means that a business may have to wait from one to three years to say with any certainty that it has been achieved. The success of any strategic direction also depends on the people designated to carry it through. Despite how obvious this statement is, many management teams fail to consider its implications. If a strategic direction is to have a solid impact on the success of a business, it must be seen by all stakeholders to be desirable, believable, and useful for getting real work done. Failure to meet these criteria will almost certainly lead to an elegant set of direction statements that may be largely ignored. What then is a desirable strategic direction? In simplest terms the direction set by an organization must meet the needs of all stakeholders and do so in a way they value. Each stakeholder group will define its needs in different ways depending on the relationship it has with the organization. Shareholders, for example, will look for the return on their investment while employees will look at the impact the direction will have on their jobs. Industry analysts, on the other hand, will look for clarity and the ability of the organization to implement the proposed direction. Managers and planners should begin by identifying who the stakeholders are and understanding what they need. The challenge then becomes one of addressing these needs, which does not mean that a different direction should be created for each group. Rather, a direction might be positioned differently for each stakeholder group if that is seen as desirable. The starting point is clearly to describe the business rationale underlying the strategic direction and its potential impact on stakeholders.

Strategic formulation 603 In creating a strategic direction, management is making a public commitment to what they see as necessary for success (Cooper and Erfurt, 2002). Any such claim needs to be believable. For example, a goal to ‘Achieve $10 billion in room sales in two years’ proposed by a hotel chain that currently has only $50 million in sales could safely be said to have little credibility. Such unbelievable goals are commonplace and are usually based on an attempt to have a direction that is truly desirable. Regardless of how desirable a direction may look, however, stakeholders will quickly compare it to the organization’s track record and capabilities before investing time, money or energy in achieving it. Finally, the direction must be useful. A simple test of any strategic direction is to ask when it was last used to make a business decision. For organizations where the answer to this question is ‘Never,’ it can be predicted that strategic direction will fall by the wayside in favor of ad hoc responses to daily issues (Ansoff, 1987). References Ansoff, H.I. (1987) Corporate Strategy, rev edn. London: Penguin. Cooper, M.J. and Erfurt, P. J. (2002) Ecotourism accreditation: a planning tool for Asia–Pacific countries? In K.-S. Chon, V.C.S. Cheung, and K. Wong (eds), Proceedings of the 5th Biennial Conference on Tourism in Asia, Hong Kong, 23–25 May. University of Houston: Haworth Hospitality Press, pp. 115–125. Tourism Council of Australia (1998) Code of Sustainable Practice. Sydney: TCA. MALCOLM COOPER RITSUMEIKAN ASIA PACIFIC UNIVERSITY, JAPAN Strategic evaluation The strategic evaluation process assesses whether the organization is achieving the desired performance and following the correct path to remain competitive into the future. Evaluation takes place at all levels of the firm. Managers obtain clear, thorough and accurate information from the frontline and throughout the organizational hierarchy. By synthesizing this information, managers compare actual outcomes with expectations established during the strategy formulation stage. The evaluation process creates a feedback loop to assess the success of implemented strategies and action plans. Poor performance usually indicates that something has gone wrong at the formulation stage, implementation stage or both. This feedback from the formulation, implementation, and evaluation cycle may become a learning process to improve planning systems or the implementation process to ensure greater success in the future. Hospitality organizations’ strategies and competitive methods should be evaluated on a frequent basis. Performance is traditionally assessed using quantitative measures such as profits or cash flow but should also be evaluated on more qualitative measures such as customer satisfaction or employee turnover rates. Managers should consider whether or not these levels of performance are satisfactory and whether they will continue at the current level into the future. References Olsen, M., Tse, E., and West, J. (1998) Strategic Management in the Hospitality Industry, 2nd edn. New York: John Wiley & Sons. Wheelen, T.L. and Hunger, J.D. (2000) Strategic Management and Business Policy, 7th edn. Upper Saddle River, N J: Prentice-Hall. ROBERT HARRINGTON NICHOLLS STATE UNIVERSITY, USA Strategic formulation Strategic formulation is the process of determining a value-based strategy that considers external opportunities and threats as well as internal capabilities and constraints. This process has generally been perceived as an analytical approach, driven by formal structure and planning systems. An on-going debate in the strategy literature has been the question of whether strategy formulation

604 Strategy implementation is a rational and comprehensive process (the deliberate view) or a more incremental and trialand-error type of approach (the emergent view) (Farjoun, 2002). The deliberate perspective is based on an early view of strategic management that assumes a predictable environment and perfect foresight by managers. The ideas underpinning the emergent approach to strategy formulation reflect the idea that strategy formulation is both a learning and maneuvering process, which allows managers to respond to the vagaries of a dynamic environment. As such, a change between what was intended (deliberate formulation) and what strategies are realized represents emerging changes. Realized strategy can be conceptualized as the combination of deliberate components (intentions defined in advance) and emergent components (the level of replacement and additive strategies) (Mintzberg et al., 1998). Consequently, an assessment of the deliberate-emergent nature of a firm’s strategy formulation process should include factors that capture the complex nature of this phenomenon. References Farjoun, M. (2002) Towards an organic perspective on strategy. Strategic Management Journal, 23, 61–594. Mintzberg, H., Ahlstrand, B., and Lampel, J. (1998) Strategic Safari. New York: The Free Press. ROBERT HARRINGTON NICHOLLS STATE UNIVERSITY, USA Strategic groups A strategic group is ‘the group of firms in an industry following the same or similar strategy along the strategic dimensions’ (Porter, 1980, 129). Strategic dimensions are essentially those decision variables which underpin the business strategies and competitive positioning of the firms within an industry. These include product market scope, distribution channels, level of product quality, degree of vertical integration, choice of technology and so on. Research into strategic groups has primarily focused upon analyzing the differences in profitability between firms. The expectation (in line with Porter’s industry structural analysis theory) that profitability differences between firms within a strategic group would be less than the differences between strategic groups has not received robust empirical support. Nonetheless, as research by Reger and Huff (1993) has demonstrated, managers within an industry typically have consistent perceptions of groupings of similar firms and the concept of strategic groups has an intuitive appeal that seems to capture the structural texture of competitive rivalry with an industry. Within the hospitality industry the value and relevance of the strategic group concept can be readily observed in the lodging sector. For example, in terms of market levels (or, if one prefers, product quality levels), the existence of clusters of brands is evident. Indeed, customers would typically be aware of which hotel brands are competing in the luxury market segment and which are competing in the economy market segment. As such, each cluster of brands represents a distinct strategic group within the lodging industry. References Porter, M.E. (1980) Competitive Strategy. New York: The Free Press. Reger, R.K. and Huff, A.S. (1993) Strategic groups: cognitive perspective. Strategic Management Journal, 14, 103–124. J. STEPHEN TAYLOR UNIVERSITY OF STRATHCLYDE, UK Strategy implementation Strategy implementation means putting the formulated strategy into action in hospitality organizations. It may also be defined as carrying out essential activities to make strategy work. Strategy implementation in the hospitality management field is often treated as a tactical activity and it is usually taken into consideration after strategy has been formulated. However, lately it

Strategy marketing planning and the marketing plan 605 has started receiving more attention since it has been realized that in hospitality organizations the main difficulty is the implementation of strategies rather than the development of them. In their studies, Okumus (2001) and Schmelzer and Olsen (1994) identified a number of implementation variables/factors such as organizational structure, culture, programs, resources, people, communication, rewards and control and constructed strategy implementation frameworks for hospitality organizations. It has been emphasized that there should be a ‘strategic fit’ among the above implementation variables. However, Okumus (2001) found that strategy implementation is a complex and dynamic process in which achieving a fit among the implementation variables is almost impossible. Moreover, internal context of hospitality organizations, particularly organizational structure and culture, play a key role in execution of strategy and focusing on the implementation plan and ignoring the wider context does not provide a holistic picture of the strategy implementation process and its challenges. References Okumus, F. (2001) Towards a strategy implementation framework. International Journal of Contemporary Hospitality Management, 13 (7), 327–338. Schmelzer, C.D. and Olsen, M.D. (1994) A databased strategy implementing framework for companies in the restaurant industry, International Journal of Hospitality Management, 13 (4), 347–359. FEVZI OKUMUS THE HONG KONG POLYTECHNIC UNIVERSITY, HONG KONG SAR, CHINA Strategy marketing planning and the marketing plan Strategic marketing planning is a management tool used to help determine where an organization is going and how it is going to get there. The strategic planning process attempts to address three core questions: 1) Where are we? 2) Where do we want to be? 3) How are we going to get there? Typically, the process is organization-wide or focused on a major function such as a division or a department. At the corporate level, managers use strategic planning to determine in what businesses the company should compete. At the Strategic Business Unit level, strategic planning is focused on how to compete within the industry. The situational analysis The first stage of strategy planning involves answering the question, ‘Where are we?’ This stage requires a company to identify its strengths and weaknesses by looking internally at the organization and then to identify the current or potential opportunities and threats by scanning the external environment. This activity is referred to as a SWOT analysis or situational analysis. The strengths and weaknesses of a hospitality organization may be broken down into four categories: marketing, operations, finance, and human resources. Once the organization’s strengths and weaknesses are identified, some sort of scan, or review, should be conducted of the organization’s environment to include the political, social, economic, demographic and technical environment. The external scan may be further broken down into a microenvironmental scan and a macroenvironmental scan. The microenvironment would include suppliers, intermediaries, stockholders, bankers, and other financial institutions, media and ad agencies, customers, and competitors. These groups directly and indirectly affect organizational decisions. The macroenvironment includes various driving forces in the environment such as changing demographics, technological advancements, and economic conditions. By matching the company’s strengths and weaknesses with the micro- and macroenvironment, the company should be able to identify the current and potential opportunities and threats. Once the SWOT analysis is complete, broad market opportunities can be identified. There

