Study Report on Hotel Front Office Management

HOTEL FRONT OFFICE MANAGEMENT
FOURTH EDI TI ON
James A. Bardi, Ed.D., CHA, CHE
The Pennsylvania State University
John Wiley & Sons, Inc.
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HOTEL FRONT OFFICE MANAGEMENT
FOURTH EDI TI ON
James A. Bardi, Ed.D., CHA, CHE
The Pennsylvania State University
John Wiley & Sons, Inc.
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This book is printed on acid-free paper.
Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved.
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Library of Congress Cataloging-in-Publication Data
Bardi, James A., 1947–
Hotel front office management / James A. Bardi. — 4th ed.
p. cm.
Includes index.
ISBN-13: 978-0-471-68710-8
ISBN-10: 0-471-68710-3 (cloth)
1. Hotel management. I. Title.
TX911.3.M27B35 2006
647.94068—dc22 2005033575
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
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Linda
Your love, patience, and encouragement made this book possible.
and
Maria, Rob, Ryan, and David
The joy of sharing this book with you makes it all worthwhile.
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Contents
Pref ace vii
Acknowl edgment s xi
C H A P T E R 1 Introduction to Hotel Management 1
C H A P T E R 2 Hotel Organization and the Front Office Manager 37
C H A P T E R 3 Effective Interdepartmental Communications 73
C H A P T E R 4 Property Management Systems 95
C H A P T E R 5 Systemwide Reservations 129
C H A P T E R 6 Revenue Management 165
C H A P T E R 7 Guest Registration 184
C H A P T E R 8 Managing the Financials 222
C H A P T E R 9 Guest Checkout 237
C H A P T E R 1 0 Preparation and Review of the Night Audit 261
C H A P T E R 1 1 Managing Hospitality 308
C H A P T E R 1 2 Training for Hospitality 336
C H A P T E R 1 3 Promoting In-house Sales 362
C H A P T E R 1 4 Security 381
C H A P T E R 1 5 Executive Housekeeping 411
Gl ossary 437
I ndex 453
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T
he fourth edition of Hotel Front Office Management remains the
standard in addressing the demands of the hotel industry in the new
millennium. Educators who are preparing professionals for roles as
front office managers and general managers in hotels are required to meet the
challenges of operations, technology, training, empowerment, and interna-
tional applications. This edition continues to encourage students to take an
active part in applying these concepts to the exciting world of hotel opera-
tions. A brand-new chapter on housekeeping reviews the role of the executive
housekeeper, a member of the management team.
The emphasis on management continues to be central to this fourth edition.
The structure of the text will assist students as they prepare for positions as
entry-level managers. The logical presentation of chapters in order of opera-
tions—an overview of lodging hospitality, a tour of the front office, a review
of the guest cycle, and an analysis of guest services—will give students insight
into the front office manager’s role in the hotel. Students will also benefit from
the discussions of other departmental managers, including security and house-
keeping, and how they relate to the front office. Specific changes to the fourth
edition include the following:
Chapter 1, “Introduction to Hotel Management,” is updated with respect
to the founders of hotel industry, including the late Kemmons Wilson,
the founder of Holiday Inn; Ray Shultz, founder of Hampton Inn; nota-
tion of the progress of the limited-service hotel chain Hampton Inn; and
the impact of the events of September 11, 2001. A section on branding
is included to help students classify the multitude of names of hotel
properties in the marketplace.
Chapter 2, “Hotel Organization and the Front Office Manager,” includes
a detailed procedure for preparing a front office schedule of employees.
Preface
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Chapter 3, “Effective Interdepartmental Communications.” contains a new mini com-
munication situation for students to analyze.
Chapter 4, “Property Management Systems,” has expanded sections on choosing soft-
ware and hardware. The term yield management is changed to revenue manage-
ment. Intranet applications are included.
Chapter 5, “Systemwide Reservations” (formerly “Reservations”), provides updates
on the central reservations systems of Choice Hotels International, Intercontinen-
tal Hotels Group (formerly Six Continents Hotels), and Carlson Hospitality World-
wide. New discussion addresses global distribution systems (GDS) and the role of
the Internet, including third-party websites.
Chapter 6, “Revenue Management” (formerly “Yield Management”), presents new
and pertinent examples of software applications. A new member of the front office
staff, the revenue manager, is reviewed via a job listing. New buzzwords are
defined: channel management of guest room sales by central reservation systems,
GDS, third-party reservation system, toll-free phone number, travel agent, and so
on are explored.
Chapter 7, “Guest Registration,” has a new section on the latest self-check-in tech-
nology.
Chapter 8, “Managing the Financials” (formerly “Processing Guest Charge Pay-
ments”), is consistent with the third edition, except for the title change.
Chapter 10, “Preparation and Review of the Night Audit” (formerly “Night Audit”),
includes sections on how to read the flash report and the night audit. Financial
errors from the third edition are corrected.
Chapter 11, “Managing Hospitality,” provides new insight into customer relationship
management by integrating technology into delivering hospitality.
Chapter 14, “Security,” describes changes since 9/11 to room key security and intro-
duces biometrics, the measurement of voice, handprint, and facial characteristics.
Each chapter is presented in smaller segments for greater ease in comprehension.
The new chapter on housekeeping focuses on the management of the housekeeping
department. This chapter features the role of the executive housekeeper as a manager and
discusses the many management concepts required to organize this department, includ-
ing assignment/workload; training; room inspection; housekeepers report; communica-
tion (English as a second language); inventory control (linens, guest supplies, cleaning
supplies, furniture); cleaning control; in-house versus outsourced laundry; the Occupa-
tional Safety Health Act (OSHA); material safety data sheets; going green; and profes-
sional associations.
The fourth edition maintains high pedagogical standards. Features include Opening
Dilemmas, which present a mini case study problem to solve with the help of subsequent
chapter presentation: a Solution to the Opening Dilemma is included at the end of each
chapter. Hospitality Profiles present commentaries from hotel front office managers, gen-
viii PREFACE
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eral managers, and other department managers in hotels, adding an element of human
relations to the text. International Highlights are articles of interest that accentuate the
international workforce and international career opportunities for graduates and provide
a forum for professors and students to discuss this aspect of hotel management. Frontline
Realities present unexpected yet very realistic situations that students must develop a
method for handling. Case Studies in each chapter allow students to apply theory. A
Glossary defines terms introduced in each chapter (these appear in boldface in the text).
A completely revised instructor’s manual is available for the fourth edition.
Will you like the fourth edition of Hotel Front Office Management? I think you will.
I would appreciate your comments ([email protected]).
My very best to the future professionals of the hotel industry.
PREFACE ix
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I
wish to acknowledge the following professors, who provided insightful
reviews of individual chapters of this and previous editions: Thomas
Jones, University of Nevada at Las Vegas, Robert McMullin, East
Stroudsburg State University, and James Reid, New York City Technical
College. Without their concern and thoughtful commentary, this effort for our
students would not have been possible.
I would like to express my appreciation to the following hospitality profes-
sionals, who provided commentary for the Hospitality Profiles included in this
fourth edition: Gary Budge, general manager, Sheraton Parsippany Hotel, Par-
sippany, NJ; Marti Cannon, executive housekeeper, Sheraton Reading Hotel,
Wyomissing, PA; Barry Griffith, Holiday Inn Express Hotel & Suites, general
manager, Reading, PA; James Heale, controller, Sheraton Reading Hotel,
Wyomissing, PA; Lee Johnson, area director of catering sales, Harbor Magic
Hotels: Admiral Fell Inn, Pier 5 Hotel, and Brookshire Suites at the Inner Har-
bor Baltimore, MD; John Juliano, director of safety and security, Royal Son-
esta Hotel, Cambridge, MA; Debra Kelly, revenue manager, Sheraton
Parsippany Hotel, Parsippany, NJ; Eric Long, general manager, Waldorf=
Astoria, New York City; Joseph Longo, general manager, The Jefferson, Rich-
mond, VA; and Patrick Mene, former vice president of quality for the Ritz-
Carlton Hotel Company, L.L.C.
Special thanks to Gary Budge and Debra Kelly for their time discussing the
operations of room reservations and revenue management, and to Marti Can-
non for her countless hours explaining the management of the housekeeping
department. Their insights provided a framework that will help future genera-
tions of hoteliers understand the business.
One additional acknowledgment is offered to Dr. Trish Welch of Southern
Illinois University, who was instrumental in making possible the first edition of
Hotel Front Office Management. Her words of support to Van Nostrand Rein-
hold for the initial prospectus and sample chapter are still greatly appreciated.
Acknowledgments
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O P E N I N G D I L E M M A
A hospitality career fair is scheduled at the end of the week at your
college or university. Your recent review of this chapter has enticed you
to explore the career opportunities in limited-service and full-service
hotels. Your instructor has asked you to prepare a list of possible
questions to ask the recruiter. What would you include in that list?
The mere mention of the word hotel conjures up exciting images: a busy lobby
filled with international dignitaries, celebrities, community leaders, attendees
of conventions and large receptions, businesspersons, and family vacationers.
The excitement you feel in a hotel lobby is something you will have forever in
your career. Savor it and enjoy it. It is the beginning of understanding the con-
cept of providing hospitality to guests. As you begin to grasp the principles of
a well-operated hotel, you will discover the important role the front office
plays in keeping this excitement intact.
The front office is the nerve center of a hotel property. Communications and
accounting are two of the most important functions of a front desk operation.
Effective communications—with guests, employees, and other departments of
the hotel—are paramount in projecting a hospitable image. Answering guest
inquiries about hotel services and other guests, marketing and sales department
requests for information on guest room availability, and housekeeping depart-
ment inquiries concerning guest reservations are but a few of the routine tasks
C H A P T E R 1
Introduction to Hotel Management
C H A P T E R F O C U S P O I N T S
?
Historical overview of the
hotel industry
?
Hotel classification
system
?
Trends that foster growth
and employment in the
hotel industry
?
Career development
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performed almost constantly by a hotel front desk in its role as communications hub.
Accounting procedures involving charges to registered and nonregistered hotel guest
accounts are also important in the hospitality field. Itemized charges are necessary to
show a breakdown of charges if a guest questions a bill.
Services for which fees are charged are available 24 hours a day in a hotel property.
Moreover, because guests may want to settle their accounts at any time of the day,
accounts must be current and accurate at all times. Keeping this data organized is a top
priority of good front office management.
Founders of the Hotel Industry
A history of the founders of the hotel industry provides an opportunity to reflect on our
heritage. Learning about the founding giants such as Statler, Hilton, Marriott, Wilson,
and Schultz, to name a few, allows a student of the industry to discover the interesting lin-
eage of hoteliers. Studying the efforts of the innovators who carved out the modern hotel
industry may help future professionals with their own career planning.
E. M. Statler
To begin to understand the history of the modern hotel industry, let’s look at its early
entrepreneurs, who were motivated by wealth and fame on a grand scale.
1
Ellsworth M.
Statler (1863–1928) developed the chain of hotels that were known as Statlers, beginning
with a hotel in Buffalo, New York, built for the 1901 Pan-American Exposition. Even-
tually there were Statler hotels in Boston, Cleveland, Detroit, New York City, St. Louis,
and other locations. In 1954, he sold the Statler chain to Conrad Hilton.
2
Statler devised a scheme to open an incredible two-story, rectangular wood structure
that would contain 2,084 rooms and accommodate 5,000 guests. It was to be a tempo-
rary structure, covered with a thin layer of plaster to make it appear substantial, although
simple to tear down after the fair closed.
3
Conrad Hilton
Conrad Hilton (1887–1979) became a successful hotelier after World War I, when he
purchased several properties in Texas during its oil boom. In 1919, he bought the Mob-
ley Hotel in Cisco, Texas. In 1925, he built the Hilton Hotel in Dallas, Texas.
4
His acqui-
sitions during and after World War II included the 3,000-room Stevens Hotel (now the
Chicago Hilton) and the Palmer House in Chicago and the Plaza and Waldorf=Astoria in
New York City. In 1946, he formed the Hilton Hotels Corporation, and in 1948, he
formed the Hilton International Company, which came to number more than 125
hotels.
5
With the purchase of the Statler chain in 1954, Hilton created the first major
chain of modern American hotels—that is, a group of hotels that follow standard oper-
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ating procedures in marketing, reservations, quality of service, food and beverage opera-
tions, housekeeping, and accounting. Hilton Hotels now includes Hilton Garden Inns,
Doubletree, Embassy Suites, Hampton Inns, Harrison Conference Centers, Homewood
Suites by Hilton, Red Lion Hotels and Inns, and Conrad International.
Cesar Ritz
Cesar Ritz was a hotelier at the Grand National Hotel in Lucerne, Switzerland. Because
of his management abilities, “the hotel became one of the most popular in Europe and
Cesar Ritz became one of the most respected hoteliers in Europe.”
6
William Waldorf Astor and John Jacob Astor IV
In 1893, William Waldorf Astor launched the 13-story Waldorf Hotel at Fifth Avenue
near Thirty-fourth Street in New York City. The Waldorf was the embodiment of Astor’s
vision of a New York hostelry that would appeal to his wealthy friends by combining
the opulence of a European mansion with the warmth and homey qualities of a private
residence.
Four years later, the Waldorf was joined by the 17-story Astoria Hotel, erected on an
adjacent site by William Waldorf Astor’s cousin, John Jacob Astor IV. The cousins built
a corridor that connected the two hotels, which became known by a single hyphenated
name, the Waldorf-Astoria.
In 1929, after decades of hosting distinguished visitors from around the world, the
Waldorf-Astoria closed its doors to make room for the Empire State Building.
The 2,200-room, 42-floor Waldorf=Astoria Hotel was rebuilt on its current site at
Park and Lexington avenues between Forty-ninth and Fiftieth streets. Upon the hotel’s
opening, President Herbert Hoover delivered a message of congratulations. President
Hoover later became a permanent resident of the Waldorf Towers, the luxurious “hotel
within a hotel” that occupies the twenty-eighth through the forty-second floors. Conrad
N. Hilton purchased the hotel in 1949 and then the land it stands on in 1977. In 1988,
the hotel underwent a $150 million restoration. It was designated a New York City land-
mark in January 1993.
7
Kemmons Wilson
Kemmons Wilson started the Holiday Inn chain in the early 1950s, opening the first in
Memphis, Tennessee. He wanted to build a chain of hotels for the traveling family and
later expanded his marketing plan to include business travelers. His accomplishments in
real estate development coupled with his hotel management skills proved a highly suc-
cessful combination.
Wilson blazed a formidable path, innovating with amenities and high-rise architecture,
including a successful round building concept featuring surprisingly functional pie-shaped
rooms. Wilson also introduced the in-house Holidex central reservation system, which set
FOUNDERS OF THE HOTEL I NDUSTRY 3
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the industry standard for both the volume of business it produced and the important
byproduct data it generated (allowing it, for example, to determine feasibility for new
locations with cunning accuracy).
8
Wilson died in February 2003 at the age of 90. His legacy to the lodging industry will
be serving the traveling public with comfortable, safe accommoations while making a
profit for investors.
J. W. Marriott and J. W. Marriott Jr.
J. W. Marriott (1900–1985) founded his hotel empire in 1957 with the Twin Bridges
Marriott Motor Hotel in Virginia, near Washington, D.C. Marriott Hotels and Resorts
had grown to include Courtyard by Marriott and American Resorts Group at the time of
J. W. Marriott’s death in 1985, at which time J. W. Marriott Jr. acquired the Howard
Johnson Company; he sold the hotels to Prime Motor Inns but retained 350 restaurants
and 68 turnpike units. In 1987, Marriott completed expansion of its Worldwide Reser-
vation Center in Omaha, Nebraska, making it the largest single-site reservations opera-
tion in U.S. hotel history. Also in 1987, Marriott acquired the Residence Inn Company,
an all-suite hotel chain targeted at extended-stay travelers. With the introduction of lim-
ited-service hotels—hotels built with guest room accommodations and limited food serv-
ice and meeting space—Marriott entered the economy lodging segment, opening the first
Fairfield Inn in Atlanta, Georgia, in 1987.
9
Ernest Henderson and Robert Moore
Ernest Henderson and Robert Moore started the Sheraton chain in 1937, when they
acquired their first hotel, the Stonehaven, in Springfield, Massachusetts. Within two
years, they purchased three hotels in Boston and soon expanded their holdings to include
properties from Maine to Florida. At the end of its first decade, Sheraton was the first
hotel chain to be listed on the New York Stock Exchange. In 1968, Sheraton was acquired
by ITT Corporation as a wholly owned subsidiary, and ambitious development plans
were put into place to create a truly global network of properties. In the 1980s, under the
leadership of John Kapioltas, Sheraton’s chairman, president, and chief executive officer,
the company received international recognition as an industry innovator in offering
modern hotel accommodations.
10
The Sheraton chain is currently owned by Starwood
Hotels & Resorts Worldwide.
Ray Schultz
In the early 1980s, Ray Schultz founded the Hampton Inn hotels, a company in the Hol-
iday Inn Corporation. These hotels were tagged as limited-service, meeting the needs of
cost-conscious business travelers and pleasure travelers alike. Schultz’s pioneering efforts
in developing a product and service for these market segments have proved a substantial
contribution to the history of the hotel industry.
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At a 1998 celebration of the expansion of the Hampton Inn hotel corporation to
more than 800 properties, Schultz said:
We started the Hampton Inn chain in 1884 to provide guests with a quality room and
special amenities like a free continental breakfast and free local phone calls, all at an
exceptional value. The opening of this hotel today tells us that we understood our
guests’ needs and that price/value is still a viable concept nearly 15 years later. Hamp-
ton Inn has been, and is committed to remaining, the standard against which all mid-
priced, limited-service hotel brands are measured.
11
Historical Developments
The history of the hotel industry is filled with concepts that shaped the products and serv-
ices offered.
The atrium concept design, limited-service hotels, and technology were notable inno-
vations. Management concepts such as marketing and total quality management (TQM)
offered managers a new way to do business in hotels. The major U.S. economic reorgan-
ization in the late 1980s shaped the way hotels could be profitable. Also, in the 1990s, a
new financial approach—real estate investment trusts (REITs)—changed the financial
structuring and operation of hotels.
The terrorist events of September 11, 2001, continue to affect how hotels market
their products and services and deliver hospitality.
Atrium Concept
The hotel industry has seen many notable developments over the past years. The atrium
concept, an architectural design in which guest rooms overlook the lobby from the first
floor to the roof, was first used in the 1960s by Hyatt Hotels.
The dramatic approach to hotel style [was] exemplified by the Hyatt Regency in
Atlanta. Designed by architect John Portman, with a striking and impressive atrium soar-
ing up its 21 stories, the hotel literally changed the course of upscale hotel design. As a
result hotels became more than a place to rest one’s head. They became hubs for excite-
ment, fun, relaxation and entertainment.
12
This 1,260-room hotel “is now one of the nation’s premier convention and trade show
facilities with 180,000 square feet of ballroom, exhibit, meeting and hospitality space.”
13
Limited-Service Hotels
The movement of hotel construction from the downtown, center-city area to the suburbs
in the 1950s coincided with the development of the U.S. highway system. The limited-
service concept—hotels built with guest room accommodations and limited food service
HI STORI CAL DEVELOPMENTS 5
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and meeting space—became prominent in the early 1980s, when many of the major
chains adopted this way to serve business travelers and travelers on a limited budget.
Hampton Inn revolutionized the hotel industry with the creation of the first national
brand targeted to the new limited-service hotel segment. The hotels featured spacious,
comfortable rooms but eliminated or reduced other elements common to hotels at that
time, such as restaurants, lounges, and meeting and lobby space, passing the resulting cost
savings on to guests in the form of lower rates.
The company pioneered a number of ideas, including the mounting of the first site by
a hotel brand on the Internet. In 1989, Hampton Inn became the first national brand
to offer guests an unconditional 100 percent satisfaction guarantee, which today is the
cornerstone of all Promus brands and a testament to the company’s commitment to
quality.
14
Technological Advances
Technology has played a major role in developing the products and services offered to
guests. Reservations systems, property management systems, and in-room guest checkout
are only the most obvious advances in technology. Impressive firsts in the adaptation of
technology to the hotel industry are shown in Figure 1-1. Note how many of the devel-
opments we call technology are recent adaptations.
Recent additions to the list include applications of wireless technology that allow
front office staff to alert others on VIP check-ins, housekeeping staff to report guest
room cleaning and release, marketing staff to maintain guest profiles, and bell staff to
process baggage handling. Guests have also found technology in the 2000s to increase
their ability to work and play at the same time; they can check email and print documents
as needed from so-called hot spots, or designated wireless transmission and reception
areas in the hotel.
Marketing Emphasis
An emphasis on niche marketing to guests was the theme in the 1970s. This technique sur-
veyed potential guest markets and built systems around the needs of identified segments.
The larger hotel-management and franchise companies also were discovering the
advantages of forging strong reservations and marketing systems. For a guest, this
meant that by calling a single phone number, he or she could be assured of a reserva-
tion and feel confident of the quality of accommodations expected.
15
The marketing emphasis continues in the 2000s through the routine use of the Inter-
net to place guest reservations. A research study of PhoCusWright data indicated “Inter-
net reservations consisted of about 13 percent of all U.S. hotel reservations in 2003.”
16
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HI STORI CAL DEVELOPMENTS 7
FI GURE 1- 1. Introduction of technological advances to the hotel industry.
1846 Central heating
1859 Elevator
1881 Electric lights
1907 In-room telephone
1927 In-room radio
1940 Air-conditioning
1950 Electric elevator
1958 Free television
1964 Holiday Inn reservation system with centralized computer
1965 Message lights on telephone
Initial front office computer systems introduced followed by room status capability
1970s Electric cash register
POS (point of sale) systems and keyless locks
Color television standard
1973 Free in-room movies (Sheraton)
1980s Property management systems
In-room guest checkout
1983 In-room personal computers
Call accounting
1990s On Command Video (on-demand movies)
LodgeNet Entertainment (interactive video games)
Interactive guest room shopping, interactive visitor’s guide, fax delivery on TV, interactive
guide to hotel’s facilities and activities, reservations from the guest room for other hotels
within the same organization, and interactive weather reports
Internet reservations
Introduction of legislation that monitored hotel ownership through real estate investment
trusts (REITs)
2000s Wireless Technology—Wireless Technology VIP Check-In, Housekeeping Guestroom Glean
and Release Status, Marketing Guest Profile, Bell Staff Baggage Handling; Guest “hot spot”
centers in hotels for wireless transmission and reception of emails and documents.
Sources: American Hotel & Motel Association; Madelin Schneider, “20th Anniversary,” Hotels & Restaurants
International 20, no. 8 (August 1986): 40 (copyright Hotels magazine, a division of Reed USA); Larry Chervenak, “Top 10
Tech Trends: 1975–1995,” Hotel & Motel Management 210, no. 14 (August 14, 1995): 45.
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Total Quality Management
Total quality management (TQM), a technique that helps managers look at processes
used to create products and services with a critical eye on improving those processes, is
practiced in hotels today. This emphasis on analyzing the delivery of services and prod-
ucts, with decision making at the front lines, in the 1990s and continues today under
terms such as quality assurance and service quality. These concepts are discussed in more
detail in chapter 11.
Major Reorganization, 1987–1988
The economic period of 1987–1988 saw a major reorganization of the hotel industry.
1986 Congress unraveled what it had stitched together in 1981. The revised Tax Act
made it clear that passive losses on real estate were no longer deductible. Hotels that
were previously economically viable suddenly were not. At this time, there were plenty
of Japanese who seemed intent on buying up, at astronomical prices, any piece of U.S.
property with a hotel or golf course on it. As a result, the value of American hotel
properties continued to increase. Between 1990 and 1995, the recession began and
ended, and the full impact of the 1986 law and overbuilding were experienced. Some
investors who had built properties in the early 1980s found their properties sales or
replacement value had fallen to 50 percent or less of original cost. Some owners sim-
ply abandoned their properties to their mortgage holders—which in many cases turned
out to be Uncle Sam, because of the simultaneous S&L debacle.
17
Hotel Investment
Real estate investment trusts (REITs) provide an investment opportunity for hoteliers. In
the Spring 2000 Virginia Hospitality and Leisure Executive Report, P. Anthony Brown
of Arthur Andersen wrote the following about the U.S. Tax Relief Extension Act of
1999. This information will be useful as you plan your career.
The most significant provision, however, is creation of a new type of corporation—a
“Taxable REIT Subsidiary” (effective January 1, 2001)—which will allow REITs to
create new incremental income streams. With new growth opportunities, shareholders
should be rewarded with higher stock prices since companies with increased growth
rates typically trade in the market at higher earnings multiples.
Under the terms of the 1999 legislation, Taxable REIT Subsidiaries can provide
non-customary services to tenants through their subsidiaries. This legislation should
enable REITs to provide better customer service, create stronger customer loyalty and
sell new, non-customary services to tenants. In addition these new subsidiaries can
lease lodging facilities from REITs. However, the lodging facilities must be managed
by an independent contractor that is actively engaged in the trade or business of oper-
ating lodging facilities for any person other than the REIT.
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With these changes, hotel REITs will be able to reorganize their structure in order
to retain more of the income generated by their hotels. For example, FelCor Lodging
Trust Inc., a hotel REIT based in Irving, Texas, currently leases its hotels to two ten-
ants: 1) a company owned by its executives and directors; and 2) Bristol Hotels and
Resorts, a publicly traded company. With the new legislation, FelCor will be able to
form a new Taxable REIT Subsidiary and transfer the leases of its hotels to this new
subsidiary. Accordingly, the net income of the existing lessee would be transferred to
the new Taxable REIT Subsidiary. However, a management company (not owned by
FelCor) must manage the hotels and must be actively engaged in the trade or business
of operating lodging facilities for any person other than the REIT.
18
September 11, 2001
The terrorist events of September 11, 2001, will have a lasting effect on how a hotel mar-
kets its products and services and delivers hospitality. The immediate impact of the ter-
rorist attacks was a decrease in the number of people willing to fly and, thus, a decrease
in demand for hotel rooms. Hotels (as well as restaurateurs, tourist attractions, govern-
ment agencies, and the like) and the federal, regional, and state tourism associations con-
tinue to cooperate to address the issue of fear as it relates to travel and tourism.
Hoteliers reviewed their marketing plans and determined how to attract the post-9/11
corporate traveler. The huge corporate guest market can no longer be taken for granted.
Corporate executives, travel planners, and traffic managers now must be greeted person-
ally by hotel staff and asked when business might be expected. New methods of attract-
ing markets such as local and regional residents are being developed. These efforts include
special packages emphasizing local history and culture, businesses, sporting events, and
natural attractions and are combined with the products and services of an individual
hotel. Is this an easy challenge? Indeed no, yet it is one that hoteliers had to grasp with
eagerness and enthusiasm in order to succeed.
R. Mark Woodworth reports that this effort is indeed a formidable task in light of the
data revealed in Trends in the Hotel Industry—USA, published by PKF Consulting and
the Hospitality Research Group (HRG). The 2003 edition reported that “the operating
profit for the average U.S. hotel dropped 9.6 percent in 2002, this after a 19.4 percent
decline in profits in 2001.”
19
Rick Swig of RSBA & Associates notes that although hotel revenues increased by 2
percent from 2003 to 2004, “other issues such as supply of hotel rooms of 4.4% since
June 2001 versus average number of rooms sold increasing only by 3.3%.” He urges,
“Hotel operators should focus on pricing power for the next 24 months until occupancy
returns to pre-2001 levels and compression begins to build. . . . National consortium and
high volume travel contracts are being finalized for 2005. Hotels will have to be success-
ful in achieving significant rate hikes through these conduits, since the past two years of
negotiations have yielded little or no rate increase as operating expense inflated.”
20
Further insight into the challenge facing hoteliers is expressed by Tom Belden of The
Philadelphia Inquirer, who relates that 94 percent of the 112 corporations surveyed by
HI STORI CAL DEVELOPMENTS 9
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the Business Travel Coalition of Radnor, Pennsylvania, cut their travel spending over a
three-year period. He reports that one participant increased its use of web-based meeting
software by 50 percent in one particular year.
21
The delivery of hospitality in hotels has also come under review. For example, hote-
liers are reviewing security plans to include the front-line employee who must take imme-
diate action based on observations at the front desk, in the dining room and recreational
areas, and on guest and public floors. The front-line employee who sees uncommon
activities has to know the importance of reporting concerns to supervisors. Special train-
ing in what to look for in guest interactions in public areas and on guest floors assists the
front-line person in becoming proactive.
Hoteliers must also be concerned with how to support hospitality as part of responsi-
ble community citizenship. Hotel general managers should develop emergency plans that
allow immediately offering public space to medical personnel and disaster victims. Short-
term concerns such as feeding disaster victims and emergency personnel and long-term
commitments such as housing displaced members of the community are among the many
issues faced by the hotel industry.
Liability implications for the owner, management contractor, or lessee with respect to
repair of facilities have arisen in addition to concerns for the safety of guests resulting
from terrorism. Andrew MacGeoch, reporting in Hotel, notes:
The obligation of an owner to repair the hotel under a management agreement usually
depends on the extent of the damage. In general, if the costs of repair do not exceed a
certain threshold specified in the management agreement [which is usually a certain
percentage of the replacement costs of the hotel], the owner will be obliged to repair
the hotel to its condition prior to the destruction. However, if the costs of repair
exceed the specified threshold, the owner will have the right to choose not to under-
take the repair and to terminate the management agreement.
MacGeoch continues with a note on liability toward guests by acts of terrorism.
Generally, neither the operator nor the owner would be held liable for any injury or
death caused by terrorist activities, unless the owner or operator has failed to exercise
reasonable care for the safety and security of their guests. Therefore, to make sure that
the reasonable-care standard is met, it is necessary and advisable for owners and oper-
ators to take reasonable and necessary steps to protect the safety of guests, including
implementing appropriate security policies and measures and providing crisis-
management training to all employees.
22
These issues of marketing, delivering hospitality, and the ramifications of possible ter-
rorism are ongoing concerns that hoteliers must continue to discuss. They must focus on
goals and subsequent planning for implementation of a safe environment for guests and
employees.
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Overview of the Hotel Industry
A working knowledge of the classifications used in the hotel industry is important to
understanding its organization. The various types of properties, their market orientation
and location, sales indicators, occupancy, and revenues as they relate to levels of service
and various types of business affiliations are all means of classifying hotel properties. Fig-
ure 1-2 serves as a reference point throughout this discussion.
OVERVI EW OF THE HOTEL I NDUSTRY 11
FI GURE 1- 2. Hotel industry overview.
I. Types of hotel properties
a. Hotels
b. Motels
c. All-suites
d. Limited-service hotels
e. Extended-stay hotels
II. Market orientation/location
a. Residential
i. Center-city
1. Hotels
2. All-suites
3. Limited-service
4. Extended-stay
ii. Suburban
1. All-suites
2. Limited-service
3. Extended-stay
b. Commercial
i. Center-city
1. Hotels
2. All-suites
3. Limited-service
4. Extended-stay
ii. Suburban
1. Hotels
2. Motels
3. All-suites
4. Limited-service
5. Extended-stay
iii. Airport
1. Hotels
2. Motels
3. All-suites
4. Limited-service
iv. Highway
1. Motels
2. All-suites
3. Limited-service
4. Extended-stay
III. Sales indicators
a. Occupancy
b. Average daily rate (ADR)
c. Yield percentage
d. Revenue per available room (RevPAR)
IV. Levels of service
a. Full-service
b. All-suites
c. Limited-service
d. Extended-stay
V. Affiliation
a. Chain
i. Franchise
ii. Company-owned
iii. Referral
iv. Management contract
b. Independent
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Types of Lodging Facilities
Classification of hotel facilities is not based on rigid criteria. The definitions can change
depending on market forces, legal criteria, location, function, and, in some cases, personal
preference, but the definitions that follow are generally accepted and are the ones
intended for these classifications throughout this text.
Hotels
A hotel usually offers guests a full range of accommodations and services, which may
include reservations, suites, public dining and banquet facilities, lounge and entertain-
ment areas, room service, cable television, personal computers, business services, meeting
rooms, specialty shops, personal services, valet, laundry, hair care, swimming pool and
other recreational activities, gaming/casino operations, ground transportation to and
from an airport, and concierge services. The size of the property can range from 20 to
more than 2,000 rooms. Hotels are found in center-city, suburban, and airport locations.
Guest stays can be overnight or long-term, as much as several weeks in length. Properties
sometimes specialize in catering to particular markets, such as conventions or gambling.
Casino hotels usually take a secondary role to the casino operation, where the emphasis
is on profitable gaming operations. Marriott’s hotels operated as JW Marriott Hotels &
Resorts and Renaissance Hotels, as well as Hyatt Hotels & Resorts brands operated as
Hyatt Regency, Grand Hyatt, and Park Hyatt Hotels, are examples in this category.
Motels
Motels offer guests a limited range of services, which may include reservations, vending
machines, swimming pools, and cable television. The size of these properties averages from
10 to 50 units. Motels are usually in suburban highway and airport locations. Guests typi-
cally stay overnight or for a few days. Motels may be located near a freestanding restaurant.
All-Suites
The all-suites concept was developed in the 1980s as a separate marketing concept. These
hotels offer guests a wide range of services that may include reservations, living room and
separate bedroom, kitchenette, optional public dining room and room service, cable tel-
evision, videocassette players and recorders, specialty shops, personal services, valet and
laundry, swimming pool, and ground transportation to and from an airport. The size of
the operation can range from 50 to more than 100 units. This type of property is usually
found in center-city, suburban, and airport locations. The length of guest stay can be
overnight, several days, or long term. Although this type of hotel may seem new, many
downtown, center-city hotels have offered accommodations with in-room kitchenette
and sitting room since the early 1900s. Now with mass marketing—advertising products
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and services through mass communications such as television, radio, and the Internet—
this type of hotel is considered “new.” Examples of the all-suite concept include Hilton’s
Embassy Suites and InterContinental’s Candlewood Suites.
Limited-Service Hotels
Limited-service hotels appeared in the mid-1980s. Hampton Inn and Marriott were
among the first organizations to offer limited-service properties.
The concept of limited service was developed for a specific segment of the market:
business and cost-conscious travelers. The range of accommodations and services may
include reservations, minimal public dining and meeting facilities, cable television, per-
sonal computers, personal services (valet and laundry), and ground transportation to and
from an airport. The size of the property can range from 100 to more than 200 rooms.
Limited-service hotels are found in center-city, suburban, and airport locations. They are
usually located near restaurants for guest convenience. Guest stays can be overnight or
long term. These properties sometimes specialize in catering to the business traveler and
offer special business technology centers. Limited-service hotel properties include Holiday
InnExpress, operated by InterContinetal Hotels Group; Comfort Inn, by Choice Hotels
International; and Marriott’s Fairfield Inn.
TYPES OF LODGI NG FACI LI TI ES 13
H O S P I T A L I T Y P R O F I L E
?
J
oseph Longo is the general man-
ager of The Jefferson Hotel, a 265-
room historic property in Rich-
mond, Virginia. One of only 17 hotels in North
America to receive both the Mobil Five Star and
AAA Five Diamond ratings, The Jefferson Hotel
offers guests the highest level of products and serv-
ices available, with a strong commitment to warm,
genuine, and gracious service.
Mr. Longo obtained B.S. degrees in business
administration and communication from Saint
John’s University in New York. While in college,
he worked at the front desk at The Saint Regis
Hotel in New York City and began his profes-
sional career at the Sheraton-Carlton Hotel in
Washington, D.C., as the rooms division manager.
He then became general manager of The River Inn
hotel in Washington, D.C., and then the regional
director of operations for the Potomac Hotel
Group. Prior to becoming general manager of The
Jefferson Hotel, Mr. Longo was regional director
of operations for the Field Hotel Association in
Valley Forge, Pennsylvania.
The sales and marketing effort for this inde-
pendently owned property requires aggressive
sales and public relations strategies. Focus is placed
not only on the guest rooms but also on the 26,000
square feet of function space and the two restau-
rants, one an AAA Five Diamond Award winner.
Mr. Longo encourages students who are pursu-
ing a hospitality management career to remember
that, as innkeepers, the hotel is like your home,
where all of your guests are made to feel welcome.
This means providing all guests with the basics of
hospitality: a comfortable room, exceptional food,
and a friendly staff to serve them. He adds that
hospitality is a diverse business, offering a unique
work experience each day.
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Extended-Stay Hotels
Extended-stay properties were designed to offer guests a home-away-from-home atmos-
phere over long stays precipitated by business, leisure, or personal necessity. For exam-
ple, a person may have to attend to a business project for several days or weeks; another
may want to visit with relatives whose home does not have adequate accommodations for
visitors; a third may be accompanying a relative or friend receiving an extended health
treatment at a medical center and require overnight accommodations. The patient him-
self may appreciate the homelike atmosphere of the extended-stay hotel in which to
recover between treatments.
Leon Stafford of The Atlanta Journal-Constitution writes, “The big, fancy hotels . . .
have struggled to get 60 percent of their rooms filled since 2001. Meanwhile, extended-
stays . . . have remained at least 70 percent filled.” He adds an interesting concept for
your career development consideration: “About three extended-stay lodges were built for
every traditional hotel constructed between 2001 and 2004.”
23
At Hilton’s Homewood Suites, the following room amenities are included: king-size
bed or two double beds in the bedroom and foldout sofa in the living room; two remote-
controlled color televisions; fully equipped kitchen with a microwave, refrigerator with
ice maker, coffeemaker, twin-burner stove, and kitchen utensils; a spacious, well-lit din-
14 CHAPTER 1
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I NTRODUCTI ON TO HOTEL MANAGEMENT
H O S P I T A L I T Y P R O F I L E
?
C
harles Gellad is the general man-
ager of the Homewood Suites in
Alexandria, Virginia. He began his
career at the Hampton Inn in Alexandria as a front
desk clerk and progressed to guest services manager
there. Then he took a position as sales manager at
the Hampton Inn in Fairfax, Virginia, and then as
director of sales at the Hampton Inn in Alexandria.
He was on board as director of sales prior to the
opening of the Homewood Suites in Alexandria.
Mr. Gellad said his market for guests includes
people who are going to be in town for an
extended period because of government contracts,
special projects, training, or relocation in the mili-
tary or in the private sector. Relocation is a com-
mon characteristic with this market.
Mr. Gellad’s extended-stay hotel offers break-
fast in the morning and a manager’s reception
(light foods and beverages); a fitness center and an
indoor whirlpool; a coin-operated laundry; an
executive center equipped with a fax machine, per-
sonal computer, copying machine, and other office
amenities; a convenience store called the Suite
Shop; free parking; and free local, credit-card, and
collect calls.
Mr. Gellad’s entry-level experience provided
him with many opportunities to learn how to deal
with different personalities. He says that when you
become a supervisor, your employees want to be
treated as individuals, but you must be fair in
interpreting the polices to everyone. He also
extends his hope that you will develop a balance
between work and a personal life. This business
can be very time-consuming, but you must take
time to develop a life outside the hotel.
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ing area; and ceiling fans and iron and ironing board. Additional hotel services include a
business center, an exercise room, and a pool. This hotel concept also structures its room
rates to attract the long-term guest.
Market Orientation
Market orientation in the hotel industry is categorized into two segments: (1) residential
hotels, which provide guest accommodations for the long term; and (2) commercial hotels,
which provide short-term accommodations for traveling guests.
Residential properties include hotels, all-suites, limited-service, and extended-stay
properties. Services may include (but are not limited to) public dining, recreational facil-
ities, social activities, and personal services. These hotels are usually located in center-city
and suburban areas where other activities (shopping, arts and entertainment, business
services, public transportation) are available to round out the living experience.
MARKET ORI ENTATI ON 15
H O S P I T A L I T Y P R O F I L E
?
B
arry Griffith, general manager of
the Holiday Inn Express Hotel
& Suites in Reading, Pennsylvania,
feels that guest service is the center of the hospi-
tality business and that this is achieved by finding
employees to deliver that service. He states, “We
as managers have to be motivators and coaches to
ensure that front line employees deliver that serv-
ice. We must also lead by example.”
The customer mix at the Holiday Inn Express
Hotel & Suites changes depending on the time of
the week. On weekdays, the mix is 80 percent
business and 20 percent leisure; on the weekend it
is 80 percent leisure and 20 percent business. Mr.
Griffith noted that an old, established hospital in
the area is relocating near his hotel. He expects
this to reconfigure his customer mix: During the
week it will be 70 percent business and 30 percent
leisure, while on the weekend it will be 90 percent
leisure and 10 percent business.
What do all these customers want? Guests in
both segments want a warm welcome and a clean
room. However, the business segment wants
quick, efficient service and high-speed Internet
service for their computers. The leisure segment
wants directions to local attractions and value
(free phone calls, breakfast, and manager’s recep-
tion on selected days).
The Holiday Inn Express is a franchise of Inter-
Continental Hotels Group. This franchise offers
reservation service, a priority club for free upgrade
on rooms, USA Today, points on merchandise and
free room-nights or air travel, high-speed Internet
service, shuttle service, free continental breakfast,
and a manager’s reception on Mondays, Tuesdays,
and Wednesdays featuring cocktails and hors
d’oeuvres.
Mr. Griffith graduated from Penn State Berks
with an associate degree in housing and food service.
His professional experience includes serving as assis-
tant general manager at the Sheraton Reading Hotel
and Sheraton Lancaster Resort. He was also in man-
agement with the Bennigan’s Restaurants chain.
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Commercial properties service the short-term transient guest. Services include (but are
not limited to) computerized reservation systems, public dining, banquet service, lounge
and entertainment areas, personal services, and shuttle transportation to airports. These
hotels may be located almost anywhere.
It is essential to note the gray areas where these two categories overlap. A commercial
lodging establishment may have a certain percentage of permanent residents. Likewise, a
residential hotel may have nightly rentals available. Owners and general managers must
exhibit a great deal of flexibility in meeting the needs of the available markets.
Sales Indicators
Sales indicators, including hotel occupancy and average daily rate, are another way of
describing hotels. This information is necessary for business investors to estimate the
profitability of a hotel.
Four factors measure a hotel’s degree of financial success: occupancy percentage, aver-
age daily rate, yield percentage, and revenue per available room (RevPAR). Occupancy
percentage is the number of rooms sold divided by the number of rooms available. Aver-
age daily rate (ADR) is the total room revenue divided by the number of rooms sold.
Yield percentage, the effectiveness of a hotel at selling its rooms at the highest rate avail-
able to the most profitable guest, reveals a facility’s success in selling its room inventory
on a daily basis. RevPAR is used to indicate the ability of each guest room to produce a
profit. Once the daily sales opportunity has presented itself, it cannot be repeated (exclud-
ing the opportunity to sell a room at a half-day rate).
Occupancy
Occupancy percentages measure the effectiveness of the marketing and sales department
as well as the external and internal marketing efforts of the front office. Occupancy per-
centage is also used by investors to determine the potential gross income, or the amount
of sales a hotel might obtain at a given level of occupancy, average daily rate, and antic-
ipated yield. However, it is important not to assume that occupancy is standard each
night. Variations occur daily and seasonally.
Average Daily Rate
The average daily rate (sometimes referred to as average room rate) is also used in pro-
jecting room revenues—the amount of room sales received—for a hotel. However, this
figure also affects guests’ expectations of their hotel experience. Guests expect higher
room rates to correlate with higher levels of service; the hotel with a rate of $175 per
night is expected to offer more services than a hotel in the same geographic area with a
rate of $85 per night. These expectations have been extensively capitalized on by major
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hotel chains, which develop different properties to meet the expectations of various seg-
ments of the hotel market.
Yield Percentage
Yield percentage measures a hotel manager’s efforts in achieving maximum occupancy at
the highest room rate possible. This term is discussed more fully in chapter 6. It is suffi-
cient to note here that this concept is relatively new in the hotel industry. Prior to the
1990s, hotel managers relied on occupancy and average daily rate as indicators of meet-
ing financial goals. Yield percentage forces managers to think in more active terms.
RevPAR (Revenue per Available Room)
RevPAR is determined by dividing room revenue received for a specific day by the num-
ber of rooms available in the hotel for that day. The formulas for determining RevPAR
are as follows:
For example, RevPAR for a hotel that has $10,000 in room revenue for the night of
September 15 with 200 rooms available equals $50 ($10,000 ÷ 200 = $50).
This same hotel on September 15 with 200 rooms, room revenue of $10,000, 125
rooms sold at an average daily rate of $80 ($10,000 ÷ 125 = $80), and with hotel occu-
pancy of 62.5 percent (125 rooms sold ÷ 200 rooms available × 100 = 62.5 percent), pro-
duces the same RevPAR (0.625 × $80 = $50).
RevPAR is used in hotels to determine the amount of dollars each hotel room produces
for the overall financial success of the hotel. The profit from the sale of a hotel room is
much greater than that from a similar food and beverage sale. However, the food and
beverage aspect of the hotel industry is essential in attracting some categories of guests
who want conference services. Chapter 6, “Revenue Management,” discusses the impor-
tance of considering the potential income from room and food and beverage sales.
Consider the following article, “January RevPAR Grows Nearly Ten Percent at Sub-
urban Lodge Company-Owned Hotels,” which was published online. It shows how
RevPAR is dependent on hotel occupancy. This article also addresses the importance of
using RevPAR to present a fuller financial picture based on factors that affect room sales,
such as economic conditions, weather patterns, and business travel, and ownership.
NEW YORK, September 16, 2004: PricewaterhouseCoopers forecasts revenue per
available room (RevPAR) to increase by 6.3 percent in 2004, the largest increase in 20
years.
RoomRevenue
Number of Available Rooms
or
Hotel l Occupancy Average Daily Rate ×
SALES I NDI CATORS 17
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The 3.7 forecast increase in average daily rate in 2004 will contribute almost 60
percent of the total forecast RevPAR gain for the year. Many factors support the
favorable outlook for ADR:
1. upward revisions to inflation forecasts;
2. acceleration of business travel and the consequent increase in higher-rate lodging
demand;
3. consolidation of ownership, and therefore, more properties under pricing discipline;
4. dramatic increase in control being exercised by hotel companies and owners over
rate integrity and inventory, leading to less discounting on third-party distribution
channels; and
5. aftermath of hurricanes in Florida, generating room demand from people involved
in damage assessment, insurance, and reconstruction in otherwise low-occupancy
months, with especially positive effects on room rates.
The lodging expansion that is underway will bring lodging demand to 2.71 million
daily occupied rooms in 2004, or 2.1 percent above the previous peak level recorded
in the 2000. With supply expanding by only 1.3 percent in 2004 amid 3.7 percent
demand growth, occupancy will advance to 60.6 percent, an increase of 1.5 occupancy
points from 2003.
“We were criticized for being too negative in 2002 and 2003, but our forecasts were
almost exactly the actual results, and for 2004 and 2005 we have been criticized for
being too positive. But this regularly scheduled quarterly update is for even more posi-
tive growth in rate; our demand forecast for 2004 is unchanged,” said Dr. Bjorn Han-
son, Global Practice Leader of PricewaterhouseCoopers Hospitality & Leisure Practice.
Real GDP is forecast by Macroeconomic Advisers to grow by 4.4 percent in 2004,
followed by 3.9 percent growth in 2005 and 3.6 percent growth in 2006. Consumer
prices are expected to advance by 2.7 percent in 2004, followed by 2.2 percent annual
increases in both 2005 and 2006. These new forecasts represent slightly slower real
GDP growth and an acceleration in inflationary pressures, compared to the macro-
economic forecasts underlying our June 2004 forecasts.
Demand growth is expected to moderate in the next two years to the long-term annual
growth rate of approximately 2.8 percent. Occupancies will improve to 62.1 percent by
2006, as supply growth remains moderate at 1.5 percent in 2005 and 1.7 percent in 2006.
After achieving 3.7 percent growth in 2004, ADR will increase by 3.5 percent in
2005 and 3.4 percent in 2006, making ADR increases the primary driver of the robust
forecast RevPAR growth of 5.0 percent in 2005 and 4.5 percent in 2006.
24
Levels of Service
The four commonly used market segments—identifiable groups of customers with simi-
lar needs for products and services—are full service, all-suites, limited service, and
extended stay. There is a great deal of overlap among these divisions, and much confu-
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sion, some of which occurs because leaders in the hotel industry do not agree on termi-
nology. Some industry leaders avoid the “budget” tag because of its connotations of
cheapness and poor quality. Others welcome the label because it appeals to travelers
looking for basic accommodations at inexpensive rates. Nevertheless, the following def-
initions provide some idea of what is offered at each level of service.
Full service is a level that provides a wide range of conveniences for the guest. These
services include, but are not limited to, reservations, on-premises dining, banquet and
meeting facilities, and recreational facilities. Examples of full-service hotels include Mar-
riott Hotels and Resorts, Renaissance Hotels, and Holiday Inns.
As discussed earlier, the all-suites category indicates a level of service appropriate for
a guest who desires an at-home atmosphere. Services include separate sleeping and living
areas or working areas, kitchenette facilities, wet bars, and other amenities at the mid-
price level. This concept appeals to the business traveler as well as to families. Marriott’s
SpringHill Suites and Embassy Suites Hotels are examples of all-suite hotels. It is inter-
esting to note that this concept is also employed in older center-city commercial hotels,
in which rooms adjoining the bedroom and bath have been remodeled as living rooms
and kitchenettes to create suites.
Limited service emphasizes basic room accommodations, guest amenities, and minimal
public areas. A continental breakfast and/or an evening cocktail is often included in the
price of the room. The guest has the opportunity to trade the public meeting room for free
in-room movies, the dining room for free local phone calls. Hampton Inns and Holiday
Inn Express Limited are examples of limited-service hotels.
Extended stay is a level of service that offers a home-away-from-home atmosphere for
business executives, visitors, and families who are planning to visit an area for an
LEVELS OF SERVI CE 19
H O S P I T A L I T Y P R O F I L E
?
G
reg Goforth is the general man-
ager of the Best Western Merry
Manor in South Portland, Maine.
The Merry Manor is a full-service hotel with 151
guest rooms, six meeting rooms, and a restaurant.
Guest amenities include a year-round outdoor
heated pool, an 18-foot indoor hot tub with a
therapeutic waterfall, and a kiddie pool. Mr.
Goforth has a degree in hotel and restaurant man-
agement from the University of New Hampshire.
He says that guests are looking for the basic com-
forts of home—clean, comfortable, well-equipped
rooms with everything in working order. He has
noticed a trend toward added amenities in the
rooms. Irons, ironing boards, and hair dryers are
now considered necessities, and having breakfast
available is a must. Business-friendly rooms with a
large desk, in-room fax machine, and easy and fast
Internet access are also vital to attracting a corpo-
rate clientele.
Mr. Goforth indicates that occupancy in the
Portland market has remained fairly consistent.
Growth in occupancy has barely kept up with the
constant increase in supply. The average daily rate
has been rising faster than inflation; however,
increased guest demands and increased payroll
expenses have added to the challenge of making a
profit. According to Mr. Goforth, the greatest
challenge for hospitality in the next few years will
be attracting and retaining qualified help.
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extended period. A fully equipped kitchenette allows international guests to prepare com-
forting foods in a new environment. The spacious bedrooms and living areas provide
work and recreational areas. Light breakfast and evening meals included. Examples of
this level of service include Hilton’s Homewood Suites hotels, InterContinental’s Stay-
bridge Suites, and Choice Hotels International’s MainStay Suites.
Business Affiliations
Business affiliations, which indicate either chain or independent ownership of hotels, also
categorize the hotel industry. These classifications are the most easily recognizable by
consumers with regard to such features as brand name, structural appearance, and ambi-
ence. Long-lasting marketing effects develop a brand loyalty and acceptance that are most
important to the long-term profitability for a hotel.
Chain Affiliation
When asked to name several chain operations (a group of hotels that follow standard
operating procedures such as marketing, reservations, quality of service, food and bever-
age operations, housekeeping, and accounting), most people would probably mention
Holiday Inn, Marriott, Sheraton, Days Inn, Hyatt, Hilton, or Econo Lodge. Students
should stay up to date regarding developments in the industry, such as acquisitions,
restructuring, and other changes in these organizations. This information, important to
know when making career decisions, can be obtained from trade journals such as Hotels
(published by Cahners, Des Plaines, Illinois), whose annual July issue includes a listing of
hotel chains, addresses, and number of rooms; the Wall Street Journal; and other news-
papers, magazines, and websites.
Chain affiliations, which include hotels that purchase operational and marketing serv-
ices from a corporation, are further divided into franchisee, referral, company-owned
properties, and management contract companies. Franchise corporations offer support
to the franchisee, who is the owner of the land and building, in the form of reservation
systems, advertising, operations management, and management development. In return
for these services, the franchisee pays fees for items such as initial startup, rental of signs
and other equipment, use of the corporation’s reservation referral system, and national
advertising.
25
Anyone wishing to enter the hotel business by investing personal funds wants to be
sure of realizing a profit. Perhaps due to lack of experience in operating a hotel or motel,
a lack of business acumen, a poor credit rating, or limited knowledge of real estate devel-
opment, this type of entrepreneur may need to seek the guidance of others. He or she can
receive direction from a corporation, such as Days Inn, Sheraton, or Hilton, concerning
land, building, and management development.
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Referral Property
Sometimes a hotel organization chooses to become a referral property—that is, to operate
as an independent in association with a certain chain. Because the property is already phys-
ically developed, the entrepreneur may want assistance only with management, marketing
and advertising, or reservation referral. Likewise, the fees are based on services required.
The chain’s quality assurance standards must, however, be met by the referral property.
Company-Owned Property
A company-owned property, a hotel that is owned and operated by a chain organization,
allows the hotel company developer to act as an independent entrepreneur. The hotel
company developer operates the hotel property in competition with all other properties
in the area. It uses its own expertise in site selection, property development, marketing
and advertising, and operations management. The hotel company developer recruits tal-
ented professions into the organization to manage such properties. It uses the chain’s
reservation system. The hotel company developer may set a limit on the number of fran-
chises so that a majority of the properties remain company-owned.
Management Contract Property
A management contract property, a hotel operated by a consulting company that pro-
vides operational and marketing expertise and a professional staff, is similar to a referral
property. Several management contract organizations develop business relationships with
existing hotels and operate the hotels as their own. Their business relationship requires
financial accountability and profitability. Management contract companies may choose
to operate each hotel as a member of a franchise or as an independent.
Brands
Hotel brands are an important part of the lodging industry, especially in consumer mar-
keting. Branding allows a hotel company to create a concept in the mind of a consumer.
This mind-concept helps the consumer classify a hotel’s offerings. For example, a ficti-
tious brand such as the Hotel Flower Chain may have three distinct offerings in its port-
folio of lodgings: the Tulip Extended Stay, the Rose Limited Inn, and the Violet
All-Suites. Another fictitious brand such as the Timber Chain may have seven more
brands in their chain with similar facilities, such as the Pine All-Suites, the Maple
All-Suites, the Sunset Extended-Stay Suites, the Timber Express, the Timber Grand
Hotels, the Timber Falls, and the Pine Limited Service. Each of these brands has distinct
product and service offerings such as communication via website, reservation service,
reservation reward point program, room accommodations, food service, personal fitness
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and business equipment, and meeting and convention facilities. Therefore, when guests
have certain needs for business or pleasure traveling, they can match them up to a cer-
tain brand.
The following is a list of major hotel brands. Further information can be accessed on
each of the hotel companies on the Internet.
MA R R I O T T S T A R WO O D
Marriott Hotels & Resorts Sheraton
JW Marriott Hotels & Resorts Westin
Renaissance Hotels & Resorts Four Points
Courtyard by Marriott St. Regis
Residence Inn The Luxury Collection
Fairfield Inn W Hotels
Conference Centers
TownePlace Suites
SpringHill Suites
Marriott Vacation Club
H Y A T T
Hyatt Regency
Grand Hyatt
Park Hyatt
I N T E R C O N T I N E N T A L S HO T E L S G R O U P C A R L S O N C O MP A N I E S
InterContinental Hotels & Resorts Park Inn Hotels
Crowne Plaza Hotels & Resorts Country Inns & Suites by Carlson
Hotel Indigo Park Plaza Hotels & Resorts
Holiday Inn Hotels & Resorts Regent International Hotels
Holiday Inn Express
Staybridge Suites
Candlewood Suites
C H O I C E H O T E L S I N T E R N A T I O N A L
Comfort Inn
Comfort Suites
Quality
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Sleep Inn
Clarion
MainStay Suites
Econo Lodge
Rodeway Inn
H I L T O N
Conrad Hotels
Doubletree
Embassy Suites Hotels
Hampton Inn
Hampton Inn & Suites
Hilton Garden Inn
Hilton Hotels
Homewood Suites by Hilton
WY N D H A M H O T E L S & R E S O R T S
Wyndham Hotels
Wyndham Resorts
Viva Wyndham Resorts
Wyndham Luxury Resorts
Wyndham Historic Hotels
Wyndham Garden Hotels
Summerfield Suites by Wyndham
Independent Properties
An independent hotel is one that is not associated with a franchise. It provides a greater
sense of warmth and individuality than does a property associated with a chain. Inde-
pendent hotel characteristics include an owner who functions as a manager, room rates
similar to chain properties, rooms decorated in different styles, and inviting dining rooms.
These hotels may be residential or commercial, with locations in the center city, subur-
bia, along the highway, or near an airport. The number of rooms can range from 50 to
1,000. They may offer full services to the guest, including suites, dining room, room serv-
ice, banquets, gift shop, beauty shop, athletic facilities, swimming pool, theaters, valet
services, concierge, and airport shuttle service. Some older independent hotels have refur-
bished their suites to capture a share of the all-suites market.
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With all of these advantages, why aren’t all lodging properties independent? The
answer lies with the U.S. economy. The development of large chains and of smaller prop-
erties often brings tax advantages and improved profits to investors. Millions of dollars
in capital are required to develop a 2,000-room full-service property. Business, financial,
and managerial expertise is more readily available in a company in which there is a pool
of skilled experts. Large corporations can also offset financial losses in certain fiscal
years or from certain properties against financial gains of other companies or properties
in their diversified portfolios.
The independent entrepreneur operates his or her business without the advantages of
consultation and assistance. This person may have worked for a large chain or gained a
great deal of operations and development experience in the industry. He or she may also
purchase a hotel property to balance an investment portfolio. As for any financial invest-
ment, the entrepreneur seeks a professional to manage and operate the establishment. The
person chosen for this job must manage all aspects of the business: room, food and bev-
erage, housekeeping, security, maintenance, parking, controller’s office, and marketing
and sales. All business decisions on expenditures must be coordinated with a profit-and-
loss statement and a balance sheet. Every sale of a guest room, every guest purchase of
food and beverage, occurs because the management of that property has been able to
market and manage the property effectively. The challenge of managing an independent
property can be overwhelming. It can, however, also offer enormous satisfaction and
financial independence.
Trends that Foster Growth
Future professionals in the hotel industry must be able to analyze who their customers
will be and why they will have customers. Marketing classes teach how to determine the
buyers of a particular product—who the potential guests of a particular hotel property
are. Such courses show how to evaluate demographic data (the size, density, distribution,
and vital statistics of a population broken down into, for example, age, sex, martial sta-
tus, and occupation categories) and psychographic data (emotional and motivational
forces that affect a service or product) for potential markets.
The second question—why there will be customers—is an important one. Students will
explore this question many times during their career in the lodging industry. A manager
must plan for profitable results. This plan must take into account the reasons customers
purchase a product—what trends will increase or decrease the need for hotel facilities?
Factors include the growth of leisure time, the development of the me/pleasure concept,
increases in discretionary income, the trend toward smaller families, changes in business
travel, and expansion of the travel experience. Other economics and political trends—
such as public liability, insurance costs, overbuilding, the value of the U.S. dollar over-
seas, gasoline prices, safety from random danger while traveling, and legislation—affect
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commerce; labor and the airline industry also have an impact on current sales as well as
growth in the lodging industry.
Leisure Time
The trend toward increased leisure time—in the form of three-day weekends, paid vaca-
tions and personal days, a workweek of 40 hours or less, and early retirement—sets the
stage for the growth of the lodging industry. As more people have available leisure time
to explore new geographical areas, try new hobbies, sample culinary trends, participate
in sporting events, and just relax, the customer base of the hotel industry expands.
Workers are spending fewer years in the labor force as the concept of early retirement
becomes more popular. As the population segment known as the baby boom ages, the
number of retirees is projected to soar. Many of them will take on a second career, but
part-time jobs will likely be more common. With the two prime ingredients for using
hotel facilities—time and money—readily at hand, these people will be a primary market
for the hotel industry.
Me/Pleasure Concept
The idea of deserving recreation away from the job to restore mental acuity and improve
attitude has evolved over the years. The work ethic of the eighteenth and nineteenth cen-
turies strongly influenced the way Americans played, as recreation and leisure were con-
sidered privileges reserved for the wealthy. Today, most workers enjoy vacations and the
feeling of getting away from it all. This trend toward fulfilling personal needs continues
in the twenty-first century.
The isolated nature of many jobs increases the need for respite. As more and more peo-
ple find themselves spending more time communicating via computer and other machin-
ery rather than face to face, social needs continue to grow. Workers need the
away-from-job experience to balance their social and mental needs with their daily-life
demands. Travel helps satisfy these needs, and the hotel industry benefits as a result.
Discretionary Income
Discretionary income, the money remaining from wages after paying for necessities such
as food, clothing, and shelter, is the most important of all the trends that support the
growth of the hospitality industry. One of the main reasons for the increase in discre-
tionary income of American families is the emergence of the two-income family. An almost
double-income family unit has emerged over the years as more married women join or stay
in the labor force. The strong growth in this labor segment will undoubtedly continue. As
more income becomes available to pay for the necessities of life, discretionary income for
leisure time and corresponding goods and services also becomes available.
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Discretionary income is not a constant. It is strongly affected by economic factors; an
economic downturn with increased unemployment reduces discretionary income, for
example. Different economic conditions tend to favor different ways of spending discre-
tionary income; for example, low interest rates, which make the purchase of high-ticket
items (such as homes, cars, boats, and aircraft) more desirable, make less discretionary
income available for short vacations or quick day trips. Students of the U.S. economy
need only review the effects of recessions, the energy crisis of the 1970s, and September
11, 2001, to see how quickly discretionary income formerly directed to the hospitality
industry can evaporate.
Family Size/Household Size
The current trend toward smaller families also indicates growth for the hospitality indus-
try. The discretionary income available for a family with two children is greater than that
for a family with five children when total incomes are equal. Household size—the num-
ber of persons in a home—has decreased over the years. Like the trend toward smaller
families, the increased number of small households indicates that more discretionary
income is available. The costs associated with a one- or two-person household are less
than those for a household of four or more people. Moreover, people who live in smaller
households are more likely to dine out, travel, and participate in leisure-time activities.
Business Travel
Corporate business travel should not be taken for granted by hotel managers in today’s
world of high energy prices and speedy communication. Oil prices significantly affect
business travel; as the cost of fuel oil rises, higher prices for air travel and other means of
transportation result. A business is not always willing or able to increase its travel budget.
When travel costs increase, less travel is undertaken and the necessity for any business
travel is reviewed. Executives no longer hop the next plane to clinch a deal if the same
task can be accomplished via a phone call, (conference call) in which three or more per-
sons are linked by telephone (or PictureTel, which is the use of telephone lines to send
and receive video and audio impressions). Shorter trips (day trips or one-night stays) are
another response to the increased cost of travel.
Business travel often represents the largest portion of the regular income of a hotel
property. This prime market must be constantly reviewed for economic details that affect
its viability.
Female Business Travel
Female business travelers represent an increasing segment of the corporate travel market.
As previously discussed, their travel is affected by energy prices and speedy communica-
tion. This particular market segment requires close attention to fulfilling special needs.
Female travelers request particular amenities and demand close attention to safety. Mar-
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keting and sales managers must develop products and services to capture this growing
market segment.
Travel as Experience
At one time, people traveled primarily out of necessity; business and family visits were the
usual reasons for traveling. Today, people travel for many reasons, including education,
culture, and personal development. Many people want to learn more about the society in
which they live. They have studied American or world history and want to see the places
they have read about. Cultural pursuits—art, theater, music, opera, ballet, and muse-
ums—can attract a constant flow of people. Sports and nature attract travelers who want
to enjoy the great outdoors as well as those who prefer to watch their favorite teams. The
push for lifelong learning has provided an incentive for many to take personal develop-
ment/enrichment courses, whether to update professional skills or to increase knowledge
of a particular hobby. Ecotourists, people who plan vacations to study the culture and
environment of a particular area, want to enjoy nature in its unblemished and unsullied
form.
Career Development
An introductory chapter on hotel management would not be complete without attention
to career development. People planning a career in the hotel industry need to review the
fundamentals of career development, which revolve around five important concepts: edu-
cational preparation, practical experience, membership in professional organizations,
ports of entry, and growth areas for the industry.
Educational Preparation
The educational base you build now will serve you well over time. The classes you are
taking in your major course of study—including management and supervision, cost con-
trol, human resources management, quantity food production, hotel management, pur-
chasing, sanitation, layout and design, accounting, and marketing—constitute a strong
foundation for your continued development of technical skills. Courses outside your
major—such as English, speech communication, computer training, arts, economics, psy-
chology, sociology, nutrition, science, and math—will help develop the skills you need to
cope in the professional world. The formal education you receive in your classroom
study will be enhanced by extracurricular activities such as clubs, student government,
sports, and other areas of special interest. These activities are a microcosm of the envi-
ronment in which you will apply your technical, liberal arts, and science courses. Clubs
associated with your major, in particular, allow you to apply theoretical concepts learned
in class to a real-life business environment.
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Your educational experience will open the door to your career. You must apply your
skills and knowledge after graduation to be an effective, successful employee in the hotel
industry. Use your degree as a starting point for an exciting career in hospitality.
The educational experience you are now obtaining must be nurtured beyond gradua-
tion day. There are many opportunities for in-service education, which are courses that
update a professional’s educational background for use in current practice; these are
offered by professional organizations, sponsors of trade shows, community colleges and
universities, technical schools, correspondence schools, trade journals, and other industry
groups, providing the professional an opportunity to stay current in industry practices.
Just as professionals in other industries take classes to refresh their skills and learn new
concepts and procedures, so must professionals in the hotel industry maintain awareness
of industry advances. One particularly relevant area is computer training. Professionals
who attended school before the early 1980s had little exposure to computers and their
ever-changing technology; even recent graduates are not always aware of the most cur-
rent trends and advances. The professional has the choice of overlooking this need or
enrolling in computer applications courses. The next choice is to determine whether these
new procedures and equipment are applicable to a particular establishment.
Professional organizations—such as the American Hotel & Lodging Association, the
Hotel Sales and Marketing Association International, and the National Restaurant Asso-
ciation—offer professionals continuing education opportunities through correspondence
courses and seminars. The American Hotel & Lodging Association offers opportunities
for hotel employees to become a Certified Hotel Administrator (CHA) and Certified
Rooms Division Executive (CRDE), among other certifications. Trade shows sponsored
by these organizations promote the latest concepts in technology, products, and supplies
as well as providing miniseminars on how to use current technology in human resources
management, food production, marketing, and general management. Community col-
leges and technical schools offer special-interest courses in management and skills appli-
cation to keep you and your staff abreast of new areas and to review basic concepts.
Attending these courses can provide new insight into operational problems. Each of these
professional organizations sponsors a website and provides opportunities to access the
abovementioned career information.
Correspondence courses are another way to learn new skills and understand new
areas. New technology in distance learning—classes offered via satellite broadcasts, cable,
PictureTel, or online computer interaction—is offered by colleges, universities, and pro-
fessional groups.
Trade journals are also extremely helpful in keeping professionals up to date with new
management concepts, technical applications, marketing principles, equipment innova-
tions, and the like. The isolation experienced by managers in out-of-the-way hotel estab-
lishments can be alleviated by reading trade journals. Such journals help all managers feel
connected to the community of hotel industry professionals, perhaps providing insight
into solving technical problems as well as boosting morale. Some trade journals are
offered free on the Internet.
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Education is a lifelong venture; it does not stop with the attainment of a degree from
a university or community college. The degree is only the beginning of a commitment to
nurturing your career.
Work Experience
The practical experience you obtain from entry-level hotel jobs—whether you are a desk
clerk, waiter/waitress, host/hostess, maid/houseman/room attendant, bellhop, or
groundskeeper—will be invaluable as you plan and develop your career in the hotel
industry. It will give you an opportunity to learn what hotel employees do and how
departments interact, and it will expose you to the momentum of a hotel—the time frame
of service available for the guest, management applications, and service concept applica-
tions, to name just a few.
Your work experience will enable you to evaluate theoretical concepts offered in the
classroom. You will have a basis for comparing your work experiences with those of
other students. You will also develop your own beliefs and behaviors, which can be
applied to other hotel properties throughout your career. At times, you will have to think
on your feet in order to resolve a guest complaint, evaluate equipment proposals, reor-
ganize work areas for efficiency, or achieve cost-effective spending. Your work experience
provides you with the proper foundation on which to base a successful career.
Professional Memberships
A professional trade organization is a group of people who voluntarily pool their efforts
to achieve a set of goals. These goals may have a political nature, such as lobbying legis-
lators or providing certification of achievement.
Professional trade organizations in the hospitality industry serve members in many
ways. First and foremost, they are a political voice in government. Through use of mem-
bership fees, trade organizations are able to lobby local, state, and federal legislators to
be sure the entrepreneur’s views are recognized. Members can opt not to have their mem-
bership fee used to support legislators who they don’t politically support on personal
issues. These organizations also offer significant opportunities for continuing education
by sponsoring seminars and trade shows. They offer group plans for insurance and other
programs that can be cost-efficient to the entrepreneur. Professional trade associations
also allow you to interact with others in the industry on both a professional and a social
level. Valuable advice and rewarding friendships often result.
Ports of Entry
A review of the organizational structure of a hotel shows many departmental managers
in a large organization. Which area is the best for you to enter to develop your career
goals? Four of the ports of entry are marketing and sales, front office, food and beverage,
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and controller. It is impossible to say which the best port of entry is; all are avenues for
career development.
