The Hospitality industry is quite diverse. There are so many unique types of hotels that one will be bewildered by hearing so many names. However, as a hotelier, it is an essential exercise. You will not be able to sell your product or service if you don’t know what they are. Not only that, but hoteliers also need to understand which type of hotel appeals to which type of guests.
Every hotel type is unique in its characteristics, pricing and amenities. We have created a manual for you regarding the various types of hotels in the hospitality industry.
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What Is A Hotel? - A Brief Revisit
Before we move to the classification of hotels, we need to revisit and revise what a hotel actually is. A hotel is an accommodation that provides various other services such as food and beverages, conferences, training arrangements, and infrastructure for official and private parties.
Each hotel has its characteristics and personality and caters to different types of guests. However, one thing common about all hotels is that it offers room inventory as their leading product/Service. It is the principal source of revenue for the hotels. Other amenities and offerings support the room inventory in generating revenue.
Based on the different needs of the guests, different types of hotels have emerged to cater to them. Hotels are classified based on their design, location, facilities, budget and so on. Let us now discuss the various types of hotels.
Types Of Hotels Based On Star Ratings
Star ratings are the most popular way to classify hotels. The higher the star, the more will be amenities, facilities, and hence, the price. Hotels are classified from 1 to 5 stars. Let us understand these types of hotels since they are the primary categorization and hoteliers often use it as a measuring scale.
1. One-Star Hotels
They are the most basic types of hotels. They have very few amenities. Their main focus is to provide a comfortable bed to sleep on. They may not even provide meals or en-suite bathrooms. However, these hotels should focus on cleanliness, maintenance and other standards.
2. Two-Star Hotels
These hotels are a notch or two higher than one-star hotels. They offer more amenities such as en suite bathrooms, and more equipped rooms, and will offer a wider selection of food and beverage options. However, these types of hotels are still quite basic compared to higher offerings. The reception and staff will showcase a more professional experience compared to one-star hotels.
3. Three-Star Hotels
Once a hotel reaches the three-star category, they have the size and the scale to provide for higher staffing and higher-end amenities. There is a significant improvement in offerings and choices from the lower star classification. These types of hotels have a more spacious reception and will also have a restaurant that caters to non-residents.
These types of hotels can be considered the lower end of full-service hotels. All these rooms have ensuite bathrooms and will offer a higher standard of comfort and equipment. These hotels can be catered to business travellers.
4. Four-Star Hotels
Four-Star hotels are expected to offer a certain type of luxury, with their amenities, decor and ambience. These hotels have all the amenities in the room that will offer them maximum comfort. In fact amenities like spacious private bathrooms, tea and coffee makers, and in-room dining become non-negotiable, and so do hotel amenities such as a swimming pool, spa and more. The in-house restaurants will also offer a better spread.
5. Five-Star Hotels
Five-Star hotels offer luxurious accommodations throughout the hotel and offer the best amenities to their guests. These hotels have no excuse for compromising on their amenities and services. Everything needs to be high-end, be it the restaurants, rooms, spa, saloon, and even the swimming pool.
6. Heritage Hotels
Can there be anything higher than five-star hotels? You may ask. Yes, heritage hotels take customer experiences to the next level. These types of hotels are set in Palaces, Forts and Havelis, offering royalty and luxury to their guests.
These properties aim to provide a luxurious experience to their guests. They will serve traditional food, along with other international options. These hotels also offer various cultural activities and experiences that are unique to the region. For example, Taj Lake Palace and Umaid Bhavan in Udaipur are the flagship traditional hotels.
Popular Types Of Hotels
Now that we have discussed the various star classifications of hotels, let us now discuss the various popular classifications of hotels. These types of hotels don’t fit into one category, because they can encompass various categorizations. For example, chain hotels can also have boutique hotels, casino hotels and various subtypes into them.
After deciding the star rating, you need to identify which of these popular types you want your hotel to be classified under. You can be under more than one popular category as well. For example, a resort can be a boutique hotel as well, offering a unique concept with fewer rooms compared to other large-sized ones.
1. Chain Hotels
Chain Hotels are also known as branded hotels. A chain hotel brand has several properties spread all over the world under its name. Each chain hotel has to abide by certain guidelines strict guidelines on design, amenities and pricing. Many chain hotel brands have several other smaller brands under them, that cater to different segments.
For example, Marriott International Inc has several hotel brands under them such as JW Marriott Hotels, The Ritz-Carlton, St. Regis Hotels and Resorts, Marriott Hotels and Resorts, Westin Hotels, Courtyard By Marriott, Four Points By Sheraton etc. All these brands cater to various unique segments.
2. Independent Hotels
They are individual hotels run independently with no company over them. Unlike chain hotels, they are single brands with no other chains. Very often, these hotels are run by families or a small group of people. They have independence regarding design, offering, rates and amenities. They are usually smaller in size compared to chain hotels. However, not they don't need to be less luxurious. Individual hotels can offer luxury and comfort as well.