606 Strategy marketing planning and the marketing plan are four basic categories of market opportunities available to a firm: ● Market penetration ● Market development ● Product/service development ● Diversification. Goals and objectives The second stage of the strategic planning process is to decide where the organization wants to be and to establish the overall mission and objectives that will guide the strategy. Drawn from the SWOT analysis and market opportunities, the organization’s strategic goals and strategies to achieve the goals must be identified. This process involves identifying or updating the organization’s mission, vision and/or values statements. Mission statements are brief written descriptions of the purpose of the organization. Mission statements vary in nature from very brief to quite comprehensive, but should state for whom the organization exists, what it is supposed to do for those groups, and how it plans to do it. Many people consider the values statement and vision statement to be part of the mission statement. Vision statements are usually a compelling description of how the organization will or should operate at some point in the future and of how customers or clients are benefiting from the organization’s products and services. Values statements list the overall priorities in how the organization will operate. Once the mission, vision, and/or value statements are established, corporate and marketing objectives should be stated. At the corporate level, objectives should specify the desired target return on investment. The marketing objectives focus on market share or other measures of sales. Objectives should be designed and worded as much as possible to be specific, measurable, quantifiable, timely, and attainable. The marketing plan The third stage of the strategic planning process involves creating a marketing plan. The marketing plan, or ‘marketing strategy,’ consists of identifying the target market and developing the marketing mix. Three target markets should be identified. First, the internal market, or employees, should be defined. For the internal marketing mix, the employee is the ‘customer’ and the job is the ‘product.’ The marketing mix for the internal target market must distribute, promote, and price the ‘product’ to the ‘customer’s’ satisfaction. The second target market is the external consumer market. This group includes the customers or guests who will directly benefit from the service or product being offered. The third target market is the intermediary market, which would include travel agents, meeting planners, and tour operators. Each market segment must be precisely identified using geographic, demographic, and psychographic variables. Once the target markets have been identified, the organization must define its positioning statement. The positioning statement defines the customer’s perception of the total product in light of the other competitive product and service offerings. The positioning statement must be clear, distinctive, unambiguous, and understood by all employees of the organization. The final step of the marketing plan is to develop the marketing mix. A separate marketing mix should be created for each identified target market. The marketing mix consists of the ‘4Ps’ – product, promotion, place, and price. Within the product considerations, a list of all product and service offerings should be compiled and the core benefits of each product/service should be listed. Next, the tangible and intangible aspects of the products and/or services should be named. As part of the promotion mix, promotion objectives should be clearly defined and the mix of advertising, personal selling, publicity, and sales promotion should be stated. Types of media usage, such as broadcast, print, and direct mail, should be identified in addition to the specific outlets, such as radio stations and magazines. The promotion budget should be determined and promotion ideas and themes should be discussed. Under the place mix, the distribution objectives (exclusive, selective, or intensive) must be identified. The use and selection of intermediaries

Sustainability 607 should be discussed as well as strategies for increasing relationships with intermediaries. Finally, as part of the marketing mix, pricing objectives should be established. These objectives should include list prices, rack rates, package prices, and menu prices. Pricing policies concerning discounting, quantity, seasonal fluctuations, and price discrimination practices should also be discussed. The strategic marketing planning process involves conducting a situational analysis, establishing goals and objectives, and developing a strategic marketing plan. An effective marketing plan should enhance the hospitality organization’s strengths, help overcome internal weaknesses, take advantage of the opportunities in consideration of the threats, and contribute to the organization’s goals. Reference Shea, L.J. (2004) Strategic Marketing Planning and the Strategic Marketing Plan. Unpublished working paper. Amherst, MA: University of Massachusetts. JENNIFER T. CONDON NEWMARKET INTERNATIONAL, INC., USA Submetering Submetering refers to the function of using additional meters, other than the main meters at the boundary of the building. The purpose of submetering is to identify where utilities are used. Without submetering, there can be no valid basis for operational control and cost allocation. Likewise, there can be no way to verify efficiencies and quantify savings. In a hotel, submetering of electricity, steam, chilled water, hot water, and cold water are all practiced. The reduced cost of chilled water metering in the past ten years has made it viable to identify where air conditioning is being used down to the level of individual rooms. Installing submeters is significantly cheaper when done during construction or major renovation, so decisions about submetering are best made prior to these activities. Consistency of meter readings is generally more important than absolute accuracy. ROBERT ALLENDER ENERGY RESOURCES MANAGEMENT, HONG KONG SAR, CHINA Sustainability Sustainability implies the protection and conservation of resources for future generations, as opposed to current users’ undue depletion. Behavioral standards have been developed in an effort to assist tourism and hospitality operators in developing practical environmental impact monitoring measures, or to regulate their activities (Cooper and Erfurt, 2002). Within the hospitality industry such standards are usually self-regulated unless they are mandated by law, as for example in the fire protection and health areas of operation. Underlying mandated and voluntary measures is the realization that the natural environment is not static but is itself constantly undergoing change. However, in order to take this change into account operationally there is a need to develop flexible management regimes and hospitality enterprises that are responsive to change. As the market for environmentally sensitive facilities continues to expand on a worldwide basis it is vital that local businesses meet global expectations and standards associated with sound environmental and operational practice. References Cooper, M.J. and Erfurt, P.J. (2002) Ecotourism accreditation: a planning tool for Asia–Pacific countries? In K.-S. Chon, V.C.S. Cheung, and K. Wong (eds), Proceedings of the 5th Biennial Conference on Tourism in Asia, Hong Kong, 23–25 May. University of Houston: Haworth Hospitality Press, pp. 115–125. Tourism Council of Australia (1998) Code of Sustainable Practice. Sydney: TCA. MALCOLM COOPER RITSUMEIKAN ASIA PACIFIC UNIVERSITY, JAPAN

608 Systematic risk Switch companies Global distribution systems (GDSs) are used extensively by travel agents to make reservations for airline seats and, to a lesser degree, hotel rooms. Switch companies (sometimes called ‘universal switches’) act as a bi-directional translator, converting electronic messages between the unique languages used by each of the four major GDSs and the large number of proprietary central reservations systems used by the hotel companies (and vice versa). Two major switch companies currently operate in the hotel sector – THISCO (The Hotel Industry Switching Company) and Wizcom. In the absence of a switch, each hotel company would have to develop costly individual interfaces between its CRS and each of the GDSs in order to make their product available to travel agents electronically. Using a switch means that only a single interface (between the CRS and the switch itself) needs to be developed to give access to all of the major GDS systems, thus saving valuable capital for the hotel company concerned. In addition to their core functionality, most switches provide a range of additional services to their users – for example, by centralizing the payment of commissions or other fees due or by including their properties on a consumer-oriented website. References Emmer, R., Tauck, C., and Moore, R. (1993) Marketing hotels using global distribution systems. Cornell Hotel and Restaurant Administration Quarterly, December, 80–89. O’Connor, P. (1999) Electronic Information Distribution in Hospitality and Tourism. Wallingford: CABI International. PETER O’CONNOR IMHI (CORNELL – ESSEC), FRANCE Switching costs These are one-time costs facing a hotel or restaurant as it contemplates switching from one supplier’s product to another’s. Such costs may include direct expenses as a different purchase price, modifications in equipment used (such as having to change the hotel linen cart configuration to accommodate the changing sizes of amenities) plus any related testing and retraining expenses (Porter, 1980). Good customer or volume discounts, generated over time by combining different purchases, could be lost. Indirect costs such as building or ending relationships and time factors may also be involved. For instance, it takes time for the hospitality firm (as a customer) to learn the operating habits of a supplier, i.e., with whom to speak in order to more easily fulfill requests, delivery patterns, etc. If switching costs are high, the hospitality firm must perceive a major benefit to changing suppliers – but such a benefit would have to clearly outweigh the high costs involved in such a switch. Otherwise, the firm would likely remain with the current supplier. If switching costs are low, the hospitality firm may more readily change suppliers. The goal is to build relationships with customers so that they perceive large costs in changing suppliers and are thus encouraged to continue existing relationships (Burnham et al., 2003). References Burnham, T.A., Frels, J.K., and Mahajan, V. (2003) Consumer switching costs: a typology, antecedents, and consequences. Academy of Marketing Science, 31 (2), 109–127. Porter, M.E. (1980) Competitive Strategy. New York: The Free Press. CHRIS ROBERTS UNIVERSITY OF MASSACHUSETTS, USA Systematic risk Systematic risk is the stock volatility caused by the capital market volatility, or the covariance of stock return with market return. This type of volatility or risk cannot be eliminated via portfolio diversification because the volatility is due to factors that affect all securities such as changes in the nation’s economy, tax reform by Congress, or a