The hotel industry demands a great deal of its professionals. All employees must have
extensive knowledge of all areas of the facility, and they must understand the overall
function of all departments. This understanding must be reflected in professional business
plans. Employees must also have good communication skills and good interpersonal
skills. The industry requires great flexibility in scheduling work responsibilities and per-
sonal life. It demands that the professional understand the entrepreneurial role of corpo-
rate owners while operating within budgeted resources.
Students who enter the lodging industry will find that each area in which they work
contributes to a good background for the ultimate position of general manager. When
trying to decide where to begin, consider reviewing the job responsibilities of department
managers to learn what tasks are required to complete each job and who is involved in
doing so.
Try to work in as many areas as you can before taking the leap into a general manager
position. The job will be a lot easier, and you will go a long way toward meeting the
establishment’s goals if you are well prepared. You will make mistakes, no matter how
much experience you have had; however, your success rate will be much higher if you
have a varied background in many departments.
Researching Growth Areas in the Hospitality Industry
Areas that offer the most potential for growth should be explored. Because such areas
change frequently, it is not possible to list them in a textbook. However, factors that sup-
port continued growth and strong business activity are regularly reported in such publi-
cations as Trends in the Lodging Industry, by Pannell, Kerr, and Forster. Hospitality
industry futures projections publications usually cover such issues as new hotel develop-
ments; hotels under consideration; activities of convention and visitors’ bureaus; strength
of local economies; development of business, recreation, and arts activities; the need for
office space; and area hotel occupancy percentages and average room rates. This infor-
mation is listed for selected cities both within the United States and at international sites.
The Internet is increasingly used as a method for researching career opportunities in
hospitality management. Search engines will produce multiple listings of hospitality
recruiters with key words such as “hotel manager,” “front office manager,” and “hotel
careers.” Also, professional hospitality organizations usually offer a job-posting service
on their websites.
The Internet provides many opportunities for a new graduate to examine trends that
are driving the industry and new technologies that will shape a career in hotel manage-
ment. This information can assist job applicants in exploring the employment possibili-
ties and prospects in different geographic areas.
Your survey of career possibilities should include a review of a potential employer’s
economic performance on a balance sheet and other features of its profit-and-loss state-
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ment. This information is available on computerized business databases. Take the time to
research the economic potential of the company you are considering. Your interview
preparations should include reviewing the regional economic prospects and the com-
pany’s economic performance. This preparation could set the stage for an investment that
lasts many years, perhaps a lifetime.
Solution to Opening Dilemma
The effort you put into preparing for a visit to a career fair is essential for making this a
learning and networking opportunity for you. Questions you could ask a representative
of a limited-service hotel include, “What are the typical management responsibilities of
an assistant general manager in your organization? What types of visitors frequent your
hotels during the week and on the weekend? What is the typical size of your hotels?”
Questions you may want to consider asking a representative of a full-service hotel
include, “What size staff is employed in your hotel? Do you have any convention hotels
in your portfolio? What services do you typically offer in a hotel in your organization?”
These types of questions open lines of communication and help you present yourself as a
future professional.
SOLUTI ON TO OPENI NG DI LEMMA 31
I N T E R N A T I O N A L H I G H L I G H T S
S
tudents of hotel management should consider international employment opportunities. Cur-
rent trade journals allow you to review the many job opportunities for hospitality profes-
sionals who have prepared themselves through education and work experience. International
employment requires managers to know operations and to have a desire to learn and work in another cul-
ture. This option can be very exciting and a great addition to your career.
u
F R O N T L I N E R E A L I T I E S
E
sther, front office manager of The Times Extended-Stay Hotel, received a phone call from
the home office of The Times Hotel Management Company asking her to participate in a
meeting to discuss the new trend in long-term visitors. The home office is thinking of renovat-
ing some of the rooms to attract the guest who wants to stay for 5 to 15 days. How would Esther prepare
for this meeting?
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Chapter Recap
This chapter introduced the future professional to the hotel industry. It began with a his-
torical review, including founders of the hotel industry—Statler, Hilton, Ritz, Astor, Wal-
dorf, Wilson, J. W. Marriott and J. W. Marriott Jr., Henderson and Moore, and Schultz. It
also discussed historical developments that have shaped the products and services offered
to guests, management trends, and economic factors. It covered the atrium concept, mar-
keting and operational emphasis, geographic relocation, the emergence of limited-service
hotels, the major reorganization of 1987–1988, adoption of total quality management,
technological advances, the continued effects of 9/11, and wireless technology in the hotel
industry. It provided an overview of the industry in terms of types of hotels; market orien-
tation/location (residential, commercial, airport, and highway); sales indicators of occu-
pancy, average daily rate, and RevPAR; levels of service (full-service, all-suites,
limited-service, and extended-stay); and type of affiliation or nonaffiliation (franchise, refer-
ral, company-owned, management contract, and independent ownership). Branding was
discussed as an approach to understanding the industry configuration. A review of trends
fostering growth in the hotel industry was presented (leisure time, me/pleasure concept, dis-
cretionary income, family size, household size, business travel, female business traveler, and
travel as an experience). Factors affecting a student’s career development choice were dis-
cussed, including educational preparation, work experience, professional memberships,
ports of entry in a hotel, and researching growth areas in the hospitality industry.
End-of-Chapter Questions
1. Name some of the hotels you have visited. What exciting things did you notice
while you were a guest there?
2. With which departments of the hotel did you come into contact before, during,
and after your visit at the property you named in question 1?
3. Investigate some of the properties in your area. In what year were they built?
What kind of competition do they have? What services or facilities did they intro-
duce to your community?
4. How do residential and commercial properties differ?
5. What are the four most common locations for hotel properties? What deter-
mines the end destination of the guest?
6. Define sales indicators. Give working examples.
7. Define four levels of service. Relate them to room rates and guest expectations.
8. Name some of the types of properties developed by major chains to meet demands
by market segments.
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9. Differentiate between franchises and company-owned properties in a chain.
What is the difference between franchises and referral groups?
10. What are the major differences between chain and independent properties?
11. Name a few hotel brands that you are familiar with and look them up on the
Internet. What similarities and differences did you find?
12. Review a recent article in the Wall Street Journal that reports on growth in leisure
time of the American worker, the me/pleasure concept, discretionary income, or
travel habits of the business traveler.
13. List attractions in your area that may entice visitors. Do these attractions provide
education, culture, or personal development? What makes them attractions?
14. Compare your career plans with the concepts presented in this chapter. Do you feel
the steps presented here will be useful to you in your first job? In subsequent jobs?
15. Go to a current hospitality-related website such as www.hotel-online.com and
research a trend in the hotel industry such as real estate investment trusts
(REITs), extended-stay hotels, or RevPAR. How does that concept affect your
future career plans?
16. Go to the website of the American Hotel & Lodging Association (www.ahla
.com) and determine how this professional trade association (formerly known as
the American Hotel & Motel Association) will be helpful to you in your career.
END- OF- CHAPTER QUESTI ONS 33
C A S E S T U D Y 1 0 1
Professor Catherine Vicente has allotted time in the
HRI-201 Introduction to Front Office Management
course for a field trip this semester. After the first
few lectures, she wants to take her class to the hotel
establishments in the vicinity of City College. The
area is well known for its tourist attractions and is
the headquarters of several major U.S. businesses.
She appoints a group of students to assist her in set-
ting up tours.
One of the students, Maria, is a resident of the
area and suggests they visit the grand old St. Thomas
Hotel in the downtown area. She would also like to
see a hotel located at the Wide World Airport. Ryan,
another student, has worked at a limited-service
property in his hometown. He understands another
hotel in that chain is located on the outskirts of the
city. David, who is applying for a job at a local
hotel, wants to get information on all-suites hotels.
Linda has heard of a new extended-stay hotel in
town and wants to know what makes it different
from a limited-service hotel.
The group has sifted through all the requests and
decided to form five teams to visit these places. Each
team will appoint one spokesperson for a panel dis-
cussion. The spokesperson will present a five-minute
summary of what was learned from the visit.
What items do you think each spokesperson will
include in his or her summary?
01_4612.qxp 1/11/06 3:27 PM Page 33
Notes
1. Madelin Schneider, “20th Anniversary,” Hotels & Restaurants International 20,
(no. 8) (August 1986):35–36.
2. 1993 Grolier Electronic Publishing, Inc.
3. Paul R. Dittmer and Gerald G. Griffin, The Dimensions of the Hospitality Indus-
try: An Introduction (New York: Van Nostrand Reinhold, 1993), 87.
4. 1993 Grolier Electronic Publishing, Inc.
5. Ibid.
6. Dittmer and Griffin, The Dimensions of the Hospitality Industry, 52–53.
7. John Meyjes: Lou Hammond & Associates, 39 E. 51st Street, New York, NY 10022.
8. Ray Sawyer, “Pivotal Era Was Exciting,” Hotel & Motel Management 210, (no. 14)
(August 14, 1995):28.
9. Marriott Corporate Relations, Marriott Drive, Dept. 977.01, Washington, DC
20058.
10. ITT Sheraton Corporation, Public Relations Department, 60 State Street, Boston,
MA 02109.
11. Cathy Planchard, “Limited Service Pioneer Hampton Inns Now Has 800 Proper-
ties,” http://www.hotel-online.com/News/PressReleases1998_4th/Oct98_Hampton
Promus.html.
12. Saul F. Leonard, “Laws of Supply, Demand Control Industry,” Hotel & Motel
Management 210, (no. 14) (August 14, 1995):74.
13. Carol Peacher, “Joe M. Hindsley Named General Manager at Hyatt Regency
Atlanta on Peachtree Street and Scott B. VandenBerg Named General Manager at
34 CHAPTER 1
?
I NTRODUCTI ON TO HOTEL MANAGEMENT
C A S E S T U D Y 1 0 2
A recent survey in a suburban community projects an
influx of new citizens into the area. Several computer
industries will be relocating to the area, and they are
expected to employ 25,000 persons at all levels of the
organizations. Also, one of these computer compa-
nies will locate its corporate headquarters here, with
an additional 500 executives arriving soon.
The local hotel association has contacted Profes-
sor Catherine Vicente of the HRI program at City
College for assistance in determining the impact
these new residents will have on their hotels with
regard to occupancy and use of facilities.
If you were Professor Vicente, what actions would
you undertake? Justify your responses with regard to
hotel operations and development. If you lived in
this community, how would these developments
affect your career in the hotel industry?
01_4612.qxp 1/11/06 3:27 PM Page 34
Grand Hyatt Atlanta in Buckhead” http://www.hotel-online.com/News/PR2004_
2nd/Apr04_AtlantaHyatts.html.
14. Planchard, “Limited Service Pioneer Hampton Inns.”
15. Leonard, 74, 80.
16. Imtiaz Muqbil, “PricewaterhouseCoopers Estimates the Net Internet Effect on the
US Lodging Industry in 2003 as a Minus $1.27 billion; 75% of Online Reserva-
tions in 2003 Made by Discount Seekers,” http://www.hotel-online.com/News/
PR2004_2nd/Apr04_PWCStudy.html Bangkok Post, Thailand Knight Ridder/Tri-
bune Business News.
17. Ibid., 80.
18. P. Anthony Brown, “Hotel REITs—Legislation Heralds a New Era,” Virginia
Hospitality and Leisure Executive Report (Spring 2000), as reported for Arthur
Andersen in Hotel-Online.com, http://www.hotel-online.com:80/Neo/Trends/
Andersen/2000_HotelReits.html.
19. R. Mark Woodworth, “More Insights into the Realities of the Post 9/11 Period,”
as reported in Hotel-Online.com, PKF Consulting, http://www.hotelonline.com/
News/PR2003_3rd/Sep03_MoreInsights.html.
20. Rick Swig, “Recent Occupancy, ADR Growth Still Do Not Spell Post-9/11 Relief,”
RSBA & Associates, San Francisco, CA 94105 as reported in Hotel-Online.com,
http://www.hotel-online.com/News/PR2004_4th/Nov04_Inflation.html.
21. Tom Belden, “Business Cut Back on Travel Budgets, Shop for Better Airfares,”
Philadelphia Inquirer, Knight Ridder/Tribune Business News, as reported in Hotel-
Online.com, http://www.hotelonline.com/News/2004_Oct_26/k.PHB.1098815827
.html.
22. Andrew MacGeoch, “Terrorism: Who’s Liable? The Legal Status of Hotel Own-
ers and Management Companies,” Hotel Asia Pacific Legal Correspondent (Octo-
ber 2003), as reported in Hotel-Online.com, http://www.hotelonline.com/News/
PR2003_4th/Oct03_TerrorismLiability.html.
23. Leon Stafford, “Extended-Stay Hotels Driven by Customers with Long-Term
Assignments and an Interest in Frugality; About 3 Extended-Stay Properties
Built for Every Traditional Hotel Between 2001 and 2004,” Atlanta Journal-
Constitution, Knight Ridder/Tribune Business News, November 14, 2004, as
reported in Hotel-Online.com.
24. PricewaterhouseCoopers, “PricewaterhouseCoopers Forecasts RevPar to Increase
by 6.3% in 2004, the Largest Increase in 20 Years,” September 3, 2004 as reported
in Hotel On-line.com, http://www.hotel-online.com/News/PR2004_3rd/Sept04_
RevPARForecast.html.
25. Tony Lima, “Chains vs. Independents,” Lodging Hospitality 43, (no. 8) (July
1987):82.
NOTES 35
01_4612.qxp 1/11/06 3:27 PM Page 35
Key Words
36 CHAPTER 1
?
I NTRODUCTI ON TO HOTEL MANAGEMENT
all-suites
American Hotel and Lodging Association
atrium concept
average daily rate (ADR)
business affiliations
chain
chain affiliations
commercial hotels
company-owned property
conference call
demographic data
discretionary income
distance learning
ecotourists
extended stay
front office
full service
independent hotel
in-service education
limited service
management contract property
market segments
mass marketing
occupancy percentage
PictureTel
potential gross income
psychographic data
real estate investment trust (REIT)
referral property
residential hotels
revenue per available room (RevPAR)
room revenues
sales indicators
total quality management (TQM)
yield percentage
01_4612.qxp 1/11/06 3:27 PM Page 36
O P E N I N G D I L E M M A
At a recent staff meeting, the general manager of The Times Hotel
asked if anyone wanted to address the group. The director of
housekeeping indicated he was at a loss in trying to work with the
front desk clerks. He had repeatedly called the desk clerks last Tuesday
to let them know that general housecleaning would be performed on
the seventh and eighth floors on Wednesday morning and that they
should not assign rooms on those floors to guests on Tuesday night.
When the cleaning crew came to work on Wednesday morning, they
were faced with 14 occupied rooms on the seventh floor and 12
occupied rooms on the eighth floor. This cost the hotel several hundred
dollars because the cleaning crew was from an outsourced contract
company, which charged the hotel a basic fee for failure to comply
with the contract. The front office manager retorted that a bus group
called two weeks ago and asked if any rooms were available because
there was a mix-up in room rates at the group’s original hotel. The
front office manager indicated something must have gone awry in the
computer system. After all, this was a good opportunity to bring in 26
additional room-nights.
C H A P T E R 2
Hotel Organization and the
Front Office Manager
C H A P T E R F O C U S P O I N T S
?
Organization of lodging
properties
?
Organization of the front
office department
?
Staffing the front office
?
Function of the front
office manager
02_4612.qxp 1/11/06 3:28 PM Page 37
Organization of Lodging Properties
The objective of most hospitality establishments is to produce a profit. To meet this goal,
factors such as current economic conditions, marketing plans, competition, and staff size
and ability are constantly reviewed.
The general manager, the person in charge of directing and leading the hotel staff in
meeting its financial, environmental, and community responsibilities, develops organiza-
tion charts that fit his or her plan to meet the goals of the company. The organization
charts—schematic drawings that list management positions in an organization—included
in this chapter are offered only as instructional examples. An organization chart repre-
sents the span of control for the general manager. Not all hotels have every position listed
in these organization charts. Persons pursuing a career in the hotel industry will be called
on many times throughout their career to develop or restructure an organization. The
people who are part of these operational plans will have a direct influence on the type of
structure developed or reorganized. The goals of the organization must be paramount in
the decision-making process. However, there must be flexibility to make the plan work.
This section points out the major organizational features of a lodging property and typ-
ical managerial duties of the people within the organization.
It is not uncommon for a general manager of a property to move people from depart-
ment to department of the hotel. This is done for many reasons. The front office manager,
the person responsible for leading the front office staff in delivering hospitality, may
express interest in the position of controller, the internal accountant for the hotel, or in
a position in the marketing and sales department. The general manager realizes a candi-
date must possess certain skills before being placed in any new position. To prepare
someone for an opening in the controller’s office, the general manager may assign him or
her some of the controller’s busywork. The front office manager might also spend slack
periods with the director of marketing and sales, the person who analyzes available mar-
kets and sells products and services at a profit, to become familiar with that department.
The general manager may also use the weekly staff meeting to explain the financial
condition and marketing plans of the property. This tactic reinforces the management
team concept. By exposing interested employees to the responsibilities of other depart-
ments and by keeping the staff informed of the current situation of the property, the gen-
eral manager enables staff members to meet their career goals within the organization.
Flexibility is the key to hospitality organization. At the operations level, familiarity
with the staff’s strengths and weaknesses is essential to meeting the demands of the situ-
ation. When the property experiences an expected slow period, regrouping may be nec-
essary to maintain full-time positions. The front office manager may have to assist the
marketing and sales office in advertising or hosting tour directors for a specific weekend.
The food and beverage director might have to spend some time in the controller’s office
completing reports and developing budgets. This interdepartmental cooperation provides
the backdrop for a smooth-running organization. Such flexibility prevents departmental
38 CHAPTER 2
?
HOTEL ORGANI ZATI ON AND THE FRONT OFFI CE MANAGER
02_4612.qxp 1/11/06 3:28 PM Page 38
jealousies and territoriality from becoming roadblocks to communication. The general
manager receives additional operational support from the director of security, the person
who takes a proactive role in establishing and maintaining a safe environment for guests
and employees. Because of the precautions necessary in delivering hospitality, the direc-
tor of security is vital to the operation of the lodging property.
Organization Charts
The major positions found in a large, full-service hotel or resort are presented in Figure
2-1. This lodging property features:
?
500+ rooms in a commercial property
?
Center-city or suburban location
?
$142 average daily rate (ADR)—total room revenue divided by the number of
rooms sold
?
60 percent occupancy—number of rooms sold divided by the number of rooms
available
?
34 percent yield—number of rooms sold at average daily rate divided by the num-
ber of rooms available at rack rate, the highest room rate category offered by a
hotel
?
$84.93 RevPAR (Revenue per Available Room)—room revenue divided by the
number of rooms available or hotel occupancy times average daily rate
?
$15.5 million in revenues
?
Full service
?
Chain—company ownership
?
Corporate guests—frequent guests who are employed by a company and receive a
special room rate
?
Convention guests—guests who attend a large convention and receive a special
room rate
?
Meeting and banquet rooms
?
Dining rooms
?
Lounge with entertainment
?
Exercise facilities with indoor pool
?
Gift shop
?
Business office and retail rentals
?
Attached parking garage
?
In-house laundry—a hotel-operated department that launders guest linens
?
Referral reservation service—a service offered by a management company of a
chain of hotels to franchisee members
ORGANI ZATI ON CHARTS 39
02_4612.qxp 1/11/06 3:28 PM Page 39
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02_4612.qxp 1/11/06 3:28 PM Page 41
To function as a well-run lodging facility, this property requires the following depart-
ment heads:
?
General manager
?
Assistant general manager
?
Controller
?
Plant engineer
?
Executive housekeeper
?
Human resources manager
?
Director of security
?
Recreation director
?
Athletics director
?
Marketing and sales director
?
Gift shop manager
?
Front office manager
?
Food and beverage director
?
Garage manager
The corporate owners have entrusted the financial success of this organization to the
general manager, who must organize departments to provide optimum service to the
guest. Each department is well organized and staffed to allow the supervisor time to plan
and develop the major revenue-producing areas. The marketing and sales director, gift
shop manager, front office manager, food and beverage director, and garage manager
develop programs that increase sales and profits and improve cost-control methods.
Those supervisors who do not head income-generating departments—controller, plant
engineer, executive housekeeper, director of security, human resources manager, recre-
ation director, and athletics director—provide services to the guest, principally behind the
scenes.
For example, the controller develops clear and concise performance reports that reflect
budget targets. The plant engineer, the person responsible for the operation and mainte-
nance of the physical plant, establishes an effective preventive maintenance program. The
executive housekeeper, the person responsible for the upkeep of the guest rooms and pub-
lic areas of the lodging property as well as control of guest room inventory items, keeps
on top of new trends in controlling costs and effective use of personnel. The director of
security provides the training for the staff for front-line safety needs of guests. The human
resources manager, the person who assists department managers in organizing personnel
functions and developing employees, provides leadership in attracting new hires and
maintaining a stable yet progressive approach to utilization of personnel. The recreation
director, the person in charge of developing and organizing recreational activities for
guests, and the athletics director, who is responsible for supervising physical exercise
facilities for guests, provide direct hospitality services for the guest, helping ensure their
safe and interesting stay.
42 CHAPTER 2
?
HOTEL ORGANI ZATI ON AND THE FRONT OFFI CE MANAGER
02_4612.qxp 1/11/06 3:28 PM Page 42
Figure 2-2 outlines the organization of a somewhat smaller lodging property. This
hotel features:
?
200 rooms in a commercial property
?
Suburban location
?
58 percent occupancy
?
38 percent yield
?
$4 million in revenues
?
$95 average daily rate
?
$55.10 RevPAR
?
Full service
?
Chain-franchise
?
Corporate guests
?
Local-community guests
?
Dining room
?
Lounge
?
Outdoor pool
?
Referral reservation service
ORGANI ZATI ON CHARTS 43
Corporate Owner
General Manager
Housekeeper Controller
Night Auditor
Pool Mgr.
Desk Clerks
Maids
Housemen
Cook
Pantry
Dishwasher
Host
Wait Staff
Bus Staff
Front Office
Manager
Restaurant
Manager
Maintenance/
Groundskeeper
FI GURE 2- 2 Notice that several of the positions listed in the full-service hotel organization chart are
eliminated from this one for a medium-size lodging property.
02_4612.qxp 1/11/06 3:28 PM Page 43
The department heads required include:
?
General manager
?
Maintenance/groundskeeper
?
Front office manager
?
Controller
?
Restaurant manager
?
Housekeeper
This managerial staff seems skeletal compared to that of a large hotel or resort. This
type of organization chart is possible because the level of service provided to guests is
reduced. At this property, the guest’s stay is one or two nights, and a dining room and
lounge are provided for convenience. Many of the department heads are working super-
visors, which means they participate in the actual work performed while supervising.
Laundry and other services are contracted out. The controller provides accounting serv-
ices as well as human resources management. The maintenance/groundskeeper oversees
indoor and outdoor facilities. The front office manager and the clerks take care of reser-
vations as well as registrations, posting, checkout, and the like. The restaurant manager
works closely with the cook and hostess in maintaining quality and cost control and guest
services. The housekeeper inspects and cleans rooms and maintains linen and cleaning
supply inventories as well as providing leadership for the housekeeping staff. Security
services are provided by the general manager and outsourced as needed.
Figure 2-3 shows the organization chart of a typical limited-service property, much
scaled down from that of a large hotel. The features of the property are:
?
150 rooms in a commercial property
?
Highway location
?
60 percent occupancy
?
50 percent yield
?
$40.18 RevPAR
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$2.2 million in revenues
?
$67 average daily rate
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Limited service
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Chain—franchise
?
In-house laundry
?
Vacation travelers
?
Business travelers
?
Complimentary continental breakfast—juice, fruit, sweet roll, cereal
?
Referral reservation service
?
Business services and communications center—guest services that include copying,
computers and fax
44 CHAPTER 2
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Corporate Owner
General Manager
Housekeeper
Housemen Maids Desk Clerks Night Auditor
Front Office
Manager
Maintenance
Manager
The department heads include:
?
General manager
?
Front office manager
?
Housekeeper
?
Maintenance manager
The general manager is a working supervisor in that he or she participates in the
actual work performed while supervising at the front desk. The general manager at this
type of property assists with marketing plans, reservations, maintenance, and
groundskeeping, maintains financial records; and implements cost-control measures. The
front office manager works regular shifts to provide coverage along with the night audi-
tor and desk clerks. The housekeeper, also a working supervisor, assists the room atten-
dants, employees who clean and maintain guest rooms and public areas.
The organization charts shown here were developed by evaluating the needs of guests.
The organization of departments and the subsequent staffing are influenced by the avail-
able labor pool, the economic conditions of the region, and the financial goals of the
organization. Each organization chart varies depending on the factors influencing a par-
ticular lodging establishment. Flexibility is essential in providing service to the guest and
leadership to the staff.
ORGANI ZATI ON CHARTS 45
FI GURE 2- 3 The organization chart for a small, limited-service lodging property
includes only minimal staffing. Several duties are combined under
various positions.
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Typical Job Responsibilities of Department Managers
As you begin your career in the lodging industry, you will undoubtedly come in contact
with the various department managers in a hotel. Some of the positions seem to be
shrouded in mystery, while others are clear. The controller, for example, works behind
the scenes, and little about his or her role is obvious. The security director seems to be
everywhere in the hotel, but what does this person do, and for what is he or she respon-
sible? The food and beverage director holds a visible position that seems to encompass
much. The general manager must be aware of both the forest and the trees, overseeing all
operations while staying on top of the small details. How can all of these positions be
coordinated to provide hospitality to the guest and profit to the investors?
General Manager
Several years ago I invited a guest speaker to my class. This person was the general man-
ager of an inn in our community. He was well prepared for the lecture and described the
organization chart and staff he had developed. After he explained the work that goes on
in the various departments and the responsibilities of the respective supervisors, a student
asked, “What do you do as the general manager if all the work is being done by your
staff?” This honest question made me terribly aware that the role of the general manager
is not easy to understand. Indeed, detailing this managerial role could fill volumes and
encompass decades of experience. However, the legitimacy of the question compels me to
be specific in describing this essential job in the organization chart.
The leadership provided by the general manager is undoubtedly the most important
quality he or she brings to this position. The general manager orchestrates the department
directors in their efforts to meet the financial goals of the organization through their
employees. The general manager is required to use the full range of managerial skills—
planning, decision making, organizing, staffing, controlling, directing, and communicat-
ing—to develop a competent staff. Performance is judged according to how effectively
supervisors are directed to meet the goals of the organization. Efficiency depends not on
how well tasks are performed but on how well employees are motivated and instructed
to meet the goals and objectives of the plans the general manager and staff have formu-
lated. Figure 2-4 presents a group of managers, supervisors, and frontline employees
who carry out the goals of the general manager.
The plans developed by the general manager along with the department supervisors
provide the vision the business needs to compete for the hospitality markets. The evalu-
ation of candidates for positions based on a well-structured division of labor begins the
process of meeting the goals and objectives of the planning stage. Who should be chosen
to lead operations? What skills and strengths are necessary to get the job done? What
degree of business acumen must this person have? What vision should be brought to the
job? How will the new hire fit into the existing staff? These are just a few questions that
a general manager must consider and act upon.
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The operational reports—operational data on critical financial aspects of hotel oper-
ations—that a general manager must review can be overwhelming in both quantity and
complexity. However, the efficient general manager knows which key operating statistics
reflect the profitability and efficiency of operations. Do the food cost percentage, labor
cost percentage, alcohol beverage cost percentage, and sales item analysis provide enough
information to indicate the success of the food and beverage department? Are the daily
occupancy percentage, average daily room rate, and total sales for the day adequate to
indicate the hotel’s profitability? Each general manager develops key indicators that
measure the financial success and operational success of the department directors. These
concepts are flexible, depending on the goals the corporate ownership established.
Communicating ideas and goals and providing feedback on performance are skills the
general manager must develop. The general manager is a pivotal link in the communica-
tion process. Each department director works from communications received (or not
received) from the general manager. Weekly staff meetings serve as a major vehicle for
sharing information. Individual meetings with department directors additionally support
the communication process. At one-on-one meetings, the general manager helps the
department director transform organizational goals into operational functions.
The general manager offers practical supervisory training to his or her staff. For exam-
ple, the director of marketing and sales may have set a goal of increasing guest room sales
by 10 percent in the next quarter. At an individual meeting with the general manager, the
director of marketing and sales agrees to meet that goal over the next three months.
TYPI CAL J OB RESPONSI BI LI TI ES OF DEPARTMENT MANAGERS 47
FI GURE 2- 4
The general
manager of a
hotel is
responsible for
orchestrating the
efforts of
managers and
employees to
produce a
financially
successful
establishment.
Photo courtesy of
Red Lion Hotels.
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What does a general manager do? He or she provides leadership to meet organiza-
tional goals of profitability and service. Leadership skills are acquired by studying theo-
ries of management and the behavior of other managers as well as practicing leadership
and receiving constructive criticism from superiors on efforts expended. The job of gen-
eral manager is a professional position. It is a career goal the achievement of which is
based on operations experience and education.
The role of the general manager, whether in a full-service or limited-service property,
must encompass the concepts previously discussed. The general manager in a limited-
service property may perform additional hands-on responsibilities, but he or she is
required to provide leadership to the other members of the management team. The use of
total quality management (TQM), or the application of managerial concepts to under-
standing operational processes and developing methods to improve those processes
(described in chapter 11), allows managers in full-service and limited-service properties
to extend leadership to front-line supervisors and employees. In full-service and limited-
service properties, where profit margins are based on lean departmental budgets, total
quality management is encouraged.
Assistant General Manager
The assistant general manager of a lodging property holds a major responsibility in devel-
oping and executing plans developed by the corporate owners, the general manager, and
other members of the management staff. The relationship between the general manager
and the assistant general manager must be founded on trust, skill, and excellent commu-
nication. The assistant general manager works with department directors to meet their
respective goals and objectives through efficient operations. Often, he or she is the liai-
son between management and operations. The more thoroughly the assistant general
manager understands the reasons for management decisions, the better able he or she is
to communicate plans to the operations supervisors. The assistant general manager is
sometimes referred to as the rooms division manager. He or she is responsible for the
entire front office operations, which includes front desk, housekeeping, bell staff,
concierge, and parking garage. The assistant general manager may also be called the oper-
ations manager.
The assistant general manager often must oversee the beginning of a task and ensure
that others complete it. He or she must also complete, review and summarize statistical
reports, and share them with the general manager. The assistant general manager is
everywhere on the property, checking on operations, providing feedback, and offering
assistance as needed. This job requires a wide variety of established operational skills,
such as front office, food and beverage, marketing and sales, and accounting. A large
property may divide the responsibilities of the assistant general manager between a rooms
division manager and an operations division manager.
Limited-service hotels usually do not have an assistant general manager position in
their organization chart. The department managers report directly to the general manager
to streamline guest services and operational budgets. Again, the general manager of a
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limited-service property may perform some hands-on tasks, but he or she is required to
provide direct leadership to the other members of the management team.
Food and Beverage Director
The food and beverage director is responsible for the efficient operation of the kitchen,
dining rooms, banquet service, room service, and lounge. This includes managing a mul-
titude of details with the supervisors of these outlets. Such details include food quality,
sanitation, inventory, cost control, training, room setup, cash control, and guest service,
to name a few. The food and beverage director keeps a keen eye on new trends in food
and beverage merchandising, cost-control factors in food and beverage preparation, and
kitchen utilities. The food and beverage director works closely with the assistant food and
beverage director, a highly skilled executive chef, a dining room supervisor, a banquet
manager, and a bar manager. This team’s goal is to provide high-quality products and
services around the clock, every day of the year. Constant supervision of products,
employees, and services is essential to ensure a fair return on investment.
Although food and beverages are served at a continental breakfast or cocktail hour at
a limited-service property, there is no food and beverage director position; here, the
responsibility for serving food and beverages is an extension of the front office manager’s
duties. However, the same principles of sanitation, food purchasing and storage, mar-
keting, standards of service, and so forth must be followed to provide good service to the
guest.
Physical Plant Engineer
The plant engineer is important in the overall delivery of service to the guest. This person
oversees a team of electricians, plumbers, heating, ventilating, and air-conditioning con-
tractors, and general repair personnel to provide behind-the-scenes services to the guests
and employees of the lodging property. With today’s emphasis on preventive mainte-
nance and energy savings, he or she must develop a plan that will keep the lodging prop-
erty well maintained within budget targets. Knowledge of current advances in equipment
and machinery is essential. This position requires a range of experience in general main-
tenance and a positive attitude about updating skills and management concepts through
continuing education.
The plant engineer interacts with all the departments of the hotel. This person is part
of the management team and can be relied on to provide sound advice about structural
stability, equipment maintenance, and environmental control. He or she can be one of the
most treasured assistants in a lodging business.
A role similar to that of the plant engineer in a limited-service property is that of main-
tenance manager, a staff member who maintains the heating and air-conditioning plant,
produces guest room keys, helps housekeeping attendants as required, and assists with
safety and security. The limited-service property emphasizes quality in guest service,
which is delivered by an efficient staff.
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Executive Housekeeper
The executive housekeeper is responsible for the upkeep of the guest rooms and public
areas of the lodging property. This person trly must work through other people to get the
job done. Each room attendant must be thoroughly trained in cleaning techniques. Each
floor inspector, a person who supervises the housekeeping function on a floor of a hotel,
and each housekeeping employee must be trained in standard inspection techniques.
(Many hotels are moving away from the use of floor inspectors, and are implementing
self-inspection systems.) Speed and efficiency are paramount in performing the vital serv-
ice of maintaining guest rooms and public areas.
Skill in supervising unskilled labor is essential. Survival fluency in foreign languages is
important to the executive housekeeper, who must communicate effectively with employ-
ees. Accurate scheduling of employees is also necessary to maintain control over labor
costs. The executive housekeeper is further responsible for maintaining and controlling an
endless inventory of linens, soap, guest amenities, furniture, in-house marketing materi-
als, live and artificial plants, and more. The executive housekeeper, like the plant engi-
neer, must stay abreast of new ideas and techniques through trade journals and
continuing education courses.
The executive housekeeper supervises the in-house laundry, if one is present. The
equipment, cleaning materials, cost controls, and scheduling are handled in cooperation
with the laundry supervisor.
The limited-service property depends on this member of the management team to
supervise the staff that provides clean rooms and operates an in-house laundry. This
hands-on supervisor works with the staff to provide many behind-the-scenes guest serv-
ices. The housekeeper travels the elevators of high-rise limited-services properties, stop-
ping at each floor to provide employees with constant supervision and motivation.
Interdepartmental cooperation and communication with the front desk and mainte-
nance department are vital for the executive housekeeper in both full-service and limited-
service hotels. The release of cleaned rooms for occupancy and the scheduling of periodic
50 CHAPTER 2
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I N T E R N A T I O N A L H I G H L I G H T S
M
anagers in a hotel have a particular responsibility to prepare their employees to communi-
cate with their guests. This is very important for international guests. Front-line employees
can assist an international guest by adopting an attitude of “hospitality without question.” This
simple concept encompasses a front-line employee maintaining a watchful eye for guests who appear con-
fused, express difficulty in communicating in the local language, or seem hesitant about responding to
inquiries. Training programs with role-playing exercises that focus on visitors who can’t communicate in
the local language and employees who have to respond to their inquiries allow front-line employees to
practice hospitality without question. This concept can be further advanced when a front office manager
maintains an inventory of employees who speak various international languages.
u
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maintenance are only two functions demonstrating why interdepartmental cooperation is
critical. In addition, the marketing and sales efforts in hotels depend on the housekeeper
to enforce cleanliness and appearance standards in the public areas so guests are attracted
to and impressed by the property. More information about the executive housekeeper
and that department is detailed in chapter 15 of this textbook.
Human Resources Manager
In a full-service lodging property, the luxury of employing a human resources manager is
beneficial for everyone. This person is responsible for administering federal, state, and
local employment laws as well as advertising for and screening job candidates and inter-
viewing, selecting, orienting, training, and evaluating employees. Each department direc-
tor can rely on the human resources manager to provide leadership in the administration
of complex personnel programs such as implementation of wage and salary laws.
Staffing a hotel involves many time-consuming tasks:
?
Writing and placing classified ads
?
Screening, interviewing, testing, and selecting candidates
?
Orienting, training, and evaluating new employees
The preparation of job descriptions, while perceived by many in the hotel industry as
a luxury, is mandatory if the employees are represented by a collective bargaining unit—
that is, a labor union. The human resources manager can assist in preparing the job
analysis and subsequent job description. This process helps him or her develop realistic
job specifications.
The development of employees by providing a plan for the growth of each takes a
great deal of planning and evaluating. Each department director works under pressure to
meet budget guidelines, quality control levels, sales quotas, and other goals. The human
resources manager can assist each director in making plans to motivate employees, to
develop career projections for them, to provide realistic pay increases, and to establish
employment policies that reflect positively on the employer.
Limited-service properties do not employ a human resources manager but rather divide
the responsibilities among department heads. Although the emphasis remains on well-
planned and competently delivered human resources activities, the streamlined limited-
service property relies on interdepartmental cooperation to accomplish its objectives.
Marketing and Sales Director
In the title of this position, the marketing function is emphasized. The person in this posi-
tion plays an essential role in all departments of the hotel. An effective director of mar-
keting and sales not only wants to attract external sales such as conventions, small
business conferences, wedding receptions, and dining room and lounge business but also
provides direction for promoting in-house sales to the guests.
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This is an exciting position that requires endless creativity. The director of marketing
and sales is constantly evaluating new markets, reviewing the needs of existing markets,
watching new promotions by the competition, organizing sales blitzes, working with
community and professional groups to maintain public relations, working with other
department directors to establish product and service specifications and in-house pro-
motional efforts, and following up on details, details, and more details. This is a high-
energy position that not only provides financial vitality but also fosters the attainment of
financial goals by all departments.
Some limited-service properties employ a full-time or half-time marketing and sales
director. The duties of this position may also be shared by the general manager and front
office manager; these duties (with the exception of soliciting food and beverage business)
are the same as those of the marketing and sales director. Competition for room sales to
the corporate, group, and pleasure travel markets is enormous, and each hotel must
address this planning need.
Front Office Manager
The role of the front office manager is detailed more completely later in this chapter. In
short, however, the major responsibilities of the front office manager include reviewing the
final draft of the night audit, a daily review of the financial accounting procedures at the
front desk and other guest service areas during the previous 24-hour period and an analy-
sis of operating results; operating and monitoring the reservation system; developing and
operating an effective communication system with front office staff and other department
directors; supervising daily registrations and checkouts; overseeing and developing
employees; establishing in-house sales programs at the front desk; preparing budgets and
cost-control systems; forecasting room sales; and maintaining business relationships with
regular corporate and community leaders. The front office manager works with an assis-
tant front office manager, a night auditor, a reservations manager, and a bell captain to
tend to the details of running an efficient department.
These are just a few of the responsibilities of the front office manager. The front office
is a pivotal point in communication among in-house sales, delivery of service to the guest,
and financial operations. The poition requires an individual who can manage the many
details of guest needs, employee supervision, interdepartmental communication, and
52 CHAPTER 2
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HOTEL ORGANI ZATI ON AND THE FRONT OFFI CE MANAGER
F R O N T L I N E R E A L I T I E S
A
future guest has called the hotel and wants to arrange a small dinner party for his guests on
the first day of his visit. The marketing and sales office is closed for the day, and the ban-
quet manager has left the property for a few hours. What would you suggest the front desk
clerk do to assist this future guest?
q
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transmittal of financial information. The person who holds this exciting position can
develop an overview of the lodging property with regard to finances and communication.
Controller
The controller is the internal accountant of a hotel. He or she is responsible for the actual
and effective administration of financial data produced daily in the hotel. In the lodging
property, appropriate daily financial information must be available to corporate owners,
management, and guests. This requires a well-organized staff, not only to prepare oper-
ating statistics but also to assist the general manager in determining the effectiveness of
each department manager. Often the general manager relies on the controller for finan-
cial insight into the operations of the property, including cash flow, discounts, evaluation
of insurance costs, fringe-benefit cost analysis, investment opportunities, computer tech-
nology applications, banking procedures, and more.
The controller’s department processes accounts payable (amounts of money the hotel
owes to vendors); accounts receivable (amounts of money owed to the hotel by guests);
the general ledger (a collection of accounts the controller uses to organize the financial
activities of the hotel); statement of cash flows (a projection of income from income-gen-
erating areas of the hotel); the profit-and-loss statement (a listing of revenues and
expenses for a certain time period); and the balance sheet (a listing of the financial posi-
tion of the hotel at a particular point in time). This busy department provides financial
information to all department directors.
The general manager of a limited-service property acts as the controller with the assis-
tance of the night auditor. (In some properties, the night audit is performed during the
day, and the night auditor is replaced with a lower-salaried front desk clerk for late-night
coverage.) The ownership of a limited-service hotel may be a part of a larger financial
portfolio of a business, which helps the general manager perform the controller’s respon-
sibilities by processing accounts payable, accounts receivable, and payroll.
Director of Security
The director of security works with department directors to develop cost-control proce-
dures that help ensure employee honesty and guest safety. This person supervises an
ongoing training program in cooperation with department directors to instruct employ-
ees in fire, job, and environmental safety procedures. Fictional stories often depict the
security director as someone who investigates crimes after the fact. On the contrary, this
person’s primary responsibility is to implement programs that make employees security-
minded, helping prevent crime from occurring.
Unfortunately, the lodging industry has always been involved in lawsuits, which have
multiplied in both number and cost in recent years. A substantial body of law provides
regulations under which properties must operate. Preventive security precautions are the
central theme of the security department today. The director of security’s background is
usually in police or detective work or in security or intelligence in the armed services. He
TYPI CAL J OB RESPONSI BI LI TI ES OF DEPARTMENT MANAGERS 53
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or she usually has an understanding of the criminal mind and the practices of criminals.
This person is constantly on the lookout for suspicious people and circumstances.
The responsibilities of this necessary position in a limited-service property are shared by
the front office manager and the general manager. Security services for on-site and park-
ing-lot patrol are often outsourced, but this practice does not relieve the general manager
of the need to develop and provide ongoing procedures to train employees to become
security-minded. More information about the director of security is explained in chapter
14 of this textbook.
Parking Garage Manager
The responsibility of ensuring a safe environment for guests’ vehicles falls to the parking
garage manager. This person supervises the work of garage attendants and maintains the
security of guests and cars in the parking garage. Garage maintenance, in cooperation
with the engineering and housekeeping departments, is another responsibility of this
position. Often a hotel rents parking spaces to local businesses and professional people,
and the associated accounting process involves accurate billing and recording of funds
and subsequent deposits. The parking garage manager also has to develop budgets and
recruit and train employees. He or she often provides driver assistance to guests when
their cars break down and directional information to departing guests. Even though these
54 CHAPTER 2
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H O S P I T A L I T Y P R O F I L E
?
E
ric O. Long, general manager of
the Waldorf=Astoria in New
York City, has been employed by
Hilton Corporation for 30 years. He has served in
various management positions at the Hilton Short
Hills, Chicago Hilton and Towers, Hilton Walt
Disney Village, Fontainebleau Hilton Resort, and
the Palmer House.
His well-thought-out career with Hilton allowed
him to develop a strong network of relationships
and vital experience to prepare him for the position
he holds today. Mr. Long indicates that there are
four major areas of responsibility in his job: finance,
marketing, customer service, and human resources
management. Although other employees carry out
the day-to-day administration of those depart-
ments, he feels he is ultimately responsible for their
success. For example, he wants to ensure that a
marketing and sales plan is current and operating,
and he attends an 8:00 A.M. customer feedback
meeting each day to review feedback on the previ-
ous day’s efforts to provide high-quality service. He
adds that he wants to ensure that the level of talent
in the organization is nurtured through motivation,
training, development, and so forth.
Early in Mr. Long’s career, his mentor encour-
aged him to gain expertise in any three areas of the
hotel and a solid working knowledge of all the
others. He feels that achieving this has been an
overriding factor in his career progression. He
encourages future hoteliers “to take complete
ownership and responsibility for your own career.
Don’t take promotions just for the sake of the pro-
motion; be selective of the moves that you make.
Each move should be weighed against the poten-
tial that it will have in growing your career.”
?
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jobs may seem small in the overall operation of a lodging property, they build a strong
foundation in providing service to the guest.
Organization of the Front Office Department
Typical Front Office Organization
The organization chart in Figure 2-5 depicts a typical organization of staff for a front
office manager. The staff includes desk clerk, cashier, reservations manager, concierge,
night auditor, telephone operator, bell staff, room key clerk, and elevator operator. Not
all of these positions are found in every lodging establishment. In some operations, the
front desk clerk acts as desk clerk, cashier, telephone operator, and reservations clerk, as
required by the volume of business. Many large, full-service hotels, in contrast, employ
the complete staff as listed.
Staffing the front desk positions incurs a cost. The front office manager, in consulta-
tion with the general manager, usually prepares a personnel budget related to salary lev-
els throughout the lodging establishment.
The responsibilities of the front office staff are quite varied. The position of the desk
clerk can encompass many duties, which typically include verifying guest reservations,
ORGANI ZATI ON OF THE FRONT OFFI CE DEPARTMENT 55
FI GURE 2- 5 This organization chart lists positions found in a front office.
Corporate Owner
General Manager
Assistant General Manager
Front Office Manager
Concierge Desk Clerk
Cashier Bell Staff
Night Auditor Telephone
Operator
Elevator
Operator
Room Key
Clerk
Reservations
Manager
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registering guests, assigning rooms, distributing keys, communicating with the house-
keeping staff, answering telephones, providing information about and directions to local
attractions, accepting cash and giving change, and acting as liaison between the lodging
establishment and the guest as well as the community.
The position of cashier includes processing guest checkouts and guest legal tender and
providing change for guests. This position is found in a number of lodging establishments,
and it helps make the front desk workload manageable when a full house, a hotel that has
its entire guest rooms occupied (sometimes referred to as 100 percent occupancy) is check-
ing out. Given the possibility that every attendee of a 400-guest convention could check out
within a few hours, this division of labor is a well-planned concept. Even with the best-
planned systems—such as express checkout, whereby the guest uses computer technology in
a guest room or a computer in the hotel lobby to check out; prior approved credit, the use of
a credit card to establish creditworthiness; or bill-to-account, an internal billing process—the
lines at the cashier station can be long and seem longer when a guest is in a hurry.
The reservations manager can be found in many of the larger lodging establishments.
This person is responsible for taking incoming requests for rooms and noting special
requests for service. The particulars of this position are endless, aimed at providing the
guest with requested information and services as well as accurate confirmation of these
items. The reservations manager is responsible for keeping an accurate room inventory by
using a reservation module of a property management system. This person must com-
municate effectively with the marketing and sales department. Peak as well as slow peri-
ods of sales must be addressed with adequate planning.
The night auditor balances the daily financial transactions. This person may also serve
as desk clerk for the night shift (11:00 P.M. to 7:00 A.M.). He or she must have a good grasp
of accounting principles and the ability to resolve financial discrepancies. This position
requires experience as a desk clerk and good communications with the controller.
The telephone operator has a very important job in the lodging establishment. This
person must be able to locate the registered guests and management staff at a moment’s
notice. He or she also must be able to deal with crises up to and including life-threaten-
ing emergencies. With the introduction of call accounting, a computer technology appli-
cation that tracks guest phone calls and posts billing charges to lodging establishments,
the telephone operator’s job has been simplified, as the tracking of telephone charges to
registered guests can now be done with ease. This person may also assist the desk clerk
and cashier when necessary.
The bell captain, with a staff of bellhops and door attendants, is a mainstay in the
lodging establishment. The bell staff starts where the computerized property management
system stops. They are the people who lift and tote the baggage, familiarize the guest with
his or her new surroundings, run errands, deliver supplies, and provide the guest with
information on in-house marketing efforts and local attractions. These people also act as
the hospitality link between the lodging establishment and the guest. They are an asset to
a well-run lodging establishment.
The key clerk can be found in very large, full-service hotels that do not have electronic
key systems. This clerk is responsible for issuing keys to registered guests and for related
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security measures. Often he or she sorts incoming mail for registered guests and the man-
agement staff. This position is now obsolete in most hotels.
The elevator operator, a person who manually operates the mechanical controls of the
elevator, is almost extinct in the lodging establishment, replaced by self-operated eleva-
tors and escalators. Some elevator operators now serve as traffic managers, who direct
hotel guests to available elevators in the lobby. In large, full-service hotels, the traffic
manager can be a welcome sight; the confusion of check-ins and checkouts can be less-
ened when he or she is on duty.
The concierge (Figure 2-6) provides guests with extensive information on entertain-
ment, sports, amusements, transportation, tours, church services, and baby sitting in the
area. He or she must know the area intimately and be able to meet the individual needs of
each guest. This person also obtains theater tickets and makes reservations in restaurants.
In most cases, the concierge is stationed at a desk in the lobby of the lodging property.
Limited-Service Hotel Front Office Organization
The organization chart in Figure 2-7 portrays a simpler workforce than that seen with a
full-service property. The desk clerks perform multiple duties such as reservations and
registrations, and they act as cashiers, telephone operators, and so forth. Whatever guest
need is presented, the front desk clerk is called on to meet it with efficiency and profes-
sionalism. In limited-service properties, the general manager may also assist, when
needed, to process reservation requests, check guests in upon arrival, and check guests out
upon departure.
ORGANI ZATI ON OF THE FRONT OFFI CE DEPARTMENT 57
FI GURE 2- 6
The concierge
provides
information on
tourist attrac-
tions and
entertainment
in the area to
hotel guests.
Photo courtesy
of Wyndham
Reading Hotel,
Reading,
Pennsylvania.
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The night auditor’s role in a limited-service property is unlike that of his or her coun-
terpart in a full-service hotel. Because there are usually no departmental transactions from
restaurants, banquets, lounges, gift shops, or spas, the night auditor is mainly concerned
with posting room and tax charges and preparing statistics for the hotel. With the uti-
lization of computer technology, the completion of the night audit has been reduced to a
minimum of time. As previously mentioned, this task may be performed early in the
morning prior to guest checkouts.
Function of the Front Office Manager
A successful front office manager conveys the spirit of a particular lodging property to the
customer. By applying management principles, he or she works through the front office
staff to communicate feelings of warmth, caring, safety, and efficiency to each guest. The
front office manager must train personnel in the technical aspects of the property man-
agement system (PMS), a hotel computer system that networks the software and hard-
ware used in reservation and registration databases, point-of-sale systems, accounting
systems, and other office software. He or she also must maintain the delicate balance
between delivery of hospitality and service and promotion of the profit centers, and
maintain the details of the communication system.
The front office manager has at his or her disposal the basic elements of effective man-
agement practice: employees, equipment, inventory (rooms to be sold), a budget, and
sales opportunities. This manager is responsible for coordinating these basic elements to
achieve the profit goals of the lodging property.
Front office employees must be trained properly to function within the guidelines and
policies of the lodging establishment. The front office manager cannot assume that an
58 CHAPTER 2
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Corporate Owner
General Manager
Front Office Manager
Desk Clerks Night Auditor
FI GURE 2- 7 The front office staff in a limited-service hotel includes a minimal
number of employees.
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employee knows how to do certain tasks. Every employee needs instructions and guid-
ance in how to provide hospitality; front office employees’ attitudes are of utmost impor-
tance to the industry. To ensure that the proper attitude prevails, employers must provide
an atmosphere in which employees are motivated to excel and that nurtures their morale
and teamwork.
The property management system gives the front office manager an unlimited oppor-
tunity for managerial control. He or she can easily track information such as Zip codes of
visitors, frequency of visits by corporate guests, and amount of revenue a particular con-
ference generated, and pass this information on to the marketing and sales department.
An unsold guest room is a sales opportunity lost forever. This is one of the major chal-
lenges of the front office manager. Cooperation between the marketing and sales depart-
ment and the front office is necessary to develop profitable advertising and point-of-sale
strategies. The subsequent training of front office personnel to seize every opportunity to
sell vacant rooms helps ensure that the financial goals of the lodging property are met.
Budgetary guidelines must be developed by the front office manager and the general
manager, as the front office manager does have a large dollar volume under his or her
control. The budgeting of money for payroll and supplies, the opportunity for improving
daily sales, and accurate recording of guest charges require the front office manager to
apply managerial skills.
The foremost concept that characterizes a front office manager is team player. The
front office manager does not labor alone to meet the profit goals of the lodging property.
The general manager sets the goals, objectives, and standards for all departments to fol-
low. The assistant manager offers the department heads additional insight into meeting
the operational needs of the establishment. The controller supplies valuable accounting
information to the front office manager as feedback on current performance and meeting
budgetary goals. The food and beverage manager, housekeeper, and plant engineer pro-
vide essential services to the guest. Without cooperation and communication among these
departments and the front office, hospitality cannot be delivered. The director of mar-
keting and sales develops programs to attract guests to the lodging property. These pro-
grams help the front office manager sell rooms. The human resources manager completes
the team by providing the front office with competent personnel to accomplish the goals,
objectives, and standards set by the general manager.
Job Analysis and Job Description
A job analysis, a detailed listing of the tasks of a job, provides the basis for a sound job
description. A job description is a listing of required duties to be performed by an
employee in a particular position. Although almost nothing is typical in the lodging
industry, certain daily tasks must be performed. A job analysis is useful in that it allows
the person preparing the job description to determine certain daily procedures. These pro-
cedures, along with typical responsibilities and interdepartmental relationships involved
in a job, form the basis for the job description. The future professional will find this man-
agement tool helpful in preparing orientation and training programs for employees. It
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also helps the human resources department ensure that each new hire is given every
opportunity to succeed.
The following is the job analysis of a typical front office manager:
7:00 A.M. Meets with the night auditor to discuss the activities of the previous
night. Notes any discrepancies in balancing the night audit.
7:30 Meets with the reservation clerk to note the incoming reservations for
the day.
8:00 Greets the first-shift desk clerks and passes along any information from
the night auditor and reservation office. Assists desk clerks in guest
checkout.
8:30 Meets with the housekeeper to identify potential problem areas of which
the front office staff should be aware. Meets with the plant engineer to
identify potential problem areas of which the front office staff should be
aware.
9:00 Meets with the director of marketing and sales to discuss ideas for
potential programs to increase sales. Discusses with the banquet
manager details of groups that will be in-house for banquets and city
ledger accounts that have left requests for billing disputes.
9:30 Checks with the chef to learn daily specials for the various restaurants.
This information will be typed and distributed to the telephone operators.
9:45 Meets with the front office staff to discuss pertinent operational
information for the day. Handles guest billing disputes.
11:00 Meets with the general manager to discuss the development of the next
fiscal budget.
12:30 P.M. Works on forecasting sheet for the coming week. Prepares preliminary
schedule and anticipated payroll.
1:30 Has a lunch appointment with a corporate business client.
2:15 Works on room blocking—reserving rooms for guests who are holding
reservations—for group reservations with the reservations clerk.
2:30 Works with the controller on budgetary targets for the next month.
Receives feedback on budget targets from last month. Checks with the
housekeeper on progress of room inspection and release.
2:45 Checks with the plant engineer on progress of plumbing repair for the
eighteenth floor.
3:00 Greets the second-shift desk clerks and relays operational information on
reservations, room assignments, room inventory, and the like.
3:15 Assists the front desk clerks in checking in a tour group.
4:00 Interviews two people for front desk clerk positions.
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4:45 Assists the front desk clerks in checking in guests.
5:15 Reviews trade journal article on empowerment of employees.
5:45 Telephones the night auditor and communicates current information
pertinent to tonight’s audit.
6:00 Checks with the director of security for information concerning security
coverage for the art exhibit in the ballroom.
6:30 Completes work order request forms for preventive maintenance on the
front office posting machine.
6:45 Prepares “things to do” schedule for tomorrow.
This job analysis reveals that the front office manager has a busy schedule involving
hands-on participation with the front office staff and communication with department
heads throughout the lodging establishment. The front office manager must be able to
project incomes and related expenses, to interview, and to interact with potential business
clients.
Based on this job analysis, a job description for a front office manager is easily pre-
pared, as shown in Figure 2-8. The job description is an effective management tool
because it details the tasks and responsibilities required of the job-holder. These guide-
lines allow the individual to apply management principles in the development of an effec-
tive front office department. They also challenge the person in the job to use prior
experience and theoretical knowledge to accomplish the tasks at hand.
The Art of Supervising
The art of supervising employees encompasses volumes of text and years of experience.
Management experts have analyzed the complexities of supervising employees. Some of
your other management courses explain in detail the concept of management. This chap-
ter covers a few concepts that will assist you in developing your own supervisory style.
The first step in developing a supervisory style is to examine the manager’s position in
the context of the management team. As the front office manager, you are assigned cer-
tain responsibilities and granted certain authorities. These are areas for participation,
growth, and limitation on the management team. Although this is a simplified overview
of the management team, it does help clarify managerial intended performance. Early in
the new job, a manager should review personal career goals with this organization. The
ports of entry to the position of general manager (described in chapter 1) will help an
aspiring general manager clarify goals and understand which areas of the hotel will pro-
vide good exposure and experience. Once you have clarified your arena of participation
and plan for growth, you can decide how best to lead a team to financial success and per-
sonal growth.
The first concept a new supervisor should address is employee motivation. What helps
each employee perform at his or her best? The emphasis is on each employee; different
incentives motivate different people. The better shift scheduling that motivates the
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second-shift desk clerk may have no effect on the part-time night auditor who is a moon-
lighter, a person who has a full-time job at another organization and a part-time job at a
hotel, two days a week on your property. The young person who prefers the second shift
(3:00–11:00 P.M.) because it better fits his or her lifestyle will not be inspired by the pos-
sibility of working the first shift. Tuition reimbursement may motivate the recent gradu-
ate of an associate degree program who wants to continue toward a four-year degree; this
62 CHAPTER 2
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HOTEL ORGANI ZATI ON AND THE FRONT OFFI CE MANAGER
FI GURE 2- 8 The job description is based on the job analysis of a front office manager.
JOB DESCRIPTION
Title: Front Office Manager
Reports to: General Manager
Typical duties:
1. Reviews final draft of night audit.
2. Operates and monitors reservation system for guest room rentals.
3. Develops and operates an effective communication system with front office staff.
4. Supervises daily operation of front office staff—reservations, registrations, and checkouts.
5. Participates with all department heads in an effective communications system facilitating the
provision of guest services.
6. Plans and participates in the delivery of marketing programs for the sale of rooms and other
hotel products and services.
7. Interfaces with various department heads and controller regarding billing disputes involving guests.
8. Develops final draft of budget for front office staff.
9. Prepares forecast of room sales for upcoming week, month, or other period as required.
10. Maintains business relationships with various corporate community leaders.
11. Oversees the personnel management for the front office department.
12. Performs these and other duties as required.
Review cycle:
1 month _______________
(date)
3 months _______________
(date)
6 months _______________
(date)
1 year _______________
(date)
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same benefit will mean little to someone uninterested in higher education. The possibil-
ity of promotion to reservations clerk may not have the same motivating effect on a tele-
phone operator who is a recently displaced worker concerned about a schedule that
meets the needs of a young family as it does on a front desk clerk who has no dependents.
Sometimes a supervisor cannot figure out what motivates a person. It is a manager’s ulti-
mate challenge to discover how to motivate each member of his or her staff. By using this
knowledge, a manager can promote not just the best interests of the employee but also the
best interests of the hotel.
Another supervisory responsibility is to achieve a balance among varying personalities
in a group work setting. This is a constant and evolving situation. Very often, a new
supervisor does not have time to assess each employee’s relationship with others on the
team, yet these dynamics are key to establishing a positive and effective team setting. The
front office staff may jockey for position with the new boss; this common situation must
be addressed as part of the job. Once the new supervisor shows himself or herself capa-
ble and competent, the supervisor can move on to the day-to-day tasks. The staff needs
this time to learn their new manager’s reactions under stress. They also want to make sure
their supervisor will be their advocate with top management. All new supervisors are
tested in this way. You should not be discouraged by this challenge but embrace it as the
first of many to come.
After working out whatever personality clashes exist among the employees, the man-
ager must be objective about the strengths and weaknesses of the staff. Who is the unof-
ficial leader of the group? Who is the agitator? Who is the complainer? Objective views
of staff are probably shared by the rest of the team. Often, the staff members are quite
aware of the shortcomings of their coworkers. They also know on whom they can rely to
check out the full house and check in the convention three hours later. The unofficial
leader of the group can assist the supervisor in conveying important ideas.
Some supervisors respond negatively to such accommodation of the staff. Their
response is based on the assumption that the supervisor has the first and last word in all
that goes on in the front office. Of course, authority is important, but any supervisor who
wants to maintain authority and have objectives met by the staff must constantly rework
his or her strategy.
Adequate personnel training (discussed in chapter 12) makes the job of a supervisor
much easier. When training is planned, executed, and reinforced, the little annoyances of
human error are minimized. As previously discussed, each job description lists the major
duties of the employees, but the gray areas—handling complaints, delivering a positive
image of the lodging property, selling other departments in the hotel, and covering for a
new trainee—cannot be communicated in a job description. On-the-job training, employee
training that takes place while producing a product or service, and videotape training are
excellent methods for clarifying such tasks. These methods serve not only to demonstrate
skills but also to communicate the financial goals, the objectives of hospitality and service,
and the idiosyncrasies of the lodging property and the people who work in it.
Employees always have special scheduling needs as well as other job-related requests,
and supervisors should try to accommodate them. The new hire who made commitments
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four to six months prior to accepting a position at the front desk will appreciate and
return a supervisor’s consideration. The individual who wants to change shifts because of
difficulties with another person on the job may just need advice on how to handle that
person. These individuals may make a good team, but they wear on each other’s patience.
A longtime employee might ask you how he or she can advance in the organization. You
may not have an immediate response, but you can indicate that you will act on the
request in the near future. Sometimes employees know that a good thing takes time to
develop. Listen to their needs; their requests may answer your problems by fitting into the
demands of the job. For example, a desk clerk who needs additional income may request
overtime hours. An opportunity may arise for this employee to fill a vacancy caused by
another employee’s illness or vacation.
The responsibility of communications within the hotel usually rests with the front office.
From the guests’ perspective, this department is the most visible part of the lodging estab-
lishment. The various departments in the hotel realize that the transfer of information to
guests is best done through the front office. When such communications fail to reach guests,
it is often the front office that bears the brunt of their unhappiness at checkout time.
The more systematic the communication process can become, the better for all con-
cerned. For example, messages that will affect the next shift of desk clerks can be
recorded in the message book, a loose-leaf binder in which the front desk staff of any shift
can record important messages. This communication tool is vital to keeping all front
office personnel informed of additions, changes, and deletions of information and activ-
ities that affect the operation of a front office. Additionally, daily function sheets, which
list the planned events in the hotel and their updates, must be delivered to the front office
on a routine basis. The daily function board or electronic bulletin board in guest rooms
available on in-room television or in public areas is usually maintained by the front
office. The guest who complains about the maintenance of a room must have the com-
plaint passed along to the right person. The complaint is then reviewed by a member of
the staff, front office manager, member of the housekeeping staff, housekeeper, member
of the maintenance staff, or maintenance director to ensure it is resolved.
Inquiries about hotel services, reservations, city ledger accounts (a collection of
accounts receivable of nonregistered guests who use the services of the hotel), accounts
payable, scheduled events, and messages for registered guests constitute only some of the
many requests for information. Desk clerks and telephone operators are expected to
know the answers to these questions or to whom they should be referred.
Some of this advice is based on my own experience. One of the jobs I was responsible
for as a front desk clerk included operating the switchboard. This job was truly stressful,
involving accuracy at every contact. Finding the right department head to meet the
request of an incoming caller or ensuring that a message is passed along to a guest are
only some of the tasks required every minute a person is on the job. If a message is con-
veyed inaccurately or if an employee fails to complete the communication process, hos-
pitality is not projected to the guest.
Ways of applying employee empowerment concepts are explored in chapter 12. The
contemporary front office manager needs extensive training and experience in this vital
64 CHAPTER 2
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area to manage a workforce that can deliver hospitality on a daily basis. Ensuring that an
employee can conduct business without constant approval from a supervisor is the goal
of empowerment. The mastery of empowerment requires a supervisor to train employees
and to practice much patience. Employees accustomed to direct supervision on all mat-
ters may not readily adapt to a work environment that requires independent thinking to
address challenges.
Staffing the Front Office
The schedule for the front office staff is based on both budgetary targets and anticipation
of guest check-ins and checkouts. An increase in the frequency of guest requests for infor-
mation and various front office services may affect the schedule. The front office manager
must also determine labor costs by reviewing salaries and hourly wages and respective
rates. The resulting figures show if the front office manager has adhered to the projected
budget. Table 2-1 (pages 66–67) shows how the costs for staffing are determined. Table
2-2 (page 68) compares these projected costs with the projected revenue generated by
room rentals, which allows for a preevaluation of income and labor expenses.
The preparation of the front office schedule is broken into four steps. The first step
requires the front office manager to estimate or forecast the needs of his or her depart-
ment for a certain period. The front office manager must review the sales history of pre-
vious events, current functions, current reservations, anticipated walk-ins, stayovers, and
check-outs for that period to determine their impact on the labor requirements for the
workweek. As you can see from the listing of personnel in Step 1 (Table 2-1), all job cat-
egories are included so the front office manager can determine how each job will be
affected.
Step 2 (Table 2-1), developing the schedule, is a twofold process that requires meeting
both the needs of the lodging establishment and the needs of employees. The lodging
establishment must deliver hospitality to the guest by remaining open 24 hours per day,
seven days per week. Also, employees have personal requests for time-off as well as needs
for working around family responsibilities and financial needs for more or less working
hours.
Step 3 (Table 2-1), calculating the anticipated payroll, requires the front office man-
ager to go back and price out each category of employee. This allows the front office
manager to determine how much money he or she has spent against the predicted income
sales.
Step 4 (Table 2-1), summary of costs by category, provides a grouping of costs by cat-
egory for each subdepartment in the front office. This total payroll figure is needed to
compare projected income for weekly room sales and weekly payroll.
Table 2-2, Comparison of Projected Income from Weekly Room Sales and Projected
Weekly Payroll, allows the front office manager, general manager, and controller to
anticipate financial performance in a hotel for a certain time frame. As you can see,
STAFFI NG THE FRONT OFFI CE 65
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02_4612.qxp 1/11/06 3:28 PM Page 67
room sales are tracked from Yesterday, Departures, and Stayovers, while Arrivals, Walk-
ins and No-shows are projected.
The information in Table 2-2 allows the front office manager to be more effective. He
or she has the opportunity to review and thus adjust data for departures, stayovers,
arrivals, and walk-ins, which affects the number of rooms sold each night. For example,
if the front office manager realizes that on a certain day at 6:30 P.M. there are 25 vacant
rooms and no more confirmed or guaranteed reservations are being held, desk clerks can
be empowered to negotiate a reasonable room rate with guests to obtain their business (in
order to secure a full house). If there were three vacant rooms and eight guaranteed
reservations being held, desk clerks would not be so empowered.
Solution to Opening Dilemma
Communication in a hotel is essential to efficiency, delivery of high-quality service, and
making a profit. In this case, the front office staff failed to place a room block in the com-
puter system for the additional 26 rooms. Does this happen frequently in the hotel busi-
ness? Unfortunately, it does. However, the delivery of high-quality service is dependent
on the upkeep of a hotel’s physical property, and this is an important operational proce-
dure. The front office manager and the director of housekeeping must cooperate in set-
ting up times for taking guest rooms out of available inventory. The front office manager
must be made aware of the costs involved in contracted services and work in partnership
with the director of housekeeping.
68 CHAPTER 2
?
HOTEL ORGANI ZATI ON AND THE FRONT OFFI CE MANAGER
TABLE 2- 2 Comparison of Projected Income from Weekly Room Sales and Projected Weekly Payroll
10/1 10/2 10/3 10/4 10/5 10/6 10/7
Yesterday’s sales 135 97 144 147 197 210 213
Departures –125 –10 –72 –75 –5 –15 –125
—–— —–– —–– —–— —–– —–– —–—
Stayovers 10 87 72 72 192 195 88
Arrivals +72 +40 +50 +125 +10 +15 35+
Walk-ins +20 +20 +30 +10 +10 +5 +50
No-shows –5 –3 –5 –10 –2 –2 –3
—–— —–– —–– —–— —–– —–– —–—
Number Sold 97 144 147 197 210 213 170
Total rooms sold (sum of number sold each day) 1,178
Income from rooms sold (at average daily rate of $75.00) $88,350.00
Projected payroll budget (from weekly estimate, Table 2-1) $ 7,658.10
Percentage of income required for payroll ([payroll × 100] ÷ income)8.66%
02_4612.qxp 1/11/06 3:28 PM Page 68
Chapter Recap
This chapter outlined the organizational structure of lodging properties and typical job
responsibilities of department managers. Specific review of the role of the front office
manager revealed many related concepts. Success in providing effective supervision begins
with a review of the resources available to the front office manager, such as employees,
equipment, room inventory, finances, and sales opportunities. After analyzing these
resources, the front office manager can direct the department more effectively; the objec-
tives of making a profit and delivering hospitality to the guest can be achieved more
easily.
The functional role of the front office manager can be understood by preparing a job
analysis and job description. This process allows the future professional to see the major
responsibilities of the job and the departmental relationships involved.
The many positions found in a front office staff have the common goal of providing
hospitality to the guest. Training, empowerment, and flexibility are necessary to make the
team work.
Forecasting, scheduling, developing a supervisory style, motivating personnel, balanc-
ing staff personalities, delegating tasks, training, and effectively communicating are only
a few of the skills a good supervisor must master. This lifelong effort is developed through
continuing education and trial and error.
End-of-Chapter Questions
1. If you are employed in the hotel industry, sketch the organization chart of the
property where you work. Have you seen this hierarchy change since you have
been employed there? If so, what do you think caused this change?
2. Compare the organization of a full-service hotel and a limited-service hotel. How
can a limited-service property operate with such a seemingly minimal staff?
3. If you are employed in the hotel industry, describe the tasks your general man-
ager performs on a daily basis. Describe the tasks your department director per-
forms on a daily basis. What relationship do both of these positions have to the
overall success of the hotel?
4. How are the positions in a front office organized? Describe the positions found
at the front office in a full-service hotel. Which positions are most crucial to pro-
viding guest service?
