In this article, we will discuss the major differences between a full-service hotel and a limited-service hotel, along with the aspects to keep in mind for both. We will go through the way they function, the clientele they target, architectural considerations, as well as staffing issues.
This article will serve as an introduction to the basic concepts of hospitality for potential investors, potential entrepreneurs who want to enter the space, or business owners who are already operating in the market and want to optimize or look for potential investors. Hospitality can be a very lucrative business but at the same time competition is high, both from large hotel chains as well as smaller businesses. Because of this, having a complete picture of the landscape of how hotels operate will grant you a key advantage in how you tackle and develop the business.
Here are the 5 key differences between full-service and limited-service hotels, as well as a look at what lies in between.
A Full-service hotel and a Limited-service hotel generally have a different set of focuses and offer different experiences.
Limited service hotels will generally be located close to or around the potential points of interest of their target clientele. This can vary from touristic to business destinations, depending on the area or setting. In this way, they exist to fill a potential requirement for people who will travel to the area where they are located, without being a main point of attraction.
This is in contrast with how full-service hotels operate, which aim to create a complete experience with all the amenities, containing all the different types of services its guests might require. They can be generally self-standing, creating a complete experience, without relying on other nearby touristic points of interest to bring in clients. It is designed from the ground up to cater to all the requirements its clientele might have.
Guests that book into a full-service establishment will, in most cases not expect to encounter further significant costs and will also have different expectations from the service and staff. Clients who opt for a limited-service hotel, on the other hand, will have fewer expectations from the staff and available amenities. What this translates to, is that they will cater to very different client bases that will not overlap, with a few exceptions.
There are exceptions to this rule, such as economy or midscale full-service hotels. In this category, travelers are looking for a significant number of services, more than in limited-service, but at a more affordable price-point, similar to a limited service establishment. This functions as a bridge between the two, trying to bring advantages from each side to create a compelling offer to the part of the clientele who is looking for a more upscale option to limited service, while still being very affordable.
They differ in the way they approach architecture and interior design
The difference in focus will also be reflected in the approach to both the architecture and interior design of the hotel. Because of its wider range of services and its larger focus full services hotels will generally be larger, with much more emphasis being placed on the architecture and interior design experience of the establishment. By contrast, limited-service hotels are going to have a much more streamlined architecture and interior design, keeping in line with the more focused experience they offer travelers.
Full-service Hotels
Full-service establishments are going to generally have a wide range of guest rooms of various sizes and typologies, ranging from simple rooms to apartments or suites. In addition to that, they also have reception halls meeting rooms, and restaurants. All these will need to have a unified and coherent interior design approach, with each individual design component complementing the other, creating a harmonious whole. This is where the larger scale of full service comes into play, as all these services will have specific spatial requirements in order to function. The back of house requirement will be much larger because of this, which will also lead to larger staffings.
Limited-service Hotels
Limited service hotels will be generally much more streamlined than their full-service counterparts. What this means is that the room variety and selection are generally going to be much smaller with normally one or two-room types on offer. The same can also be said about the amenities, limited-service hotels will generally have much more simplified amenities and not offer elements such as meeting rooms or a la carte restaurants, instead opting to either remove them completely or include a scaled-back version. For example, they might not have a restaurant but can contain offer self-service breakfast. In contrast to the full-service segment, limited service will have fewer requirements, and will have smaller facilities.
From an architectural point of view, limited-service establishments will be smaller and focus more on integrating with the surrounding context, such as the urban landscape, while the full-service ones will be larger and stand out more.
This line of thinking will also expand to the approach to interior design. Full-service rooms and suites will generally have much more attention given to how they are designed and the included services, such as a coffee machine or bathrobes and slippers. Guestrooms in limited-service hotels, even the mid-price segment will have much more basic rooms, containing only the bare necessities and avoiding lavish decorations. Materials and furnishings used will also be of average quality, with only the basic furnishings used in the room.
The interior design for the establishment will follow the same concept. Limited service hotels will have a more basic decor, with simple furnishings and spaces, avoiding anything sumptuous or grand. This is also true for the mid-price sector, which will have the basics but might have an interior design more in line with the brand or identity of the establishment.
