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115 Cards in this Set
- Front
- Back
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business
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any entity that provides goods and/or services intended to satisfy customers' needs in an effort to earn a profit
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capital-intensive businesses
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require large amounts of capital-that is, money, equipment, land, and other resources-to get started and operate
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creditors
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entities or individuals that loan money to a business with an obligation of repayment
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customers
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the individuals who buy the goods and/or services of a business
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employees
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the people who, under the direction of the business owner or his or her agent (the employer), perform tasks and/or provide services in exchange for agreed-upon compensation from the owner
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entrepreneur
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someone who risks resources such as time and money to start and operate a business
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goods-producing businesses
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primarily turn out tangible products by engaging in activities such as manufacturing, construction, mining, and agriculture
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hybrid businesses
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product- and service-providing businesses (such as hospitality businesses) that focus on treating their customers as more than just strangers to make money off of, but rather as guests, in a warm, friendly, and generous way, so that relationships are formed and loyalties ensue and profits are generated
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labor-intensive businesses
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usually depend more on humans than machines and buildings for satisfying customers and earning profits
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loss
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when a business brings in less money than it needs to cover its expenses
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multiplier effect
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a measure of how tourist/visitor expenditures get re-spent/invested -- calculated by adding measurable traveler expenditures (direct benefits) and multiplying by a "factor" (which is an estimation of the number of times each dollar circulates through the local economy) to estimate the indirect benefits
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nonprofit organizations
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exist to achieve some other goal(s) beyond the usual objective of profit and must have one or more exempt purposes (as approved by the IRS) stated in its organizing documents
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owners(s)
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the individuals or groups that provide the ongoing resources needed to operate the business and have legal title to the business
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profit
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what's left after all expenses have been subtracted from the revenue brought in from the sale of the goods and/or services the business provides to its customers
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service businesses
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don't make (at least not solely) tangible stuff, but perform activities for customers (e.g. finance, insurance, entertainment, health care etc.)
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stakeholders
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individuals who have an interest in the ongoing performance and actions of any particular business
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stockholders
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investors who purchase stock – a certificate representing a share or portion of the ownership in a firm
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tourism businesses
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support "the activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes"
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vendors
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suppliers of goods or services of a commercial nature to other businesses
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lifetime value of a guest
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the amount of money/revenues a guest will generate for a business over the life of their relationship with that business
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moments of truth
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occur anytime a customer comes into contact with any aspect of a business, however remote, and has an opportunity to form an impression
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service
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activities performed by employees for customers
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business plan
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will literally spell out the operational details, assumptions, and predictions for a (new) business. A well-crafted business plan will also help the entrepreneur in systematically organizing for success, but the most significant function of many business plans is to influence those with money to share some with the entrepreneur - to help convert a dream into reality
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debt financing
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occurs when an entrepreneur finds someone or some entity (creditor) to obtain business start-up funds from - in exchange for having lent the money, the creditor will expect (over an agreed-upon time period) to be repaid the original amount borrowed (the principal) plus interest, at an agreed-upon rate
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entrepreneur
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someone who risks resources such as time and money to start and operate a business
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equity financing
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compared to debt financing, equity financing entails no repayment, but it does require the entrepreneur to sell at least a partial interest in the new business. This essentially means the equity investor becomes a co-owner of the business
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trade or vendor credit
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occurs when vendors allow entrepreneurs to purchase supplies and equipment directly and spread the payments over several months or years
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client (aka host)
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the firm which hires a management company to perform an outsourced function
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coercive power
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influence gained based on the ability punish
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initial fee
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an amount paid by a franchisee to a franchisor simply for the right to use the franchisor's brand and to participate in their business system
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legitimate power
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influence gained from being hired, elected or appointed to a powerful position
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management companies (aka contractors or operators)
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businesses that exist to operate someone else's business - for a fee
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offshoring
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occurs when a company moves jobs from one country to another
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ongoing royalties
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periodic fees franchisee pay to franchisors, usually calculated as a percentage of the franchisees' sales revenue for a specific time frame
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organization chart
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visual representation of a business's structure showing employee/job titles, the work they'll do, and how they'll interact with each other and the guests
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outsourcing
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occurs when a firm hires an outside company/third party to do work formerly done by employees of the original firm
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referent power
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influence gained from having the admiration/respect of others; may be based in part on personal charisma and connections
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expert power
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influence gained from possessing more extensive knowledge (or just knowing more than other individuals/employees)
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reward power
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influence gained from the ability to reward/control over compensation
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Uniform Franchise Offering Circular (UFOC)
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A document franchisors are required to provide to all prospective franchisees which details fees associated with the franchise agreement and includes the franchisor's business history and financial condition
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advertising
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paid non-personal messages via mass-communication media (e.g. TV, radio, billboards, Web)
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internal marketing
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occurs when a hospitality business attempts to attract and retain employees and to communicate why it is important for all employees to strive to achieve guest service standards
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market
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all current and potential customers for a hospitality business's products/services
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market segmentation
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occurs when a hospitality business divides current and potential customers into groups with common characteristics -- ustomers can be segmented in two ways: (1) based on the benefits the market segment receives from the product, or (2) based on some observable characteristics, such as demographics (age, gender, ethnicity/race, income, educational attainment, home ownership, employment status, etc.), geography (where they are coming from), purpose (why they are visiting), and distribution (buying from the Internet versus calling the hotel direct)
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marketing (aka external marketing)
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the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives
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marketing strategy
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is what to do - which (combination) of the 6 Ps (Product/service, Promotion, Place, People, Packages) to employ in attempting to reach marketing goals/objectives
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marketing tactics
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is how a marketing strategy is implemented (i.e. "how" to advertise or package etc.)