Systematic risk 609 change in the world energy situation (Van Horne and Wachowicz, 2001). Even if an investor holds a portfolio consisting of all the stocks in the capital market, he or she will still be exposed to systematic risk. The non-diversifiability of systematic risk determines that it should be priced on the capital market. High systematic risk should be compensated by high return, and vice versa. For an individual investing in a hospitality firm, the systematic risk of the firm is the relevant factor in determining his or her required rate of return within the Capital Asset Pricing Model (CAPM) framework. A hospitality firm’s systematic risk, denoted as beta, is measured by the slope of the characteristic line that represents the sensitivity of the firm stock’s return to the overall return of the capital market. Reference Van Horne, J.C. and Wachowicz, J.M. (2001) Fundamentals of Financial Management, 11th edn. Upper Saddle River, NJ: Prentice-Hall. HYUNJOON KIM UNIVERSITY OF HAWAII, USA

T Reference Revel, J. (1982) Culture and Cuisine. Garden City, NY: Doubleday & Company. JAKSA KIVELA THE HONG KONG POLYTECHNIC UNIVERSITY, HONG KONG SAR, CHINA Tables per server Tables per server numbers indicate how many tables are assigned to each server or server station in a foodservice operation. For example, if a restaurant has 50 tables, it may assign four or five tables to each server. Typically, fine dining restaurants assign fewer tables per server than casual dining restaurants and as a result offer a higher level of service. Some foodservice managers prefer assigning a certain number of seats to each server rather than assigning a certain number of tables. In this case, all servers might have a mix of 2-tops, 4-tops, and 6-tops, but would be serving approximately the same number of guests. As Sanders, Paz, and Wilkinson (2002) point out, one of the major factors involved in determining the appropriate number of tables per server (or servers per table in rare situations) is the use of bussers. Bussers may be employed to simply clear and reset tables; such use increases somewhat the amount of time available for the server to spend with guests. Another approach is to use bussers for most other functions besides Table d’hôte The literal interpretation of table d’hôte is ‘table or offering of the host.’ It stems from a bygone period when nobility and people of means entertained their guests in their homes. A contemporary table d’hôte or ‘set’ menu offers a fixed price for a limited number of courses and dishes. It can also be offered for a set dining period, e.g. lunch. Table d’hôte menus may change daily, weekly, or even monthly, and they may be used in rotation, as they are for cycle menus in on-site foodservice. Table d’hôte menus offer a complete meal of three or more courses with or without a choice of dishes in each course. Guests usually pay full price for all courses whether or not they consume all of them. Some foodservice operators who offer special gourmet table d’hôte menus for events such as Christmas dinner or wedding banquets require a deposit when making reservations. Foodservice operators prefer table d’hôte menus because they are versatile and adaptable to different occasions; production costs are easier to monitor; food materials usage and sales estimates are more accurate; more time can be spent on high-quality production and service; and higher quality food materials can be purchased because of reduced food stock needs. It should be noted, however, that many foodservice operations offer a table d’hôte menu in conjunction with an à la carte menu, thus offering diners a ‘fast-track’ selection, a ‘value-for-money’ choice, menu items that are not featured on the à la carte menu, seasonal or regional food specialties, and promotional items.

Telephone systems 611 taking the guests’ orders and delivering the food. In such situations, bussers must be more fully trained since their interaction with the guest is considerable. Reference Sanders, E., Paz, P., and Wilkinson, R. (2002) Service at Its Best. Upper Saddle River, NJ: Prentice-Hall. SHERRI KIMES CORNELL UNIVERSITY, USA TCP/IP TCP and IP are protocols governing the handling and the formatting of data in an electronic communications system; they are the main protocols used on the Internet. The messages (files) exchanged over the network are divided into small units (called packets) by TCP, while IP takes care of managing the actual delivery of the data. The routing needed to accomplish this is completely transparent to the user. All is needed in order to access another system is an ‘Internet address’ (called IP address), a 32-bit number, normally written as 4 decimal numbers. A specific service, called DNS (domain name service), provides a database containing the correspondence between numeric addresses and alphabetic domain names. TCP/IP uses the client/server model of communication in which a computer user (a client) requests and is provided with a service by another computer (a server). This is the case, for example, in which a consumer is asking to view a hotel website. TCP/IP protocols support services such as remote login to a computer, file transfer (FTP), electronic mail and the World Wide Web. In the hospitality industry, beside these applications, many internal networks are using TCP/IP protocols to connect not only computers, but also other electronic equipment. References Loshin, P. (2003) TCP/IP Clearly Explained, 4th edn. San Francisco, CA: Morgan Kaufmann. Tanenbaum, A.S. (2003) Computer Networks, 4th edn. Upper Saddle River, NJ: Prentice-Hall. RODOLFO BAGGIO BOCCONI UNIVERSITY, ITALY Telephone systems Telephone systems are used to link people together within an organization, and to the outside world. Most hotels provide telephones in guestrooms, which allow guests to ring reception or other numbers within or outside the hotel. The system usually has a private automated branch exchange (PABX) where calls are received, perhaps by a receptionist, and then transferred to the appropriate person within the organization. Many systems allow ‘direct dial-in’ (DDI) so that calls can be made direct to the correct extension without being processed by the receptionist. Hotel telephone systems allow guests to make calls, recording details automatically and passing charges to the guest’s bill. With the increased use of mobile phones, and the premium rates often charged by hotels, there may be reduced demand for voice telephony. However, there is a dramatic growth in the provision of Internet connections in guestrooms, allowing guests with laptop computers to access e-mail and Web browsers. Telephone systems also allow a range of other facilities, including automatic wake-up calls and voicemail for guests. The telephone system often links to the property management system (PMS), allowing cleaners to notify the PMS that a room is clean. The PMS can also direct the telephone system to bar calls from unoccupied rooms. References O’Connor, P. (2000) Using Computers in Hospitality, 2nd edn. London: Cassell. Smith, J. (1990) Practical Computing – A Guide for Hotel and Catering Students. Oxford: ButterworthHeinemann. JOHN NIGHTINGALE LEEDS METROPOLITAN UNIVERSITY, UK

612 Tennis tournaments Tennis professional classifications In the private club industry within the United States the importance of obtaining a certification from the United States Professional Tennis Association (USPTA) cannot be overstated. USPTA’s Career Development Program offers tennis teachers three certification levels, culminating with the master professional designation. To earn the Professional 1 designation the individual must be 22 years or older, have successfully passed the certification exam at the Pro 1 level or higher, hold a score of 4.5 on the National Tennis Rating Program (skills test), and have three or five seasons of full-time instructional experience. An individual holding the Professional 2 designation must be at least 18 years old, have successfully completed an apprenticeship program or an equivalent combination of experience, successfully passed the written examination at a Pro 2 or higher, and passed the National Tennis Rating Program at 4.0 or higher. To hold a Professional 3 designation and individual must be at least 18 years old, have passed the written certification examination at the Pro 3 level or higher, must hold a National Tennis Rating Program score of 4.0 or higher, but is not required to have tennis-teaching experience. The Master Professional must hold a Professional 1 designation for a specified period of time, have maintained continuing education hours and completed a variety of service activities as recognized by the USPTA. To receive this designation, the tennis pro must submit an application to the Master Professional review board of the USPTA for ratification and certification. Reference http://www.uspta.org/. Accessed 28 January 2004. CHIEMI YAGI UNIVERSITY EDUCATION CENTER, UNIVERSITY OF THE RYUKYUS, JAPAN Tennis tournaments The importance of tennis to private clubs received its biggest influx during the 1970s when the game of tennis was at its pinnacle. As a result of this changing societal trend private club operators have been slow to add additional tennis facilities within private country club facilities. Nonetheless, for the tennis enthusiast tennis tournaments are essential to maintaining their needs for competition, social bonding, physical invigoration, and fitness concerns. The common tournaments offered at private clubs are (a) men’s and women’s singles, (b) men’s and women’s doubles, and (c) mixed doubles. To make any of these tournaments a success, the tennis pro should engage the tennis committee in securing the use of the courts for tournament play, confirming that the tournament will be sanctioned by the United States Tennis Association, deciding the hours of play, deciding which courts will be used for the tournament and which courts will remain accessible to the members, arranging publicity (if this is to be public event), and ensuring that all registrant information is completed in advance and so that rosters of play can be established. The tennis pro, tennis committee, and tennis director play a critical role in organizing the event, matching the players, establishing event timing, recording and supervising of the tournament, and finalizing the event via a tournament banquet with resultant public relation events being planned as well. References Perdue, Joe (1997) Contemporary Club Management. Lansing, MI: Educational Institute of the American Hotel and Motel Association. White, Ted and Gerstner, Larry (1991) Club Operations and Management. New York: Van Nostrand Reinhold. ARAM SON JAMES COOK UNIVERSITY, AUSTRALIA