5. If you have ever worked in a front office in a lodging property, summarize what
you think the front office manager does. If you have not worked in a front office
of a hotel, you might want to visit with a front office manager and ask for insight
into this position.
END- OF- CHAPTER QUESTI ONS 69
02_4612.qxp 1/11/06 3:28 PM Page 69
6. What resources are available to the front office manager? Rank the importance
of these resources in providing service to guests and supervising employees.
7. How does the front office manager relate to other members of the hotel man-
agement staff? Give examples.
8. Why should a job analysis be performed prior to preparing a job description? Do
you think this procedure is necessary? Why or why not?
9. What are the four steps required in preparing a schedule?
10. How do you think your supervisor developed his or her supervisory style? What
do you think will be the basis in developing your supervisory style?
11. What does “the art of supervision” mean to you? Reflect on your answer and
highlight which concepts are important to your future supervisory style.
12. Why does trying to understand individual motivation help in supervising?
13. What are some of the personality clashes you have noticed where you work?
How did your supervisor handle them? Would you have handled them differently
if you were the supervisor?
14. Generally speaking, what benefits can a well-trained front office person offer the
front office manager?
15. Give examples of how the front office is responsible for communication with
other departments, with hotel guests, and with the public.
70 CHAPTER 2
?
HOTEL ORGANI ZATI ON AND THE FRONT OFFI CE MANAGER
C A S E S T U D Y 2 0 1
Ana Chavarria, front office manager, has been with
The Times Hotel for several years. She recalls her
first few months as a time of great stress. Milo Diaz,
the personnel manager, was always calling her to
post her schedules on time and authorize payroll
forms. Thomas Brown, executive housekeeper,
seemed a great friend off the premises of the hotel,
but at work, he continually badgered the front desk
clerks on guest check-in and checkout problems.
Yoon-Whan Li, executive engineer, also had com-
munication issues with Ana, such as the time when a
desk clerk called Yoon-Whan at home to indicate
that an elevator was stuck on the fourth floor when
it was only manually stopped by a group of chil-
dren. Eric Jones, food and beverage manager,
blamed Ana’s desk clerks because hotel guests were
not frequenting the dining room and lounge, asking
her, “When will the desk clerks ever learn to talk
about those free coupons for the dining room and
lounge that they so stoically hand out?” Then there
was Lorraine DeSantes, director of marketing and
sales, who had just about all she could take from
desk clerks who misplaced phone messages, directed
hotel guests to restaurants across the street, and
offered information on “a good restaurant right
around the corner.”
Ana has taken those comments to heart and feels
she can justify her shortcomings and those of her
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END- OF- CHAPTER QUESTI ONS 71
C A S E S T U D Y 2 0 1 ( c ont i nued)
staff. She knows the schedules are to be posted by
Tuesday morning of each week, but several of her
employees give her last-minute requests for days off.
Her payroll forms are usually delayed because she
wants to spend time with the guests who are regis-
tering or checking out. The front desk clerks have
made major errors in checking guests into rooms
that are not ready, but she offers, “It must be that
the computer system gives them the wrong informa-
tion.” The elevator issue wasn’t the front desk
clerk’s fault. It was his third night on the job, and no
one had thought to explain what constitutes an
emergency call to the executive engineer. She wants
her front desk clerks to distribute those food and
beverage coupons, but they just don’t get excited
about it. And Lorraine DeSantes’s messages are
always given to her; “She just makes no attempt to
look in her mailbox.”
She also remembered when Margaret Chu, gen-
eral manager of The Times Hotel, asked her to visit
in her office. She let Ana know that her six-month
probationary period would be over in one month
and it was time to discuss Ana’s progress before a
permanent offer was made. Ana was uneasy, know-
ing her colleagues had reported major errors on her
behalf. However, Margaret Chu took an approach
that was different from that of other general man-
agers with whom Ana had worked. Ms. Chu asked
her to prepare a list of strategies to use in working
toward improvement in the following areas:
?
Employee motivation
?
Personnel training
?
Effective scheduling of employees
?
Communication
?
Empowerment
Ms. Chu has asked you to assist Ana in develop-
ing strategies to use for improving her ability in the
art of supervising employees. What would you sug-
gest?
C A S E S T U D Y 2 0 2
A local hotel developer has called you to assist her
corporation in designing job descriptions for a new
hotel. This is the corporation’s first venture into the
hotel business, so the developer wants you to be
explicit in writing the job descriptions. The hotel is
similar to the 500+-room full-service hotel depicted
in Figure 2-1. Prepare job descriptions for the fol-
lowing management positions:
?
General manager
?
Front office manager
?
Executive housekeeper
?
Food and beverage director
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Key Words
72 CHAPTER 2
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HOTEL ORGANI ZATI ON AND THE FRONT OFFI CE MANAGER
accounts payable
accounts receivable
assistant general manager
athletics director
average daily rate (ADR)
balance sheet
bell captain
bell staff
bill-to-account
business services and communications
center
call accounting
cashier
city ledger accounts
collective bargaining unit
concierge
continental breakfast
controller
convention guests
corporate guests
daily function sheet
desk clerk
director of marketing and sales
director of security
elevator operator
executive housekeeper
express checkout
floor inspector
food and beverage director
front office manager
full house
general ledger
general manager
human resources manager
in-house laundry
job analysis
job description
key clerk
maintenance manager
message book
moonlighter
night audit
night auditor
on-the-job training
operational reports
organization chart
parking garage manager
percent occupancy
percent yield
plant engineer
prior approved credit
profit-and-loss statement
property management system (PMS)
rack rate
recreation director
referral reservation service
reservations manager
room attendants
room blocking
statement of cash flows
telephone operator
total quality management (TQM)
traffic managers
working supervisors
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O P E N I N G D I L E M M A
The leader of a workshop in one of the conference rooms is uneasy
about his program today. After noticing the connection for the
teleconference is not working, he stops by the front desk and asks if the
convention representative could come to the conference room. The desk
clerk on duty offers to locate the convention representative and send
her to the room. After the workshop leader leaves the front desk area,
the desk clerk remarks, “You would think we have to be all things to
all people all the time!”
C H A P T E R 3
Effective Interdepartmental
Communications
C H A P T E R F O C U S P O I N T S
?
Role of the front office in
establishing and main-
taining effective commu-
nications with other
departments
?
Discussion and applica-
tion of total quality
management techniques
used in improving inter-
departmental communi-
cation
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Role of the Front Office in Interdepartmental Communications
The front office plays a pivotal role in delivering hospitality to guests. It sets the stage for
a pleasant or an unpleasant visit. Guests, often in an unfamiliar setting and wanting to pro-
ceed with their business or vacation plans, are eager to learn the who, what, when, where,
and how of their new environment. Requests for information often begin with the porter,
bellhop, switchboard operator, front desk clerk, cashier, or concierge, because these
employees are the most visible to the guest and are perceived to be the most knowledge-
able. These employees are believed to have their finger on the pulse of the organization and
the community. Their responses to guests’ requests for information on public transporta-
tion, location of hotel facilities, special events in the community, and the like indicate how
well the hotel has prepared them for this important role. Front office managers must take
an active part in gathering information that will be of interest to guests. They must also be
active in developing procedures for the front office to disburse this information.
The relationships the front office manager develops with the other department direc-
tors and their employees are vital to gathering information for guests. Developing posi-
tive personal relationships is part of the communication process, but it cannot be relied
on to ensure that accurate and current information is relayed. How does the front office
manager encourage effective interdepartmental communication (communication between
departments)? This chapter provides relevant background for you as you begin your pro-
fessional career. It is important to note that this discussion is applicable to intradepart-
mental communication (communication inside a department) as well.
Figure 3-1 shows the departments in a hotel that interact with the front office. The front
office is at the center of the diagram to illustrate the many interdepartmental lines of com-
munication that exist. These lines are based on the direction each department is given to
provide hospitality in the form of clean rooms, properly operating equipment, safe envi-
ronment, well-prepared food and beverages, efficient table service, and professional organ-
ization and delivery of service for a scheduled function as well as accurate accounting of
guest charges and the like. These general objectives help department directors organize
their operations and meet the overall goal of delivering professional hospitality. However,
in reality, constant effort is required to manage the details of employees, materials, proce-
dures, and communication skills to produce acceptable products and services.
Front Office Interaction with Other Departments in the Hotel
The front office staff interacts with all departments of the hotel, including marketing and
sales, housekeeping, food and beverage, banquet, controller, maintenance, security, and
human resources. These departments view the front office as a communication liaison in
providing guest services. Each of the departments has a unique communication link with
the front office staff. The front office in any type of lodging property provides the face
74 CHAPTER 3
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EFFECTI VE I NTERDEPARTMENTAL COMMUNI CATI ONS
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and voice of hospitality for the organization around the clock. Guests are most likely to
approach the front office staff for connections to staff in other departments. As you
review the following lodging facility departments, try to grasp the role of the front office
in communication with each. As shown in Figure 3-1, the front office is a clearinghouse
for communication activities. The members of the front office team must know to whom
they can direct guest inquiries for assistance. They learn this by means of a thorough
training program in in-house policy and procedures and a constant concern for provid-
ing hospitality to the guest.
Marketing and Sales Department
The marketing and sales department relies on the front office to provide data on guest his-
tories, or details concerning each guest’s visit. Some of the information gathered is based
on ZIP code, frequency of visits, corporate affiliation, special needs, and reservations for
sleeping rooms. It is also the front office’s job to make a good first impression on the pub-
lic, to relay messages, and to meet the requests of guests who are using the hotel for meet-
ings, seminars, and banquets.
The guest history is a valuable resource for marketing and sales, which uses the guest
registration information to target marketing campaigns, develop promotions, prepare
mailing labels, and select appropriate advertising media. The front office staff must make
every effort to keep this database current and accurate.
FRONT OFFI CE I NTERACTI ON WI TH OTHER DEPARTMENTS I N THE HOTEL 75
Banquets
FRONT OFFICE Food and Beverage Controller
Security Housekeeping
Maintenance Marketing and Sales
Human Resources Management
FI GURE 3- 1 The front office serves as a clearinghouse for communication activities.
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The process of completing the booking of a special function (such as a wedding recep-
tion, convention, or seminar) depends on the availability of sleeping rooms for guests.
The marketing and sales executives may have to check the lists of available rooms three
or six months, or even a year in the future to be sure the hotel can accommodate the
expected number of guests. A database of available rooms is maintained in the property
management system by the front office.
The first guest contact with the marketing and sales department is usually through the
hotel’s switchboard. A competent switchboard operator who is friendly and knowledge-
able about hotel operations and personnel makes a good first impression, conveying to
the prospective client that the hotel is competent. When the guest finally arrives for the
function, the first actual contact with the hotel is usually through the front office staff.
The front office manager who makes the effort to determine which banquet supervisor is
in charge and communicates that information to the desk clerk on duty demonstrates to
the public that this hotel is dedicated to providing hospitality.
Messages for the marketing and sales department must be relayed completely, accu-
rately, and quickly. The switchboard operator is a vital link in the communication
between the prospective client and a salesperson in the marketing and sales department.
The front office manager should instruct all new front office personnel about the staff in
the marketing and sales department and what each person’s job entails. (This applies to
all departments in the hotel, not just marketing and sales, as explained in chapter 12.)
Front office employees should know how to pronounce the names of all marketing and
sales employees. To help front office staff become familiar with all these people, man-
agers should show new employees pictures of the department directors and supervisors.
Requests for service at meetings, seminars, banquets, and the like are often made at the
front office. The banquet manager, the person responsible for fulfilling the details of serv-
ice for a banquet or special event, or sales associate, who books the guest’s requirements
for banquets and other special events, might be busy with another function. If a guest
needs an extension cord or if an electrical outlet malfunctions, the front desk staff must
be ready to meet the guest’s needs. The front office manager should establish standard
operating procedures for the front office employees to contact maintenance, housekeep-
ing, marketing and sales, or the food and beverage department to meet other common
requests. Knowing how to find a small tool kit, adapters, adhesive materials, extra table
covers, or window cleaner will help the guest and save the time involved in tracking down
the salesperson in charge.
Housekeeping Department
Housekeeping and the front office communicate about housekeeping room status, the
report on the availability of the rooms for immediate guest occupancy. Housekeeping
room status can be described in the following communication terms:
?
Available Clean, or Ready—room is ready to be occupied
?
Occupied—guest or guests are already occupying a room
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EFFECTI VE I NTERDEPARTMENTAL COMMUNI CATI ONS
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?
Stayover—guest will not be checking out of a room on the current day
?
Dirty or On-Change—guest has checked out of the room, but the housekeeping
staff has not released the room for occupancy
?
Out-of-Order—room is not available for occupancy because of a mechanical
malfunction
Housekeeping and the front office also communicate on the details of potential house
count (a report of the number of guests registered in the hotel), security concerns, and
requests for amenities (personal toiletry items such as shampoo, toothpaste, and mouth-
wash; electrical equipment). These issues are of immediate concern to the guest as well as
to supervisors in the hotel.
Reporting of room status is handled on a face-to-face basis in a hotel that does not use
a property management system (PMS). The bihourly or hourly visits of the housekeeper
to the front desk clerk are a familiar scene in such a hotel. The official reporting of room
status at the end of the day is accomplished with a housekeeper’s room report—a report
prepared by the housekeeper that lists the guest room occupancy status as vacant, occu-
pied, or out of order. Sometimes even regular reporting of room status is not adequate,
as guests may be anxiously awaiting the opportunity to occupy a room. On these occa-
sions, the front desk clerk must telephone the floor supervisor to determine when the
servicing of a room will be completed.
The housekeeper relies on the room sales projections—a weekly report prepared and
distributed by the front office manager that indicates the number of departures, arrivals,
walk-ins, stayovers, and no-shows—to schedule employees. Timely distribution of the
room sales projections assists the executive housekeeper in planning employee personal
leaves and vacation days.
The front desk also relies on housekeeping personnel to report unusual circumstances
that may indicate a violation of security for the guests. For example, if a maid or house-
man notices obviously nonregistered guests on a floor, a fire exit that has been propped
open, or sounds of a domestic disturbance in a guest room, he or she must report these
potential security violations to the front office. The front office staff, in turn, relays the
information to the proper in-house or civil authority. The front office manager may want
to direct the front desk clerks and switchboard operators to call floor supervisors peri-
odically to check activity on the guest floors.
Guest requests for additional or special amenities and guest room supplies may be ini-
tiated at the front desk. The prompt relay of requests for extra blankets, towels, soap, and
shampoo to housekeeping is essential. This is hospitality at its best. More examples of
communication between the housekeeping and front office departments are presented in
chapter 15.
Food and Beverage Department
Communication between the food and beverage department and the front office is essential.
Transfers, which are forms used to communicate a charge to a guest’s account, are used to
FRONT OFFI CE I NTERACTI ON WI TH OTHER DEPARTMENTS I N THE HOTEL 77
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relay messages and provide accurate information. Communication activities also include
reporting predicted house counts, an estimate of the number of guests expected to register
based on previous occupancy activities, and processing requests for paid-outs, forms used
to indicate the amounts of monies paid out of the cashier’s drawer on behalf of a guest or
an employee of the hotel. These vital services help an overworked food and beverage man-
ager, restaurant manager, or banquet captain meet the demands of the public.
Incoming messages for the food and beverage manager and executive chef from ven-
dors and other industry representatives are important to the business operation of the
food and beverage department. If the switchboard operator is given instructions on
screening callers (such as times when the executive chef cannot be disturbed because of a
busy workload or staff meetings, or vendors in whom the chef is not interested), the
important messages can receive top priority.
In a hotel that has point-of-sale terminals, computerized cash registers that interface
with a property management system, information on guest charges is automatically
posted to a guest’s folio—his or her record of charges and payments. When a hotel does
not have such terminals, the desk clerk is responsible for posting accurate charges on the
guest folio and relies on transfer slips. The night auditor’s job is made easier if the trans-
fer slip is accurately prepared and posted. The front office manager should work with the
78 CHAPTER 3
?
EFFECTI VE I NTERDEPARTMENTAL COMMUNI CATI ONS
H O S P I T A L I T Y P R O F I L E
?
M
ichael DeCaire is the food and
beverage manager at the Hous-
ton Hilton, Houston, Texas. His
previous experience includes positions as execu-
tive chef at the Park Hotel in Charlotte, North
Carolina; executive and executive sous chef at the
Pacific Star Hotel on the Island of Guam; and
executive sous chef at the Greenleaf Resort in
Haines City, Florida.
Mr. DeCaire relies on the front desk for accu-
rate forecasting of arrivals, notification of VIPs
and Hilton Honors Club members, communica-
tion of complaints and positive comments con-
cerning food and service, and processing of guest
bills. He also works with the front desk to obtain
a thorough knowledge of the needs and location of
banquet and meeting guests through a ten-day
forecast of banquet and meeting events.
The communication emphasis at the Houston
Hilton is extended into a nine-week cross-training
program, in which all departments (food and bev-
erage, front desk, housekeeping, sales, etc.) partic-
ipate in learning the basics of each department.
This training effort allows the salesperson to
appreciate the duties of a cook, the waiter or wait-
ress to understand the duties of a front desk clerk,
and the front desk clerk to value the duties of a
housekeeper. Another area of cooperative training
efforts is fire command post training.
Mr. DeCaire offers the following advice for stu-
dents wanting to make a career in the hotel indus-
try: Take an entry-level job in the hospitality
industry so you can understand the work require-
ments of weekends, holidays, and nights prior to
investing in a college education. This effort will
pay big dividends for your career growth.
?
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food and beverage director in developing standard operating procedures and methods to
complete the transfer of charges.
The supervisors in the food and beverage department rely on the predicted house
count prepared by the front office manager to schedule employees and predict sales. For
example, the restaurant supervisor working the breakfast shift needs to know how many
guests will be in the hotel so he or she can determine how many servers to schedule for
breakfast service. Timely and accurate preparation of this communication tool assists in
staffing control and sales predictions.
Authorized members of the food and beverage department occasionally ask the front
office for cash, in the form of a paid-out, to purchase last-minute items for a banquet, the
lounge, or the restaurant or to take advantage of unplanned opportunities to promote
hospitality. Specific guidelines concerning cash limits, turnaround time, prior approval,
authorized signatures, and purchase receipts are developed by the general manager and
front office manager. These guidelines help maintain control of paid-outs.
Banquet Department
The banquet department, which often combines the functions of a marketing and sales
department and a food and beverage department, requires the front office to relay infor-
mation to guests about scheduled events and bill payment.
The front desk staff may also provide labor to prepare the daily announcement board,
an inside listing of the daily activities of the hotel (time, group, and room assignment),
and marquee, the curbside message board, which includes the logo of the hotel and space
for a message. Because the majority of banquet guests may not be registered guests in the
hotel, the front office is a logical communications center.
A daily posting on a felt board or an electronic bulletin board provides all guests and
employees with information on scheduled group events. The preparation of the marquee
may include congratulatory, welcome, sales promotion, or other important messages. In
some hotels, an employee in the front office contacts the marketing and sales department
for the message.
The banquet guest who is unfamiliar with the hotel property will ask at the front office
for directions. This service might seem minor in the overall delivery of service, but it is
essential to the lost or confused guest. The front office staff must know both how to
direct guests to particular meeting rooms or reception areas and which functions are
being held in which rooms. Front desk clerks, as shown in Figure 3-2, must be ready to
provide information for all departmental activities in the hotel.
The person responsible for paying the bills for a special event will also find his or her
way to the front office to settle the city ledger accounts. If the banquet captain is not
available to personally present the bill for the function, the front desk clerk should be
informed about the specifics of food and beverage charges, gratuities, rental charges,
method of payment, and the like.
FRONT OFFI CE I NTERACTI ON WI TH OTHER DEPARTMENTS I N THE HOTEL 79
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Controller
The controller relies on the front office staff to provide a daily summary of financial
transactions through a well-prepared night audit. This information is also used to meas-
ure management ability to meet budget targets. Because the front office provides the con-
troller with financial data for billing and maintenance of credit card ledgers, these two
departments must relay payments and charges through the posting machine or property
management system.
The information produced by the front office is a necessary first step in the process of
the factual guest accounting process and the financial assembly of data for the controller.
Without accurate daily entry by desk clerks and production of a night audit, the con-
troller does not have the figures to produce reports for the owners, general manager, and
supervisors. One might expect this communication to be in the form of reports. However,
the front office and controller departments often communicate orally. They share a com-
mon concern for guest hospitality, and when finances are concerned, oral discussion is
inevitable.
80 CHAPTER 3
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EFFECTI VE I NTERDEPARTMENTAL COMMUNI CATI ONS
FI GURE 3- 2
Front desk
clerks must be
able to provide
immediate
responses to
guests’
requests for
information.
Photo courtesy
of Radisson
Hospitality
Worldwide.
03_4612.qxp 1/11/06 3:29 PM Page 80
Maintenance or Engineering Department
The maintenance or engineering department and front office communicate on room sta-
tus and requests for maintenance service. Maintenance employees must know the occu-
pancy status of a room before attending to plumbing, heating, or air-conditioning
problems. If the room is reserved, the two departments work out a time frame so the
guest can enter the room on arrival or be assigned to another room. Cooperative efforts
produce the best solutions to difficult situations. Figure 3-3 depicts the essential commu-
nication and planning by departmental managers to provide guest services at a time that
does not interfere with delivering hospitality.
Likewise, the requests from guests for the repair of heating, ventilating, and air-con-
ditioning units, plumbing, televisions, and other room furnishings are directed to the
front desk, which relays them to the maintenance department. The front desk clerk must
keep track of the repair schedule, as guests want to know when the repair will be made.
FRONT OFFI CE I NTERACTI ON WI TH OTHER DEPARTMENTS I N THE HOTEL 81
H O S P I T A L I T Y P R O F I L E
?
J
ames Heale is the controller at
the Sheraton Reading Hotel,
located in Wyomissing, Pennsylva-
nia. He processes money that comes in and
expenses and taxes that are paid out. He prepares
daily audits, is responsible for payroll preparation,
and produces quarterly and annual financial state-
ments. He also prepares financial forecasts and
subsequent budgets.
Mr. Heale says his relationships with desk
clerks, cashiers, and night auditors are important;
however, his relationship with their respective
managers is more important. He audits the work
of the desk clerks, cashiers, and night auditors but
does not directly supervise them. If they make mis-
takes, Mr. Heale tries to show them why. He
makes sure they receive proper training, which
includes letting them know the results of audits
when they occur and making them aware of their
individual performance.
Mr. Heale has a good relationship with the
front office manager. They work together to fore-
cast room sales and to audit daily cash banks. The
front office manager monitors the payroll and may
ask for Mr. Heale’s assistance. The front office
manager is also involved in cash management
problems; he and Mr. Heale alert each other to
problems and work together to solve them. The
front office manager monitors accounts receivable
and is required to let Mr. Heale know when a
guest has exceeded his or her credit limit.
He adds that everyone in a hotel is a salesper-
son. Selling is a big part of his job through foster-
ing a good relationship with local vendors. His
efforts may encourage vendors to become cus-
tomers of the hotel.
?
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Security Department
Communications between the security department and the front office are important in
providing hospitality to the guest. These departments work together closely in maintain-
ing guest security. Fire safety measures and emergency communication systems as well as
procedures for routine investigation of guest security concerns require the cooperation of
these departments. Because of the events of September 11, 2001, the nature of the secu-
rity hotels offer their guests has changed. All members of the front office team must be
on alert for people who don’t belong in the lobby and report inconsistencies with the
security department. This professional view of security allows the front office to support
the security department.
82 CHAPTER 3
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EFFECTI VE I NTERDEPARTMENTAL COMMUNI CATI ONS
FI GURE 3- 3
Coordination
of
maintenance
service
requires
cooperation
between the
maintenance
and front
office depart-
ments. Photo
courtesy of
Host/Racine
Industries,
Inc.
03_4612.qxp 1/11/06 3:29 PM Page 82
Human Resources Management Department
The human resources management department may rely on the front office staff to act as
an initial point of contact for potential employees in all departments. It may even ask the
front office to screen job candidates. If so, guidelines for and training in screening meth-
ods must be provided.
Some directors of human resources management depend on the front office to distrib-
ute application forms and other personnel-related information to job applicants. The
potential employee may ask for directions to the personnel office at the front desk. The
human resources management department may also develop guidelines for the front desk
clerk to use in initially screening candidates. These guidelines may include concerns about
personal hygiene, completion of an application, education requirements, experience, and
citizenship status. This information helps the executives in the human resources manage-
ment department interview potential job candidates.
Analyzing the Lines of Communication
This section describes situations in which communications between the front office and
other departments play a role. Each situation involves communication problems between
departments, traces the source of miscommunication, analyzes the communication sys-
tem, and presents methods that will help improve communications. The purpose of this
method of presentation is to help future professionals develop a systematic way of con-
tinually improving communications.
Situation 1: Marketing and Sales Knows It All—But Didn’t Tell Us
Mr. and Mrs. Oil Magnate are hosting a private party for 200 people in the Chandelier
Room of City Hotel. On arriving at the hotel, they approach the front desk and ask if Mr.
Benton, the director of marketing and sales, is available. The desk clerk checks the duty
board and sees that Mr. Benton has left for the day. He responds, “Sorry, he’s left for the
day. What are you here for anyway?” The Magnates immediately feel neglected and ask
to see the manager on duty.
Mr. Gerard, the assistant general manager, arrives on the scene and asks what he can
do for the Magnates. Mr. Magnate has a number of concerns: Who will be in charge of
their party? Will their two favorite servers be serving the cocktails, appetizers, and din-
ner? Have the flowers that were flown in from Holland arrived? Mr. Gerard says, “Gee,
you’ll have to speak with André, our banquet captain. He knows everything.”
When André arrives, he tells the Magnates that Mr. Benton left no instructions about
who will be serving the party, and he has not seen any tulips in the walk-in. Mrs. Mag-
nate declares her party will be a disaster. Mr. Magnate decides to proceed with the party
and take up the lack of professional service later.
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Later has arrived: Mr. Magnate has complained to the general manager and I. M.
Owner—the owner of City Hotel—and both are upset about the situation. Mr. Magnate
and I. M. Owner are co-investors in a construction project. Even if the two men were not
business associates, the treatment of any guest in such a shabby way spells disaster for
future convention and banquet sales.
Analysis The communications breakdown in this case was the fault of all the employees involved.
Communication is a two-way process, and both senders and receivers must take active
roles. As the sender, Mr. Benton, the director of marketing and sales, did not do his
homework. Assuming he was aware of I. M. Owner’s relationship with Mr. and Mrs.
Magnate, he should have adjusted his work schedule so he could be there for the party.
He also should have informed the front office manager of the Magnates’ scheduled event,
explained who they were, and asked that he be summoned immediately on their arrival.
Mr. Benton should also have worked more closely with André, the banquet manager, in
scheduling employees and receiving and storing the flowers. Although Mr. Gerard, the
assistant general manager, would not normally be involved in the details of a party, in this
case, the VIP status of the guests would be a reason for him to be aware of the presence
of the Magnates in the hotel.
The receivers in the communication process are also at fault. These include the front
office staff, the banquet manager, and the assistant general manager. At times, a member
of the management team fails to communicate the particulars of an upcoming event.
However, the front office staff, the banquet manager, and the assistant general manager
are responsible for reviewing the daily function board as well as the weekly function
sheet. They are also responsible for learning about the backgrounds of the people, asso-
ciations, and corporations that stay at and conduct business with the hotel.
Several things can be done to avoid this type of situation. First, the front office man-
ager can ensure that the initial guest contact will be professional by reviewing the func-
tion board with each front desk employee on each shift. The manager can then help the
front office staff focus on the day’s upcoming events. Weekly staff meetings may also pro-
vide an opportunity for the director of marketing and sales to give brief synopses of who
will be in the hotel in the coming week. At that point, special requests for VIP treatment
can be noted.
Situation 2: Peace and Harmony in 507
Veronica is busy at the front desk checking in a busload of guests. Several of the guests
ask her for directions to the nearest dining facility because they are hungry. Two of the
guests seem restless and want to get into their room right away. One of them is an eld-
erly traveler who needs assistance with his luggage and the other one, his young grand-
son, had experienced motion sickness on the bus. Although it seemed normal that a
couple of guests would be restless and require special attention, something about these
two disturbs Veronica. The elderly man’s blank look on his face and his uneasy restless-
ness made her wonder what was on his mind. She checks them into room 507, calls the
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bell staff and asks for assistance with the elderly guest’s luggage, suggests that the elderly
guest take a nap so he could rest from the bus trip, and directs the younger guest to do
likewise.
The day continues, and several more routine check-ins and check outs occur. Veron-
ica takes a midafternoon break and happens to notice the elderly traveler crossing the
lobby of the hotel on her way to the hotel’s restaurant. She remarks to herself, “He seems
to be walking much straighter and taller than he did when he checked in. It’s only been
two hours since he got off the bus; that nap must have done him some good!” Likewise,
on her return from her break, she sees the younger guest laughing and talking with
friends while they listened to their boom box in the lobby. That nap must have helped
cure his motion sickness.
Veronica greets her replacement afternoon coworkers, John and Delanney, and checks
out. She has to hurry because she had an appointment in the city. Two hours into their
shift, John receives a phone call from room 505 complaining of strange, loud noises in the
hallway. John alerts Ishmael, the security guard on duty, and Ishmael investigated the sit-
uation. When Ishmael approaches room 507, he couldn’t believe what he saw. The two
guests are hosting a nondenominational religious party complete with live animals, musi-
cal instruments, and oh, yes—a bright 1,000-watt lamp. “The people in the room,” Ish-
mael said later. “There must have been at least 45 of them, and they invited me in to share
peace and harmony.” They are quite taken aback when Ishmael tells them the party will
have to break up because state law prohibits more than two people in that particular
room. However, they cooperate and abide by the law.
Analysis In this situation, we can see three communication opportunities were overlooked. First,
when Veronica had misgivings about the elderly traveler and his grandson who had expe-
rienced motion sickness, she should have discussed them with a coworker or supervisor.
It may have been nothing, but then again, it may have been a situation that would war-
rant further investigation. Then, when these misgivings were supported by the quick
cures two hours later, this should have alerted her to something questionable—and pre-
cipitated a discussion with her supervisor or a call to the director of security. Again, it
could have led to nothing, but a polite courtesy call to room 507 could have saved time
later on. The third missed opportunity was Veronica’s failure to relate her concerns about
these two guests to John and Delanney. This shift-change communication is vital for
keeping guests safe. All the communication training employees receive does not override
the human instinct that should underlie the communication process.
Situation 3: I Know What You Said, and I Think I Know What You Mean
The director of maintenance, Sam Jones, has assigned his crew to start painting the
Tower rooms at the hotel. Prior to making this assignment, he checked with the reserva-
tions manager, Keith Thomas, for approval to place the Tower rooms out of order for
four days. Keith consented because a prior reservation for 150 rooms for Photo Bugs
International had been confirmed for 100.
ANALYZI NG THE LI NES OF COMMUNI CATI ON 85
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At 1:00 P.M., Sam receives a call from Keith asking if it is possible to reassign the
painting crew to some other duty. The Photo Bugs have arrived—all 150 rooms’ worth!
The lobby is filled with guests for whom there are no available rooms. Sam tells
Keith to give them one hour to clean up the mess and air out the south wing. He says
the north wing has not been prepared for painting, so those guest rooms are ready for
occupancy.
Analysis What went right? What went wrong? This case demonstrates that cooperation between
two staff members can resolve even the most unfortunate of situations. Sam was aware
of the need for prior approval to take guest rooms out of service. Keith’s decision to grant
the request had a legitimate basis. Sam was also able to head off a nasty situation for the
guests by being flexible. Then what went wrong?
The words that people use in communicating with hotel staff members must be clari-
fied. In this case, the person who booked the convention said there were confirmations
for 100. Was this 100 guests for 50 rooms or 100 guests for 100 rooms? This lack of clar-
ity was at the root of the problem. In some hotels, the reservations manager may require
a change in reservations to be written (in the form of a letter); these written instructions
are then attached to the convention contract.
These examples of day-to-day problems in a hotel underscore the importance of good
communication between the front office and other departments. Similar problems will
occur again and again as you begin your career in the hospitality industry. You will
grow as a professional if you adopt an analytical view of the communication system.
Front office managers who actively participate in systematic communications are more
effective managers. Training employees in proper procedures for dealing with other
employees as well as their own departments helps improve the delivery of professional
hospitality.
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I N T E R N A T I O N A L H I G H L I G H T S
J
ustin, the front desk clerk on duty, cannot speak Spanish fluently but knows how to commu-
nicate phonetically with the Spanish-speaking housekeeping staff. When Victorio, the house-
man, approaches the front desk to inform Justin which rooms are clean, they use the phonetic
pronunciation of numerals and housekeeping status. For example:
English Phonetic Spanish
Room 2180 (dough s, ooe no, oh cho, sarh o)
is (es tah)
clean (limp e oh)
u
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The Role of Total Quality Management in Effective Communication
Total quality management (TQM) is a management technique that encourages managers
to look with a critical eye at processes used to deliver products and services. Managers
must ask front-line employees and supervisors to question each step in the methods they
use to provide hospitality for guests. Examples: “Why do guests complain about waiting
in line to check out?” “Why do guests say our table service is rushed?” “Why do guests
get upset when their rooms aren’t ready on check-in?” Managers and their employees
must then look for answers to these questions.
Total quality management was developed by W. Edwards Deming, a management the-
orist, in the early 1950s. His intent was to offer a new way for American manufacturers
to improve the quality of their products by reducing defects through worker participation
in the planning process. American manufacturers were reluctant at first to embrace total
quality management, but Japanese manufacturers were quick to adopt Deming’s princi-
ples of streamlining methods to manufacture products such as automobiles. He gave
managers tools such as flowcharts to analyze production by dividing the manufacturing
process into components and then focusing on the segments of processes that produce the
end product.
The most important aspect of total quality management in the context of the hotel
industry is the interaction between frontline employees and their supervisors. The inter-
action of employees in a group setting or on a one-on-one basis to determine the root of
the problem and how the desired end result can be achieved thrusts them into an atmos-
phere of cooperation that may not have previously existed. First-shift and second-shift
employees, who usually do not understand each other’s activities, find they do have com-
mon concerns about serving the guest. Housekeeping and front desk employees come to
realize that a guest’s request for a late checkout plays havoc with the delivery of hospi-
tality. Total quality management practices ensure that the front office checks with house-
keeping to determine room availability in such a situation. The bottom line is that
interdepartmental communication is enhanced each time a team of members of various
departments meets to analyze a challenge to the delivery of hospitality. Figure 3-4 pro-
vides a view of the interaction necessary to make total quality management a success.
ANALYZI NG THE LI NES OF COMMUNI CATI ON 87
F R O N T L I N E R E A L I T I E S
W
hile a guest in room 421 is checking out, she indicates a dripping faucet in that room. After
the guest departs, the desk clerk brushes off her remark, saying to a fellow desk clerk,
“There are so many dripping faucets in this hotel that one more won’t mean anything.”
If you were the front office manager and you heard this exchange, what would you do? How would
you encourage better communication between the front office and maintenance?
q
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An Example of Total Quality Management in a Hotel
Total quality management in a hotel may be applied as follows: The general manager has
received numerous complaints about the messy appearance of the lobby—furniture and
pillows are out of place, ashtrays are overflowing, flowers are wilted, and trash recepta-
cles are overflowing. The front office manager recruits a total quality management team,
consisting of a front desk clerk, a maid, a waiter, a cashier, and the director of market-
ing and sales. The team discusses how the lobby area could be better maintained. The
maid says her colleagues are overworked and are allotted only 15 minutes to clean up the
public areas on the day shift. The front desk clerk says he would often like to take a few
minutes to go out to the lobby to straighten the furniture and pillows, but he is not
allowed to leave the front desk unattended. The director of marketing and sales say she
is embarrassed when a prospective client comes into the hotel and is greeted with such a
mess. She has called housekeeping several times to have the lobby cleaned but is told, “It’s
not in the budget to have the lobby cleaned six times a day.” All of the team members
realize the untidy lobby does create a poor impression of the hotel and the situation does
have to be remedied.
The team decides to look at the elements in the situation. The furniture is on wheels
for ease of moving when the housekeeping staff cleans. The pillows add a decorative
touch to the environment, but they are usually scattered about. The waiter jokingly says,
88 CHAPTER 3
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EFFECTI VE I NTERDEPARTMENTAL COMMUNI CATI ONS
FI GURE 3- 4
Group
analysis of
jobs is an
essential
element in
total quality
management.
Photo
courtesy of
Radisson
Hotels.
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“Let’s sew them to the back and arms of the sofa!” Might the ashtrays be removed and
receptacles added for guests to use in extinguishing a cigarette? Could a larger waste
receptacle with a swinging lid be used to avoid misplaced litter? “The fresh flowers are
nice,” adds one of the team members, “but many hotels use silk flowers and plants. This
must save money over the long run.”
The team discussion encourages each person to understand why the maid can’t
straighten the lobby every two or three hours and why the desk clerk can’t leave his post
to take care of the problem. The employees’ comments concerning furniture and appoint-
ments foster an atmosphere of understanding. Team members start looking at one
another with more empathy and are slower to criticize on other matters. Was the issue of
the messy lobby resolved? Yes, but more important, the team members developed a way
to look at a challenge in a more constructive manner.
Solution to Opening Dilemma
Upon initial review, the problem seems to be that all employees should be encouraged to
assist guests in an emergency. However, in this case, the desk clerk has a perception prob-
lem about his job. This shortsightedness probably results from poor training, a lack of
opportunities for employees from various departments to exchange ideas and socialize,
and an atmosphere for employee motivation. The front office manager should discuss the
situation with the convention representative and emphasize the benefits of total quality
management. Supervisors must concentrate on the guests’ needs and foster employee
growth and development so their employees will likewise concentrate on guests’ needs.
These concepts are at the heart of effective interdepartmental communications.
Chapter Recap
This chapter analyzed the interdepartmental communications that must be maintained in
a hotel. In particular, it focused on how the front office relates to employees in all depart-
ments—marketing and sales, housekeeping, food and beverage, banquets, controller,
maintenance, security, and human resources. Guest needs are met when employees coop-
erate and communicate to provide hotel services. However, when these lines of commu-
nication break down, so, too, does quality of service. The front office manager must take
an objective view of these communications, considering the needs of the guest, the actions
of the employees, and the policies and procedures in effect. There are times when seg-
ments of the communication system will seem overwhelming, but the professional hote-
lier improves with each new challenge.
CHAPTER RECAP 89
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Situations illustrating communication lapses and their subsequent analysis provided
insights into the complex process of communicating. Each employee must develop an
appreciation for the work of other departments and an understanding of how each
employee’s activities affect the delivery of hospitality. Well-developed operational policies
and training programs assist employees in communicating within a department and
between departments.
Total quality management was introduced as a management tool that encourages
interdepartmental cooperation and communication. This management technique focuses
on ways everyone can work together to discuss issues and problems and resolve them as
a team. This method produces the best products and services for the guest.
End-of-Chapter Questions
1. How do the communication efforts of front office employees help set the tone for
a guest’s visit? Give examples.
2. Give examples of how the marketing and sales department and the front office
communicate.
3. Communications between the front office and the housekeeping department
revolve around room status. How can each department director ensure that these
communications are effective?
4. How does the banquet department interact with the front office? Do you think
any of these duties should be shifted to the banquet captain’s staff? Why or why
not?
5. What does the controller expect of the front office on a daily basis? Why is this
communication tool so important?
6. What role does the front office play in communications between the guest and the
maintenance department?
7. How can the human resources department include the front office in the opera-
tions and communications process?
8. What does “tracing and analyzing the lines of communication” mean to you? Do
you think this concept will assist you in your career in the hospitality industry?
9. What is your reaction to the use of total quality management as a means of
developing better communications between departments?
10. Identify a problem area in your place of employment and develop a plan to use
total quality management to resolve the issue. Whom would you place on the
total quality management team? What results would you expect?
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END- OF- CHAPTER QUESTI ONS 91
C A S E S T U D Y 3 0 1
It is Thursday morning at The Times Hotel. The
reservations manager has printed the list of reserva-
tions for the day. The front office staff has prepared
252 packets for guests who have preregistered for
the Pet Owners of the Americas Conference. The
Times Hotel has been designated the headquarters
for the cat owners, while The Sebastian Hotel,
located two blocks away, has been designated the
headquarters for the dog owners. The participants in
the Pet Owners of the Americas Conference are sup-
posed to start arriving at noon.
The Times Hotel had a full house on Wednesday
night. A planning group (179 rooms) for the Biology
Researchers Conference was in the hotel. They held
a meeting that ran into the early hours of Thursday
morning. Several of the guests posted DO NOT DIS-
TURB signs on their doors.
Yoon-Whan Li, the executive engineer, has noticed
the air conditioning going on and off on the fifth
and sixth floors. Yoon-Whan investigates the prob-
lem and estimates it will require about 12 hours of
repair time. Yoon-Whan gets on the phone to the
front office to report the problem, but the desk
clerks are busy and fail to answer the phone. Mean-
while, another repair call comes in, and Yoon-Whan
is off again. The air-conditioning situation is never
reported to the front office.
The chef is busy preparing vendor orders for the
day. He is also planning the food production work-
sheets for the Pet Owners of the Americas. The chef
has left word with one of the suppliers to return his
call early in the afternoon to clarify an order for the
banquet tonight. The organizer for the Pet Owners
of the Americas wants a special Swiss chocolate ice
cream cake roll. The sales office has also included an
order for two ice sculptures—one cat and one dog.
The banquet manager and several of his crew are
scheduled to arrive about three hours prior to the
banquet to begin setting up furniture and tabletops.
The servers will arrive about one hour before the
banquet begins.
It is now 11:00 A.M., and a group of the conferees
has arrived to register. They have brought along
their cats and want to know where they can house
them. The front desk clerk does not know where the
cats are to be housed. He calls the sales department
and asks for directions. The sales department says
the person who organized this conference specifi-
cally told the participants they were to leave their
pets at home. This was not to be a pet show, only a
business/seminar conference.
The housekeeping staff is unable to get into the
rooms (checkout time is noon). The Biology Researchers
Conference attendees have not risen because of the
late planning meeting. Also, two of the room atten-
dants did not report to work this morning.
It is now 1:30 P.M., and the majority of the Pet
Owners are in the lobby, with their pets, waiting to
get into the rooms. With the air conditioning out of
order, the lobby is bedlam. The odor and noise are
beyond description. Housekeeping calls down and
says it will need about two more hours before the
first 75 rooms can be released.
The switchboard has been bombarded with tele-
phone calls for the Pet Owners. The chef is anticipat-
ing his call from the vendor for the Swiss chocolate
ice cream cake roll. He finally calls the supplier and
finds out she has been trying to call him to let him
know that the supplier is out of this product, but no
one answered the phone at the front desk. The chef is
beside himself and runs out of the kitchen into the
lobby area. He finds the switchboard operator and
verbally rips him apart. The front office manager is
up to her ears in kitty litter and responds likewise to
the chef. It is not the best of situations.
Just when it seems that nothing else can go
wrong, a group of ten Pet Owners of the Americas
arrives in the lobby with guaranteed reservations.
(continues)
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C A S E S T U D Y 3 0 1 ( c ont i nued)
The hotel is completely booked, and these additional
reservations represent an overbooked situation. The
reservationist forgot to ask if these guests were cat or
dog owners. You guessed it—they all brought along
Fido. The clamor in the lobby is now unbearable—
dogs are barking at cats, cats are hissing at dogs,
and guests are complaining loudly.
The banquet manager and his crew have finished
setting up the room for the banquet. One of the crew
turns on the air conditioning; there is a dull roar,
and blue smoke pours from the vents. Thinking this
is only a temporary condition, he does not report it
to the banquet manager. Later on, the banquet man-
ager instructs the setup crew to take the ice sculp-
tures from the freezer and set them in front of the
podium and head table. The banquet servers will be
arriving within an hour to start the preparations for
the banquet.
If you were the front office manager, what would
you do to solve the immediate problems at hand?
After the commotion had settled down, how would
you analyze the situation? List the opportunities for
improving communications between the front office
and other departments.
C A S E S T U D Y 3 0 2
The following script fictionalizes a hotel general
manager’s weekly staff meeting. Several students
should act the roles of staff members, while other
students observe and analyze the communications.
Margaret Chu (general manager): Good morning,
everyone! It’s great to gather once again to dis-
cuss our challenges and plan for the future.
Let’s see, Ana, you asked to have time today to
discuss the issue of too few parking spaces in
the hotel garage.
Ana Chavarria (front office manager): Yes, and
this problem is causing all kinds of difficulties
for my staff. At least ten guests a day threaten
to cancel their next reservation if I don’t find
them a parking space. How am I supposed to
achieve 100 percent occupancy with such a little
thing as parking causing such a big problem?
Andy Roth (parking garage manager): Hold on
there, Ana. Running a parking garage isn’t an
easy job. We have a lot of new monthly busi-
ness customers who are helping us make
plenty of money. Did you forget that those
new monthly business customers paid for the
property management system you just bought?
You were pretty happy about that new busi-
ness six months ago.
Margaret Chu: Look, folks, we have to focus on
the customer right now; I think both of you
have lost sight of who the customer is.
Eric Jones (food and beverage manager): It seems
to me we have too few customers. I would like
to see some of those new parking customers
stop in to one of my restaurants to have lunch.
We have been tracking our lunch guests with
business card drawings, and so far we have
only had three of them in for lunch. Let’s get
rid of those new parking customers and stick
to the regular hotel guests.
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END- OF- CHAPTER QUESTI ONS 93
C A S E S T U D Y 3 0 2 ( c ont i nued)
Frank Goss (director of maintenance): I agree.
Those new parking customers are littering all
over the garage. They dump their cigarette
butts and fast-food trash all over the place.
Andy Roth: I’ll tell you just like I told Ana, those
new parking customers bought you that fancy
machine to change light bulbs in your depart-
ment. Where were all of you people when I
asked Margaret Chu if we could start to market
the sales of new parking garage permits? This
hotel should be called Hotel Second Guess!
Eric Jones: I think we are getting carried away
with this concern; the real problem we have
here is the lack of cooperation with security.
Ana, didn’t you have two guest rooms broken
into this month? It’s too bad the director of
security isn’t here to tell us more about it. We
never seem to get any follow-up reports on
what’s going on or what we can do to prevent
it from happening again.
Margaret Chu: Mike, that is a good point you
bring up, but we have to resolve Ana’s prob-
lem first. What do all of you suggest we do
about the parking problem? Should we aban-
don a profitable profit center or keep the hotel
guests happy?
Andy Roth: Ms. Chu, if I may be so bold as to say
so, the solution we need is neither of those two
options but a third one. Let’s lease some off-
premises parking from the Reston Hotel
across the street for our hotel guests during the
business week. My friend Margo runs that
garage, and she says it is only about 75 percent
full most weekdays.
Margaret Chu: Well, Andy, I will have to check
this out with the general manager of the
Reston. He and I have a meeting with the City
Visitors Association tomorrow.
Frank Goss: Ms. Chu, before we get to that secu-
rity problem, let’s discuss my need to cover the
second shift over the weekend. That is an
impossible request, because I am so under-
staffed. Do any of you have any extra employ-
ees who are handy in fixing things and would
like to earn a few extra bucks?
Margaret Chu: Frank, it’s not that easy. We are
on a tight budget, and there are no extra dol-
lars to pay overtime. Let’s think about it and
put a hold on scheduling a person for the sec-
ond shift until we can resolve the issue.
Frank Goss: Sounds good to me.
Margaret Chu: OK, Frank, we can meet right
after this meeting and talk about it.
Many of you do have challenges running
your departments, and most of the time you
do a great job. However, from what I am hear-
ing today, we need to start anticipating prob-
lems before they happen. Recently I ran across
a management technique called total quality
management. It will help us understand one
another’s challenges and make us a little more
patient. I will schedule a few workshops for
you and your employees in the next few
weeks.
As observers of this staff meeting, how do you
feel the staff members interact with one another?
What role is Margaret Chu playing? If you were the
general manager, what role would you play? What
effect do you feel the total quality management
workshops will have on this group?
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Key Words
94 CHAPTER 3
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EFFECTI VE I NTERDEPARTMENTAL COMMUNI CATI ONS
amenities
banquet manager
daily announcement board
folio
guest histories
house count
housekeeper’s room report
housekeeping room status
interdepartmental communication
intradepartmental communication
marquee
paid-outs
point-of-sale terminals
predicted house count
room sales projections
sales associate
total quality management (TQM)
transfers
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O P E N I N G D I L E M M A
At a recent hotel trade show, you noticed a new property management
system that seems to produce all the types of reports your current
system cannot produce. The vendor at the show said she will set up a
meeting with you in a week or two to talk more about this system.
How would you prepare for her visit?
The first three chapters of this text provided an overview of the hotel industry,
organization of the hotel, organization and management of the front office,
and interdepartmental communication, which laid the groundwork for under-
standing how the front office fits into a network for providing service to the
guest. In this chapter, we focus on the operational aspects of the front desk
department, which include considering the physical structure and positioning
of the front desk, selecting a property management system (PMS), and using
PMS applications.
Computer applications are central to front office operations in today’s mod-
ern hotels. For new properties, computers are standard equipment; for existing
hotels, computers are being integrated into everyday operations to assist in
providing hospitality to guests. Computer applications include routinely pro-
cessing reservations as well as handling registrations, guest charges, guest
checkout, and the night audit. Interfacing, the electronic sharing of data, of hotel
departments such as food and beverage and the gift shop through point-of-sale,
C H A P T E R 4
Property Management Systems
C H A P T E R F O C U S P O I N T S
?
Physical structure and
positioning of the front
desk
?
Selecting a property
management system
(PMS)
?
Using PMS applications
04_4612.qxp 1/11/06 3:30 PM Page 95
an outlet in the hotel that generates income (restaurant, gift shop, spa, garage); mainte-
nance through monitoring of energy and heating and cooling systems; and security
through control of guest keys are just a few of the applications that are explored in this
chapter.
As you begin your career in the lodging industry, you will want to develop a thorough
understanding of front office computer applications. This text does not refer to one par-
ticular computer hardware or software system; your training at any lodging property will
include specific operating procedures to produce reports or review information from the
database. Instead, this chapter provides general information on which you can base your
understanding of computer applications at the front desk. These applications are encom-
passed by the term property management system (PMS), a generic term for applications
of computer hardware and software used to manage a hotel.
You will notice that PMS is not confined to the front office; it interfaces with house-
keeping, food and beverage, marketing and sales, gift shop, controller, engineering, safety
96 CHAPTER 4
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H O S P I T A L I T Y P R O F I L E
?
K
evin Corprew, director of rooms
operation at the Marriott in
Overland Park, Kansas, is a gradu-
ate of the University of Houston in hotel and
restaurant management. Mr. Corprew has worked
with Marriott Hotels in various places and posi-
tions, including the Marriott Medical Center in
Houston, Texas, as a desk clerk, rooms controller,
and supervisor; the Airport Marriott in Houston,
Texas, as a banquet manager; and the Marriott
Courtyard in Legacy Park, Dallas, Texas, in rooms
care (housekeeping and engineering), front office,
and restaurant and bar areas. He also worked at
the Hilton Washington and Towers in Washing-
ton, D.C., in sales.
Mr. Corprew indicates that the ambience of the
front desk requires a simple, elegant appearance.
Preliminary discussions of new trends in front desk
structure include a walk-through for associates
that allows them to pass in front of and behind the
desk to accommodate guests. Also, the front desk
and lobby should be considered together in design
and function.
The organization of the front desk, with its com-
puters and vast amounts of details, revolves around
an uncomplicated guideline: Keep it simple. Mr.
Corprew provides plenty of key machines (elec-
tronic devices to make electronic guest room keys);
ensures that all staff follow standard operating pro-
cedures, such as keeping faxes and mail in one loca-
tion; and requires associates to be considerate of
guests’ needs. His organizational principle is con-
tinued at the time of check-in, when a 100 percent
automated property management system requires
the associate only to swipe a credit card and to pre-
pare and present the room key to the guest.
Kevin Corprew urges young professionals who
want to make a career in the hospitality industry
to lead by example with high morals and stan-
dards. He encourages students to start in entry-
level jobs so they have a basis for dealing with
employees.
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and security, and other departments, all of which are service departments of a hotel. Each
department plays a role, along with the front office, in serving the needs of the guest—
before, during, and after the guest’s stay. The front office staff coordinates the commu-
nications, accounting, security, and safety requirements of the guest. As the nerve center
of the hotel, the front office handles most of the recordkeeping and so benefits most from
a computerized system.
The first part of this chapter sets the stage for adopting a PMS. Software and hardware
are discussed,
1
as are other considerations in choosing a PMS. The final section of the
chapter discusses the various computer modules of the PMS as they apply to the lodging
industry.
2
Physical Structure and Positioning of the Front Desk
Figure 4-1 shows the layout of a computerized front office. While manual equipment is
still used in some independent properties, the computerized system has become the sys-
tem of choice, primarily because of the needs of guests, management, and owners.
Guest First Impression
The front desk has always held a pivotal position of importance in the lodging operation.
It is one of the first points of contact with the guest, and, as such, its ambience sets the
tone for the hotel. Neatness, orderliness, attractiveness, quality, and professionalism are
PHYSI CAL STRUCTURE AND POSI TI ONI NG OF THE FRONT DESK 97
FI GURE 4- 1 The layout of computerized equipment centers on guest service
and employee efficiency.
1
2 5
3
4
1
8
6
7
1. Monitor and Screen
2. Cash Drawer
3. Folio Bucket
4. Printer
5. Key Drawer
6. Time Clock
7. Call Accounting
8. Emergency Mgmt./Security
Display Panel
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just a few of the impressions the front desk should convey to a guest. The guest wants to
feel important, safe, and in the hands of professionals. The impression conveyed by the
physical layout of the desk assists the front office in creating a positive image for the oper-
ation. Providing hospitality to the guest and promoting in-house sales (covered in more
detail in chapters 11 and 13) are of great importance to the continued financial success
of the operation. To provide an environment in which these objectives can be met, a well-
planned physical arrangement of the front desk is important.
Creating a Balance Between Guest Flow and Employee Work
Equipment The front desk should be positioned so that it accommodates the guest while enabling
employees to work efficiently. Guests who wait in line for ten minutes only to be told they
are in the wrong line will have a negative first impression. Likewise, a desk clerk who has
to wait to use a printer or share a computer terminal will not be as efficient as possible.
As you become familiar with the practice of processing guests at the front desk, you will
see how easy it is to plan a layout of the physical equipment needed.
Guest Safety The position of the front desk is usually determined by the main entrance of the building
and the location of the elevator. The front desk clerk and the night auditor must be able
to see anyone who enters the hotel; this helps ensure a safe environment for the guest.
Positioning the front desk on the same side as the main entrance and the elevator is not
recommended. Figure 4-2 shows a few arrangements that allow entrances to be moni-
tored. In all three settings, the front desk clerk has a view of who is coming into the hotel
from the street entrance and who is coming off the elevator. This view is essential to the
night auditor, who assists security in monitoring the activities in the hotel lobby.
In light of the security issues that emerged after 9/11, the positioning of the front desk
is even more important, allowing the front desk staff to be the front-line sentinels of the
hotel. Although they may not leave their post, they must be trained to be observant and
efficient in summoning the right people to investigate a situation. Positioning a hotel front
desk facing the main entry and exit allows the desk clerk to more easily monitor who
is entering and leaving the building—an important advantage when considering hotel
security.
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I N T E R N A T I O N A L H I G H L I G H T S
I
nternational translation cards, which assist foreign guests in translating travel phrases of their
native language into English, are frequently kept at front desks. Foreign visitors and hotel desk
clerks find these cue cards helpful.
u
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Selecting a Property Management System
This section focuses on the components that should be included when deciding to adopt
a PMS. The decision-making process begins with understanding the importance of a
needs analysis performed by a team of front-line staff members. The needs analysis
should focus on the flow of the guests through the hotel and interdepartmental commu-
nication needs. A review of administrative paperwork produced by management in all
areas of the hotel is also a consideration. After management has gathered relevant data
concerning operational needs, it must objectively determine whether a computer will
help improve guest service. Other important concepts covered here include software
selection considerations and computer hardware terminology. A review of how people
interact with computers and how a hotel must make provisions while hardware is being
installed is also offered. The importance of computer training and planning a backup
power source for continued computer operation is reviewed. The often overlooked main-
tenance agreement and the important financial payback complete the discussion of select-
ing a PMS.
SELECTI NG A PROPERTY MANAGEMENT SYSTEM 99
FI GURE 4- 2 Front office staff have a clear view of persons entering the lobby from the street entrance
or elevator.
1
2
3
1
2
3
1
2
3
1. Front Desk
2. Elevator
3. Main Entrance
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Importance of a Needs Analysis
Selecting new equipment for a hotel property is best done after a needs analysis is per-
formed.
3
A needs analysis indicates the flow of information and services of a specific
property to determine whether the new equipment—in this case, computers—can
improve the flow. The bottlenecks that occur at registration or the lack of information
from the housekeeping department on the occupancy status of a room can be alleviated
by the use of computers at the front desk. Only after the completion of an operational
flow analysis can computer applications be developed to improve the situation.
The importance of needs analysis can be most clearly seen when you consider what
can go wrong if such an analysis is not made. The first area of concern for property own-
ers and managers is cost, both initially and over the long term. As the technology has
evolved and the equipment become more common, the cost of computerizing a hotel has
decreased and the payback period has shortened. However, even with these lower costs,
installing and operating a PMS is not inexpensive, and the cost of installing and operat-
ing a system that does not meet the specific needs of a particular property is exorbitant.
A system that works well for one downtown hotel may not meet the needs of a down-
town hotel in another city or of a motel in the same area. All the technological gadgetry
in the world will not impress a guest if the equipment fails to deliver service. The system
must meet the needs of the staff as well as the guests. An inappropriate PMS will produce
control reports that are not useful to management; the functions of such software there-
fore are limited, and the cost of the system exceeds its value. For example, a hotel owner
who believes that a PMS will speed registrations and decides to purchase a system that
does not allow housekeeping staff to input room status from the guest room phone will
be disappointed.
Procedure for Performing a Needs Analysis
The following list shows the procedure for performing a needs analysis.
1. Select a team to analyze needs.
2. Analyze the flow of guests through the lodging property.
?
Reservations
?
Registration
?
Guest accounting
?
Checkout
?
Night audit
?
Guest history
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3. Analyze the flow of information from other departments to the front office.
4. Analyze the administrative paperwork produced in other departments.
5. Review the information gathered in steps 2, 3, and 4.
6. Evaluate the needs that have been identified—such as control reports, communi-
cation, and administrative paperwork produced in other departments—in terms of
importance.
7. Combine needs to determine desired applications.
Selecting a Team
The first and most important step in performing a needs analysis for adopting a PMS in
a hotel is to select a team to determine the reports and information being generated. The
analysis team should include employees at both the management and staff levels. Such a
team is better able to see all aspects of the operation; management can provide input on
the overall objectives, while staff is more aware of day-to-day needs. The front office
manager who feels the reservation system is inefficient may find that the desk clerk not
only agrees but can offer suggestions for improving the situation. This desk clerk may not
know the first thing about flow analysis processes—preparing a schematic drawing of the
operations included in a particular function—but the hands-on information provided will
assist the front office manager in evaluating the reservation system. In another instance,
the general manager may request that certain additional room sales analysis reports be
produced by the marketing and sales department only to find the front office manager
producing that information.
Analyzing the Flow of Guests Through the Hotel
The second step in the needs analysis is to analyze the flow of guests through the visit to
the property, which provides a structure for this detailed analysis process. The guest stay
does not start at registration but at the time a reservation is made. (In reality, the guest
stay starts even before this, because guests often select a property as a result of market-
ing efforts.)
Issues that can be analyzed are quite diverse. They include the ease with which the tele-
phone system can be used, the availability of room occupancy status for guests on any
specific date, the length of time it takes to complete a reservation request, the method
used to confirm a reservation, the procedure used to block rooms, and the means of find-
ing a single reservation. Also subject to analysis are the methods for gathering guest
information upon check-in and the processes for ensuring the correct posting of guest
charges, the time required for a guest to check out, the procedure used to resolve a guest’s
dispute of charges, and the process for posting meal and phone charges just before check-
out. How are the daily room charges and taxes posted to the rooms? How long does it
PROCEDURE FOR PERFORMI NG A NEEDS ANALYSI S 101
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take to do this? Are any vital statistics not being produced by completion of the night
audit report? How is the information assembled in the night audit? How long does it take
to produce this information? Also determine if guest information already on hand from
reservation, registration, and guest accounting is being applied for additional visits.
Communicating Information
The third step in the needs analysis process is to look at the information flowing from
other departments to the front office. How is information concerning occupancy status
received from the housekeeping department? How can a guest report an emergency or fire
on the property? How do the food and beverage department and gift shop report guest
charges? How does the marketing and sales department determine if blocks of rooms are
available on certain dates? How does the engineering department monitor energy use in
guest rooms? How does the security department ensure the integrity of guest keys? How
is email used? A good PMS can embrace all of these lines of communication.
Reviewing Administrative Paperwork
The fourth step is to review the administrative paperwork produced in the hotel that is
necessary to assist management. How does the human resources department maintain
personnel files and former employee records? How is direct mail advertising generated in
the marketing and sales department? How are function books and individual function
sheets maintained? How are tickler files (files used to prompt notice of when certain
events will be occurring) maintained? How are work orders processed? What method is
used to devise daily menu specials?
Management Review of Information
In the fifth step of this analysis, management must take charge of reviewing the informa-
tion compiled to determine if needs are being met. Is the marketing and sales department
making mistakes because incorrect information concerning the inventory of available
rooms is provided by the front office staff? Are desk clerks unable to check the occupancy
status of a guest room because the housekeeping department is not providing immediate
information? Have misquotes on room rates caused lost revenue for the hotel? Is the night
auditor unable to retrieve room status information to confirm or guarantee reservations?
The significance of each need and the consequences if the need is not met are then
established. Customer satisfaction and quality of service as well as financial implications
are considered. How often have conventions not been booked because accurate informa-
tion on room availability was not at hand? How much revenue was lost as a result? How
frequently does a general manager receive complaints because a guest was sent to a room
that was under repair or not cleaned? How often must the front office manager adjust a
guest’s room rate because of a misquote? How does the number of guaranteed reserva-
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tions compare with the number of confirmed reservations? Why are guaranteed reserva-
tions not requested by the night auditor?
Evaluate Needs that Have Been Identified
This step requires a discussion between department managers as to the significance of the
reports produced as they relate to producing customer service and financial success of the
operation. Each module in the PMS will have a related cost, and the justification for that
cost can be simplified if all discussions focus on the goals of the operation.
Assessing Needs Based on Findings
The final step in the analysis is to combine operational and administrative needs to deter-
mine which computer applications are appropriate for the property. Often the shared use
of a room inventory database is well worth the financial investment. A word processing
program to produce direct mail letters, regular correspondence, and daily menus may also
justify a particular module of a PMS. The needs analysis enables you to know what
you need and what you do not need and will help you choose from the many systems
available.
Choosing Software
Selecting software, the computer programs or applications that process data such as
guest information and aid in financial transactions and report generation, is more impor-
tant than selecting hardware, or actual computer equipment such as central processing
units, keyboards, monitors, and printers. The effectiveness of a PMS depends on select-
ing software that allows management to increase guest satisfaction and to access finan-
cial and informational data for control purposes. The information obtained from the
needs analysis provides a framework for evaluating the numerous software packages on
the market today.
Each software package offers numerous features; it is important to choose one pack-
age that is most appropriate for your needs. Software on the market today includes guest
service, accounting, and information options that are standard in the hotel industry.
Investigate the guest service features, accounting options, and information applications to
determine which PMS is best for your property. Software vendor personnel will discuss
with you the options that fit the size of your hotel and the needs of the guests. Hoteliers
should also look forward and think of expansion and growth of their property, or per-
haps change in the mix of their market. For example, one hotel may plan to add 200
rooms to the same market, while another hotel may not add any rooms but have a shift
in guest type from 20 percent family and 80 percent business to 80 percent family and 20
percent business. Now the family market is doing much more dining in the restaurant
(indicating a need for a point-of-sale system that interfaces with the PMS), purchasing
PROCEDURE FOR PERFORMI NG A NEEDS ANALYSI S 103
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more in the gift shop, (another need), and indicating more gift purchases for day-trip
packages (yet another need).
If you feel the applications of a particular software package will not help you manage
your property, that adding a particular guest service will not increase guest satisfaction,
that no significant savings will result from producing more sophisticated accounting
reports, or that the arrangement of historical information about guests will not be bene-
ficial, then you should not adopt that PMS. You control the software selection; its func-
tion is to help you do a better job. Only you can decide which applications are most
useful in your facility. Some of the more common options for various departments are
listed in Figure 4-3.
Examples of how the PMS modules can be applied include the following. The mar-
keting and sales department in any size hotel will clearly find that computerization of
client files, meeting room information, and guest history is useful. Preparation of direct
mail for a smaller property perhaps would best be outsourced, while a larger property
may make better use of a PMS module. The travel agent mode for maintaining a database
of travel agents and processing their fees is useful to any size property. The night audit is
almost a universal necessity to properties of all sizes. The former eight hours of labor over
balancing the guest ledger and city ledger are replaced by a few keystrokes, in some
cases. The front desk module, with its applications for check-in, check out, room status,
postings to guest accounts, advance deposits, and cashier options, are also acceptable at
both small and large properties. The call accounting system is an option that found its
way into the hotel’s front desk (even at smaller hotels because of the deregulation of
telecommunication systems in the U.S.) before some of the other modules, such as the
point-of-sale in the restaurant. A maintenance module is more appropriate for a large
hotel, whereas a small hotel can rely on an in-house email system, telephone, or paper
mail system. These examples, as any other technologies that are developed, should always
be evaluated against goals of the hotel, the needs of guest, and a budget.
Future hoteliers should maintain a library of current PMS vendors. The Internet pro-
vides a useful and immediate resource for most hoteliers. This first step is accomplished by
going to your favorite Web browser and typing in such key phrases as “property manage-
ment system,” “hotel pms” “hotel computer,” or “HITEC” (Hospitality Industry Tech-
nology Exposition and Conference, which features all the latest computer software for the
hospitality industry.) Another method of keeping your PMS file up to date is to attend
local and regional trade shows. Stopping by a booth at the hotel show and discussing your
current needs with a software vendor will assist you in maintaining awareness on the
developments in the industry and matching them with the needs analysis of your guests.
Choosing Hardware
Choosing hardware for a PMS is not as difficult as choosing software. Today, most avail-
able hardware is compatible with standard computer operating systems (such as The
Opera PMS offered by MICROS
®
FIDELIO, which connects with [Network] Windows
NT Server 4.0 or Novell IntraNetware 4.1; [Database] xBase running under DOS
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PROCEDURE FOR PERFORMI NG A NEEDS ANALYSI S 105
FI GURE 4- 3 Common software options in a PMS.
Marketing and Sales
• Client file • Travel agent
• Direct mail • Meeting room information
• Guest history
Night Audit
• Room and tax posting
• Various operational reports
Accounting
• Accounts payable • Payroll
• Accounts receivable • Profit-and-loss statement
• General ledger • Balance sheet
Human Resources Management
• Personnel files
• Time and attendance
Electronic Mail
Security
Reservations
• Room availability
• Yield management
Front Desk
• Check-in • Guest credit audit
• Room status • Advance deposits
• Postings to guest accounts • Cashier
Call Accounting
• Guest information
• Phone call posting
Housekeeping
• Room status
Maintenance
• Work orders
Food and Beverage
• Point-of-sale • Inventory
• Menu profitability • Recipes
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6.22/Windows 3.11; or [Client] Windows NT 4.0 Workstation or Windows 95). This
consideration is essential because most software programs are written to run on these
standard operating systems. In short, you must choose your hardware based on its abil-
ity to handle the software; review this with your hardware vendor.
Other technology factors to consider include the following working concepts:
Processor speed: how fast a central processing unit (CPU) makes calculations per sec-
ond; expressed in megahertz (MHz)
Disk drive: a place in the computer where data is stored or read; CD or DVD drive or
3
1
?
2-inch floppy drive
Megabyte: 1,024 kilobytes of formatted capacity
Gigabyte: 1,024 megabytes of formatted capacity
Access time: the amount of time required for a processor to retrieve information from
the hard drive; recorded in milliseconds
Internet: a network of computer systems that share information over high-speed elec-
tronic connections
Intranet: a computer network for in-house users to share timely operational informa-
tion to conduct business
I/O ports (input/output devices): keyboard, monitor, modem, mouse, joystick, light
pen, printer, and trackball
Monitor: a television screen with color or monochrome capacity to view input and
output data, control column width and line length of display, adjust height of char-
acter display, and allow visual control
Keypad: a collection of numeric typewriter keys and function keys that allow the
operator to enter numbers or perform math functions in a computer
Keyboard: a standard or Dvorak-type typewriter-style keypad that allows the opera-
tor to enter or retrieve data
Printer: computer hardware that produces images on paper
Inkjet: produces small dots printed with liquid ink on paper
Laser: produces photo images on paper
Letter-quality: a better type of dot-matrix print
Single-sheet: a type of printer that uses single-sheet paper
Modem: computer hardware that allows for transfer of data through telephone lines;
expressed in baud—information transfer—rates
CPS (characters per second): measure of the speed with which individual characters
are printed
Computer supplies: paper, forms, ribbons, ink cartridges, and floppy disks needed to
operate the system
Megahertz (MHz): one million cycles per second; indicates computer speed
PPM (pages per minute): printing speed capability
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The front office manager must be aware of the operational capabilities of the PMS.
Computer texts and trade journals can help you understand the hardware options avail-
able; Personal Computer PC magazine, in particular, is helpful for keeping up to date
with hardware configurations and software applications. Visits to hospitality industry
trade shows also help keep you informed on state-of-the-art systems.
The standard hardware used to operate a PMS is shown in Figure 4-4. The basic
hardware requirements are organized around the point-of-sale and customer service
areas. Keyboards, monitors, disk drives, and printers constitute the basic user setup. The
data manipulation and storage area is part of the mainframe, minicomputer, or personal
computer.
