Hospitality
`
`ounclaiions
`
`and
`_ Practices
`
`\$a:‘\aL«
`
`.
`
`
`
`Robert . Lewis
`" RiC11a,rc1E.C11am}Jers
`Harsha
`C11ac120%
`
`%
`
`%
`
`L
`
`Starbucks, Ex. 1072
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`
`Marketing
`Leadership
`in Hospitality
`
`
`
`FOUNDATIONS AND PRACTICES
`
`Second Edition
`
`ROBERT C. LEWIS, Ph.D.
`Professor of Marketing and Graduate Coordinator
`School of Hotel and Food Administration
`
`University of Guelph, Guelph. Ontario
`
`RICHARD E. CHAMBERS, MBA
`President
`-
`
`Directional Marketing
`New York, New York
`
`HARSHA E. CHACKO, Ph.D.
`Associate Professor
`School of Hotel, Restaurant and Tourism Administration
`
`University of New Orleans, Louisiana
`
`VAN NOSTRAND REENHOLD
`I®P A Division of International Thomson Publishing inc.
`
`V
`
`I
`
`
`
`New York - Albany - Bonn - Boston - Detroit - London - Madrid - Melbourne
`Mexico City - Paris - San Francisco - Singapore - Tokyo - Toronto
`
`1
`
`ii
`
`Starbucks, Ex. 1072
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`
`
`Copyright © 1995 by Van Nostrand Reinhold
`P A division of International Thomson Publishing Inc.
`I® The ITP logo is a trademark under license.
`
`Printed in the United States of America
`For more information, contact:
`
`Van Nostrand Reinhold
`
`New York, NY 10003
`
`International Thomson Publishing Europe
`Berkshire House 168-173
`
`London WC 1V 7AA
`
`Thomas Nelson Australia
`
`South Melbourne, 3205
`Victoria, Australia
`
`1120 Birchmount Road
`Scarborough, Ontario
`
`International Thomson Publishing GmbH
`Konigswinterer Strasse 418
`53227 Bonn
`Germany
`
`International Thomson Publishing Asia
`221 Henderson Road
`Henderson Building
`Singapore 0315
`
`International Thomson Publishing Japan
`Hirakawacho Kyowa Building, 3F
`2-2-1 Hirakawacho
`Chiyoda—ku, 102 Tokyo
`Japan
`
`International Thomson Editores
`Campos Eliseos 385, Piso 7
`Co1.'Po1anco
`11560 Mexico D.F. Mexico
`
`All rights reserved. No part of this work covered by the copyright hereon may
`be reproduced or used in any form or by any means—graphic, electronic, or
`mechanical, including photocopying, recording, taping, or information storage
`and retrieval systems»-without the Written permission of the publisher:
`
`12345678910EDW-AA0100999897969594
`
`Library of Congress Cataloging-in-Publication Data
`
`Starbucks, Ex. 1072
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`
`
`
`
`
`
`Channels of Distribution
`
`681
`
`rates, the travel agency role in meeting plan-
`ning is bound to increase.
`
`The Travel Agent Role
`
`The travel agent is faced with a blizzard of
`changing conditions in the marketplace. Air-
`lines, collectively, are reported to change fares
`as many as 80,000 times a day. To recommend
`a hotel, the agent needs knowledge of location,
`rates, amenities, dining, entertainment, park-
`ing, ground transportation, recreation facilities,
`and more. The technology of the industry is
`changing at a furious pace in an attempt to keep
`up with all this information. Thus, the travel
`agent relies heavily on systems we have pre-
`viously discussed, plus some others.
`Agencies that were on manual systems only
`a short time ago, now have sophisticated data-
`base equipment to manage their bookings. (Al-
`most 100 percent in the United States, but not
`so in Europe and Asia, as shown in Table 16-1.)
`Figure 16-23 shows one example of such sophis-
`tication. Other automated systems are, in fact,
`largely reservation terminals provided by the
`airlines (e.g., Apollo by United Airlines and Sa-
`
`.ln the United States, 96% of all agencies are automated. They make $10.5 billion yearly in
`kings, half of which are CRS transactions.
`
`. ilropean agency market consists of 40,000 agency locations,. producing $9 billion in hotel
`.-Six countries account for 75% of these agencies: the UK, Germany, France, Italy, Spain,
`den. Mega-agencies dominate and tend to specialize in either business or leisure/passage
`y 40% of agencies are automated. In the UK, 22% of agents are automated. Germany is
`_pe’s most technologically advancecl—-~70% are equipped with Amadeus’ Start System. Only
`el bookings in Europe are made via CRS.