Third party planner 613 Third party planner A third party planner can be described in a couple of ways: An independent meeting or event professional provides event or meeting services for a third party, meaning a corporation, a nonprofit, a educational institution or an association, as an outsourced vendor. Or, another definition created by a group of meeting industry peers, describes the broader business perspective of third party planners: Independent meeting professionals are small business owners, individuals or third party representatives that are contracted to assist, in whole or in part, in the arrangements of client meetings, events, conferences and/or exhibitions. They may be self-employed and/or operate a division within a company specifically designed to administer various facets of design, planning, strategic consultation, support services and/or logistics for meetings, conferences, and/or exhibitions. Two examples of third party planner applications follow: ● The meeting department of a major association based in Washington, DC regularly hires a third party to handle the details of an annual awards banquet held during the annual convention. The third party is responsible for inviting the individual award winners, the evening logistics and production, handling RSVPs separate from the convention’s registration process, ordering flowers, décor and the actual award plaques, and scripting the evening’s schedule. The head of the meeting department is thrilled with the consistency of the third party and saves on staff expense. He only pays for the specific service: the awards banquet. ● A Fortune 500 company has a complete meeting, travel, and event department. However, the senior VP of marketing is budgeting for a single sales and marketing retreat for his senior managers and has retained a third party, separate from the negotiated agreements within the organization, to manage the site selection process. The third party is responsible for managing the process, identifying the audience, prospecting destinations, soliciting venue availability, and negotiating a value based contract. The cost of this service is covered by a commission paid by the venue to the third party. This is a specific service that the independent will provide. These are two, very different, examples of services provided by a third party planner; with two separate pricing models, yet both represent qualified, legitimate business within the meeting and event industry. Third party planners types and services The services that third parties perform range from managing small parts of an event (task or service specific), to the full service deliverable: ‘soup to nuts.’ Many organizations that have a small staff, choose to outsource their meeting or event services rather than hire and bring these services in-house. Full service meeting or event planners are hired by their client organization to take the complete meeting from the very beginning – determining goals and objectives – to the end – the thank you letters and budget reconciliation. In the case of task or service specifics, the third party planner may be contracted to perform a piece of the meeting or event. For example: ● Registration ● Housing only ● Site selection only ● Sponsorship development or fund raising ● Theme development ● Budgeting ● Premiums/gifts ● Menu planning/BEO (banquet event order) development ● On-site management ● Sports activities, tours, and recreation ● Agenda planning; program development

614 Third party planner ● Exhibit management ● Facilitation or training; or fundraising. Often, a destination management company (DMC) is hired to perform specific pieces of a convention, like tours, spouse events, or other items specific to their city. They often have the best contacts in the city, can arrange for the best price and provide the greatest insight into the destination. In international waters, a professional congress organizer (PCO) can perform those same services. Why clients hire third parties There seem to be two reasons that organizations outsource a meeting: either they do not have the talent within the organization to deliver the specific services needed; or the current meeting or event department is overwhelmed with other responsibilities. In either scenario, third party planners are a great resource because they will have the skills necessary to step in and get the job done and yet will not be a competitive threat to the in-house planner. How third parties charge for their services In drawing up a budget for outsourcing meeting or event functions, there are a few guiding formulas that will assist in creating a framework for these costs: ● Commissions ● Service fees per project hourly deliverables ● Cost of hiring an employee. It is helpful to run the numbers in a variety of ways to gain a complete picture and thus arrive at the best decision. Under a commission structure, a hotel pays the third party up to 10% (or more during value seasons) of the guestroom revenue generated by a meeting. Commissions are not usually paid on other revenue brought to a hotel or conference center, such as food and beverage, audiovisual or entertainment. For example, if 75 attendees are staying at a hotel (each in a single room) for three evenings at $150 per night, the total guestroom revenue paid to the hotel will be $33,750 (75 3 $150  $33,750). The hotel could pay $3375 (or 10%) in commissions to the meeting management company. Practices on accepting commissions vary among third parties. Some companies will not accept commissions under any circumstances. These companies feel strongly that clients may question their objectivity if they accept commissions. They believe that clients might think that they negotiate contracts with the vendor that pays the best commission, not the vendor that gives the client the best deal. Some companies reduce their fee to the client by the amount of the commission. These companies see commissions as a way to provide extra savings to their clients, while still making a fair and reasonable profit. A third group of third parties views commissions as a way to increase their revenues, and accept the commission in addition to the client’s fee. Regardless of the compensation structure, thorough discussion about fees and commissions with the third party and their vendors is called for. As with any enforceable contract, agreements about commissions – such as when they are paid and to whom – should be in writing. It is also fair to discuss commissions and rebates from suppliers, asking the third party if they are compensated from any other sources. Service fees are as straightforward as they seem – the client organization compensates the third party directly for its services. Service fees follow no standard formula, but there are several options: ● À la carte pricing: Based on the request for proposal (RFP), each service is given a price ● Single price: The entire scope of work is covered in a single price ● Retainer: The third party is paid a fee to guarantee that they will be available whenever the hiring organization needs the services ● Service contract: Negotiated contract (based on an RFP) regarding individual services that can be purchased over the course of a year.

Timeshare financing 615 This contract is renegotiated each year, not each meeting. The third option is to consider what it would cost in terms of time, energy, and salary for personnel within the organization to manage this event, or to hire a third party onto the staff. Standard human resources formulas would consider the following as an annual cost: $ Salary higher-level 75,000 Benefits (35% of salary) 26,250 Overhead 10,000 Training and development 1,000 Total 112,250 SHELLEY T.I. HARRIS THE HARRIS GROUP, USA Timeshare financing The development of a timeshare resort, otherwise known as a vacation ownership resort, is a capital-intensive operation from the outset that requires calculated and structured financing. The three predominant types of financing that are available to a timeshare developer are hypothecation, sales of receivables, and securitization. Hypothecation Hypothecation in the timeshare industry refers to the process of pledging an asset as collateral (security) for a loan. The most common usage is the phrase ‘to hypothecate a mortgage,’ which occurs when a borrower assigns rights to a piece of real estate (such as a hotel and the land on which it stands) or other asset (such as accounts receivable, inventory, etc.) to a lender. This asset, called the collateral, is pledged as security for a loan in addition to the promissory note (obligation to repay) that is signed by the borrower. If an asset is hypothecated, the loan is secured. If no collateral is pledged, the loan is unsecured. In the event of a default (failure to repay) by the borrower on a secured loan, the lender has the right to seize the hypothecated asset (the collateral) and sell it, using the proceeds to repay the loan. In contrast, in the case of a default on an unsecured loan, the lender must take the borrower to court to force repayment. This may result in the borrower filing for bankruptcy protection, in which event the lender will have to wait for the bankruptcy court to determine how the remaining assets of the borrower will be divided among all of the unsecured creditors. A single asset may be hypothecated to more than one loan. In this case, the first loan has a senior claim (first lien). The other loans have subordinated or junior claims (second lien, third lien, etc.). In the event of a default, the collateral is sold and the most senior loan gets repaid first. Subordinated claims get repaid in order and only if any proceeds remain. Once the proceeds from the collateral have been dispersed, any ‘secured’ lenders who have not been repaid in full must make a legal claim as an unsecured creditor. For this reason, subordinated claims provide less default protection for a lender. Sales of receivables Many timeshare businesses sell products and services to their customers on credit. As one example, hotels that host conventions often allow event sponsors 30 days or more to pay their bills. As another example, time share resorts often allow buyers to pay for their purchases through monthly payments made over a number of years rather than in full when the contract is signed. In both cases, selling on credit creates a receivable on the business’s balance sheet and earnings on the business’s income statement. Selling on credit does not, however, provide an immediate cash flow. Because businesses need cash flow to pay their own bills – the timeshare resort must pay its mortgage, its employees, and its utility bills and the timeshare resort must pay its employees and its building contractors – it may be desirable to sell receivables in order to raise cash. If a timeshare developer chooses to sell its receivables to create cash flow, it will need to make a decision; to whom to sell the receivables. A financier who specializes in the purchase of receivables is