PROCEDURE FOR PERFORMI NG A NEEDS ANALYSI S 107
FI GURE 4- 4
Computer hard-
ware, such as
keyboards and
monitors, typi-
cally have a
standard setup.
Photo courtesy of
PhotoDisc, Inc.
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The ability to interface among computer databases (sharing or networking of infor-
mation) is very important. This concept must be designed into the PMS for it to con-
tribute to the effective delivery of hospitality to the guest and to generate a return on its
investment. As computer applications become more sophisticated, sharing databases is
essential. For example, the information secured at the time a reservation is made can be
used by the marketing and sales department to generate more business. The point-of-sale
data captured in the restaurants can be reviewed by front office staff to check how they
can sharpen their hospitality delivery skills for guests on arrival. For example, if the staff
knows a guest likes to order a certain Italian pastry as part of his meal, then they can per-
haps use that as part of the welcoming chat upon arrival. Or if a review of a guest folio
reveals that she played a particular sport during her previous stay, the staff could men-
tion the opportunity to set a start time for that sport. All of these ideas help make the
guest feel important and help make a positive return on the investment for the PMS.
The positioning of the hardware at workstations should be based on the same work-
flow analysis used for any new process or equipment. Consider the needs of the guest
(who will be the end user), the employee who will operate the equipment, and the other
staff who will want access to information. The information you gain from the needs
analysis will assist you in explaining your particular needs to the computer consultants
who will install your PMS.
The installation of the electronic cables that connect all of the hardware must also be
analyzed. Installation and replacement of cables that run through walls and floors can be
costly. Proper computer functioning requires an air-conditioned environment; in guest
service areas, this may not present a problem, but in other areas, it may pose difficulties.
Ergonomics, the study of how people relate physiologically to machines, is also a con-
sideration for the front office manager. Glare and flicker from the cursor, a flashing point
on a monitor that indicates where data can be entered, and movement on screens can
cause eyestrain. In fact, it is fairly common for computer operators to require lenses to
correct eyestrain. Another common complaint is neck pain due to improper positioning
of the monitor. The swivel base provided on most hardware helps eliminate these prob-
lems. Pain in the wrist may also occur if the keyboard is positioned above the waist of the
operator. Carpal tunnel syndrome, or compression of a nerve in the wrist and fingers, is
another unfortunate result of overuse of computer keyboards. Because carpal tunnel syn-
drome causes extreme pain for a computer operator, the keyboard should be positioned
at or below waist level. Also, pain in fingers and hands can occur with extensive entry of
data on a keyboard.
Other PMS Selection Considerations
Other factors to consider in choosing a PMS are vendor claims, installation plans, train-
ing, backup power sources, and maintenance.
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Vendor Claims
The prospective PMS purchaser should contact current users of the system being consid-
ered and ask relevant questions: How easy is it to operate this system? How useful are the
reports you obtain? Has the vendor been available to help train staff and provide emer-
gency service? Answers such as “I don’t know how the property could manage without
it” or “It is difficult to operate, and the reports are awkward” may alert you to potential
advantages or problems. (Remember, however, that different properties have different
needs and priorities; a rave review because the system provides an option you consider
unimportant is meaningless for your purposes.) Consider the amount of time these prop-
erties spent on needs analyses. A visit to the hotel property is worth the effort. Learning
how different features of the system work, how various departments interact with the
PMS, and what kinds of forms are used will help you with part of your decision. You will
also develop a feeling for how guest services are affected.
Hardware Installation Plans
A careful plan for hardware installation will help the management maintain guest serv-
ice and employee morale. First, it is key to determine who will install wiring or cables.
Next to be determined is which hardware will be installed and at what times, followed
by which departments will receive hardware first and what methods will be required to
get all departments of the property online, a term used to indicate that a computer is
operational and connected with a central computer. This information should be used
to develop a flowchart, which will help departments adapt and interact using online
operations.
Computer Training Programs
The training offered by a computer company ranges from classes held at the corporate
headquarters to on-the-job training sessions and informal consultant hot lines. The staff
that will use the computers must be thoroughly trained if the equipment is to be put to
its best use. Training at the terminals should be preceded by an explanation of how the
system will help staff members in their work. Some computer companies lend a dummy
computer setup to a lodging property so the staff can experiment with the training mod-
ules (Figure 4-5). This allows them to make mistakes in private and to become familiar
with the keyboard configuration. Documentation of procedures will also assist the staff
in developing an awareness of the system’s capabilities, as will individual hotel-developed
step-by-step computer application cue cards.
It is also important to note that employee resistance to change can be overcome with
an early buy-in to a new concept and a user-friendly training program. The team concept
will help employees overcome resistance to change because they are included on the
team. Members of the needs analysis team will see an idea develop from concept to
OTHER PMS SELECTI ON CONSI DERATI ONS 109
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fruition. Many employees resist change because they fear they will be unable to perform
a new task; a training program that allows adequate time and practice will help introduce
the technology and decrease this fear.
Backup Power Sources
What happens if the power goes out? This concern, as well as the possibility of
brownouts, partial loss of electricity, and blackouts, total loss of electricity, is addressed
by computer dealers. Battery-powered temporary energy units are used when power is
lost or cut to ensure that operational data are not lost. Hotel managers who have expe-
rienced power losses are well versed in maintaining communication among the depart-
ments and posting charges as required. Once the power returns in full, the staff can catch
up on posting to the electronic folio.
Maintenance Agreement
One final consideration in adopting a PMS is the maintenance agreement, which should
spell out the related costs of repair and replacement of hardware and software. Allowance
for emergency service and times available for general service should also be listed. Loaner
or backup equipment availability enhances the attractiveness of the agreement.
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FI GURE 4- 5
Employees
need time to
practice using
computer
hardware and
software.
Photo courtesy
of Red Lion
Hotels.
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Financial Considerations
Purchasing or leasing a PMS for hotel use is a major financial decision. Such an invest-
ment can tie up cash flow. If the costs and benefits are not realistically projected, profits
may be in jeopardy. The first part of this chapter stressed the importance of performing
a needs analysis. Hotel properties that match computer applications with needs by going
through this process will achieve the most realistic assessment of costs versus benefits
when adopting computers.
The controller of a lodging property usually prepares a budget in consultation with the
general manager. Sales of room-nights, food and beverages, and other products and serv-
ices are projected. Considered with these projections are the related costs of producing
those goods and services. The controller is usually aware of the specific costs in each
department—the amount of overtime pay required at the end of the month to produce the
monthly inventory in the food and beverage department, the extra part-time help
required to staff the front desk for a busy checkout or check-in, the cost to produce a
direct mail piece for the marketing and sales office, and the fee charged by the outside
accountant to produce a monthly profit-and-loss statement. This knowledge is helpful in
determining how much money can be saved if a PMS were to be introduced. The amount
of money that can be saved (along with tax depreciation advantages) must be equal to or
greater than the amount spent on the computer system. Sometimes management may feel
that less tangible benefits, such as greater service to the guest or improved morale among
employees, justify the cost even when dollar savings are not quite equal.
The decision about whether to purchase or lease must also be made. The outright cost
of purchase, related finance charges (if applicable), discount for cash, and depreciation
are only a few of the points to review if the hotel decides to purchase. These considera-
tions must be weighed against continuance of cash flow, application of lease payments to
the purchase price, and tax advantages of leasing.
Determining the payback period—the time required for the hotel to recoup purchase
price, installation charges, financing fees, and so forth through cost savings and increased
guest satisfaction—will also assist management in deciding whether or not to install com-
puters. If the controller reports a series of financial problems such as the following, the
payback period becomes clearer:
?
5 percent of all local phone calls are not posted at the front desk
?
2 percent of sales are lost every month because guest checks are inaccurately totaled
in the food and beverage department
?
10 hours of overtime could be saved through internal preparation of paychecks for
each pay period
As the department directors go over their respective profit-and-loss statements with
the controller, additional areas for cost recovery can be noted. The time invested in
preparing an accurate needs analysis will pay off in the long run.
FI NANCI AL CONSI DERATI ONS 111
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The above concerns of the controller include areas in addition to the front desk.
Remember that the adoption of a PMS includes the management of all guest services and
accounting functions. While the needs of the front desk alone—for a call-accounting sys-
tem or the rental of a reservations system—may not justify the expense of a PMS, the
needs of all departments can make such a system cost-effective.
PMS Applications
The property management system is organized around the functions needed to assist in
delivering service to the guest. The software options listed earlier in this chapter are only
a few of the many available to hoteliers. For purposes of this review, assume that the
lodging property is equipped with a state-of-the art PMS and that the system is up and
running. The software program main menu lists on the screen all the available individual
programs (modules) included in the system. Refer to Figure 4-6. These modules lie at the
heart of the front office manager and his or her staff’s ability to deliver excellent service
to the guest because of the underlying role of communication between departments and
sharing of financial information. The PMS has become so much an essential part of lodg-
ing operations that to operate a hotel without one would be very difficult. The front office
manager relies on the reservation module almost hourly to check changes that may affect
the day’s service and financial operations. The night audit, if completed as it was in pre-
vious years—tallying columns or using a mechanical audit machine—would take much
training and many labor hours. The posting module is another timesaver that produces a
much more accurate and efficient-looking guest ledger.
The options shown in Figure 4-6 are similar to those previously listed in this chapter.
The front desk clerk can access any of these individual programs by typing the designated
112 CHAPTER 4
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FI GURE 4- 6 Main menu of a property management system.
1. Reservations 10. Back Office
2. Yield Management 11. Housekeeping
3. Registration 12. Food and Beverage
4. Room Status 13. Maintenance
5. Posting 14. Security
6. Call Accounting 15. Marketing and Sales
7. Checkout 16. Personnel
8. Night Audit 17. Electronic Mail
9. Inquiries/Reports 18. Time Clock
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keystrokes or following directions on a touchscreen, a type of computer monitor that
allows the operator to input data with the touch of a finger. The documentation, which
consists of either printed or on-screen (monitor) instructions, explains how to operate the
hardware or software that accompanies a specific PMS. This documentation comprises
written step-by-step instructions as well as a flowchart of individual programs and sub-
programs, all of which are valuable in training staff. The flowcharts are comparable to
the blueprints of a building. The following discussion of individual modules and subpro-
grams highlights the applications of these software options in a property management
system.
Reservations
The reservations module (refer to Figure 4-7) consists of subsystems that can receive indi-
vidual guest or group data, check a guest’s request against a data bank of available
rooms, and store this information. The guest data are received through a personal phone
call, through another computer in the referral system, or via the Internet. All of the pos-
sibilities or room types and locations, room rates, and special requests can be matched
with the existing room inventories. This information can be stored for up to 52 weeks (or
more) in most systems.
Information concerning guarantees with credit cards or confirmed reservations is cap-
tured at this time. Details on deposits, blocking, times of arrival and departure, VIP guest
lists, and projected occupancies, and reports on these reservation functions assist the front
office manager.
The guest who is checking out of the Limited-Service Inn in Dallas, Texas, and wants
to make a reservation at the Limited-Service Inn in Chicago for that evening can have the
reservation confirmed within seconds. The guest information is already available in the
data bank, and through electronic transmissions, the request is verified (via a check of the
existing room inventories held in the data bank for the Limited-Service Inn in Chicago)
by a central computer. Other referral agencies follow similar procedures. (Further exam-
ples of computerized reservations options are provided in chapter 5.)
PMS APPLI CATI ONS 113
FI GURE 4- 7 Reservations module.
1. Guest Data 7. Departures
2. Room Inventory 8. VIP
3. Deposits 9. Projected Occupancy
4. Special Requests 10. Travel Agents
5. Blocking 11. Guest Messages
6. Arrivals 12. Reports
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Revenue Management
Revenue management, a process of planning to achieve maximum room rates and most
profitable guests (guests who will spend money at the hotel’s food and beverage outlets,
gift shops, etc.), encourages front office managers, general managers, and marketing and
sales directors to target sales periods and develop sales programs that will maximize
profit for the hotel. This module (Figure 4-8) shares similar databases with the reserva-
tions module—room inventory, room rates, reservation status, and guest information. If
a hotel is entering a maximum demand sales period, the yield management module allows
the reservations manager to block out that period to prevent guest requests for room
reservations for less than the minimum time. Also, the computer prompts the reservations
clerk on which room rate category to apply. Daily reports on how well the front office
achieved maximum yield of rack rates, the highest room rate charged in a hotel, provides
feedback to the general manager and owners. A history of guest sales in food and bever-
age also assists sales and marketing managers in determining if a group reservation has
potential for profitability.
Registration
Guest registration modules have greatly improved the check-in process. Because infor-
mation has already been captured at the time of reservation, less time is required for reg-
istration. The front desk clerk need only verify the guest’s request for room type, location,
and rate with room inventory and room status. Provisions for walk-in guests without
reservations are similarly handled. Method of payment is also established. The hard plas-
tic key can be issued after the security module has changed the entrance code for the
room. The guest registration procedure can also be completed by the self-check-in process,
a procedure that requires the guest to insert a credit card having a magnetic stripe con-
taining personal and financial data into a self-check-in terminal and answer a few simple
questions concerning the guest stay (Figure 4-9). (Self-check-in is discussed in more detail
in chapter 7.) Also note the inclusion of the intranet in this module; it greatly supports the
communication process required by the front office staff in delivering hospitality at the
time of check-in.
As an example of how this module works, consider the guest who flies to Chicago
from Dallas, signs a guest registration form, waits until the desk clerk checks the status
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FI GURE 4- 8 Revenue management module.
1. Master Rate Table
2. Per-Person Increments
3. Guest Type Increments
4. Revenue Management
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of the room, and receives a key—check-in is complete. All guest information was cap-
tured when the initial reservation at the Dallas Limited-Service Inn was made. The data
bank of room occupancy information provided by the housekeeper is available to the
front desk via the computer. The front desk clerk chooses the room the guest will occupy
and issues a key. The total time required for registration is less than five minutes.
Room Status
Access to the room status module provides information on availability of entry to a guest
room. There are two types of room status: reservation and housekeeping. Reservation
status can be open, confirmed, guaranteed, or repair. Housekeeping status can be ready,
on change, or out of order. Reservation status is maintained by the reservation depart-
ment or reservation system, while housekeeping status is provided by the housekeeping
department. The room status feature is one of the most valuable features of the PMS (Fig-
ure 4-10). It streamlines the operation problems of check-in and assists other departments
as well. This module, which may share the same room data bank with reservations, pro-
vides reports used by the housekeeper, front office manager and staff, maintenance engi-
neer, night auditor, reservations clerk, and marketing and sales department. The
housekeeper must know which guest rooms have been occupied and need cleaning; desk
clerks must know if the guest room is reserved or open for sale; the maintenance engineer
must plan for routine painting and refurbishing; the night auditor must verify which
rooms have been sold to complete the night audit; the reservations clerk needs informa-
tion on the availability of guest rooms; and the marketing and sales department must
have current information on room availability for conventions. This is another module
that might include the intranet; however, room status information is immediate in nature,
and the posting of a message with a delayed response time may not be appropriate. On
the other hand, if a series of rooms will be taken out of use for an extended period, the
PMS APPLI CATI ONS 115
FI GURE 4- 9 Registration module.
1. Reservations 5. Security
2. Guest Data/Registration 6. Reports
3. Room Inventory 7. Self-Check-in
4. Room Status 8. Intranet
F R O N T L I N E R E A L I T I E S
T
he general manager of the hotel asks you to help determine the payback period for a
$20,000 PMS. How would you begin?
q
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intranet could be the appropriate place to post an advance notice for the marketing and
sales department and the front office. Such a notice would prevent taking reservations for
unavailable rooms.
Posting
The posting module of a PMS often supplies one of the first benefits realized by the front
office manager: immediate posting of charges incurred by the guests (Figure 4-11). Not
only is the posting operation streamlined but also accuracy is ensured. A PMS allows the
posting to occur at the point of sale in the restaurant, lounge, or gift shop. Similarly,
room and tax charges or telephone calls can be posted to the electronic folio in a very
short time. Transfers and adjustments of guest charges (with approval by management)
to folios are easily made. Charges incurred on behalf of the guest can be posted to the
electronic folio by entering room number, amount of charge, department, and transaction
type. These data are stored in memory and retrieved after an inquiry, during report gen-
eration, or at checkout. The accuracy of these charges still depends on the employee oper-
ating the point-of-sale terminal in the restaurant. Entering an inaccurate room number
(room 412 entered as 712) or a reversed amount ($32.23 entered as $23.32) will still
result in an incorrect posting.
Our guest at the Limited-Service Inn in Chicago wants to charge his valet expense of
$20.95 to his room account. After the desk clerk has processed the paid-out to the deliv-
eryperson, this charge is posted to the electronic folio by entering the room number,
amount of charge, department, and type of transaction. The night auditor verifies the
integrity of all department totals.
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FI GURE 4- 10 Room status module.
1. Room Inventory
2. Availability
3. Reports
4. Intranet
FI GURE 4- 11 Posting module.
1. Point-of-Sale 6. Paid-out
2. Room 7. Miscellaneous Charges
3. Tax 8. Phone
4. Transfer 9. Display Folio
5. Adjustment 10. Reports
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Call Accounting
The call accounting module of a PMS is a system that automatically posts telephone
charges and a predetermined markup to a guest’s folio (Figure 4-12). The individual sub-
scriber to the telephone system (the lodging property) can charge a service fee for any
local or long-distance call. The hotel can now use the telephone system to generate profit
rather than to simply supply service to the guest. The ability to make a profit through
adding service charges, combined with the increased frequency and accuracy of elec-
tronic posting, has made the call-accounting option a desirable one. However, with the
increased use of cell phones, phone cards, and personal digital assistants (PDAs), tele-
phone revenue has declined in some properties. The PMS call-accounting feature retrieves
data for time, charges, and service fee and then posts these charges to the electronic folio.
The accuracy of processing telephone charges is greatly increased through the use of a
PMS call-accounting feature.
Checkout
The inconvenience of guest checkout (long lines, disputes over charges) is greatly reduced
with the PMS checkout feature, which prints out an accurate, neat, and complete guest
folio in seconds (Figure 4-13).
Disputes over guest charges still occur at the time of checkout, but not as often. The
posting of a long-distance telephone call to room 295 instead of room 296 is less likely
to occur with a PMS, because the PMS interfaces with the call-accounting system and the
phone charge is automatically posted to the guest’s electronic folio.
Efficiency at time of checkout is also improved when the desk clerk retrieves a hard
copy of the folio and presents it for review to the guest. The guest has already indicated
method of payment at check-in. An imprint of the credit card has been made, or prepay-
ment has occurred. The floor limit, a dollar amount of credit allowed by the credit card
PMS APPLI CATI ONS 117
FI GURE 4- 12 Call accounting module.
1. Guest Information 4. Messages
2. Employee Information 5. Wake-up Calls
3. Post Charges 6. Reports
FI GURE 4- 13 Checkout module.
1. Folio 4. Back Office Transfer
2. Adjustments 5. Reports
3. Cashier 6. Guest History
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agency, and house limit, a dollar amount of credit allowed by the hotel, have been mon-
itored by the PMS. These controls help avoid high debit balances, the amount of money
the guest owes the hotel. Last-minute purchases of products or services are automatically
posted at the point-of-sale terminals.
The guest completes the checkout process by confirming the method of payment. The
desk clerk may suggest making future reservations at this property or other properties in
the chain or referral group. Transfers to the city ledger are made electronically at this
time. Cashier activity reports are monitored, as is other information about the day’s
checkouts (such as number of guest departures and time of departures). A PMS can gen-
erate a paid in advance (PIA) listing, which monitors guests who paid cash at check-in.
The PIA prevents guests from charging products or services to their guest folio.
Guests can avoid checkout lines by using in-room guest checkout, a feature of the
property management system that allows the guest to use a guest room television to check
out of the hotel. For this process, the night desk staff slips a copy of an updated guest folio
under the door the night before checkout. The guest enters a few digits on the television
control panel to start the process. After he or she answers questions about multiple guest
accounts in the same room, accuracy of charges, and method of payment, for example, the
process is complete. The guest can pick up a copy of the folio at the front desk if desired.
Night Audit
The night audit has always been labor-intensive. In addition to acting as a desk clerk and
posting the room and tax charges, the night auditor must balance the guest transactions of
the day. To extend credit to guests, debits and credits, the amount of money the hotel owes
the guests, must be balanced daily. The debits originating from the various departments must
be checked against the totals posted to the guest folios. The credits, in the form of guest pay-
ments, must be accounted for by reviewing the guests’ outstanding balances. Although this
sounds like a simple process, the procedure can be very involved (Figure 4-14).
The PMS simplifies the night audit by producing totals from departments and guest
folios. These data are assembled into standard report forms. Financial information is pre-
sented in the daily report, used by the management of the lodging property to determine
the financial success of a particular day. Note that the intranet can also be included in this
module because the night auditor can post emails to departmental employees concerning
the final night audit or other operational details from the previous evening.
118 CHAPTER 4
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PROPERTY MANAGEMENT SYSTEMS
FI GURE 4- 14 Night audit module.
1. Guest Charges 5. Financial Reports
2. Department Totals 6. Housekeeping
3. City Ledger 7. Intranet
4. Cashier
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Inquiries/Reports
The inquiries/reports feature of the PMS allows management to retrieve operating or
financial information at any time. The front office manager may want to check the num-
ber of available rooms in the room inventory for a particular night, the number of guests
expected to be checked in, the number of guests to be checked out for the day, the cur-
rent room status from the housekeeping department, or the outstanding balance report,
a listing of guests’ folio balances. These reports can be produced easily on a PMS (Figure
4-15). The inquiries/reports feature of the PMS enables management to maintain a cur-
rent view of operations and finances.
Back Office
The hotel’s accounting office, known as the back office, uses the accounting module of a
PMS, which assists in the overall financial management of the hotel (Figure 4-16). The
PMS simplifies the accounting processes, which include the labor-intensive posting pro-
cedure of accounts payable, which is the amount of money the hotel owes vendors; the
transfer of accounts receivable, which is the amount of money owed to the hotel, based
on the guest ledger and city ledger; compilation and production of the payroll; budget
preparation; the production of the profit-and-loss statement, which is an official financial
listing of income and expenses; and the balance sheet, which is an official financial list-
ing of assets, liabilities, and owner’s equity at a certain point. For example, financial
information concerning a certain vendor is entered once on a terminal located in the back
PMS APPLI CATI ONS 119
FI GURE 4- 15 Inquiries/reports module.
1. Reservations
2. Registrations
3. Checkouts
4. Housekeeping
5. Credit Balances
FI GURE 4- 16 Back office module.
1. Accounts Payable 5. General Ledger
2. Accounts Receivable 6. Reports
3. Payroll 7. Intranet
4. Budgets
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office (also referred to as controller’s office). This information is then reflected through-
out of the accounting process. Likewise, the financial information produced through the
night audit can be accessed for various reports. These and other features assist in stream-
lining the accounting process. The intranet is another feature on this module that is most
useful in communicating to front desk staff about situations where a guest’s charges may
need clarification after check out or about cost centers that have incurred charges that
need clarification.
Housekeeping
Obtaining current information concerning guest room status has always caused problems
for the front desk staff. Guests become impatient when they are delayed check-in. Desk
clerks who have not received a room release from housekeeping have no choice but to
remain calm and try to appease the guests. The process of obtaining ready status is quickly
achieved with a PMS (Figure 4-17). The maid or houseman enters the ready status imme-
diately through a computer terminal on the guest floor instead of waiting to report a block
of rooms to the floor supervisor. The housekeeper no longer needs to make several trips
per day to the desk clerk to release blocks of rooms. The efficiency of this module depends
on the continued efforts of the housekeeping staff in reporting room status.
Assigning room attendants to clean rooms can be done easily. Labor analysis of num-
ber of guest rooms cleaned by room attendants and number of labor hours required to
clean guest rooms is performed faster, and the daily housekeeper’s report is quickly gen-
erated. Inventory of equipment and guest room supplies is also readily available.
Maintenance requests for guest rooms can be communicated instantly through the
PMS. The maintenance department staff can also check room status information to deter-
mine if the housekeeping staff noted repairs to be made. If the maintenance department
wants to take a room out of service for a few days to perform repairs, this information
can be relayed to the housekeeping and front desk staff through the housekeeping mod-
ule on the intranet.
Food and Beverage
The food and beverage module reduces paper flow (vouchers) as well as telephone calls
from the restaurants and lounges to the front desk (Figure 4-18). It also facilitates the
120 CHAPTER 4
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FI GURE 4- 17 Housekeeping module.
1. Room Availability 5. Equipment/Supplies Inventory
2. Personnel Assignment 6. Maintenance Requests
3. Analysis 7. Intranet
4. Housekeeper’s Report
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accounting process, verifying the integrity of the point-of-sale system. Cashier reports
(cash, credit, room service) are easily produced. Other features include inventory control
and calculation, recipe development, pricing, item profit evaluation, and sales projec-
tions. Sales production analysis and labor analysis are also possible with this module.
Maintenance
Using a PMS streamlines the processing of work orders. Repair orders are entered by var-
ious department members. Incomplete jobs can be prioritized, and completed jobs can be
analyzed for cost. Inventories of equipment and parts can be maintained. The mainte-
nance module is also used to track energy costs and areas of use. In fact, heating and air
conditioning in guest rooms can be activated at the front desk. This module enables the
management of a hotel to analyze operational information of this vital department (Fig-
ure 4-19).
Security
Electronic key production has enhanced key control. Each guest receives an electronic key
that has a unique electronic code, because the PMS changes the key configuration or com-
bination for each new guest room. Blank key cards (plastic or metal) can be coded at the
front desk for each new guest.
Continual monitoring is a feature of the security module of the PMS. Fire alarm sys-
tems, including sprinklers and smoke detectors in guest rooms, public areas, and opera-
tional areas are kept under constant surveillance via a fire safety display terminal. An
PMS APPLI CATI ONS 121
FI GURE 4- 18 Food and beverage module.
1. Point-of-Sale 5. Recipes
2. Posting 6. Sales Control
3. Cashier Reports 7. Sales Production Analysis
4. Food/Beverage Inventory 8. Labor Analysis
FI GURE 4- 19 Maintenance module.
1. Review Work Order 5. Repair Cost Analysis
2. Room Status 6. Enery Usage Analysis
3. Cost/Labor Analysis 7. Guest Room Power Start
4. Inventory
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alarm system or a voice telephone monitoring system alerts guests to a fire anywhere on
the property. Elevators return automatically to the main lobby or other designated floor.
Burglar alarms are also monitored through this module. The security feature of a PMS
monitors security codes in other modules as well (Figure 4-20).
Marketing and Sales
The marketing and sales department makes extensive use of the PMS (Figure 4-21). This
department can retrieve guest histories—information on guests’ previous stays that
reveals geographic origin, telephone information, organizational affiliation, credit card
usage, room accommodation preferences, and the like—from reservation and registration
files. The source of the reservation (secretary, group, travel agent), type of accommoda-
tion requested, and ZIP code of business office or personal domicile are only some of the
data that can be obtained from the reservation files. Additional marketing data (newspa-
pers read, radio stations listened to, source of recommendation) can be collected at the
time of registration to give the marketing and sales department information on advertis-
ing media for target markets.
Another PMS application that the marketing and sales department can use is the abil-
ity to produce direct mail letters, which are letters sent directly to individuals in a targeted
market group. Individual letters advertising certain products and services, together with
mailing labels, can be prepared. Weekly function sheets, listings of the daily events in a
hotel such as meetings, banquets, and receptions, can be produced by assessing individ-
ual banquet sheets, listings of the details of an event at which food and beverages are
served. Information on clients can be stored and updated as required. Contracts can also
be produced. Tickler files on upcoming events are a great asset in keeping an edge on the
122 CHAPTER 4
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FI GURE 4- 20 Security module.
1. Keys
2. Fire Alarm
3. Burglar Alarm
4. Security Code Transactions
FI GURE 4- 21 Marketing and sales module.
1. Guest History 5. Desktop Publishing
2. Word Processing 6. Reports
3. Client Files 7. Travel Agencies
4. Banquet Files 8. Room Status—Meeting Rooms
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competition. In addition, monthly newsletters can be produced through the word pro-
cessing and desktop publishing applications. This module maintains reserved occupancy
status of meeting and banquet rooms—a great organizational feature.
Personnel
The maintenance of personnel files is greatly enhanced by using a PMS (Figure 4-22). Infor-
mation concerning job category, date of hire, record of orientation and training, rate of pay,
last evaluation date, promotions, pay increases, payroll deductions, and the like assist man-
agement in developing a well-operated human resources department. The amount of paper
involved in employee recordkeeping can be kept to a minimum. The word processing appli-
cation is used to generate form letters, job descriptions, reports, employee procedures, and
policy manuals. The PMS also permits labor analysis to be performed with ease.
Electronic Mail
The electronic mail feature, often called email, is a communication system that uses an
electronic network to send messages via computers. It is helpful in distributing current
information on policies and procedures to a large staff as well as communicating with
current and former hotel guests. When email is used, security codes are issued to main-
tain privacy. Staff members are able to check their email at the computer terminal. Copies
of email can be printed if needed for future reference (Figure 4-23).
In a large corporation with many company-owned properties or franchises, email allows
for communication among establishments. In a hotel with many operating departments
PMS APPLI CATI ONS 123
FI GURE 4- 22 Personnel module.
1. Employee File
2. Job Control List
3. Word Processing
4. Analysis
5. Reports
FI GURE 4- 23 Electronic mail module.
1. Security Codes
2. Mail
3. Hard Copy
4. Intranet
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and thus many department heads, this feature is a great asset to the communication
process. Regardless of the size of the lodging property, the email function in an intranet
configuration is a useful communication tool. Throughout this section, applications high-
light its value to the front office manager and his or her staff as well as the other depart-
ment managers and their staffs.
Time Clock
Individual employees are issued a security code and an individual personal identification
number. Upon entering their work area, they need only enter that number to record their
start time. As they leave the work area for breaks or at a shift’s end, they again need only
enter that number. This information is stored and used by the controller’s department
when compiling the payroll. This feature saves a great deal of time in calculating the num-
ber of hours an employee worked on any given day (Figure 4-24).
Solution to Opening Dilemma
Prior to the PMS vendor’s visit, it is advisable to perform a needs analysis. Although such
an analysis may have been performed five years ago, the needs of hotel guests, manage-
ment, and operations change over time. Forming a team of frontline employees and
supervisors allows for a good decision. This team should analyze the flow of guests
through the duration of their stay to establish a list of guest needs that could be enhanced
through PMS technology. Because the team is composed of employees from different
departments, other departmental requirements, including administrative paperwork,
must also be discussed. These discussions enable the team to prepare a list of ways to
enhance the guest’s stay, assist departments in preparing reports, and improve commu-
nications among departments. The final step is to prioritize the needs and measure them
against the budget. Other considerations include verifying vendor claims, developing
installation plans, discussing training programs provided by the computer company, find-
ing out about the availability of backup power sources, and securing a reasonable main-
tenance agreement. Financial considerations include cost-benefit analysis, the decision to
purchase or lease, and working out a realistic payback period.
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FI GURE 4- 24 Time clock module.
1. Security Codes 4. Time Out
2. Personal Identification Number 5. Analysis
3. Time In 6. Reports
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Chapter Recap
This chapter reviewed the importance of positioning the front desk to allow front office
personnel a view of guests who enter the lobby from the street entrance and elevators to
underscore the hotel’s responsibility for guest security for the guest. The guest’s first
impression is enhanced by the ambience, physical appearance, and orderliness of the
equipment and personnel. The front office manager must establish a balance between
guest service and work processing to allow for efficiency.
This chapter examined the use of computers by a hotel property, particularly in the
front office. Deciding to purchase a computer system and choosing the system begins with
a thorough needs analysis, a detailed procedure that allows the front office manager (and
other department managers) to assess the value of automating particular systems. The
process of evaluating software is a prime prerequisite in determining which computer
applications best meet the needs of a particular property. The front office manager should
also evaluate the hardware needed to operate the selected software package. The decision
to adopt a system is further clarified by considering vendor claims concerning operation,
installation, training, backup power sources, and the maintenance agreement. The finan-
cial considerations of purchasing or leasing complete the computer decision. Front office
managers should be aware of the computer applications—reservations, registration, room
status, posting, call accounting, checkout, night audit, inquiries/reports, back office,
housekeeping, food and beverage, maintenance, security, marketing and sales, personnel,
electronic mail, and time clock—of a property management system as they relate to the
successful operation of a front office.
End-of-Chapter Questions
1. When arranging equipment at the front desk, what factors should be considered?
2. Why is the position of the front desk in a hotel lobby important?
3. Describe the evolving role of computers in the hotel industry.
4. Explain in your own words what a property management system is. How does a
property management system help provide hospitality to guests?
5. Why should a needs analysis be performed before computers and software are
purchased? What are the components of a needs analysis?
6. Why are computer software considerations more important than computer hard-
ware considerations?
7. If you are employed at a hotel that uses a property management system, which of
the software options described in the text do you use? Explain the advantages of
these modules.
END- OF- CHAPTER QUESTI ONS 125
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8. If you are employed in a hotel with a property management system, discuss com-
puter hardware descriptions with your front office manager. What equipment
does your manager find most valuable? Why?
9. Why is interfacing important in a property management system? What are some
examples of interfacing?
10. What is ergonomics? How does the ergonomics of computer terminals affect the
front office staff?
11. How would you go about verifying vendor claims when considering the purchase
of a property management system?
12. How does a well-developed installation plan for a property management system
assist hotel management?
13. Why should management be sure employees are properly trained to use a property
management system?
14. If the power goes out in a 200-room lodging property for four hours, how would
you preserve the data in the property management system?
15. If you are employed in a hotel, ask your front office manager if there is a main-
tenance agreement for the property management system. What items are cov-
ered? How well has the computer company stood behind the agreement?
16. Discuss the purchase versus lease consideration in terms of financial profitability.
17. What does the main menu of a PMS tell an operator? How is it organized?
18. Review the computer applications described in this chapter. Explain how they are
used to provide better service to the guest and to improve financial control in the
hotel.
19. What is an intranet? What are some uses for it in a lodging property?
126 CHAPTER 4
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C A S E S T U D Y 4 0 1
Ana Chavarria, front office manager, and Lorraine
DeSantes, director of marketing and sales, have just
returned from a computer conference at which they
were able to look at the latest property management
systems for hotels. Ana is enthusiastic about updat-
ing and adopting front office applications for reser-
vations, registration, room status, posting, call
accounting, checkout, and night audit. Lorraine is
sure the marketing and sales applications will help
her department be more efficient.
Both realize the cost involved in obtaining mod-
ules for a property management system. What
would you suggest they do prior to discussing this
issue with Margaret Chu, general manager of The
Times Hotel?
Assuming Ms. Chu is willing to consider the pur-
chase of a PMS, how should Ana and Lorraine pro-
ceed? Whom should they include in developing a
PMS adoption plan and why? What areas should
they investigate?
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NOTES 127
C A S E S T U D Y 4 0 2
The computer team of The Times Hotel is in the
process of updating a computer needs analysis. The
team is ready to decide which new modules should
be adopted. Ana Chavarria, front office manager
and chairperson of the committee, is seeking con-
sensus on whether the team should recommend the
purchase of a point-of-sale module for the restaurant
operation or a guest history module for the market-
ing and sales department. Eric Jones, food and bev-
erage manager, says the point-of-sale module will
pay for itself in six months because guests are walk-
ing out of the hotel without having their breakfast
charges posted to their folios. Lorraine DeSantes,
director of marketing and sales, says the purchase of
the guest history module will increase business by 25
percent in the first year. The budget will allow for
only one purchase. What concepts would you rec-
ommend to the team to break the stalemate?
Notes
1. CARA Information Systems, Inc.; Computerized Lodging Systems, Inc.; ECI/
EECO Computer, Inc.; Hotel Information Systems; and Lodgistix, Inc.
2. Ibid.
3. Reprinted from Hospitals 56, no. 9 (May 1, 1982), by permission. Copyright 1982
by American Hospital Publishing, Inc.
Key Words
access time
accounts payable
accounts receivable
back office
balance sheet
banquet sheet
blackouts
brownouts
call accounting
computer supplies
CPS (characters per second)
credit
cursor
debit balance
directmail letters
disk drive
email
ergonomics
floppy drive
fire safety display terminal
floor limit
flow analysis processes
function sheets
gigabyte
guest histories
hardware
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128 CHAPTER 4
?
PROPERTY MANAGEMENT SYSTEMS
house limit
inkjet
inquiries/reports
in-room guest checkout
interfacing
Internet
intranet
I/O ports (input/output devices)
keyboard
keypad
laser
letter-quality
main menu
megabyte
megahertz
modem
monitor
needs analysis
online
outstanding balance report
paid in advance (PIA)
payback period
point-of-sale
posting
ppm (pages per minute)
printer
processor speed
profit-and-loss statement
property management system (PMS)
rack rate
revenue management
room status
self-check-in process
single-sheet
software
tickler files
touchscreen
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O P E N I N G D I L E M M A
Two days remain before the first guest checks in for the Forest
Conservation Conference. A quick review of the reservation module
report indicates that several of the new desk clerks took guaranteed
reservations (35 rooms) for that convention that account for 10
percent more rooms than are available.
Making reservations is a necessity for travelers and an important marketing
tool for lodging establishments. Travelers in various market segments depend
on a well-organized reservation system that is easily accessible through toll-free
numbers, the Internet, or at a few hours’ notice. Lodging establishments want
to provide a continuous flow of guests, which will bring profits. A reservation
system must ensure efficient means of accessing, processing, and confirming
information (Figure 5-1). Without an efficient reservation system, all aspects of
managing a hotel are negatively affected. For example, while overbooking
reservations may guarantee a full house for the hotel, it also leaves the guest
who is turned away with a negative impression. This not only decreases the
hope of repeat business but also ensures that the dissatisfied customer will tell
others of the negative experience. This chapter examines the reservation system
as an integral part of progressive front office management and discusses the
operation of a well-run system.
C H A P T E R 5
Systemwide Reservations
C H A P T E R F O C U S P O I N T S
?
Importance of guest
reservations to travelers
and lodging establish-
ments
?
Overview of reservation
system
?
Sources of reservations
?
Forecasting reservations
?
Overbooking (occupancy
management)
?
Processing guest
reservations
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Importance of a Reservation System
Profitable business ventures rely on effective marketing principles, which include review-
ing people who require hotel products and services, determining their specific needs,
developing products and services that meet these needs, and making a profit on the sale
of those products and services.
A well-organized reservation system allows hotels to ensure a steady flow of guests
into their properties. Hotel chains, through their central reservation system, offer their
members the ability to fill 30 percent or more of available rooms nightly. Independent
hoteliers, in contrast, must create exciting marketing programs to capture room business.
Easy access to a hotel’s data bank of rooms helps in fulfilling the customers’ needs as well
as in reaching a targeted daily occupancy rate, average daily rate, yield percentage, and
RevPAR. A reservation system is the primary means of producing positive cash flow and
a favorable income statement.
Overview of the Reservation System
The hotel industry is powered by sales derived from the use of computerized reservations
systems. The systems used to fill rooms consist of the hotel’s primary efforts (via mar-
keting and sales and use of their own brand reservation system), their toll-free number,
130 CHAPTER 5
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FI GURE 5- 1
A reservation
clerk is ready to
process a guest’s
request for a
room reservation.
Photo courtesy of
Radisson
Hospitality
Worldwide.
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global distribution systems (GDS), travel agents, and third-party sources such as whole-
salers who buy rooms from the hotel and resell them on the Internet. The following infor-
mation shows how hotels rely on a combination of these well-organized systems to
produce a profit.
Choice Hotels International
The following information on Choice Hotels International, Intercontinental Hotel Group
(Six formerly Continents Hotels) (formerly Bass Hotels & Resorts), Carlson Hospitality
Worldwide, and Pegasus Solutions provides a concise view of the importance of com-
puterized reservation systems to the hospitality industry.
Choice Hotels International, with 5,000 franchisees in 42 countries, operates under
the Comfort, Quality, Clarion, Sleep Inn, Econo Lodge, MainStay Suites, and Rodeway
Inn brands. In a press release, Choice Hotels International announced its capability of
offering guests reservation services through handheld computers:
Owners of the Palm VII or Palm VIIx handheld computer can download Choice’s web
clipping application to their handheld by visiting www.choicehotels.com, then clicking
on “wireless” on the options menu. After following the download instructions, Palm
VII or Palm VIIx handheld owners with Palm.Net service are able to reserve rooms,
check room availability, check on existing reservations and more. “Essentially, the
application provides all of the booking capabilities available through our web site,”
said Gary Thomson [senior vice president and chief information officer at Choice].
1
At one of its two reservations call centers, they received 32,000 calls per day, which
accounted for 40 percent of all Choice worldwide reservations.
InterContinental Hotels Group
Intercontinental Hotels Group (formerly Six Continents) operates 3,500 hotels and
535,000 guest rooms in nearly 100 countries and territories around the world. Holidex
Plus is the hotel’s reservation system. The company states,
IHG (Intercontinental Hotels Group) experiences over 7 million visits to its Web site
each month. Plus, Internet revenues have increased by 50 percent since the launch of
the industry leading Lowest Internet Rate Guarantee (LIRG) more than one year ago.
IHG was the world’s first hotel company to offer the LIRG. This is a consumer prom-
ise that states every hotel reservation booked directly through an InterContinental
Hotels Group Web site is guaranteed to have the lowest rate publicly available on the
Internet for that hotel. HOLIDEX(R) Plus links hotels directly to various Global Dis-
tribution Systems (GDS) and travel Web sites. HOLIDEX Plus is far more than an
inventory and rate system; it is a strategic revenue system. This includes the ability to
set and fence rates giving your hotels business and market requirements. It will allow
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a hotel to create programs that will compete in your unique market like tailor-driven
promotions—resulting in increased revenue and a wider choice of personalized pack-
ages for guests.
2
Carlson Hospitality Worldwide
Carlson Hospitality Worldwide’s central reservation system is called Curtis-C (pro-
nounced “courtesy”).
Carlson Hospitality Worldwide Reservations Services today (December 18, 2003)
announced it has completed its enhanced “Next Generation” seamless interface with
three Global Distribution Systems (GDS), providing travel agents and those booking
through the GDS direct access to real-time rates and availability at Carlson hotel
brands. Regent International Hotels; Radisson Hotels & Resorts; Park Plaza Hotels &
Resorts; Country Inns & Suites By Carlson; and Park Inn, now offer hotel shopping
via the company’s central reservations system, Curtis-C, through Sabre (Direct Con-
nect Shop), Galileo (Inside Shopper), and Amadeus (Dynamic Access).
3
The Carlson system services approximately 730 hotel locations and six cruise ships
operating on all seven continents. For the year 2000, it processed approximately 8,900
reservations per day, with a total of 3,242,031 for that year. Brands include Regent
International Hotels, Radisson Hotels & Resorts, Country Inns & Suites by Carlson,
Park Plaza and Park Inn hotels in North America, and Radisson Seven Seas Cruises. It is
connected to 455,000 travel agents via the global distribution system (GDS). Curtis-C
interfaces with the company’s hotels via HARMONY, the company’s property manage-
ment system, and the CustomerKARE (or Customer Knowledge and Relationship
Enabling) system. It also interfaces with the HARMONY Database Manager, which
provides access to hotel inventory (updated rates and availability) along with the ability
to deliver reservations through several distribution systems; the Guest Communication
Manager, a system that manages guest satisfaction information (providing a history of
service problems per guest per hotel and scanning for trends and patterns); and Knowl-
edgeNet, which provides hotels with easy access to valuable company information (cor-
porate policies, forms, reports, hotel procedures, and newsletters) and eliminates monthly
printing of hotel reports and distribution to the properties. The benefits of this interfac-
ing of data include creating and distributing products worldwide in seconds, making
information easily accessible to customize the customer experience, allowing for synergies
among applications and reducing resource requirements, and adapting to changing mar-
kets and technologies.
4
Global Distribution Systems (GDS) in Securing Reservations
Global Distribution Systems (GDS) are distributors of hotel rooms to corporations such
as travel agents that buy rooms in large volume. GDSs that play a prominent role in
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securing guest reservations include Amadeus, Galileo, SABRE, and Worldspan. The fol-
lowing details the scale of their operation.
TravelCLICK, the source of hotel industry electronic distribution for many GDSs,
reported the following based on GDS bookings and Internet travel sites. Electronic book-
ings for European hotel rooms in the second quarter of 2004 were up by almost 17 per-
cent relative to the same period in 2003. The average daily rate (ADR) improved by about
9 percent.
5
Role of the Internet in Securing Reservations
The business and pleasure traveler have entered the marketplace with a great degree of
sophistication. Armed with information from advertising television promotions, direct
mail promotions from credit cards, airline frequent flyer incentive plans, and other pro-
motional sources, they want to secure the best rates and value for their accommodations.
They search the Internet for the best price and make sure they are satisfied with their hit.
How did this free marketplace come about? How did it seem to become a buyer’s mar-
ketplace? Why do the hoteliers grimace at the thought of the Internet rate? The follow-
ing discussions on the background of room rates offered via the Internet, the effect of the
Internet on pricing rooms, and consumers’ response to use of the Internet in making reser-
vations shows how technology has changed the way hoteliers do business.
Background on Room Rates Offered Via the Internet
Sharon H. McAuliffe outlines thoughts for you to consider on room rates offered via the
Internet.
6
Prior to the Internet entrance into the marketing of rooms, the only public rates
available for consumers were those published on brochures or obtained by means of
phone calls to the hotel property or a travel agent. Any discounts were offered to whole-
salers and corporate clients based on their volume of business or length of stay. When the
dot.com mania hit consumers, the wholesalers decided to advertise free offers to entice
consumers to use the Internet. This has left a lasting impression on the consumer’s pur-
chasing manner. An initial wholesaler offered to take empty hotel rooms into their inven-
tory on the Internet, and hoteliers were grateful to sell the rooms at low sale prices.
Internet volume was light and everything seemed fine. Then other Internet sites offered
similar models with their discounts and with a guaranteed lowest price. The result is a
transparency of rates. Guests can check room rates before check-in to see if their guar-
anteed room rate has been offered lower on the Internet.
Effect of Internet on Pricing Rooms
Imtiaz Muqbil,
7
reports on Pricewaterhouse Coopers’ study, “Effect of the Internet on
Pricing,” which was to estimate of the effect of the Internet on lodging room rates, focus-
ing on what room rates in 2003 would have been without the effects of the
Internet. He mentions that the Travel Industry of America figures quoted in the study
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indicated that approximately 35 percent of Americans used the Internet to research travel.
The real-time rate information availability causes business and group consumers to
rebook reservations if lower rates are posted. He says these posted rates are now becom-
ing negotiated maximum rates. Another feature of the Internet search yields reduced
search costs for leisure travelers because they can compare room rates in their destination
areas.
So what is the net effect of this Internet search? The study estimated the net effect to be
minus $1.27 billion. This loss is caused by the combination of lower average daily room
rate (ADR) because of increased transparency and price competition and increased rev-
enues due to increased bookings stimulated by the lower rate. It is interesting to note that
the study found that the average rate for Internet bookings was 17 percent below the rate
for non-Internet bookings. Furthermore, Internet reservations consisted of about 13 per-
cent of all U.S. hotel reservations in 2003. The study estimated that about 7 percent of
these online bookings were incremental reservations, made by travelers who would not
have reserved without the existence of low Internet rates. The study estimates that the net
Internet effect on the U.S. lodging industry in 2005 will have increased by about 30 percent.
What type of person goes online to make a reservation? The report indicated that in
2003, 75 percent were discount seekers and 25 percent were convenience bookers. The
study estimates that in 2005 Internet bookings will come equally from people seeking
convenience and people seeking discounts.
Another point Muqbil makes is that price transparency, or the ability of the consumer
to determine room rates, will continue to affect the ability of hotels to increase room rates
during low seasons. However, during peak seasons, the Internet may enable hotels to
increase rates more rapidly than was possible before the Internet.
Consumers Response to Use of the Internet—Third-Party Websites
Third-party websites such as Expedia and Travelocity provide the consumer an opportu-
nity to view hotel room availability and rate with a few keystrokes on the computer. The
consumer response to the opportunity to book room reservations online has been over-
whelming. TravelCLICK, a Chicago-based electronic provider of reservations for con-
sumers, serves over 7,500 customers in more than 140 countries around the world. It
indicated the continued consumers’ reliance on the Internet to process reservations.
“Internet (consumer online) room nights displayed growth of 18.7% above the second
quarter of 2003 [in 2004].” Year-to-date performance figures [second quarter 2004]
reveal total GDS [Global Distribution System] and Pegasus Hotel e-Commerce room
night sales at 57,131,438. Of that total, 46,510,434 were sold by travel agents and
10,621,004 originated by the consumer off the Internet.
8
This overwhelming response to the Internet continues. Price and Starkov
9
report that
“in 2004 twenty percent of hotel bookings will be influenced by the Internet, but done
offline (call center, walk-ins). In 2004, for the first time Internet hotel bookings will sur-
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pass GDS hotel bookings. Two years from now the Internet will contribute over 27% of
all hotel bookings (PhoCusWright).” This trend began in 2003, when The Hospitality
Sales & Marketing Association International (HSMAI) and Smith Travel Research
reported
10
that branded hotel sites accounted for 75 percent (14.8 million) of Internet
reservations. Third-party (Expedia, Hotels.com) and GDS Internet sites accounted for 25
percent.
Financial Effects of Third-Party Reservations
The financial effects of this consumer response should be evaluated. The chapter on rev-
enue management considers the job of the revenue manager, which includes evaluating
channels of room reservations. For example, a reservation completed via a travel agent
may incur a 10 percent commission, while a third-party reservation may incur a com-
mission as high as 18 percent. If you do the math on a room that sells for $100, the com-
mission equals $10 for the 10 percent and $18 for the 18 percent. If you extend that
example of an $8 difference to just 10 rooms per night for 365 nights per year, the result
is $29,200 ($8 × 10 × 365 = $29,200). However, there is another side to that argument.
What if you didn’t place those extra rooms for sale on the third-party reservation site?
Would they have remained unsold? Would you have lost all income, let alone the differ-
ential of $29,200? It is indeed a struggle of wits and experience to compete in the revenue
management venue.
Types of Reservation Systems
Franchisee
A franchisee is a hotel owner who has access to a national reservation system and receives
the benefits of the corporation’s management expertise, financial backing, national adver-
tising, and group purchasing. A franchise member of a reservation system or a member
of a referral system gains significant advantages from interhotel property referrals, a sys-
tem in which one member-property recommends another member-property to a guest,
and national advertising.
Referral Member
A referral member of a reservation referral system, a worldwide organization that processes
requests for room reservations at a particular member-hotel, is a hotel developer/owner
who has access to the national reservation system. Hotels that are members of the reser-
vation system are more than able to justify these costs; for example, a chain property may
obtain 15 to 30 percent of its daily room rentals from the national reservation system,
TYPES OF RESERVATI ON SYSTEMS 135
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depending on local economic and market conditions. Compared to the costs incurred by
an independent property that must generate every single room sale with individual mar-
keting and sales efforts, franchise referral costs seem minimal.
Use of the reservation system by franchises and referral properties incurs fees such as
royalty, marketing, and reservations. For example, in 2005, Hilton requires an initial fee
of $85,000 for the first 275 guest rooms or suites plus $300 for each additional guest
room or suite, with a minimum fee of $75,000. A 5 percent of monthly gross rooms rev-
enue is considered the franchise fee. The monthly program fee is 4 percent of monthly
gross rooms revenue. Hilton requires installation of their OnQ proprietary business soft-
ware and hardware system; the costs for these systems range from $40,000 to $150,000.
Hilton notes that the franchisee doesn’t need to purchase the hardware or software com-
ponents (except for the up-front costs of installation), or pay for ongoing maintenance
and technical support, because these are provided by Hilton Hotels Corporation and paid
through the franchisee’s monthly fee of 0.75 percent of the hotel’s monthly gross room
revenue. There are other fees for participation in the Frequent Traveler/Guest Reward
program, training, and computer system.
11
Marriott charges similar franchise fees for an investor seeking a Fairfield Inn franchisee.
A $40,000 or $400/room (which ever is greater) application fee is charged. The royalty fee
is based on 4.5 percent of the gross room revenues. Marriott assesses 2.5 percent of gross
room revenues fee for marketing. Reservation fees include 1.00% of gross room revenues,
$2.95 per non-property reservation, and a communication support fee of $412.00 per
accounting period. Marriott lists $52,500 to $76,500 pre-opening fees and property man-
agement system costs depending on the size of the property, the training required, and
where the property management system hardware and software is purchased.
12
If you do the math on the cost of operating a hotel under the auspices of either of these
franchises, you can determine that a franchise is a very expensive business option. How-
ever, the benefits (reservation system, advertising, management development, etc.) of
operating a hotel with a franchise are numerous and far outweigh those costs.
Sources of Reservations
Guest reservations come from a variety of market segments. Some of the more common
groups are corporate clients, social/military/educational/religious/fraternal (SMERF)
organizations, group travelers, leisure travelers, and current guests who want to return to
the same hotel. This is only one way of classifying guest reservations. The purpose of ana-
lyzing these segments is to understand the needs of each group and provide reservation
systems to meet their needs. Keep in mind that reviewing their needs will assist you in
gaining insight into guests’ methods of communication. The more you learn about those
methods, the better you will be able to monitor and improve current reservation com-
munication systems.
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Corporate Clients
The corporate client is a hotel guest who is employed by a business or is a guest of that
business. Corporate clients provide a hotel with an opportunity to establish a regular flow
of business during sales periods that would otherwise be flat. For example, a hotel located
in an area popular with weekend tourists would operate at a loss if an aggressive mar-
keting effort were not made to secure corporate clients from Sunday through Thursday
nights. Corporate clients are usually in town to visit corporate headquarters or to attend
business meetings or conventions. Visits are usually structured in advance, with detailed
agendas and itineraries. Such structured schedules suggest the corporate guest needs reser-
vations to ensure a productive business visit.
The reservation for the corporate guest may be initiated by a secretary or an adminis-
trative assistant. These office personnel are vital to the marketing efforts of a hotel. Many
hotels offer a secretaries club, which is a powerful marketing and public relations effort
aimed at this group. The program encourages the secretary or administrative assistant to
make room reservations with the hotel for visiting business clients by providing incentives
such as gift certificates for the person who books the most reservations, free meals for
being a member, and free special-interest seminars. This system provides the basis for a
loyal contingent of secretaries and administrative assistants who think of the club’s hotel
first. This marketing program helps the front office manager and the reservationist get to
know the leaders in the business community in an indirect way. If such people need a
quick reservation on a busy night, they feel they will receive special consideration from
the hotel’s management.
A toll-free phone number assists the cost-conscious corporate client by giving corpo-
rate guests calling from outside the property’s area code an opportunity to save on phone
bills. The independent lodging property that has installed a toll-free phone number gives
itself a marketing advantage. If the person making the reservation wants to check out
rates, location, amenities, related hotel services, and the like, he or she can do so without
incurring expense. The corporate client can then match travel needs with available lodg-
ing properties.
The corporate client can also place the reservation through the reservation/referral sys-
tem of the chain organization. The large chains, which advertise by radio, television, bill-
board, and print, allow the corporate client to make reservations easily through a toll-free
number. The number connects the caller to a reservationist who has access to a data bank
of available rooms at lodging properties that are members of the chain or referral system.
The reservation can be completed in minutes. The use of a single phone number to access
all properties offers the corporate client an easy, standard way to make reservations for
stays in several cities with one call. In the lodging industry, this opportunity to gain
repeat business is very important.
The travel agent also makes reservations for corporate clients. The travel agent who is
booking air or other transportation for clients usually books room reservations as well.
The corporate client can also visit a hotel’s website to obtain information and make a
room reservation.
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Social/Military/Educational/Religious/Fraternal (SMERF)
The SMERF market provides a good opportunity to fill vacancies in odd times of the
business of the cycle, because this market will travel at off-peak times to save money. For
example, educators may hold meetings during the Christmas vacation or summer recess
so they can secure a lower room rate. SMERF groups may number just 50 to 100, but
there are many such groups to be courted. They can be mined through the combined
efforts of a local travel and tourism board, Internet searches to determine when they
schedule their annual, semiannual, or quarterly meetings, and a review of local newspa-
pers to identify the leaders of local chapters.
Meetings/Incentive/Conference/Event (MICE)
The lucrative MICE market requires a devoted hotel marketing and sales team or agency
to locate large groups of conference attendees who want to schedule their meeting at a
conference hotel. Many details are involved in encouraging a group to book an event,
including airfares, supply of hotel rooms, room rates, and area cultural activities. The
support of a local tourism and travel association is a major asset.
Group Travelers
Group travelers are persons traveling as a group either on business or for leisure. Con-
vention guests and seminar attendees are examples of groups that travel on business. Par-
ticipants in organized tours who pursue recreation, education, and hobbies, and special
interests constitute some of the leisure segment. The key to marketing reservations to this
group is providing an efficient access method for planning details of a tour. The group
planner is the person responsible for securing guest room accommodations, food and bev-
erage programs, transportation reservations, meeting facilities, registration procedures,
tours, and information on sightseeing, as well as maintaining a budget for group travel-
ers. The group planner must satisfy the needs of the group in an efficient, orderly, and
professional manner. The details involved in organizing a three-day convention in a large
city for 700 attendees or a seven-day tour of points of interest for 44 people are quite
extensive. How does the group planner begin?
Options available for the tour or meeting planner include tapping into the bus associ-
ation network, an organization of bus owners and tour operators who offer transporta-
tion and travel information to groups, using directories listing lodging properties,
communicating with hotel representatives of lodging properties, and contacting hotel
brokers. Hoteliers provide information concerning lodging facilities and tourism through
these sources.
Bus associations are professional organizations on the national and state levels that
provide their members with organized destination information needed for planning tours
and conventions. Usually these associations organize conventions of their own by work-
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ing with hotels, tourist attractions, and travel and promotion associations in the public
sector that supply facilities and points of interest to the group traveler. Through the
monthly publications of these associations, members can remain current on the travel
industry. The lodging operation that advertises in these publications will reach a market
that is looking to add variety to a group tour.
Travel directories, organized listings of hotel reservation access methods and hotel
geographic and accommodations information, also help the group travel planner match
facilities with the needs of the group. The most common of these directories is the Hotel
and Travel Index. Other directories include Travel Books & Guides from AAA, Miche-
lin Guide, Mobil Travel Guides, Official Hotel Guide, Official Meeting Facilities Guide
North America, The Hotel Guide, and Weissmann Travel Reports. However, the ease of
access to information on a hotel’s products and services via the Internet is highlighted by
Starkov and Price,
13
who indicate that “over 162 million Americans are active Internet
users (Nielsen).” Beatty
14
urges hotel operators to use websites to attract online cus-
tomers: “A recent survey of 1,100 Internet users conducted for Genex, an Internet design
company based in Atlanta, found that 65 percent of respondents will not patronize a
poorly designed site—even if it is a favorite brand.”
Working with a hotel representative, a member of the hotel’s marketing and sales
department who actively seeks group activities planners, is another method the group
planner may find quite useful. Armed with details about the lodging facility, points of
interest in the area, and community background, the hotel representative can prepare a
package deal for the planner. The active solicitation of group business can prove prof-
itable for a hotel.
Another type of active solicitation for group travelers is done by the hotel broker. This
is the person who sells hotel room prize packages to corporations, sweepstakes promot-
ers, game shows, and other sponsors. By booking reservations in volume, a hotel broker
obtains a discount for the organization that wants to offer a hotel visit as a prize. Chain
and referral organizations usually have people in their corporate marketing and sales divi-
sions who contact organized groups or brokers to sell the hotel rooms and facilities.
As mentioned earlier, the key to securing the business of group travelers is to develop
a structured access system that assists the planner in meeting the needs of the group. The
more readily available the information concerning the lodging property, tourist attrac-
tions, and the community, the easier it is for the planner to choose a property. (Please
note that hotel brokers also solicit room blocks from hoteliers on certain dates for resale
on their third-party website.)
Leisure Travelers
Leisure travelers are people who travel alone or with others to visit points of interest or
relatives, or for other personal reasons. These travelers, who are often unrestricted by
deadlines or schedules, are more flexible in their travel plans than are corporate clients
and group travelers. They are more willing to seek someplace to stay along the way;
SOURCES OF RESERVATI ONS 139
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however, some of the people in this group may want to obtain guaranteed reservations
to ensure a trip with no surprises. This fragmented group consists of many subgroups,
including singles, married couples, young families, senior citizens, and students. Some of
the methods the leisure traveler can use to secure room reservations are travel agencies,
toll-free numbers, reservation/referral systems, and the Internet.
Although using travel agents to place reservations may not be as common with leisure
travelers as it is with businesspeople, the ease of one-stop shopping that travel agents
offer encourages hotels to develop strong business relationships with them. The fee a
lodging facility pays for accepting a reservation placed by a travel agent is usually 10 per-
cent or more of the room rate, a minimal sum compared to the increase in volume and
subsequent profits that an agent can generate for a property. Another method used by the
traveler to make reservations is the toll-free phone number. Calling these numbers, which
are listed in travel guides and the phone book, provides travelers with up-to-the-minute
room rates and reservation availability status.
The third method available for the traveler is the reservation/referral system. This
option offers the traveler a quick way to contact a particular hotel via a national or an
international reservation/referral system. Travelers planning long trips or visits to unfa-
miliar areas usually prefer some assurance that accommodations will be available, clean,
safe, and comfortable. The name recognition built up over time by a chain provides that
assurance and convinces the traveler to place room reservations through its reserva-
tion/referral system.
A fourth method used by the market segment to make reservations is via the Internet.
Travelers can visit the website of participating hotels to investigate accommodations and
pricing as well as to make reservations. The leisure market has embraced this method, via
their home computers and widespread Internet connection.
Current Guests
An often overlooked way to attract room reservations is through current guests, guests
who are registered in the hotel. (Although this topic is covered in more detail in chapter
13, it is important to mention it here as a source of reservations.) This potential market
is a promising source of repeat business. The people in this group have already experi-
enced the services and facilities of a lodging property and may be willing to make an
immediate commitment to more hospitality from the same hotel or another hotel in the
same chain or referral group.
The opportunity to book additional reservations occurs during the check-in and
checkout phases of the guests stay. After registering the guest, the front desk clerk may
ask if he or she will be continuing to travel after leaving the hotel. If the guest mentions
plans to travel to another city, the desk clerk may inquire if a reservation is needed. Like-
wise, the desk clerk may ask the guest on checkout if additional reservations are needed
for continuation of this trip or for future trips. The hotel that promotes its facilities to
current guests in this way will be rewarded with an increase in room occupancy.
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Forecasting Reservations
Forecasting, or rooms forecasts, which involves projecting room sales for a specific
period, is a natural next step after collecting the data from the reservation process. This
step includes previewing the effects of reservations on the income statement, scheduling
labor, and planning for the use of facilities. In addition to presenting a practical method
for preparing a rooms forecast (sometimes referred to as a projection of room sales), this
section also explains how such a forecast can be used as a means of communication with
other departments (Figure 5-2).
One of the purposes of a rooms forecast is to preview the income statement. It enables
hotel managers to determine projected income and related expenses for a certain period.
The front office manager who has estimated total room occupancy to be 100 rooms with
an average room rate of $90 for a seven-day period can project a revenue of $63,000 (100 ×
$90 × 7) from room sales. Budgeted cost control policies allow the front office manager
FORECASTI NG RESERVATI ONS 141
FI GURE 5- 2 A rooms forecast assists in planning for delivery of service.
ROOMS FORECAST FROM: __ SUN DEC 1 __ TO: __ SAT DEC 7 __
1 2 3 4 5 6 7
GUAR RES 25 50 55 40 45 10 10
CONF RES 20 25 20 20 25 10 15
WALK-INS 80 80 80 5 5 5 5
GROUPS 20 0 0 30 30 30 0
TTL ROOMS 145 155 155 95 105 55 30
TTL GUESTS 180 195 190 110 125 75 45
COMMENTS: DEC 1/2/3 WALK-INS FROM DDS CONVENTION AT STONE HILL MANOR
DEC 4/5/6 JOHNSON TOURS FROM CANADA—ALL MEALS IN DINING
ROOM A LA CARTE
CC: HOUSEKEEPER GENERAL MGR
FRONT OFFICE MGR DIR MKTG AND SALES
SWITCHBOARD FOOD AND BEV MGR
MAINT ENGR EXEC CHEF
GARAGE MGR BANQ MGR
RESTAURANT MGR HOSTESS A.M./P.M.
LOUNGE MGR
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to allocate a certain amount of that income for front office staff. This process of project-
ing sales and related expenses is important to the successful management of the front
office (Figure 5-3).
The front office is not the only department that depends on a well-constructed rooms
forecast. The food and beverage department, housekeeping department, and maintenance
department rely on the house count, or the number of persons registered in a hotel on a
specific night. This is important for scheduling labor, using facilities, planning improve-
ments or renovating facilities, ordering supplies, and the like. For example, if a full house,
100 percent hotel occupancy, is predicted and there are no scheduled banquet-breakfasts,
142 CHAPTER 5
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FI GURE 5- 3 The front office forecast is issued to all department heads in the hotel.
TIMES HOTEL
Weekly Room Sale Forecast
10/1 10/2 10/3 10/4 10/5 10/6 10/7
Departures 0 10 72 75 5 15 125
Arrivals:
Confirmed 40 20 30 25 5 8 22
Guaranteed 30 18 17 90 4 2 10
Total 70 38 47 115 9 10 32
Walk-ins 20 20 30 10 10 5 50
Stayovers* 10 85 68 65 175 177 65
No-shows 5 3 5 10 2 2 3
TOTAL** 95 140 140 180 192 190 144
*Yesterday’s total—departures
**Yesterday’s total—departures + arrivals + walk-ins – no-shows
Notes:
10/1 Dental Commitee (125 rooms), checkout 9:00 A.M.–10:30 A.M.
Lion’s Convention (72 rooms), check-in 1:00 P.M.–4:00 P.M.
10/3 Lion’s Convention, checkout after 10:00 A.M. group brunch; checkout extended until 1:00 P.M.
Antique Car Show in town. Most are staying at Hearford Hotel (only 50 reservations so far);
expect overflow from Hearford, about 30 walk-ins.
10/4 Antique Car Show over today.
Advanced Gymnastics Convention. Mostly ages 10–16.
Check-in 4:00 P.M.–6:00 P.M.
10/7 Advanced Gymnastics checks out at 12:00 noon.
Painters Convention in town. Headquarters is the Anderson Hotel.
Expect overflow, 50 walk-ins.
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extra waitstaff must be scheduled in the dining room. Employees in the housekeeping
department may be refused vacation when a full house is expected. Other contingencies
include a maintenance department’s need to schedule major repairs and preventive main-
tenance, annual cleaning, and remodeling of guest rooms when occupancy is low; a con-
troller’s need to prepare a cash flow estimate; an executive housekeeper’s need to
schedule adequate staff based on guest room occupancy; a security department’s require-
ment to be aware of activity projected for the hotel; and a parking garage manager’s need
to know if the garage can meet the auto/van space requirements for the anticipated guests.
These are just a few of the uses of the rooms forecast.
The front office manager determines the revenues projected by this rooms forecast. To
do this, the average room rate or the specific room rate for a group may be applied. This
information is important to the controller, general manager, and owner of the hotel, who
use it in managing the hotel’s finances. This system can also be used to prepare quarterly
or yearly forecasts.
Overbooking (Occupancy Management)
The practice of overbooking—accepting reservations for more rooms than are available by
forecasting the number of no-show reservations, stayovers, understays, and walk-ins, with
the goal of attaining 100 percent occupancy—is viewed by the general public with skepti-
cism. As a future hotelier, you should prepare for the onerous task of developing a policy
on overbooking. The front office manager is responsible for administering this policy.
American courts seem to agree that “in many instances, overbooking to overcome the
problem of no-shows and late cancellations may produce advantages by way of operat-
ing efficiencies that far outweigh the occasional inconveniences to guests and travellers.”
They have held hotel overbooking to be customary and justifiable practice for offsetting
the losses from no-shows. Writing in February 1980, Gould et al. could find no direct
statutory or administrative law governing hotel overbooking with the exception of one
Florida regulation.
15
Hoteliers and front office managers who practice overbooking do so
to meet an organization’s financial objectives. They do not intentionally overbook to
cause problems for the traveler. Rex S. Toh reports “the no-show rate is anywhere
between 5 and 15% in most markets.”
16
The financial loss due to no-shows may be substantial. In a hotel that typically has 100
confirmed reservations (not guaranteed with a credit card) and experiences a 5 percent
no-show rate, five rooms per night would remain unsold. With an average room rate of
$70, these five rooms would cost the hotel $350 in revenue. Over a year, this amounts to
$127,750. Lost revenues of this volume force the hotelier to develop an aggressive occu-
pancy management policy. This policy is based on management of the occupancy cate-
gories into which guests are placed: those with confirmed reservations, those with
guaranteed reservations, stayovers, understays, and walk-ins. However, most hoteliers
require a guest guarantee his or her stay with a credit card number to ensure their intent
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of arrival and thus guarantee payment for product and services on the part of the guest
and hotel.
Confirmed reservations, prospective guests who have a reservation for accommoda-
tions that is honored until a specified time, represent the critical element in no-shows.
After that time (usually 4:00 P.M. or 6:00 P.M.), the hotel is under no obligation to hold
the reservation. The front office manager must keep accurate records of no-shows in this
group. Various types of travelers with confirmed reservations—corporate, group,
leisure—have different no-show rates. For example, corporate confirmed reservations
may have a 1 percent overall no-show rate. Group travelers may have a 0.5 percent no-
show rate, with no-shows all coming from one or two particular bus companies. Leisure
travelers may have a 10 percent no-show rate. A detailed investigation of each of these
categories will suggest methods for minimizing no-show rates.
Guaranteed reservations, prospective guests who have made a contract with the hotel
for a guest room, represent a less volatile group because the guest provides a credit card
number to hold a room reservation. Rex S. Toh reports that the no-show rate for guar-
anteed reservations was 2 percent, compared to 10 percent for confirmed reservations.