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merchandising/sales promotion
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occurs when a hospitality business uses displays, giveaways, or discount and premium offers (buy one get one free coupons, contests, and/or games) to build short-term traffic and sales
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packages
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hospitality marketing strategy category which considers what (if any) combinations of products/services and pricing schemes should be utilized to achieve success
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people
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hospitality marketing strategy category which considers the impact employees have on service quality, and thus the marketing of the business
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personal selling
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occurs when a hospitality business hires someone to go out looking for new (usually groups) of guests/customers
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place and/or distribution
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hospitality marketing strategy category which considers the location of the business, or what Internet sites used will be used to sell the product/service etc.
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positioning
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occurs when a hospitality business communicates a unique benefit to a target market
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price
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hospitality marketing strategy category related to what to charge the guest for the product/service
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primary (marketing) research
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involves using specific techniques to collect data that do not already exist and that will answer specific questions -- is often complicated and costly to undertake
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product/service
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hospitality marketing strategy category which stipulates what the business will provide for sale to guests
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promotion
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hospitality marketing strategy category which includes deciding whether to do advertising, public relations, personal selling, and merchandising or some combination thereof
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public relations (PR)
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consists of nonpaid/non-sales messages, traditionally spread via press releases/conferences but now more likely through Web-based social networks and blogs, which provide opportunities for businesses to share good deeds/news such as sponsorships of community events or charities, donations to scholarship funds, etc.; the intent is to build long-term positive impressions and goodwill for the business
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secondary (marketing) research
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is collected by others for other purposes, but may still be used to answer some gmroe general marketing questions
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bonus
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an extra payment made to an employee at the end of a specific time frame - above an employee's regular base wage or salary
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cafeteria plans
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at the employer's discretion, they may provide employees with a set dollar figure per year which the employee may then choose to spend on some or all of the various programs included on the employers “benefits menu” – have become more common recently because of the rising expenses associated with various employee benefits as well as the varying needs of different employees
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commissions
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extra payments made to an employee based on meeting specific quantities or levels of sales during a pre-agreed-upon time frame
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compensation package
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all the things that employers trade to employees in exchange for their behaviors on the job
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cost per hire
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the charges a hospitality business incurs to hire an employee - calculated by adding any and all advertising fees, employee referral expenses, travel and/or relocation expenses etc. associated when a new employee is brought into the business
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defined benefits plan
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employer paid retirement plans that involved specific promises to pay employees upon retirement, usually based on the number of years the employee worked for the company, their average earnings over the later years of employment, and their age upon retirement. Having proven to be relatively risky and expensive for companies to administer, these plans are effectively extinct, especially among contemporary hospitality employers
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defined contribution plan
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plans which provide no guaranteed benefit levels; the amount of money available to any employee upon retirement is based on amounts the employee chose to save and invest over the years and what sort of return was earned on those invested funds after fees have been deducted by the companies that manage the accounts. These plans may or may not include contributions from the hospitality employer. The choices of defined contribution plans offered by employers may vary, but a common option is named after the section of the Internal Revenue Service (IRS) code that established these plans, the 401(k) plan
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direct compensation
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cash paid to employees as either wages, salaries, bonuses, and/or commissions in exchange for their behaviors on the job
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employee assistance programs (EAPs)
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employer sponsored programs which provide employees with confidential professional counseling and/or referral assistance in dealing with a variety of circumstances that may affect on-the-job performance such as drug or alcohol dependence, family or marital difficulties, legal or financial problems, or other personal issues
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employee referrals
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process of rewarding current employees (usually with cash) for each new employee they recruit/refer to the HB (the new hire typically has to remain employed for a minimum time period before the bonus is paid)
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exempt employees
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are eligible to be paid by salary and do not qualify for overtime pay, no matter how many hours they might work in a week -- the U.S. Department of Labor applies salary level standards and duties standards in determining which employees are considered exempt
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exit interviews