616 Timeshare industry traditionally called a factor, and the sale is referred to as ‘factoring the receivables.’ The business may also be able to securitize certain types of receivables. Another issue to be resolved is the discount on the sale. Securitization Securitization in the timeshare industry is a process in which a number of financial assets (typically loans of some specific type) are sold to a legal entity called a special purpose vehicle, which then sells new securities to investors based on the assets it holds in trust. The group of loans owned by the special purpose vehicle is called the asset pool. The payments made to investors in these new securities come from the earnings of the loans in the pool. The securities created during a securitization are called asset-backed securities or ABS. The most common form of ABS are those created from one to four family residential (home) mortgages; these are called mortgage-backed securities or MBS. Other ABS are created from time share receivables, commercial real estate loans, home equity loans, automobile loans, student loans, and credit card receivables. For lenders, the advantage of securitization is that it allows originators of loans (such as timeshare resort owners and other lenders) to sell assets that, individually, would be very illiquid (difficult to sell for an amount close to their underlying value). This allows the lender to specialize in originations, reusing the same capital over and over again as new loans are originated, sold for securitization, the proceeds of the sale used to originate a new group of loans, and so on. For example, a time share resort developer may be very good at developing a new resort, marketing it to potential buyers, evaluating the buyer’s credit, and creating a receivable (loan) by which the buyer agrees to make monthly payments over a number of years. The developer, however, may not wish to have its capital tied up until the buyer makes the required payments. Securitization allows the developer to sell these receivables, take the profit from the project, and reinvest its capital back into a new resort. Investors prefer to buy ABS rather than individual loans for two reasons. First, each ABS share represents parts of each individual loan in the pool, so the ABS investor is well-diversified. If the investor instead bought individual loans, he or she would have to take care to build a welldiversified portfolio. Second, most ABS provide added default protection for investors. This may come from a third party insurer who agrees to make good on any defaults by the borrowers in the pool. Or the protection may come from overcollateralization, which occurs when the value of the individual loans in the pool is greater than the value of the ABS that are issued. It is also possible for a lender to sell loans to the pool with recourse. Selling ‘with recourse’ means that the original lender is liable if too many of the borrowers default. If the investor bought individual loans rather than ABS, he or she would have to evaluate the credit quality (the default risk) of each individual loan, an expensive and timeconsuming task. References Anonymous (2000) Why can’t my line do that? The Kansas Banker, 90 (11), 24–26. Monroe, Ann (1985) Sales of receivables by big firms gain respect in public offerings, The Wall Street Journal, 2 December, p. 1. Roever, W. Alexander and Fabozzi, Frank J. (2003) A primer on securitization, Journal of Structured and Project Finance, 9 (2), 5–17. JAMES H.GILKESON UNIVERSITY OF CENTRAL FLORIDA, USA Timeshare industry Timeshare ownership has made steps to become a mainstream travel product. The resilience of the timeshare market and continued growth based on number of units sold and the addition of an increasing number of national brands have placed the timeshare industry in a promising position. The legitimization of the timeshare industry by established brands has given timeshare an increasing amount of credibility. Currently only 12–15% of timeshares are brands, but this will

Timeshare industry 617 change as major industry brands are looking for alternative sources of income. Sales have been driven up to nearly US$9 billion annually, with 6.2 million owners worldwide owning 9.9 million weeks. The incentive of developing units as timeshares has been the availability of capital through financing. In a market where six out of ten timeshare units are financed through the developer by the timeshare owner, the cashstrapped hospitality industry is prompted to stand up and take notice. Currently, the enticement is the promise of longer stays at destinations. In a society that is opting for shorter vacations, vacation ownership is encouraging the lengthening of stays at individual destinations. Development has increased in the more traditional timeshare venues (i.e. beach) and has found a new area in the emergent urban market. The leisure traveler desires more cultural options, entertainment, dining experiences, and shopping opportunities, which can be easily satisfied in a more urban location. Growth has extended to the international arena, although to date Marriott Vacation Club International is the only international brand represented. Spain continues to be the dominant force in Europe, possibilities are being investigated in Eastern Europe and Asia. Timeshare exchange groups in conjunction with the World Travel and Tourism Commission are seeking to develop tourism policies that will help with the regulation of these emerging markets and will ignite development opportunities in these areas. There are currently 5300 resorts worldwide in 95 different countries with 1600 operating in the United States. There are 2.7 million timeshare owners in the United States and 6.2 million timeshare owners worldwide cementing the timeshare industry as a truly global concept. The Caribbean, where there are currently 8500 timeshare units being planned, has become one of the most dynamic markets. Aruba, St Maarten, Dominican Republic, Puerto Rico, and the Bahamas have been the areas of biggest growth. The major impediment continues to be politics. Taxation and the complexities of some of the tax structures on some islands have created barriers to growth. Working with the governments to figure out amenable solutions to the tax structure and consumer protection issues will continue to be at the forefront in order to ensure that growth is not stunted in these areas. Diversification is the rule instead of the exception in this vibrant industry. The types of units to be sold as timeshare have begun to be as diverse as the public purchasing them. The high end units sold by Four Seasons Hotels & Resorts and Ritz–Carlton Hotels have filled a niche of buyers looking to have a taste of luxury at a more reasonable cost and as the market opens there is room for more moderately priced resorts. The traditional marketable beach location has been taken over by the desire to be close to attractions and entertainment in the United States. The largest number of new timeshares sold are attraction and entertainment locations (58%) followed by the beach locations (45%). These numbers indicate the increase in people wanting a fuller vacation experience by having the proximity to a selection of entertainment options and the opening of the timeshare market to locations that do not have close proximity to the beach. The reasons behind purchasing timeshares units in the United States include the desire for flexibility. Overall flexibility – ability to use different locations, unit sizes, times of year, as applicable – was rated by 86% of timeshare purchasers as very important. Certainty of quality accommodations was rated 84%. Exchange opportunity with other resorts through an exchange company was rated 80%. Credibility of the timeshare company was rated 77% and liking the timeshare resort, amenities, or unit was rated by 72% as very important (Ragatz Associates, 2003; Pricewaterhousecoopers, 2002). Less US consumers use their time at their home timeshare resort (34%) than the consumers that exchange for another location (54%). The remainder rent (4%) or give their unit away to friends or family (3%). This number indicates the ongoing necessity or effective, convenient exchange methods and the increase in demand for flexibility in the purchase of a timeshare. The split-week use option has helped with the desired flexibility sought by US timeshare purchasers. Nearly 30% of current owners indicated that their unit was in a resort that allows them to

618 Timeshare industry split their week of time into two or more shorter stays. The hesitations about purchasing cover a wide range of reasons from the location of the resort to clarity of the exchange option. However, the primary reasons for hesitation to purchase include: possible future maintenance fee increase (65%), usually do not make same-day purchase decisions (63%), and price (59%). Developers will need to take today’s more educated prospects into consideration in their sales practices. Price is second to being rushed to make a decision and having insurances of a stable fee payment system. The growth has also been based on the increasing satisfaction of timeshare owners in the United States. More than half of the timeshare consumers were very satisfied with their purchase (55%), 29% were somewhat satisfied, and a minority (16%) were neutral, somewhat dissatisfied, or very dissatisfied. Most timeshare owners are looking forward to their vacations. Seventy-seven percent of timeshare owners in the United States state that timeshare ownership has increased the degree that they look forward to vacations. The purchase of the timeshare has extended time spent on vacation. Sixtynine percent believe it has increased the amount of time spent on vacation after the purchase of their timeshare unit. Finally, in a time where a prime motivator is education in one’s travel experience timeshare ownership is proving to fulfill this need as well. Sixty-nine percent feel that their ownership has increased their learning experiences. Most US timeshare owners own a timeshare in one resort (58%). However, an increasing number of people are buying timeshares in more than one resort. Twenty-eight percent own timeshares in two resorts and 14% own timeshares in three or more resorts. Also, 17% of the US timeshare buyers have expressed interest in buying more time in the same resort where they already own week(s). The trends indicate the number of multiple resort timeshare owners increasing thereby reiterating the positive experience that people are finding in their timeshare purchases. The ‘do not call’ regulations have prompted timeshare developers in the United States to rethink their marketing tactics. Twenty-two percent of people who have made recent timeshare purchases stated that they found out about the resort via a telephone sales call. However, direct mail was mentioned by 19% of the people that had made recent timeshare purchases in listing how they had found out about the resort. This could prompt the need for a more dynamic mail campaign to alleviate leads lost through the loss of the telemarketing tool. The resale of the timeshare unit is not the biggest part of the US timeshare industry. Although, it is about a $390 billion dollar business annually, consumer-to-consumer resales represent only 15% of the market. The average price paid for an annual week of timeshare use in the United States has increased to $14,200 per week in 2003 from $8846 in 1997. These numbers show that not only has the US timeshare market been resilient in the postSeptember 11, 2001 economy, it has been thriving. The prices have been escalating at a rate of 3% annually and show no signs of slowing down. Most timeshare buyers in the United States are female (54%), white (77%), married (56%), are 37 years old or older (57%), and have household incomes of $50,000 (63%). These numbers show that there is room for diversity amongst prospective timeshare purchasers. Education and a more cross-cultural marketing plan will only drive interest and growth in the timeshare industry. Currently, the family market is appealing based on the family-friendly atmosphere of timeshare resorts. However, by 2010 there is going to be a 29% decrease in the households with children under the age of 18 and the markets are going to need to reinvent themselves yet again. The sites that are built to be able to handle large families and have units that can become smaller through lock-off configurations will be the best bet to serve both markets. The awareness of timeshares by people in the United States is increasing. Eighty-seven percent of households with incomes of $25,000 or greater have heard of timeshares. Sixty-eight percent of those people have a very positive, somewhat positive or neutral view of timeshares in the United States which reiterates a move in the right direction for this industry. Most timeshare resorts in the U.S. are located in Florida (323), California (125),