`
`Pan, Hong Kong, Australia, and Korea—account for 80% of all travel activity The
`market is dominated by mega-agencies. Four account for half of the travel business. Japan
`J1 is the world’s largest travel agency, followed by Kintetsu, Nippon Travel Agency, and
`__ Automation is clearly on the rise, yet few hotel bookings are conducted through CRS.
`Japanese agencies have CRS systems, only 30-40% outside Japan have access to CRS.
`
`‘-113. Hotels, November, 1993, p. 82. Courtesy of Hotels.
`
`
`
`
`
`riety of hospitality needs. The travel agent is
`compensated in the form of a commission, usu-
`ally based upon the rate of the service pur-
`chased. As a rule of thumb in most cases, a 10
`percent commission is paid to travel agents who
`. book cruises and hotel rooms, while airlines and
`' ental car firms pay a lesser rate. '1}:-ivel agen-
`ies also form consortia, using the strength of
`any individual agencies to combine marketing
`nd negotiating clout as a channel member. As
`channel of distribution, the travel agent is
`econd to none. Table 16-1 shows the status of
`
`_1-lmarily oriented toward the individual trav-
`ler, be it for business or pleasure This practice
`3 been changing, and agents are handling
`re meetings and group itineraries each year.
`The travel agency also is more of a full—service
`annel whereby hotel-booking may be iiiciden-
`5to the airline and ground transportation al-
`ly arranged. Because of this, travel agencies
`actively soliciting corporate meeting ac-
`ts, especially when they have previously
`dled the company’s
`individual business
`1 By promising more clout in negotiating
`
`
`
`

`
`
`
`lvlarheting Manager
`
`“V i_:raveLOCiIx GUI technology accesses databases that can be coupled with
`/ 1
`"Ix" visual presentation that educates the user by providing information
`/ ‘\descrihed in the "thousand words“ ofa picture.
`
`‘\
`
`l\\
`
`.«
`
`
`
`
`_ - Ruse iiiieesnn
`
`in: ii!
`
`
` 1 Dnnltln in ulna‘: : um
`
`-‘
`-
`-
`:m1nnu:,,.-,
`Fiesnrvaunns Enliy
`
`i:an|u:L'rm'ni.==.s mun llnn Elullllur
`
`n1r. HM
` n7ai1n4
`
`Emu-ms ilwncarth hiufl. sunn an
`
`11:
`lflmuusiln
`
`
`A1750
`Uafuiu
`
` cnmmua»m
`
`
`
`
`
`
`
` II-J lm\'i:|.DOlX 195!
`
`FIGURE lé-23 ’I'raveLOG1X’s CRS technology
`
`bre by American Airlines), creating a direct link
`between travel agents and the airlines control-
`ling this distribution channel. Figure 16-24 is a
`sample directory page from the Sabre system.
`Like the hotel systems, these have been called
`central reservations systems (CRS), but are
`now being called global distribution systems
`(GDS). Table 16-2 shows GDS computer screen
`data that travel agents would view for the
`
`offering thousands of packages, incentives, an
`varying rate structures to varying people 8-
`varying times, makes booking a difficult taska __
`
`The rental car industry has followed Suit
`with the airlines and hotels, offering special’
`promotions and incentives every day. Many of‘
`these promotions have conditions attached to
`them, such as booking an airline seat 30 days in
`
`myriad
`
`

`
`
`
`Channels of Distribution
`
`683
`
`SABRE ASOCIATES RFERENCE 1994
`
`
`HOTELS
`
`
`
`LIIIIIOUSINE SERIVCES
`
`.......Y:'EXT1'I.IBC
`BOSTON COACH
`...Y:‘EXTfOCB
`CAMELOT EIAFITHFIOFP...
`...Yp‘EXTfCYC
`CAREY INT'L LIMOUSINE
`.,.N'.IGOTHAM
`GOTHAM LIMOUSINE..."
`NIPPON TRAVEL AGENCY ...Y1’EXT.‘NFN
`N'_ILlMO SERVICE NJ
`NIILEMO SERVICE LAX
`NZILIMO SERVICE F-IDU
`N“lL.|MO SERVICE SJU
`
`"NATIONAL TOURISM
`
`OFFICES
`
`ANTIGUA
`AUSTRALIA
`AUSTRIA
`BAHAMAS .
