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INKIJKEXEMPLAAR ©SVHChapter 2 | The Hospitality Industry Trend in the hospitality market 1: The new Now We live in a special time. Many people expect their business to return to normal once the crisis is over. This is a mistake. It will no longer be like it once was. We see the emergence of the New Gastronomy, the New Accommodation and New Food Systems. The pressure on the profit margin is structural. Even when the economy improves, businesses will have to settle for less. Thanks to the Internet, the customer really has become king. They can book later, faster, cheaper, they’re crazy about deals and are not afraid to negotiate. Hotel booking sites take the structural margin of sales out of their hands. Restaurants also pass on the marketing and booking functions to others. Source: Foodinspiration 2014 51

INKIJKEXEMPLAAR ©SVHMarketing & Sales for the Hospitality Industry The increase in mobility The consumer can move around easier and will travel further from home due to increased free time. He must therefore go somewhere else to eat, drink and even sleep. This can be an advantage for hospitality establishments outside the cities and along motorways. This also includes facilities at stations and airports. Trend in the hospitality market 2: Experience & Storytelling The guest not only visits for eating, drinking and sleeping, they are looking for an experience. The New Accommodation Finding a hotel room in someone's home (airbnb.com), pop-up dinner parties at strangers (eatwith.com), city tips by locals (urbanauts.com, spottedbylocals.com). The New Gastronomy A successful concept focuses on a signature dish. Trends in this include the new coffee bars, culinary hamburger bars, tea bars, juice bars and salad bars. All busy with iconisation: or making themselves famous for one product. The trend of the smaller menu is now widespread. Quality and creativity wins over the amount of choice. A new hospitality segment has arisen in line with this development: the gastropub. This is a contraction of the words gastronomy and pub and it combines authentic cuisine, a casual atmosphere and proper value for money. Today’s consumer has fast access to information sources through things like the Internet and mobile telephones. This allows him to do comparative value studies and price comparisons. Tips about restaurants can also be found on the Internet.52

Chapter 2 | The Hospitality Industry Trend in the hospitality market 3: Increase in eating out. Out-of-home consumption is increasing. In 2016 the out-of-home consumption in the Netherlands grew to a total of €55 billion euros. That equals a growth of 2.7% compared to the year before, which is mainly due to an increasing need for convenience. The hospitality industry will also benefit from this. Eating out is once again on the rise and both the fast-food sector and the restaurant sector can benefit from this. But the retail industry also increasingly mixes with the ‘eating market’ using smart and innovative concepts.INKIJKEXEMPLAAR ©SVHIn 2016 the out of homeconsumption in the Netherlandsgrew to a total of 55 billioneoufr2o.7s.. That equals a growth . compared to the yearbefore, which is mainly due to anincreasing need for convenience. 53

INKIJKEXEMPLAAR ©SVHMarketing & Sales for the Hospitality Industry 2.6  |  Changes at hospitality establishments A hospitality business will therefore have to adapt constantly to changes in the market. These can be small changes like having a menu printed in braille because there is an institute for the blind located nearby, to bigger changes such as changing the business formula. Naturally, the latter has much bigger consequences for the business and its staff. Legislation in the Netherlands also changes regularly. The regulations regarding the provision of alcohol to young people, for example, has had a big impact on the implementation of the hospitality activities of bars. The hospitality entrepreneur will need to remain up to date with any changes. How can he do that? The entrepreneur is often informed by suppliers about all kinds of trends. The entrepreneur can also read professional literature such as ‘Misset Horeca', and can get additional training or allow his staff to follow a course in order to have the necessary competencies in house. He can also find information on various Internet sites. The bookkeeper or accountant can provide the hospitality entrepreneur with tips and advice. The bookkeeper also knows the company well and usually has multiple hospitality entrepreneurs in his customer base. A clever hospitality entrepreneur will listen to this professional. We will review a number of changes in this section. We will primarily discuss national developments. First, we discuss a nationwide problem and the response to it by hospitality businesses and then we look at two developments within the hospitality industry, namely upscaling and downscaling. Increase in labour costs Hospitality entrepreneurs face the problem that hospitality products are labour intensive and labour costs are increasing. The fast-food industry was able to anticipate this labour cost development. They began producing more efficiently by standardising the production process. This allowed for the hiring of lower educated (and therefore cheaper) personnel. Several self- service concepts have been developed that take full advantage of labour cost savings. The small hospitality business run by a hospitality entrepreneur with his wife and mostly part-time staff is one way to resolve this issue. They use a flexible business operation by using the part-time staff only when really necessary. This saves hours and labour costs.54

Chapter 2 | The Hospitality Industry Upscaling It became increasingly difficult for accommodation businesses to make a profit due to the high demands placed on the hospitality product by the consumer and the business guest. More and more small hotel companies could not meet these high demands and stopped doing business. They were replaced by large hotels with modern facilities. This development is called upscaling. Hotels with many rooms have lower operating costs per room. A larger company has greater purchasing power, so it can charge lower prices. The costs of a telephone exchange, computer and reservation system, 24-hour reception, swimming pool and fitness centre are equally expensive for a large or small hotel. In a larger company, the tasks can be divided so that everyone regularly does what he or she is good at, which means that it is all done more efficiently.UpscalingINKIJKEXEMPLAAR ©SVH Specialists can also be brought in, for example for the kitchen or for management. Another advantage of upscaling is that it allows for better working within the market, because a larger budget is available, for example, or because more guests are welcome. Risk spreading is another advantage of a larger company. Of course, there are also disadvantages. The large gulf between the central management and the employees, for example. This makes it more difficult to motivate the employees in a large company. Another major drawback is that the bond with the guests is not as strong. The tendency to upscale doesn’t just happen in the hotel industry, it also occurs with cinemas and certain restaurant chains.Downscaling Downscaling Downscaling is the opposite of upscaling. Downscaling means the increase of small companies. You can see an example of this in the restaurant sector. Small businesses are much more flexible in business operations in order to deal with increasing labour costs. The consumer also has an increasing interest in hospitality establishments with good quality meals and where atmosphere, ambiance and hospitality come first. Small hospitality establishments can often better fulfil these wishes. The advantage of such a small business is that there is a personal and strong relationship with the clientele. Such a small company can also very easily specialise and focus on a small target group. By being the biggest in this small market, a hospitality establishment has less competition. A small business has the advantage of being flexible and the menu and layout can be quickly adjusted. Small hospitality establishments are also known for their close relationship with the staff, which increases motivation. Disadvantages of a small hospitality establishment are that purchasing will be more expensive and that the hospitality entrepreneur has to be able to do everything with little division of tasks. His staff will need to have a broad knowledge and he will have few specialised staff in service. 55