Timeshare resales 619 South Carolina (119), Colorado (75), Hawaii (71), and North Carolina (59). As this industry matures the following states are entering the picture with greater numbers: Nevada (55), Missouri (49), Texas (49), Arizona (45), Massachusetts (45), and Virginia (40). The expansion has been prompted by the positive impact timeshare resorts may have in the community. The result of the timeshare owner visiting more often and staying longer in a community has resulted in an increase in capital brought into the community. United States timeshare owners report that once a timeshare unit has been purchased the amount they personally spend in the resort area where their timeshare is located has increased 146% after purchasing. This is welcome addition to any community wishing to have a stable tourism economy fueled by an increase in visitation and a stabilized repeat visitation record. The timeshare business in the United States pours $5.4 billion dollars annually into the collective communities where they are located. The average US travel party spends $1205 in the local economy during their visit on average. The maintenance of the timeshare properties in the United States contributes to the local economies as well. Annually timeshare owners pay $1.87 billion dollars in maintenance fees to maintain and operate their resorts. Much of this money is spent in the local community through contract work for repairs and other services needed to upkeep the resort property. The constancy is key stable tourism economy that timeshare resorts bring in the United States. Ninety-two percent of the timeshare owners report using their unit themselves or allowing others to use their timeshare unit. High timeshare occupancy results in a strong year-round utilization of the product resulting in less seasonality which in turn strengthens the job market and the success of the local businesses in the United States. The state of the timeshare industry throughout the world is promising and shows signs that it is a staple in the hospitality mix that is going to strengthen the hospitality and tourism industry’s buying power, provide more options to the growing traveling public, and offer stability to the economies of the communities in which they are housed. As more people become educated about the possibilities of vacation ownership and as more brand names enter the fray there will be even bigger and better contributions from the timeshare industry to the health of the hospitality and tourism industry in the future. Key points to watch will be the effect of the baby boom generation on the market, the diversification of the timeshare product, the effect of more brand names in the timeshare arena, and the growth of the industry around the world prompting an increase in diversity among timeshare purchasers. References American Resort and Development Association (2004) http://www.arda.org. Accessed 11 February. Crotts, John and Ragatz, Richard (2002) Recent US timeshare purchasers: who are they, what are they buying, and how can they be reached? International Journal of Hospitality Management, 21 (3), 227–238. Interval International (2003) Future Timeshare Buyers: 2003 Market Profile. Miami, FL: Interval International. Marson, Joan (2002) The timeshare oasis: in a difficult environment, timeshare offers hoteliers ancillary opportunity. Hotels, 36 (2), 43–46. Pricewaterhousecoopers (2002) A Study of the Timeshare and Vacation Ownership Industry. Prepared for ARDA International Foundation, New York. Ragatz Associates (2003) Resort Timesharing in the United States. Eugene, OR: Ragatz. Scoviak, Mary (2003) A little bit of sunshine: consumers’ unwillingness to give up their holidays and a greater need for family time continue to support cautious optimism for timeshare and fractional ownership. Hotels, 37 (2), 28–34. TAMMIE KAUFMAN UNIVERSITY OF CENTRAL FLORIDA, USA Timeshare resales Simply defined, a resale is a legal timeshare interest that is sold by a purchaser to a third

620 Tipping party. If the timeshare interest is fee-simple property, an owner can dispose of it by sale, lease, or in a will within the limits set forth by applicable laws or in the purchase documents. If the product is not sold as a fee-simple interest, such as a right-to-use or vacation-club products, the owner may not have a right to resell their timeshare interest. The owner must refer to their original purchase documents to determine if a ‘resales’ clause exists. The concept of a ‘resale’ market is problematic because as a resort reaches sellout, the developer’s prices rise as a reflection of product demand. As a result, the owner who purchases at a lower price early in the resort development process has bargaining power in setting the resale price. A dilemma exists when the owner sells his or her timeshare interest at a lower price, therefore entering into direct competition with the developer. Another challenge exists because the timeshare owner typically does not gain a full return on their capital due to the elevated sales and marketing costs associated with the timeshare product. References American Resort Development Association (2002) The Timeshare Industry Manual. Washington, DC: ARDA. Trowbridge, Keith (1993) Timesharing Today. New York: Simon & Schuster. BEVERLY SPARKS GRIFFITH UNIVERSITY, AUSTRALIA Tipping Tips are voluntary payments made to service providers after they have delivered a service product. In American restaurants, it is customary to tip a waiter or waitress 15–20% of the check amount. These restaurant tips amount to approximately $20 billion a year and represent nearly all of US waiters’ and waitresses’ take-home pay. Even in countries with less generous tipping norms, tips often make up a substantial portion of servers’ incomes. Thus, tipping is an important issue to restaurant servers around the globe. It should be a concern of restaurant managers as well. Tipping affects servers’ attitudes and behaviors as well as customers’ dining experiences, so it should be managed to maximize employee motivation and customer satisfaction. Tipping also affects restaurants’ legal responsibilities with respect to income and social security taxes, so it should be carefully monitored and recorded by managers. Many restaurant managers rely on tips to (a) motivate servers to deliver high-quality service, (b) measure server performance, and (c) identify dissatisfied guests who need grievances addressed. These uses of tips assume that tips are strongly related to customers’ perceptions of service quality. Research has not, however, supported that assumption (e.g., Lynn, 2001). In fact, customers’ service ratings account for only about 4% of the variability in a restaurant’s tip percentages, so tipping should not be relied upon to accomplish the previously mentioned goals. If managers cannot rely upon tips to reflect service quality, they can nevertheless rely on good tips to help keep servers happy and motivated. Moreover, managers can increase their servers’ tip incomes by providing the servers with appropriate tools and training. For example, researchers have found that servers in casualdining restaurants earn larger tips when they introduce themselves by name, squat down next to tables, touch customers on the shoulder, smile at customers, joke and play games with customers, call customers by name, write or draw on the backs of checks, deliver checks on tip trays embossed with credit card logos, and give customers after-dinner candies. Managers who train servers to do one or more of these things and who provide servers with the appropriate tip trays and candies can increase their servers’ tips by 20% or more. The effects of this increase in tips on servers’ morale include reducing server turnover and improving customer service (Lynn, 1996). In addition to employing the techniques mentioned in the previous paragraphs, servers unfortunately can also increase their tip incomes by (a) focusing on customers at the expense of their other responsibilities in the restaurant, (b) hurrying customers in order to turn tables quickly during busy nights, (c) stealing food and drinks that are

Total quality management (TQM) 621 Deming in the early 1950s. Deming sought to offer a new way for US manufacturers to improve the quality of their products by reducing defects through worker participation in the planning process. US manufacturers were slow to embrace the concept but Japanese manufacturers were quick to adopt the principles, particularly in streamlining the design of automobiles. Joseph Juran expressed his approach to total quality management in the form of a quality trilogy. Managing for quality involved three basic processes: ● Quality planning, or identifying the customer (both internal and external), determining their needs, designing goods and services to meet these needs at the established quality and cost goal ● Quality control, or establishing standards or critical elements of performance, identifying measures and methods of measurements, comparing actual to standard and taking action if necessary ● Quality improvement, or identifying appropriate improvement projects, including organizing the team, discovering the causes and providing remedies, and finally, developing mechanisms to control the new process and hold the gains. Juran also created the concept of cost of quality. The four elements of cost of quality are: ● Prevention cost, or those costs associated with the initial design quality ● Appraisal costs, or those costs associated with the inspection testing of raw materials, workin-progress, finished goods, procedures for testing, training manuals, etc. ● External costs of returned merchandise, such as making repairs or refunds, credibility loss and lawsuits ● Internal costs of scrap, rework, redesign, downtime, broken equipment, reduced yields, selling products at a discount, etc. Philip Crosby described quality as free and argued that zero defects were a desirable and achievable goal. He articulated his view of quality as the four absolutes of quality management: quality means conformance to requirements; quality comes from prevention which is a result given to customers free of charge, (d) ignoring or spending little time on groups considered poor tippers, (e) refusing to work during slow shifts, and (f ) under-reporting their tip incomes for tax purposes. Thus, tipping may actually reward behaviors that most restaurant managers would consider undesirable and managers of tipped employees need to keep a watchful eye to identify and discourage such behavior. In particular, restaurant managers in the United States need to monitor and record their servers’ tip incomes because they are responsible for withholding income taxes on tips and for making social security contributions based on tip income. Recently, the US Supreme Court ruled that the IRS can audit restaurants (rather than individual servers in restaurants) and hold them responsible for paying social security taxes on undeclared tip income even when those undeclared tips cannot be attributed to a particular server. This has substantially reduced the cost to the government of collecting taxes on undeclared tips and has substantially increased the costs to restaurants of under-reporting tip income. As a result, many restaurants enter into agreements with the IRS in which they work with the agency to estimate their servers’ tip earnings, educate employees about tip-reporting responsibilities, and set up procedures for reporting tip income. In exchange, the IRS agrees not to audit the restaurants’ tips as long as the agreements are in effect. References Lynn, M. (2001) Restaurant tipping and service quality: a tenuous relationship. Cornell Hotel and Restaurant Administration Quarterly, 42, 14–20. Lynn, M. (1996) Seven ways to increase your servers’ tips. Cornell Hotel and Restaurant Administration Quarterly, 37 ( June), 24–29. WM. MICHAEL LYNN CORNELL UNIVERSITY, USA Total quality management (TQM) Total quality management (TQM) was developed by management theorist W. Edwards