3. Boutique Hotels
Boutique Hotels are usually smaller than chain hotels. They have less than 100 rooms. These types of hotels cater to a specific type of audience, with unique designs and amenities. The designs are based on a particular theme and exemplify a particular character. Some boutique hotels are independently owned, while some are part of a chain.
4. Resorts
Even though hotels and resorts are perceived to be different types of accommodations, in reality, a resort is a type of hotel. Resorts are usually found in popular locations such as beaches, hill stations and other destinations. They try to provide everything to the guests at one property - swimming pool, restaurant, bar, recreational activities, shopping and more. Resorts can either be a part of a chain hotel brand or be independent.
5. Apart-Hotels
These hotels combine the best of both worlds, apartments and hotels. These types of hotels offer all the amenities of a hotel, with apartment-like amenities such as a kitchen or kitchenette, and several bedrooms.
These types of accommodations are perfect for those who want more control over their experience, such as an opportunity to cook their own meals and accommodate more people. These types of accommodations are perfect for digital nomads, who want to feel at home while working.
6. Hostels
They are accommodations that are catered to budget travellers. They offer bunk beds in dormitory settings with shared bathroom facilities. These properties are catered to youths, who have a smaller budget and don’t mind sharing their room with others.
Hostels have various other facilities as well, such as a restaurant, common area, games area, lounge area and self-service laundry. Nowadays, hostels are now offering various other accommodations such as double rooms and single rooms to diversify their offerings.
7. Bed and Breakfast
Bed and Breakfast are smaller, privately owned hotels, that are popular with customers who want to experience a local feel within the heart of a location. These smaller properties offer a comfortable bed to sleep on, and breakfast during the morning. These types of accommodations are popular in sightseeing locations, where the guests will be exploring the place for most of the day, coming home only at night or late evening.
Types Of Hotels Catering To A Niche/Audience
These types of hotels cater to a specific niche or a type of audience. These hotels aim to provide a specific and special experience to the guests. That experience is the USP of the hotel and tries to attract guests that are looking for these amenities. For example, Casino Hotels are for those who want to experience Casinos. While motels are those that are catered to those on the move.
This category is an optional third step for hotels, after determining your star rating and also the popular umbrella category you want to fit your hotel in. You may or may not choose to associate yourself with a niche category. However, with higher competition, it is always a great idea to define a niche, that will attract that specific audience who want to experience the following niche.
1. Motels
Motels are a blend of two words, motels and hotels. The concept of motel evolved in the 1920s, to cater to those who are travelling long distances on roads. Even though the concept of motels is slowly gaining international popularity, it is still concentrated mostly in the USA, Canada, Australia and New Zealand.
This type of hotel usually has a one or two-floor layout, with the rooms directly accessible from the parking. Motels aim to offer a comfortable bed to sleep on for road travellers. They are located on highways and other major roadways. They offer simpler amenities compared to hotels such as housekeeping, swimming pool or breakfast. Motels can be independently owned or be a part of a chain brand.
2. Eco Hotels
Eco Hotels are also known as sustainable hotels or green hotels. These types of hotels operate in an environmentally friendly manner. These hotels reduce wastage and pollution by using solar panels, using renewable utensils and avoiding excessive use of plastic. With the growing popularity of sustainability, these hotels are gaining in popularity as well.
3. All-Suite Hotels
All-Suite Hotels are those that have all their guest's rooms are suites. Suites are spacious rooms with a separate bedroom, and living room. They can also have a kitchen area with various cooking accessories. These hotels often use the term ‘suites’ in their names to distinguish them from other hotels. Many hotels have an all-suites brand under them.
4. Casino Hotels
As the name suggests, casino hotels are those that allow access to in-house casinos for their guests. Other than that, they are like any other hotel offering various room, F&B, and stay options. Casino hotels are usually luxury hotels.
5. Pet-Friendly Hotels
Pet-Friendly Hotels are those that allow guests to carry their pets with them. Some properties ask for additional charges to keep pets, while some offer complementary pet stays. These hotels also have weight restrictions, restrictions on breeds allowed, and a limit on the number of animals they can carry.
6. Conference Hotels
Conference Hotels, also known as Convention Centre Hotels, are those that are dedicated to providing meeting space along with accommodation. They are designed to host large events and provide all the equipment and set-up needed to do so. These rooms are perfect for business travellers and corporates. It is a perfect spot to host weddings as well.
7. Gastro Hotels
A hotel dedicated to culinary experience? Yes, Gastro Hotels are new emerging categories that are dedicated to providing delicious food for their guests. They offer unique and fantastic dishes. These hotels are popular outside India, however, many hotels in India, especially high-end ones, do focus on offering various food options to their guests.
8. Transit Hotels
These hotels are designed for those who are on the move. It is for those who want to catch a flight the next day. These hotels are located close to the ports of entry and exit, such as airports, seaports and railway stations. Hotels located inside the airport themselves are known as transit hotels too. These hotels are only for staying purposes and they offer all the amenities of that of a standard hotel.