Marketing & Sales for the Hospitality Industry Significantly more guests in accommodations Dutch accommodation providers had Germans, perhaps also due to the relatively significantly more guests in 2014 than in nice weather. The favourable exchange rate the previous year. This was especially true could also have played a role for British for visitors from abroad. A little over half guests. There were also more tourists of them came from Germany, the United from Oceania (15 percent), Asia and Africa Kingdom or Belgium. The province of (both 12 percent), but their influence on Zeeland experienced the greatest growth in the overall growth was limited due to the the number of guests. relatively low total of 1.3 million.INKIJKEXEMPLAAR ©SVH In 2014, 36 million guests stayed in Dutch In comparison, 3.9 million came from accommodations, such as hotels, holiday Germany alone. The majority (79 percent) bungalows, campsites and group accom- of the foreign guests stayed in hotels. If we modations. This was 6 percent more than in look specifically at hotels, it’s notable that 2013 and was the strongest growth of the there were 1 percent fewer tourists from the last six years. The number of Dutch guests Scandinavian countries. For the first time rose by 4 percent and the number of visi- since 2010 there were fewer guests from tors from abroad was 9 percent more than Russia (2 percent), which could be related the previous year. That is significantly higher to the rate of the ruble and the strained than the growth in the number of interna- political relations. tional travellers published by the UNWTO of 5 percent worldwide and 2 percent in Strongest growth in Zeeland Western Europe. At 17 percent, the increase in guests was by far the largest in accommodations in Zee- Growth was mainly determined by land, distantly followed by Noord-Holland (9 German, British and Belgian tourists. percent) and Zuid-Holland (8 percent). It was The increase in German, British and not just the number of foreign tourists that in- Belgian guests (by 12, 11 and 10 percent creased in these three provinces; the number respectively) had the most influence on of Dutch tourists also grew relatively strongly. growth in 2014. They together accounted The number of guests remained the same for 54 percent of all foreign guests. The in Limburg and North Brabant, and growth periods before and after the summer remained limited to 1 percent in Flevoland. holidays especially saw more Belgians and Sources: | StatLine: Logiesaccommodaties; gasten | StatLine: Hotels; gasten, regio | UNWTO World Tourism Barometer56

INKIJKEXEMPLAAR ©SVHChapter 2 | The Hospitality Industry 2.7  |  Collaboration in the hospitality industry In the previous section, we discussed some important changes in the hospitality industry over the past decades. One of those changes was upscaling and we listed some pros and cons. Small hospitality establishments saw the advantages of those big companies and decided to work together. In some cases, this collaboration is so extensive that you could say that collaboration is a feature of the hospitality industry. Benefits of collaboration By working together with other companies, the hospitality entrepreneur profits from certain benefits that large organisations also have. Hospitality entrepreneurs benefit financially from joint purchasing. Hospitality establishments can work the market more cheaply by creating joint advertising. A festival can be made much grander if several hospitality businesses participate. And so on. When companies work together, it often happens in the following areas: Advocacy This could be something like an entrepreneurial association in a certain city. This association protects the interests of the entrepreneurs in decisions to be made by the town council. A well- known example is Koninklijke Horeca Nederland, which is active at national and municipal levels. Some collaborative partnerships provide training for staff and entrepreneurs. 57

Marketing & Sales for the Hospitality IndustryPurchase combination Purchasing Purchasing together is more economical. A well-known form of collaboration is the purchasing collaborative.INKIJKEXEMPLAAR ©SVH A number of companies combine forces and purchase together. A well-known example in retail is the purchasing collaborative Euretco and BestBuy Horeca Group in the hospitality industry. Sales and promotion When advertising is done together, more can be done, the fixed costs remain the same and only the circulation volume becomes larger. For example, a hotel reservation system for a group of hotels in Friesland that have collectively set up a site with the aim of circumventing the big booking sites, which charge at least 10% commission to hotels. Finance/Administration Administration is not usually one of the hospitality entrepreneur’s favourite tasks. But he often cannot pay an administrator on his own. Some collaborative partnerships have their own administrative office. Personnel Some collaborative partnerships participate in joint recruitment and have a personnel pool. Disadvantages of collaboration There are also some disadvantages associated with collaboration. The entrepreneur loses some of his independence. The entrepreneur has to take the collaborative partnership into account when taking decisions; he hereby has less flexibility. The entrepreneur will also need to invest. Positive results of collaboration do not happen immediately or automatically. You only notice the benefits in the longer term. Collaboration requires effort and sacrifices before results are posted. Types of collaboration There are a number of ways entrepreneurs can work together. In practice, we have horizontal and vertical forms of collaboration. The expression horizontal and vertical refers back to the previously discussed supply chain. When hospitality entrepreneurs (a link in the supply chain) collaborate with each other, you then use the term horizontal collaboration. Horizontal Horizontal collaboration occurs between entrepreneurs who are in the same link within the supply collaboration chain and perform the same function. Examples in the hospitality industry include: Kwalitaria (Franchise Friendly Concepts) and the Alliance Gastronomique (a collaborative partnership of luxury restaurant businesses). Vertical collaboration occurs when two or more links in the supply chain collaborate.58

Chapter 2 | The Hospitality Industry Vertical A well-known example of vertical collaboration is the beer brewery contract in which the brewerycollaboration and the hospitality entrepreneur collaborate financially in exchange for beer purchasing. However, European regulations impose quite a few restrictions on this type of collaboration; we now see that beer companies collaborate with hospitality entrepreneurs by purchasing properties. There are also examples of vertical collaboration within the travel industry.INKIJKEXEMPLAAR ©SVH There are many differences in the individual entrepreneur’s degree of freedom within the various types of collaborations. In the case of a purchasing collaborative, there can be a lot of freedom. The hospitality entrepreneur determines which products he orders via the purchasing collaborative, how his interior looks and what staff he hires. The advantage is, of course, that the entrepreneur can take all decisions independently and rapidly adapt to the market. There are also types of collaboratives where the entrepreneur has little freedom in doing business. The collaborative partnership sets rules on the layout, the product range, personnel clothing and how often the toilets need to be cleaned, to name a few. The most well-known example of this is franchising.Franchising Franchising An entrepreneur devises a good business formula. Instead of setting up branches everywhere himself, he engages independent entrepreneurs who can use the concept in exchange for paying a fee. In order to keep the concept recognisable, these entrepreneurs have to adhere to certain rules. The creator of the concept is the franchisor and the entrepreneur who uses it is the franchisee. Some franchise chains have very strict rules, such as McDonald's. Everything is laid out in thick manuals at McDonald's. McDonald’s employees have to study these manuals and all work must be done according to strict patterns. The decor, the food and the staff uniforms are also regulated. There are fixed suppliers from where purchasing must be done. This strict type of collaboration is very successful. But one weak link can undermine the whole enterprise. This is why the franchisor controls all the locations. If a branch does not comply with the rules, it runs the risk of being forced out. Franchisor The franchisor provides the entrepreneur with not only a product and a brand name, but can also help with the marketing, advertising, management guidance and personnel training. The franchisor takes on special tasks such as market research, place of establishment research, any administration and concept development. The franchise fee usually consists of an entrance fee and an annual percentage of the turnover. 59

INKIJKEXEMPLAAR ©SVHMarketing & Sales for the Hospitality Industry Franchisee As a franchisee, a start-up or established entrepreneur receives a proven business formula. The franchisee is entitled to a geographically exclusive market area and to the use of the brand name. These rights create a good competitive position for the entrepreneur. He can very quickly build up a clientele because the name recognition is already big. The downside, of course, is clear: he will not be able to put his own stamp on his branch because he is subordinate to the system. There are more than a hundred different franchise organisations active in the retail sector. Well-known examples are Hema and Blokker.60

Chapter 2 | The Hospitality Industrycreator of the concept is thefranchisor and the entrepreneurwho uses it is the franchisee.INKIJKEXEMPLAAR ©SVHBelow is a list of all the pros and cons for franchisee and franchisor.Franchisor FranchiseePros Pros1. Little capital required to grow 1. Training programme for entrepreneur2. Rapid growth is possible and staff3. Highly motivated franchisees4. No personnel problems 2. Use of the franchisor’s well-known name and image 3. The franchisor’s support and guidance 4. Less start-up losses 5. Win-win situationCons Cons1. Little control over franchisees 1. High starting capital required2. Weak franchisees can cause a lot of 2. High annual contribution for promotion damage and concept development 3. Less independent 4. The entrepreneur is subordinate to the system 5. The entrepreneur cannot respond flexibly to the local market 61