17
The front office manager should investigate these no-shows to determine their sources
and plan accordingly.
Stayovers are currently registered guests who wish to extend their stay beyond the time
for which they made reservations. Accurate records by traveler category (corporate,
group, leisure) reveal the stayover rate of each. For example, employees of a corporation
who travel with spouses may extend a Thursday and Friday business trip to include a Sat-
urday. Similarly, a group conference scheduled from Monday through Thursday may
encourage the attendees to stay longer to sightsee.
Understays are guests who arrive on time but decide to leave before their predicted
date of departure. Leisure travelers may find their tourist attraction less interesting than
anticipated. Urgent business may require the corporate client to return to the office
sooner than expected. Maintaining accurate records helps the front office manager pre-
dict understays.
A welcome sector of the hotel market, walk-in guests, can enhance daily occupancy
percentages when effectively managed. The front office manager must be aware of activ-
ity in the local area. Heavy tourist seasons, special tourist events, conventions, and the
like will increase the number of potential guests. Awareness of such possibilities helps the
front office manager plan. Walk-in numbers are often higher if the front office manager
maintains good relations with the front office managers of nearby hotels, who may refer
guests to the property when their own are fully booked. Sending guests who cannot be
accommodated to nearby hotels is a win-win situation for guests and hotels.
When these occupancy categories are tracked, the front office manager can more accu-
rately predict occupancy. The front office manager can obtain the data for this formula
by reviewing the property management system (PMS) reservation module, which lists the
groups, corporate clients, and individual guests who have made reservations for a specific
period. Also, the front office manager should check tourist activity in the area, business
events planned in other hotels, and other local special events.
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The following occupancy management formula considers confirmed reservations,
guaranteed reservations, no-show factors for these two types of reservations, predicted
stayovers, predicted understays, and predicted walk-ins to determine the number of addi-
tional room reservations needed to achieve 100 percent occupancy. No-show factors are
based on prior experience with people with confirmed or guaranteed reservations who
did not show up.
Here is an example of how to use this formula:
1. If a 200-room lodging property has 75 confirmed reservations with a 5 percent no-
show factor in that category, 71 rooms can be predicted to be occupied by guests
with confirmed reservations. The no-show factor is based on historical records of
this category for this property maintained and reviewed by the front office manager.
2. There are 100 guaranteed reservations with a historical no-show rate of 2 percent.
This means that 2 rooms have probably been reserved by no-show guests and may
be available for sale. The policy of the hotel may or may not allow the sale of these
2 rooms. If the hotel knows of other hotels in the immediate area that have avail-
able rooms for that particular night, the front office manager might be willing to
walk a guest with a guaranteed reservation to another hotel if all the guests with
guaranteed reservations arrive. It is important to be extremely cautious in this cat-
egory. An unpleasant scene can occur if an exhausted guest arrives at 3:00 A.M.
with a guaranteed reservation and finds no vacancies.
3. The predicted number of stayovers at this given time—based on historical records,
with considerations for the season of the year, tourist attractions, nature of the cur-
rent guests (convention, tourist, or business traveler)—is 4 rooms. This number of
rooms must be subtracted from the number of rooms available for sale.
4. The predicted number of understays at this given time, considering factors similar
to those applied to stayovers, is 5. This number of rooms is added to the number
of rooms available for sale.
5. The predicted number of walk-ins for this given period—using historical records
and available information concerning tourist events, activity at other hotels, attrac-
tions in nearby communities, and the like—is 8.
total number of rooms available
confirmed – rreservations no-showfactor based on histo × rrical data
guaranteed reservations no-show – × factor based on historical data
predicted – stayovers
predicted understays
predicted
+
– wwalk-ins
= number of additional roomreservattions needed to achieve 100 percent occupanncy
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The arithmetic for this example works out as follows:
The occupancy management formula indicates to the front office manager that 24
additional rooms must be rented to achieve 100 percent occupancy. By predicting this
number, the front office manager has reasonable flexibility in accepting 24 additional
reservations for the evening.
Revenue Management
Revenue management is the technique of planning to achieve maximum room rates and
most profitable guests. This practice encourages front office managers, general managers,
and marketing and sales directors to target sales periods and to develop sales programs
that will maximize profit for the hotel. This topic is fully explored in chapter 6. Revenue
management is part of the successful administration of a reservation system because it
forces the front office manager to make a realistic attempt to produce a favorable income
statement. Applying rate categories to specific periods with minimum length of reserva-
tions and reviewing potential markets and their spending habits assist the front office
manager not only in meeting the goal of 100 percent occupancy but also in achieving
maximum profitability.
–
200 rooms available
71 confirmed reservatio ons (75
guaranteed reservati
–[ . ])
–
75 0 05
98
×
oons (100
4 stayovers 5 underst
–[ . ])
–
100 0 02 ×
+ aays
8 walk-ins
= number of additional roo
–
24 mmreservations needed to achieve 100 percennt occupancy
146 CHAPTER 5
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F R O N T L I N E R E A L I T I E S
A
s front office manager of The Times Hotel, you want to project the number of additional
rooms you will need to overbook to achieve 100 percent occupancy for the night of April
15. Use the following historical data to determine the number of additional room reservations
needed to achieve 100 percent occupancy: 500 rooms available, 100 confirmed reservations with a 5 per-
cent no-show history, 200 guaranteed rooms with a 2 percent no-show history, 15 stayovers, 10 under-
stays, and 45 walk-ins.
q
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Processing Guest Reservations
Means of communication with the client; room inventory data banks; systems for reser-
vation, confirmation, deposits, and cancellations; and blocking procedures, a process of
reserving a room on a specific day, are the major components of a well-organized guest
reservation processing system.
The guest who wants to secure overnight lodging accommodations must have an effi-
cient means of communicating the room reservation to the hotel, such as a toll-free phone
number, fax number, or personal computer. In turn, the hotel must have a way to check
reservation requests against a data bank of available rooms. To ensure the reliability of
the room reservation, the hotel establishes a deposit or guarantee system that commits the
guest to the purchase of the accommodation. A cancellation process allows the guest and
the hotel the flexibility necessary to function in a complex society. A blocking procedure
that balances future commitments with present room requirements also helps the front
office manager provide an effective room reservation processing system.
Systemwide Reservation Systems
The lodging property associated with a systemwide reservation service is connected to the
system via a nationwide toll-free telephone number. The telephone number is widely dis-
tributed by the marketing and sales departments of the corporation. The potential guest
who dials this toll-free number is greeted by an operator located at the central reservation
headquarters. This operator has access to the computerized data bank of available rooms
at each participating lodging property, so that, for example, a request for a certain type of
room for three consecutive nights (February 15, 16, and 17) at a property in Boston can
be matched through the data bank. If the participating property has rooms available for
those nights, the request can be processed. If it does not have space available, the opera-
tor can suggest properties in the reservation/referral system that do have rooms available.
After the operator determines that the guest’s room request can be satisfied, he or she
asks for the arrival time. The many lodging properties in the industry have different poli-
cies on how long they will hold a reserved room; some will hold the room until 6:00 P.M.,
for example, while others will hold the reservation only until 4:00 P.M. In any case, the
time of arrival is extremely important to the hotel’s income. Rooms held for guests who
do not show and that cannot be resold adversely affect the front office manager’s ability
to produce income. The maxim that “a room unsold is an opportunity lost forever” has
profound implications for the profit-and-loss statement.
Because the hotel must have lead time to resell a no-show reservation and because
guests want to ensure that their accommodations will not be resold before they arrive, a
system must be in place to meet the needs of each. Both computerized and traditional
reservations systems can offer various levels of reservation assurance to accomplish this
goal via advanced, confirmed, and guaranteed reservations.
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Outsourcing Reservations
In addition to central reservation systems (CRS) operated by hotels, outsourcing
providers of central reservation systems are available for hotel managers.
This new breed of CRS and service provider processes voice, Internet and Global Dis-
tribution System–based reservations on behalf of hotels. This hybrid group provides
reservation systems to clients that want to manage closely their reservation processing,
while also offering all the services of a traditional representation company. In addition,
these companies offer their services through Web-enabled application-service provider
[ASP] models.
SynXis Agent, a suite of reservation-management and distribution products, consists
of four main components—a CRS; GDS connectivity; alternate-distribution-system con-
nectivity; and Book-A-Rez, an Internet-booking tool. Through its suite of Internet-based
applications, SynXis enables hotel operators to consolidate and control hotel inventory
from all booking sources. It also provides direct access to the four major GDSs and
enables consumers to book hotel reservations online through the hotel’s Web site.
Sally Payze, former vice president of operations at SynXis, indicates, “It consoli-
dates inventory across all booking channels into a single image of inventory. That
allows all channels to have access to the last room available and there is no managing
of allotments by channel. Its interface allows hotels to define and manage group pro-
files, administer room blocks and manage rooming lists. In addition, travel planners
can enter their own rooming lists directly from the Web, which saves hotel labor, pro-
vides immediate confirmation numbers and reduces data-entry errors.”
18
Another provider of reservations outsourcing is Pegasus Solutions. The services they
offer include real-time availability and pricing for property and room types, a Web-based
property access tool for rate and inventory management, property information and elec-
tronic report distribution, connectivity to electronic distribution systems, interfaces with
key industry property management systems, revenue systems, and loyalty program sys-
tems to approximately 7500 hotels.
19
Types of Reservations
Confirmed The confirmed reservation is comparable to a contract that becomes void at a certain
Reservations hour of a certain day. The confirmed reservation allows the hotel to project the number
of guests that will check in by the deadline hour. After that deadline, the hotel is free to
sell unclaimed room to walk-in guests or to accept overflow guests from another prop-
erty. The hotel usually keeps track of the number of no-shows and compares them to the
total number of confirmed reservations that were made; these historical records help in
predicting occupancy—and revenue—accurately. (They are also used in overbooking,
discussed earlier in this chapter.)
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Guaranteed Guaranteed reservations enable lodging establishments to predict revenue even more
Reservations accurately. They commit the guest to pay for a room night and the hotel to provide
accommodations regardless of arrival time. If the guest does not show up (without prior
cancellation), the hotel may process a credit card voucher for payment. Likewise, no mat-
ter when the guest arrives on the reserved night, the hotel must have the reserved accom-
modation available. The guaranteed reservation requires the hotel to determine the
method of guest payment. The guest may secure the method of payment with a valid
credit card, an advance payment, or a preauthorized line of credit. (Each of these meth-
ods is described in detail in chapter 9.)
Reservation Codes
Reservation codes are a sequential series of alphanumeric combinations that provide the
guest with a reference for a confirmed or guaranteed reservation. (Reservation codes are
also referred to as confirmation numbers.) Such a code indicates that accommodations
have been secured for a specific date with a commitment to pay for at least the first room-
night. The code, which usually consists of several letters and digits that do not necessar-
ily have any meaning to the guest, may identify the hotel in the chain/referral group, the
person who processed the reservation, the date of arrival, the date of departure, the type
of credit card, the credit card number, the room rate, the type of room, and/or the sequen-
tial number of the reservation. The organization that develops the code includes in it
information appropriate for the efficient management of a particular reservation system.
A guaranteed reservation code may look like this:
122-JB-0309-0311-MC-75-K-98765R
?
122: the identification number of the property in the chain
?
JB: the initials of the reservationist or desk clerk who accepted the reservation
?
0309: the date of arrival
?
0311: the date of departure
?
MC: the type of credit card (MasterCard)
?
75: the nightly room rate of $75
?
K: indication that the reserved room has a king-size bed
?
98765R: the sequential reservation number
A few things should be kept in mind when establishing a reservation code system. The
amount of memory available to store the code information in a computer data bank may
be limited. Therefore, a short code that provides less information may be necessary. The
reservation code should be designed to give adequate information to the hotel property
that must provide accommodations for the guest. The purpose of the code is to commu-
nicate the details of a guaranteed accommodation to the host property. The guest data
have already been entered into the central computer and usually can be easily retrieved.
However, there are times when these data may not be available, or they may be misplaced.
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When this happens, a reservation code allows the host property to provide appropriate
accommodations.
The method of paying for a guaranteed reservation is established when the reservation
is made. Credit cards or previously approved direct billing are the most common meth-
ods. Sometimes the guest sends a bank check or delivers cash to secure a reservation. A
bank check is acceptable, as long as adequate time is available to process it. The cash
advance payment and bank check, however, should alert the front office manager that
this guest has not established a line of credit with a credit card organization or with the
hotel. Determining how the guest will pay the final bill is essential. The folios of guests
who pay cash in advance must be monitored.
Cancellations
Cancellations due to a guest’s change in plans are easily handled by a computerized reserva-
tions system. The guest calls the central reservation system or the hotel where the reservation
was made. Some lodging organizations stipulate a period for canceling reservations. Twenty-
four, 48, or 72 hours’ notice may be required for the guest to be exempt from paying the first
night’s room rate. Policies vary among reservation systems, based on the historical frequency
of cancellations (and the subsequent effect on the profit-and-loss statement) and the public
relations policy (the potential of lost repeat business) of the organization.
Cancellation Codes
A cancellation code is a sequential series of alphanumeric combinations that provides the
guest with a reference for a cancellation of a guaranteed reservation. (Cancellation codes
are also referred to as cancellation numbers.) Such a code verifies that the cancellation has
been communicated to the hotel property and assures the guest that he or she is not liable
for the canceled reservation. For example, if the front office staff mistakenly processes a
charge for a guaranteed reservation that had been canceled, the guest could refute the
credit card billing with the cancellation code.
A cancellation code is composed like a reservation code and consists of letters and dig-
its that may identify the hotel property, the person who processed the cancellation, the
date of arrival, the date of departure, and/or the sequential number of the cancellation.
This and other information is included to ensure efficient management of room cancella-
tions. If the guest had applied a cash deposit to the room, a credit balance on the guest
folio would have to be processed. A cancellation code may look like this:
122-RB-0309-1001X
?
122: the identification number of the property in the chain
?
RB: the initials of the reservationist or desk clerk who accepted the cancellation
?
0309: the date of arrival
?
1001X: the sequential number of the cancellation
150 CHAPTER 5
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Blocking Procedure
After a reservation is received, the reserved room is blocked in the room inventory. In a
computerized reservation system, the room is automatically removed from the available-
room data bank for the dates involved. For example, if each of the participating 75
hotels in the reservation/referral system has 200 rooms available, the room bank would
have 15,000 rooms available to be sold on any one night. As a reservation request is
processed, the room or rooms involved are blocked out of the available-room inventory.
Reservation requests for 4,000 rooms on a particular night at the participating properties
require the computer to block (or reserve) those rooms at the appropriate hotels. If addi-
tional reservation requests are received for that night at a particular property and that
hotel is already filled to capacity, the computer will not process the requests. It may, how-
ever, tell the computer terminal operator that a hotel in the same geographic area has
vacancies. This is undoubtedly one of the major advantages of participating in a reserva-
tion/referral system. This type of blocking is usually referred to as blocking on the hori-
zon—that is, in the distant future. Another type of blocking, referred to as daily blocking,
involves assigning guests to their particular rooms on a daily basis.
Process of Completing Reservations Through a PMS
The previous discussion focused on processing guest reservations through a central
reservation headquarters. However, the individual PMS at a member hotel of a reserva-
tion/referral system is also able to process a reservation request. Chapter 4 discusses the
reservation module and includes the list of applications available to the reservationist or
desk clerk (shown in Figure 4-7). If the reservationist selects option 1, Guest Data, the
screen of the video display terminal will look like that in Figure 5-4. The clerk enters the
data into the PMS as requested. That data is then cleared through the rooms reservations
bank to confirm the availability of the room requested.
Other options in the menu are accessed as needed. For example, option 2, Room
Inventory, lists the reservation status, or the availability of a guest room to be rented on
a particular night—that is, open (room is available for renting), confirmed (room is
reserved until 4:00 P.M. or 6:00 P.M.), guaranteed (room is reserved until guest arrives),
and repair (room is not available for guest rental) (Figure 5-5). Option 3, Deposits, is
accessed when the clerk must determine whether the guest had a deposit on file (Figure
5-6). The information for this option is compiled from the Guest Data option, where the
clerk indicates the guest wanted to guarantee a reservation with a credit card or send a
cash (bank check) deposit. Option 4, Special Requests, assists the reservationist or desk
clerk in determining if rooms are available to meet the specific needs of a guest (Figure 5-
7). Facilities for handicapped guests, smoking/no smoking options, particular views, and
locations near other hotel facilities are some of the features listed here. This option helps
the new desk clerk provide hospitality to guests.
PROCESS OF COMPLETI NG RESERVATI ONS THROUGH A PMS 151
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FI GURE 5- 4 The guest data screen prompts the reservationist to obtain information about the guest
and his or her stay.
RESERVATIONS—ENTER GUEST DATA
NAME:
COMPANY:
BILLING ADDRESS: ZIP:
PHONE NUMBER:
DATE OF ARRIVAL: TIME OF ARRIVAL: DATE OF DEP.:
AIRLINE: FLIGHT #: TIME OF ARRIVAL:
ROOM: # GUESTS: RATE:
COMMENTS:
CONFIRMATION:
CREDIT CARD: NUMBER:
TRAVEL AGENCY: AGENT: ID #:
ADDRESS: ZIP:
FI GURE 5- 5 The room inventory screen keeps track of guest room reservation status.
ROOM INVENTORY 11.06
ROOM TYPE RATE STATUS GUEST
101 K 65 OPEN
102 K 65 CONF SMITH, V.
103 K 65 CONF GREY, R.
104 DB 55 GUAR LITTLE, N.
105 DB 55 GUAR THOMAS, P.
106 K 75 OPEN
107 K 75 OPEN
108 KSUITE 95 GUAR DENTON, K.
109 DB 55 OPEN
110 DB 55 GUAR SLAYTON, J.
115 K 75 REPAIR
116 K 75 REPAIR
117 KSUITE 95 REPAIR
120 SUITE 150 GUAR STONE CO. CONV.
121 K 95 GUAR STONE CO. CONV.
122 K 95 GUAR STONE CO. CONV.
123 K 70 GUAR STONE CO. CONV.
124 K 70 GUAR STONE CO. CONV.
125 K 70 GUAR STONE CO. CONV.
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FI GURE 5- 6 The guest deposits data screen displays a guest’s deposit for a particular visit.
DEPOSITS—RETRIEVE DATA
NAME: GROSSMAN, S.
MANDRAKE INSURANCE CO.
ADDRESS: 47 LANKIN DRIVE
PHILADELPHIA, PA 00000
ARRIV: 0917 CASH 75.00 FOLIO: 55598R
NAME: LINCOLN, D.
KLINE SHOE SALES
ADDRESS: 7989 VICTORY PLAZA
NY, NY 00000
ARRIV: 0917 CASH 100.00 FOLIO: 56789R
FI GURE 5- 7 The special requests screen assists reservationists in meeting a guest’s request for
specific room accommodations.
SPECIAL REQUESTS—ROOM AVAILABILITY 06 05
ROOM TYPE RATE STATUS
101 DB/RAMP NEARBY 65 OPEN
108 K/RAMP NEARBY HDKP BATH 75 OPEN
109 DB/RAMP NEARBY HDKP SHOWER 75 REPAIR
115 K/HEARING & VISUAL IMP/HDKP SHOWER 75 OPEN
130 K/OCEAN VIEW 85 OPEN
133 K/OCEAN VIEW 85 OPEN
136 K/HEARING & VISUAL IMP/HDKP SHOWER 75 OPEN
201 K/HDKP TUB 75 OPEN
208 K/HDKP TUB 75 OPEN
209 DB/HDKP SHOWER 55 OPEN
211 K/POOLSIDE 75 OPEN
301 K/HDKP TUB 75 OPEN
333 K/OCEAN VIEW 85 OPEN
428 DB/MEETING ROOM 95 OPEN
435 DB/MEETING ROOM 95 REPAIR
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Option 5, Blocking, provides reports to the front office manager on which rooms are
to be reserved for incoming guests on a particular day or on the horizon (Figure 5-8). This
option assigns a guest or guests to a specific room. Option 6, Arrivals, lists the individu-
als or groups expected to arrive on a specific date (Figure 5-9). Option 7, Departures,
154 CHAPTER 5
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SYSTEMWI DE RESERVATI ONS
FI GURE 5- 8 The blocking report screen provides front office staff with room
reservation status on the horizon.
BLOCKING REPORT 02 MONTH
ROOM STATUS COMMENTS
101 GUAR PENN CONFR
102 GUAR PENN CONFR
103 GUAR PENN CONFR
104 GUAR PENN CONFR
105 GUAR PENN CONFR
106 OPEN
107 OPEN
108 OPEN
109 GUAR 0205114501
110 OPEN
201 GUAR PENN CONFR
202 GUAR PENN CONFR
203 GUAR PENN CONFR
204 GUAR PENN CONFR
205 GUAR PENN CONFR
206 GUAR PENN CONFR
207 OPEN
208 OPEN
209 GUAR 0219BR4567
210 GUAR 0418BR4512
301 OPEN
302 GUAR PENN CONFR
303 GUAR PENN CONFR
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indicates which guests are expected to check out on a particular date. This option is used
by the front office manager or desk clerk to determine room availability for guests who
wish to overstay their reserved time as well as to sell future visits (Figure 5-10). Option
8, VIP, provides the desk clerk with information on guests with VIP status (Figure 5-11).
Even though all guests are very important persons, VIP status is granted to persons who
may be regular guests and expect special treatment, or celebrities or officials who need to
spend minimal time checking in. If this information is obtained with the reservation
request, it will assist the desk clerk at registration.
Option 9, Projected Occupancy, provides the various departments in the hotel with
information concerning the number of guests who will be in the hotel on a certain day
(Figure 5-12). Option 10, Travel Agents, allows the reservationist to maintain data on the
travel agent or travel agency that initiated a reservation (Figure 5-13). This option allows
speedy processing of the agent’s or agency’s fee for placing a reservation with the hotel.
This option interfaces with the accounts payable module. Option 11, Guest Messages,
allows the front desk clerk to relay important information to the guests on registration
(Figure 5-14). This feature is another way the hotel can convey hospitality to the guest by
demonstrating attention to details. Reports concerning reservations can be obtained by
the front office manager by selecting option 12, Reports.
PROCESS OF COMPLETI NG RESERVATI ONS THROUGH A PMS 155
FI GURE 5- 9 The arrival report screen lists incoming guests with reservations.
RESERVATIONS INCOMING 01 15
NAME ROOM RATE DEP
ABERNATHY, R. 400 75 0216
BROWNING, J. 201 75 0217
CANTER, D. 104 65 0216
COSMOE, G. 105 65 0219
DEXTER, A. 125 70 0217
DRAINING, L. 405 95 0216
GENTRY, A. 202 70 0216
KENT, R. 409 70 0218
MURRY, C. 338 80 0218
PLENTER, S. 339 80 0217
SMITH, F. 301 75 0218
SMITH, S. 103 65 0216
WHITE, G. 115 75 0216
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FI GURE 5- 10 The departures screen lists names of guests and groups for a
particular day.
DEPARTURES 03 09
ROOM NAME COMMENTS
207 SMITH, V. GREATER COMPANY
208 ANAHOE, L. GREATER COMPANY
209
211 LISTER, B. MERCY HOSPITAL
215
233 CRAMER, N. KRATER INSURANCE CO.
235
301 SAMSON, N. MERCY HOSPITAL
304
319 DONTON, M. JOHNSON TOURS
321 JOHNSON TOURS
322 ZIGLER, R. JOHNSON TOURS
323 JOHNSON TOURS
324 ASTON, M. JOHNSON TOURS
325 BAKER, K. JOHNSON TOURS
BAKER, P. JOHNSON TOURS
FI GURE 5- 11 The VIP information screen lists details of special needs of guests.
VIP INFORMATION
BLAKELY, FRANK M/M
GRANITE DEVELOPMENT COMPANY
2234 WEST RIVER DRIVE
GRANITE, IN 00000
000-000-0000
LIKES SUITE 129/30 OR SUITE 145/46. PERSONAL SECURITY GUARD NEEDS
ROOM 131 OR 147. ALERT HOTEL SECURITY OF THEIR ARRIVAL.
CEO/GRANITE DEVELOPMENT COMPANY WILL WANT BABYSITTER
(CHILDREN AGES 5 AND 7). CALL CHEF TO SEND WINE AND CHEESE AND
CHOCOLATE CHIP OR OATMEAL COOKIES AND MILK. CALL GIFT SHOP
FOR YELLOW ROSES FOR MRS. BLAKELY.
DIRECT BILL (TIMES HOTEL ACCT. NO. 420G) TO GRANITE
DEVELOPMENT COMPANY, 301 THOMPSON DRIVE, GRANITE, IN 00000
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PROCESS OF COMPLETI NG RESERVATI ONS THROUGH A PMS 157
FI GURE 5- 12 The projected occupancy screen assists front office managers in
meeting projected income.
PROJECTED OCCUPANCY 12 18
CONF RES 42 ROOMS 50 GUESTS
GUAR RES* 89 ROOMS 93 GUESTS
STAYOVERS** 50 ROOMS 85 GUESTS
WALK-INS*** 35 ROOMS 50 GUESTS
TOTALS 216 ROOMS 278 GUESTS
OCCUPANCY 86% ROOM INCOME $15,120
* JOHNSON AEROSPACE ARRIVAL AFTER 10 P.M.
** SMITHMILL CORP. BUFFET BREAKFAST AND BANQUET DINNER.
***LANCER STAMP SHOW AT ST. THOMAS HOTEL.
FI GURE 5- 13 The travel agent screen assists hotels in keeping track of commissions
paid to travel agents.
TRAVEL AGENT INFO
DATE AGENCY AGENT ACTIVITY COMM STATUS
09 23 MENTING BLANT, E. GUAR 5 PD 09 30
#4591 #4512 B @70
32 KAVE
SIMINTON, NJ 00000
000-000-0000
09 30 MENTING CROSS, L. GUAR 10 PD 10 05
#4591 #4501 B @65
02 01 MENTING CROSS, L. GUAR 20 PD 02 10
#4591 #4501 B @75
02 05 MENTING BROWN, A. GUAR 10 PD 02 15
#4591 #4522 B @70
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These examples provide only a brief overview of the capabilities of the reservation
module of a PMS. Your hands-on experience will provide you with real-life applications
of a valuable management tool. Managing reservation data allow the front office man-
ager to organize hundreds of details into usable information—information that helps pro-
vide hospitality to guests and bring financial success to the lodging property.
Database Interfaces
To plan their work, department managers rely on information captured at the time a
reservation is made. Database interfaces, which transfer shared information among com-
puters, allow managers to retrieve this information at will. Marketing directors need cur-
rent data to monitor projected sales, while sales representatives in the marketing
department need immediate information on room availability for specific periods. House-
keeping staff members plan routine care and maintenance activities depending on pro-
jected occupancy. Maintenance crews plan refurbishing and repairs when projected
occupancy is low. Food and beverage directors can promote a positive cash flow by
increasing food and beverage marketing programs during slow room sales periods. The
controller also needs to access the reservation database when planning fiscal budgets.
True Integration
The term true integration denotes a hotel’s central reservations system and property man-
agement sharing a database. Rebecca Oliva reports the term true integration, in which the
158 CHAPTER 5
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SYSTEMWI DE RESERVATI ONS
FI GURE 5- 14 The guest message screen is available for front office staff at a
moment’s notice.
MESSAGE—GUESTS
BRINKE, L. W. 01 02 12:57 P.M.
TOM WASKIN OF GN MERCH IS NOT ABLE TO KEEP APPT ON 01 02 AT
4:00 P.M.
CALL HIM TO RESCHEDULE 000-000-0000 BEFORE 7:00 P.M. 01 02. SWE
BRINKE, L. W. 10 12 1:38 P.M.
JENNIFER HOW OF STERN ELEC WILL MEET YOU AT 5:00 P.M. IN TIMES
HOTEL LOBBY AS PLANNED. BRING ALONG DATA ON RESEARCH
PROJECT 21-Z. SWE
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CRS and PMS use the same database for processing reservations.
20
This allows for real-
time reservations, which are a perceived benefit for consumers, as well as less technology
investment for the storage of data, which is a benefit for hotel investors. Hotels can
access reservation data via the Internet.
Solution to Opening Dilemma
The override feature on a reservation module for a property management system allows
individual employees to book reservations beyond the number of rooms available and
beyond the occupancy management limit. This feature must be controlled by the reser-
vations manager, front office manager, or manager on duty. The front office staff must
check out the room availability in nearby hotels and notify guests that their room reser-
vations will be handled at another hotel. In some cases, guests can’t be notified prior to
their arrival, and the front desk staff must be prepared to deliver customer service with
utmost composure.
Chapter Recap
This chapter addressed hotel reservation systems. As the popularity of computerized
reservation systems has increased, chains and referral properties have adopted them to
meet the needs of the traveling public. The consumer’s increasing reliance on the Internet
to make room reservations has affected the profitability of hotels.
Reservations ensure that corporate, group, and leisure travelers have accommodations
at their destination and provide the hotel with a steady flow of business. Determining the
sources of these reservations assists the front office manager in developing procedures to
satisfy the needs of the guest. The traveler can use various means to make reservations,
such as toll-free telephone numbers, fax numbers, and the Internet. The rooms forecast
is used to communicate occupancy status to other departments in the hotel. Overbook-
ing, used to balance no-shows and understays, can be carefully structured using the occu-
pancy management formula. Computerized reservation systems also help front office
managers manage guest information databases, dates of arrival, length of stay, and so
forth. Confirmed and guaranteed reservations assure the guest of accommodations on
arrival, with various degrees of assurance based on time of arrival and willingness to pre-
pay. These levels of assurance also affect the financial success of the hotel. All elements
discussed in this chapter combine to provide means of access for the guest and a tech-
nique for marketing rooms for the hotel. The front office manager is responsible for pro-
viding this service to the guest.
CHAPTER RECAP 159
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End-of-Chapter Questions
1. How does a well-organized reservation system meet the needs of the traveler?
2. How does the lodging industry meet the need of the traveler for assured reservations?
3. What advantages does a hotel belonging to a reservation/referral system enjoy?
4. What are the major sources of guest reservations? What information does this
analysis reveal?
5. Discuss the nature of a typical corporate client’s travel plans and explain how these
plans are supported to a well-organized reservation system. What reservation access
methods are available to the corporate client?
6. Why are tour or meeting planners important to the hotel with regard to group reser-
vations? What reservation access methods are available to the planner of group tours?
7. How does the leisure traveler differ from the corporate client and the group traveler?
What reservation access methods are available to the traveler?
8. If you have been or are currently employed at a front desk in a hotel, what do you
think of the potential for repeat business from current guests? Does your hotel have
a procedure to secure reservations on check-in or checkout?
9. Why is it necessary to prepare a rooms forecast? What are the components of this
management tool? In addition to the front office manager, who else uses the room
forecast?
10. What does overbooking mean? Discuss the legal and financial implications of this
practice.
11. What are the components of an aggressive occupancy management procedure? How
are they applied to the occupancy management formula?
12. What are the major steps involved in processing a guest reservation?
13. Briefly describe the method used to process a reservation with a computerized system.
14. Discuss the differences between a confirmed reservation and a guaranteed reserva-
tion. What financial implications does each entail?
15. Design a reservation code for a computerized reservation system. Why did you
choose the control features in your code?
16. Develop a cancellation code for a computerized reservation system. Why did you
choose the control features in your code?
17. What does blocking of rooms involve? Give examples.
18. How do you think true integration of the central reservation system and a hotel’s
property management system affect guest satisfaction and the hotel’s financial success?
160 CHAPTER 5
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END- OF- CHAPTER QUESTI ONS 161
C A S E S T U D Y 5 0 1
Margaret Chu, general manager of The Times Hotel,
and Ana Chavarria, front office manager, are in the
process of developing a policy on overbooking. The
current policy prohibits the reservations manager
from booking more than 100 percent of the avail-
able rooms. Reservations are composed of 60 per-
cent confirmed and 40 percent guaranteed.
In the past six months, about 5 percent of the
confirmed reservations have been no-shows, result-
ing in a financial loss of about 500 room-nights. No
analysis of the confirmed reservations that resulted
in no-shows has been made because Ms. Chavarria
has not had time to organize such a study. This loss
of $42,500 (500 rooms × $85 average room rate)
has forced management to consider developing an
aggressive occupancy management program.
Offer some suggestions to Ms. Chu and Ms.
Chavarria concerning the following related con-
cepts: the legality of overbooking, the need to main-
tain an accurate accounting of the financial impact
of no-shows, and the management of the reserva-
tion/occupancy categories that make up the hotel’s
room sales (confirmed reservations, guaranteed
reservations, stayovers, understays, and walk-ins).
C A S E S T U D Y 5 0 2
Use the following data to prepare a rooms forecast
for the first week of May for The Times Hotel:
Number of rooms available = 600
Number of rooms occupied on April 30 = 300
May 1:
Departures = 200 rooms
Arrivals = 200 rooms (70 percent confirmed,
30 percent guaranteed)
Walk-ins = 40 rooms
No-shows = 0.02 percent of expected arrivals
May 2:
Departures = 50 rooms
Arrivals = 100 rooms (60 percent confirmed,
40 percent guaranteed)
Walk-ins = 10 rooms
No-shows = 0.02 percent of expected arrivals
May 3:
Departures = 200 rooms
Arrivals = 100 rooms (50 percent confirmed,
50 percent guaranteed)
Walk-ins = 20 rooms
No-shows = 0.02 percent of expected arrivals
May 4:
Departures = 50 rooms
Arrivals = 100 rooms (20 percent confirmed,
80 percent guaranteed)
Walk-ins = 10 rooms
No-shows = 0.01 percent of expected arrivals
May 5:
Departures = 300 rooms
Arrivals = 70 rooms (30 percent confirmed,
70 percent guaranteed)
Walk-ins = 25 rooms
No-shows = 0.0143 percent of expected arrivals
May 6:
Departures = 50 rooms
Arrivals = 175 rooms (92 percent confirmed,
8 percent guaranteed)
Walk-ins = 10 rooms
No-shows = 0.04 percent of expected arrivals
(continues)
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162 CHAPTER 5
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SYSTEMWI DE RESERVATI ONS
C A S E S T U D Y 5 0 2 ( c ont i nued)
May 7:
Departures = 200 rooms
Arrivals = 180 rooms (10 percent confirmed,
90 percent guaranteed)
Walk-ins = 25 rooms
No-shows = 0.0223 percent of expected arrivals
Notes
1. “Choice Hotels Offers Wireless Reservations via Palm Handhelds,” October 19,
2000, Choice Hotels, Silver Spring, MD.
2. Carolyn Hergert, “InterContinental Hotels Offering Current and Prospective
Franchisees a Multi-brand Marketing Platform,” January 7, 2004, http://www
.hotel-online.com/News/PR2004_1st/Jan04_IHGList.html.
3. Betsy Day, “Carlson Hospitality Worldwide Reservations Services Completes
Connectivity with Sabre, Galileo, and Amadeus,” December 18, 2003, http://
www.hotel-online.com/News/PR2003_4th/Dec03_CarlsonResv.html.
4. Betsy Day, Public Relations Director, Carlson Hospitality Worldwide, Min-
neapolis, MN, personal communication to author, June 26, 2001.
5. Marie Cabo, “Electronic Bookings for European Hotels Jumps 16.9% in Q2,”
October 4, 2004, http://www.hotel-online.com/News/PR2004-4thOct04Travel
ClickEurope.html.
6. Sharon H. McAuliffe, “Wresting Back Control from the Online Wholesalers,”
January 2003, http://www.hotel-online.com/News/PR2003_1st/Jan03RateParity
.html.
7. Imtiaz Muqbil, “PricewaterhouseCoopers Estimates the Net Internet Effect on
the US Lodging Industry in 2003 as a Minus $1.27 billion,” April 19, 2004,
http://www.hotel-online.com/News/PR2004_2nd/Apr04_PWCStudy.html.
8. Marie Cabo, TravelCLICK Reports Second Quarter 2004 Electronic Hotel Book-
ings Increase of Over 10%; Hotel Revenue from Electronic Channels Up by
More Than 17%,” (September 20, 2004), http://www.hotel-online.com/News/
PR2004_3rd/Sept04_eMonitor.html.
9. Jason Price and Max Starkov, “Developing an Email Marketing Strategy in Hos-
pitality,” September 2004, http://www.hotel-online.com/News/PR2004_3rd/
Sept04_EmailStrategy.html.
10. Hotel, Sales, and Marketing Association International, “Hotel Branded Web
Sites Capture 75% of Internet Reservations, Third Party and GDS Sites Share the
05_4612.qxp 1/11/06 3:32 PM Page 162
Remaining 25%,” April 27, 2004, http://www.hotel-online.com/News/PR2004_
2nd/Apro04_InternetMarketing.html.
11. Overview of Hilton Franchise Fees, 2005, http://www.hiltonfranchise.com/
Index.asp?S=2&P=10.
12. Overview of Marriott Franchise Fees, 2005, http://marriott.com/development/
lodgingFee.mi.
13. Max Starkov and Jason Price, “Do You Know Where Your Hotel Is in Cyber-
space?” January 1, 2002, http://www.hotel-online.com/News.PR2002_1st/Jan02_
Cyberrspace.html.
14. Brent Beatty, “HoteleMarketing, the Industry’s Leading Digital Marketing Com-
pany, Launches New Set of Services for Hotel Management Companies,” August
26, 2003, http://www.hotel-online.com/News/PR2003_3rd/Aug03_eMrketing
.html.
15. Rex S. Toh, “Coping with No-Shows, Late Cancellations, and Oversales: Amer-
ican Hotels Out-do the Airlines,” International Journal of Hospitality Manage-
ment 5, no. 3 (1986): 122.
16. Ibid., 121.
17. Ibid., 122.
18. Bruce Adams, “Baby Grows Up,” Hotel and Motel Management 216, no. 10
(June 4, 2001): 50.
19. Pegasus Reservation Services, http://www.pegs.com/products_services/tech/
rezview.htm, 888-431-0700. Pegasus Solutions, Inc. 2005.
20. Rebecca Oliva, “Singular Solution,” Hotels 35, no. 7 (July 2001): 99.
NOTES 163
Key Words
blocking on the horizon
blocking procedures
bus association network
cancellation code
confirmed reservations
corporate client
current guests
daily blocking
database interfaces
forecasting
franchisee
full house
group planner
group travelers
guaranteed reservations
hotel broker
hotel representative
house count
interhotel property referrals
leisure traveler
no-show factor
occupancy management formula
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164 CHAPTER 5
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SYSTEMWI DE RESERVATI ONS
outsourcing
overbooking
referral member
reservation code
reservation referral system
reservation status
revenue management
rooms forecasts
stayovers
third-party reservation web site
travel directories
true integration
understays
walk-in guests
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O P E N I N G D I L E M M A
The sales manager has left a message for the front office manager, the
food and beverage manager, and the revenue manager requesting
clearance to book a conference of 400 accountants for the first three
days of April. The front office manager needs to check out some things
before returning the call to the sales manager.
As mentioned in earlier chapters, revenue management is the technique of plan-
ning to achieve maximum room rates and most profitable guests. This concept
originated with the use of yield management, a similar concept, in hotel man-
agement circles in the late 1980s; in fact, yield management was borrowed
from the airline industry to assist hoteliers in becoming better decision makers
and marketers. It forced hotel managers to develop reservation policies that
would build a profitable bottom line. Although adoption of yield management
had been slow in the hotel industry, it offers far-reaching opportunities for
hoteliers in the twenty-first century in the form of revenue management. This
chapter applies concepts of yield management to the demands of aggressive
applications of revenue management. For example we see in the following arti-
cle on revenue management by Dr. Robert McMullin, professor of hotel, restau-
rant, and tourism management at East Stroudsburg University, how aggressive
applications of yield management are employed in revenue management.
C H A P T E R 6
Revenue Management
C H A P T E R F O C U S P O I N T S
?
Occupancy percentage
?
Average daily rate
?
RevPAR
?
History of revenue
management
?
Use of yield management
?
Components of revenue
management
?
Applications of revenue
management
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As with other businesses, pricing for the lodging industry is based on supply and
demand. A good illustration of this is room rates at hotels near the Pocono Raceway
in Pennsylvania where there are two big races (the NASCAR Pocono 500 and the
Pennsylvania 500) every year. Hotels in the area are full for the races, which define the
peak season. During peak season hotels collect rack rates. However, during the val-
leys, or off seasons, hotels must offer discounts and accept group travel discounts. The
period between the peaks and valleys is called shoulder time, during which hotels build
business and offer a variety of rates.
1
Occupancy Percentage
To explain revenue management, we first review traditional measures of success in a
hotel. Occupancy percentage historically revealed the success of a hotel’s staff in attract-
ing guests to a particular property. This traditional view of measuring the effectiveness of
the general manager, marketing staff, and front office staff was used to answer questions
like these: How many rooms were sold due to the director of sales’ efforts in creating
attractive and enticing direct mail, radio and television ads, billboard displays, or news-
paper and magazine display ads? How effective were reservation agents in meeting the
room and amenity needs of the guests? Did travel agents book a reservation? How com-
petent were front office staff members in making the sale? Today’s questions include: Did
the director of sales choose the right website to advertise the hotel’s excess room inven-
tory? Did the revenue manager price the rooms at the correct rate for the correct period?
While interpretations of occupancy percentage are still indicators of the staff’s efforts, in
this chapter we focus on applications of revenue management because it provides a more
comprehensive review of factors such as room rate potential, revenue potential, and
nature of the group.
The occupancy percentage for a hotel property is computed daily. The method used to
determine it is as follows:
To see how this formula works, consider a hotel that sold 75 rooms with a room inven-
tory of 100 rooms; this would yield a 75 percent occupancy percentage:
Investors also use occupancy percentage to determine the potential gross income of a
lodging establishment. For example, a 100-room property with a daily average 65 percent
occupancy and an $89 average daily rate generates about $2.1 million in sales annually:
75
100
75% × = 100
Number of Rooms Sold
Number of Rooms Availablle
Single Occupancy % × = 100
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100 rooms × 0.65 occupancy = 65 rooms occupied daily; 65 × $89 room rate = $5,785
revenue per day; $5,785 × 365 days in a year = $2,111,525 gross income from room sales
annually.
However, it is important not to assume that occupancy is standard each night. Varia-
tions are reflected in the following example:
A 65 percent occupancy is usually achieved on Monday, Tuesday, and Wednesday
evenings. However, Thursday, Friday, and Saturday night statistics reveal a 40 percent
occupancy, with Sunday night occupancy at 50 percent. Therefore:
Double occupancy is a measure of a hotel staff’s ability to attract more than one guest
to a room. Usually a room with more than one guest requires a higher room rate and thus
brings additional income to the hotel. This method is also traditional in determining the
success of building a profitable bottom line. The method to determine double occupancy
percentage is as follows:
Number of Guests Number of Rooms Sold
Number
–
of Rooms Sold
Double Occupancy % × = 100
Monday–Wednesday: 100 0 65 89 156 52 3 × × × × = . $ ( ) $$ ,
. $
902 460
100 0 40 89 156 Thursday–Saturday: × × × ( ) $ ,
. $
52 3 555 360
100 0 50 89 156
× =
× × × × Sunday: 552 231 400 $ , =
Total: $1,689,220
OCCUPANCY PERCENTAGE 167
FI GURE 6- 1
A front office
manager
discusses the
elements of
yield manage-
ment as it
applies to
revenue
management
in a training
session. Photo
courtesy of
Hotel
Information
Systems.
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If a hotel sold 100 rooms to 150 guests, then the double occupancy percentage is 50 per-
cent, computed as follows:
Average Daily Rate
Average daily rate (ADR) is a measure of the hotel staff’s efforts in selling available room
rates. Such questions as why more $85 rooms than $99 rooms were sold, or whether the
marketing office developed attractive weekend packages to sell the $80 rooms instead of
relying on the desk clerk on duty to take any reasonable offer from walk-in guests, are
typically answered when the ADR is reviewed.
The method to compute the ADR is as follows:
If a hotel has daily room sales of $4,800 with 60 rooms sold, the ADR is $80, computed
as follows:
The ADR is used in projecting room revenues for a hotel, as previously described in
the discussion of occupancy percentage. Occupancy percentage and ADR computations
are essential parts of revenue management because they challenge hoteliers to maximize
occupancy and room rates.
RevPAR
RevPAR (revenue per available room) was introduced in chapter 1 to allow you to rec-
ognize it as one of the financial determinants that hoteliers use in discussing revenue man-
agement. RevPAR is determined by dividing room revenue received for a specific day by
the number of rooms available in the hotel for that day. The formulas for determining
RevPAR are as follows:
This type of financial insight into a hotel’s ability to produce income allows owners,
general managers, and front office managers to question standard indicators of hotel suc-
cess. RevPAR asks the question, “How many dollars is each room producing?” If certain
RoomRevenue
Number of Available Rooms
or
Hotel l Occupancy Average Daily Rate ×
$4,800
60
= $80
Total RoomSales
Number of Rooms Sold
150 100
100
50%
–
× = 100
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rooms are always occupied because of a lower rate, attractive amenities, or other reasons,
then the hotel’s administration may want to duplicate those sales to similar markets. This
questioning opens the door for revenue management, which turns the passive efforts of
hoteliers into aggressive financial strategies.
History of Yield Management
Yield management is the source of the concepts that underlie revenue management. The
history of yield management provides a framework for your developing a background
knowledge of revenue management. The airline industry instituted yield management
after deregulation in the late 1970s.
2
The airlines blocked out certain periods when seats
on flights were priced at certain levels; the potential passenger either booked the flight at
the price quoted or found other means of transportation. This bold marketing policy met
with some problems but established the economic structure of airfares.
Hotels and airlines share similar operational features. Each has a fixed number of
products (hotel rooms and airline seats) that, if not sold on a certain day or flight, can-
not be resold. Airlines and hotels sell to market segments that have distinct needs in prod-
uct and service level. Each has demand periods (holidays, weekdays, and weekends in
hotels; holidays, weekdays, and time of day for airlines) that place the provider in a favor-
able position. Airlines and hotels have various rates from which guests can choose. Reser-
vations allow managers to use yield management.
3
By using computers to track a
database of products (hotel rooms and airline seats) and to process reservations, man-
agers have the ability to look at a sales horizon of 45 to 90 days and to set price and reser-
vation policies that will allow a prediction of profitability.
One of the major differences in how yield management is used in airlines and hotels is
that at the hotel, the guest may also spend money for products and services besides the
room itself. The airline passenger usually does not have an opportunity to spend large
amounts of money during a flight. Because of this difference, hoteliers must consider the
financial potential of one prospective guest over another in determining reservation poli-
cies. For example, one group may want to book a block of 500 rooms with a $50,000
value plus banquets and other food and beverage service events that total $25,000, while
another group may want to book a block of 600 rooms with a value of $60,000 but no
additional food and beverage income.
Use of Yield Management
Yield management has now caught on in the hotel industry. It is imperative that hoteliers
understand the importance of the basic factors of yield management—room rate cate-
gories, room inventory, and group buying power—to navigate their way through revenue
management. The goal of revenue management is twofold: to maximize profit for guest
USE OF YI ELD MANAGEMENT 169
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room sales and to maximize profit for hotel services. These goals are important for future
hoteliers to understand, because if they set out only to maximize room sales, the most
profitable guest may not stay in the guest room. This is the difference between airline
yield management and hotel revenue management.
The following discussion shows how revenue management is used in the hotel indus-
try. As you read through this information, note how the management staff is using tech-
nology to make informed decisions that will reflect favorably on the bottom line. (You
may note that the terms yield management and revenue management are now inter-
changeable. Yield management was the earlier concept from which revenue management
developed.) The real challenge of developing any computer application is to support the
goals of the management staff. The following quote from the International Hotel Asso-
ciation summarizes the importance of using yield management as a business tool: “Yield
Management is the must-have business planning tool for hoteliers in the 1990s and
beyond. The computerized functioning [mathematical model] of yield management is
complex, but the concept is simple: By using a combination of pricing and inventory con-
trol, a hotelier can maximize profits from the sale of rooms and services.”
4
So how are hotel general managers, directors of marketing, and front office managers
applying this new technology to produce more profit for a hotel? Here are examples:
The first example is provided by Maxim, a global provider of revenue management
systems, and TravelCLICK, an electronic provider of reservations for consumers.
Maxim Revenue Management Solutions (MaximRMS), a leading global provider of
revenue management and profit optimization software and services for the hospitality
industry, and TravelCLICK, the leading provider of solutions that help hotels maximize
profit from electronic distribution channels, announced the signing of a strategic partner-
ship agreement aimed at delivering an industry-leading portfolio of revenue management
tools to the hospitality industry. The two companies introduced RevenueDASHBOARD™,
a revenue management system built specifically for senior executives and hotel owners.
RevenueDASHBOARD provides executives with an overview of their hotel’s or com-
pany’s forecasted demand by channel, taking budget and competition into consideration.
The system identifies peak and need periods and generates specific calls to action that help
hotels improve revenue, profitability, and competitive positions.
5
Programs like the maxim
®
automated revenue management system apply information
about property history and booking and stay activity to algorithms for forecasting.
The resulting information combined with user interface enables significant increases in
revenue per available room (revPAR) and bottom line revenue. Systems like this use a
company’s history to predict future demand for a variety of factors, including arrival
dates, rates, room types, and length of stay.
6
The following information is provided by MICROS on another revenue management
software product available to hoteliers, revenue managers, and front office managers.
OPERA Revenue Management, powered by OPUS 2 Revenue Technologies, is inte-
grated with OPERA CRS, ORS, and PMS. It provides property-based and centralized
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revenue management, using group analysis, managing transients at the stay pattern
level and “Hotel within a Hotel” revenue management. Additionally, the system is
interfaced with the OPERA Sales and Catering System.
7
Revenue Manager
Because revenue management has become such an active part of hotel management, a
new operational position has emerged: the revenue manager. The revenue manager
reports to the general manager, works closely with the marketing and sales department,
and consults with the front office manager. The job of the revenue manager is to oversee
the room inventory and room rates that are offered throughout the year to groups and
individuals and through the various channels: central reservation system, Global Distri-
bution System, third-party reservation systems, toll-free reservation number, etc. The
revenue manager also identifies trends and methods to match those trends. The person in
this job communicates on a regular basis with members of a revenue management team.
The following is a management job listing for a revenue manager.
8
1. Monitor, analyze, and report on demand patterns, sales, and losses.
2. Develop, implement daily, and improve sales strategies as needed.
3. Work with Sales, Catering, and Conference Planning to balance transient and
group business. Provide feedback about potential new customers.
4. Analyze no-shows, cancellations, early departures, and unexpected stayover patterns.
5. Direct weekly revenue meetings.
6. Assist with product development and marketing of transient packaging.
7. Adjust all rates and restrictions on property and through all transient channels.
8. Provide weekly reports about business pace and changes in consumer behavior that
affect revenue.
Components of Revenue Management
To understand revenue management you first must understand the components of rev-
enue management and their relationships. Each part of revenue management feeds into a
network that supports the goal of maximizing profit for a hotel.
Definition of Yield
Previously, occupancy percentage was presented as a traditional concept used to try to
achieve 100 percent occupancy. Using this concept, a certain percentage of the rooms
may have been sold, but how profitable was the venture? For example, Table 6-1 shows
COMPONENTS OF REVENUE MANAGEMENT 171
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Hotel ABC, which has 500 rooms. It sells 200 rooms at $80 and 200 rooms at $95 (rack
rate), earning $35,000 in room sales and achieving an 80 percent occupancy. Hotel XYZ
also has 500 rooms and sells 100 rooms at $80 and 300 rooms at $95 (rack rate), earn-
ing $36,500 and achieving the same 80 percent occupancy. This additional daily income
($1,500) will assist hoteliers in building a better profit-and-loss statement. This process
of creating additional income leads us to the definition of yield. Yield is the percentage of
income that could be secured if 100 percent of available rooms were sold at their full rack
rate. Revenue realized is the actual amount of room revenue earned (number of rooms
sold × actual rate). Revenue potential is the room revenue that could be received if all the
rooms were sold at the rack rate. The formula for determining yield is as follows:
9
Table 6-2 demonstrates the effects of revenue management strategies. Both hotels
have achieved an 80 percent occupancy, but Hotel XYZ has achieved a higher yield
while selling the same amount of rooms.
Another example of determining yield is as follows: If The Times Hotel has 300 rooms
available for sale and sold 200 rooms at $85 with a rack rate of $110, the yield is 51.51
percent.
The determination of yield provides a better measure of a hotel staff’s effort to achieve
maximum occupancy than the traditional occupancy percentage. The 51 percent yield
means the staff’s effort in achieving maximum occupancy could have been improved by
200 85 17 000
300 110 33 000
100 51 51
× =
× =
× =
$ $ ,
$ $ ,
. %
Yield
Revenue Realized
Revenue Potential
=
172 CHAPTER 6
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REVENUE MANAGEMENT
TABLE 6- 1 Occupancy Percentage Comparison
No. Rooms No. Rooms Occupancy
Hotel Available Sold Rate Income %
ABC 500 200 $80 $16,000
80
200 $95 19,000
—— ———–
400 $35,000
XYZ 500 100 $80 $8,000
80
300 $95 28,500
—— ———–
400 $36,500
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using effective strategies to sell more $110 rooms. Thus, one of the goals of revenue man-
agement is to sell all available rooms at the highest rate (rack rate). A later subsection of
this chapter deals with the development of effective strategies to ensure maximum yield.
Optimal Occupancy and Optimal Rate
Achieving the best yield involves redefining occupancy percentage and average daily rate.
Although these concepts are important to the long-range potential financial picture, they
take on a new meaning with revenue management. Optimal occupancy, achieving 100
percent occupancy with room sales, which will yield the highest room rate, and optimal
room rate, a room rate that approaches the rack rate, work together to produce the yield.
The following scenario illustrates the harmony that must be achieved to maximize yield:
A 300-room hotel has sold 100 rooms at $76, 150 rooms at $84, and 35 rooms at $95
(rack rate). The yield for this combination is 83 percent. If revenue management were in
use and the daily report revealed 200 rooms sold at $90 and 85 rooms at $95, a 91 per-
cent yield could have been realized. Not only could an additional 8 percentage points
have been achieved but also an additional $2,550 could have been earned. In both situa-
tions, an occupancy of 95 percent was achieved, but the average daily rate in the first case
was $82.54, while the optimal room rate in the second case was $91.49. The $91.49 opti-
mal room rate more closely approaches the $95.00 rack rate.
Strategies
E. Orkin offers a simple policy for developing strategies to implement yield management:
When demand is high, maximize rates; when demand is low, maximize room sales.
10
[Author’s note: Orkin’s use of the term yield management can be interchanged with the
term revenue management.] This idea is expressed in Table 6-3. Orkin also offers specifics
on developing strategies. He says that when demand is high, “restrict or close availability
of low-rate categories and packages to transients [guests], require minimum length of
stays, and commit rooms only to groups willing to pay higher rates. When demand is low,
provide reservation agents with special promotional rates to offer transients who balk at
standard rates, solicit group business from organizations and segments that are character-
istically rate sensitive, and promote limited-availability low-cost packages to local
COMPONENTS OF REVENUE MANAGEMENT 173
TABLE 6- 2 Yield Comparison
Revenue Revenue
Hotel Realized Potential Yield %
ABC $35,000 $47,500* 73.68
XYZ $36,500 $47,500* 76.84
*500 rooms × $95 (rack rate) = $47,500
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market.”
11
Restricting or closing availability was indeed a challenge because most front
office managers were familiar with the sell-out-the-house operating procedure and were
unsure this aggressive marketing tactic would work. Some hoteliers were setting reserva-
tion policies that required minimum length of stay during heavy demand periods. The pro-
cedure recommended for low demand (special promotional rates and soliciting group and
local business) was the strategy used during any demand period. As revenue management
continues to be tried and tested in hotels, various combinations of maximizing room rates
and room sales continue to challenge hoteliers, revenue managers, and front desk managers.
For example, Carol Verret reports
12
on the importance of developing a revenue man-
agement strategy.
A revenue management strategy establishes “target” numbers to be achieved through
a variety of ways: sales, manipulating the GDS, controlling the allocation and rate in
the electronic distribution channels, etc. In other words, it is a proactive rather than
reactive function that simply turns the faucets on and off.
She describes the components of revenue management.
13
Revenue drivers are defined as all areas of revenue generation within the organization.
This includes central reservations, property-level reservations, the sales department,
the electronic distribution channels and the web site.
Forecasting
An important feature of yield management is forecasting room sales. Orkin suggests
using a daily decision orientation rather than a seasonal decision-making scheme in devel-
oping a particular strategy.
14
(Revenue managers continue to apply these concepts of
yield management daily.) Accurate forecasting of transient demand assists hoteliers in
developing strategies to maximize sales to this group. For example, if a hotel has group
business reservations for 95 percent of available rooms, seeking transient business with
special promotional packages during that period would not be advisable. If the period fol-
lowing the group business is low, then advance knowledge of this information allows
time for marketing and sales to develop special promotional packages aimed at the tran-
sient and local markets.
174 CHAPTER 6
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TABLE 6- 3 Revenue Management Strategies
Demand Strategy
High Maximize rates, require minimum stays
Low Maximize room sales, open all rate categories
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Block-Out Periods
The strategies just discussed for high demand periods require revenue managers, hotel
managers, and front office managers to block out certain days when potential guests who
seek reservations must commit to a minimum length of stay. If a guest requests a reser-
vation for October 25 but that date falls in a block-out period of October 24, 25, and 26,
the reservation agent must refuse the request. If the guest is willing to commit to all three
days, then the reservation can be processed. This process of establishing block-out peri-
ods allows a hotel to develop standardized reservation operating procedures for a 24-
hour-a-day reservation system. Forecasting these periods is an essential feature of yield
management.
Systems and Procedures
Orkin suggests that a front office manager who implements yield management use an
automated system that processes reservations, tracks demand, and blocks out room avail-
ability during certain periods.
15
The details of operating a reservation system for a year-
round 500-room hotel that uses yield management would be overwhelming if left to
manual calculation. Orkin also advises initiating specific rate-setting policies that will
ensure profitability. Establishing block-out periods requires an ongoing marketing effort
by the hotel to ensure sales in projected low demand periods. He urges front office man-
agers to develop a well-trained staff who understand and use yield management proce-
dures. Training is a key element in making a complicated system workable (Figure 6-2).
Those of you who have experience in the hotel industry will appreciate Orkin’s last
caution: Be adaptable to changes in demand. If a four-day convention booked 90 percent
of the rooms for arrival on April 5 and 25 percent of those reservations cancel by March
30, the front office manager should drop the restrictions for a four-day stay and encour-
age reservation agents to offer promotional packages to transient guests.
Channel Management
There are many opportunities for guest room sales to be completed—central reservation
system, GDS, third-party reservation system, toll-free phone reservation, travel agent,
etc.—as noted in the chapter on reservations. Revenue management requires the objective
COMPONENTS OF REVENUE MANAGEMENT 175
F R O N T L I N E R E A L I T I E S
T
he controller of the hotel has asked the front office manager to project room sales for the
next 45 days. This is necessary for the controller to estimate cash flow for a payment on a
loan that is due in 30 days. How will the use of revenue management help the front office man-
ager make an accurate projection?
q
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review of those sales channels to determine which approach would have afforded the
hotel with maximum opportunity for financial gain. Rebecca Oliver, in her article on
channel management software, provides information on how this technology can assist
revenue managers in this important function of their jobs.
“It wasn’t too long ago when revenue management solutions revolutionized the way
hotels did business. Rather than a manual process of calculating rates and occupan-
cies, the revenue management systems gave automatic recommendations for rates.
Now, revenue management system (RMS) vendors are hoping to revolutionize the
industry once again with advanced systems that offer hotels the ability to perform rev-
enue management by different channels.”
“What we are seeing is a giant leap forward in revenue management as it moves to
embrace distribution through electronic channels,” says John Burns, principal, Hos-
pitality Technology Consulting, Scottsdale, Arizona. “It is a complex development
process and calls for sophisticated strategy. Revenue management is not plug-and-
play, and [vendors] have to make sure [hotels] will benefit from the technology.”
“These new systems have been adapted to keep up with the reservation activity out-
side of hotels, namely, central reservations offices and electronic reservation channels.
While just coming on to the market, some hotels have realized results, and others
anticipate the benefits yet to come.”
176 CHAPTER 6
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FI GURE 6- 2
A front office
manager
encourages
discussions of
the application
of yield
management
in a training
session as the
basis of
revenue
management.
Photo courtesy
of IBM.
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She continues [Vendors have developed software to manage this challenge.] “We
saw a trend that many of our hotels were having great success in maximizing their
yield with their revenue management system connected to the property management
system, but they did not have any easy way to apply their strategy to their central
reservation system (CRS)-powered channels, with their confusing way of booking
channels and business models,” says Bernard Ellis, senior vice president of product/
channel management, SynXis.
16
Feedback
Feedback on decisions employed in revenue management is essential to any new venture
in management. A record of the date and amount of turnaway business is vital for hote-
liers to assess the viability of revenue management and to update revenue management
and marketing strategies for the future.
17
A general manger who reviews the report of a
recent five-day block-out period, as depicted in Table 6-4, would find that the period
restricted for a five-day minimum length of stay worked well for May 1–3, but 178 room
reservations were lost for May 4–5. The director of marketing and sales must research the
contracts the hotel had with the various groups involved. Also, the front office manager
should ask if the front desk clerks, bell staff, or cashiers heard any guest comments on
why they checked out earlier than scheduled. The turnaway business on May 3–5 might
also indicate that the convention events scheduled on these days were more interesting or
that the members of this group did not want to commit to a five-day stay and wanted
reservations for only the last three days of the convention.
Management Challenges in Using Revenue Management
An enormous problem facing hotels that employ revenue management is alienation of
customers.
18
Potential guests who have a reservation refused because they do not want
to comply with minimum-stay requirements or who feel they are victims of price goug-
ing may not choose that hotel or any hotel in that chain the next time they need lodg-
COMPONENTS OF REVENUE MANAGEMENT 177
TABLE 6- 4 Turnaway Business Report
Yield No. Rooms Dollars Lost
Date % Turned Away [@ $95 Rack Rate]
May 1 98 35 3,325
May 2 96 20 1,900
May 3 93 60 5,700
May 4 50 90 8,500
May 5 50 88 8,360
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ing. It is important that employees be well trained in presenting reservation policies to
the public.
Considerations for Food and Beverage Sales
The previous discussion of revenue management focused on rates, room availability,
minimum stay, and the like. However, another issue that assists hoteliers in setting rev-
enue management policies cannot be overlooked: potential food and beverage sales.
19
Certain market segments tend to purchase more food and beverages than other segments.
This factor must be taken into consideration to determine the most profitable customer
to whom to offer the reservation.
Review Table 6-5 to determine which potential group would bring in the most income
to the hotel. Group B, with projected income of $92,500 due to projected food and bev-
erage costs (perhaps guests with larger expense accounts or scheduled banquet meals),
will bring more projected income to the hotel, even though the room rate for group B is
lower than for group A.
Some hoteliers debate the food and beverage issue because the profit from food and
beverage sales is not as great as that from room sales. Other debates in applying revenue
management center on the type of guests who request reservations and the subsequent
effects on room furnishings and use of hotel facilities. For example, group B may be a
conference group of high school students who may damage hotel facilities, while group
A may be senior citizens attending a conference. Developing effective revenue manage-
ment policies, which identify groups who may yield additional income (or expense), is
necessary to make revenue management work. This is indeed a challenge to you as you
begin your career as a hotelier.
Applications of Revenue Management
The best way to understand revenue management is to apply it to various situations. Try your
hand at the following scenarios to become familiar with the basics of revenue management.
178 CHAPTER 6
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REVENUE MANAGEMENT
TABLE 6- 5 Considerations of Food and Beverage Income in Setting
Revenue Management Strategies
Room Food and Projected
Group No. Rooms Rate Income Beverage Income Income
A 350 $110 $38,500 $18,750 $57,250
B 300 $100 30,000 62,500 92,500
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Scenario 1
A front office manager has reviewed the daily report, which reveals that 240 rooms were
sold last night. The hotel has 300 rooms and a rack rate of $98. Using the following
breakdown of room sales, determine the yield for last night:
85 rooms at $98
65 rooms at $90
90 rooms at $75
Scenario 2
The general manager has asked you to develop a block-out period for the October
Annual Weekend Homecoming event at The Times Hotel. There is a definite possibility
of 100 percent occupancy, but the general manager is concerned that several of the
alumni will dine off-premises. He would like a package rate that includes a kickoff break-
fast and a dinner after the game. How will you proceed?
Scenario 3
A representative from the Governor’s Conference has requested a block of 200 rooms for
three days at a $75 rate. This conference is attended by people who know how to enter-
tain, and the projected food and beverage expenditure per person is significant. During
that same three-day period, a jazz concert is scheduled in the city. In the past, reservations
from this group plus walk-ins have allowed you to achieve 100 percent occupancy (200
rooms) at a $135 rate (rack rate is $95). However, the jazz enthusiasts do not have a pos-
itive history of large food and beverage purchases. What would you do, and on what
would you base your decision?
Solution to Opening Dilemma
The front office manager must check the room availability for this period in the reserva-
tion module. She must determine if any block-out periods already exist and, if so, what
minimum room-night restrictions are in force. She must also check with the food and bev-
erage manager to determine the availability of banquet facilities and food services and the
financial implications that may influence the decision. The revenue manager must provide
information on rates and minimum reservation periods appropriate for the dates that are
requested. If the decision leans toward rejection of the offer, the sales manager should
consider public relations implications.
SOLUTI ON TO OPENI NG DI LEMMA 179
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Chapter Recap
This chapter discussed the traditional concepts of occupancy percentage and average
daily rate in determining the effectiveness of management’s efforts to achieve a positive
income statement. RevPAR was used to answer the question “How many dollars is each
room producing?” Yield management was introduced as a tool hoteliers can use in devel-
oping guest room sales strategies and evaluating potential food and beverage purchases
to ensure a higher profit. Yield management was borrowed from the airline industry,
which shares a common operational design with the hotel industry. Components of yield
management include revenue realized, revenue potential, optimal occupancy and optimal
rates, strategies, block-out periods, forecasting, systems and procedures, feedback, and
challenges front office managers face in implementing and using yield management. These
concepts have been adopted into a daily revenue management operations practice and
require the services of a revenue manager to monitor all opportunities to sell room inven-
tory at various room rates and evaluate the potential financial impact of groups.
End-of-Chapter Questions
1. Explain in your own words the concept of revenue management.
2. What does a revenue manager do as a member of the hotel management team?
3. Explain in your own words the concept of revenue management. How are yield
management and revenue management related?
4. What does occupancy percentage tell the owner of a hotel? Discuss the shortcomings
of this concept in measuring the effectiveness of a general manager.
5. Similarly, discuss the use of occupancy percentage versus the average daily rate
(ADR) in determining the effectiveness of a general manager. What impression does
quoting only the ADR give the owner of a hotel?
6. How can the use of RevPAR assist hotel managers in measuring the effectiveness of
front desk staff and marketing managers?
7. What similarities in operational design do the airline industry and the hotel indus-
try share?
8. What are the goals of revenue management? If you are employed at a front desk in
a hotel, do you see these goals being achieved?
9. Determine the yield for a hotel that has 200 rooms available for sale with a rack rate
of $80, all of which are sold at $75.
10. Determine the yield for a hotel that has 275 rooms available for sale with a rack rate
of $60 and sells 150 rooms of them at $75.
180 CHAPTER 6
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11. Determine the yield for a hotel that has 1,000 rooms available for sale with a rack
rate of $135 and sells 850 rooms of them at $100.
12. Discuss the concepts of yield and occupancy percentage as revealed in questions 9,
10, and 11.
13. Discuss strategies to use when demand is high.
14. Discuss strategies to use when demand is low.
15. Why should a revenue manager set daily rate strategies as opposed to general period
rate strategies?
16. In your own words explain the term block-out period.
17. Why is sharing revenue management strategies with the front office staff so impor-
tant to the success of the revenue management program?
18. What role does the transient guest play in the success of achieving yield?
19. What information can be obtained by reviewing the breakdown of rooms sold by
rate category in the daily report? What should a hotel staff do with this information?
20. How can review of the various sales channels assist the revenue manager in his or
her job?
21. Why should turnaway business be reviewed daily? What should the hotel staff do
with this information?
22. What role do potential food and beverage sales play in revenue management? What
are your thoughts on rejecting the role of this concept in achieving yield?
END- OF- CHAPTER QUESTI ONS 181
C A S E S T U D Y 6 0 1
Ana Chavarria, front office manager at The Times
Hotel, has completed a revenue management semi-
nar at Keystone University and is preparing an argu-
ment in favor of adopting this concept at The Times
Hotel to present to Margaret Chu, the general man-
ager. She begins by compiling a history of room
occupancy and ADRs, which she hopes will reveal
areas in which revenue management could help. She
prepares an electronic spreadsheet that lists rooms
sold with corresponding room rates and correlates
the data to tourism activities in the area. Ana sends
an analysis of revenue realized and revenue potential
to Ms. Chu for review prior to their discussion.
After reviewing the analysis, Ms. Chu concludes,
“This is just another scam; the industry is slow to
adopt this,” and disregards the entire report. She
knows that occupancy percentage, ADR, and
RevPAR are all you need to be efficient today, so
why change?
Ana passes Ms. Chu in the lobby, and Ms. Chu
indicates her distrust of the revenue management
concept but says she will listen to Ana’s presentation
tomorrow.
What tips could you give Ana to help her present
a sound case for the adoption of revenue manage-
ment?
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Notes
1. Robert McMullin, “Why Do Hotel / Resort Room Rates Fluctuate Throughout
The Year?” Pocono Record, August 29, 2002.
2. S. E. Kimes, “Basics of Yield Management,” Cornell Hotel and Restaurant
Administration Quarterly 30, no. 3 (November 1989): 15.
3. Ibid., 15–17.
4. “The ABCs of Yield Management,” Hotels 27, no. 4 (April 1993): 55. Copyright
Hotels magazine, a division of Reed USA.
5. Kathryn Lange, “Maxim Revenue Management Solutions and TravelCLICK Sign
Strategic Alliance,” June 2, 2004, http://www.hotel-online.com/News/PR2004_2nd/
June04_MaximTravelCLICK.html.