Types Of Hotels Based On Duration Of Stay
In general, most hotels offer accommodation from 1 night to a few nights. However, various hotels cater to longer stays or offer stays for less than a day as well. Some hotels are dedicated to unconventional stay durations.
1. Standard Commercial Hotels
As the name suggests, standard commercial hotels offer a stay duration ranging from one day to a week. They are the most common type of hotels and in fact, these hotels are the ones most use.
2. Extended Stay Hotels
Extended Stay hotels are those that offer stays longer than a week. These hotels are designed for those who are looking for something more than a hotel. Airbnb is a perfect example. These types of hotels offer special services and amenities such as full-fledged kitchens, a refrigerator, grocery shopping services, housekeeping services and so on. The room rates of these hotels are determined by their length of stay.
3. Microstays Hotels
As the name suggests, microstay hotels are designed for those who want to stretch out and lay down for a few hours. These hotels can be booked by the hour. These hotels are perfect for those who have long layovers, during transit and cannot book a hotel based on standard check-in and check-out dates.
Classification Of Chain Hotels
Many Chain hotels classify themselves into various categories based on the quality of services and amenities. These are known as “Chain Scales”. This scale was developed by Smith Travel Research. This classification is quite useful because with this, we can easily classify hotel chains, and the various brands under them based on their offerings. They are mostly based on the average daily rate of their rooms.
1. Luxury Chain
These hotels are the creme la creme of the hotel industry. They offer luxurious experiences such as high-end rooms, distinct restaurants, and various other amenities. They offer unique amenities such as a spa with a sauna, golf courses, and more. They carry a very high price tag.
2. Upper Upscale Chain
They are slightly less luxurious compared to luxury hotel chains, but they are not to be underestimated. They offer unique experiences and stunning services and amenities, but at a lesser price. They have a slightly lower price tag compared to high-luxury hotel chains, but they are still expensive.
3. Upscale Chain
Upscale Chains are full-service hotels that offer great amenities and full services. They may not be as luxurious as luxury and upper upscale hotels but they offer great customer experiences.
4. Upper Midscale Chain
Upper Midscale hotels are more humble compared to Upscale Chains. They offer comfortable rooms and all the modern amenities. These hotels are quite affordable. The main aim of these hotels is to provide comfort.
5. Midscale Chain
Midscale hotels are quite basic. They offer standard design, comfortable rooms and may include breakfast.
6. Economy Chain
They are no-frills hotels that offer the lowest prices with the most basic of amenities. They are catered towards guests to only want a room to sleep in.
Which Type Of Hotel Should I Establish?
With so many types of hotels, it is natural to get confused as to which type of hotel you should establish as a hotelier. You need to go step by step. With these steps, you will be able to determine which hotel type will generate the best returns for your business.
Step 1
Decide on which star category you want to make your hotel into. If a hotelier wants their hotel to be a one-star or a two-star one, they will be able to provide very basic amenities. You cannot offer a boutique hotel in this range, because they require a unique experience that needs to be a little sophisticated.
If you are choosing to be a 3-star, 4-star or 5-star hotel, you have more flexibility and choice. Once you decide on the star category, you can decide on the budget. High-end hotels need more budget to establish and maintain. In turn, you will also have a charge price accordingly.
Step 2
Decide what you want to offer to your guests. This includes location, amenities and more. With the star category and the budget decided, you can streamline what you want to offer. For example, if you want to establish a hotel at the beach, you can decide whether to establish an all-inclusive beach resort or a simple two-star hotel near the beach. Likewise, you need to decide whether you want your hotel to be a boutique one, or a standard hotel.
With a location and hotel category in mind, you will be able to start working on the plan. Because you cannot offer a beach-style resort on a hill station, and you cannot offer a bed and breakfast option at a location which is mostly great for a staycation.
Step 3
This is the final but important step. Hoteliers need to decide whether they want to cater to a niche or a broader audience. This is important because based on these factors, you will have to adjust your revenue management, budgeting, and marketing. For example, if you going for a niche theme, you will have a challenge getting that niche audience to you. So you need to spend a significant part of your capital and revenue on marketing.
You also have a adjust room rates to take care of your bottom line. Niche properties will also incur higher expenses too because you will need to have the infrastructure to provide such experiences.
However, now the question arises, should we go for the niche market or the general market? You need to understand that the general market is saturated. There are several luxury hotels, run-of-the-mill standard hotels etc. You need to offer something unique to attract the guests. Catering to the niche market is risky but it is worth it.
With these steps, you will be able to navigate the various categories of hotels and choose which one is the best for you as a business.
To Conclude
With a detailed guide, hoteliers will be able to decide which hotel to establish. With so many types of hotels, you have plenty of options to explore, execute and experiment with various ideas, and choose one that works for you.
Read our blogs to know more about the various concepts, trends and challenges of the hospitality industry.