A Limited-service hotel and a Full-service hotel cater to different budgets and types of travelers
Both limited and full-service hotels target different target audiences. Full-service hotels will generally focus on clients with larger budgets, looking to have a complete set of services available to them, while limited-service hotels will focus on cash-conscious travelers, as well as the leisure market. This also ties in heavily with the category in which they fall.
Full-service hotels will in most cases fall into several general categories: midscale, upper midscale, upscale, upper-upscale, and luxury, with key differences between them.
In the mid-price segment, customers are usually looking for full services at a limited services price point or close to it. They can also cater to business travelers and will be situated near highways, airports, or downtown areas. Upscale hotels start to have brand recognition and value customer loyalty, offering a wider range of rooms and special services, like concierge and room service. They will be generally located in larger cities with international airports or tourist destinations. Finally, luxury hotels have the largest palette of services guests could expect, and top-level quality and convenience. They are normally located in resort areas and the center of major cities.
Full-service hotel typical characteristics per typology:
– Economy hotels: Tend to have a mix of mostly K-type (king-size) rooms, offer only a self-serve breakfast and usually lack function space and recreational facilities.
– Midscale hotels: Usually have a mix of mostly K-type (king-size) rooms, offer self-serve breakfast only. They may have limited function spaces (if so I typically is about less than 1 seat per key) and offer fitness room and/or swimming pool.
– Upper Midscale hotels: Typically have a mix of mostly K-type (king-size) rooms, may offer full service or fast casual model F&B facilities. They offer a function spaces (about less than 2 seats per key), fitness room and may have a pool.
– Upscale hotels: Typically have a mix of mostly K-type (king-size) rooms. May offer full service or fast casual model F&B facilities. They offer a function spaces (about less than 3 seats per key), fitness room and swimming pool.
– Upper Upscale hotels: Typically have a mix of mostly K-type (king-size) rooms and Club level rooms, they will offer at least 1 full service 3 meal restaurant plus one bar or lounge . They offer a function spaces and business center(a minimum than 3 seats per key), fitness room and swimming pool and they might have a spa.
– Luxury hotels: Typically have a mix of mostly K-type (king-size) rooms and Club level rooms. Typicalle they have two or more restaurant plus one or two bar/lounges. They offer a function spaces and business center(a minimum than 3 seats per key), fitness room and swimming pool and spa facilities.
Learn more about hotel classifications in the STR website.
Limited services hotels typically services
In contrast, limited services hotels focus on offering accommodation at an accessible price point, while focusing on offering the most basic amenities, such as internet and television, among others. Large groups and businesses travelers are some of the key client categories for limited-service hotels. Groups, in particular, can be a very lucrative niche for limited-service establishments, creating a solid business relationship with the decision-maker and planner can be very important in building loyalty and retention in the long run. Similarly, corporate and business clients can be a good option for a lucrative business relationship, with the ability to build easy retainment. Limited service clients will also be very interested in the local attractions and offers, which further enhances the complementary relationship between limited-service hotels and the local context.
They offer different types of services
The biggest difference between full service and limited service is the inclusion of an on-site food and beverage component, which will be found almost exclusively in full-service hotels. Beyond this, limited service will offer fewer amenities than full service, although the gap is continuously shrinking in recent years.
Full-service hotels services
Full-service properties will focus on offering a wide range of services, scaling the offer based on the category of the hotel. Beyond the larger variety in guest rooms, they can also offer lounges, meeting spaces, workspaces, function spaces, ballrooms, fitness and spa centers, as well as a pool or even retail areas. They will go from a very limited selection in the mid-price segment, to a complete offer in the luxury category, as well as based on the location and type of establishment. All this will be on top of offering an onsite restaurant.