Marketing & Sales for the Hospitality Industry 2.8  |  Organisations and institutions in the hospitality industry In this section, we will discuss a number of organisations and institutions that you will deal with as a hospitality entrepreneur. A hospitality entrepreneur must register with several organisations, these are called public industry organisations. The hospitality entrepreneur can also be a member of other organisations, which are called private industry organisations.Private industryINKIJKEXEMPLAAR ©SVH organisation Koninklijke Horeca Nederland In 2006, 20,500 of the more than 45,000 hospitality establishments in Netherlands were members of the largest industry association for hospitality entrepreneurs. Koninklijke Horeca Nederland is an association that you can join. It is an example of a private industry organisation. In order to better respond to the specific needs of its members, KHN has created seven sectors: 1. Bars/pubs 2. Chinese-Indonesian companies 3. Nightclubs/hall owners 4. Fast food and ice cream establishments 5. Hotels 6. Restaurants 7. Tourism and recreation Koninklijke Horeca Nederland stands up for the interests of hospitality businesses, for example with the Government, the Lower House, the municipalities and the Chamber of Commerce. KHN members get, amongst other things, a discount on Buma rights and the commission to be paid to credit card companies. KHN’s Information and Advice Centre is the advice centre for the members. This centre can provide information about legal affairs, management and marketing.62

INKIJKEXEMPLAAR ©SVHChapter 2 | The Hospitality Industry The Nederlands Horeca Gilde The NHG is an employers’ organisation for hospitality entrepreneurs of SMEs. There are currently more than 625 members. The Nederlands Horeca Gilde was founded in 1994. NHG’s objectives are limited to: • cost savings; • a workable CLA (CAO); • space for enterprise. RECRON More than 1,700 leisure businesses are affiliated with the Vereniging van Recreatieondernemers Nederland. Recron works with industry groups in order to better respond to the specific wishes of its members. The industry groups for day leisure businesses are: • day-trip destinations, • swimming pools, • saunas/spas, • outdoor sports entrepreneurs. The industry groups for overnight leisure businesses are: • group accommodations, • bungalow parks, • camping establishments. Recron strives for the best possible business environment in the leisure industry and represents the collective and individual interests of the members. RECRON tries to achieve this by, amongst other things, exercising influence on government policy at the national, provincial, local and European levels. Veneca Veneca (Vereniging Nederlandse Cateringorganisaties) is the industry organisation of 13 nationally operating contract catering organisations (providing restorative services based on a duration contract by a professional caterer). With 4,000 corporate catering locations, Veneca members provide over 2 million meals per day at companies, Government offices or institutions. More than 97% of the outsourcing market is provided by Veneca members. At the end of 2005, there were approximately 17,000 employees working for Veneca members, of which 76% were women and 24% were men. The total sales amounted to nearly 1.2 billion euros in 2005. The majority of these sales was achieved in corporate catering, including inflight catering (over 85%). 63

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INKIJKEXEMPLAAR ©SVHChapter 2 | The Hospitality Industry FNV Horecabond The FNV Horecabond is an association that protects the interests of all employees and benefit recipients in hospitality, (contract) catering and (accommodation)recreation. Consultation with employers for improving the position of employees (CLA/CAO) is the primary role of this union. Twenty-eight thousand of them are members of the union. Advocacy would be virtually impossible without the support of many of these members. The FNV is a collaboration of fourteen trade unions, that together account for 1.2 million members and is by far the largest and strongest trade union centre in the Netherlands. CNV Horeca CNV Horeca represents within the CNV Bedrijvenbond the interests of employees in hospitality, contract catering and recreation. The CNV Bedrijvenbond consists of 23 trade groups and organises all employees in the industry, the food and transport sectors. There are 10 other CNV unions in addition to the CNV Bedrijvenbond. Chamber of Commerce The Chamber of Commerce forms the civil status of business. Every hospitality establishment should be registered with the Chamber of Commerce within a week after opening. This registration is required. The Chamber of Commerce is a public industry organisation. It is responsible for maintaining the Trade Register. The Chamber of Commerce is also an information and advice centre for businesses, in particular for the starting entrepreneur. There are 21 Chambers of Commerce in the Netherlands, distributed over 60 offices. The Chamber of Commerce is becoming more active in the market for commercial service. It thereby sells address files to the registered companies. VVV (Tourist Information Centres) The VVV centres are the focal points for tourist information in all regions throughout our country. They also promote the city and region, and take care of reservations for daytime recreation in our country. 65

INKIJKEXEMPLAAR ©SVHMarketing & Sales for the Hospitality Industry NBTC The objective of the Nederlands Bureau voor Toerisme en Congressen is to stimulate the tourist, recreational and business visits to the Netherlands. The NBTC is concerned with promotion, marketing and PR, information services, product development and consumer research. NBTC also has offices abroad for this purpose. The NBTC protects, develops and operates the Dutch brand. Netherlands Food and Consumer Product Safety Authority (NVWA) The Netherlands Food and Consumer Product Safety Authority (NVWA) is the Government organisation that examines and protects the safety of food and consumer products. The Commodities Act (Warenwet) contains the legal requirements for the preparation and handling of food. The Commodities Act is the basis of a large number of 'Commodities Act Decrees'. Preparation and Processing of Foodstuffs (Commodities Act) Decree This Commodities Act Decree contains the requirements for: • the storage, preparation, handling, processing, packaging and transport of raw materials of food and beverages; • equipment and materials used in the preparation and handling of food and beverages; • the layout of 'preparation' locations and business premises; • t he conditions under which food and drink should be prepared, handled and stored. This must only take place in the business premises. The NVWA is also charged with monitoring compliance with the 16/18 regulation relating to the serving of alcoholic beverages. The NBTC protects, develops and operates the Dutch brand.66

INKIJKEXEMPLAAR ©SVHChapter 2 | The Hospitality Industry 2.9  |  Control questions 1 Name the main features of the hospitality product. 2 What businesses (manifestations) make up the hospitality industry? 3 What marketing tools comprise the hospitality mix? 4 What is the difference between supply chain and industry? 5 Name two vertical changes in the supply chain. 6 Name two horizontal changes in the supply chain. 7 State the pros and cons of collaboration in the hospitality industry. 8 What are horizontal and vertical collaboration? 9 McDonald’s is a famous franchise chain. What does this entail? 10 View the websites of Foodinspiration, Koninklijke Horeca Nederland and the local Chamber of Commerce. Answer the following questions: a. What can these institutions mean to a hospitality entrepreneur? b. What are the main categories? c. Where do you find the information for starting up a business? d. What information do these institutions provide regarding the marketing and sales of a company? 67

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Chapter 3 | Business typesChapter 3Business typesINKIJKEXEMPLAAR ©SVH The chapter at a glance 72 3.1 3.2 Introduction  73 3.3 3.4 Drinking establishments 75 3.5 3.6 Para-commercial82 3.7 3.8 Meal supply businesses 84 Food supply businesses 88 Accommodation establishments  92 Catering  95 Questions about the chapter  97 For more information, exercises, answers and supporting material: www.masaho.nl 71

Chapter 3 | Business types Marketing and Sales for the Hospitality Industry part 1INKIJKEXEMPLAAR ©SVHDrinking es- tablishmentCatering Hospitality Meal supplying industryAccommoda- Food supplying tionwww.masaho.nl - Questions: e-mail to [email protected]