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an interview conducted with an employee who is leaving the business -- the primary goal is usually to learn more about actual working conditions with the intent of improving future practices -- offers of confidential treatment of responses or even anonymity (by conducting the exit interview via computer/online) may be used to try to increase the likelihood the soon-to-be former employee will tell the truth
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external recruiting
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occurs when an HB doesn't have a currently qualified employee to fill an open job, it must then attempt find someone not already employed a the firm (e.g. "buy from the outside")
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HR cycle/process
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For any hospitality business consists of its ongoing efforts at employee recruiting (finding folks and getting them to apply/throw their name in the hat), selecting (fishing out the keepers – persuading them to join the team), training (telling and showing them how to do well and improve), evaluating (did they do the right stuff -- what happens if they did or didn't?), compensating (determining just rewards and providing them in a fair fashion) and separating (because for good or bad reasons, everyone leaves eventually)
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indirect compensation
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payments, some of which are required by law (i.e. Social Security, Medicare, Worker’s Compensation and Unemployment Insurance programs) and other noncash rewards and programs at the employers discretion such as paid time off, insurance, retirement programs, and employee assistance programs (EAPs), each of which employees may benefit from at some point (or not) in their lives
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insurance
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Hospitality businesses may or may not (or under laws prevailing at the time this is being published) elect to offer a range of insurance benefits to their employees -- from insurance coverage for pets to health, dental, vision, disability, life, and long-term care insurance plans for the employees and their families may (or may not) be included
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internal recruiting
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occurs when a hospitality business looks to find current employees who may be promoted or transferred from their present positions to different jobs within the hospitality business (e.g. the "make or grow our own" approach")
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Module 7 Key Terms
-------------------------------------------------------------------------------- bonus an extra payment made to an employee at the end of a specific time frame - above an employee's regular base wage or salary cafeteria plans at the employer's discretion, they may provide employees with a set dollar figure per year which the employee may then choose to spend on some or all of the various programs included on the employers “benefits menu” – have become more common recently because of the rising expenses associated with various employee benefits as well as the varying needs of different employees commissions extra payments made to an employee based on meeting specific quantities or levels of sales during a pre-agreed-upon time frame compensation package all the things that employers trade to employees in exchange for their behaviors on the job cost per hire the charges a hospitality business incurs to hire an employee - calculated by adding any and all advertising fees, employee referral expenses, travel and/or relocation expenses etc. associated when a new employee is brought into the business defined benefits plan employer paid retirement plans that involved specific promises to pay employees upon retirement, usually based on the number of years the employee worked for the company, their average earnings over the later years of employment, and their age upon retirement. Having proven to be relatively risky and expensive for companies to administer, these plans are effectively extinct, especially among contemporary hospitality employers defined contribution plan plans which provide no guaranteed benefit levels; the amount of money available to any employee upon retirement is based on amounts the employee chose to save and invest over the years and what sort of return was earned on those invested funds after fees have been deducted by the companies that manage the accounts. These plans may or may not include contributions from the hospitality employer. The choices of defined contribution plans offered by employers may vary, but a common option is named after the section of the Internal Revenue Service (IRS) code that established these plans, the 401(k) plan direct compensation cash paid to employees as either wages, salaries, bonuses, and/or commissions in exchange for their behaviors on the job employee assistance programs (EAPs) employer sponsored programs which provide employees with confidential professional counseling and/or referral assistance in dealing with a variety of circumstances that may affect on-the-job performance such as drug or alcohol dependence, family or marital difficulties, legal or financial problems, or other personal issues employee referrals process of rewarding current employees (usually with cash) for each new employee they recruit/refer to the HB (the new hire typically has to remain employed for a minimum time period before the bonus is paid) exempt employees are eligible to be paid by salary and do not qualify for overtime pay, no matter how many hours they might work in a week -- the U.S. Department of Labor applies salary level standards and duties standards in determining which employees are considered exempt exit interviews an interview conducted with an employee who is leaving the business -- the primary goal is usually to learn more about actual working conditions with the intent of improving future practices -- offers of confidential treatment of responses or even anonymity (by conducting the exit interview via computer/online) may be used to try to increase the likelihood the soon-to-be former employee will tell the truth external recruiting occurs when an HB doesn't have a currently qualified employee to fill an open job, it must then attempt find someone not already employed a the firm (e.g. "buy from the outside") HR cycle/process For any hospitality business consists of its ongoing efforts at employee recruiting (finding folks and getting them to apply/throw their name in the hat), selecting (fishing out the keepers – persuading them to join the team), training (telling and showing them how to do well and improve), evaluating (did they do the right stuff -- what happens if they did or didn't?), compensating (determining just rewards and providing them in a fair fashion) and separating (because for good or bad reasons, everyone leaves eventually) indirect compensation payments, some of which are required by law (i.e. Social Security, Medicare, Worker’s Compensation and Unemployment Insurance programs) and other noncash rewards and programs at the employers discretion such as paid time off, insurance, retirement programs, and employee assistance programs (EAPs), each of which employees may benefit from at some point (or not) in their lives insurance Hospitality businesses may or may not (or under laws prevailing at the time this is being published) elect to offer a range of insurance benefits to their employees -- from insurance coverage for pets to health, dental, vision, disability, life, and long-term care insurance plans for the employees and their families may (or may not) be included internal recruiting occurs when a hospitality business looks to find current employees who may be promoted or transferred from their present positions to different jobs within the hospitality business (e.g. the "make or grow our own" approach") job analysis |