6. Maximum Revenue Management Solutions (2002–2003), http://www.maximrms
.com/maxim.html.
7. OPERA RMS (2000) Micros Systems, Inc.—Products, http://www.micros.com/
products/products_descriptions/opera_revenue_management_system/default.asp
?frmVertical=Hotels&frmProduct=OPERA+Enterprise+Solution+%28OES%29.
8. Benchmark Hospitality International at Leesburg, VA (Benchmark Hospitality
managed by The Woodlands—Houston, TX). Management job listing,
http://benchmark.hospitalityonline.comjobs/6300/.
9. E. Orkin, “Boosting Your Bottom Line with Yield Management,” Cornell Hotel
and Restaurant Administration Quarterly 28, no. 4 (February 1988): 52.
10. Ibid., 53.
11. Ibid., 54.
182 CHAPTER 6
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REVENUE MANAGEMENT
C A S E S T U D Y 6 0 2
Suggest revenue management strategies to use under
the following circumstances at The Times Hotel:
Situation 1: The Train Collectors will be in town
from November 10 through November 15 and will
draw 50,000 people. Every room in town is
expected to be taken for that period. What policy
should the hotel develop for guests who want to
reserve a room for the following periods?
?
November 10 only
?
November 10 and 11 only
?
November 10, 11, and 12 only
?
November 11, 12, and 13 only
?
November 12, 13, and 14 only
?
November 13, 14, and 15 only
?
November 13 and 14 only
?
November 14 and 15 only
?
November 15 only
Situation 2: The last two weeks of December are
usually a slow period for room sales, but a local
Snow and Ice Festival will attract visitors who may
request reservations for single overnight accommo-
dations. What policy should the hotel develop for
accepting room reservation?
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12. Carol Verret, “The Revenue Management Strategy,” July 2004, http://www
.hotel-online.com/News/PR2004_2004_3rd/Jul04_PrePlanMarketing.html.
13. Carol Verret, “Revenue Management: The Integration of Revenue Drivers,”
March 2004, http://www.hotel-online.com/NewsPR2004_1st/Mar04_Revenue
Drivers.html.
14. Ibid., 53
15. Ibid.
16. Rebecca Oliver, “Multiple Forecasts,” February 2004, Hotels, http://www
.hotelsmmmag.com/archives/2004/02/tech-tevenue-management-systems.asp.
17. Ibid., 56.
18. Kimes, “Basics of Yield Management,” 19.
19. Ibid., 18–19.
Key Words
KEY WORDS 183
average daily rate (ADR)
double occupancy percentage
occupancy percentage
optimal occupancy
optimal room rate
revenue management
revenue manager
revenue potential
revenue realized
yield
yield management
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O P E N I N G D I L E M M A
The group leader of a busload of tourists approaches the front desk for
check-in. The front desk clerk acknowledges the group leader and
begins the check-in procedure, only to realize that there are no clean
rooms available. The desk clerk mutters, “It’s 4:00 P.M., and you
would think someone in housekeeping would have released those rooms
by now.” The group leader remarks, “What’s holding up the process?”
One of the first opportunities for face-to-face contact with a hotel occurs when
the guest registers. At this point, all the marketing efforts and computerized
reservation systems should come together. Will the guest receive what has been
advertised and promised? The front desk clerk who is well trained in the reg-
istration process must be able to portray the hotel in a positive manner. This
good first impression helps ensure an enjoyable visit.
The first step in the guest registration process is to capture guest data such
as name, address, ZIP code, length of stay, and company affiliation, which are
needed during his or her stay and after departure. Various departments in the
hotel require this information to provide service to the guest. The registration
process continues with the extension of credit, room selection, room rate appli-
cation, the opportunity to sell hotel services, room key assignment, and folio
processing. Continually efficient performance of the registration process is
essential to ensuring hospitality for all guests and profitability for the hotel.
C H A P T E R 7
Guest Registration
C H A P T E R F O C U S P O I N T S
?
Importance of the first
guest contact
?
Capturing guest data
?
Guest registration
procedures
?
Registration with a
property management
system
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Importance of the First Guest Contact
The first impression a guest receives of a lodging facility during registration is extremely
important in setting the tone for hospitality and establishing a continuing business rela-
tionship. The guest who is warmly welcomed with a sincere greeting will respond posi-
tively to the hotel and will expect similar hospitality from other hotel employees. If the
guest receives a half-hearted welcome, he or she will not be enthusiastic about the lodg-
ing facility and will be more likely to find fault with the hotel during his or her visit.
Today’s guest expects to be treated with respect and concern, and many hotels make the
effort to meet those expectations. Those that do not should not expect the guest to
return.
What constitutes a warm welcome? This varies from employee to employee. It begins
with the employee’s empathizing with the feelings of the traveler, someone who has been
away from familiar surroundings for many hours or many days. He or she may be
stressed by the frustrations of commercial travel, delayed schedules, lost luggage, jet lag,
missed meals, unfamiliar surroundings, unclear directions, or unfamiliar public trans-
portation. The hotel employee who is considerate of the traveler under these circum-
stances is more likely to recognize anxiety, restlessness, and hostility and respond to
them in a positive, understanding manner.
A typical scenario is as follows: Mr. Traveler arrives at 9:15 A.M. at the registration
desk of a hotel. He is visibly upset because he is late for an important presentation to a
group of investors. He wants to get into his room, drop off his luggage, and get public
transportation to the corporate center. The desk clerk knows no clean rooms are avail-
able at this time. The desk clerk rings for a bellhop to escort Mr. Traveler to the luggage
storage area. When the bellhop arrives, the desk clerk describes Mr. Traveler’s situation.
The bellhop calls the doorman to obtain a taxi, gives Mr. Traveler a receipt for his lug-
gage, and escorts him to the main entrance of the hotel. Then he takes Mr. Traveler’s lug-
gage to the storage area. These time saving practices allow Mr. Traveler to arrive at the
presentation in a reasonable amount of time. When Mr. Traveler returns to the hotel later
that day, he expresses his appreciation to the desk clerk on duty. The stage has been set
for an enjoyable, hospitable stay.
However, the situation could have gone like this: When Mr. Traveler arrives, the desk
clerk tells him, “Checkout time is not until 12 noon, and we don’t have any rooms avail-
able yet. Check back with us after 4:00 P.M.” Mr. Traveler searches for the luggage
room, drops off his luggage (losing minutes because of a long line), manages to find his
way back out to the main entrance, and asks the doorman to hail a cab (losing another
ten minutes because it is rush hour). Mr. Traveler arrives late for the presentation because
of the delay at the hotel and heavy traffic. Because Mr. Traveler is unaware of the avail-
ability of other room accommodations in the area, he returns after the presentation and
waits in the hotel’s lobby or lounge until 4:00 P.M. This time, the stage is set for an
unpleasant visit. Mr. Traveler will probably choose another hotel the next time he has
business in the area.
I MPORTANCE OF THE FI RST GUEST CONTACT 185
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These two scenarios are repeated frequently in the hospitality industry. The latter, too
often the norm, gives rise to discussions of overpriced accommodations and unfriendly
and unhelpful hotel staff. A system must be in place to ensure that all travelers are
extended hospitality as a standard operating procedure. The first guest contact is too vital
to the delivery of a well-managed guest stay to leave it to the personal discretion of an
individual.
Components of the Registration Process
The registration process is one of the many points of interaction with the guest and, ulti-
mately, the cornerstone of delivering service before, during, and after the guest stay.
Early in this section, we discuss the importance of capturing guest data that is confirmed
from the previous reservation process or initiated with a walk-in guest. While guests are
in our care, we can communicate with them, maintain an accurate accounting record,
respond to inquiries about financial concerns, and follow up on service.
The registration process follows a succinct procedure of offering guest hospitality,
retrieving a reservation, reviewing the registration card for completeness, extending credit,
selecting a room to meet the needs of the guest, checking room status, confirming room
rates, promoting additional room sales, assigning room keys, and processing the guest
folio. All these steps occur within the space of several minutes, but the organization behind
the scenes of the registration process is essential. Let’s take a look at how the hotel oper-
ational policies and procedures are developed to support a smooth registration process.
Capturing Guest Data
It is important to note at the outset the value of capturing guest data at registration. This
information is used by many employees in the hotel to provide service and hospitality to
the guest. It is used to transfer messages to the guest, inform the staff of the guest’s needs,
check credit background, and process charges.
Guests receive phone calls, phone messages, mail, and fax transmissions that the hotel
must deliver. Recording the proper spelling of a guest’s name, including the middle ini-
tial, during registration will assist the telephone operator and bellhop in locating the cor-
rect guest. A person with a common last name such as Smith should not miss an
important message just because more than one Thomas Smith is registered at the hotel.
Hotel employees need to know who each person is in the hotel so standard operating
procedures can be carried out. For example, the director of security wants the house-
keeping staff to be alert for indications that more people are staying in a room than are
registered for it. Not only does this information assist in providing security to registered
guests, but it also provides the hotel with additional income.
Guests’ special needs—such as certain room furnishings (cribs or rollaway beds), facil-
ities for the physically challenged, separate folios for guests splitting costs, wake-up calls,
186 CHAPTER 7
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or requests for rooms on lower floors that were not indicated when the reservation was
made—should be noted and communicated to the appropriate hotel staff. Guests who are
members of a group must have their registrations handled in a special manner to expe-
dite the process. However, it is still important that the tour leader of the group provide
individual guest information and room assignments. This information is necessary so the
hotel staff can locate a specific guest or deliver messages as they are received.
The front desk clerk who accepts a guest’s credit card as a means of payment must
check the validity of the card and the available credit balance. Obtaining credit informa-
tion from walk-ins or guests with confirmed reservations aids in the process of extending
credit, billing, and collecting charges on checkout.
Guest Registration Procedure
The guest registration procedure involves several steps that, if followed accurately, allow
management to ensure a pleasant, efficient, and safe visit. The process is discussed gen-
erally as these steps relate to effective front office management. Later in this chapter, use
of a PMS (property management system) method of registration is discussed.
1. Guest requests to check into the hotel.
2. Front desk clerk projects hospitality toward the guest.
3. Front desk clerk inquires about guest reservation.
4. Guest completes registration card.
5. Front desk clerk reviews completeness of registration card.
6. Front desk clerk verifies credit.
7. Front desk clerk makes room selection.
8. Front desk clerk makes room assignment.
9. Front desk clerk assigns room rate.
10. Front desk clerk discusses sales opportunities for hotel products and services with
guest.
11. Front desk clerk provides room key.
Guest Hospitality
The registration process begins when a guest requests to check into the hotel. The guest
may arrive alone or with a group. The front desk clerk begins the check-in process with a
display of hospitality toward the guest; important elements include eye contact, a warm
smile, an inquiry regarding travel experience, an offer to assist the guest in a dilemma, and
COMPONENTS OF THE REGI STRATI ON PROCESS 187
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the like. As mentioned earlier, the importance of a warm welcome to a guest’s positive
impression of the hotel and its staff cannot be overemphasized. Most travelers expect com-
mon courtesy along with a high-quality product and a well-developed delivery system.
Inquiry about Reservation
After the front desk clerk welcomes the guest, he or she asks if a reservation was placed. If
the guest responds affirmatively, the reservation is retrieved (called up on the computer). If
the guest is a walk-in, the front desk clerk must check the availability of accommodations.
If accommodations are available, the next step is to complete the registration card.
Completion of Registration Card
The registration card provides the hotel with guest’s billing information and provides the
guest with information on checkout time and room rates (Figure 7-1). Even if the guest
has a reservation, the completion of the registration card is important, as it verifies the
spelling of names, addresses, phone numbers, anticipated date of departure, number of
people in the party, room rate, and method of payment.
The top portion of the registration card supplies information about the guest so the
hotel has an accurate listing. With this information, phone calls, messages, and the like can
be relayed as they are received. This record is also used for billing purposes. If the hotel has
parking facilities, the garage manager needs information on the guest’s car for security and
control purposes. Obtaining complete and accurate information is important in hotels that
use a PMS; this electronic folio form is preprinted. (Author’s note: Some hotels do not use
a registration card because the details of the reservation are recorded electronically. There-
fore, the hotel’s policy is to bypass this step in the registration process and have the desk
clerk confirm the details of the guest’s information in the following step.)
Review Completeness of Registration Card
The front desk clerk should quickly review the completeness of the registration card or
electronic folio. For example, handwriting should be legible, and the electronic form
should have all appropriate boxes completed. If a revised registration card must be
printed, now is the time to do it. The guest may forget to fill in a ZIP code, which is used
by the marketing and sales department to analyze market demographics as well as by the
controller’s office to process invoices. If a guest does not know a license plate number or
other auto information, the desk clerk must indicate to the guest that this information is
necessary for security. If the desk clerk follows up this statement with a phone call to the
garage attendant to obtain the necessary information, the effort will be appreciated by the
guest, security officer, and garage manager.
Any areas on the registration card that remain blank should be called to the guest’s
attention. Such omissions may be oversights, or they may be an effort by the guest to
commit fraud. The guest who does not supply a credit card and gives a weak excuse (“I
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forgot it in my car” or “It is in my suitcase, which the airline is delivering in three
hours”), combined with a front desk clerk who accepts these reasons, sets the stage for
fraud. A busy front desk clerk may forget to obtain this information later in the day.
Extension of Guest Credit
Front desk clerks must perform a few basic procedures to extend credit to guests. These
include accepting the designated credit card from the guest, using credit card processing
equipment, interpreting information from the credit card validation machine, and verify-
ing the cardholder’s identification.
COMPONENTS OF THE REGI STRATI ON PROCESS 189
FI GURE 7- 1 A registration form is used in a PMS and is often preprinted for guests
who have reservations.
Hotel Registration
ON CHECKING OUT, MY ACCOUNT WILL BE SETTLED BY:
CASH
AMERICAN EXPRESS
DINERS CLUB
HOME
BUSINESS
COUNTRY____________________________________________________________
COMPANY____________________________________________________________
SIGNATURE
WHILE THE HOTEL IS NOT RESPONSIBLE FOR ANY LOSS IN YOUR GUEST ROOM OR
AUTOMOBILE, IT IS ADVISABLE THAT MONEY, JEWELS, AND OTHER VALUABLE ITEMS
BE PLACED IN THE SAFETY DEPOSIT BOXES AT THE FRONT DESK.
NAME________________________________________________________________
STREET______________________________________________________________
CITY_____________________________________ STATE________ ZIP__________
CARTE BLANCHE
MASTERCARD / VISA
DISCOVER
PERSONAL CHECK
OTHER (SPECIFY)
_________________
NAME
FIRM
ADD.
ROOM
RATE
AGENT
GUEST
DEPART
ARRIVE
TYPE
(LAST) (FIRST) (INITIAL)
07_4612.qxp 1/11/06 3:35 PM Page 189
Credit Cards Credit cards are grouped according to the issuing agency. The major groupings are bank
cards, commercial cards, private label cards, and intersell cards. As their name suggests,
bank cards are issued by banks; Visa, MasterCard, and JCB are three examples. Com-
mercial cards are issued by corporations; Diners Club is an example. Private label cards
are generally issued by a retail organization, such as a department store or gasoline com-
pany. Their use is usually limited to products sold by the issuing organization, but they
may be acceptable for other purposes. Intersell cards are similar to private label cards but
are issued by a major hotel chain. This type of card is acceptable at all properties of the
chain and any of its subsidiaries.
The issuing agency previously verified the credit rating of the person to whom the card
was issued. This enables the hotel to extend credit to the person who offers the credit card
for future payment; this is a very important option for hotels. Hotels extend credit to
guests as a basis for doing business. Without this preestablished certification of credit, a
hotel would have to develop, operate, and maintain a system of establishing customer
credit. Hotel chains that accept intersell cards do this, as do smaller hotels that are will-
ing to bill to an account.
All credit cards are not equal from a hotel’s financial point of view. The hotel may
have a standing policy to request a bank credit card first or its own intersell card and then
a commercial credit card. The reason for this is the discount rate, a percentage of the total
sale that is charged by the credit card agency to the commercial enterprise for the con-
venience of accepting the credit card. The discount rate depends on the volume of sales
transactions, amount of individual sales transaction, expediency with which vouchers are
turned into cash, and other factors. Each general manager, in consultation with the con-
troller and front office manager, works with each issuing agency to determine a rate that
is realistic for the hotel.
The commercial credit card may require a 10 percent discount of the sale to be
returned to the credit card agency, while one bank credit card requires 4 percent and
another bank credit card requires 3 percent. The effect on the profit-and-loss statement
is shown in the following illustration:
Commercial Bank Card 1 Bank Card 2
Guest bill $200 $200 $200
Discount rate × .10 × .04 × .03
Amount of discount $ 20 $ 8 $ 6
Guest bill $200 $200 $200
Amount of discount – 20 – 8 – 6
Hotel revenue $180 $192 $194
Even though Bank Card 2 seems most profitable, it may not be the credit card pre-
ferred by the hotel. The Bank Card 2 credit issuing agency may stipulate a seven-day turn-
around time, so the hotel will not have access to the money until seven days have passed.
Bank Card 1 may give the hotel instant access to the money on deposit of the vouchers.
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The cash flow requirements of the hotel must be thoroughly investigated and income and
expenses must be projected before management can decide which credit cards it prefers.
Guests choose their credit cards for a variety of reasons, but sometimes they simply
offer the first one pulled from a wallet. If the desk clerk is alert to the guest who displays
several major credit cards, a request for the desired card may be accepted. This small pro-
cedure could mean more profit for the hotel over a fiscal year.
Credit-Card The credit card imprinter, a machine that makes an imprint of the credit card the guest
Processing will use as the method of payment, and the credit card validator, a computer terminal
linked to a credit card data bank that holds information about the customer’s current bal-
ance and security status, are basic pieces of equipment at the front desk in many hotels.
However, some hotels with a PMS or computerized credit card processing equipment do
not require this equipment. The credit card validator can produce an electronic imprint
(receipt) for the guest. The front desk clerk uses the credit card imprinter to imprint the
cardholder’s name, card number, and card expiration date onto a preprinted voucher.
The credit card validator enables the front desk clerk to establish approval for a certain
amount of money to be deducted from a guest’s credit line. The credit card company pro-
vides an approval code for authorization of the charge.
The data programmed into a credit card validator by the credit card issuing agencies
differ from company to company. Some may only indicate that a card is current. Some
indicate that the credit card is valid and the amount of the sale will not cause the guest to
exceed his or her credit limit; conversely, the information may indicate that the amount
of the sale will cause the guest to exceed the limit. For example, a guest’s bill, estimated
to be $300 for a three-day stay, may not be covered by an available credit line of $173.
In that case, the front desk clerk will have to ask for another credit card to establish
credit. The information received from the credit card validator may also indicate that this
credit card was reported stolen and should be retained by the hotel. Established proce-
dures for handling fraud indicate how hotel security should be alerted in this case.
Proof of Some hotels require proof of identification when a credit card is presented, whereas others
Identification demand none. When the hotel policy does require the guest to produce identification, a
valid driver’s license with a photo is usually acceptable. Alteration of nonphoto identifi-
cation is all too common, making it less than reliable. Hotel security departments must
COMPONENTS OF THE REGI STRATI ON PROCESS 191
I N T E R N A T I O N A L H I G H L I G H T S
I
n 2004, JCB (an international credit card company) reported annual sales volume of JPY 5.69
trillion (approximately US$52 billion) in 11.71 million merchant outlets with 51.6 million
cardmembers in the United States, United Kingdom, Germany, the Netherlands, Spain, Switzer-
land, China, Republic of Korea, Japan, Thailand, Hong Kong, Taiwan, Philippines, Singapore, Indone-
sia, Malaysia, Australia, and New Zealand.
1
u
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work with the front office in training desk clerks and cashiers to be alert to fraudulent
identifications.
Bill-to-Account The credit card is the commonest way to establish credit in a hotel. However, there are
other means of extending credit to the guest. The bill-to-account requires the guest or the
guest’s employer to establish a line of credit and to adhere to a regular payment sched-
ule. The guest or the employer completes a standard credit application. The controller
evaluates the completed form, considering outstanding financial obligations, liquid finan-
cial assets, credit card balances, and other credit concerns. If the applicant is deemed cred-
itworthy, then the controller establishes a line of credit. The bill-to-account client is
informed of the billing schedule and payment schedule.
When offering bill-to-account credit to the guest, the hotel takes on the responsibility
of bill collecting. It must anticipate the effect of the billing and payment schedule on the
profit-and-loss statement and the cash flow of the hotel. The controller’s office is respon-
sible for the accounting process of the bill-to-account clients. This can involve many
hours of clerical work and computer processing time. This extra labor should be evalu-
ated when deciding whether the 3–10 percent discount charged by the credit card issuing
agency is more cost-effective than internal accounting of guest charges. Because some
credit card issuing agencies offer immediate cash tender to the hotel’s bank account,
some hotels may prefer this method of payment so they can meet immediate financial
obligations (employee payroll, vendor accounts, tax payments, and the like).
Room Selection Part of the registration process is the front desk clerk’s selection of a guest room, which
can be confusing for the front desk clerk and frustrating for the guest. This step involves
blocking guest rooms prior to a guest’s arrival, meeting the guest’s needs, and maintain-
ing a room inventory system. If the guest is assigned a room that does not meet his or her
personal requirements, the guest then requests a different room. The front desk clerk
responds with a list of available options that seem to satisfy the guest’s request.
Blocking The blocking procedure is important in ensuring an even flow of guests who want to
Procedure check in. Blocked rooms allow the front desk clerk to immediately assign a room to a
guest without searching through confirmed and guaranteed reservations as well as avail-
able room inventory. Otherwise, desk clerks must review reservations and available
rooms at the guest’s arrival.
The blocking procedure begins with a review of confirmed and guaranteed reserva-
tions as well as expected checkouts for a particular day. For example, if a 200-room hotel
has 125 rooms occupied on the night of November 1 with 25 room checkouts scheduled
for the morning of November 2, the front office manager determines that 100 rooms are
available for guests to use on November 2, as follows:
200 rooms available in the hotel
– 125 rooms occupied on Nov. 1
75 rooms available fo = rr sale on Nov. 1
+ 25 roomcheckouts on Nov.. 2
= 100 rooms available for sale on Nov. 2
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From this 100-room inventory, the front office manager or a designated front office staff
person is able to determine which room should be assigned to which guest reservation.
Continuing with this example, if there are 90 guest reservations for the evening of
November 2 and 35 of them have indicated an early arrival of 10:00 A.M., then the per-
son who is blocking the rooms for November 2 will block their rooms from the rooms
unoccupied on November 1. The remaining 55 reservations can have their rooms blocked
into the remaining available room inventory. In some hotels, no specific match is made
between a guest reservation and guest room. Instead, the person who is blocking rooms
provides a list to front desk clerks that indicates that certain rooms with two double beds,
a king-size bed, facilities for the handicapped, and the like, are held for guests with reser-
vations. Hence, the first-come, first-served concept of matching reservation with available
room is followed.
Meeting Guest Guests’ needs usually include bed requirements, room location, floor plan arrangements,
Requests ancillary equipment, rooms designed and equipped for special needs, immediate avail-
ability, and price. If the guest has a reservation, the room selection is blocked prior to the
guest’s arrival. The walk-in guest presents opportunities to the front desk clerk to opti-
mize a sale and meet the needs of the guest. Opportunities to sell are discussed later in this
section.
Special The first issue in room selection is meeting the guest’s requests for special accommoda-
Accommo- tions. The general trend in designing hotel rooms includes placing two beds, usually
dations king-size, queen-size, or double, in one room, which can accommodate the single guest,
businesspeople sharing a room, a family of two adults and three children, and various
other guest parties. This design permits the front desk clerk considerable freedom in
assigning a room, as so many different needs can be met. Hotels with some rooms con-
taining two twin beds or one twin bed and one double bed or one king-size bed with no
room for a rollaway restrict the front desk clerk in assigning rooms and therefore affect
the bottom-line income from each room. New hotels offer more opportunities for front
desk clerks to meet guests’ requests for various bed arrangements and maximize room
income. The hotelier must provide the front desk clerks with several options offering var-
ious bed sizes and rate flexibility. The front office manager who discusses guest prefer-
ences with the reservationist and the front desk clerks and reviews guest comment cards
is able to determine which bed accommodations should be made available.
Location Guests often request a certain room location: on the lower level of a hotel, near the park-
ing lot, away from the elevator shaft, in the corner of the building, far from a convention.
Also, certain views of the area may be requested—for example, ocean, bay, lake, or city
square. Rooms with special views are usually priced higher, as the guest is willing to pay
more, feeling the view will enhance the visit. Although these rooms are limited by the
design and location of the building, they add a certain character to a lodging property.
The marketing and sales department usually promote these rooms heavily. Sometimes,
guests’ requests for specific locations or views can be easily met; other times, a lack of
available rooms will force the guest to compromise.
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Layout and The guest may request a certain floor plan or room decor. If a businessperson wants to
Decor use the room as a small meeting room as well as a sleeping area, a room with a Murphy
bed, a bed that is hinged at the base of the headboard and swings up into the wall for
storage (such as the SICO brand wall-bed), should be assigned, if available. A guest who
is on an extended business trip may request a room with a kitchenette. Several people
sharing a room for a visit may appreciate one in which the sleeping and living areas are
separate. The newly revived suite design meets various guest needs. Rooms with balconies
or special themes and decors are often requested to enhance a special occasion.
Equipment Guests also request various ancillary equipment and amenities. Although cable television
and telephones are now standard room furnishings, large-screen televisions, videocassette
recorders, satellite reception, computer and Internet jacks, extra telephone jacks, and
more than one telephone may be requested. Some hotels provide computers, fax machines,
equipment for facsimile reproduction via telephone lines, and convertible desks, which
accommodate a businessperson’s need for work space (Figure 7-2). The availability of
upscale amenities—such as terrycloth robes, fragrant soaps and shampoos, well-stocked
honor bars and snack bins, complimentary local and national newspapers, popular
weekly magazines, and high-speed or wireless Internet access—often plays a role in the
guest’s decision to stay at a hotel. If guests are not sure you offer these amenities, they
may request them.
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FI GURE 7- 2
This room is
equipped with
such amenities as
a computer and
in-room fax to
facilitate the
business guest’s
stay. Photo
courtesy of
Westin Hotels
and Resorts.
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Special Needs Guests often request rooms designed and furnished with equipment to meet special needs.
Rooms equipped for the hearing-impaired and guests in wheelchairs are common.
Advances in hotel marketing, building design and construction, and electronic safety
features allow the guest with a physical disability to enjoy the facilities of the hotel.
Hotel owners who maintain aggressive marketing and sales departments realize the
growing number of active people in the labor force who are physically challenged and
who travel. Legislation may also be an impetus to provide accommodations for the
physically challenged. Ramps, specially designed bathroom facilities, and electronic
visual devices that alert the hearing-impaired to fire danger can be located on the lower
floors of a hotel. Smoking and nonsmoking guest rooms are also frequently requested by
guests.
Availability Immediate availability is of great concern to most guests. Usually the traveler has spent
many hours in transit and wants to unload luggage, freshen up, and move on to other
activities. For other guests, registration is the last stop before collapsing from a wearying
day of travel and activity. The guest is vulnerable at this time, often willing to accept a
room with a higher rate that meets his or her immediate needs. Nevertheless, the front
desk clerk should do all that is possible to locate a room that is ready for occupancy
before trying to pitch a higher-priced room.
Long lines of people waiting to register and delayed availability of rooms can make
room selection difficult for the front desk clerk. A delay by the housekeeper in releasing
rooms for occupancy often causes guests to wait. Sometimes the desk clerk must inquire
of the housekeeping department whether rooms are ready for occupancy. Guests who
insist they be admitted to a room—any room—because of special circumstances make the
front desk clerk’s room selection decision complex (considerations of room availability,
room type, room rate, etc.). When the reputation of the hotel is at risk, a quick confer-
ence with the front office manager may speed the decision-making process for the front
desk clerk (if desk clerks have not been empowered to make such decisions). In such a
case, the front office manager and the general manager should assist the housekeeping
department in working out rough spots and streamline the communication system
between housekeeping and the front office.
Price Price is often another guest concern. Guests with budget constraints may request a room
Constraints for the lowest price; this is their primary concern. Room location, floor plan, room
arrangements, ancillary equipment, and immediate occupancy play lesser roles in their
room selection. When guests request the least expensive room available, a front desk clerk
should try to accommodate them from the available inventory of rooms. Depending on
the projected occupancy for the night, the front office manager may instruct the front
desk staff to accommodate all such guests within reason; a sale that brings in 10–20 per-
cent less than the designated rates is better than several rooms left unsold. Communica-
tion between front desk clerks and front office managers and the training of front desk
clerks to sell rooms underlie the effectiveness of providing guests with acceptable room
rates.
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Room Inventory
Maintaining a room inventory system involves constantly updating and checking a data-
base that specifies housekeeping status, a term that indicates availability of a room, such
as occupied (guest or guests are already occupying a room), stayover (guest will not be
checking out of a room on the current day), dirty or on change (a guest has checked out
of the room, but the housekeeping staff has not released the room for occupancy), out of
order (the room is not available for occupancy because of a mechanical malfunction), and
available, clean, or ready (the room is ready to be occupied). This facet of registration
requires constant communication efforts among front office, housekeeping, maintenance,
and reservation staffs.
The following lists of reservation statuses (from chapter 5) and housekeeping statuses
are offered as a review and a means to differentiate housekeeping status from reservation
status.
Reservation Status Housekeeping Status
Open Available, Clean, or Ready
Confirmed 4 P.M. Occupied
Confirmed 6 P.M. Stayover
Guaranteed Dirty or On Change
Repair Out of Order
Accurate, up-to-date room status reports are vital to the operation of a front desk for
providing guest hospitality and financial viability. The desk clerk who assigns a dirty
room to a guest conveys incompetence. Assigning a room that already has occupants cre-
ates hostility and embarrassment for both the new and the current guests. Conversely, a
room that is thought to be occupied but in fact is vacant is defined as a sleeper. This is a
lost sales opportunity that cannot be re-created the next day.
The housekeeping department must communicate the housekeeping status in an accu-
rate, orderly, and speedy manner. The floor supervisor of the housekeeping department
must inspect each room to determine if guests have indeed vacated the room, to ensure
the cleanliness and servicing of the room, and to note physical repairs that are needed
before the room is released to the front desk for rental. An orderly system whereby the
housekeeping department transfers this information to the front desk—through regularly
scheduled communications from the floor supervisor, maid, or houseman via the tele-
phone, PMS, or personal visits to the front desk—is necessary to maintain the integrity
of the system. Delays in transferring this information slow the process of providing hos-
pitality to the guest.
The reservations staff must also be aware of the need to coordinate the immediate
requirement of a businessperson for a small meeting room at the last minute with that of
an incoming guest for a sitting room for a small gathering, the latter requiring confirma-
tion when the reservation is made. Adequately meeting these requests is important to
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delivering hospitality to the guest. When the guest arrives to register and finds these
essential facilities are unavailable, hostility toward the hotel—specifically directed at the
front desk clerk—results. Standard operating procedures must be established to ensure
the accuracy of room status.
Room Rates
The marketing plan of a hotel includes pricing programs for room rates, based on many
intricate and market-sensitive factors. Courses in hospitality marketing and hotel opera-
tions will help you develop an understanding of their relationship to price. This intro-
duction discusses the importance of establishing and monitoring effective room rates to
ensure maximization of profit.
Establishing The rental charge for a room provides income to pay for hotel expenses generated in
Room Rates other areas, such as administrative costs, overhead, and utilities. Often students try to
compare the efficiencies (control of food cost and labor costs, marketing techniques, etc.)
of a freestanding restaurant with the sometimes seeming inefficiencies of a hotel restau-
rant. In a hotel, the general manager may plan for some of the profit from room rental to
be applied to food and beverage operations. In a freestanding restaurant, the manager
does not have that luxury.
When hotel real estate developers perform feasibility studies, they base the profitabil-
ity of the enterprise on sales projections and related factors such as investment opportu-
nities, investment portfolio balance, and current income tax laws. A consulting firm
surveys market demand for room sales and room rates to form a basis for a room sales
projection. Of course, adjustment of market demand because of the entrance of this new
hotel into the market is calculated. An example of a room sales projection is shown in
Figure 7-3.
The three room sales projections at various average room rates shown in Figure 7-3
give the real estate developers some idea of room income, provided management and
operations are able to produce and service the sales. The investors in the Spring Time
Hotel project must determine projected sales in all departments (such as food and bever-
age, garage, gift shop, athletic facilities, and rentals). This total income figure is the basis
for total projected sales. Further consideration must be given to related expenses such as
food and beverage costs, furnishings, labor, administrative costs, loan repayments, over-
head, utilities, and advertising. These costs are assembled in a standard profit-and-loss
statement. With computer spreadsheets, it is easy to determine whether anticipated
income will be adequate to cover incurred costs and provide profit. If the projected
income is inadequate, the investors manipulate the average room rate—raising it, for
example, from $70 to $75 or from $90 to $95—and analyze the results. While the income
generated may seem favorable, the price-sensitive market where the hotel will be located
may not be able to produce the number of projected sales at the higher room rates.
Clearly, room rates involve many factors, including projected sales and related
expenses along with realistic considerations of market competition, marketing and sales
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efforts, operations, price sensitivity, and tax investment opportunities. The room rate set
for one season may be adjusted up or down for another. If a competitor lowers or raises
room rates, the front office manager must consult with the owners, general manager, and
other department heads. The decision to lower or raise rates or offer a special package
depends on the effect of this action on the profit-and-loss statement. In areas saturated
with hotel rooms and experiencing a slowdown in tourism or business activity, price wars
can spell disaster to a hotel operation. Projecting a hotel’s financial success using room
sales alone does not take into account the possibility of an area’s future oversaturation
with rooms. When room rates are adjusted to compete with those of other hotels, hotel
revenues are affected. Other hotel operations that are not cost-effective then drain the
profits from the total operation.
Rule-of-Thumb Several methods are used to establish room rates. Each provides guidelines for the hotel
Method real estate developer. These are guidelines only and should be reviewed with the previous
discussion in mind. The front office manager must stay in touch with the general manager
and controller to monitor room rate effectiveness. The rule-of-thumb method for deter-
mining room rates stipulates that the room rate should be $2 for every $1,000 of con-
struction costs. For example, if a new hotel is constructed at a cost of $45,000 per room,
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FI GURE 7- 3 Room sales projections are based on room rates and market sensitivity to these rates.
SPRING TIME HOTEL PROJECT—ROOM SALES PROJECTION
J F M A M J J A S O N D
Rooms avail. 200 200 200 200 200 200 200 200 200 200 200 200
% occ. 40 40 50 70 70 80 90 100 70 70 50 40
Rooms sold/
day 80 80 120 140 140 160 180 200 140 140 400 80
Days/mo. 31 28 31 30 31 30 31 31 30 31 30 31
Proj. rooms
sold 2,480 2,240 3,720 4,200 4,340 4,800 5,580 6,200 4,200 4,340 3,100 2,480
TOTAL ROOMS PER YEAR = 47,680
47,680 47,680 47,680
× $70 rate × $85 rate × $90 rate
————— ————— —————
$3,337,600 $4,052,800 $4,291,200
–10% –15%
(loss in sales because (loss in sales because
of higher rate) of higher rate)
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the room rate would initially be $90 per night. Clearly, this is a very general method of
guesstimating room rates and should not be relied on alone.
Hubbart The Hubbart formula considers such factors as operating expenses, desired return on
Formula investment, and income from various departments in the hotel to establish room rates.
This method relies on the front office to produce income to cover operating expenses,
overhead, and return on investment for the hotel operation. The following example
applies these factors:
A hotel with $4,017,236 of operating expenses (departmental operating expenses and
overhead), a desired return on investment of $1,500,000 and additional income of
$150,000 from other sources (food and beverage, rentals, telephone) with projected room
sales of 47,680 room-nights would set its room rate at $113.
Once again, these methods are guidelines only. Room rates must be constantly moni-
tored with regard to market conditions of supply and demand. The front office manager
must actively survey competing room rates to determine the competitiveness of the hotel’s
rates. This survey is a voluntary participation by the hotels. Figure 7-4 is an example of
a weekly room rate survey.
(Operating Expenses Desired ROI) Other Inco + – mme
Projected RoomNights
RoomRate =
($ , , 4 017 2336 1 500 000 150 000
47 680
113
+
=
$ , , ) – $ ,
,
$
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FI GURE 7- 4 A room rate survey compares room rates of competing hotels.
ROOM RATE SURVEY—WEEK OF 0215
RACK CORP. GROUP
Number of Persons in Room 1 2 1 2 1 2 3 4
Hotel
SMITH LODGE $70 $80 $68 $68 $65 $65 $65 $65
WINSTON ARMS $72 $80 $68 $70 $60 $65 $70 $75
HARBOR HOUSE $75 $85 $70 $75 $60 $60 $65 $65
THOMAS INN $80 $90 $75 $80 $75 $75 $80 $80
ALLISON INN $100 $100 $89 $95 $80 $80 $85 $90
GREY TOWERS $85 $95 $80 $80 $75 $75 $75 $80
JACKSON HOTEL $78 $85 $73 $78 $63 $65 $68 $70
TIMES HOTEL $90 $100 $80 $89 $75 $75 $80 $85
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This subsection on room rates is presented to show you the complexities of establish-
ing a room rate. The market factors, construction costs, operating expenses, desired return
on investment, efficiencies of operations, and marketing programs combine to produce a
complex concept. Front office managers must constantly monitor the effects of estab-
lished room rates on the profit-and-loss statement. Other department managers in the
hotel must also be aware of their importance to the overall financial success of the hotel.
Types of Hotels develop room rate categories to attract different markets. These rates depend on
Room Rates seasons, number of potential sales in a market, and other factors. Providing constant
feedback on the effectiveness of room rates in attracting business and evaluating the con-
tinued need for each of these categories are the responsibilities of the front office manager
and the director of marketing and sales. Commonly used room rate categories are rack
rate, corporate rate, commercial rate, military/educational rate, group rate, family rate,
package rate, American plan, half-day rate, and complimentary rate.
A rack rate, the highest room rate charged by a hotel, is the rate given to a guest who
does not fall into any particular category, such as a walk-in who requests a room for the
night. Rack rates are usually the highest rates charged by the hotel, but they do not nec-
essarily produce the most income for the hotel (see chapter 6). Charging a group $5 less
than the rack rate to encourage repeat business may garner more income for the hotel in
the long run.
Corporate rates are room rates offered to businesspeople staying in the hotel. This cat-
egory can be broken down into businesspeople who are frequent guests (a specified num-
ber of visits per week or per month) and guests who are employees of a corporation that
has contracted for a rate that reflects all business from that corporation.
Commercial rates are room rates for businesspeople that represent a company and
have infrequent or sporadic patterns of travel. Collectively, this group can be a major seg-
ment of hotel guests and thus warrant a special rate. The hotel usually develops a fre-
quent guest marketing program that is associated with their frequent guest stay program
to encourage guests to accumulate points toward upgrades in rooms, free room stays, or
airline miles. For example, Starwood uses Starwood Preferred Guest, while Hilton uses
Hilton HHonors. A card is issued and then validated with each visit. After a specified
number of visits, the guest is awarded a free room-night. Many variations of this concept
are in use. Marketing and sales departments of large hotel corporations develop sophis-
ticated frequent-visitor marketing programs to encourage guests to stay with them.
Military and educational rates are room rates established for military personnel and
educators, because they travel on restricted travel expense accounts and are price-
conscious. These groups are a source of significant room sales because their frequent vis-
its may supply a sizable amount of repeat business.
Group rates are room rates offered to large groups of people visiting the hotel for a
common reason. The marketing and sales department usually negotiates this rate with a
travel agency or professional organization. For example, a travel or tour agent may be
granted a group rate for a bus group of 40 tourists. A meeting planner may request a
group rate for 400 convention delegates. This is a lucrative source of potential business
for a hotel.
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Family rates, room rates offered to encourage visits by families with children, are
offered during seasonal or promotional times. For example, children under a certain age
are not charged if they stay in a room with an adult. Franchise organizations promote this
concept vigorously through television and display advertising.
Package rates, room rates that include goods and services in addition to rental of a
room, are developed by marketing and sales departments to lure guests into a hotel dur-
ing low sales periods. A bridal suite package may include complimentary champagne, a
cheese-and-cracker basket, flowers, and a complimentary breakfast. A Weekend in the
City package may include lunch in the hotel dining room, tickets to the theater, a late-
night snack, and tickets to an art gallery or a sporting event. If these packages are adver-
tised and promoted, they become a regular source of business for low-volume weekends.
A variation of the package rate is the American plan, a room rate that includes
meals—usually breakfast and the evening meal—as well as the room rental. The modified
American plan, a room rate that offers one meal with the price of a room, is common in
resorts, where the pace of life is more leisurely. (The system in which food and beverages
are kept separate from room charges is called the European plan.)
A frequently used rate classification is the half-day rate, a room rate based on length
of guest stay in a room, which is applied to guests who use a room for only three or four
hours of a day (not overnight) to rest after sightseeing or shopping or between air flights.
Businesspeople may want to rent a room for a short business meeting. Lawyers may want
to rent a room to maintain privacy while taking a deposition from a witness. The room
is then rented again that evening. If a hotel has guaranteed reservations for late arrivals,
the front desk clerk can accept half-day guests for those rooms from 1 through 5 P.M. A
good communication system with the housekeeping department is essential so the room
can be cleaned for the guest with a guaranteed reservation. The hotel that offers a half-
day rate must establish reservations blocking procedures that indicate which rooms are
available for half-day rentals. If rooms are needed by a convention group in the early
afternoon following another convention group that checked out that morning, this type
of sale is not recommended.
The final rate category is a complimentary rate (comp), where there is no charge to the
guest. The management of the hotel reserves the right to grant comp rooms for various
reasons. Guests who are part of the hotel’s management hierarchy or personnel group
may receive a comp room as a fringe benefit. Management may offer comp rates to tour
directors and bus drivers of the tour group, travel agents, tour operators, and local dig-
nitaries who are vital to the public relations program of the hotel. This rate does cost the
hotel, but the cost is usually outweighed by the goodwill generated.
These rate categories have variations in all hotels. The purpose of the rate categories is
to attract groups of guests who will supply repeat business and help ensure full occupancy.
Maximizing The front desk clerk and reservationist have the opportunity to present various room
Room Rates rates in a manner that reflects the positive features of the product. Guests who are
assigned a room at the highest or lowest rate without any choice are not given the oppor-
tunity to participate in the sales decision. Guests who want to enjoy the best accommoda-
tions may look as though they could afford only the lowest-priced room. Other guests who
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look as though they could afford the Governor’s Suite may have budgeted only enough for
the lowest-priced room. Reservations placed by telephone do not bias the reservationist
according to the personal appearance of the future guest. A planned sales pitch to maxi-
mize room rates for all guests must be formulated and taught to the front office staff.
Although it is beyond the scope of this textbook, the layout and design of the com-
puter screen for Internet reservations should capture the attention of the guest as well as
provide the same information that the reservationist would discuss. The prospective guest
is looking for the hotel’s toll-free number, address, rates, photos (3-D virtual tour if pos-
sible), food and beverage accommodations, etc.
Knowledge of room furnishings, special features, layout, and rate ranges is necessary
to establish a room rate maximization program. In addition, these features should be
described in a way that enhances them and tempts the guest. The most important part of
this program is to ensure that the front desk staff can carry it out; not everyone enjoys
selling, and the staff must be encouraged to develop the proper attitude toward sales.
Employee incentive programs are helpful in motivating front desk staff.
The desk clerk or reservationist who handles the walk-in guest, the guest with a reser-
vation, or a guest making a reservation must be extremely knowledgeable about the
product being sold. Familiarity with room furnishings, special features, floor plans, views,
and rate ranges is obtained through experience and training. The training of a new per-
son in the front office must include visits to the various guest rooms and public areas of
the hotel. These visits should be reinforced with written descriptions of room inventories
that note the various room furnishings, special features, and floor diagrams of each cat-
egory. Room rate ranges may be printed on special brochures for the guests. However,
applying room rates in special cases must be supported by clear policies and communi-
cated to the special staff. The front office manager must develop case studies that illus-
trate exceptions to the stated rate ranges. Situational applications appropriate to periods
of low projected occupancy, 100 percent occupancy, and an overbooked house can be of
great assistance in training.
The staff not only must know the hotel’s features but should be able to entice guests
with positive descriptions. A room described as “decorated in pastels; contains two king-
size beds with comforters, overstuffed chairs, and a well-stocked minibar and refreshment
cabinet; overlooks the bay side of the Charles River; and provides complete privacy”
tempts the guest to want this luxurious experience.
Coaching the Not everyone, of course, is a born salesperson. Indeed, most people are generally shy
Shy Employee about selling. Desk clerks who are not comfortable selling rooms must be encouraged to
in Sales Skills develop these skills by practicing them until they become natural. How can a front office
manager foster such skills?
People are reluctant to sell because they feel they are pushing the buyer to purchase
something. They can be made more comfortable in selling when they believe they are
offering a service or product that will benefit the guest. Each of the room’s features
should be highlighted as a reason for the guest to select the room. This reason relates to
guest satisfaction. For example, if the clerk promotes a guest room with an additional
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small meeting room (at a higher rate) as an attractive feature, the person who is register-
ing may be grateful to learn about this valuable option, because he or she can conduct
corporate business without renting two rooms.
Front desk clerks should be trained to recognize subtle clues to a guest’s needs. Clues
are usually present in both face-to-face situations and during telephone calls. Not all peo-
ple recognize these clues because they are not trained to listen for them. A training pro-
cedure should be developed and presented to the front office staff. When the front desk
clerk feels comfortable in being able to satisfy the guest’s needs with a certain type of
room, then a good sales attitude has been fostered. The idea that “I have to sell” is
replaced with “I want to make the guest’s experience the best it can be.” If a caller men-
tions that a reservation is an anniversary gift to her parents, the reservationist may want
to suggest “a bayside room that overlooks the Charles River or a room that looks out
over the beautiful mountain ranges of the Poconos in Pennsylvania.”
A front office manager should also devise an incentive program for the staff to maxi-
mize room rates. Incentives should be related to the needs of the employee. If money is
the motivator, then a financial reward (based on the average daily rate achieved for the
evening above the standard average daily rate) is presented as a bonus to the desk clerk.
This bonus could also consist of preference in scheduling, additional vacation or personal
days, or consideration for promotions. If employees know their individual efforts in
achieving room rate maximization will be recognized, they will be more enthusiastic
about selling. As with all incentive programs, the financial expenditures for the rewards
must be cost-effective.
The staff with the proper knowledge, vocabulary, and attitude maximizes room rates
better than the staff that is simply told to sell from the bottom up, a sales method that
involves presenting the least expensive rate first, or from the top down, a sales method that
involves presenting the most expensive rate first. These principles are important in achiev-
ing a maximum room rate. However, if the desk clerk or reservationist is armed with facts
about the product (rooms), familiar with words that accentuate the positive features of the
product, and comfortable with selling as a procedure that improves the guest’s stay, then
he or she is likely to generate higher room rates and encourage repeat business.
Sales Opportunities
The front desk clerk has an unparalleled opportunity to promote the services of the hotel
during guest registration. The front office manager who has adopted both a marketing
focus as well as a front office focus understands the benefits of developing a front office
staff that is comfortable with salesmanship. The discussion here focuses on additional
room reservations that can be garnered at registration and the promotion of these addi-
tional room reservations.
Future The front office manager should consider developing procedures for front desk clerks to
Reservations follow that encourage a guest to book additional reservations during the check-in process.
Suggesting additional reservations during registration may remind the businessperson of
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the need for room accommodations the following week, when he or she will visit a city
with a hotel affiliated with the same chain. It may inspire the traveler who has not made
reservations for the rest of his or her trip and finds your rates or frequent guest market-
ing program attractive to stay in a chain member property. This promotion of member
properties can be a profitable marketing concept. Front office managers in independent
hotels also find this concept profitable. Independent hotels have the advantage of offer-
ing unique lodging experiences. Guests who are frequent visitors to a city may want to
secure reservations for their next trip. Front desk clerks must ask the guest to make addi-
tional reservations.
Developing a Maximizing sales opportunities requires a program in which the front desk clerks actively
Plan for Pro- participate, making it profitable for the hotel. The previous discussion of sales opportu-
moting Future nities also applies to developing a plan for promoting future reservations.
Reservations The front office manager who wants to develop a plan to sell rooms at the time of
guest registration must consider the opportunities for booking additional rooms, sales-
manship skills, incentive plans, and effects on the profit-and-loss statement. During reg-
istration, the front desk clerk should ask guests if they will need additional reservations
for the remainder of their trip. Again, during checkout, the front desk clerk should
inquire if the guests need additional reservations. If these inquiries are reinforced with
printed materials in guest rooms and elevators that advertise the value of and offer an
incentive to make additional reservations, or if repeat business is rewarded with a fre-
quent-visitor incentive program, then the possibility of securing additional reservations is
realistic. If desk clerks encourage future reservations because they believe they are help-
ing the guest with travel plans, they will be more comfortable and successful in persuad-
ing guests to make reservations.
The front office manager should develop an incentive program to assist desk clerks in
achieving additional reservations at the time of registration. The effects of such a plan on
the profit-and-loss statement are usually easy to determine. Additional room sales gener-
ate additional income. The controller of the hotel will notice the increase in sales. The
costs of administering the incentive program should be compared to the income produced
by the additional reservations; such costs may include financial bonuses and additional
vacation.
204 CHAPTER 7
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GUEST REGI STRATI ON
F R O N T L I N E R E A L I T I E S
A
s front office manager of a hotel, you have noticed that several of your desk clerks don’t
offer a warm display of hospitality at check-in times. They are a nice group of people and
mean well, but they don’t have the spark they used to display several months ago. How would
you handle this situation?
q
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Assigning Room Keys
During the guest registration process, a room key is issued to the guest. This is a fairly
simple task; however, the process does involve security and maintenance of keys. Later in
this chapter, the computerized method of room key assignment is discussed.
After the front desk clerk determines the room assignment and the guest agrees to the
room rate, the key or keys are obtained for the guest. The key being issued must be
checked against the room number assigned on the registration card, electronic folio, or
computer screen before it is handed to the guest. A key for room 969 can look like 696
if it is viewed upside down. The key for room 243 could mistakenly be picked up for
room 234. These errors occur when the front desk staff is busy checking people in and
out. Giving the room key to the guest should be handled with utmost discretion, for the
guest’s safety. The front desk clerk should not loudly announce, “Here is your key to
room 284.” It is better to say, simply, “Here is your key,” or “Your room number is writ-
ten on the inside of your check-in packet.” It is also important to instruct a guest on the
procedure for using an electronic key, a plastic key with electronic codes embedded on a
magnetic strip. If there is a waiting period or a colored indicator light on the guest room
door, the clerk should point this out.
Security of the Key System
Maintaining the security of the keys requires that they be stored in a safe place. The famil-
iar pigeonhole key and mail rack system is still common in some hotels. Some have
adopted a key drawer, located beneath the front desk. Hotels with electronic locking sys-
tems produce a new key for each new guest. The electronic combination is changed each
time at the front desk. Guests who lose their keys during a stay may ask for a duplicate,
for which proof of identification and proof of registration should be required. This pro-
tects the guest who is registered in the room as well as other guests of the hotel. Most
guests do not mind providing these proofs of identification. They are usually satisfied to
know their security is a priority at the hotel.
Maintaining the Key System
The maintenance of a hard-key system requires the front office staff and housekeeping
staff to return keys to their storage area, a time-consuming job when several hundred keys
must be returned to their pigeonholes or slots in a key drawer (a drawer located under-
neath the counter of the front desk that holds room keys in slots in numerical order) after
a full house has checked out. If the housekeeping staff notices a key left in a room after
a guest has checked out, it should be returned to the front desk. Some hotels use a key
fob, a decorative and descriptive plastic or metal tag attached to a hard key (a metal
device used to trip tumblers in a mechanical lock) that lists the name and address of the
hotel, to encourage the finder of a key to mail it back (Figure 7-5). Other hotels do not
COMPONENTS OF THE REGI STRATI ON PROCESS 205
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attach such a key fob because they believe that if a key is found (or actively sought) by a
person with criminal intentions, guest security is at risk. Keys and locks that have become
worn must be replaced, a responsibility of the maintenance department. Replacement of
room keys and locks can be done only with an authorized purchase order from the con-
troller, initiated by the front office or maintenance department. The security department
maintains control of key replacement activity.
Maintaining the electronic locking system is much simpler than maintaining the hard-
key system. On checkout, when the guest’s folio is cleared in the PMS, the plastic key is
rendered invalid (Figure 7-6). When the next guest registers for that room, a new elec-
tronic combination is set and a new electronic key issued. Encoding the electronic com-
bination on a magnetic strip on a credit card–type key is also possible.
After the guest receives the room key, the front desk clerk should ask if the guest needs
help carrying luggage and other personal effects to the room. If help is needed, a bellhop
is summoned to escort the guest to the room. If the guest does not require assistance, the
front desk clerk should provide clear directions to the room.
Registration with a PMS
As you learned in chapter 4, property management systems have many capabilities,
including registration. To review, the basic applications of the PMS registration module
are as follows:
?
Retrieving reservation form
?
Checking room inventory option
?
Checking room status option
?
Verifying room rate
?
Issuing room key
206 CHAPTER 7
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GUEST REGI STRATI ON
FI GURE 7- 6 Electronic key cards are used to protect guests.
MAGNETIC STRIP CARD
Front Back
KLINE INN
422 W. Pine
Castor, MO
Please drop this
key into the
nearest
U.S. Postal Service
mailbox.
Thank you!
FI GURE 7- 5
A key fob and
guest room key
are used in hotels
with mechanical
locks.
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Retrieving Reservation Form
The registration module is put to use before the guest arrives at the hotel to register. Guests
who have placed reservations with the hotel have already had their data entered into the
PMS database. Figure 7-7 shows a completed version of the blank guest data screen illus-
trated in Figure 5-4. The guest information is now available for registration. The PMS is
able to produce advance registration forms for guests, like that shown in Figure 7-8, with
REGI STERI NG WI TH A PMS 207
FI GURE 7- 7 A completed reservation screen on a PMS provides information on a guest’s requests
for a visit.
RESERVATIONS—ENTER GUEST DATA
NAME: BLACKWRIGHT, SAMUEL
COMPANY: HANNINGTON ACCOUNTING
BILLING ADDRESS: 467 WEST AVENUE ARLINGTON, LA ZIP: 00000
PHONE NUMBER: 000-000-0000
DATE OF ARRIVAL: 0309 TIME OF ARRIVAL: 6 PM DATE OF DEP.: 0311
AIRLINE: AA FLIGHT #: 144 TIME OF ARRIVAL: 3:45 PM
ROOM: # GUESTS: 1 RATE: 80
COMMENTS:
CONFIRMATION #: 122JB03090311MC80K98765R
CREDIT CARD: MC NUMBER: 000000000000000000000
TRAVEL AGENCY: AGENT: ID #:
ADDRESS: ZIP:
FI GURE 7- 8 An advance registration form is prepared prior to a guest’s arrival.
ARRIV RESV DEP CONF NO ROOM ASMT RATE
03-09 6 PM 0311 122JB03090311MC80K97865R 722 80.00
GUEST INFO NO. GUEST CREDIT CARD
Blackwright, Samuel 1 MC 000000000000000000000
Hannington Accounting
467 West Ave.
Arlington, LA 00000
000-000-0000
_________________________________
Guest Signature
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an interface between the registration module and the reservation module database. The
PMS preselects a room for the guest from the room inventory for the day of arrival. When
the guest arrives, the advance registration form already will have been printed the night
before by the second- or third-shift front desk clerks. After the advance registration forms
are printed, they are filed alphabetically at the front desk. Some operations choose not to
preprint the forms but instead have the guest complete a standard registration card.
However, having preprinted advance registration forms available when guests arrive is
invaluable in registering guests quickly, particularly when a full house is checking in or
when the front desk is operating with less than its full staff.
When a guest with a reservation arrives at the front desk to register, the front desk
clerk greets him or her and then inquires whether the guest has a reservation. The desk
clerk retrieves the preprinted advance registration form from the file. If no form is avail-
able, the desk clerk retrieves this information from the reservation module by entering the
guest’s last name or confirmation number. The guest information is then available for
registration.
The registration module can also handle the registration of groups, allowing advance
registration information for entire groups of guests to be preprinted. Figure 7-9 shows
how registration details for a group can be controlled. With further processing of this
information, including preassignment of rooms, group preregistration packets, like those
shown in Figure 7-10, can be prepared, making the registration of groups simple for both
the tour director and the front office.
Checking Room Inventory Option
What happens if a name is missing from the reservation data bank for a person or group?
If the guest cannot produce a confirmation number and no reservation can be found, the
front desk clerk tries to provide accommodations. The room inventory and room status
options of the registration module are checked to determine if rooms are available. The
room inventory option indicates the availability of rooms (Figure 7-11). It informs the desk
clerk which rooms are being held for reservations (GUAR for guaranteed and CONF for
confirmed), which have been taken out of inventory because of a needed repair (REPAIR),
and which are available to rent for the night (OPEN). Additional information is provided
about the features of the rooms, such as king-size bed (K), a room suitable for holding a
conference (CONF), a room with two king-size beds (2K), a room with one double bed
(DB), a room with a bay view (BAY), a room with a kitchenette (KITCH), a room with a
studio couch (STUDIO), adjoining rooms (/), or a room with a conversation area and
other amenities (SUITE). The rate per room for a single guest is indicated.
Checking Room Status Option
The desk clerk also needs to know which rooms are ready for occupancy; this can be
determined by activating the room status option of the PMS (Figure 7-12). This option is
similar to the room inventory option but does not include rates and has a column on sta-
208 CHAPTER 7
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GUEST REGI STRATI ON
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REGI STERI NG WI TH A PMS 209
FI GURE 7- 9 The group registration option keeps track of members of a group.
GROUP REGISTRATION
NAME OF GROUP: JOHNSON HIGH SCHOOL DEBATE TEAM
DATE IN: 0109 DATE OUT: 0112 NO. ROMS: 8
NO. GUESTS: 15 RATE: 57/S 64/D
BILLING INFO: DIRECT BILL R. SIMINGTON, 401 MADISON DR., OLIVER, DE 00000
21 DAYS. EACH PAYS INCIDENTALS AT CHECKOUT.
ROOM NO. NAME RATE COMMENTS
201 VERKIN, S. 32
201 LAKEROUTE, B. 32
202 SIMINGTON, R. 57 ADVISER
203 CASTLE, N. 32
203 ZEIGLER, R. 32
204 DRAKE, J. 32
204 DRAKE, A. 32
205 LENKSON, C. 32
205 SMITH, B. 32
206 HARMON, T. 32
206 LASTER, H. 32
207 AROWW, C. 32
207 THOMPSON, N. 32
208 JONES, K. 32
209 SAMSET, O. 32
FI GURE 7- 10 A group preregistration packet helps achieve quick registration for groups.
TIMES HOTEL
(GROUP REGISTRATION)
Welcome to our hotel. Your registration has been preprocessed. You have been assigned to room _____.
Your tour guide has arranged to make final payment for room charges. Questions concerning other
charges to your room account can be answered by dialing “3” on your room phone.
Thank you,
Front Desk Manager
07_4612.qxp 1/11/06 3:35 PM Page 209
tus, telling the desk clerk which rooms are being cleaned and serviced by housekeeping
(ON CHG), which are being repaired (OUT OF ORDR), which are occupied by another
guest (OCC), and which are available for guest occupancy (READY). The integrity of this
information is maintained with constant input and updates from the housekeeping and
maintenance departments. This communication is also enhanced with the use of an
210 CHAPTER 7
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GUEST REGI STRATI ON
FI GURE 7- 11 The room inventory screen of a PMS tells front desk staff the
reservation status.
ROOM INVENTORY 1225
ROOM TYPE COMMENTS RATE AVAILABILITY
109 K BAY 68 GUAR
201 K KITCH 75 REPAIR
202 K 65 CONF
203 K 65 CONF
204 K 65 CONF
205 K 65 OPEN
206 CONF STUDIO 80 OPEN
207 K /208 65 OPEN
208 K /207 65 OPEN
209 K BAY 68 GUAR
210 K KITCH 75 GUAR
301 2K SUITE 100 REPAIR
302 2K SUITE 100 GUAR
303 DB 55 OPEN
304 K KITCH 75 OPEN
305 K 65 OPEN
306 CONF STUDIO 80 GUAR
307 K /308 65 GUAR
308 K /307 65 OPEN
309 K BAY 68 OPEN
310 K KITCH 75 GUAR
401 K KITCH 75 GUAR
07_4612.qxp 1/11/06 3:35 PM Page 210
intranet. Staff members in housekeeping and the front office can send messages quickly
informing each other of room status of rooms with a few keystrokes.
If a room is available and the front desk clerk is fairly sure the hotel will not be full
that night, the guest without a confirmation number or reservation is handled as a walk-
in guest. The guest data option of the registration module allows the front desk clerk to
REGI STERI NG WI TH A PMS 211
FI GURE 7- 12 The room status screen of a PMS tells front desk staff the
housekeeping status.
ROOM STATUS 0722
ROOM TYPE COMMENTS AVAILABILITY STATUS
109 K BAY GUAR ON CHG
201 K KITCH REPAIR OUT OF ORDR
202 K CONF ON CHG
203 K CONF ON CHG
204 K CONF READY
205 K OPEN READY
206 CONF STUDIO OPEN READY
207 K /208 OPEN ON CHG
208 K /207 OPEN ON CHG
209 K BAY GUAR READY
210 K KITCH GUAR ON CHG
301 2K SUITE REPAIR OUT OF ORDR
302 2K SUITE GUAR READY
303 DB OPEN READY
304 K KITCH OPEN READY
305 K OPEN ON CHG
306 CONF STUDIO GUAR READY
307 K /308 GUAR ON CHG
308 K /307 OPEN ON CHG
309 K BAY OPEN ON CHG
310 K KITCH GUAR ON CHG
401 K KITCH GUAR ON CHG
07_4612.qxp 1/11/06 3:35 PM Page 211
enter guest registration information (Figure 7-13). Note that this option prompts the desk
clerk to inquire if the guest needs additional reservations for future visits.
A guest may present a confirmation number when no rooms are available. When
overbooking produces more guests than rooms are available for, a guest is “walked” to
another hotel that can provide accommodations. Although, when walking a guest with a
reservation, the hotel is under no obligation to provide cab fare, pay for the room at the
other property, provide telephone calls to allow the guest to notify people of a change of
venue, pay for a meal, or provide a complimentary future stay, some hotels try to accom-
modate the guest in these ways to ensure positive guest relations. While the guest is usu-
ally not satisfied with the situation, he or she may accept the alternative accommodations
as better than nothing. When the front office staff realizes that an overbooking situation
is fast approaching, they should telephone nearby hotels to establish projected occupancy.
Verifying Room Rate
The guest may remember a quoted rate at the time of registration that is not on the con-
firmation form or in the PMS. It is wise to discuss any discrepancies with the guest to
avoid problems at checkout. The guest who thought she was being charged $85 when in
fact it was $125 could be embarrassed at checkout if she doesn’t have adequate financial
resources to pay. Desk clerks should have guests acknowledge the room rate by asking
them to initial the room rate on the registration form. It is also important to discuss room
taxes and local municipal charges that may be added to the room rate.
212 CHAPTER 7
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GUEST REGI STRATI ON
FI GURE 7- 13 A blank registration screen in a PMS is activated to register a walk-in guest.
REGISTRATION—ENTER GUEST DATA
NAME:
COMPANY:
BILLING ADDRESS: ZIP:
PHONE NUMBER:
CREDIT CARD: TYPE: NUMBER: EXP. DATE:
AUTO MAKE: MODEL: LIC. PLATE: STATE:
TYPE OF ROOM: NO. GUESTS: RATE:
DATE IN: DATE OUT: CLERK:
FUTURE RESERVATION? DATE: TYPE ROOM: NO. GUESTS:
HOTEL ID NO.: CONF: YES NO GUAR: YES NO
CONF NO.:
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Issuing Room Key
If the guest can be accommodated, the new key for the guest room is prepared with an
electronic key preparation device (Figure 7-14). This device produces a new key (the size
of a credit card, composed of plastic) encoded with an electronic combination for each
new guest. The combination for the door lock is controlled through the hotel’s security
system.
Obtaining Reports from the PMS
The PMS can also produce an alphabetical listing of the guests and their room numbers.
This option, a variation of the registered guests report option shown in Figure 7-15, is
available to the switchboard operator.
The front office manager can access various report options of the registration module
for effective front office management. The registration module options just discussed pro-
vide the basis for gathering and organizing information the front office manager needs to
monitor. For example, the guest arrivals report option informs the front office manager of
the guests with reservations who are expected to arrive (Figure 7-16). The group arrivals
report option lists the groups with reservations that are expected to arrive (Figure 7-17).
These data can be arranged by different categories—room number, date of registra-
tion, checkout date, room rate, guest name—according to the front office manager’s
REGI STERI NG WI TH A PMS 213
FI GURE 7- 14
An electronic
device is used to
prepare new
electronic room
keys for guests.
Photo courtesy of
Wyndham
Reading Hotel,
Reading,
Pennsylvania.
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214 CHAPTER 7
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GUEST REGI STRATI ON
FI GURE 7- 15 Registered guests can be listed alphabetically with a PMS.
REGISTERED GUESTS 0215
DATE DATE NO.
ROOM NAME ADDRESS IN OUT RATE GUESTS
205 ARRISON, T. RD 1 OLANA, AZ 00000 0215 0216 75 2
312 CRUCCI, N. 414 HANOVER ST., 0205 0217 70 1
CANTON, OH 00000
313 DANTOZ, M. 102 N. FRONT ST., 0213 0216 70 1
LANGLY, MD 00000
315 FRANTNZ, B. 21 S BROADWAY, 0211 0216 75 2
NY, NY 00000
402 HABBEL, B. BOX 56, LITTROCK, 0215 0217 75 2
MN 00000
403 IQENTEZ, G. HOBART, NY 00000 0213 0216 70 1
409 JANNSEN, P. 87 ORCHARD LN., 0215 0222 90 1
GREATIN, NY 00000
410 ROSCO, R. 98 BREWER RD., 0213 0221 70 1
THOMPSON, DE 00000
411 SMITH, V. 21 ROSE AVE., 0215 0218 70 1
BILLINGS, TN 00000
501 ZUKERMEN, A. 345 S HARRY BLVD., 0215 0219 85 2
JOHNSTOWN, CA 00000
FI GURE 7- 16 An alphabetical listing of guests who will arrive can be prepared by a PMS.
ARRIVALS—INDIVIDUAL GUESTS 0918
NAME RESV DATE IN DATE OUT CONF NO.
BLAKELY, K. GUAR 0918 0920 09180920JCB75K9334L
BROWN, J. CONF 0918 0919 09180919JCB75K9211L
CASTOR, V. GUAR 0918 0922 09180922V75K8456L
CONRAD, M. GUAR 0918 0921 09180921MC75K8475L
DRENNEL, A. GUAR 0918 0921 09180921V80K8412L
FESTER, P. CONF 0918 0925 09180925JCB75K8399L
HRASTE, B. GUAR 0918 0191 09180919JCB75K8401L
LOTTER, M. GUAR 0918 0922 09180922V80K8455L
07_4612.qxp 1/11/06 3:35 PM Page 214
needs. These report options, often referred to as data sorts, which indicate groupings of
information, vary depending on the type of software used for the PMS. The room inven-
tory report option, which gives the front office manager a quick listing of the rooms that
are still vacant (Figure 7-18), is useful in achieving maximum occupancy. Variations of
this option include listings of all vacant, occupied, on-change, or on-repair rooms, sorted
by type—with king-size beds, on the first floor, with a bay view, in a certain rate range.
The room status report option provides a quick listing of which rooms are available for
occupancy (Figure 7-19). Variations of this option sort all rooms that are ready, on
change, occupied, or out of order.
REGI STERI NG WI TH A PMS 215
FI GURE 7- 17 A PMS can list names of groups that will arrive by date of arrival.
Arrivals—Groups 0918
NAME DATE IN DATE OUT NO. ROOMS RATE NO. GUESTS
HARBOR TOURS 0918 0922 02/1 55/1 42
20/2 65/2
JOHNSON HS BAND 0918 0921 02.1 45/1 54
13/4 60/4
MIGHTY TOURS 0918 0919 02/1 55/1 42
20/2 65/2
FI GURE 7- 18 This screen on a PMS helps front office staff to determine which
rooms are vacant.
ROOM VACANCIES 0701
ROOM ROOM ROOM
103 402 701
104 411 710
109 415 800
205 503 813
206 509 817
318 515 823
327 517 824
333 605 825
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Self-Check-In
The PMS allows guests to check themselves in with a credit card. The guest with a reser-
vation guaranteed by a credit card can use a designated computer terminal (Figure 7-20)
that guides him or her through the registration procedure. This option assists in stream-
lining registration at a busy front desk. The owners, general manager, and front office
manager must weigh the capital expenditures, decreased labor costs, increased speed of
registration, delivery of hospitality, and opportunity for selling additional hotel services
within the hotel when deciding whether to provide this option. Hotels with a high occu-
pancy percentage may choose to install this technology to keep the registration lines
moving. However, it is important to consider room status, such as the possibility of a
room’s being on change when a guest is waiting to enter it. The efficiency of the house-
keeping department in cleaning and servicing rooms must also be considered. If a guest
does not need to enter a room immediately, then a self-check-in system may be cost-
effective in providing the guest with an additional service.
Consider the following technology that Hilton Hotels uses in registration to support
efficiency.
216 CHAPTER 7
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GUEST REGI STRATI ON
FI GURE 7- 19 This screen on a PMS provides the housekeeping status of guest
rooms.