`BARBADOS
`BARBUDA .
`BELGIUM ..
`BERMUDA ..
`BRITAIN ..
`CHINA .
`CURACAO ..
`DENMARK ..
`FINLAND
`FRANCE ..
`NTFRANCE
`
`GERMANY...
`N',IGE.FIMANY
`HAMBURG .
`NZIHAMSUFIG
`HOLLAND
`N‘.INE'I-IERLANDS
`ITALY.......
`NVITALY
`JAMAICA
`NWAMAICA
`MALTA.....
`NVMALTA
`MEXICO.....,.
`NTMEXICO
`MARTINIQUE ..
`NTMAFITINIOUE
`NETHERLANDS
`N'.INETHEFILANDS
`NEVIS
`N'.'NE\/IS
`N'lNEW ZEALAND
`N'.‘FI'IILIPFINES
`PHILIPPINES
`TPOHTUGAL
`PORTUGAL ..
`..N'.IS'I” KITTS
`SAINT KITTS.
`‘IST MARTIN
`SAINT MARTIN.
`SINGAPORE.
`NZISINGAPORE
`
`SPAIN .......
`'fSPA|N
`SWEDEN ......
`I.N'lSWEDEI‘-I
`SWITZERLAND.
`..N'.’SWlTZEHL.AND
`THA|LAND............
`..N'f|'HA|I..AND
`UNITED KINGDOM ..
`..N'JBHlTAIN
`
`N'lANT|GUA
`N‘I-AUSTRALIA
`NTAUSTFIIA
`NTSAHAMA5
`N';‘SAFIBADOS
`NZIBARSLJDA
`NZISELGIIJM
`NVBERMUDA
`NTEFIITAIN
`
`
`
`
`
`
`
`
`
`
`
`HOTELS
`
`TFIAVELODGE HOTELS
`
`YIHHLIZTL
`
`Travelodgc.
`
`ULTIMATE RESORTS ...............Y.'I'IHI.NUR
`
`UTELL INTERNATIONAL
`
`YIHHLIZUI
`
`S‘
`
`UINTERNATIONAL
`
`......YIHHL.ZVN
`
`.tYlI'|HIJXVA
`..YIHHL:'ZVI
`..Y:‘HHUOW
`
`VACATION NETWORK
`THE VAGAEIOND INNS
`VENTURE INNS .......
`VIDAFEL, RESORTS.
`VILLAGE RESORTS.
`
`..\’I'HHL:'ZVFI VILLAS BY MARRIOTT
`
`..Y|'I'IHUI'IMB
`
`YIHHUZVF
`VII-" RESERVATIONS
`VIP RESERVATIONS INC.
`cas cons: VP
`all mmnes Ham: Resorts
`‘ LOCATIONS INMOHE DIANGCXJUNTRIES
`I INSTL‘VI'CDNFIRM.lTICN.S...D'm1 LIrIkALLAMm$
`I GUAfiANTEEDCDMMIS£laM..Pa;me1rPro9va-ns
`
`h‘U'l7ughCID'Catp Woda'TmvnIPaymenlPrDgram WESTIN I-IOTELS.t.t.....
`
`YIHHLIOWI
`.Y:‘HI-IUOWM
`WESTMARK HOTELS
`‘(II-IHUHWS
`WICHITA INN SUITES...
`WORLD HOTELS......
`WYNDHAM HOTELS
`
`MUTUAL OF OI-IAMA
`‘IIEXTIOMLI
`
`Mutual
`Wflmaha.
`Ensuranr.-e Company
`
`
`
`
`
`VOYAGEUR 4]
`
`
`
`ITT
`
`SHERATON HOTELS
`WHI-ILIZSI
`
`..Y1’I-IHIJUSJ
`SIGNATURE INNS ..
`.,Y!I"IHLII-ISY
`SKYLINE HOTELS ..
`UYIHHLJZOI
`SLEEP INNS.
`..Y;'I'IHi..-'XLX
`SMALL LUXURY HOTELS AI
`SONESTA HOTELS...................YIHI-ILIZSO
`SOUTHERN PACIFIC HTLS .....Y1'HHLJ‘USP
`SOUTHERN SUN HTLS .t
`h4YmHL|'H5U
`SR5. HOTELS
`..Y!I-IHLDISFI
`STAKIS HOTEL GROUP ..