622 Total quality management (TQM) of training, discipline, example, and leadership; quality performance standard is zero defects; and quality measurement is the price of nonconformance. Others such as Armand Feigenbaum define total quality management as an excellencedriven rather than a defect-driven concept; and Kaoru Ishikawa believed that all divisions and all employees in the organization should be involved in studying and promoting quality control. Ishikawa focused on the customer as primary in defining quality. He also advocated quality control circles. He understood the value of using teamwork in solving quality problems. Total quality management in a hotel or lodging enterprise is a management technique that encourages managers to look with a critical eye at the processes used to deliver products and services. Managers must ask front-line employees and supervisors to question each step in the methods they use in providing hospitality for guests. Some examples might be asking guests why they are unhappy about waiting in line at check-out or why a guest might feel the table service in a hotel restaurant was rushed or why guests are dissatisfied when their room is not ready on check-in. Critical to success in total quality management is the interaction that occurs between frontline employees and their supervisors; specifically, the interaction of employees in a group setting and/or one-on-one basis to determine the basic cause of the problem and how a specific end result can be achieved. This interaction typically moves managers, supervisors, and employees into a cooperative interaction that may not have previously existed. Such interaction can be as simple as day and night shift employees who may not understand each other’s activities, finding they do have common concerns about serving guests. Total quality management in a hotel could be explained with the following example. The hotel general manager receives multiple complaints about the sloppy appearance of the hotel’s lobby including furniture in disarray, ashtrays overflowing, flowers wilted and trash containers overflowing. The general manager recruits a total quality management team, which consists of a front desk agent, a housekeeper, a food server, and the director of marketing and sales. The team meets and discusses how the lobby area could be more effectively maintained. The housekeeper indicates his colleagues are working at capacity and are permitted only 15 minutes to clean up the lobby on the day shift. The front desk agent says that she would often like to take a few minutes to leave the desk and go into the lobby to straighten the furniture, but is not allowed to leave the desk unattended. The director of marketing and sales indicates that he is embarrassed when prospective customers come into the hotel and see the lobby. He indicates that he has called housekeeping several times to have the lobby cleaned and is told it is not in the budget to have the lobby cleaned more than once daily. The food server indicates that whenever he is passing through the lobby he tries to pick up food and beverage related items and carry them to the restaurant but that his time out of the restaurant is very limited. All of the team members begin to understand the impact that the lobby appearance is having on the success of the hotel. The team decides to look at the elements of the problem. The furniture is on wheels for ease of moving when housekeeping is cleaning. The pillows on the furniture do add a decorative look to the furniture but are usually scattered about. The housekeeper suggests they be sewn to the back and arms of the sofas. The food server asks whether ashtrays might be replaced with receptacles; and the front desk agent suggests that receptacles with a swinging lid be used to avoid misplaced litter. The director of marketing and sales wonders whether the fresh flowers might be replaced with silk flowers and plants. The team discussion encourages each person to understand why the housekeeper cannot straighten the lobby every two or three hours and why the front desk agent cannot leave her post to take care of the problems. The employees’ comments concerning furniture and appointments create a better understanding of the problem. Team members start looking at one another with more understanding and are slower to criticize on this and other issues. The problem of the lobby was resolved but more importantly the team members developed a way to look at a challenge in a more constructive manner.

Trade show organizer 623 Reference George, Stephen and Weimerskirch, Arthur (1998) Total Quality Management: Strategies and Techniques Proven at Today’s Most Successful Companies. New York: John Wiley & Sons. WILLIAM FISHER UNIVERSITY OF CENTRAL FLORIDA, USA Trade show A trade show is the exhibit of products and services that are targeted to a specific clientele and are not open to the public. It is a marketing activity that provides the exhibiting company the opportunity to do market research, talk to customers, and promote products and/or services. Trade shows are business-to-business (B2B) activities. Trade shows are usually held in convention centers but may be held in convention hotels, armories, arenas, or other venues. Some trade shows also offer educational sessions. Attendees pay a registration or entrance fee that gives them access to the show floor. Educational sessions may require a separate payment. Attendees visit the shows to learn about products, compare products, find out about new trends in their industry, and make buying decisions. Exhibitors at the shows may give away product samples, demonstrate products and/or talk to attendees about how their products can be used. The modern trade show is a descendent of early fairs and festivals where people gathered to barter or sell goods. The Crystal Palace Exhibition that took place in Britain in 1851 is generally considered the first modern exhibition. As new types of products were introduced during the Industrial Revolution, a new method of product distribution was required. Exhibitions were that new form. Associations, which began to develop in the United States in the mid 1800s, started to organize their own exhibitions to help their members market their products. Trade shows are one type of exhibition and have become a major industry worldwide. The models for trade shows differ around the world. In the United States they tend to be short-term events, lasting from 3 to 5 days. In other parts of the world, these events may last weeks or months. Venues have been designed specifically to accommodate large trade shows that require floors that can handle tons of freight, loading docks where semi-trucks can park, roll-up doors that semitrucks can drive through, high ceilings, and other special features. References Morrow, S.L. (2002) The Art of the Show. Dallas, TX: Education Foundation, International Association for Exhibition Management. Robbe, D. (2002) Expositions and Trade Shows. New York: John Wiley. DEBORAH BREITER UNIVERSITY OF CENTRAL FLORIDA, USA Trade show organizer The individual who plans a trade show, reserves the space, markets to exhibitors, and promotes attendance by buyers is known as a trade show organizer. Several different people may actually accomplish these activities but one person would have overall responsibility for the success of the event. The organizer must create a business plan for the event that includes goals and objectives, operational plans, and evaluation methods. Somebody must negotiate contracts with a variety of suppliers. A dedicated exhibition facility, such as a convention center, might be chosen to house the event but sometimes a convention hotel can be used. Other types of venues for trade shows include arenas, armories, and civic centers. Trade show organizers may also negotiate with hotels for blocks of sleeping rooms for attendees. They may also negotiate contracts for shuttle buses to run between the convention venue and hotels. The show organizer hires a general services contractor to handle the freight for the event, create the graphics and look of the show, design the registration area, create an exhibitor services kit and act as the liaison between show management and the venue. Show management

624 Training sells exhibit space to companies and businesses. Trade show organizers today are being challenged to provide greater value to their exhibitors. Private events are starting to compete for marketing dollars that exhibiting companies have to spend. References Morrow, S.L. (2002) The Art of the Show. Dallas, TX: Education Foundation, International Association for Exhibition Management. Robbe, D. (2002) Expositions and Trade Shows. New York: John Wiley & Sons. DEBORAH BREITER UNIVERSITY OF CENTRAL FLORIDA, USA Trade union A trade union is an organization of employees formed to engage in collective action and membership. It is usually based on a particular industry or occupational group (De Cieri and Kramar, 2003). The goals of trade unions are usually to enable their members to pursue their industrial interests, but some unions may also seek political and social goals. Unions as ‘ex parte’ agents on behalf of their members generally have recognition under most industrial legislation, particularly in collective bargaining, for pursuing wage claims and grievance handling with employers. Unlike employer associations, trade unions tend to be more cohesive as they share common goals. In some countries unions are also called employee associations or guilds. Employers may also form trade unions to represent their broader interests, in the form of employer associations. Union representational rights tend to do better under pluralism. In most industrialized countries, union representation in the hospitality industry is lower than that of other industries (Woods, 2002). Reasons usually given for this situation include split-shift work scheduling and a frantic pace of operations which limits available time for collective discussion; separate and distinct hospitality jobs mitigate formation of an holistic and cohesive work group; paternalistic management styles; high proportion of part-time, casual, and flexible forms of employment; transient nature of many hotel workers; anti-union orientation of some front-line hospitality workers, etc. References De Cieri, H. and Kramar, R. (2003) Human Resource Management in Australia: Strategy, People, Performance. Sydney: McGraw-Hill. Woods, R.H. (2002) Managing Hospitality Human Resources, 3rd edn. Lansing, MI: Educational Institute of theAmerican Hotel and Lodging Association. DARREN LEE-ROSS JAMES COOK UNIVERSITY, AUSTRALIA Training Training can be identified as activities that ‘help an individual acquire competence in a specific task, process or role’ (Harrison, 2002, 5). Within the hospitality industry training focus is often on the development of specific skills related to behavior and performance that will ultimately have an impact on guest satisfaction. In developing training to address these areas, organizations will use a process often referred to as the training cycle. This is a continuous process involving the following activities: ● Identification and analysis of training needs ● Planning and design of training interventions ● Delivery of training interventions ● Monitoring and evaluation of outcomes. The first stage in the process is training needs analysis. At this point the organization identifies the key skills, knowledge, attitudes, and behaviors that are required for effective performance. There are many ways in which to identify these, such as assessment methods, interviewing staff about their job, observing staff whilst carrying out specific tasks or reviewing the results of performance appraisals. Other sources of information are guest feedback and analysis of business