ROOM STATUS 0524
ROOM STATUS ROOM STATUS
101 ON CHG 114 ON CHG
102 ON CHG 115 READY
103 ON CHG 116 ON CHG
104 ON CHG 117 ON CHG
105 READY 118 ON CHG
106 ON CHG 119 OCC
107 ON CHG 120 OCC
108 OUT OF ORDR 201 READY
109 OCC 202 READY
110 OCC 203 READY
111 OCC 204 ON CHG
112 READY 205 OUT OF ORDR
113 OUT OF ORDR 206 READY
07_4612.qxp 1/11/06 3:35 PM Page 216
Hilton Hotels Corporation (NYSE:HLT) announced today [August 31, 2004] that
having completed deployment of its proprietary technology platform called OnQ™
across all of its more than 2,200 Hilton Family Hotels, including Hilton
®
, Conrad
®
,
Doubletree
®
, Embassy Suites Hotels
®
, Hampton Inn
®
, Hampton Inn & Suites
®
, Hilton
Garden Inn
®
, Hilton Grand Vacations Club
®
and Homewood Suites by Hilton
®
, the
company continues to utilize technology to enhance guest recognition and efficiency,
rolling out or expanding the following cutting-edge programs:
?
Remote, Web-based check-in 24 hours prior to arrival enables guests with pass-
word-protected online account to select their room type and features based on
preferences and history and print their confirmation document;
?
Electronic folio access enables individual business travelers to review online and
print their hotel folios (hotel receipts) following their stays at any of the 2,200+
Hilton Family of Hotels; for all guests with password-protected online preferences,
a first for a multi-brand hotel company;
?
Expansion of automated check-in kiosks to 100 kiosks within 45 Hilton Family hotels
by year-end with an emphasis on metro and airport markets, enabling self-service
check-in, room selection, check-out and a variety of other automated services; and
?
High-Speed Internet Access now is available to guests at more than 1,995 of its
2,200 hotels, bringing the Hilton Family closer to 100 percent completion than its
top competitors.
3
REGI STERI NG WI TH A PMS 217
FI GURE 7- 20
A guest may
choose to use the
self-check-in
option of a
property manage-
ment system.
Photo courtesy of
Hyatt Hotels and
Resorts.
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Each of these technologies allows the guest to check into the room without waiting in
line. However, they require a well-orchestrated communication system between the front
office and the housekeeping and maintenance departments to ensure that guest rooms are
prepared and made ready for guest entry. Hospitality remains the organized effort of peo-
ple behind the technology.
Solution to Opening Dilemma
Good communication between the housekeeping and front office departments relies on
constant efforts by both departments to determine the progress in releasing rooms. There
are times when the housekeeping department is short-staffed or extremely busy, and its
communication of the release of rooms can be delayed. In those cases, the front office
staff should make an extra effort to stay in close touch with the floor supervisors to deter-
mine how soon rooms will be released for sale by floor supervisors. In some hotels,
housekeeping staff members can release rooms via the property management system.
Chapter Recap
This chapter described, in detail, the process of registering hotel guests. The process
begins with emphasizing to the staff the importance of making a good first impression on
the guest, which sets the stage for an enjoyable guest stay. Obtaining accurate and com-
plete guest information during registration serves as the basis for a sound communication
system among all the departments in the hotel that provide services to the guest. Regis-
tering the guest involves extending credit to the guest, selecting a room, constructing and
applying room rates, selling hotel services, and assigning a room key.
218 CHAPTER 7
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GUEST REGI STRATI ON
I N T E R N A T I O N A L H I G H L I G H T S
J
udy Colbert reports in Lodging how to deliver hospitality to international visitors: “To make
foreign guests feel comfortable, the hotel [New York Hilton and Towers] has a multilingual
staff that speaks 30 different languages. Each wears a lapel pin in the colors of the country flag
for the language he or she speaks. Brochures, local information, and in-room materials are available in
several languages. And an AT&T Language Line, which provides assistance in 140 languages, is accessi-
ble from every guestroom.”
2
Hyatt Hotels is working on an educational program to train the staff to the nuances of international
visitors. These materials include world culture and trends, learning a dozen or so basic phrases in foreign
languages, and preparing signage and in-room pieces in multiple languages.
3
u
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End-of-Chapter Questions
1. How important do you think the guest’s first contact with the hotel is in provid-
ing hospitality? Give examples from your experiences as a guest in a hotel.
2. Why is obtaining accurate guest data during the registration process so impor-
tant? Who uses these guest data besides the front office? Give examples of how
incorrect data can affect the guest and the hotel.
3. What are the major parts of the guest registration process? How will knowledge
of this system help you as you progress in a management career in the hotel?
4. Why is the choice of credit cards important to the profit-and-loss statement of the
hotel? Give examples.
5. What hidden costs are involved in using a bill-to-account system? When do you
think a hotel is justified in adopting a bill-to-account system?
6. Identify some of the requests guests may make with regard to room selection.
How can a front desk clerk be attuned to the needs of guests?
7. Why are establishing and monitoring room rates so essential to the hotel’s profit-
and-loss statement?
8. What are the rule-of-thumb method and the Hubbart formula for establishing
room rates? How effective do you feel each one is in ensuring profit for a hotel?
9. Describe a system of monitoring room rates. If you are employed at a front desk,
do you see your supervisor or manager using such a system? How often? How
effective do you feel this is in maintaining effective room rates?
10. Describe the various types of room rates. If you were asked by the front office
manager to determine which room rates should be eliminated and whether any
new types should be initiated, how would you proceed?
11. What do you think of the room rate maximization program described in the
chapter? How does it affect the profit-and-loss statement? What are the impor-
tant components of this program?
12. What are some opportunities for the desk clerk to sell hotel services, as discussed
in this chapter? If you are employed at the front desk of a hotel, do you see this
being done? What effect does this have on the profit-and-loss statement?
13. What pointers would you give a new desk clerk on room key assignment?
14. Explain how to use the PMS to register a guest with a reservation. Note any
inefficiencies.
15. Discuss the advantages and disadvantages of registering guests with a PMS.
END- OF- CHAPTER QUESTI ONS 219
07_4612.qxp 1/11/06 3:35 PM Page 219
Notes
1. JCB International Credit Card Co., Ltd., 700 S. Flower Street, Suite 1000, Los
Angeles, California, 90017 http://www.jcbinternational.com/htm/about/inform
.htm#in2.
2. Judy Colbert, “The Do’s and Don’ts of Attracting International Guests,” Lodging
25, no. 8 (April 2000): 33–34.
3. Hilton Hotels, “Hilton’s Customer Information System, Called OnQ, Rolling Out
Across 8 Hotel Brands; Seeking Guest Loyalty and Competitive Advantage with
Proprietary Technology,” August 31, 2004, http://hotel-online.com/News/PR2004_
3rd/Aug04_OnQ.html.
220 CHAPTER 7
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GUEST REGI STRATI ON
C A S E S T U D Y 7 0 1
Ana Chavarria, front office manager of The Times
Hotel, has been meeting with the owner and general
manager for the past several weeks to discuss the
upgrade of the hotel’s PMS. The owner is reluctant
to make the purchase; the capital investment,
although reasonable, is still significant and will
affect the cash flow. Margaret Chu, the general man-
ager, was previously employed by a hotel that
upgraded its PMS, and she was somewhat perplexed
by the advertised benefits versus the real benefits in
terms of improved customer service. Ms. Chavarria,
in contrast, had a very encouraging experience with
a PMS upgrade. The owner asks Ana to prepare a
report to justify the upgrade of the PMS at The
Times Hotel.
What concepts should Ana use to justify the
upgrade purchase to achieve improved customer serv-
ice in registration? Consider such aspects of the regis-
tration process as registering individuals and groups,
determining room status, and issuing room keys.
C A S E S T U D Y 7 0 2
Margaret Chu, general manager of The Times Hotel,
has finished reviewing the latest batch of comment
cards from the past weekend. Several of the glitches
in guest service centered on the “It took too long to
get into my room” syndrome. Ms. Chu thought she
had this worked out with Ana Chavarria, front
office manager, and Thomas Brown, executive
housekeeper. Both of these managers developed a
plan and shared it with him just one week ago.
“What could have gone wrong?” wondered Ms.
Chu. She has set up a meeting with Ana and Thomas
for this afternoon. Provide a brief outline of points
Ms. Chu should discuss.
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Key Words
KEY WORDS 221
American plan
bank cards
bill-to-account
bottom up
commercial cards
commercial rates
complimentary rate (comp)
corporate rates
credit card imprinter
credit card validator
data sorts
discount rate
electronic key
European plan
family rates
fax machine
group rates
half-day rate
hard key
housekeeping status
Hubbart formula
intersell cards
key drawer
key fob
military and educational rates
modified American plan
Murphy bed
package rates
private label cards
rack rate
registration card
rule-of-thumb method for determining
room rates
sleeper
top down
walking a guest with a reservation
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O P E N I N G D I L E M M A
The night auditor has been unable to track down a $35.50 shortage in
balancing the night audit. He suspects that it occurred because of a
posting error on a paid-out on behalf of a guest or food service
department staffperson.
The lodging industry has always prided itself on its ability to maintain up-to-
date records of outstanding guest balances (Figure 8-1). The front office
processes a multitude of charges and payments every day, requiring a well-
organized bookkeeping system. This chapter addresses how those guest
charges are processed.
C H A P T E R 8
Managing the Financials
C H A P T E R F O C U S P O I N T S
?
Common bookkeeping
practices performed in
the front office
?
Forms used to process
guest charges and
payments
?
Account ledgers
?
Procedures for process-
ing guest charges and
payments
?
Procedures for transfer-
ring guest and city
ledgers to accounts
receivable
?
Importance of standard
operating procedures for
posting and the night
audit
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Common Bookkeeping Practices
Debits and Credits
Knowledge of basic bookkeeping methods enables the front office manager to understand
the reasons for following particular procedures when handling financial transactions.
This ability greatly assists the front office manager in training front desk clerks and night
auditors. Instead of teaching the staff which keys to press on the keyboard to process a
transaction, the manager explains why a charge must be posted in a certain way; this
facilitates bookkeeping procedures. Many of you have already taken a basic accounting
course or have had experience with a bookkeeping system. However, this chapter does
not assume any previous knowledge of accounting procedures.
Assets are items that have monetary value. Liabilities are financial or other contractual
obligations or debts. These two concepts provide the basics for a bookkeeping system.
Examples of assets include ownership of a cell phone, a textbook, or two tickets to a con-
cert. Examples of liabilities include a contract to pay for the cell phone on a monthly
basis, a contract to pay for a car, or a promise to pay a friend for word processing a term
paper. Guest charges are financial obligations that are owed to a hotel; these are consid-
ered an asset for the hotel. If a guest prepays an account, this is a liability to the hotel
because the hotel must return the money to the guest at checkout.
COMMON BOOKKEEPI NG PRACTI CES 223
FI GURE 8- 1
The electronic
folio displays all
the data on a
guest’s stay that
is held within the
PMS. Photo
courtesy of
Wyndham
Reading Hotel,
Reading,
Pennsylvania.
08_4612.qxp 1/11/06 3:36 PM Page 223
Assets and liabilities are increased and decreased by an organized set of accounting
practices. These are called debits, which refer to an increase in an asset or a decrease in a
liability, and credits, which refer to a decrease in an asset or an increase in a liability. Deb-
its and credits provide a basis for the hotel bookkeeping system. They provide the power
(mechanical means) to increase and decrease assets and liabilities for the guest and the
hotel. The effects of debits and credits on assets and liabilities are shown in Table 8-1.
While this definition may be easy to remember, it is sometimes difficult to apply.
However, if you apply it with regard to the type of account, you should have no problem.
The following examples demonstrate how to apply debits and credits.
If a guest charges $100 on a credit card for goods and services in the hotel on any one day,
the individual charges are processed as a debit (an increase) to the guest account and an asset
to the hotel’s accounts receivables. A credit (an increase) of an equal value is applied to the
respective departmental sales accounts (a revenue account, part of owner’s equity).
If a guest pays $100 in advance to reserve a room, this amount is processed as a credit
(an increase) to the guest account (the hotel’s advance payments, a liability). A debit (an
increase) of an equal amount is applied to the hotel’s cash account (an asset).
Forms Used to Process Guest Charges and Payments
Folio, Transfers, and Paid-out Slips
The folio, transfers, and paid-out slips are documents that allow for the documentation
and transfer of charges and payments to a guest’s account (Figure 8-2). In a property
management system, the electronic folio is stored in the computer memory until a hard
copy is required. The hard copy of the electronic folio is a standard folio that lists the date
of transaction, item, transfer slip number for referral, debit or credit amount, and
updated balance. The transfer slip allows the desk clerk to transfer an amount of money
from one account to another while creating a paper trail. A paid-out slip (a numbered
form that authorizes cash disbursement from the front desk clerk’s bank for products on
behalf of a guest or an employee of the hotel) documents the authorized payment of cash
224 CHAPTER 8
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MANAGI NG THE FI NANCI ALS
TABLE 8- 1 Effects of Debits and Credits on Assets and Liabilities
DEBIT CREDIT
ASSETS increases decreases
LIABILITIES decreases increases
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to a vendor or an employee for a quick purchase of materials for the hotel. In a hotel with
a PMS that interfaces with point-of-sale departments, the transfer of charges incurred by
the guest or the transfer of a portion of one guest’s bill to another guest’s folio is done
automatically.
The front desk clerk uses these forms in posting charges and payments, which is the
process of debiting and crediting charges and payments to a guest folio. The night audi-
tor then tracks the procedures the front desk clerk used in posting. These forms assist in
maintaining control of bookkeeping activities in the front office.
Account Ledgers
Guest Ledger and City Ledger
The guest ledger is a collection of folios (records of guests’ charges and payments) of cur-
rent guests of the hotel. The city ledger is a collection of folios of unregistered hotel guests
ACCOUNT LEDGERS 225
FI GURE 8- 2
The front desk
clerk will post a
credit card
payment on a
guest’s folio.
Photo courtesy of
The Breakers.
08_4612.qxp 1/11/06 3:36 PM Page 225
who maintain accounts with the hotel. These guests may submit cash advances for a
future purchase of the hotel’s goods and services, such as a deposit on a banquet or on a
reservation. The hotel may also offer personal billing accounts to local businesspeople;
these are also part of the city ledger. Unregistered hotel guests may keep open accounts
for entertaining clients, for example. All of the folios are held in a folio well, a device that
holds the individual printed hard-copy guest folios and city ledger folios, or bucket that
provides the physical dimensions of the guest ledger and city ledger.
The accurate and timely processing of all these accounts assists the front office man-
ager in maintaining hard copies of guests’ financial transactions with the hotel. These
accounts are collectively referred to as the hotel’s accounts receivable—what guests owe
the hotel. The accounts receivable consist of two categories, the guest ledger and the city
ledger.
Tracking a guest stay from initial reservation through checkout provides examples of
the many charges and payments that affect the guest ledger (Table 8-2). Likewise, fol-
lowing the activities of the unregistered guest shows how city ledger accounts are affected
(Table 8-3).
226 CHAPTER 8
?
MANAGI NG THE FI NANCI ALS
TABLE 8- 2 Transactions Affecting the Guest Ledger
State in Guest Cycle Type of Transaction
Reservation • Deposit on future reservation
• Return of deposit on reservation due to cancellation
Registration • Prepayment of account
Guest stay • Charge for room and tax
• Charge for food and beverages and gratuities
• Charge for purchases in gift shop
• Charge for parking
• Charge for valet
• Charge for phone calls
• Charge for in-room movies
• Charge for cash advance
Checkout • Payment of outstanding balance
• Return of credit balance to guest
• Transfer of charges to another account
• Correction of posting errors
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Posting Guest Charges and Payments
As mentioned earlier, processing guest charges and payments is referred to as posting
(increasing and decreasing assets and liabilities). Posting adds or subtracts guest charges
and payments to the guest’s individual account. Again, the accurate and timely posting of
guest charges and payments is important to maintaining accurate financial records, as the
guest may decide to check out at any time during the day and will require an accurate
statement of transactions at that time.
Posting charges and payments in a hotel with a PMS greatly increases the accuracy of
the posting. Each of the PMS posting module options, as listed in Figure 4-11, allows the
front desk clerk to post the charges and payments that a guest incurs during his or her
stay. With relative ease, the guest’s electronic folio can be updated at the time of purchase
of goods and services. Figure 8-3 is an example of an electronic folio to which charges
and payments have been posted with a PMS.
Point-of-Sale
The point-of-sale option allows the front office computer to interface with the comput-
ers in other departments. In a hotel, when the front office interfaces with the restaurant,
the front office computer terminal accepts and automatically posts charges made in the
restaurant (the point of sale) to a guest’s folio. Any department (gift shop, recreational
facilities, room service, and telephone) in the hotel that can serve as a point of sale (the
place where a product or service is purchased) must be able to interface with the front
office to post charges to the guest’s account. This electronic transfer ensures that the
charge is posted to the guest folio in a timely manner and increases the accuracy of the
posting. (See Figure 8-4.)
POSTI NG GUEST CHARGES AND PAYMENTS 227
TABLE 8- 3 Transactions Affecting the City Ledger
Nonregistered Guest Activity Type of Transaction
Food and beverage • Deposit on upcoming function
• Return of deposit due to cancellation
• Charge for food and beverages
• Payment for food and beverages
Business/entertainment • Charge for food and beverages
• Payment for food and beverages
Office and retail rental • Rental charge
• Payment of rental charge
Parking rental • Parking charge
• Payment of parking charge
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228 CHAPTER 8
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MANAGI NG THE FI NANCI ALS
FI GURE 8- 3 Posting charges electronically to a folio.
TIMES HOTEL
403 75.00 OCT23 OCT24
Gray, T.K. Great Tire Co., 49W. Sixth St., Croy, OH 00000
10/23 Restaurant 23.09 23.09
10/23 Gratuity 5.00 28.09
10/23 Local Call 0.50 28.59
10/23 GiftShop 18.45 47.04
10/23 Room 75.00 122.04
10/23 Tax 7.50 129.54
10/23 Occ Tax 3.00 132.54
10/24 Restaurant 10.00 142.54
10/24 Trans #54777 50.00 192.54
GiftShop
10/24 Adjust #D435 0.50– 192.04
Phone
10/24 Paid-out #36A52 25.39 217.43
10/24 Visa 4567890 217.43– 0
Colonial Shoppe
10/23 Sundry 18.45
403 Gray,T.
Adjust #D435
10/24 Local .50
403 Gray,T.
Phone 403 Gray, T.
10/23 Local .50
Olivers
10/23 Food 23.09
Grat 5.00
403 Gray, T.
Transfer #54777
10/24 50.00
Colonial Shoppe
To 403 Gray, T.
From 209 Somson, L.
Paid-out / #36A52
10/24 25.39
C.O.D Pkg
403 Gray, T.
Olivers
10/24 Food 10.00
403 Gray, T.
08_4612.qxp 1/11/06 3:36 PM Page 228
Room and Tax
The room option of the posting module has been described as a “blessing” by front
office employees who used to work with a mechanical posting machine. In a mechanical
front office system, the desk clerk or night auditor physically removed each guest folio
from its file, placed the folio into the posting machine, depressed the correct keys,
removed the folio from the posting machine, and then refiled it. In a hotel with a PMS,
the desk clerk automatically posts charges to individual electronic folios by activating the
room option. While the PMS is posting room charges, the clerk is free to do other tasks.
The tax option is often activated with the room option because most properties are
required by state or local laws to charge and collect sales and occupancy taxes from
guests. The tax option posts the appropriate taxes to the guest folio when the room
charge is posted.
POSTI NG GUEST CHARGES AND PAYMENTS 229
FI GURE 8- 4
When guests
incur charges in
the dining room,
these are
immediately
posted electroni-
cally to the guest
folios via the
point-of-sale
terminal. Photo
courtesy of Omron
Systems, Inc.
08_4612.qxp 1/11/06 3:36 PM Page 229
Transfers and Adjustments
The transfer and adjustment options enable front office personnel to correct errors in and
make requested changes to the guest folio. The charges posted to a guest’s electronic folio
at times must be transferred to another folio, or adjustments to the amounts must be
made. For example, a guest may discover that his or her hotel bill will be picked up by a
corporation in the city. The bill had been guaranteed with the guest’s credit card. The
front desk clerk must transfer the guest’s charges from the folio in the guest ledger to the
corporation’s house account in the city ledger. Another guest may claim that a charge
from room service should have been charged to the person who was sharing the room. In
this case, the front desk clerk adjusts (removes) the charge from one guest folio and
transfers it to the other guest folio.
A guest may question charges for a phone call, movie viewing, or other services. The
desk clerk can immediately adjust the account, depending on the authorized financial cor-
rection flexibility policy. This policy spells out the guidelines for a desk clerk to follow in
adjusting a guest’s account. For example, a guest may refuse to pay for a telephone call
because it should have been posted to the folio of the guest who was sharing the room.
Otherwise, the front office shift supervisor or front office manager will authorize the
adjustment. It is important to remember that immediate correction of errors may influ-
ence a guest’s perception of a hotel’s service. The policy on authorized financial correc-
tion flexibility reflects the quality of service the hotel wants to deliver.
All of these transfers and adjustments can be made easily with a PMS. Also, the adjust-
ments are at once reflected in all the guest and departmental accounts affected by the
change, with very little paperwork. This system makes the night auditor’s job of verify-
ing the integrity of accounts much easier.
Paid-Out
The paid-out option is used to track authorized requests for cash paid out of the desk
clerk’s cash drawer. Desk clerks may be required to pay immediately for goods and serv-
ices on behalf of guests, such as delivery of flowers, valet services, and COD (cash on
delivery) packages. These charges are usually preauthorized by the hotel on behalf of the
guest. The amount paid out can be charged to the guest’s folio and reflected in the desk
clerk’s cash balance and the departmental account in one process. This saves the tedious
effort of initiating a paper trail and also avoids the possibility of human error.
230 CHAPTER 8
?
MANAGI NG THE FI NANCI ALS
F R O N T L I N E R E A L I T I E S
A
guest in the hotel has reviewed her account and says the person who was sharing the room
incurred the $12.15 phone charges. The guest wants you to take care of this. How would
you proceed?
q
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Miscellaneous Charges
The miscellaneous charges option is included in a PMS to allow the desk clerk to post
charges that are atypical of the majority of hotel properties. If a hotel has, for example,
a recreational facility that lacks a point-of-sale terminal, this option may be engaged. This
feature can also be used to post miscellaneous charges to the city ledger accounts.
Phone
The phone option is included in a PMS for properties that do not have an interface with
the call-accounting system. With the call-accounting interface, the charges for local and
long-distance phone calls, plus surcharges, are posted automatically. Without the inter-
face, the desk clerk must manually post the phone charge on the electronic folio.
Display Folio
The display folio option permits the front desk clerk or other authorized members of the
management staff to view a guest’s electronic folio at any time. If a guest requests the cur-
rent balance on his or her folio, the desk clerk can produce a hard copy of the folio with
a few keystrokes. After the guest reviews the hard copy, he or she may indicate that a cer-
tain charge is in error. This discrepancy can be resolved prior to checkout.
Reports
The reports option allows the front office manager to organize data in a way that is use-
ful to the controller and the management team. The night auditor can cross-check depart-
mental totals from the restaurant, phone service, gift shop, or recreational facility with
the amounts charged to the guest folios. These data can be shared with department man-
agers to provide feedback for evaluating marketing programs and cost-control efforts.
Figure 8-5 illustrates the types of reports that can be obtained.
Transferring Guest and City Ledgers to Accounts Receivable
The debits and credits incurred by guests and future guests of the hotel are maintained as
back office accounts receivable (monies owed to the hotel). Once the guest has received
the goods and enjoyed the services of the hotel, then this financial record must be trans-
ferred to the master accounts receivable for the hotel. If a guest’s folio shows a debit bal-
ance (an amount the guest owes to the hotel) of $291 and the guest wants to pay that off
by charging $291 to his MasterCard, then the amount is transferred to the MasterCard
accounts receivable.
TRANSFERRI NG GUEST AND CI TY LEDGERS TO ACCOUNTS RECEI VABLE 231
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232 CHAPTER 8
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MANAGI NG THE FI NANCI ALS
FI GURE 8- 5 Reports created with the posting module.
Olivers Restaurant 1/28 2,315.92
M Total Room CHG V M/C JCB DC
B 750.25 125.90 67.50 35.87 234.00 .00
L 890.67 25.00 124.50 340.00 150.00 75.00
D 675.00 235.00 56.98 75.00 221.75 125.00
GRAYSTONE LOUNGE 1/28 1,496.48
1. 780.09 121.00 .00 .00 45.00 .00
2. 456.98 75.00 35.80 87.30 89.60 75.40
3. 259.41 12.90 .00 .00 .00 .00
COLONIAL SHOPPE 1/28 1,324.72
1. 571.97 153.98 .00 76.43 121.56 .00
2. 752.75 259.93 82.87 83.76 25.71 .00
ROOM1/28 4,529.56
TAX 1/28 452.95
ADJUST 1/28 66.04
OLIVERS 23.98 #X4567
OLIVERS 5.98 #X4568
PHONE .50 #X4569
PHONE .50 #X4570
OLIVERS 27.54 #X4571
PHONE 7.54 #X4572
PAID OUT 1/28 143.20
OLIVERS 45.00 #45A41-SUPPLIES
OLIVERS 12.00 #45A42-SUPPLIES
ROOM 701 32.45 #45A43-FLOWERS
ROOM 531 3.75 #45S44-COD
ADMIN 50.00 #45A45-SUPPLIES
PHONE 1/28 578.15
LD 450.61
LOC 127.54
08_4612.qxp 1/11/06 3:36 PM Page 232
Another type of transaction involves the back office accounts payable, amounts of
money prepaid on behalf of the guest for future consumption of goods or services (some-
times referred to as back office cash accounts), such as when a guest deposits a sum of
money for a future stay. For example, the personal check a guest sends to the hotel, dated
February 5, for a stay on the following December 21 must be credited first to the hotel’s
back office accounts payable or back office cash account and then to the guest’s folio.
This amount of money is held for the guest’s arrival on December 21. When the guest
arrives on December 21, the guest folio is brought to the front of the folio well and acti-
vated upon registration.
These examples demonstrate that the activities in the guest ledger and city ledger are
not isolated. They are reflected in the back office account. The guest ledger and city ledger
are temporary holding facilities for the guest’s account. The back office accounts are the
permanent arenas for financial processing.
Importance of Standard Operating Procedures
for Posting and the Night Audit
Standard operating procedures for processing charges and payments are used for the
night audit, which is performed to balance the day’s financial transactions. The financial
activities recorded in the guest ledger, city ledger, and various departments within the
hotel must be processed accurately. It is not uncommon for a night auditor to spend many
hours looking for a small or large dollar amount to correct a discrepancy in the accounts.
Errors can often be traced to a front desk clerk who transposed a dollar amount ($35.87
entered as $53.87) or transferred a charge to an incorrect account ($20.50 valet charge
as a $20.50 restaurant charge). However, it is difficult to detect if a desk clerk used an
incorrect folio (room 626 instead of room 625). An experienced night auditor can usu-
ally pinpoint the error and resolve discrepancies caused by transposing figures or picking
up incorrect accounts.
Because of the tedious effort required to resolve such errors, front office managers
must thoroughly train front office personnel to process guest charges and payments cor-
rectly. This training program must include a statement of behavioral objectives, prepara-
tion and demonstration of detailed written procedures to follow when posting charges
and payments, preparation and discussion of theoretical material that explains debits and
credits, explanation of all related backup paperwork, clarification of the relationship of
front office accounting procedures to back office accounting procedures, and delivery of
hands-on training on the PMS. Such training efforts pay off in reduced bookkeeping
errors and better customer service.
I MPORTANCE OF STANDARD OPERATI NG PROCEDURES FOR POSTI NG AND THE NI GHT AUDI T 233
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Solution to Opening Dilemma
The night auditor should check paid-out slips with accompanying invoices from floral
shops, dry cleaners, specialty shops, and the like, or receipts from suppliers to determine
if posting figures were transposed.
Chapter Recap
This chapter described procedures for processing guest charges and payments in a front
office that uses a property management system. This process is based on knowledge of
basic bookkeeping concepts—assets, liabilities, debits, and credits—as they apply to the
guest ledger and city ledger. Folios, transfers, and paid-out slips form a communication
system to track the charges and payments from the various departments and guests. The
interface of the property management system with the point of sale was presented as it
affects the guest bookkeeping system. Transferring accounting data from the guest ledger
and city ledger to the back office accounts was also discussed. The importance of adher-
ing to standard operating procedures in processing guest charges and payments for the
night audit was emphasized. The preparation of a training program for new front office
personnel was cited as a way to ensure that this goal is achieved. These operating proce-
dures are essential to maintaining the integrity of the guest’s bill and streamlining the
hotel’s bookkeeping process.
End-of-Chapter Questions
1. List some assets a student may hold. List some liabilities a student may incur.
What differentiates the two terms?
2. In your own words, define the bookkeeping terms debit and credit. What power
do they have in a bookkeeping context?
3. What forms are used in the various departments and the front office to provide
records of a guest’s charges and payments? Describe each. What are the purposes
of these forms?
4. What is an electronic folio? How would you describe this to a front desk clerk
who just started to use a PMS?
5. What is the guest ledger? Give an example of something included in it. Describe
how you would post a check for prepayment of two nights’ room rate.
234 CHAPTER 8
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MANAGI NG THE FI NANCI ALS
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6. What is the city ledger? Give an example of something included in it. Describe
how you would post a check for prepayment of a social reception.
7. Give examples of the financial transactions that may occur during a guest stay.
8. Give examples of the financial transactions in which the nonregistered guest may
be involved.
9. If you are employed in a hotel that uses a property management system that inter-
faces with a point-of-sale department, describe the procedure for posting a guest
charge or payment.
10. Why are the guest and city ledgers considered only temporary holding areas for
financial transactions? Where are such records permanently maintained?
11. Why is careful and accurate posting of charges and payments so important to
the night audit? How can a front office manager ensure that posting is done
correctly?
END- OF- CHAPTER QUESTI ONS 235
C A S E S T U D Y 8 0 1
Ana Chavarria, front office manager, has just fin-
ished talking with Cynthia Restin, the night auditor,
who has spent the majority of her shift trying to
track down three posting errors totaling $298.98.
Last Tuesday night, a charge of $34.50 was posted
to the wrong department in the city ledger; on
Wednesday night, a paid-out in the amount of
$21.85 had no financial document attached to the
paid-out slip; and on Thursday, a $250.00 prepay-
ment on a social event was credited to a city ledger
account as $520.00. Cynthia told Ana that she has
been at The Times Hotel for more than ten years
and, in her experience, such mistakes are usually the
result of improper training of new front desk clerks.
Ana thanked Cynthia for the information and told
her she would look into the matter.
Ana called Mary Yu, lead person on the first
shift, into her office. Mary trained the new front
desk clerks, Henry Yee and Tony Berks. Both Henry
and Tony were good trainees and seemed to under-
stand all the tasks involved in operating the property
management system. Ana asked Mary to relate the
procedure she used to train these new recruits.
Mary says she described the property manage-
ment system to them and then let them post some
dummy charges on the training module. Then she
had them correct each other’s mistakes. After they
had practiced for 15 minutes, the front desk became
very busy, and they had to turn the training mode
off and activate the regular operating mode. Henry
posted several paid-out charges and transfers. Tony
was a little more reluctant to touch the machine, but
after the coffee break, he wanted to try to post guest
payments.
Ana realizes that the development of a training
program is her responsibility, and she has let that
responsibility slip. How would you help Ana pre-
pare an effective training program that teaches new
front desk clerks why and how to post guest charges
and payments?
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Key Words
236 CHAPTER 8
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C A S E S T U D Y 8 0 2
Ana Chavarria, front office manager of The Times
Hotel, has gathered her front office staff at a meeting
to discuss the current policy on adjusting guest
charges. Several guests have completed and returned
guest comment cards indicating that requests for
adjustments on their accounts were delayed.
Luis Jimenez recalls that one guest had requested
that a $10.25 phone call be removed from his
account because he did not make that call. Another
guest wanted an $8.95 movie charge deducted from
her bill because she did not watch the movie. Luis
said he referred these guests to the front office super-
visor on duty, which made both guests angry. The
guests who were waiting in line for service were also
annoyed.
Lavina Luquis had a similar situation, but she
decided to just deduct the disputed $32.95 lunch
charge without approval. The front office supervisor
on duty reprimanded Lavina and told her, “All
adjustments are handled by me.”
Ana wants to update the hotel’s policy on author-
izing adjustment of guest accounts. Give her guide-
lines on dollar amounts that can be adjusted without
the supervisor’s approval and describe some situa-
tions in which adjustments can be applied.
accounts receivable
assets
back office accounts payable
credit
debit
folio well
liabilities
paid-out slips
posting
revenue account
transfer slip
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O P E N I N G D I L E M M A
The general manager of the hotel indicated at the staff meeting today
that the budget allows for the purchase of an additional module in the
property management system. She suggests the guest history module
might be just what the hotel needs to increase room sales. The general
manager has scheduled a visit from the PMS vendor tomorrow and
wants you (the front office manager), the director of marketing and
sales, and the revenue manager to prepare a list of questions for the
vendor that will help determine whether the purchase of the guest
history module for the hotel is justified.
Guest checkout can be a time of confusion, short tempers, and long lines, a test
of the patience of both the guest and the cashier. Think of the last time you
checked out of a hotel. How did it go? Was the cashier courteous and hos-
pitable? If not, were you angry because of his or her indifference? Always remem-
ber what it is like to be a guest. This simple approach will serve you well
throughout your career in the hospitality industry.
C H A P T E R 9
Guest Checkout
C H A P T E R F O C U S P O I N T S
?
Organization of late
charges to produce an
accurate guest folio
?
Procedures necessary to
perform the guest
checkout
?
Transfer of guest
accounts to the back
office
?
Checkout reports
available with a property
management system
?
Guest histories
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This chapter assists you in developing a thorough understanding of the guest checkout
process. It is not a difficult procedure to understand and implement; however, it does
require planning in order to organize the details of this part of the guest’s stay.
The use of the checkout module of a PMS is discussed throughout the chapter. Recall
from Figure 4-13, the checkout module, that the options available include folio, adjust-
ments, cashier, back office transfer, reports, and guest history.
Organizing Late Charges to Ensure Accuracy
As you learned in earlier chapters, when a hotel utilizes all modules in the PMS through-
out the guest’s stay, charges for room, tax, food and beverages, valet, and other services
are posted to the guest folio as they are incurred. At the time of checkout, late charges,
or guest charges that might not be included on the guest folio because of a delay in post-
ing by other departments, can result in substantial loss of income, as Table 9-1 indicates.
Failure to post telephone charges for local or long-distance calls made by the guest
prior to checkout is another area where revenue may be lost. For example, a lodging
property that fails to post 20 phone calls per day, at an average cost of 50 cents each,
would lose $3,650 per year.
Front offices with a property management system that can interface the posting mod-
ule with the point-of-sale departments and the call-accounting system can post late
charges easily. As soon as the charge is incurred at the point of sale or through the call-
accounting system, it is posted to the electronic folio. Without this interface, the point-
of-sale cashier must telephone the front desk clerk prior to the guest’s checkout. The
telephone operator and front desk clerk must have a good reporting system to record all
phone calls. When a PMS is not used, the front office manager and other department
managers should initiate a communication program for their employees that ensures the
quick and accurate relay of last-minute charges.
238 CHAPTER 9
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GUEST CHECKOUT
TABLE 9- 1 Revenue Loss Caused by Failure to Post Charges
Lost Breakfast Charges
Average number of charged breakfasts per day 100
Percentage of lost charges × .03
—–—
Number of lost charges per day 3
Average check × $5.00
–———
Amount lost per day $15.00
Days per year × 365
—–––—
Amount lost per year $5,475
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Guest Checkout Procedure
If front office personnel collect and post guest late charges in an appropriate and timely
manner, then the guest checkout can proceed without bottlenecks. However, when the
cashier or front desk clerk must make phone calls to the restaurant, gift shop, and switch-
board to verify charges, delays and disputes can occur.
The guest checkout involves the following steps:
1. Guest requests checkout.
2. Desk clerk inquires about quality of products and services.
3. Guest returns key to desk clerk.
4. Desk clerk retrieves hard copy of electronic folio.
5. Desk clerk reviews folio for completeness.
6. Guest reviews charges and payments.
7. Guest determines method of payment.
8. Guest makes payment.
9. Desk clerk inquires about additional reservations.
10. Desk clerk files folio and related documents for the night audit.
11. Desk clerk communicates guest departure to housekeeping and other depart-
ments in the hotel if necessary.
The objective of the checkout process is to process the guest’s request for settlement
of his or her account as quickly and efficiently as possible. The lodging establishment also
wants to maintain a quality control system for both the guest and the hotel; posting errors
can mean erroneous charges for the guest and lost money for the lodging establishment.
Throughout your career in lodging management, you will be called on to develop
operational procedures. First, set your objectives and keep them simple. Accommodate
guests and maintain necessary data to provide the lodging establishment with information
for the income statement. The steps outlined for guest checkout show how easy it is to
establish operational procedures when you keep these goals in mind. The narratives that
follow elaborate on each step in the guest checkout.
Inquiring about Quality of Products and Services
When the guest arrives at the front desk to check out, the cashier should inquire about
the guest’s satisfaction with the accommodations, food and beverages, and miscellaneous
services provided by the hotel (Figure 9-1). Cashiers should be alert to possible problems.
GUEST CHECKOUT PROCEDURE 239
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Incidental comments about a cold room, low water pressure, leaky plumbing, or dam-
aged furniture should be noted and passed along to the appropriate department heads.
Because guests often do not verbalize complaints or compliments, all lodging proper-
ties should have guest comment cards available as an optional source of communication.
In many leading lodging chains, the chief executive officer answers these cards personally.
The general manager of an independent lodging property can provide a similar personal
touch by acknowledging negative comments. A good public relations program can be
enhanced by addressing minor problems experienced by the guest that might indicate lack
of concern. Also, concern for guest satisfaction affects the financial success of the hotel.
Retrieving the Room Key
Lodging properties that use a hard-key system must request the return of the hard key.
The security of the guest as well as the financial investment in the hard-key system man-
dates that this procedure be a part of the guest checkout. Guest security is jeopardized if
keys are lost or not returned. A 200-room property with approximately five keys per
room that must be constantly replaced finds that a great deal of money is spent to main-
tain the key supply. Some properties require a key deposit, returnable on guest checkout.
The hotel with a PMS and/or an electronic key system can easily change the electronic
code on a key for future entrance to the guest room. Although the initial financial invest-
ment in such a system is substantial, security is the ultimate objective in adopting this
technology.
240 CHAPTER 9
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FI GURE 9- 1
Guest checkout
is a time for
inquiring about
guest services
and determining
method of
payment. Photo
courtesy of
Wyndham
Reading Hotel,
Reading,
Pennsylvania.
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Retrieving and Reviewing the Folio
In a front office with a PMS, the cashier uses the folio option of the checkout module to
retrieve the electronic folio by entering the guest’s name or room number. A hard copy is
printed for the guest.
The guest and the cashier should both review the folio. The cashier reviews the obvi-
ous charges: room fee and tax for the number of nights spent in the hotel (day of arrival
through last night), incidentals (such as movie rental, personal phone calls, and pur-
chases at the gift shop) paid for by the individual rather than a corporation, and the like.
The cashier must inquire if late charges were incurred at the restaurant or other hotel
department or if last-minute phone calls were made.
The guest must also be shown a copy of the folio for a final review. The front office
manager should develop an empowerment procedure based on a list of tasks in which to
follow if charges are questioned. Typical questions concern charges for phone calls that
were not made, meals not eaten, gifts not purchased, flowers not received, laundry not
sent out, or in-room movies not viewed. Using the list provided by the front office man-
ager, the front desk clerk or cashier may adjust these charges up to a certain dollar
amount. A thorough cost control procedure to track the total adjustments by each
employee can help keep such adjustments in line. Large dollar amounts that are ques-
tioned by the guest should be referred to the front office manager. The adjustments
option of the checkout module in a property management system can be used to make
changes.
This empowerment concept is important to develop in staff members because many
guests do question postings made to their accounts. Employees must learn listening skills
that will enable them to discern just what form of satisfaction the guest is asking for.
Employees should be encouraged to try several techniques to determine which will meet
the needs of the guest within the financial and service limitations.
In-Room Guest Checkout
Before proceeding with the guest checkout procedure, it is important to note the guest’s
option to use in-room guest checkout, a computerized procedure that allows guests to set-
tle their accounts from their rooms (Figure 9-2). In some PMSs that feature in-room guest
GUEST CHECKOUT PROCEDURE 241
F R O N T L I N E R E A L I T I E S
O
n checkout, a front desk clerk asks a guest if his accommodations were acceptable. The
guest says the heater in the room didn’t work last night. Because the hotel has a 100 per-
cent satisfaction guarantee, the desk clerk is obliged to comp the room. If you were the front
office manager, what would you do to follow up on this incident?
q
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checkout, the guest can initiate the guest checkout the night before departing by follow-
ing instructions located near the television set in the guest room. The guest can view a
final version of the folio on the television screen on the morning of checkout. This expe-
dites the process by alerting the front office to have a hard copy ready for payment. If the
guest indicates that he or she will pay by credit card or direct billing (bill-to-account), the
guest does not have to stop by the front desk to check out. A control procedure is built
into the PMS to prevent cash customers from using in-room checkout. A guest who is
going to pay with cash has not established a line of credit with the hotel.
Determining Method of Payment and Collection
During registration, the guest indicates the method of payment he or she plans to use. Pos-
sibilities include credit cards, direct billing (bill-to-account), cash or personal check, trav-
eler’s checks, or debit cards. During checkout, the guest confirms the method of payment.
242 CHAPTER 9
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FI GURE 9- 2
This hotel guest
is reviewing his
folio on the
television screen
in his room prior
to finalizing guest
checkout. Photo
courtesy of ITT
Sheraton
Corporation.
09_4612.qxp 1/11/06 3:38 PM Page 242
Credit Cards
Today’s business and leisure travelers usually pay with a credit card. “Plastic money” has
advantages for the cardholder as well as for the hotel. The cardholder is assured instant
credit to satisfy debts incurred. The extensive travel required of some businesspeople
would make the almost constant requests for cash advances by corporate employees dif-
ficult to manage. The advantage for the lodging establishment is that payment is assured
(less a discount paid to the corporation issuing the credit card). It is important to note
that with the increased use and advances of computers in the business world, the reim-
bursement period can be reduced to none—the hotel is immediately credited with pay-
ment. As these advances occur, the ready acceptance of various credit cards will change.
The front office, in cooperation with the controller, usually establishes a priority sys-
tem for accepting credit cards based on cash flow requirements and the effect of the dis-
count rate offered. The average guest is probably not aware of the discount rate and may
be willing to use whatever credit card the front desk clerk requests.
Processing a credit card in an automated hotel follows a standard procedure. The
objectives of the procedure include accurate recording of the amounts of charges and tax,
name (address and phone number of cardholder are optional), verification of the credit
card dollar limit, and capture of fraudulent credit cards. The procedure includes the fol-
lowing steps:
1. Note the credit card expiration date.
2. Enter the approval of the amount of the charge on the PMS checkout screen.
3. Verify the credit limit available by using the credit card validator.
4. Allow the guest to review folio and sign.
5. Check the guest signature on the folio against the signature on the card.
6. Give the card and the guest copy of the folio to the guest.
Once the procedure is developed, it must be followed to the letter, without exception.
The fraudulent use of credit cards takes a great toll on the profits of the hotel. An incen-
tive system for cashiers and front desk clerks can be built into the procedure for process-
ing credit cards to encourage the capture of fraudulent cards. The small monetary reward
is nominal compared to the cost of a hotel bill that may never be recovered. In addition,
hotels should develop a procedure for retrieval of fraudulent credit cards. The safety of
front desk staff is extremely important in this procedure.
Bill-to-Account (Direct Billing)
Hotel guests, both corporate representatives and private guests, may also use the bill-to-
account, a preauthorized account that allows guests to have their charges processed on a
regular billing cycle without the use of a credit card (sometimes referred to as direct
DETERMI NI NG METHOD OF PAYMENT AND COLLECTI ON 243
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billing) to settle an account. Direct billing requires prior approval of the credit limit of an
organization (corporate representatives) or an individual (private guest). Usually the cor-
poration requesting direct billing completes an application for credit approval. The con-
troller in the lodging establishment then performs a credit check to determine a credit
rating and a credit limit. This house limit of credit, a credit limit set by an individual
hotel, varies depending on the amount of projected charges and the length of time
allowed for charges to be paid. The credit rating of the corporation in question plays a
large part in assigning a credit limit.
The application usually lists people who are authorized to use the account as well as
authorized positions within the corporation. Identification cards with an authorization
number are issued by the hotel. It is the responsibility of the corporation applying for
credit to monitor the authorized use of the credit. The cashier must verify identification
of the corporate guest.
The bill-to-account option should be reviewed with an eye toward cost-effectiveness.
Although the hotel does not have to pay a 3–8 percent discount rate to the credit card
agency, the cost incurred by the controller’s office (credit checks, billing, postage, collec-
tion of bad debts) must be considered. The question of cash flow—almost immediate pay-
ment from the credit card agency versus a four- to eight-week waiting period for
corporate accounts—should also be considered. The marketing implications of direct
billing deserve attention as well. The status conferred by this option may be desirable to
corporate representatives and private guests.
The following procedure is used to process a bill-to-account payment:
1. Request corporate or personal identification.
2. Check to be sure the individual is authorized by the account holder to bill to the
account.
3. Note credit limit per employee.
4. Note red flags on the credit file due to nonpayment of bills.
5. Note authorized signature.
6. Enter charges into the point-of-sale terminal along with bill-to-account identifi-
cation. When this information is entered into the POS, it is also entered into an
electronic folio in the city ledger of the PMS.
Cash and Personal Checks
When guests indicate during registration that they will pay their bills with cash or a per-
sonal check, the front desk clerk should immediately be on the alert. Such a guest may
well charge everything during his or her stay (perhaps only one day in length) at the hotel
and then exit without paying. Consequently, most hotels require cash in advance from
guests who choose this method of payment, as the guest has not established a credit rat-
244 CHAPTER 9
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ing with the hotel. In addition, close monitoring by the night auditor and front desk
clerks of the guest’s charge activity is in order. Such guests are not allowed charge privi-
leges at other departments in the hotel. In properties with a PMS, the guest name and
room number are entered to block charges at point-of-sale areas. In a hotel without food
and beverage, gift shop, and health club POS terminals, the front office must alert those
departments that this guest has not been extended charge privileges.
To process a cash payment, the following procedure can be used:
1. Check the daily currency conversion rate when converting foreign into national
currency. Take time to ensure the math is accurate.
2. Retain the amount tendered outside the cash drawer until the transaction is
completed.
3. Maintain an orderly cash drawer, with bills separated by denomination.
4. Develop an orderly procedure to make change from the amount tendered.
5. Count the change out loud when giving it to the guest.
6. Perform only one procedure at a time. Refuse to make change for another bill of
a different denomination if a previous transaction has not been completed.
7. Issue a receipt for the transaction.
Most lodging properties simply do not accept personal checks; the opportunity for fraud
is too great. This policy often comes as a surprise to guests, who may protest that this is the
only means of payment they have. However, the hotel can use commercial check authori-
zation companies and credit card companies that guarantee a guest’s personal check.
The procedure for processing personal checks is as follows:
1. Request a personal check-cashing card.
2. Refer to the list of persons who are not allowed to present checks as legal tender.
3. Compare the written amount of the check with the figures to be sure they match.
4. Note low-numbered checks. Low numbers may indicate a newly opened,
unestablished account, and the check will require a supervisor’s approval.
5. Request identification (a valid driver’s license and a major credit card) and record
the numbers on the back of the check. Compare the name and address imprinted
on the check with a valid driver’s license.
6. Compare the signature on the check with the requested identification.
7. Validate the amount of the check and the credit rating of the guest with a com-
mercial check authorization company or credit card company.
DETERMI NI NG METHOD OF PAYMENT AND COLLECTI ON 245
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Traveler’s Checks
Traveler’s checks are prepaid checks issued by a bank or financial organization; they have
been an acceptable form of legal tender for many years. These checks are a welcome
method of payment in the lodging industry. Traveler’s checks are processed like cash.
Proof of credit is already established, and the hotel pays no percentage of the sale to a
credit card agency, as the guest paid a percentage of the face amount of the traveler’s
check to the issuing agency. However, checking proof of identification (a valid driver’s
license or major credit card) should be a standard traveler’s check–cashing policy. The
guest should sign the traveler’s check in the cashier’s presence, and that signature should
be compared with the signature already on the check. The list of traveler’s check numbers
that are not acceptable, supplied regularly by the check-issuing agency, must be consulted
to ensure that the checks are valid.
Debit Cards
Debit cards, or check cards, are embossed plastic cards with a magnetic strip on the reverse
side that authorize direct transfer of funds from a customer’s bank account to the com-
mercial organization’s bank account for purchase of goods and services. Some examples
of debit cards are MAC, NYCE, STAR, and PLUS. These are similar to credit cards in that
they guarantee creditworthiness, against which the hotel charges the bill; however, the pay-
ment is deducted directly and immediately from the guest’s personal savings or checking
account and transferred to the hotel’s account rather than being billed to the guest on a
monthly basis. Debit cards continue to gain in popularity as the use of credit cards
becomes more costly to the guest. However, the concept of float, the delay in payment
after using a credit card, may remain a more attractive benefit for some guests. Some debit
cards have a credit-card logo embossed on the plastic card, which indicates they are accept-
able at places that accept that particular credit card and are processed through a credit
card financial organization. Debit cards are processed similarly to credit cards.
To process a debit card payment, the following procedure is used:
1. Insert debit card into validation machine.
2. Have guest enter personal identification number.
3. Process debit-card voucher as a cash payment on the guest folio.
Assisting the Guest with Method of Payment
Guests may find they are short on cash or are otherwise unable to pay their bill due to an
expensive emergency, overextension of credit card limits, or theft. When these situations
occur, the front desk clerk or cashier should be ready to offer the following services.
246 CHAPTER 9
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Money Wire
Western Union provides money wire, an electronic message that authorizes money from
one person to be issued to another person; this service has been available to travelers for
many years, with a fee charged by Western Union. This convenient service should be
established as an option for a guest. The front office manager should develop and com-
municate a procedure that includes the phone number and address of the nearest money
wire center.
Travelers Aid Society
The Travelers Aid Society was founded for the purpose of aiding the down-and-out trav-
eler beset by an unexpected emergency in an unfamiliar city. The phone number and
address of this organization must also be communicated to the front office staff as an
option of payment.
Auto Clubs
The auto clubs—AAA (American Automobile Association) being the best known—and
private gasoline companies offer their members immediate cash advances in case of an
emergency. Again, a listing of phone numbers of auto clubs for guest use not only helps
the guest but ensures that the lodging establishment will be paid.
The method of payment, in the end, can affect the hotel’s bottom line. The preap-
proval criterion for credit card and debit card holders is an important requirement when
a hotel is extending credit to a guest from check-in to checkout. The discount rate charged
by the issuing agency, which takes a percentage of the gross charges, affects the income
statement as well. It is important, however, to show concern for the guest whose cir-
cumstances have taken a turn for the worse (serious accident, theft, unexpected illness,
etc.). The front office should be equipped to offer information on alternatives such as
auto clubs and money wires; this can be perceived as a display of genuine hospitality.
International Currency Exchange
When an international guest presents a credit card for payment at checkout, the credit
card issuing agency processes the payment according to the current exchange rate
between countries. If a guest wants to pay in his or her national currency, the cashier
must compute the exchange. The daily international exchange rate can be found by call-
ing a bank or other financial institution or reviewing the international exchange rates
published in the Wall Street Journal in the Currency Trading section. Exchange rates for
the U.S. dollar, pound, euro, peso, yen, and Canadian dollar are listed.
On January 1, 1999, the euro became the accepted currency for the following 11
member-states of the European Community: Belgium, Germany, Spain, France, Ireland,
ASSI STI NG THE GUEST WI TH METHOD OF PAYMENT 247
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Italy, Luxembourg, the Netherlands, Austria, Portugal, and Finland. In January 2001,
Greece adopted the euro, and in January 2002, euro coins and bills were introduced. The
euro provides ease in traveling throughout Europe, as travelers need not exchange cur-
rency at each participating country.
The goal in computing the exchange is to determine how much of the international vis-
itor’s national currency is required to pay the bill in the United States. With that goal in
mind, here is a simple procedure to follow. If a Canadian guest at a U.S. hotel wants to
pay a $500.00 hotel bill in Canadian dollars with an exchange rate of $0.80 (Canadian)
to US$1.00, use the following formula to compute the exchange:
If an English guest at a U.S. hotel wants to pay a $500.00 hotel bill in pounds with an
exchange rate of £1 to US$2.00, use the following formula to compute the exchange:
It is important to consider the float time of the international currency collected and
presented to a bank for deposit in a hotel’s account; that is, it will take several days or
weeks before the currency is credited to the hotel’s account. Also, a different rate of
exchange may be in effect at the time of the currency exchange transaction. For example,
a U.S. hotel may deposit £10,000 from an English tour group thinking it will receive
US$20,000 (US$2.00 for each English pound), but three weeks later, when the transac-
tion occurs, the exchange rate may be US$1.90 for £1. In this case, the U.S. hotel would
receive approximately US$19,000 (10,000 × 1.9 = 19,000) instead of the US$20,000
originally computed at the time of deposit. To compensate for this, the hotel must con-
sider adding a surcharge to the rate used that day as well as to cover a transaction fee
charge by banks. For example, in the case in which a U.S. hotel anticipates receiving
US$20,000 for a deposit of £10,000 based on an exchange rate of £1 for each US$2, it
may be better for the hotel to use £1 for each $1.90 to cover a volatile exchange rate and
a banking fee. The U.S. hotel would collect £10,526 ($20,000 ÷ 1.90 = £10,526) at the
time of checkout to compensate for the float time of the international currency.
US$500.00
£2.00
English pounds required = 250 tto pay the bill at a U.S. hotel
US$500.00
Canadian $0.80
Canadian do = $ . 625 00 lllars required to pay the bill at a U.S. hootel
248 CHAPTER 9
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GUEST CHECKOUT
F R O N T L I N E R E A L I T I E S
A
guest from Europe has changed her mind about using a credit card to pay the outstanding
folio balance and wants to pay with English pounds. How would you proceed?
q
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Obtaining Future Reservations
Checkout, the last contact point with the guest, is the best opportunity for securing addi-
tional reservations. It is at this time that the cashier or front desk clerk can best assist the
marketing and sales department. The front office manager should develop a standard
procedure for the front office staff to follow, which may include these steps:
1. At the beginning of the checkout procedure, inquire about the guest’s stay. Main-
tain good eye contact and listen closely.
2. Ask if the guest will be returning to the area in the near future or if he or she will
need a reservation for a property in the hotel’s chain or referral group. If so, ask
whether he or she would like to make a reservation for that visit. Because all the
guest data are already on file, a confirmation of the reservation can be sent later.
If the guest is in a hurry, the reservation staff can follow up later. Your role is to
plant the seed of a future sale as well as to accommodate a guest.
3. Continue to check out the guest. Again, make eye contact. If the guest does not
respond positively to the first inquiry, offer a departure brochure or directory
that includes information about making additional reservations at the hotel’s
property or properties within the chain or referral group.
4. Bid the guest farewell.
5. Report to the shift supervisor any negative comments from the guest concerning
his or her stay.
6. Process future reservations or alert the reservation clerk to these requests.
This standard procedure should be part of the desk clerk’s training program. As with
other sales efforts at the front office, selling additional reservations at checkout should be
rewarded through an employee incentive program. This procedure gives the front office
personnel a basic structure to use in pitching the sale and accommodating the guest. The
employee still has the opportunity to adapt the pitch to his or her own style.
Filing Documents
The paperwork documenting the day’s transactions must be in place when the night
auditor’s shift begins. Guest folios, transfers, paid-out slips, and the like must be filed
according to a standard system. This may seem like a simple task, but at a busy front desk
with many checkouts and check-ins, it is easy to misplace documents. Care must be taken
FI LI NG DOCUMENTS 249
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to provide the night auditor with all the necessary proof of origination of charges and
trail of payment options.
Relaying Guest Departures to Other Departments
It is essential that other departments be notified that a guest has checked out to ensure
smooth operation of the hotel. The PMS allows the front desk clerk and the house-
keeping employees to inform one another of guest departures, stayovers, room avail-
ability status, and other occupancy details as they occur. As mentioned earlier, once the
electronic folio is cleared from active memory after checkout, the guest departure is indi-
cated on all other modules of the system. The front desk clerk need not telephone the
housekeeper to say that room 203 is vacant; the housekeeper need not spend hours
reporting room availability status to the front desk clerks. Backup phone calls are still
made for situations for which current information is needed from the maintenance
department. The maid or houseman can inform the front desk clerk electronically of
room availability status.
In addition to informing the food and beverage department of guests who have
checked out, other departments where guests can incur charges must be notified as well
to prevent acceptance of unauthorized guest charges. Other departments, such as gift
shops, recreational activity centers, and valet service, are also notified so a guest who has
already checked out is no longer able to charge a closed account. A system for notifying
other departments, perhaps not interfaced in the PMS, of guest checkouts should be a
basic operating procedure of the front office.
The entire communication system between the front office and other departments is
enhanced when employees care about doing their jobs right. Desk clerks should ensure
that rooms showing a ready status are indeed available. Housekeeping personnel must
report when rooms are ready to be occupied. Careful screening of job candidates and
proper training, which includes an explanation of the importance of maintaining com-
munication with other departments, are vital to smooth operations. When everyone
works together, the guest is satisfied, the lodging establishment receives a fair return on
its investment, and the employee’s career opportunities are enhanced.
Removing Guest Information from the System
In hotels with a PMS, removing guest information requires closing the electronic folio.
This deletes the guest name and room number from the electronic guest database and the
call-accounting system. These data are stored for future processing by the accounting
office (see the following section) as well as the marketing and sales department for devel-
oping guest histories (discussed later in the chapter).
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Transfer of Guest Accounts to the Back Office
Some methods of payment require transferring folio balances to the back office for fur-
ther processing. Credit card payments are processed and added to the master credit card
account according to type (such as Visa or JCB). The controller maintains this account as
accounts receivable. Bill-to-account charges must also be transferred to the back office
accounts receivable. The controller processes the account according to standard operat-
ing procedures, which are handled electronically in a property management system. The
back office transfer option enables the controller or front office staff to transfer accounts
that require special handling or adjustments.
Checkout Reports Available with a Property Management System
The front office manager should review and analyze data produced during checkout.
Most of this information is financial. The data can be grouped into categories as the front
office manager desires; method of payment and the respective amounts, total room sales,
total room count, and total room sales by type are some sorting options. Room status and
occupancy availability can also be tracked. The number of guests who actually checked
out versus the number who should have checked out can be compared. An analysis of
guests who understayed or overstayed their reservations can be made. The reports option
of the checkout module in the PMS allows the front office manager, director of market-
ing and sales, controller, and other department heads to review these statistics. Figures 9-3,
9-4, 9-5, and 9-6 are examples of the reports available from this module.
CHECKOUT REPORTS AVAI LABLE WI TH A PROPERTY MANAGEMENT SYSTEM 251
FI GURE 9- 3 Method of payment report option of a PMS.
2/15 Method of Payment
Type Gross Net
V $ 456.98 $ 431.56
MC/ 598.01 565.20
JCB 4,125.73 3,202.11
Direct bill 105.34 105.34
Cash 395.91 395.91
TOTALS $5,681.97 $4,700.12
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FI GURE 9- 4 Room sales report option of a PMS.
9/22 Room Sales
Type Occupied Available Sales Guests
K 35 37 $2,698.12 42
KK 50 50 2,965.09 65
KS 10 15 1,000.54 11
DD 45 50 2,258.36 68
TOTALS 140 152 $8,922.11 186
FI GURE 9- 5 Room status report option of a PMS.
11/1—2:19 P.M. Room Status
DD K KK KS
104 OCC 101 ON CHG 201 ON CHG 108 ON CHG
204 READY 102 ON CHG 202 ON CHG 109 READY
209 READY 103 ON CHG 203 OOO 205 READY
210 ON CHG 105 READY 206 READY 208 READY
211 ON CHG 106 OUT OF ORDR 207 READY 301 OCC
304 ON CHG 107 ON CHG 303 OCC 308 READY
309 READY 302 OCC 307 OCC
310 READY 305 OUT OF ORDR
311 READY 306 ON CHG
FI GURE 9- 6 Understay reservation report option of a PMS.
Week beginning: 2/01
2/1 2/2 2/3 2/4 2/5
No. reservations 125 54 10 5 2
No. completed 125 50 7 3 1
Variation 0 4 3 2 1
Lost revenue 0 $480 $630 $480 $300
TOTAL LOST SALES: $1,890
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Guest Histories
Guest histories are marketing analyses of guests’ geographic and demographic informa-
tion that also provide information about guest activities while staying at the hotel. This
analysis is simplified by the use of a PMS. The guest history option of the checkout mod-
ule assists the front office manager in preparing reports of such data for the director of
marketing and sales. The particulars of guest histories can also be obtained from regis-
tration cards, if the hotel still uses them, the electronic folio and the data from the reser-
vation system in the PMS, or the Internet.
ZIP Code or Postal Code
The most useful part of the marketing data is the ZIP or postal code, an individual local
postal designation assigned by a country. It provides the person who is developing mar-
keting strategies with geographic indicators of populations who have tried the products
and services of a particular lodging establishment. This geographic information can be
matched with communications media, such as website, radio, television, and newspapers,
that are available in that area and with demographic (age, sex, income, occupation, mar-
ital status, etc.) and psychograpic (lifestyle) data. Matching website, radio stations, tele-
vision stations, and newspapers to a group that constitutes the hotel’s prime market as
well as developing well-structured direct-mail campaigns can be a profitable marketing
strategy. Defining the market for continued business is part of a sound business plan.
Developing Conventions and Conferences
The front office manager who reviews the registration cards and reservation cards for
group affiliations finds data for potential development of guests by the marketing and
sales department. Follow-up by the marketing and sales department to representatives of
organizations that have stayed in the hotel may lead to the booking of future conventions
and conferences.
The constant demand for meeting facilities does not just happen. Corporate clients that
book facility space want to be assured that all details will be handled professionally. Trust
in a hotel begins with the hotel’s establishing a good track record in handling the small
details of hospitality—efficiency in processing reservations, registrations, checkout proce-
dures, and in the maintenance of clean and attractive facilities. This trust (along with a
good room rate and adequate meeting space) increases room sales to small conferences.
FAM Tours
The guest history also provides information about the method of advertising that helped
to secure the reservation and registration (Figure 9-7). If guest histories reveal that a large
number of reservations originated with a particular travel or tour agency, then the
GUEST HI STORI ES 253
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marketing and sales department should maintain a strong relationship with that agency
and develop relationships with other agencies within that particular point of origin as
well. FAM (familiarization) tours—complimentary visits sponsored by the lodging prop-
erty that host representatives of travel organizations, bus associations, social and non-
profit organizations, and local corporate traffic managers—can produce an increase in
future room revenue. During these tours, representatives can see firsthand what the prop-
erty has to offer.
Origination of Reservation
A lodging property that has a 70 percent corporate client market might also want to
review who makes the reservations for these business professionals at the corporate
client’s office. The administrative assistant, traffic manager, or executive secretary is
probably the person who makes the reservations. If this is the case, the lodging estab-
lishment should put in place a program that encourages these people to call the lodging
establishment for the reservation. Incentive programs that reward those who make a cer-
tain number of reservations over a specified period are an example.
Walk-in guests can also provide valuable marketing data. If guests indicate that “the
billboard on Route 777N” was the means by which they learned about your hotel, you
will have an idea about the cost-effectiveness of this type of advertising. If guests are being
referred by the local gasoline station or convenience store, consider providing brochures
and other information to these businesses. Perhaps complimentary dinners or escape
weekends for the referral source personnel would be effective.
Frequency of Guest Visit
Data from the guest histories concerning frequency of visits also reveals areas for follow-
up (Figure 9-8). The frequent guest, defined as a person who stays at the establishment
254 CHAPTER 9
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FI GURE 9- 7 Referral sources analysis option of a PMS.
1/1–6.30 Guest History Analysis of Method of Referral
Method No. %
Direct mail 300 19
Billboard 121 8
Reservation system 420 26
Local referral 89 5
Car radio 35 2
Newspaper 35 2
Website 600 38
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more than a specified number of times per month or year, might be offered a free accom-
modation as either a business or a personal guest. This person and his or her company
should be entered into the database for follow-up with advertising promotions designed
to attract that market segment.
Types of Room Requested
The guest history is useful in determining the types of rooms requested. Are rooms with
two double beds requested more often than rooms with one king-size bed? Are rooms
designated as nonsmoking being requested more often than rooms designated as smok-
ing? Are suites with cooking facilities requested by corporate clients for long-term guests?
Such hard, quantifiable data are what hotel owners use to make construction and pur-
chasing decisions.
Room Rates Versus Occupancy Patterns
Reviewing room rates can assist the controller and director of marketing and sales in fore-
casting profit-and-loss statements. The frequency with which certain price categories
GUEST HI STORI ES 255
FI GURE 9- 8 Corporate guest data option of a PMS.
1/1–1/31 Guest History—Corporate Guest Frequency
Corporate Guest Frequency No. Rooms
Anderson Corp. 1/4 10
Anderson Corp. 1/7 2
Anderson Corp. 1/15 5
Dentson Co. 1/5 9
Dentson Co. 1/23 1
Hartson College 1/4 16
Montgomery House 1/20 7
Norris Insurance Co. 1/14 50
Norris Insurance Co. 1/15 65
Norris Insurance Co. 1/16 10
Olson Bakery 1/18 10
VIP Corp. 1/2 10
VIP Corp. 1/9 10
VIP Corp. 1/25 14
VIP Corp. 1/26 17
VIP Corp. 1/28 5
VIP Corp. 1/30 23
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of rooms are rented indicates the price sensitivity of certain market segments. If price
sensitivity is an indicator of room occupancy, then marketing programs that maximize
profits in that area must be implemented.
Examining occupancy patterns helps the front office manager schedule personnel. In
certain corporate market properties, the hotel may be full from Sunday through Thurs-
day nights but nearly empty on Friday and Saturday. A lodging establishment with a large
volume of tourist business on weekends experiences the opposite situation. The front
office manager should schedule staff accordingly.
The guest history of the PMS checkout module gives the front office manager a sophis-
ticated method of drawing on these data from a database of reservations and registra-
tions. It is easy to group marketing patterns. The concepts already discussed help in
developing the data that are readily available.
Last Impressions of the Hotel
The front desk staff has the vital responsibility in the hospitality industry to create the
guests’ last impression of the hotel. All the great service opportunities afforded the guest
throughout his or her stay can be shattered or further advanced at the point of depar-
ture. Kind words, a speedy check out, an offer for directions to the airport, etc., all let
the guest know you care. For example, Marriott International, Inc., offers At Your Ser-
vice
®
, which includes Internet resources of local weather reports, information on airport
shuttle, and prior downloading of a future guest’s email. All of these services allow
guests to prepare for their visit and, when the time comes for check out, a good oppor-
tunity exists for the front office staff to create that last impression that continues the dis-
play of hospitality.
1
256 CHAPTER 9
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I N T E R N A T I O N A L H I G H L I G H T S
T
he Travel Industry Association of America indicates (2004) that travelers to the United States
from China, India, Russia, and Poland will increase.
2
The implications of this type of predic-
tion are that students preparing for a career in the hotel industry must become familiar with the
needs of international visitors during checkout. Studying foreign languages, common cultural concerns,
and differences in legal tender help students become valuable members of the hotel team. A hotel
employee who can assist an international guest in understanding the guest folio and determining the rates
of currency exchange greatly improves the chances that this guest will return.
u
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Solution to Opening Dilemma
The following list of questions to ask the vendor may help justify the purchase of the
guest history PMS:
?
Does this module allow us to track registrations by ZIP code?
?
Can we match ZIP code and media indicated on registration, such as radio, televi-
sion, newspaper, billboard, third-party website, central reservation, travel agent,
and direct mail?
?
Can we print a list of guest business affiliations?
?
Can we print a list of persons who initiate the reservations for corporate clients?
?
Are we able to track frequency of individual guest reservations?
?
Is there a means of showing how many times our suites are rented versus how many
times our standard deluxe rooms are rented?
?
Can that list of suite and standard deluxe room rentals be sorted by groups, such
as corporate, tourist, government, or commercial?
?
Can we track the number of denials we have had to issue because a certain type of
room was not available?
?
Does this module show our occupancy patterns by week, month, and year?
Chapter Recap
This chapter introduced the concepts and procedures required to organize and operate a
guest checkout system in a hotel. The importance of communicating late charges to the
front office and of notifying point-of-sale areas about checkouts was discussed. The pro-
cedure for checking out a guest was reviewed, with attention given to sales and hospital-
ity aspects of the procedure. The chapter emphasized the importance of communication
among the housekeeping department, the food and beverage department, and the front
office to strengthen service and to ensure the profitability of the lodging property. The
guest history, from which guest data are grouped and analyzed, was presented as an
important source of marketing feedback.
End-of-Chapter Questions
1. Why should a front office manager be concerned about compiling a guest’s late
charges? Give an example of losses that can result if late charges go unpaid.
2. Why should a front desk clerk ask a guest who is checking out about the quality
of products and services? Who needs this information?
END- OF- CHAPTER QUESTI ONS 257
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3. Why is the retrieval of a room key so important to the guest? to the hotel?
4. Do you feel a guest should review the guest folio during checkout? Why?
5. If you have used an in-room guest checkout system while you were a guest in a
hotel, describe the procedure you followed. Do you feel it was a convenience or
a novelty?
6. Discuss the methods of payment available to the guest. Why does the hotel not
consider these payment options financially equal?
7. Discuss the types of credit cards. Explain their advantages to the guest and to the
hotel.
8. What does bill-to-account mean? What are the hidden costs involved with this
method of payment?
9. Why is cash not an eagerly sought method of payment?
10. What is a debit card? How does it differ from a credit card?
11. Summarize the procedures to follow when accepting credit cards, bill-to-accounts,
cash, checks, and traveler’s checks as methods of payment.