`..YIHHL.IHBS
`STERLING INTI.
`..Y.'I‘IHL.IOWFI
`STDUFFER HOTELS
`.Y.'I-IHUXST
`SUMMEFIFIELD SUITES .
`.Yn'HHLIOES
`
`SUMMIT INTERNATIONAL
`
`Y}!-IHUXLO
`
`SUXVYVXIT
`INTERNATIONAL HOTELS
`
`SUPRANATEONAL LTD
`YIHHUHSX
`
`
`
`
`
`(>
`25}
`supranational
`Hotels
`
`j. "‘ ....._
`
`
`
`.Y;‘I~IHLt'CEH
`
`SUSSE
`SWALLOW HOTELS.
`SWISSOTEL
`THISTLE HOTELS.
`TFIAVAMEFIICA......
`TFIEFF HOTELS .........
`TRUST INTL HOTELS
`TUFIKEY DIRECT INTL.
`
`
`
`
`
`FIGURE I6-24 Page from a Sabre system directory
`
`.42 Choices, whether to take airline, ho-
`_9I1I3a1 points) and you have an incred-
`P16: problem for the ordinary traveler.
`“V61 agent tries to ease this burden
`
`and may well earn his or her commission on
`this basis alone.
`
`For some time, travel agents were considered
`necessary evils by both the airline and hotel
`
`
`
`

`
`V_ " -_ Cfiinpletéljff.r¢_Vis.¢§_-'.fo="réflegt tI1¢'f_:11:niq@e1y:cfimpetitive marketplace of the7 .'
`-_
`_ fi_inéfié8,I5
`2'fil‘_itj2;' Sec__ond_ _Edz'n'_on, off_e1'_s\compre—-
`-- %h¢%njs;v¢88c¢v¢rage
`jéry a§p:_e§£t §_f_ _t_t1_e_:i15;.5_spita11ty i11_dustry——a11d how t6 us¢ mat:
`'
`-
`”f:.the..3-b¢'$t}_1{;j:1gi__iv'irIi__'
`'__?W_rju'ten‘_py;__g;;ee
`aii'1;_l_1'<:J;1t__1:e_$':.illzlliénspitality1'eseai¢h;'_-. '.
`I
`I
`H
`I
`I
`I
`:1_11_"s‘new.'edjt1dx;'_1s-.an__myé'a1';ié1§i:e.i§8§u;¢'e__fo;511"students ahd_i11dustry professionals. Ifi1ic_1fides'-
`-:.C--Qu_I.1‘-t].._e-S-SI.-P-:a§eS-.:3o'f evisédf ifipéjatétll 8mat¢ria1.8 withhfifndxeds of .n_é_W adverris8enaf%er:rsI8 and 3
`'i11!iS:1.iafi°_HS§'.?iii?1'?ii1¥!Siii'S?a¥ii?¢d§'5<%5'fFOIi1.iIidiiS‘iY Pr0feSSi0na1S-"."'
`'.
`i
`.
`I
`%'
`"bf.th¢-léilfiéfif-.'m.éIk9t%fI0m the t11e0reti¢a.1 .f°l¥Ii¢1ati0ns
`t6: act_y'1a_1” 'cas_e'._st'udies_=tlr_1a_t dgmoigsfiaté
`
`.
`
`..
`
`"
`'
`
`.-
`
`-#1‘€?€i%5+1?%?%?='éI8'._'I';'i¢éi%iers11=zi'.§!?;HéSprtalIty
`
`_efC_<2.*=_r1.'Ec?i'rior.z5 8iVéS~Yofi.-th.é t<5.01§_--YOU.neéd:..i¢i.t?#3¢'I 3
`td e:_1s'_I'.t:r_e:_t11at_:
`
`_-
`
`_
`
`..
`
`E2_1:c:h'
`
`trategy
`
`c1'é'aI1y'--lilliisffnantsed
`
`.
`
`Bfigifigss ;
`
`-each. '_
`
`3
`
`_
`
`ISBN U-—'-G‘-IE-DLEBE-l::
`9DDUO
`
`9 80442 018887
`
`Starbucks, Ex. 1072
`Starbucks v. Ameranth, CBM2015-00091