INKIJKEXEMPLAAR ©SVHChapter 3 | Business types 3.1  | Introduction After half a year, Peter has visited a lot of other hospitality establishments in the region. What a difference with his own business. Each business has a number of pluses and minuses. His own business, centrally located in the town centre, is close to all the shops. Most of the parking spaces are empty in the evening, so his guests can easily find a place to park. However, when the weather is nice he only has 1 terrace with space for 25 guests. It’s really too dark inside for lunch. What really stands out to Peter about the hospitality establishments in the neighbouring villages is, amongst other things, a rear terrace along a nature reserve with space for 40 people, a nice restaurant at the marina at the mouth of a river and a large terrace with a view of the meadows and cows. In the previous chapter, we saw that there are many different business types in the hospitality industry. This is called differentiation. This differentiation of hospitality businesses is characteristic within the industry. Differentiation is necessary because hospitality establishments don't want to resemble each other in the battle to win favour with guests. Competition forces the hospitality entrepreneur to profile within the market. In this chapter, we look at the different types of businesses that provide drinks, meals, food and accommodation. Following this is a section about a relatively new part of the hospitality industry, namely catering. The goal is for you to gain insight into business types, be able to differentiate between them and that you get used to using certain industry expressions (like hotel garni or conference-resort hotel). 73

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INKIJKEXEMPLAAR ©SVHChapter 3 | Business types 3.2  |  Drinking establishments With drinking establishments, you immediately think of the pub/bar business type. This makes sense since more than half of the drinking establishments are pubs/bars. But big discotheques, party centres/halls and social clubs also supply drinks and so does a canteen at a leisure company or a beach hospitality establishment. Para-commercial companies will be discussed in a separate section. The visitors People usually go to drinking establishments for one of the following reasons: Contact function A cosy atmosphere contributes to conversations between the visitors. Some visitors come to a pub specifically for this reason. Bridging function A drinking establishment bridges the time between different activities. For example, when you finish your meal at a restaurant at 8:00 pm but the movie you want to see doesn’t start until 9:00 pm. You go for a drink somewhere in the meantime. Service function A drinking establishment provides for certain needs of visitors. A nice cold beer or the atmosphere and a chat with the publican. It’s logical that these three functions do not occur separately, but often in a combination in which one or more functions prevail. This can be enhanced by the type of pub that you visit. As a guest at a local pub you expect something different than when visiting a grand café. The publican Nowadays, being a publican is much more than being someone who sells drinks. The publican must be tactful, knowledgeable about human nature, influential and a good entrepreneur. Lack of business acumen is one of the reasons for the high turnover in the pub sector compared with other sectors. Of the 11,000 publicans, more than 1,000 quit every year. The large number of closures is not so strange when you consider that this market is particularly sensitive to trends. The threshold for starting a pub is not that high. 75

INKIJKEXEMPLAAR ©SVHMarketing & Sales for the Hospitality Industry 1 0 reasons not to become a publican 10 reasons to become a publican 10 reasons not to become a publican. 1. It is exhausting and unhealthy. The average publican works 70 to 80 hours a week. And he doesn’t earn much more than paid employment. 2. It is dangerous. You're always around alcohol in a pub! As a publican, try not to drink or at least not to become addicted. Sexual temptations can also be dangerous, especially for the married publican. Also take into account the difficult customers, nicotine and the risk of being robbed by people you trust. 3. It is too cosy. Before you know it, the publican starts to act like the guests: drinking, singing and laughing. But the guests go home and the publican still has to do the cleaning, administration, rotas, etc. 4. It limits your horizon. A publican rarely leaves his business. Over time, you fall out of the loop. 5. You are never the guest. All the businesses visited are assessed from the perspective of an entrepreneur and not as a guest. There are few veterans in the profession who still have a fresh take on the market. 6. Financial temptation. A beginning entrepreneur must always be careful with his money. And not spend all the profits on clothing, cars and a partner. 7. Wanting to get rich quick. There are few entrepreneurs in the hospitality industry who manage to amass a fortune in a short time. 8. You have to learn maths. Publicans often have a well developed emotional intelligence. But to operate successfully, the entrepreneur must also be able to do maths. 9. Vanity as pitfall. Having your own business is no way to boost your ego. An entrepreneur wanting to be seen as successful and attractive can quickly lead to spending habits above their means. 10. You can never do it right. As a publican, you never do it right. Aggrieved customers, jealous colleagues, employees who feel passed over and civil servants, all of whom have something to say about your business. 10 reasons to become a publican 1. Make money in the long term. By living sensibly during the first years and with a good administration and investing responsibly, you can earn a good living after about 10 years or so. 2. Life is more fun with your own business. If you take good care of yourself, colleagues and staff, you’ll have a great job in a work environment that you created. 3. You love people. Being a people person is an important reason for becoming a hospitality entrepreneur. Just be careful not to become too attached to the guests and employees. You are first and foremost an entrepreneur.76

Chapter 3 | Business types 4. You love organising and management. You have to enjoy solving problems. You have to be able to distinguish between the main and secondary issues. You have to be able to develop plans and put them to paper. And so on. 5. The figures are important to you. You can manage based on the figures. Turnover per half-day, productivity per employee, winners and losers in the product range. Having this information means being able to take properly justified decisions. 6. You love coaching. An employee’s behaviour is a reflection of the organisation and the atmosphere in a business, for which the entrepreneur is responsible. 7. Once you’re an entrepreneur, the hospitality industry is no longer a hobby. Entrepreneurship means no more going out in your own business. A good entrepreneur will not have a problem with this. 8. You are responsible for success and failure. The entrepreneur is the key to success and to failure. And that is the great challenge of entrepreneurship. 9. You can cope well with changing circumstances. Seeing opportunities, turning threats into opportunities, not becoming nervous from risks. Flexibility is the magic word for good entrepreneurship. 10. You want to become smarter. At many companies, apathy sets in after a few years. The passion is gone. The product range is the same, the interior shows signs of wear and tear, the customer base doesn’t change . An entrepreneur must want to become smarter in his profession, in management and in the reconciliation between private and professional life. Source: Misset HorecaINKIJKEXEMPLAAR ©SVHLife is more fun with yourown business. 77

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Chapter 3 | Business typesINKIJKEXEMPLAAR ©SVHBusiness types The pub Pubs, which used to be called coffee houses, used to fulfil many functions. They used to be the main places for sharing all the latest news. In those times, the average residents were not welcome. These pubs were only visited by the wealthy. Over the course of time, the focus was less and less on coffee and more on cosiness and good hospitality. There were also other beverages sold in addition to coffee, the food menu became more extensive, and newspapers, the pool table and games like cards and chess were introduced. The coffee house / pub was no longer a local where you went to get your cup of coffee and later drink a beer, but became more of a social meeting place. This is why it’s important for a starting entrepreneur to give his pub a soul and character as soon as possible. The soul of a hospitality establishment What is that anyway? In a street with a number of pubs, there could be one that’s almost empty and another one that is packed full of people. Why does one place get so much more business than the other? Hospitality industry experts speak of a company’s soul. Guests know what it is but find it difficult to define. The soul is in the atmosphere. It’s not just the decor. It may help if the pub is no longer brand new. The idea that there have been many guests over the years gives a hospitality establishment a bit of something extra. Its soul is largely determined by the publican with the personality marketing tool. A good publican is worth their weight in gold. He makes guests feel welcome and important. Brown café These are pubs that, according to the Licensing and Catering Act of 1967, did not meet the minimum design requirements. This may be due to one of the following reasons: the ceiling is lower than 2.6 metres, the floor space is smaller than 35 m2 or the women's and men's toilets are absent or not separated. These small pubs were to close upon the introduction of this law. This would affect 264 traditional pubs in Amsterdam alone. That’s why this law included a permanent waiver for all pubs dating from before 1967 as regards the floor space and ceiling height, but not for the toilets. Nowadays, the name brown café is used for many more pubs/bars than what was previously meant by the term. It has become much more of an indication of atmosphere and, therefore, a business type. Coffee shop Traditionally, the term coffee shop was used for a place where you could drink coffee and tea. This type of hospitality establishment does not require a license under the Licensing and Catering Act because it does not serve alcohol. Nowadays, the term coffee shop is mainly used for places that sell soft drugs. The policy of tolerance has meant that the number of coffee shops has risen sharply over the past 20 years. 79