Limited-service hotels services
Limited service hotels in the vast majority of cases will not include a restaurant. This is due to the significant cost of investment required, as well as the difficult regulatory requirements for functioning. While initially, the palette of services offered by limited-service properties was small, it has expanded quite a lot in recent years. You can now find business amenities, fitness rooms, a pool, or even small workspaces, within limited-service establishments. Higher customer demands of receiving more quality at a reasonable price point have driven this shift, narrowing the gap between the two. It’s important to note, however, that while the number of amenities has increased, they are not at the level of full-service hotels, being smaller and of more average quality than their full-service counterparts.
Regarding the key missing amenity between the two, the food and beverage component, limited-service hotels have found ways of circumventing it in a few manners. It’s now possible to find a very limited beverage component on-site, in the form of a coffee lounge, an included breakfast buffet, which does not require a complete a la carte service kitchen. It’s also important to note that they generally lack room service services as well. These will not be at the high-quality level offered by full-service properties, but it’s an additional step in bridging the gap between the two typologies.
A Limited-service hotel and a Full-service hotel are staffed differently
The differences in the services provided between full service and limited service will also result in different staffing requirements between the two categories, with limited service hotels requiring a smaller number of staff, as well as not as much specialized personnel. The difference in staffing levels will also lead to a smaller back of house requirement.
Hotel staff will be broken down into two general categories, the front of the house, the guest-facing component, and the back of the house, which keeps operations running smoothly. These will be present for both full and limited-service establishments, as well as in almost all hospitality venues. An essential part of hotel management is keeping a solid and working connection between the front and back of house operations, with a disconnect between leading to many issues and problems.
Front of House (FOH)
The front-of-house staff work directly and tackle all operations related to guests, like check-ins and check-outs, while also providing any potential assistance when a guest requires it. These vary from front desk agents to bell staff, to the concierge, to general manager, to name a few. They often work in shifts, so as to ensure constant availability to the clients.
Back of House (BOH)
The back-of-house staff, although sometimes invisible, are essential to keep operations running. They normally have minimal guest contact, working either in spaces that are completely separate from the rest or in the absence of clients. Unlike the front of the house, the back of the house works during normal business hours. Marketing and finance staff and housekeeping are some of the best examples for this category.
A special position in this system, in the case of full-service hotels, is the restaurant manager which is the only position that gaps both the front and back of the house.
A hybrid between the two, the select-service hotel
With the difference between full and limited service shrinking, a new category has appeared, the select-service hotel, incorporating only the most used features of full-service hotels, but on a much more limited scale. They have the fundamental characteristics of limited-service establishments, with added amenities found only in full-service hotels.
Over the course of the past couple of decades, the difference between full and limited-service establishments has gotten blurrier, which eventually led to the appearance of this new category. What this means is that in essence, they offer banquet and restaurant facilities, but on a limited scale and budget. The major difference between full and limited service has always been the food and beverage facility, and this segment tackles exactly that.
They offer affordable comfort, with the most familiar in-room amenities of full services, effectively closing the gap between the major categories. There are a few typologies of select-service hotels, such as boutique, which offer high-end select services tailored to a specific client niche, urban hotels, located in key urban areas offering clients access to the city in which they are established, hotels dedicated to conferences or conventions. This is in contrast to more typical full-service hotels, which can fall under different typologies, such as luxury urban, upscale, upper-upscale, or luxury resorts.
Full Service Hotel vs Limited Service Hotel Conclusions
The difference between full-service and limited-service hotels is slowly shrinking, with many limited-service establishments offering more and better amenities, and the mid-price full-service establishments offering a great cost to quality value for anyone looking to upgrade. With that being said, the major food and beverage component is still missing in limited-service establishments, the new ideas brought forward only cover this adequately.
Cutthroat competition has given way to the appearance of select-service hotels, a new hybrid approach. While there may not be a lot of difference in profitability between limited and select services, the establishment costs are the real attraction, giving investors the ability to launch a hospitality service business, at a much more affordable investment point.
More and more hotels are investing in their services and expanding their offer, turning hospitality into a very competitive industry. Hotels are very interested in offering as many facilities as possible, creating the best possible offer to attract customers and potential walk-ins. As such, it is essential that potential investors and entrepreneurs are familiar with what can be done and empowered with the knowledge to make the best decision.
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