the process of getting detailed information about the work activities, required performance levels and behaviors, equipment, tools, and context for each required position
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job description
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a document which details the observable actions required of someone performing a specific job well – including the essential duties they are expected to perform, which specific tasks they must accomplish, and what responsibilities they have
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job specifications (aka job requirements)
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the section of a job description which addresses the skills, knowledge, and any other characteristics needed by anyone doing the job as well as the physical and other demands the job places on the person doing it
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nonexempt employees (aka blue collar workers)
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employees who are eligible to be paid overtime (usually 1.5 times the regular wage rate) for any hours worked past 40 hours in a designated workweek (subject to prevailing state and/or municipal laws)
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nonfinancial compensation
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the potential rewards/satisfaction that an employee may experience from doing the job itself or from the people and the environment in and around which the person works
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on-the-job training (OJT)
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a common training method used in hospitality businesses -- ideally entails an employees undertaking a new job under the watchful eye and with the expert coaching of an experienced and enthusiastic veteran co-worker. At worst, this is the "just follow Pat around" approach, and it can turn out that Pat is tired, ornery, having a bad life, and has absolutely no interest in training anyone
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orientation
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typically the 1st step in new employee training intended to ensure that each new employee understands who and what really matters at that HB and what behaviors will be expected of them on the job -- including an overview of the organizational structure and at least a tour of the business as well as an outline of the new employee’s daily routine with an emphasis on safety procedures and security rules
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paid time off
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at the start of each year (or whenever the business designates) eligible employees are provided a "bank" of paid time off days to use (often with advanced notice and prescheduled approval) as they best see fit - for vacations, medical appointments, or other personal matters - this approach usually intended as solution to confusion resulting from the traditional separating and sorting of vacation time from holidays and personal and sick days
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performance appraisal
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a meeting of a supervisor/manager and a subordinate employee used to discuss and compare performance expectations with the employee's actual performance and results for a specific time period
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realistic job previews (RJPs)
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telling and/or showing all applicants what it's really like to have a particular job (both the good and the bad stuff) -- can take the form of text descriptions, video presentations, and work simulations
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recruiting
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the process of getting the word out to suitable contenders for open positions, encouraging them to apply for employment with the hospitality business
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selection tools
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tests and/or assessments that may be administered to assist in sorting candidates based on job-related categories -- could include intelligence tests, physical ability tests, personality assessments, work simulations, virtual "in-box" exercises, or combinations of all or several of these
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separating
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the last stage in the HR cycle when employment is terminated, whether for cause (employee was fired) or voluntary (resignation or retirement)
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yield ratio
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the percentage of applicants from a recruitment source that make it to the next stage of the process - computation entails counting the number of applicants generated from each recruiting method undertaken (whether internal or external) to see which (if any) lead to actual hires
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accounting
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identifying, measuring, recording, and communicating financial data -- the rule-keeping language and system for understanding and doing business
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accrual basis
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requires revenues to be recognized and recorded when a sale is made, regardless of when payment is received, and for expenses to be recorded when the gain from the expense happens, not necessarily when payment is made for the expense
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budgets
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are the plans for how a hospitality business will use its financial resources to accomplish its future goals -- by taking advantage of what can be learned from past results and combining it with educated forecasts and predictions, hospitality managers use budgets to attempt to increase the likelihood that they'll achieve future financial success
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depreciation
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an expense associated with purchases of assets such as buildings and equipment -- it is recorded as an expense over the useful life of the asset so that the financial results in the year these sorts of items are purchased don't appear artificially disastrous and then miraculously strong in the following years as the asset continues to contribute to generation of revenues for the business
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cash basis (for accounting)
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entails recording deposits (revenue) when money from a sale is actually received and recording checks (payments for expenses) at the time a purchase is made -- the cash basis for accounting can provide deceiving short-term results—for example, it ignores uncollected revenue that is appropriately earned and expenses incurred (to earn revenues) that have not been paid for, which may make it appear that a business is profitable at a given point in time even if its not