Training 625 volumes. For example, if there is an increase in complaints around the standard of breakfast service this may highlight a training need in the restaurant or kitchen areas. When training needs have been identified the organization will then develop a training plan to address the needs. This plan will include detail on the overall objectives of training interventions, the people involved, the methods to be used (classroom style, presentations, workshops, on-the-job training etc). The delivery of the training interventions can be through a variety of means. On-the-job training can be a mix of one or all of the following: instruction, coaching, counseling, delegation from a manager, secondment or guided processes (Wilson, 1999). In the UK, 87% of organizations use on-the-job training (CIPD, 2001). The process can be both informal and formal in structure. A formalized structure would involve the individual observing a more experienced employee carrying out job tasks. The individual would then ask questions to clarify understanding and have an attempt at the task; the individual then practices the task under supervision from the more experienced member of staff. Eventually the individual will take on more tasks and become proficient without supervision. McDonald’s uses this method for training new staff members. Each staff member is allocated a ‘buddy’ from a special ‘training squad’ to work with them until they become fully trained in all job tasks. Hilton (UK) also uses a system of ‘departmental trainers’ who are experienced employees who will work on the job with those requiring training. This type of training is cost-effective as it is carried out at the workplace during operational hours. It is best suited for one-to-one training. Wilson (1999) further defines off-the-job training as interventions provided either internally or externally which require the individual member of staff to be removed from the operation whilst completing their training. In-company methods used involve lectures, presentations, role-plays etc, normally within a classroom or workshopstyle environment. For example, a general manager will attend a series of workshops at head office designed to improve budgeting and financial skills. External methods tend to be short and long college courses and/or training sessions conducted by consultants or training providers. For example a head chef may be required to attend college to complete a certificate course in food hygiene. These methods are more costly in terms of time and money as individuals are being trained outside of the working environment. They are generally used for longer-term career development or for the acquisition of specialist skills and knowledge. Some organizations have developed their training provision beyond on-the-job training to gain competitive advantage within the marketplace. By setting up corporate universities they ensure a consistent approach to the training of all staff from entry-level, hourly paid employees to development programs for managers and executives. The most well-known corporate universities are Disney and McDonald’s. The final part of the training cycle is evaluation of training outcomes. Although evaluation to test knowledge can take place throughout the training session, e.g. through question and answer sessions or tests at the end of each section before moving to the next section, the evaluation of training is generally carried out on completion of the training intervention. The Kirkpatrick Model (1967) is a popular method of evaluation: ‘most trainers espouse this classic approach’ (Simmonds, 2003, 171). Kirkpatrick (1967) states that evaluation takes place on four distinct levels: ● Reaction ● Learning ● Behavior ● Results. At the most basic level, we can evaluate the trainees’ reaction to the training intervention. This is often achieved by issuing post-course evaluation sheets, sometimes referred to as ‘happy sheets.’ Second we can identify what the participants learned from the training intervention, for example setting a task or test for them to complete both at the start and at the end of the program. Any resultant improvement would suggest that learning has taken place. Behavioral change can be measured by looking at the resultant workplace behaviors, for example asking has

626 Turnover there been a decrease in the number of accidents since the completion of health and safety training. Finally, and probably more difficult, is the evaluation of whether the learning and change in behavior have had an impact on the organization. For example, have room sales and revenue increased as a result of sales training for the reservations team? Within the hospitality industry customer satisfaction is a central theme and therefore there is much emphasis placed on customer service training. Dimensions of customer service include: communication skills; sensitivity to customer needs; motivation to provide service; job knowledge; situational analysis skills; understanding of clearly defined performance standards; initiative; integrity and flexibility; and thorough and timely follow-up. All of these dimensions could be identified as the skill set required of any hospitality employee and as such it would be prudent for organizations to carry out a training needs analysis related to these areas. If any needs were highlighted the organization would then design training interventions to address the needs. Such programs may include training on anticipating guest needs. This would be achieved by using role-plays to show how employees can read verbal and non-verbal behaviors to indicate whether a customer was satisfied. Additionally, they could involve activities designed to train staff in how to deal with angry customers or customers with unusual needs. On completion of training the organization could evaluate the success of the program by comparing customer satisfaction levels with those prior to the training program. References CIPD (2001) Annual Training Survey Report. London: Chartered Institute of Personnel and Development. Harrison, R. (2002) Learning and Development. London: Chartered Institute of Personnel and Development. Kirkpatrick, D. (1967) As cited in Simmonds, D. (2003) Designing and Delivering Training. London: Chartered Institute of Personnel and Development. Simmonds, D. (2003) Designing and Delivering Training. London: Chartered Institute of Personnel and Development. Wilson, J. (ed.) (1999) Human Resource Development. London: Kogan Page. DEBRA F. CANNON GEORGIA STATE UNIVERSITY, USA SAMANTHA QUAIL GLASGOW CALEDONIAN UNIVERSITY, UK Turnover Turnover occurs when an employee leaves his or her organization either voluntarily or involuntarily. Operationally, turnover is often expressed as a percentage either within a hospitality organization’s department or the organization as a whole, or sometimes both. Turnover, in percentage and department/organizational terms, may differ between hospitality organizations depending on natural business seasons, the organization’s location, external forces (international or domestic), and staff themselves. Turnover rate is typically expressed as an annualized percentage. While turnover rates in the hospitality industry vary considerably by country, they tend to be significantly higher than in most other industries. For example, within the US turnover in all industries was estimated at 13% in 1995, whereas in the hospitality industry it was estimated to range from 58 to 154% among staff, and 15 to 48% among management personnel’ (Pizam and Ellis, 1999,113). Turnover is associated with both costs and benefits. Turnover costs include: (1) replacement costs, such as those associated with recruitment, selection, and training; (2) reduced customer service and product quality; and (3) poor morale resulting from insecurity and increased workload for remaining employees. (Deery and Shaw, 1999). On the positive side, turnover can bring resolution to performance issues, provide opportunities for promotion, and result in new skills and ideas being introduced to the organization. Some organizations have what can be described as a turnover culture in which a high rate of turnover is accepted as standard

Turnover culture 627 turnover rates in excess of 200%. Turnover culture tends to be correlated with poor communication within organizations and more autocratic styles of management. Turnover culture is a product of a number of factors, including the seasonality of employment, the limited career structure in smaller establishments, the semi- or unskilled nature of some jobs, and finally, the percentage of employees from secondary labor markets. Where the industry has faced a significant problem for certain labor-intensive or semi-skilled jobs it has tended to turn to labor from foreign countries. However, these low-skilled employees are often more motivated by extrinsic rewards such as pay and conditions and are therefore more likely to be lured to another employer by higher wages or to escape poor working conditions therefore perpetuating the problem. However, despite these industry-related turnover factors, many employees who leave a job voluntarily do not move out of the sector. Instead, it is accepted that people move from establishment to establishment with little organizational loyalty. This perpetuates a turnover culture that produces a higher level of employee churn than experienced in other sectors (Woods, 2002). Reference Woods, R.H. (2002) Managing Hospitality Human Resources, 3rd edn. Lansing, MI: Educational Institute of the American Hotel and Lodging Association. GILLIAN KELLOCK HAY GLASGOW CALEDONIAN UNIVERSITY, UK business practice and little is done to rectify the situation (Deery, 2002). High rates of voluntary turnover have been linked to many factors, including job dissatisfaction and lack of connection between subordinate and supervisor (Pizam and Ellis, 1999). References Deery, M. (2002) Labour turnover in international hospitality and tourism. In N. D’AnnunzioGreen, G.A. Maxwell, and S. Watson (eds), Human Resource Management: International Perspectives in Hospitality and Tourism. London: Continuum. Deery, M.A. and Shaw, R.N. (1999) An investigation of the relationship between employee turnover and organizational culture. Journal of Hospitality and Tourism Research, 23 (4), 387–400. Pizam, A. and Ellis, T. (1999) Absenteeism and turnover in the hospitality industry. In D. Lee-Ross (ed.), HRM in Tourism and Hospitality. London: Cassell, pp. 109–131. JULIA CHRISTENSEN HUGHES UNIVERSITY OF GUELPH, CANADA ANTHONY BRIEN LINCOLN UNIVERSITY, NEW ZEALAND Turnover culture Staff turnover is generally acknowledged as particularly high within the hospitality industry. Indeed, some fast food chains have annual