INKIJKEXEMPLAAR ©SVHMarketing & Sales for the Hospitality Industry The grand café In 1702, the Italian Francesco Procopio Dei Coltelli had a coffee house in Paris. He called this coffee house 'Café', which is why we now use this word for a café. Unlike the other coffee houses in Paris, which were quite soberly furnished, Procopio’s café was sumptuously decorated. His spacious café had marble floors, mirrors on the walls and chandeliers on the ceiling. In addition to coffee, the enterprising Italian also served ice cream, liqueurs and other sweet treats. He was the first café owner with a grand café. Nowadays, a grand café is open seven days a week from morning. It should be big, bright and attractively furnished and radiate a certain grandeur. The grand café must have a full selection of drinks, but coffee must be a big part of the sales. Visitors should be able to order something to eat throughout the day. High demands are placed on a business that is open seven days a week and that serves food and drink. The expensive decoration and many square meters of floor space require a lot of skilled staff. With the atmosphere and pricing come higher expectations that cannot always be fulfilled in practice. People expect a higher-level menu for a grand café than for a snack bar. The huge investment and the high personnel expenses can only be recouped by locating in the centres of large and medium-sized cities. When choosing a location, the accessibility for shoppers and people going out is essential. Due to the high costs a grand café has to focus on a wide public, of which the most important target group is composed of those aged 25 and older. The grand café also gets a lot of visitors aged 55 and older. This target group frequently uses the tourist facilities in the Netherlands. This is why grand cafés can now also be found in villages that have a major recreational attraction. The bistro Hospitality entrepreneurs in student cities noticed that the pubs would empty around dinner time. All the students went to student canteens or home to eat. Not all students returned to the city after eating. This is why many publicans developed their businesses into bistros. A bistro serves meals in addition to drinks in a casual setting at affordable prices. Due to the low prices, bistros have become especially popular in student cities. In addition to students, you now see more and more older people, dual earners and families with older children visiting bistros. A bistro in a city centre usually has three functions. From 10:00 am until 5:00 pm, it’s open for drinks and snacks such as coffee with pastries and lunches. Meal service begins at 5:00 pm and it becomes a drinking establishment after the kitchen closes at 9:00 pm. This product expansion means that bistros are more labour intensive compared to an ordinary pub. This also places higher demands on the management because the quality of the total product has to be maintained (freshness of the products and service of the staff). The bistro’s three functions must stay in balance as much as possible. Once the kitchen sales are more than 50% of the total sales, the business is known as a restaurant and loses its drinking establishment function. A bistro can never achieve the gross profit margin with food that it could by only serving drinks. It is important that bistros have a healthy mix between food and drink, and that the evening function80

INKIJKEXEMPLAAR ©SVHChapter 3 | Business types is retained. If a bistro wants to grow, this would be better achieved by encouraging turnover through food rather than drink sales. Brasserie Many hospitality establishments call themselves brasseries, from a large pub with a lot of different beers on tap to a mid-level restaurant. There is often not much difference between a brasserie and a grand café. Discotheque There are about 350 discotheques in the Netherlands. Examination of the profit and loss accounts of discotheques shows that personnel costs, the cost for DJs and bands, and the depreciation costs are especially high. The depreciation costs are high because the decor is very trend sensitive. We’ve seen a decline in the number of discotheques in our country partly because of the limited opening hours and the high investment in equipment and decor. Party centres and halls Many village centres have traditionally had a pub with a party hall/room. This is where a choir could practise and weddings and parties could take place. You now see increasingly more businesses emerging that focus solely on parties and celebrations. They offer opportunities for family celebrations, corporate outings and events. Parties can also be held with a specific theme such as the Middle Ages, fairy tales, the jungle, etc. The target group must be approached differently than with a pub. The people invited will come. You have to convince the party organisers using leaflets and offers (price quotations). New developments This section would not be complete if we don't discuss some trends and developments. The first trend is that drinking establishments more often try to entertain or involve their guests. Examples include a karaoke bar, an Internet café, a pool bar and a sports bar. Various party halls have entertainment staff in-house. Drinking establishments provide meals more often. The division is becoming less clear. This is not surprising because it ensures an optimal use of space if you offer the opportunity for drinking and dancing in the evening, while giving guests the opportunity to have lunch in the afternoon and also serve dinners until 9:00 pm. Finally, it should be noted once again that drinking establishments are very trend sensitive. Think about formulas like the ski hut and all the concepts around the lounge idea. Every new trend looks for a reflection in the nightlife. It’s sensible for a hospitality entrepreneur to stay up to date on these trends and to see if there is an economically responsible application for a trend. 81

Marketing & Sales for the Hospitality Industry 3.3  | Para-commercial In addition to the usual hospitality businesses in the drinking establishment market, we also see another group of organisations that are active in this market. These are called para-commercial institutions and organisations. 'Para' means in addition to. These are organisations that are not hospitality establishments but that do provide hospitality services. These are organisations that provide hospitality services in addition to their main operational activity. Where ordinary hospitality businesses have a profit target, para-commercial institutions have a different social purpose. Examples of para-commercial institutions are sports canteens, community centres and youth clubs. Unfair competition Many hospitality entrepreneurs think that para-commercial activities are an unfair form of com- petition. And that is not so surprising. Many para-commercial companies are subsidized by the government. For example, they can use their property for a token rent of €1-. And they often use volunteers. This means that they have lower staff costs than the typical hospitality entrepreneur. Para-commercial institutions only need to pay limited VAT and are exempt from tax on profit. In short, they can offer their products much cheaper than hospitality entrepreneurs.Para-commercialINKIJKEXEMPLAAR ©SVH institutions Regulation Municipalities are required to attach restrictive conditions to permits for para-commercial institutions. These restrictive conditions could regard things like hours of operation and promotional activities. It depends on the municipality’s policy whether the para-commercial activities remain manageable. The organisation Koninklijke Horeca Nederland protects the interests of hospitality entrepreneurs. An entrepreneur can get assistance from the Legal Advice department regarding any disadvantage caused by para-commercial activities. Para’ means in addition to.82

INKIJKEXEMPLAAR ©SVHChapter 3 | Business types Recommendations from research on serving alcoholic beverages to inebriated customers/minors (doortappen) The Southeast Brabant region wanted to get insight into the serving of alcohol to inebriated customers/minors in hospitality establishments and para-commercial institutions. This research was drawn up and implemented in 2013 (Franken e.a. 2013). The report is on the STAP website, the Dutch institute for alcohol consumption. Five recommendations have been established for the 21 participating ‘Laat je niet Flessen!’ regarding the continued serving of alcohol situation: Recommendation 1: S et an alcohol serving enforcement plan on behalf of sports canteens, youth centres and hospitality establishments. Parts of this include: • Information on Drinks and Catering Act for sales points • Training supervisors • Drawing up sanctions policy Recommendation 2: H ave a door policy regarding drunkenness. An important part of the door policy is to set up and train doormen/bouncers in the area of drunkenness. Start with the most important hotspots in the region. Recommendation 3: Invest in project-based focus for sports canteens. Research and inform the sports canteens on the rules regarding serving alcohol. Link the results of the research back to the sport associations. Recommendation 4: T rain the bar staff at the hotspots on the prohibition of serving to inebriated customers/minors. Evaluate whether the main hotspots have now received bar training. And to what extent this training specifically addresses the prohibition of serving inebriated customers/minors. Random sampling allows for a number of hospitality establishments to be asked about their experience with the training. A training that focuses solely on the serving of alcohol to inebriated customers/minors can be developed and offered to the hotspots. Recommendation 5: R emeasurement. Evaluate the compliance with the prohibition of serving to inebriated customers/minors over 1 to 2 years using the exact same method. This impact measurement can be used to evaluate the extent that compliance has changed compared to the current research. Source: stap.nl 83

