When asked to explain the essence of the lodging business, I have a simple answer: It’s part real estate and part retail. A hotel is developed as a real estate investment, but profits generated from the retail component of the business ultimately drive its value, justifying the developer’s initial decision to build and allowing him to develop more product.

So what does this have to do with cork sniffing? In an industry speech back in the 1980s, Darryl Hartley-Leonard, the quotable then head of Hyatt Hotels decried the era of the “cork sniffers,” those hotel executives, mostly general managers, who were too concerned with the freshness of flowers in the lobby or the quality of the wine in the restaurant to appreciate the real purpose of a hotel: making profits and driving value.

Even though Hartley-Leonard made those remarks 20-plus years ago, I’m still shocked this critical disconnect still exists in the industry. While more than ever GMs are accountable for bottom-line results at their properties, many of them still harbor the notion their job is really about providing top-notch service and hospitality to guests rather than driving profits. (Don’t get me wrong. The core of the hotel business still needs to focus on accommodating guests in the most hospitable manner possible. It also needs to be approached with a strong eye on the bottom line.)

The School of Hospitality Business at Michigan State University is tackling this once-massive, but still-present cultural divide head on. Director Ron Cichy recently hired former long-time Marriott executive Richard Farrar to launch and lead the Real Estate Development Institute at The School. Since 1927, Michigan State has been one of the leading hospitality schools in the U.S. and world. During those 84 years, The School has been best known for its strong emphasis on hotel (and later restaurant and the institutional) operations and has produced some of the top hospitality GMs and operations executives in the business. Now, The School is building on that strength. Among the Institute’s goals is a mandate to “focus on the space where hospitality business operations and management intersect with development and ownership.”

The institute will create educational programs, host industry events and conduct research that helps students, alumni, faculty and the industry work more effectively on both sides (real estate and retail) of the hospitality street. The School has also beefed-up its curriculum to give its students a strong footing in hotel real estate development and finance disciplines, and in 2005 introduced a real estate and development specialization.

If you believe change in an industry starts within its educational system, then Michigan State is on the right track. As Dr. Cichy wrote to me in a recent e-mail message, “Hospitality higher education needs to evolve from simply focusing on management and operations to also including the perspectives of the owners and developers.” That’s a good mission statement all hotel companies need to adopt to prosper in the future. Put another way, keep the lobby flowers fresh, but make sure you’re getting the best prices from your florist.