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double-entry system
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a journal entry in the double-entry system requires that equal amounts of debit and credit entries are needed to record every transaction -- typically, a debit either increases an asset account reported on the balance sheet or an expense account reported on the income statement. A credit on the other side usually increases a liability or an equity account on the balance sheet, or records revenue on the income statement
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financial accounting
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is done for stakeholders that are external -- creditors, investors, and vendors as well as tax-collecting governments at all levels and even competitors
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Generally Accepted Accounting Principles (GAAP)
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are the fundamental accounting guidelines that have been agreed on by accounting experts, regulators, and companies over many years – the intention is that each company's financial information prepared utilizing GAAP will provide an accurate and fair representation of its financial circumstances. The U.S. experts who establish GAAP are members of the Financial Accounting Standards Board (FASB)
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managerial accounting
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delivers the necessary information so that internal stakeholders (such as the employees and managers) can make meaningful decisions to effectively manage usiness operations
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matching principle
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all expenses accumulated in the process of obtaining revenue for a business are to be matched with (that is, subtracted from) that revenue during the same accounting time period
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ratio analysis
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involves comparing two elements from financial statements generated during the same time frame, usually by dividing one element of a financial statement by another – the resulting ratios may be used by managers of a business to compare actual financial results to goals, past performance, or both and may also be compared to the results of direct competitors or against industry averages
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trend analysis
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comparison of financial results over time (e.g. day to day, month to month, and/or year to year) allows stakeholders decide what's changing and what's not -- a variety of circumstances could have an impact on any hospitality businesses' results from one time to another—some of which the management may have direct control over (e.g., the purchase or sale of major assets) and others that are beyond control (e.g., economic or weather conditions)
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uniform system of accounts
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expert groups from several segments of the hospitality industry (i.e., lodging, restaurants, and private clubs) have further refined basic accounting rules and processes as specifically applied in their segment -- intended to provide stakeholders of businesses within each segment with the means to make meaningful comparisons intended to enhance decision making because the operating data are consistently collected and reported
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assessment
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a one time charge or possibly periodic charges a private club applies to its members in order to make up revenue shortfalls or cover expenses which may have been underestimated by the club's management for any financial period (subject to the club's bylaws)
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board of directors
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individuals elected by and from a private club's membership to establish and implement policies and set strategies as well maintain financial oversight of the club's operations
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city clubs
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private clubs established in urban areas to accommodate networking of both a social and business nature; generally focused on high quality food and beverage service and may include meeting rooms, overnight accommodations as well as exercise facilities
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committees
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the member subgroups that private clubs set up (based on the club’s bylaws) which serve to divide the work necessary to keep the club functioning as well as disperse power and provide internal checks and balances
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country clubs
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private clubs which are literally and figuratively built around golf, sometimes including very extensive facilities; some level of food and beverage service is nearly always provided
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equity clubs
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private clubs which have been granted nonprofit status (by the IRS) based on meeting criteria such as limited membership and existing substantially to promote social activities and recreation and where no club earnings are used to directly benefit any individual member
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food and beverage minimum
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pricing policy utilized in some private clubs which entails the club charging its members a predetermined minimum amount for club food and/or beverages during a set time frame (often monthly); each member pays whether they eat and/or drink at the club or not
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general manager
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the individual hired to manage day-to-day club business on behalf of the members. Some clubs refer to this position as the Chief Operating Officer (COO) as she/he directs overall operations of the club while reporting to the club's board of directors
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initiation fees
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the price a new member pays to join a private club.
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member dues
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the price each member is charged (typically monthly) to maintain their membership in a private club, whether they visit the club/use the facilities or not
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nonequity clubs (aka proprietary or developer clubs)
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an ownership form for private clubs wherein the club is formed as a corporation with the owners/managers retaining operational control much like any other for-profit hospitality business.
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yacht clubs
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private clubs which provide boating related services such as moorage slips, fueling and possibly food and beverage, swimming and locker room/clubhouse facilities for their members
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