Marketing & Sales for the Hospitality IndustryINKIJKEXEMPLAAR ©SVH 3.4  |  Meal supply businesses There are very different business types classified as meal supply businesses. Take for instance a luxury Michelin star restaurant or a Greek restaurant; they both fall under the umbrella of a meal supply business. This section looks at the different types of businesses and studies some current developments in this sector. A feature of a meal supplier is that it has a license under the Licensing and Catering Act, while food suppliers usually do not have this license and cannot sell strong alcoholic beverages. Turnover Restaurant sector Foodstep monitoring (new categorisation) 2014 Restaurants (national cuisine) 2,195 Restaurants, Asian 762 Restaurants, foreign incl. pizzeria 933 Creperie/Pancakes 154 Bistro 647 Event/Party Caterer 226 Total 4,917 Source: Foodstep (x million euros including VAT)84

INKIJKEXEMPLAAR ©SVHChapter 3 || BBuussinineessssttyyppeess In 2001, there were more restaurants serving foreign cuisine than Dutch-French cuisine for the first time and this ratio has been maintained in recent years. Of particular note is the growth in the number of Thai and Spanish restaurants. Tapas bars are quite popular in the Netherlands. The average floor space has shifted by about 150 square metres since 1995. The small restaurant is usually operated by an entrepreneur/owner and his family. These businesses have benefited from the increase in prosperity and the changed needs pattern of the middle class incomes (the largest part of the population). People who are put off by the image and prices of the classic restaurant go to the small restaurant type instead. This scale reduction in the meal supplying sector allows for specialisation and the hospitality establishment’s own identity. The classic restaurant This business type focuses mainly on the financially influential public, such as the typical businessman and well-off individuals. They are luxury restaurants with an exclusive atmosphere. They only work with high-quality, fresh primary products. The classic restaurant is very labour intensive with high personnel costs. This type of restaurant often has a seasonal speciality menu instead of an extensive menu. The seasonal speciality menu can limit the mise-en-place in the kitchen and more attention can be paid to the actual meals. Offering a few menus and a limited number of à-la-carte dishes, should benefit the quality of the meals. This approach also improves labour productivity. Fine dining means you should always exceed customer expectations. To achieve this, a classic restaurant’s business formula has to meet extremely high quality standards. This is reflected in the quality of the cuisine, the hospitality and the atmospheric environment. But the entrepreneur has 85

Marketing & Sales for the Hospitality Industry to invest a lot of money to achieve this. A constant flow of guests is required to cover the high fixed costs. Many restaurants struggle to achieve a good operating result due to the strong impact of economic developments on the results and the relatively short business season. Word-of-mouth advertising and a lot of positive publicity contribute to a successful business. Getting a Michelin star is a good way to get the attention of the press.INKIJKEXEMPLAAR ©SVHTheme restaurant The mid-level restaurant Mid-level restaurants are all meal supply businesses at a level between classic (luxury) restaurants and bistros. Many mid-level restaurants provide the guest with a specific experience using a theme. The theme is supplemented by the decor and service in combination with the meals and method of preparation. This will put the guests in a certain mood. Theme restaurants often invoke a sense of nostalgia in guests. This is why a pancake restaurant is often old-fashioned and traditionally decorated and tries to provide an authentic Dutch feeling. Other theme restaurants, such as Italian and Greek restaurants, owe their success to reminding guests of holiday memories. Many mid-level restaurants have a standardised kitchen, which saves on staff costs and better preserves the quality. What is notable about theme restaurants is the personal approach to the guest. A theme is derived from: In the Netherlands, we have seafood 1 . The type of cuisine restaurants, pancake houses, steak 2. The country of origin restaurants, pizza restaurants, and so on. 3. The method of preparation A Chinese restaurant or a Greek restaurant and a Mexican restaurant. For example, a grill restaurant or a wok restaurant.86

Chapter 3 | Business typesNumber of Locations Restaurant Sector Foodstep monitoring (new categorisation)INKIJKEXEMPLAAR ©SVHRestaurants (national cuisine)2014 Restaurants, Asian 4,589 Restaurants, foreign incl. pizzeria 2,753 Creperie/Pancakes 3,511 Bistro Event/Party Caterer 452 Total 3,260 1,909Source: Datling, Foodstep 16,474The roadside restaurantThe Dutch are increasingly mobile. It is quite common for a household to have multiple cars. Alogical consequence of this mobility and increased leisure time is that we are more often on the goand want to use facilities along the way.This group of businesses divides their clientele into three groups: truck drivers, business/salesrepresentatives and recreational travellers. These three customer groups have specific needsand exhibit different consumption habits. While the truck drivers appreciate a homey feel, restand relaxation opportunities, the recreational traveller wants clean toilets, play opportunities forchildren and quick service.Some entrepreneurs choose to split their roadside restaurant into multiple business formulas sothat it offers something for everyone. This is why many roadside restaurants have a self-servicerestaurant and an à la carte restaurant.The fast food market is also increasing its presence in the roadside market, as we see from the riseof the number of McDonald's McDrives along the motorways and the food concepts in servicestations. 87

Marketing & Sales for the Hospitality Industry 3.5  |  Food supply businesses The cafeteria The cafeteria is an example of a food supply business. The origin of the cafeteria business type is different than you might expect. Cafeterias started from bread and pastry bakeries. The bakers made croquettes and sold them uncooked to customers. Clever bakers soon realised that they could earn even more if they also fried the croquettes for immediate consumption. But bakers were only allowed to be open from 9:00 am to 6:00 pm. And it was precisely after those hours that they could sell a lot of croquettes. This is when food automats were designed. Customers could get their warm croquettes from the automats at any time. It goes without saying that increasingly more products were sold in automats because if it works for a croquette then it can also work for a hotdog. For a long time, cafeterias have also felt more connected to the retail trade than with the hospitality industry. Today, many cafeterias have seating and they also provide meals. Some even call themselves bistros. Some cafeterias are busy working together to boost the image of the cafeterias. This is how the horizontal collaborative partnership Kwalitaria came about. FEBO In 1941, FEBO registered with the Chamber of Commerce in Amsterdam as bread and pastry bakery. The name FEBO comes from the Ferdinand Bolstraat in Amsterdam, where the first branch was located. After a few years, FEBO started to expand its range with homemade salads and croquettes to eat on the spot or for take-away. This became such a success that it was decided to close the bakery and turn it into a kitchen and change the store into food automats. The concept of 'see, open and go' was particularly successful. FEBO has since opened about 60 branches, of which a large majority (54) are franchise related.INKIJKEXEMPLAAR ©SVH Efficiency The fast-food restaurant The need for a quick meal arose in America. This gave rise to a business type with the emphasis on efficiency. The aforementioned standardised service process made sure that the guests, as with a cafeteria, got their food in no time. Fast-food restaurants were not only notable for their speed, but also for their crystal clear layout that added to the image. The fast-food concept was not an immediate hit in the Netherlands. But the combination of fast-food and the motorway turned out to be a gold mine.88

Chapter 3 | Business types A fast-food restaurant must ensure that: a. It makes a big impression. A fast-food restaurant can be identifiable for the guests through the use of colours, signage and location. b. The products are recognisable and of consistent quality. Because many chains are active in this market, they should ensure that quality is the same at every branch. Because you are only as strong as your weakest link. c. The service is quick. There is a reason it‘s called a fast-food restaurant. Guests expect to be helped quickly and don’t want to wait longer than five minutes.INKIJKEXEMPLAAR ©SVHPilot store The chains operating in the fast-food industry (McDonald's and Burger King) are often large organisations. They can invest a lot of money in marketing. They employ marketing experts who figure out how a company should look in order to appeal to the target group. What products and service may be required and what prices can be asked? Pilot stores are often used to improve the business formula. Pilot stores are test companies where a new business formula or part of a business formula is tested.Facility hospitality Facility hospitality services services The offer of drinks, meals and food on the consumer market does not only come from hospitality establishments. Almost all hospitality facilities in the world of sports, culture and well-being are usually operated in-house. These so-called facility hospitality services are also increasingly encountered in retail (e.g. garden centres) and petrol stations. To clarify: the phenomenon in which hospitality services are offered and operated in organisations with original core activities other than hospitality, are called facility hospitality services. Facility hospitality services take place in: • retail (e.g. La Place in the V&D); • petrol stations (C'est Pain in the Esso stations); • cultural institutions and cinemas; • traditional sports institutions (a canteen in a gym); • new types of sport and leisure services (restaurant at an indoor ski slope). 89

INKIJKEXEMPLAAR ©SVHMarketing & Sales for the Hospitality Industry Délifrance The first Délifrance branch opened in 1983. A French baker thought that the time was right to introduce real freshly baked French bread in the Netherlands. There are now over 75 branches in the Netherlands (they call them ‘Boulangerie et Café-Français'-branches) and there are also approximately 75 Délifrance Corners in Esso petrol stations. This French formula has also been a hit in other parts of the world, mainly in Europe and Asia. But there are also branches on the Antilles and in South Africa. Délifrance is a franchise concept, where the franchisee pays for services of the parent company. The entrepreneur has the right to use the name and get support and training from the parent company. The location must always be decorated in the house style. The entrepreneur must pay a €15,000 entry fee to start a branch. The entrepreneur must also pay 6% of the turnover every year, excluding VAT. The Délifrance business concept: Product In principle, all branches are free in their choice of product assortment. But the branches do have a purchase obligation for the bakery products and ingredients. These products must be purchased at designated distributors or the parent company. All bread products are supplied partially pre-baked and then finished at the branches. The rolls are long and narrow in order to maintain the French image. The consumer can buy rolls to eat on the spot or to take away. Personality Délifrance staff should have a nice, fresh appearance. Hospitality experience or diplomas are not a requirement. There are several internal training opportunities. Many locations have couples working as the entrepreneurs, which reduces the labour costs. Presentation Délifrance works with natural products, which provides a healthy alternative to fast-food chains. The branches are decorated in warm contemporary colours. The exteriors of the branches also have the same fresh look. Light and dark yellow striped awnings and a wide façade in the same colours lets passers-by know that they’re at a Délifrance. Consumers must be able to get a good look inside. This should encourage accessibility. Take-away products are sold from a window along the side of the business with the most foot-traffic.90

Chapter 3 | Business types Location A new Délifrance branch must be in the middle of a city or shopping centre or in a place visited by a lot of people, such as a residential boulevard. Most of the businesses generate the most turnover between 11:00 am and 2:00 pm. A 'Boulangerie et Café-Français’ establishment must be bigger than 100 m2 and have more than 50 seats. Promotion The company sees the Délifrance Corners in the Esso stations as advertising. Délifrance makes its presence known at these stations by using lit displays and signs. This is also good for the brand recognition. Délifrance does not advertise in daily or weekly newspapers. It does use company flyers, posters and special offer signs. The franchisee can use the name of Délifrance for own promotional activities. Price The entrepreneur may determine his own selling prices. However, most entrepreneurs use the same prices. The prices for products that can be enjoyed on site are somewhat higher than the prices for products that are consumed elsewhere. However, the gross profit margin is higher for the products sold 'at the window'. This is because there is no need for servers, tables are not used, there are no dishes to be washed, etc.INKIJKEXEMPLAAR ©SVHAn entrepreneur may determinehis own selling prices. 91

Marketing & Sales for the Hospitality Industry 3.6  |  Accommodation establishments The history of the hotel market shows that each means of transport brings its own form of guest accommodation. The stagecoach was designated for inns, trains led to station hotels, the arrival of the automobile led to the building of motels, and planes led to airport hotels at most airports.INKIJKEXEMPLAAR ©SVHManagement contract Almost all the major hotels are now owned by investment companies. They let the hotels to hotel chains or operate them at their own expense using international hotel management companies. These companies manage the hotel, which uses the name, the business formula and the reservation system of the chain. The financial compensation is set out in a contract based on a predetermined management fee. This is called a management contract and is quite similar to franchising. An entrepreneur who wants to manage a hotel will pay particular attention to its location. 'Location, Location, Location' is a well-known saying of Hilton, which he used to explain the success of the Hilton hotels. There are five geographical options for hotels: 1. the roadside hotels (motels along motorways); 2. the airport hotels; 3. the city centre hotels; 4. the suburban hotels (at the outskirts of the city, business parks and along perimeter roads); 5. the conference-resort hotels. Roadside hotels Roadside hotels are more commonly known as motels. You’ll find a lot of roadside hotels along well-known motorways (such as the 'Route de Soleil'). These hotels will often have signage along the way to advertise their presence and how much a night’s accommodation costs. These roadside hotels are generally members of a hotel chain such as Formule 1 or Novotel. Aligning with a large organisation has the advantage of major brand awareness. The prospective guest sees a specific hotel along the way and generally knows what to expect. A brand name increases the chances of people stopping. Airport hotels Starting a hotel at an airport is appealing because air travel is popular and aircraft arrive and depart at all times of the day and night. Just like along the motorway, there are a lot of chains located at airports. Well-known chains that can be seen at many airports include: Hilton, Mariott, Sheraton, Holiday Inn and Crown Plaza. The idea is that a certain brand gives the guest certainty about the facilities and the luxury level of the hotel. This certainty is especially welcome for the guest staying abroad. In regions with a strong business market, we see many more luxury hotel chains around airports than in regions without this business market.92

INKIJKEXEMPLAAR ©SVHChapter 3 | Business types City centre hotels Many small guest accommodations are closing in cities. The reasons for this include outdated accommodation, non-compliance with the safety rules, lack of facilities, parking problems and not enough rooms to generate a profit. Large modern hotels filled the resulting lack of hotel beds. In 2001 the number of hotels remained the same but the number of rooms increased by 15%. The advantage for a hotel to be established in the city centre is that there is always a stream of visitors to a city. It goes without saying that the success of the hotel partly depends on the attractiveness of the city. The appeal of certain cities is trend sensitive. The term ‘downtown’ is often used abroad when referring to a hotel that is located right in the city centre. Suburban hotels It's difficult to start a new hotel in a city centre. The ground is often expensive, parking spaces are rare and, in some cities, the city centre is full of old buildings. A hospitality entrepreneur could then opt to open his hotel on the outskirts of the city. He can sell the rooms cheaper than in the city centre. Guests can park at the hotel and then use public transport. A particular difficulty for suburban hotels is to get the guest inside in the first place. Affiliation with hotel chains through, for example, a franchise or management contract and good contacts with tour operators can help with this and make it possible to have a profitable business. Conference-resort hotels. A hotel in a rural or wooded area is attractive for tourists. Especially if the hotel also offers all kinds of additional facilities like a swimming pool, tennis courts and a restaurant. But the tourists are only there during a few months of the year. The hotel is basically empty the rest of the time. Smart hoteliers developed facilities for conferences and meetings. This was a golden opportunity because it allows for the full use of the hotel’s capacity. In the months of September to June, the focus is on the meeting market and tourists mainly come on the weekends and during holiday periods. 93

INKIJKEXEMPLAAR ©SVHMarketing & Sales for the Hospitality Industry Ibis Hotel How can a hotel distinguish itself from other hotels? One hotel will distinguish itself through luxury, or with a really special kitchen or through pricing. Ibis Hotels distinguish themselves through the right price for a no-frills product. Ibis does not use special promotions to tempt guests to stay with them. The price is kept as low as possible and the product as simple as possible. This is what guests can expect. Ibis is a subsidiary of the major French hotel company Accor, which also runs the Formule 1 hotels. Ibis’ business formula is characterized by: Product An Ibis Hotel consists of hotel rooms of at least 16 m2. Every room has a television and a bathroom. An Ibis Hotel has a restaurant with limited opening times. There is a 24-hour snack service. An important part of the formula is the 15-minute guarantee. A complaint must be resolved within 15 minutes. If this does not happen, the guest gets his money back. Presentation The Ibis hotel group has a recognisable house style that is consistently reflected in the exterior of the hotel building, the interior of the rooms, the presentation of the staff, the menus, etc. Personality The 15-minute guarantee requires the employees to be enterprising and resourceful. Employees need to be able to resolve minor technical problems themselves. Most complaints are about the TV remote or a broken lamp. Location An Ibis Hotel must be easily accessible by car. An Ibis Hotel must have at least 80 hotel rooms. Ibis Hotels can be found in cities, along the motorway and at airports. There are 12 locations in the Netherlands. Promotion Ibis works on brand recognition through the recognisability of the logo and the clear signage in the cities. This is supported in the Netherlands with radio advertising. Ibis wants to have as much direct contact with guests as possible and use intermediaries as little as possible. Price The ‘prix juste’, the right price for a no-frills product. Ibis works as little as possible with price discounts. By keeping the product simple, this low price can be maintained. The prices are determined separately for weekend and weekday stays. Guests can purchase an Ibis card, and receive a 10 percent discount on each visit.94

Chapter 3 | Business types 3.7  | Catering Providing meals does not only take place within the traditional hospitality establishment, but also in schools, companies, institutions, aircraft, etc. Snacks and drinks can also be provided at festivals and parties. This is a whole new branch within the hospitality industry: catering.INKIJKEXEMPLAAR ©SVHCatering Catering is when food and/or drink provision is outsourced to third parties. The activities of a catering company can range from a business that has someone provide the sandwiches to providing everything for a 25th wedding anniversary in a marquee. A caterer often specialises in a certain branch of catering. The five catering types include: 1. Industrial catering More and more companies want a company restaurant but do not want to manage it themselves. They would rather hand it over to specialised businesses, called food contractors. This type of catering has grown tremendously in the past 20 years. This has to do with, amongst other things, the massive return of organisations to their core tasks. Security, garden maintenance, administration and catering are divested and outsourced to others. Of all companies with more than 200 employees, more than 50% have outsourced the staff restaurant.Food contractor A food contractor is a specialised business that supplies the raw materials/ingredients, prepares the meals and manages the staff restaurant. A food contractor usually takes on the following tasks: • providing staff, including management; • assortment policy and menu composition; • purchasing and decoration of restaurant; • preparing the meals; • taking care of the sales; • budgeting and administration; • training the staff. In practice, the caterer manages a company restaurant and all associated services at the client’s expense and risk. This is comparable to a management contract as discussed previously in the accommodation establishments section. Sodexo and Eurest are well-known caterers in this area. The industrial caterers are united in the Veneca organisation. 95

Marketing & Sales for the Hospitality Industry 2. Institutional catering Catering for people residing in institutions such as hospitals, retirement homes and service flats is also called institutional catering. 3. Transport catering Transport catering is catering for the crew members and passengers on planes, buses and trains. Most Dutch airlines have their own catering organisation, which also caters for a large number of foreign airlines. Bus catering is becoming increasingly popular for coach tours to Spain, for example. 4. Party and event catering This type of catering provides snacks, meals and beverages to small or large groups of people on an occasional basis. Party catering includes a comprehensive package of products and services, from providing the idea to taking care of the total organisation. Maison Van den Boer and Martinair are well-known names in this area. More and more cafeterias, restaurants and hotels are acting on this fast-growing market. Companies and individuals use these services. 5. Hospitality catering Some hospitality establishments, especially the hospitality services at sporting facilities, do not have enough kitchen capacity to prepare meals and snacks themselves. For example, a bar-party room company or an indoor tennis centre. This type of catering provides the meals for these companies, so that there is no need to expand the kitchen capacity.INKIJKEXEMPLAAR ©SVH hAowsphiotalelintyewindbruastnrcyh.. within the catering96

Chapter 3 | Business types3.8  |  Questions about the chapter1 Drinking establishments in the hospitality industry have a number of functions including contact, bridging and service functions. Under what function do the following activities fall? Briefly explain your answer.INKIJKEXEMPLAAR ©SVHActivity Function WhyCelebrating your birthday with your friendsTelling your marital problems to the bartenderHaving a drink in Hotel Americain after dinnerand before the movie startsInformal drinks with your colleagues at the localpubResting after the first round of shopping2 See the ten reasons regarding whether or not to become a publican. What qualities should you have as a publican in order to keep up with this type of work? State five qualities: 1 2 3 4 53 Acanteen at the local football club is an example of a para-commercial business. As of 1 January 2014, all municipalities had to start regulating this type of business. See www.vng. nl/onderwerpenindex/veiligheid/drank-en-horecawet/nieuws/gemeenten-aan-de-slag-met- verordening-paracommerciele-instellingen. What is the purpose of this regulation and why should a municipality be involved with it? 97

Marketing & Sales for the Hospitality Industry 4 State the main characteristics (at least three) of the following business types:INKIJKEXEMPLAAR ©SVHBusiness typeCharacteristics Neighbourhood pub Bistro * Grand café * Nightclub * Party pub * * * * * * * * * * * * 5 This chapter covers a number of new developments and trends. a. What are trends? b. What developments or trends are listed here? c. Do you also know of any hospitality establishments that use trends? Which ones? And what trend do they use? d. See foodinspiration.nl. What is in the Food Inspiration Trend Report? The Food Inspiration Trend Report is indispensable for marketers, executives, managers, concept developers, educational institutions, food service professionals and consultants working in the food service industry.98

Chapter 3 | Business types6 What are the agreements (at least four) of the following business types in the meal and food supply sectors?Business type AgreementsClassic restaurantMid-level restaurant *Roadside restaurant *INKIJKEXEMPLAAR ©SVH * *Business type AgreementsCafeteriaFast-food restaurant * * * * 99

INKIJKEXEMPLAAR ©SVHMarketing & Sales for the Hospitality Industry 7 What type of hotels does the book list based on geographical possibilities? 1 2 3 4 5 8 What five types of catering are listed in the book? Provide an explanation for each type. 1 Explanation: 2 Explanation: 3 Explanation: 4 Explanation: 5 Explanation:100