12. A guest wants to pay her account of US$439 in Canadian dollars. How would
you proceed?
13. How do you feel about obtaining a reservation at the time of checkout? What
steps would you suggest to a front office manager to secure future reservations?
14. Why does the night auditor want all paperwork in order before beginning the
night audit?
15. Why must the front office communicate a guest’s departure to the point-of-sale
areas not interfaced with a PMS?
16. What types of guest accounts are transferred to the back office?
17. List the reports that can be generated by the checkout procedure and explain how
they can assist management.
18. Discuss the role of the guest history in developing strategies by the marketing and
sales department.
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CASE STUDY 259
C A S E S T U D Y 9 0 1
Margaret Chu, general manager of The Times Hotel,
has received a phone call from the Service Feedback
Agency, which she employs to provide feedback on
customer service. The agent from this service said
that 6 of 15 former guests indicated a lengthy delay
in checkout and that the holdup in service was due
to a desk clerk who repeatedly had to call for the
supervisor to clarify how to operate the PMS. On
another point of service, none of the 15 former
guests was asked to make a future reservation.
Ms. Chu calls Ana Chavarria, front office man-
ager, into the office to discuss this report. Ana finds
the service feedback report disturbing and promises
to rectify the matter. Later that day, she calls Vicente
Ramirez, head cashier, into her office. She asks him
to write a step-by-step procedure for checking out a
guest, with particular attention to use of the PMS.
She also calls Angelo DeSalo, head reservation
agent, into her office and asks why no future reser-
vations are being requested at the time of checkout.
Angelo indicates that desk clerks are busy and they
just don’t have time to request another reservation.
What steps do you think Vicente Ramirez will
include in the procedure for checking out a guest?
What suggestions can you give Ana Chavarria to
motivate her desk clerks to ask for an additional
reservation at checkout?
C A S E S T U D Y 9 0 2
Margaret Chu, general manager of The Times Hotel,
has returned from a meeting of the local hotel asso-
ciation. The head of the state government agency on
international tourism made a presentation and asked
the attendees to support the state’s efforts to secure
international visitors to the area. He said recent
reports indicate that foreign visitors to the state will
increase by 25 percent in the next two years. The
economic impact of this tourism could mean more
than $100 million to the local economy.
Ms. Chu calls her hotel professor friend, Monica
Blair, at the local university and asks if Dr. Blair
has a student or two who might want to take on a
project of outlining concepts to use in preparing a
front desk staff for international visitors. The stu-
dents would work with Ana Chavarria, front office
manager.
Prior to visiting Ms. Chavarria, the students are
instructed to prepare an outline focusing on the
question, “What does the international guest need to
know to have a successful visit to our town?”
Help these two students develop a list of ques-
tions to use in their meeting with Ana Chavarria.
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Notes
1. John Wolf, “Marriott Launches at Your Service
®
Pre-Arrival Planning Across
2.500 Planning Across Hotels Globally,” (January 1, 2005) http://www.hotel-
online.com/News/PR2005_1stJan05_MarriottAtYourService.htm
2. “New TIA Report Examines Emerging Inbound Markets,” Travel Industry Asso-
ciation of America, 1100 New York Avenue, NW, Suite 450, Washington, DC
2005-3934. http://www.tia.org/Travel
Key Words
260 CHAPTER 9
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GUEST CHECKOUT
bill-to-account
debit cards
euro
FAM (familiarization) tours
float
guest histories
house limit
in-room guest checkout
late charges
money wire
traveler’s checks
ZIP or postal code
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O P E N I N G D I L E M M A
The front office manager has asked you to train a new night auditor.
You are required to prepare an outline of concepts you will use in
training. The outline is due tomorrow.
The hotel’s financial management starts in the front office. Of course, this
responsibility is shared with the controller’s office, but it begins with the accu-
rate and timely processing of guest accounts. This chapter addresses the assem-
bling and balancing of all financial transactions in the guest accounts and hotel
departments for each day of the year. This can be a time-consuming process for
the night auditor, but it provides a balance of debit and credit entries to guest
and departmental accounts, which include income- and expense-generating
areas of the hotel (e.g., restaurants, gift shop, banquets) (Figure 10-1).
Importance of the Night Audit
The night audit is the control process whereby the financial activity of guests’
accounts is maintained and balanced. This process tracks charges and pay-
ments (debits and credits) and the departmental receipts and charges on a daily
basis. This working definition encompasses not only the mechanical proofing
of totals of charges and payments but the further review of account activity by
management. The front office manager monitors the credit activity of guests,
projects daily cash flow from room sales, and monitors projected and actual
sales for the various departments.
C H A P T E R 1 0
Preparation and Review
of the Night Audit
C H A P T E R F O C U S P O I N T S
?
Importance of the night
audit in a hotel
?
Night audit process
?
The daily flash report
?
Reading the night audit
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Learning the process of the night audit can provide valuable information for someone
who plans to continue in the hotel industry. It also gives the necessary objective overview
to evaluate the hotel’s financial activity. Students will become aware of the role of the
general manager, as the night audit allows a review of all the financial activity that takes
places in a hotel in one day. Based on that review, the general manager must determine
how the night audit should be adapted to meet the expenses and profit goals for the
accounting period. It also allows the general manager to see if marketing plans and oper-
ational activities have accomplished their stated profit goals. The night audit provides
insight into how each department must be monitored to produce an acceptable income
statement. It pulls together the plans and operations of a hotel on a daily basis, not just
at the end of an accounting period. Ultimately, the night audit allows general managers
to make good financial decisions based on current and cumulative data.
The Night Auditor
The night auditor has many responsibilities in addition to preparing the night audit
report. This person also must check in and check out guests who arrive or depart after
11:00 P.M., process reservations, perform the duties of security guard, monitor fire safety
262 CHAPTER 10
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FI GURE 10- 1
The night auditor
provides a
financial check on
guest folios and
departmental
activities. Photo
courtesy of
Wyndham
Reading Hotel,
Reading,
Pennsylvania.
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systems, act as cashier for banquet functions, and perform the work of manager on duty.
The night auditor acts as a communication link between the guest and hotel operations
during the 11:00 P.M. to 7:00 A.M. shift. This is an important position.
The Night Audit Process
The night audit is not one of those reports that is put on the shelf and forgotten. Man-
agement uses it to verify the integrity of the guest accounts and to review operational
effectiveness, which is the ability of a manager to control costs and meet profit goals.
Therefore, accuracy is extremely important. Future hoteliers who want to comprehend
the significance of the night audit should participate in the preparation of one. The fol-
lowing discussion of the preparation of the night audit will give you insight into the
details of “where the numbers come from.”
The six basic steps involved in preparing a night audit are:
1. Posting room and tax charges
2. Assembling guest charges and payments
3. Reconciling departmental financial activities
4. Reconciling the accounts receivable
5. Running the trial balance
6. Preparing the night audit report
This listing will guide you through the seemingly endless proofing of totals and cross-
checking of entries, and expedite the completion of the process.
The process presented in this chapter describes performing the night audit with a
property management system. Learning the mechanical or hand method of doing the
night audit, however, will assist the front office manager in understanding the intricacies
of following a paper trail of guest and departmental transactions. Undoubtedly, the mod-
ern method of performing the night audit on a PMS will be used, but you should also be
familiar with the components up close and personal.
Posting Room and Tax Charges
After the night auditor reviews any messages from other front office staff, reviews guests
who checked out of the hotel, extends any guest stays, reviews all room rates, and prints
a variance report, his or her first task is to post room and tax charges to all accounts. The
PMS can easily post these charges to the electronic folios.
THE NI GHT AUDI T PROCESS 263
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Assembling Guest Charges and Payments
The modules in a PMS (food and beverage, call accounting, gift shop, etc.) allow for ease
in assembling guest charges and payments. The following is a typical list of point-of-sale
departments for which income is reported:
?
Restaurant 1 (breakfast)
?
Restaurant 2 (lunch)
?
Restaurant 3 (dinner)
?
Room service 1 (breakfast)
?
Room service 2 (lunch)
?
Room service 3 (dinner)
?
Lounge 1 (lunch)
?
Lounge 2 (happy hour)
?
Lounge 3 (dinner)
?
Lounge 4 (entertainment)
?
Valet
?
Telephone
?
Gift shop
?
Spa and pool
?
Parking
?
Miscellaneous
Note how the restaurant, room service, and lounge paperwork is further classified by
meal or function, to facilitate recordkeeping. General managers can review the income-
generation activity of each of these departments when they are reported separately.
The guest charges option of the night audit module in a property management system
can sort and total all departmental charges and payments posted to the electronic folios
from the point-of-sale systems that interface with the PMS. These data are accurate as long
as the person entering the charges at the point-of-sale terminal keys them in accurately.
Reconciling Departmental Financial Activities
The departmental totals option of the night audit module in the PMS report the totals of
sales by department, as shown in Figure 10-2. These totals are compared to posting
information received from the point-of-sale system.
Another departmental total that must be verified is the cash tendered by guests at the
front office. Hotels vary in their cash-processing policies. Some front offices process
restaurant guest checks from cash customers or other departments in the hotel because
management wants to centralize the cash transactions. In other hotels, this policy would
264 CHAPTER 10
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THE NI GHT AUDI T PROCESS 265
FI GURE 10- 2 The departmental totals option of a PMS lists amounts generated by each department.
Courtesy of Wyndham Reading Hotel, Reading, Pennsylvania.
Departmental Tools
Department Amount
Room
Tax
Local Telephone
Long-Distance Telephone
Paidout
Beverage
Write off Credit
Restaurant Breakfast
Restaurant Lunch
Restaurant Dinner
Lounge Beer
Lounge Wine
Lounge Liquor
Restaurant Tips
Restaurant Merchandise
Restaurant Tax
Room Service
Room Service Tips
Gift Shop
Movie
Vending
Parking
Dry Cleaning
Newspaper
Rollaway
Gift Certificates
Copies
Faxes
Stamps
Adv. Deposit Refund
Banquet Food
Banquet Beverage
Banquet Service Charge
Banquet Wine
Banquet Liquor
Banquet Beer
Banquet Meeting Rooms
Banquet Tax
TOTAL
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be a great inconvenience because of the distance of the restaurants, lounges, and gift
shops from the front office. It also requires additional personnel to carry the guest checks
with the cash or credit cards to the front office.
The cashier option of the night audit module in the PMS reports the amount of cash,
credit cards, and coupons received and discounts processed during the shift, as shown in
Figure 10-3. The total amount of cash received by each cashier issued a cash drawer must
be verified against the total money deposited for that shift.
Reconciling Accounts Receivable
The city ledger is an accounts receivable held at the front office. As noted in chapter 2,
the city ledger is a collection of guest accounts of persons who are not registered with the
hotel. They have either received approval for direct billing privileges or paid a deposit on
a future banquet, meeting, or reception. The night auditor treats these accounts just like
the accounts on the guest ledger for registered guests. He or she must assemble the
charges and verify their accuracy. The cash received from these accounts is reflected in the
cashier’s report.
The figures in a city ledger can be quite large. A hotel that promotes direct billing as
a customer service may have outstanding guest debit charges of $10,000 to $50,000. The
hotel may hold a credit balance, amounts of money it owes guests in future services, of
$25,000 to $150,000 or more from deposits on future receptions and meeting room
rentals. The controller of the hotel must closely watch the balances of these accounts to
ensure effective cash flow management.
The master credit card account—an account receivable that tracks bank, commercial,
private label, and intersell credit cards such as Visa, MasterCard, and JCB—is held at the
front office. Depending on the size of the hotel, the services offered to the guest, and the
speed of reimbursement from the credit card agency, this figure may also be quite large.
It is not uncommon for a medium-size hotel to have an outstanding credit balance of
$30,000 to $50,000 at any one time. As checks are received from the credit card agency,
this figure is reduced. It rises again when new charges are posted to a guest’s folio. When
266 CHAPTER 10
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F R O N T L I N E R E A L I T I E S
A
front desk clerk was $2.75 over on her cashier’s report for the shift. What do you think is
the source of the overage? How would you correct the error?
q
F R O N T L I N E R E A L I T I E S
T
he front office manager asks you to retrieve a total for the Visa credit card balance in the
accounts receivable. How would you proceed?
q
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THE NI GHT AUDI T PROCESS 267
FI GURE 10- 3 The cashier’s report maintains control of cashier activity. Courtesy of
Wyndham Reading Hotel, Reading, Pennsylvania.
Cashier Report
Department Amount
Front Desk
Cash Received
Write Off
Travel Agent Commission
Checks
Employee Discount Fee
Credit Card Received
MasterCard
Visa
Diners Club
JCB
Hotel Gift Certificate
Restaurant
Cash Received
Credit Card Received
Visa
MasterCard
Diners Club
JCB
Gift Certificate Redeemed
Lounge
Room Service
Discounts
Welcome Discount Coupon
Banquets
Cash Received
Credit Card Received
Visa
MasterCard
Diners Club
JCB
Allowances
TOTAL
Deposit Summary
Cash/Foreign Currency
Other Payment Methods
Deposits Subtotal
A/R Total
Paid Out
Total Deposit
Actual Deposit
Over/Short
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the checks from the credit-card agency are received, they are posted to the respective
credit card’s account receivable, and a current balance is calculated.
The city ledger and accounts receivable options of the night audit module of a PMS
produces a report of the activity on the city ledger and master credit card accounts.
Running the Trial Balance
A trial balance (Figure 10-4) is a first run on a set of debits to determine their accuracy
compared to a corresponding set of credits. The trial balance helps the night auditor focus
on accounts in which charges may have been posted or reported incorrectly. For that rea-
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FI GURE 10- 4 A trial balance report lists the debit and credit activity of the front
desk, receivables, and payables. Courtesy of Wyndham Reading
Hotel, Reading, Pennsylvania.
Trial Balance
Front Desk Activity Amount
Opening Balance
Total Debits (Room and Tax)
Total Credits (Various Methods of Payments)
Deposits Transfer (Payments Collected on Banquets or Room Deposits)
Closing Balance
Advance Deposits (Current Amounts in System) Amount
Opening Balance
Total Credits
Applied/Canceled
Closing Balance
Receivables Amount
Opening Balance
Total Debits (General Ledger Accounts of corporations and individuals)
Total Credits (Various Methods of Payments)
Closing Balance
Payables Amount
Opening Balance
Total Debits (Travel Agent Fees Paid by the Hotel)
Total Credits (Various Methods of Payments)
Closing Balance
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son, it is important that the night auditor compare the departmental totals against trans-
fers and paid-out slips for each department processed by desk clerks and cashiers.
Goal of Preparing the Night Audit Report
OK, so now that all the financial data have been assembled, what do we do with the num-
bers? Students studying hotel front office management may ask, “Why should the night
audit report be prepared?” It generates a massive amount of daily operational financial
feedback that provides an immediate opportunity for managers to react and respond.
General managers and supervisors must use the information to improve the situations
that have resulted from their efforts. The night audit report is key in maximizing the effi-
ciency of a hotel. The daily figures regarding room occupancy, yield percentage, average
daily rate, and revenue per available room (RevPAR) suggest opportunities to improve a
slow sales period. Guests who demand an accurate folio complete with guest charges can
be helped more efficiently as a result of this process.
As you begin your career in the hotel industry, take the opportunity to review the
financial statistics generated by the night audit report. The result will be a capsule review
of the importance of departmental financial activities and their role in delivering hospi-
tality. This background will also provide you with insight into the decision-making
process, which, in turn, helps hotel departments adhere to their budgets.
Preparing the Night Audit Report
The night audit report is usually organized to meet the needs of a specific lodging estab-
lishment. Some general managers might require more financial data than others. Figure
10-5 is a sample of a night audit report of all financial activities of the day. You may want
to note the columns headed “Budget” and “Goal.” The budget figure is the target amount
of sales planned for that day. The goal figure shows what percentage of the budgeted fig-
ure was actually achieved. If a larger amount was budgeted than was realized, then some
part of the operation is not functioning as expected. Some hotel managers want a cumu-
lative figure reported each day, to gain a more comprehensive overview of the achieve-
ment of financial goals.
It is important that managers approach this report as a functional tool that provides
daily operational financial data. Its major components may seem overwhelming when
perceived as a whole. With experience, you learn to view this seemingly complicated doc-
ument in separate parts, each of which provides feedback on daily operational perform-
ance. Daily review of the reported figures allows management the opportunity to be
flexible in meeting financial goals.
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FI GURE 10- 5 Night audit report.
Night Audit Date ________________
$ Actual $ Budget Goal (%)
ROOM 4,500.00 7,500.00 60.00
TAX 450.00 750.00 60.00
Restaurant 1 750.00 825.00 90.91
Restaurant 2 1,200.00 1,500.00 80.00
Restaurant 3 2,000.00 1,500.00 133.33
TOTAL REST SALES 3,950.00 3825.00 103.27
SALES TAX 197.50 191.25 103.27
Rest Tips 1 112.50 123.75 90.91
Rest Tips 2 180.00 225.00 80.00
Rest Tips 3 300.00 225.00 133.33
TOTAL REST TIPS 592.50 573.75 103.27
Room Srv 1 125.00 350.00 35.71
Room Srv 2 150.00 300.00 50.00
Room Srv 3 300.00 250.00 120.00
TOTAL ROOM SRV 575.00 900.00 63.89
SALES TAX 28.75 45.00 63.89
Room Srv 1 Tips 25.00 70.00 35.71
Room Srv 2 Tips 30.00 60.00 50.00
Room Srv 3 Tips 60.00 50.00 120.00
TOTAL ROOM SRV TIPS 115.00 180.00 63.89
Banq Bkfst 0.00 350.00 0.00
Banq Lunch 200.00 500.00 40.00
Banq Dinner 4,300.00 6,500.00 66.15
TOTAL BANQ 4,500.00 7,350.00 61.22
Banq Bkfst Tips 0.00 63.00 0.00
Banq Lunch Tips 36.00 90.00 40.00
Banq Dinner Tips 774.00 1,170.00 66.15
TOTAL BANQ TIPS 810.00 1,323.00 61.22
Banq Bar Lunch 125.00 200.00 62.50
Banq Bar Dinner 485.00 400.00 121.25
TOTAL BANQ BAR 610.00 600.00 101.67
ROOM RENTAL 200.00 250.00 80.00
Lounge 1 125.00 85.00 147.67
Lounge 2 780.00 950.00 82.11
Lounge 3 500.00 450.00 111.11
Lounge 4 600.00 575.00 104.35
TOTAL LOUNGE SALES 2,005.00 2,060.00 97.33
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PREPARI NG THE NI GHT AUDI T REPORT 271
Lounge Tips 1 12.50 8.50 147.06
Lounge Tips 2 78.00 95.00 82.11
Lounge Tips 3 50.00 45.00 111.11
Lounge Tips 4 60.00 57.50 104.35
TOTAL LOUNGE TIPS 200.50 206.00 97.33
VALET 350.00 250.00 140.00
Tele Local 110.00 125.00 88.00
Tele Long Distance 295.00 300.00 98.33
TOTAL PHONE 405.00 425.00 95.29
GIFT SHOP 212.00 350.00 60.57
GIFT SHOP SALES TAX 10.60 17.50 60.57
VENDING 125.00 100.00 125.00
SPA 450.00 500.00 90.00
PARKING 500.00 350.00 142.86
TOTAL REVENUE 20,786.85 27,746.50 74.92
Less Paid-outs
Valet 120.00
Tips 0.00
TOTAL PAID-OUTS 120.00
Less Discounts
Room 0.00
Food 25.00
TOTAL DISCOUNTS 25.00
Less Write-offs
Rooms 75.00
Food 15.00
TOTAL WRITE-OFFS 90.00
Total Paid-out and Noncollect Sales 235.00
Total Cash Sales 4,028.45
Today’s Outstd A/R 16,758.40
Total Revenue 21,021.85
Yesterday’s Outstd A/R 75,985.12
TOTAL OUTSTD A/R 92,743.52
CREDIT CARD REC’D A/R 37,500.12
Cash Rec’d A/R 5,390.87
FI GURE 10- 5 (continued)
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BAL A/R 49,852.53 75,000.00 66.47
ANALYSIS OF A/R
City Ledger 12,045.15
Direct Bill 3,598.55
Visa 19,681.01
MC 13,788.24
JCB 4,939.03
Total A/R 54,411.98
BANK DEPOSIT ANALYSIS OF BANK DEPOSIT
Cash 9,419.32 Total Cash Sales $4,028.45
Visa 22,967.98 Credit Card Rec’d A/R 37,500.12
MC 11,687.05 Cash Rec’d A/R 5,390.87
JCB 2,845.09
TTL BANK DEP $46,191.44 $46,919.44
AMT TR A/R $16,758.40
Cashier’s Report
Actual Amount POS Amount Difference
Shift 1
Cash $907.25 $907.29 –$0.04
Cr Cd 29,750.67 29,750.67 $0.00
TOTAL 1 $30,657.92 $30,657.96 –$0.04
Shift 2
Cash $7,884.81 $7,883.81 $1.00
Cr Cd 7,000.45 7,000.45 0.00
TOTAL 2 $14,885.26 $14,884.26 $1.00
Shift 3
Cash $628.22 $628.22 $0.00
Cr Cd 749.00 749.00 0.00
TOTAL 3 $1,377.22 $1,377.22 $0.00
TOTALS $46,920.40 $46,919.44 $0.96
Analysis Cash Report
Cash Sls $4,028.45
Cr Cd A/R 37,500.12
Cash A/R 5,390.87
TOTAL $46,919.44
FI GURE 10- 5 (continued)
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Departmental Totals
Each department in the hotel is required to provide a daily sales report to the front office.
These figures are listed and compared to the budget goal. General managers of hotels use
these figures to determine the profitability of income-generating departments and the suc-
cess of marketing programs.
Bank Deposit
Bank deposits are also part of the night audit. In large hotels, bank deposits are made sev-
eral times a day to satisfy security concerns. The bank deposit includes both cash and
credit card deposits. It is important to note that cash, business checks, and checks from
credit card companies are received several times throughout the business day. After these
are received and recorded, they are turned over to a cashier at the front desk to post them
to the corresponding guest or city ledger account.
PREPARI NG THE NI GHT AUDI T REPORT 273
Manager’s Report
Actual Budget Difference
ROOMS AVAIL 100 100 0
ROOMS SOLD 65 85 20
ROOM VAC 30 15 –15
ROOMS OOO 0 0 0
ROOMS COMP 0 0 0
OCC % 65.00% 85.00% 20.00%
DBL OCC % 15.38% 11.76% –3.62%
YIELD % 52.94% 88.24% 35.30%
REVPAR $45.00 $75.00 $30.00
ROOM INC $4,500.00 $7,500.00 $3,000.00
NO. GUESTS 75 95 20
AV. RATE $69.23 $88.24 $19.01
RACK RATE $85.00 $85.00 $0.00
NO-SHOWS 3 1 –2
FI GURE 10- 5 (continued)
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Accounts Receivable
The accounts receivable is an ongoing listing of outstanding amounts owed to the hotel.
As mentioned in chapter 8, these potential sources of revenue are essential to positive cash
flow. Managing and updating these accounts by reviewing them daily is a primary
responsibility of the controller and general manager.
Cashier’s Report
Some hotels run the traditional three shifts (7:00 A.M.–3:00 P.M., 3:00 P.M.–11:00 P.M.,
and 11:00 P.M.–7:00 A.M.) for cashiers. In larger hotels, several cashiers may work each
shift. No matter how many cashiers there are per shift, each is responsible for actual cash
and credit cards received, which are compared to PMS totals. The cashier’s report, dis-
cussed earlier in the chapter, lists cashier activity of cash and credit cards and PMS totals
and is an important part of the financial control system of a hotel. The front office man-
ager and the controller reviews this part of the night audit and looks for discrepancies
between the actual amount received and the PMS total. They also assess the cashier’s
accuracy.
Manager’s Report
The manager’s report is a listing of occupancy statistics from the previous day, such as
occupancy percentage, yield percentage, average daily rate, RevPAR, and number of
guests. Data such as these are necessary for monitoring the operation of a financially
viable business. The general manager, controller, front office manager, and director of
marketing and sales review these statistics daily.
Formulas for Balancing the Night Audit Report
The following formulas will provide you with an understanding of how to balance the
night audit.
Formula to Balance Guest Ledger Formula to Balance City Ledger
yesterday's outstanding A/R
today's outstan + dding A/R income
total outstanding A/R
cred
=
– iit card received and applied to A/R
cash r – eeceived and applied to A/R
balance of A/R =
total revenue
paid-outs and noncollect sale – ss
daily revenue
total cash income
today's
=
–
– ooutstanding A/R income
0 =
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Formula to Balance Bank Deposit
Room and Tax
The room sales figure represents the total of posted daily guest room charges. The night
auditor obtains this figure from the PMS by activating the cumulative total feature, an
electronic feature that adds all posted room rate amounts previously entered into one
grand total. This figure is only as accurate as the posting of daily room rates. If a desk
clerk transposes figures, then the total room sales amount will be incorrect. Because a
large portion of room income is considered profit, management watches this figure
closely. The room sales figure is verified by the housekeeping report, which lists the occu-
pancy status of each room according to the housekeeping department. The corresponding
tax total is obtained by activating the tax cumulative total feature, an electronic feature
of a PMS that adds all posted room tax amounts previously entered into one grand total.
This figure is necessary for tax collecting and reporting.
Total Restaurant Sales and Sales Tax
The total restaurant sales figure comprises all sales incurred at restaurants or food out-
lets in the hotel. Restaurant 1 may represent breakfast sales; 2, lunch sales; and 3, dinner
sales. Or Restaurant 1 may represent all food sales from Restaurant A; 2, food sales from
the pool snack bar; and 3, sales from Restaurant B. These figures are verified against the
daily sales report, a financial activity report produced by a department in a hotel that
reflects daily sales activities with accompanying cash register tapes or point-of-sale audit
tapes from each of the restaurants or food outlets. The sales tax figure is also obtained
from the daily sales reports.
Tips for Restaurant, Room Service, Banquet, and Lounge Employees
Tips paid out to service employees represent an important control feature. Not only is
management required to report this amount to state and federal agencies, but the tips may
be paid out from the desk clerk’s cash drawer or the restaurant cash drawer. In any case,
tips charged to the guest’s account on restaurant guest checks, tips paid immediately to
service employees from the desk clerk’s cash drawer on paid-out slips, room service guest
checks, and charged tips on credit card vouchers are used to verify this total.
total bank deposit
total cash sales
credit
–
– ccard received A/R
cash received A/R –
0 =
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Room Service
Some hotels report room service sales as a separate figure from total restaurant sales. If
a hotel has organized a special marketing and merchandising campaign to increase room
service sales or feels that careful monitoring of this potentially profitable service is nec-
essary, then the night auditor reports this figure. Room service 1 may represent breakfast
sales only; 2, lunch sales; and 3, dinner sales.
Banquet Sales
Hotels with large banquet operations report the banquet sales figure separately from
restaurant sales. These figures are a total of the guest checks, which tally the individual
banquet charges. The night auditor also checks the daily function sheet to ensure that all
scheduled functions have been billed.
The general manager can use banquet sales figures to determine how effective the food
and beverage manager is in controlling related expenses for this division. Banquet sales
also indicate how effective the director of marketing and sales is in generating business.
Banquet breakfast, banquet lunch, and banquet dinner figures are reported separately
because they provide marketing information on which areas are successful and which
could be more successful. The banquet sales figures (and the room sales figure) also pro-
vide information on the cash flow activity of the hotel. If the hotel has scheduled $25,000
of banquet business and $25,000 of rooms business for a weekend, it can meet various
financial obligations due on Monday, depending on method of payment. The controller
in a hotel therefore watches room and banquet sales closely.
Banquet Bar and Total Lounge Sales
The sales figures for the banquet bar and lounge areas originate from the point-of-sale
cash registers. The total sales figures from the outlets that serve alcoholic beverages are
reported to the front office on a daily sales report after each shift. Each report is accom-
panied by the cash register tapes or audit tapes.
Sales figures from the various lounges and banquets are reported separately because
the food and beverage manager must determine how well cost-control efforts are main-
tained for that department, and the director of marketing and sales may want to research
the success of certain marketing and merchandising campaigns.
Room Rental
The charges for room rental—these are not guest rooms but meeting and function
rooms—are reported on special room rental guest checks. The night auditor cross-checks
these guest checks against the daily function sheet to be sure the banquet manager
charged room rentals to the appropriate guests.
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This figure is reported separately at hotels that charge fees for the rental of facilities
when no food or beverage is ordered. For example, banquet rooms may be rented for
seminars, meetings, demonstrations, and shows. Because room rental represents a poten-
tially large profit area (especially during slow banquet sales periods), general managers
want to know how effective the marketing and sales department is in maximizing this
profit center.
Valet
One of the services a hotel offers is dry cleaning and laundry. This feature must be closely
monitored because the hotel pays cash to the off-premises dry cleaner or laundry service
when the clothing is returned. These costs, plus a markup for hotel handling charges, are
posted to the guests’ folios. Some hotels maintain a valet or dry cleaning/laundry journal
indicating valet tags, control numbers, processing dates, vendor charges, handling
charges, posting activity, daily totals, and the like. Transfer slips are prepared to indicate
the charges for valet service. The charges on these transfer slips are then posted to the
guests’ folios. The total of the transfer slips comprises the valet total for the night audit.
Telephone Charges
After the telephone industry was deregulated in the early 1980s, call accounting became
a standard practice in hotels. This allowed hotels to set individual surcharge rates, or
rates for adding service charges for out-of-state long-distance telephone service. The tele-
phone department became a profitable area in the hotel business. Because all phone calls
are charged to the guest folio, an accurate accounting of the charges is necessary. In a
hotel with a call-accounting system that interfaces with a property management system,
this tally is electronically obtained.
Gift Shop Sales and Tax
The gift shop in a hotel prepares a daily sales report for the front office. Cash register
tapes or point-of-sale audit tapes accompany the report. The general manager examines
the financial activity of this profit center—another area in which cash flow potential is
monitored. Recording the tax collected on gift shop sales and reporting this figure is a
necessary accounting procedure.
Vending
Hotels that maintain their own vending machines monitor the daily collection of cash. If
a facility has a large number of vending machines, the food and beverage manager assigns
one person to collect and count the money and prepare a daily sales report. These reports
provide the total sales figure for vending.
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Spa
The use of health facilities at a hotel may be provided free to guests. However, other
products and services—such as swimsuits, health-related products and equipment, the
services of a masseur or masseuse, sports lessons, and rental equipment—are sold to the
guest. These costs are usually charged to the guest folio. A daily sales report is prepared
at each of the health/recreation facilities. Some hotels offer their health/recreation facili-
ties for a fee to the general public. Transfer slips for charges to the guest accounts for
future billing in the city ledger provide a total against which total spa charges are verified.
Parking
A hotel that offers valet parking or parking spaces to guests and the general public
acquires large amounts of cash during a business day. Cash, business checks, and debit
and credit card payments are collected throughout the day for general parking, long-term
business parking, and parking valet services. Guests in the hotel who are charged for
parking services have this amount charged to their accounts. The parking garage manager
prepares a daily report of the cash and charge activities for each shift. Supporting docu-
mentation, including parking tickets, cash register tapes, transfer slips, and monthly park-
ing permit renewals, accompany the daily report. The night auditor prepares a summary
total of this account from these reports.
Total Revenue and Total Write-Offs
The total revenue and total write-off figures represent all the cash and charge transactions
for the day, reflecting all the previously reported figures. General managers compare the
actual and budgeted figures to determine how well operations have met the financial
goals of the hotel.
Throughout the business day, the front office manager authorizes paid-out slips (for
valet service, tips, supplies, and the like), discounts (for rooms or restaurant charges, for
example), and adjustments (room, telephone, and restaurant, for example) in the form of
write-offs to guest accounts. The general manager maintains strict control over these fig-
ures. These amounts are verified with authorized paid-out slips and transfer slips.
Cash Sales and Accounts Receivable Balance
The total revenue represents both cash and charge guest sales. A separate figure is
reported for total cash sales for the day. This figure represents the totals reported and
received from the departmental daily reports and is also required to justify the daily bank
deposit.
Charge sales are reflected in the outstanding accounts receivable (Today’s Outstd
A/R). This is the amount that remains to be received from the guests. Total paid-outs,
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total discounts, and total write-offs are subtracted from that figure. Today’s outstanding
accounts receivable figure is added to yesterday’s outstanding accounts receivable (Yes-
terday’s Outstd A/R) to obtain a cumulative balance of outstanding accounts receivable
(Total Outstd A/R).
Credit Cards and Cash Applied to Accounts Receivable
Throughout the business day, the controller of the hotel requests front desk clerks or
cashiers to post business checks and cash received from credit card companies, direct
billing accounts, and city ledger accounts. The charges from these groups were previously
moved to accounts receivable. These checks and cash payments represent charges from
previously held banquets, guest room rentals, and the like. The general manager of the
hotel watches this figure to determine cash flow activity. Again, the outstanding balance
of accounts receivable is updated.
Analysis of Accounts Receivable
The front office manager maintains an analysis of the accounts receivable balance that
indicates the source of each account receivable—city ledger, direct billing, or various
credit cards. (It is important to note here that city ledger accounts may have a credit bal-
ance but are maintained as an account receivable. For example, if a guest pays a $500
deposit on a future banquet, a credit balance is maintained on the account. When this
credit balance is computed with other debit balances, a debit balance is realized.) The
controller uses this information to track the aging of accounts, determining the stage of
the payment cycle—such as 10 days old, 30 days overdue, 60 days overdue—and to oper-
ate an overdue payment collection program.
Bank Deposit and Amount Transferred to Accounts Receivable
The cash, credit card vouchers, and charges received during the business day from cash,
charge, and accounts receivable transactions must be deposited in the hotel’s bank
accounts or transferred to the hotel’s internal accounts receivable. The night auditor pro-
vides a summary of the components of the bank deposit. Bank deposits are made
throughout the business day. Those individual totals make up the total bank deposit
(TTL BANK DEP). Credit card totals are listed here because, in some circumstances, the
credit card voucher is considered cash at the time of deposit. The cash and credit card
totals deposited must match the total cash sales plus the cash received and applied to out-
standing accounts receivable (Cash Rec’d A/R) minus total paid-outs. The total actual
cash and credit card payments received, which are reported on the cashier’s report, match
the total bank deposit figure. The amount transferred to accounts receivable (AMT TR
A/R) corresponds to today’s outstanding accounts receivable (Today’s Outstd A/R).
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Cashier’s Report
In some hotels, the front desk clerk or cashier is responsible for proofing and collecting
the departmental daily reports. In those situations, the cash and credit card vouchers are
added to the individual cashier’s shift report. Also included in that report are the amounts
of cash and credit card checks received for application to accounts receivable. Each
cashier’s shift report is verified by departmental daily reports, cash and credit card vouch-
ers, and accounts receivable cash and credit card check transactions. These figures must
be verified in the daily bank deposit.
The cashier’s report also notes variances in actual totals and PMS totals. Usually, the
hotel sets a policy regarding the liability of the front desk clerk or cashier for these vari-
ances. For example, if the actual amount collected is one cent to one dollar less than the
amount obtained in the cashier’s report, the front desk clerk or cashier is not liable for
the difference. The front office manager should investigate amounts significantly larger
than one dollar to see if such losses are regular occurrences. When the actual amount col-
lected is more than the amount obtained in the cashier’s report, the extra money is main-
tained in a house fund to compensate for undercollections. These amounts should also be
investigated as to regularity and source. Substantial overages and shortages must be
investigated for proper debiting and crediting of a guest’s account.
Operating Statistics
The night auditor prepares the daily operating statistics for the general manager and the
department directors. This quick summary reviews the day’s activities and the hotel’s suc-
cess in meeting financial budget targets. Hotel general managers rely on these statistics as
operational feedback mechanisms because they provide information on the need to mod-
ify existing operational procedures and offer insight into budgeting for future operational
procedures. These figures become part of the hotel’s historical operations record.
The rooms sold, rooms vacant, and rooms out of order are determined by assessing the
housekeeping module (Figure 4-17) and the housekeeper’s report (Figure 10-6). The
number of complimentary rooms (rooms comp) is determined by reviewing guest reser-
vations, registration cards, and electronic folios. A quick method used to determine occu-
pancy percentage, double occupancy percentage, yield, average daily rate, and RevPAR
is shown in Figure 10-7.
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F R O N T L I N E R E A L I T I E S
T
he PMS is down, and the night audit report must be prepared. How would you suggest the
night auditor proceed?
q
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FI GURE 10- 6 The housekeeper’s report verifies the number of rooms occupied on
a particular night.
Housekeeper’s Report Date _____________
Room Status Room Status Room Status
101 O 134 OOO 167 V
102 O 135 O 168 O
103 O 136 V 169 O
104 O 137 V 170 O
105 V 138 O 171 O
106 V 139 O 172 O
107 O 140 V 173 O
108 O 141 O 174 O
109 O 142 O 175 O
110 O 143 O 176 O
111 O 144 OOO 177 OOO
112 O 145 OOO 178 OOO
113 O 146 O 179 O
114 O 147 O 180 O
115 O 148 V 181 V
116 V 149 V 182 O
117 O 150 O 183 O
118 O 151 O 184 O
119 O 152 O 185 O
120 O 153 O 186 O
121 V 154 O 187 V
122 V 155 V 188 V
123 V 156 V 189 V
124 O 157 O 190 O
125 O 158 O 191 V
126 O 159 O 192 V
127 O 160 V 193 O
128 O 161 V 194 V
129 O 162 V 195 O
130 O 163 O 196 V
131 O 164 O 197 O
132 O 165 O 198 V
133 V 166 V 199 V
200 V
O: Occupied V: Vacant OOO: Out of order
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Room income for the day is obtained from the total room charges posted after a cer-
tain time in the evening (between 11:00 P.M. and midnight) and any half-day rate charges.
The number of guests is provided by the PMS registration module. The number of no-
shows is compiled by tallying the number of reservations with a confirmed status that did
not show. Not included in this figure are guaranteed reservations, which are processed
with a credit card number regardless of whether the guest showed.
The preparation of a night audit report can be time-consuming. However, with a
great deal of cooperation, planning, and organization, combined with the use of a PMS
that interfaces with point-of-sale systems, the time can be greatly reduced. The accurate
preparation of the night audit report provides an essential control and communication
tool for management.
Daily Flash Report
The daily flash report, a PMS listing of departmental totals by day, period to date, and
year to date, is useful to general managers and department managers and supervisors.
This report is reviewed daily to indicate how successful a department manager was the
previous day in achieving sales. This tool is important in discussing strategies for the suc-
cessful achievement of financial goals. Figure 10-8 illustrates the major components of a
flash report.
FI GURE 10- 7 These formulas offer an easy method for determining operating statistics.
Statistic Method
Occupancy percentage
Double occupancy percentage
Yield
Average daily rate
RevPAR
roomrevenue
number of available rooms
or
hotell occupancy percentage average daily rat × ee
roomincome
number of rooms sold
number of rooms sold average daily rate
nu
×
mmber of rooms available rack rate
100
×
×
number of guest – number of rooms sold
number oof rooms sold
100 ×
number of rooms sold
number of rooms availablle
100 ×
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FI GURE 10- 8 The daily flash report is reviewed each morning by the general manager
and various department managers to determine the financial success
of the previous day and current status in achieving other financial
goals. Courtesy of Wyndham Reading Hotel, Reading, Pennsylvania.
Daily Flash Report Date _____________
Daily Totals Period to Date Year to Date
Revenue Types
Room
Telephone
Food & Beverage
Selected Departmental Totals
Restaurant Breakfast
Restaurant Lunch
Restaurant Dinner
Lounge Beer
Lounge Wine
Lounge Liquor
Banquet Food
Banquet Beverage
Banquet Wine
Banquet Liquor
Banquet Beer
Occupancy Totals
Total Rooms
Occupied Rooms
Single Rooms
Double/Plus Rooms
Complimentary Rooms
Day Rooms
Group Rooms
Transient Rooms
O-O-O Rooms
Occupancy %
Average Daily Rate
RevPAR
Yield
Arrivals
Departures
Stay Overs
6 pm No-shows
Guar No-shows
Walk-ins
Arrivals Canceled
Reservations Taken
Reservations Canceled
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Reading the Flash Report
Here are some insights into reading the Flash Report.
Room Sales—The general manager tracks these figures because they are the major
source of income for the hotel. Because room sales provide the most profit, this is
an important figure to watch daily. Marketing and sales also wants to know this
figure, as does the front office manager.
Selected Departmental Totals for Food and Beverage—These figures are a primary
concern for the general manager as he or she evaluates the effectiveness of the food
and beverage manager and his or her staff. It is important to do this daily rather
than weekly or monthly.
Occupancy Totals—These figures provide the general manager, front office manager,
and marketing and sales with feedback on the effectiveness of advertising in influ-
encing patronage to the hotel. They provide bottom-line financial details of what
works and what doesn’t with regard to online and print-based ads, cold calls, etc.
When the daily totals fall below the projected figures, a group effort is needed to
determine what steps should be taken to revitalize marketing.
Here are some reasons that could lead to low occupancy and that should be researched:
Why are O-O-O (out-of-order rooms) at such a high number? Did that have an effect on
the low occupancy? Did the low arrival figure occur because of airline problems? Was the
low yield caused by a failure of a group not meeting its room quota? Are we not asking
for credit cards to guarantee a room reservation? Experience in the hotel industry provides
many opportunities for future hoteliers to gain insight into asking questions such as these.
When these questions arise, the general manager follows up with inquiries to the relevant
departmental supervisor, such as the director of maintenance (rooms O-O-O); front office
manager (airlines); marketing and sales manager (group room quota); and front office man-
ager (reservations without credit card).
Reading the Night Audit
Here are insights into reading the night audit.
Room Sales—Check the budgeted and actual figures to determine if the sales efforts for
the previous day were fruitful. If not, hold a brief meeting with the marketing and sales
department to determine which strategies worked and which did not work. Include the
revenue manager in the discussion to provide feedback on rates and channels.
Restaurant Sales—Review the individual meal periods and determine if they met their
goals. If the numbers are not up to the goal, ask the supervisor what factors (weather,
quality of food, quality of service, competition, etc.) could have caused these results.
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Room Service—Because this is a profitable area for the hotel, it should be reviewed
carefully. Review the actual and budgeted numbers and determine what could have
caused the difference. Perhaps room service should be actively marketed, compared
to the silent marketing of a menu placed in the guest’s room.
Banquet Sales—Again, this is a large profit producer for the hotel. However, this type
of activity is planned many days and weeks in advance and should be reviewed
accordingly. Sometimes unexpected events such as weather or mishap can occur that
cause a cancellation. Management should also look at which type of meal is pro-
ducing or not producing income. For example, if all the banquet income is coming
from lunches, then there are opportunities for banquet sales in breakfast and dinner.
Banquet Bar Sales—Bar sales for lunch and dinner also provide additional profit for
the hotel. These too should be monitored as an opportunity for their inclusion in
the meal occasion.
Room Rental—Room rental provides income for the hotel to pay heating, lighting, air
conditioning, and other utilities. Therefore, every opportunity should be made to
charge and collect this fee.
Lounge Sales—Lounges throughout the hotel are assigned a goal for the night, depend-
ing on their market. The general manager compares the actual with budget to
determine if the staff at the lounge has done its job. If not, then a discussion should
be held with the supervisor of the lounge and director of food and beverage.
Valet—This service is handled outside the hotel, and a fee is added to the guest’s bill.
This fee is basically profit for the hotel. The general manager should work with the
front office manager to develop a marketing plan that ensures that front desk staff
promotes this service to the guest.
Telephone—Telephone charges are usually electronically posted to the guest’s folio
with the call-accounting module of the PMS. This figure allows the general man-
ager to see how many dollars are collected. With the increased use of high-speed
Internet access in guest rooms, this dollar figure is worth watching because of the
dollar investment in technology.
Gift Shop—Sometimes the gift shop is outsourced by the hotel to a third party. In that
situation, the hotel collects a certain percentage of the total gross sales. The general
manager wants to know what gross sales are on this report. If the gift shop is oper-
ated by the hotel, the general manager wants to compare actual and budgeted sales
and discuss marketing efforts with gift shop manager.
Vending—Vending can also be an outsourced effort for the hotel. If it is outsourced,
then the sales agreement that covers a daily, semi-weekly, or weekly deposit is listed
here. If the vending is operated by the hotel, then the daily cash deposit is listed here.
This is an easy target for theft, so the general manager must keep a close eye on the
total that was produced by the few or many vending machines in the hotel.
Spa—Some hotels outsource their spa to a third party. In that situation, the hotel
collects a certain percentage of the total gross sales. The general manager tracks
those gross sales on this report. If the spa is operated by the hotel, then the general
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manager compares actual and budgeted sales and discusses marketing efforts with
the spa’s manager.
Parking—When the parking lot or parking deck is outsourced by the hotel to a third
party, the hotel collects a certain percentage of the total gross sales. The general
manager tracks those gross sales on this report. If the parking garage is operated by
the hotel, then the general manager compares actual and budgeted sales and dis-
cusses marketing efforts with the parking garage manager. Parking lots are expen-
sive to operate, but they can also bring in money to the hotel.
Total Paid-Outs—This figure is usually low because not many people are authorized
to receive money from the front desk clerk for emergency cash. Large amounts
listed here on the night audit would indicate a problem!
Total Discounts—Some hotels have a 100 percent satisfaction pledge, and if this is the
policy, you can see where this would be evident. If the restaurant had to credit a
guest’s check for food, that too would show up here. Mistakes do occur, and they
have to be justified to provide feedback.
Total Write-Offs—This section of the night audit is reserved for writing off accounts
(rooms and food) that are not being paid for by guests for the evening. These are
usually guests of the hotel.
Total Paid-Out and Noncollect Sales—This is a total of total paid-outs, total dis-
counts, and total write-offs; it is a figure that general managers need to control so
it doesn’t get out of line.
Total Cash Sales—This figure represents non-credit sales. Usually it is low because the
hotel operates in credit sales. A high cash figure suggests possible concern for sev-
eral guests who are paying cash and have not established creditworthiness, and the
potential for security problems for the hotel.
Today’s Outstanding Accounts Receivable—This is the amount charged by guests on
their folio from all departments.
Total Revenue—This figure is a total of all cash sales and charge sales for the day.
Yesterday’s Outstanding Accounts Receivable—This number is very large because of
the delay in receiving actual funds from credit card companies. For example, when
a guest charges a room-night on a credit card, there may be a five-day delay before
the actual check or electronic payment clears the hotel’s bank account. Until the time
of the clearing, the controller maintains the balance of that guest’s folio as out-
standing. As a note of precaution, it needs monitoring by the controller’s staff to be
sure the accounts are aged, especially those house accounts tended by in-house staff.
Total Outstanding Accounts Receivable—This is the total of (Today’s) and (Yester-
day’s) Outstanding Accounting Receivable. Again, this is a large number.
Credit Card Received Accounts Receivable—This figure tells the general manager how
much money was applied to credit card balances and received in checks from credit
card companies. Farther down on the page (Bank Deposit), an analysis indicates to
which credit cards this total was applied. As a control procedure, received checks
are logged in by one person, then forwarded to another staff person for deposit.
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Cash Received Accounts Receivable—This figure represents cash received for applica-
tion to credit card balances, etc.
Balance Accounts Receivable—This figure is the total of outstanding accounts receiv-
able to the hotel—city ledger, direct bill, and credit cards. This figure is analyzed
under Analysis of Accounts Receivable. These two totals must match.
Bank Deposit—This is a listing of the cash and credit card deposits. The figure must
match the Credit Card Received Accounts Receivable. This is a control feature. The
accompanying Analysis of Bank Deposit provides the general manager with an
overview of the sources of the funds deposited. Keep in mind that credit card sales
do carry a discount fee and that this adds up over time.
Cashier’s Report—This control report is included in the night audit to verify the totals
of each cashier for cash sales, credit card sales, and sales applied to accounts receiv-
able. The accompanying Analysis Cash Report provides a summary of these three
areas. The totals must match the totals of each shift.
Manager’s Report—This is a very useful report for the general manger because it pro-
vides an overview of the staff’s financial efforts of the previous day. This quick look
or comparison of actual versus budgeted figures is extremely helpful for the general
manager as well as departmental managers.
Solution to Opening Dilemma
It is important to prepare a training outline that maximizes the front office manager’s
efforts to train the night auditor. The session can begin by explaining that the objective
of the night audit is to evaluate the hotel’s financial activity and that the night audit
process monitors departmental financial activity. The outline should cover the major
concepts of posting room and tax charges, assembling guest charges and payments, rec-
onciling departmental financial activities, reconciling the accounts receivable, run-
ning the trial balance, and preparing the night audit report. The front office manager
should explain the formulas used to balance the night audit: formula to balance guest
ledger, formula to balance city ledger, and formula to balance bank deposit, as well as
formulas to compute operating statistics. The night auditor must also know how to per-
form the duties of a front desk clerk—reservations, registrations, postings, and check out.
Chapter Recap
This chapter demonstrated the importance of producing an accurate summary of the
financial transactions that occur in a hotel on any given day. The components of the night
audit were listed and described. These include posting room and tax charges, assembling
guest charges and payments, reconciling departmental financial activities, reconciling the
CHAPTER RECAP 287
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accounts receivable, running the trial balance, and preparing the night audit report. Also,
the preparation of a night audit report and manager’s report were illustrated as well as
the daily flash report, and their management implications were discussed. The accurate
preparation of the night audit report and follow-up on the data assembled allow the
hotel’s management team to adjust financial plans. A summary was offered of how to
interpret the major components of the night audit.
End-of-Chapter Questions
1. Why does a hotel need to balance its financial transactions each day?
2. What is the night audit? What steps are involved in preparing it?
3. What is the manager’s report? What does each statistic tell the general manager?
4. Why must the night audit be prepared systematically?
5. What is a trial balance? What information does it provide the night auditor?
6. Why must the accounts receivable be included in the night audit? What do the
accounts receivable comprise?
7. Discuss the importance of the night audit to the daily management of a hotel. Who
reviews the night audit? Why would they be interested in these financial data?
8. If you were reading the night audit, which figure would assist you in determining
whether or not the restaurant managers met their sales goals? How would you
know what amount of money was paid out on behalf of the food and beverage
department on the previous day for miscellaneous sales to the grocery store? How
would you know what total amount of money guests charged to their room folios
yesterday? What figures represent the Total Outstanding Accounts Receivable?
9. Why should the accounts receivable be analyzed?
10. Why should the bank deposit and amount transferred to accounts receivable be
listed on the night audit? What does each figure represent?
11. How can the front office manager control the cash in the front office cash drawer?
12. Why is it important to prepare hotel operating statistics?
13. Discuss the procedure to determine occupancy percentage, double occupancy
percentage, and average daily rate.
14. Discuss the procedure to determine yield. How important is this to the general
manager?
15. Discuss the procedure to compute RevPAR.
16. What use is the daily flash report to a general manager? to a front desk manager?
to a food and beverage manager?
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C A S E S T U D Y 1 0 0 1
DEPARTMENTAL DAILY SALES REPORT
DATE ______________
$ Actual $ Budget Goal (%)
Restaurant 1 299.57 825.00
Restaurant 2 500.00 1,500.00
Restaurant 3 1,200.00 1,500.00
SALES TAX (rate = 5%)
Rest Tips 1 45.00 123.75
Rest Tips 2 75.00 225.00
Rest Tips 3 180.00 225.00
REST TIPS (rate = 15%)
Room Srv 1 45.00 350.00
Room Srv 2 200.00 300.00
Room Srv 3 135.95 250.00
SALES TAX (rate = 5%)
Room Srv 1 Tips 9.00 70.00
Room Srv 2 Tips 40.00 60.00
Room Srv 3 Tips 27.19 50.00
ROOM SRV TIPS (rate = 20%)
Banq Bkfst 0.00 350.00
Banq Lunch 675.00 500.00
Banq Dinner 3,021.45 6,500.00
Banq Bkfst Tips 0.00 63.00
Banq Lunch Tips 121.50 90.00
Banq Dinner Tips 543.86 1,170.00
BANQ TIPS (rate = 18%)
Banq Bar Lunch 85.00 200.00
Banq Bar Dinner 587.25 400.00
ROOM RENTAL 100.00 250.00
Lounge 1 165.00 85.00
Lounge 2 346.75 950.00
Lounge 3 295.00 4 50.00
Lounge 4 420.00 575.00
Lounge Tips 1 16.50 8.50
Lounge Tips 2 34.68 95.00
The Times Hotel has collected the following data,
which represent the financial transactions in the
hotel today. Assemble this information into a night
audit report, using the format shown in Figure 10-9
(a blank worksheet for you to fill in, which follows
the data).
CASE STUDY 289
(continues)
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$ Actual $ Budget Goal (%)
Lounge Tips 3 29.50 45.00
Lounge Tips 4 42.00 57.50
LOUNGE TIPS (rate = 10%)
VALET 45.00 250.00
Tele Local 125.00 125.00
Tele Long Dist 87.90 300.00
GIFT SHOP 150.68 350.00
SALES TAX (rate = 5%) 7.53 17.50
VENDING 86.25 100.00
SPA 211.00 500.00
PARKING 397.50 350.00
Paid-outs
Valet 85.00
Tips 0.00
Discounts
Room 0.00
Food 15.00
Write-offs
Rooms 0.00
Food 122.89
Total Cash Sales 2,906.98
Today’s Outstd A/R 12,513.56
Yesterday’s Outstd A/R 43,900.11
CREDIT CARD REC’D A/R 7,034.76
CASH REC’D A/R 2,098.63
BAL A/R 47,279.76 75,000.00
ANALYSIS OF A/R
City Ledger 3,078.00
Direct Bill 5,901.00
Visa 15,623.01
MC 15,540.45
JCB 7,137.30
BANK DEPOSIT
Cash $5,005.61
Visa $3,532.98
MC $1,656.69
JCB $1,845.09
C A S E S T U D Y 1 0 0 1 ( c ont i nued)
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CASE STUDY 291
Cashier’s Report
Actual Amount POS Amount Difference
Shift 1
Cash $3,754.21 $3,755.21
Cr Cd 5,276.07 5,276.07
TOTAL 1 $9,030.28 $9,031.28
Shift 2
Cash $1,001.12 $1,002.50
Cr Cd $1,406.95 1,406.95
TOTAL 2 $2,408.07 $2,409.45
Shift 3
Cash $250.28 $250.28
Cr Cd $351.74 $351.74
TOTAL 3 $602.02 $602.02
TOTALS $12,040.37 $12,042.75
Analysis Cash Report
Cash Sls $2,906.98
Cr Cd A/R 7,034.76
Cash A/R 2,098.63
TOTAL $12,040.37
Manager’s Report
Actual Budget Difference
ROOMS AVAIL 125 125 0
ROOMS SOLD 60 85 25
ROOMS VAC 65 40 –25
ROOMS OOO 0 0 0
ROOMS COMP 0 0 0
ROOM INCOME $4,500.00 $7,500.00 $3,000.00
ROOM TAX $450.00 $750.00 $300.00
NO. GUESTS 93 95 2
RACK RATE $80.00 $80.00 $0.00
NO-SHOWS 1 1 0
BANK DEPOSIT ANALYSIS OF BANK DEPOSIT
Cash $5,005.61
VISA $3,532.98 Total Cash Sales $2,906.98
MC $1,656.69 Credit Card Rec’d A/R 7,034.76
JCB $1,845.09 Cash Rec’d A/R 2,098.63
$12,040.37
C A S E S T U D Y 1 0 0 1 ( c ont i nued)
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FI GURE 10- 9 Times Hotel night audit.
Night Audit DATE __________
$ Actual $ Budget Goal (%)
ROOM __________ 7,500.00 __________
TAX __________ 750.00 __________
Restaurant 1 __________ 825.00 __________
Restaurant 2 __________ 1,500.00 __________
Restaurant 3 __________ 1,500.00 __________
TOTAL REST SALES __________ 3825.00 __________
SALES TAX __________ 191.25 __________
Rest Tips 1 __________ 123.75 __________
Rest Tips 2 __________ 225.00 __________
Rest Tips 3 __________ 225.00 __________
TOTAL REST TIPS __________ 573.75 __________
Room Srv 1 __________ 350.00 __________
Room Srv 2 __________ 300.00 __________
Room Srv 3 __________ 250.00 __________
TOTAL ROOM SRV __________ 900.00 __________
SALES TAX __________ 45.00 __________
Room Srv 1 Tips __________ 70.00 __________
Room Srv 2 Tips __________ 60.00 __________
Room Srv 3 Tips __________ 50.00 __________
TOTAL ROOM SRV TIPS __________ 180.00 __________
Banq Bkfst __________ 350.00 __________
Banq Lunch __________ 500.00 __________
Banq Dinner __________ 6,500.00 __________
TOTAL BANQ __________ 7,350.00 __________
Banq Bkfst Tips __________ 63.00 __________
Banq Lunch Tips __________ 90.00 __________
Banq Dinner Tips __________ 1,170.00 __________
TOTAL BANQ TIPS __________ 1,323.00 __________
Banq Bar Lunch __________ 200.00 __________
Banq Bar Dinner __________ 400.00 __________
TOTAL BANQ BAR __________ 600.00 __________
ROOM RENTAL __________ 250.00 __________
Lounge 1 __________ 85.00 __________
Lounge 2 __________ 950.00 __________
Lounge 3 __________ 450.00 __________
Lounge 4 __________ 575.00 __________
TOTAL LOUNGE SALES __________ 2,060.00 __________
Lounge Tips 1 __________ 8.50 __________
Lounge Tips 2 __________ 95.00 __________
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CASE STUDY 293
$ Actual $ Budget Goal (%)
Lounge Tips 3 __________ 45.00 __________
Lounge Tips 4 __________ 57.50 __________
TOTAL LOUNGE TIPS __________ 206.00 __________
VALET __________ 250.00 __________
Tele Local __________ 125.00 __________
Tele Long Distance __________ 300.00 __________
TOTAL PHONE __________ 425.00 __________
GIFT SHOP __________ 350.00 __________
GIFT SHOP SALES TAX __________ 17.50 __________
VENDING __________ 100.00 __________
SPA __________ 500.00 __________
PARKING __________ 350.00 __________
TOTAL REVENUE __________ 27,746.50 __________
Less Paid-outs
Valet __________
Tips __________
TOTAL PAID-OUTS __________
Less Discounts
Room __________
Food __________
TOTAL DISCOUNTS __________
Less Write-offs
Rooms __________
Food __________
TOTAL WRITE-OFFS __________
Total Paid-out and Noncollect Sales __________
Total Cash Sales __________
Today’s Outstd A/R __________
Total Revenue __________
Yesterday’s Outstd A/R __________
TOTAL OUTSTD A/R __________
CREDIT CARD REC’D A/R __________
Cash Rec’d A/R __________
BAL A/R __________ 75,000.00 __________
ANALYSIS OF A/R
City Ledger __________
Direct Bill __________
Visa __________
MC __________
JCB __________
Total A/R __________
FI GURE 10- 9 (continued)
(continues)
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BANK DEPOSIT ANALYSIS OF BANK DEPOSIT
Cash __________ Total Cash Sales __________
Visa __________ Credit Card Rec’d A/R __________
MC __________ Cash Rec’d A/R __________
JCB __________
TTL BANK DEP __________
AMT TR A/R __________
Cashier’s Report
Actual Amount POS Amount Difference
Shift 1
Cash __________ __________ __________
Cr Cd __________ __________ __________
TOTAL 1 __________ __________ __________
Shift 2
Cash __________ __________ __________
Cr Cd __________ __________ __________
TOTAL 2 __________ __________ __________
Shift 3
Cash __________ __________ __________
Cr Cd __________ __________ __________
TOTAL 3 __________ __________ __________
TOTALS __________ __________ __________
Analysis Cash Report
Cash Sls __________
Cr Cd A/R __________
Cash A/R __________
TOTAL __________
Manager’s Report
Actual Budget Difference
ROOMS AVAIL __________ __________ __________
ROOMS SOLD __________ __________ __________
ROOM VAC __________ __________ __________
ROOMS OOO __________ __________ __________
ROOMS COMP __________ __________ __________
OCC % __________ __________ __________
DBL OCC % __________ __________ __________
YIELD % __________ __________ __________
REVPAR __________ __________ __________
ROOM INC __________ __________ __________
NO. GUESTS __________ __________ __________
AV. RATE __________ __________ __________
RACK RATE __________ __________ __________
NO-SHOWS __________ __________ __________
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FI GURE 10- 9 (continued)
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CASE STUDY 295
C A S E S T U D Y 1 0 0 2
DEPARTMENTAL DAILY SALES REPORT
DATE _____________
$ Actual $ Budget Goal (%)
Restaurant 1 500.00 475.00
Restaurant 2 650.00 755.00
Restaurant 3 1,905.00 2,100.00
SALES TAX (rate = 5%)
Rest Tips 1 75.00 71.25
Rest Tips 2 97.50 113.25
Rest Tips 3 285.75 315.00
REST TIPS (rate = 15%)
Room Srv 1 235.00 300.00
Room Srv 2 120.00 250.00
Room Srv 3 458.00 700.00
SALES TAX (rate = 5%)
Room Srv 1 Tips 47.00 60.00
Room Srv 2 Tips 24.00 50.00
Room Srv 3 Tips 91.60 140.00
ROOM SRV TIPS (rate = 20%)
Banq Bkfst 579.00 250.00
Banq Lunch 2,458.00 3,500.00
Banq Dinner 5,091.00 7,250.00
Banq Bkfst Tips 104.22 45.00
Banq Lunch Tips 442.44 630.00
Banq Dinner Tips 916.38 1,305.00
BANQ TIPS (rate = 18%)
Banq Bar Lunch 326.00 450.00
Banq Bar Dinner 2,987.50 3,950.00
ROOM RENTAL 725.00 1,000.00
Lounge 1 350.00 400.00
Lounge 2 2,104.00 2,000.00
Lounge 3 581.00 675.00
Lounge 4 695.50 850.00
Lounge Tips 1 35.00 40.00
The Barrington Hotel has collected the following
data, which represent the financial transactions in
the hotel today. Assemble this information into a
night audit report, using the format shown in Figure
10-10 (a blank worksheet for you to fill in, which
follows the data).
(continues)
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296 CHAPTER 10
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PREPARATI ON AND REVI EW OF THE NI GHT AUDI T
$ Actual $ Budget Goal (%)
Lounge Tips 2 210.40 200.00
Lounge Tips 3 58.10 67.50
Lounge Tips 4 69.55 85.00
LOUNGE TIPS (rate = 10%)
VALET 210.00 350.00
Tele Local 68.00 125.00
Tele Long Dist 201.00 300.00
GIFT SHOP 277.00 450.00
SALES TAX (rate = 5%) 13.85 22.50
VENDING 121.00 100.00
SPA 293.00 500.00
PARKING 417.00 350.00
Paid-outs
Valet 132.00
Tips 0.00
Discounts
Room 0.00
Food 32.00
Write-offs
Rooms 0.00
Food 87.97
Total Cash Sales 2,906.98
Today’s Outstd A/R 28,259.21
Yesterday’s Outstd A/R 57,880.11
CREDIT CARD REC’D A/R 12,091.50
CASH REC’D A/R 3,522.65
BAL A/R 70,525.17 80,000.00
ANALYSIS OF A/R
City Ledger 13,278.00
Direct Bill 15,999.00
Visa 25,623.01
MC 11,487.34
JCB 4,137.82
BANK DEPOSIT ANALYSIS OF BANK DEPOSIT
Cash $6,429.63 Total Cash Sales $2,906.98
Visa $7,509.34 Credit Card Rec’d A/R 12,091.50
MC $2,828.00 Cash Rec’d A/R 3,522.65
JCB $1,754.16
$18,521.13
C A S E S T U D Y 1 0 0 2 ( c ont i nued)
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Cashier’s Report
Actual Amount POS Amount Difference
Shift 1
Cash $4,822.22 $4,822.50
Cr Cd 9,068.63 9,068.63
TOTAL 1 $13,890.85 $13,891.13
Shift 2
Cash $1,285.93 $1,286.00
Cr Cd 2,418.30 2,418.30
TOTAL 2 $3,704.23 $3,704.30
Shift 3
Cash $321.48 $321.48
Cr Cd 604.58 604.58
TOTAL 3 $926.06 $926.06
TOTALS $18,521.14 $18,521.49
Analysis Cash Report
Cash Sls $2,906.98
Cr Cd A/R 12,091.50
Cash A/R 3,522.65
TOTAL $18,521.13
Manager’s Report
Actual Budget Difference
ROOMS AVAIL 143 143 0
ROOMS SOLD 92 112 20
ROOMS VAC 51 31 –20
ROOMS OOO 0 0 0
ROOMS COMP 0 0 0
ROOM INC $6,500.00 $8,200.00 $1,700.00
ROOM TAX $650.00 $820.00 $170.00
NO. GUESTS 100 160 60
RACK RATE $95.00 $95.00 $0.00
NO-SHOWS 2 1 –1
CASE STUDY 297
C A S E S T U D Y 1 0 0 2 ( c ont i nued)
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FI GURE 10- 10 Barrington Hotel night audit.
Night Audit DATE _____________
$ Actual $ Budget Goal (%)
ROOM __________ 8,200.00 __________
TAX __________ 820.00 __________
Restaurant 1 __________ 475.00 __________
Restaurant 2 __________ 755.00 __________
Restaurant 3 __________ 2,100.00 __________
TOTAL REST SALES __________ 3,330.00 __________
SALES TAX __________ 166.50 __________
Rest Tips 1 __________ 71.25 __________
Rest Tips 2 __________ 113.25 __________
Rest Tips 3 __________ 315.00 __________
TOTAL REST TIPS __________ 499.50 __________
Room Srv 1 __________ 300.00 __________
Room Srv 2 __________ 250.00 __________
Room Srv 3 __________ 700.00 __________
TOTAL ROOM SRV __________ 1,250.00 __________
SALES TAX __________ 62.50 __________
Room Srv 1 Tips __________ 60.00 __________
Room Srv 2 Tips __________ 50.00 __________
Room Srv 3 Tips __________ 140.00 __________
TOTAL ROOM SRV TIPS __________ 250.00 __________
Banq Bkfst __________ 250.00 __________
Banq Lunch __________ 3,500.00 __________
Banq Dinner __________ 7,250.00 __________
TOTAL BANQ __________ 11,000.00 __________
Banq Bkfst Tips __________ 45.00 __________
Banq Lunch Tips __________ 630.00 __________
Banq Dinner Tips __________ 1,305.00 __________
TOTAL BANQ TIPS __________ 1,980.00 __________
Banq Bar Lunch __________ 450.00 __________
Banq Bar Dinner __________ 3,950.00 __________
TOTAL BANQ BAR __________ 4,400.00 __________
ROOM RENTAL __________ 1000.00 __________
Lounge 1 __________ 400.00 __________
Lounge 2 __________ 2,000.00 __________
Lounge 3 __________ 675.00 __________
Lounge 4 __________ 850.00 __________
TOTAL LOUNGE SALES __________ 3,925.00 __________
Lounge Tips 1 __________ 40.00 __________
Lounge Tips 2 __________ 200.00 __________
298 CHAPTER 10
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$ Actual $ Budget Goal (%)
Lounge Tips 3 __________ 67.50 __________
Lounge Tips 4 __________ 85.00 __________
TOTAL LOUNGE TIPS __________ 392.50 __________
VALET __________ 350.00 __________
Tele Local __________ 125.00 __________
Tele Long Distance __________ 300.00 __________
TOTAL PHONE __________ 425.00 __________
GIFT SHOP __________ 450.00 __________
GIFT SHOP SALES TAX __________ 22.50 __________
VENDING __________ 100.00 __________
SPA __________ 500.00 __________
PARKING __________ 350.00 __________
TOTAL REVENUE __________ 39,473.50 __________
Less Paid-outs
Valet __________
Tips __________
TOTAL PAID-OUTS __________
Less Discounts
Room __________
Food __________
TOTAL DISCOUNTS __________
Less Write-offs
Rooms __________
Food __________
TOTAL WRITE-OFFS __________
Total Paid-out and Noncollect Sales __________
Total Cash Sales __________
Today’s Outstd A/R __________
Total Revenue __________
Yesterday’s Outstd A/R __________
TOTAL OUTSTD A/R __________
CREDIT CARD REC’D A/R __________
Cash Rec’d A/R __________
BAL A/R __________ 80,000.00 __________
ANALYSIS OF A/R
City Ledger __________
Direct Bill __________
Visa __________
MC __________
JCB __________
Total A/R __________
CASE STUDY 299
FI GURE 10- 10 (continued)
(continues)
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BANK DEPOSIT ANALYSIS OF BANK DEPOSIT
Cash __________ Total Cash Sales __________
Visa __________ Credit Card Rec’d A/R __________
MC __________ Cash Rec’d A/R __________
JCB __________
TTL BANK DEP __________
AMT TR A/R __________
Cashier’s Report
Actual Amount POS Amount Difference
Shift 1
Cash __________ __________ __________
Cr Cd __________ __________ __________
TOTAL 1 __________ __________ __________
Shift 2
Cash __________ __________ __________
Cr Cd __________ __________ __________
TOTAL 2 __________ __________ __________
Shift 3
Cash __________ __________ __________
Cr Cd __________ __________ __________
TOTAL 3 __________ __________ __________
TOTALS __________ __________ __________
Analysis Cash Report
Cash Sls __________
Cr Cd A/R __________
Cash A/R __________
TOTAL __________
Manager’s Report
Actual Budget Difference
ROOMS AVAIL __________ __________ __________
ROOMS SOLD __________ __________ __________
ROOM VAC __________ __________ __________
ROOMS OOO __________ __________ __________
ROOMS COMP __________ __________ __________
OCC % __________ __________ __________
DBL OCC % __________ __________ __________
YIELD % __________ __________ __________
REVPAR __________ __________ __________
ROOM INC __________ __________ __________
NO. GUESTS __________ __________ __________
AV. RATE __________ __________ __________
RACK RATE __________ __________ __________
NO-SHOWS __________ __________ __________
300 CHAPTER 10
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PREPARATI ON AND REVI EW OF THE NI GHT AUDI T
FI GURE 10- 10 (continued)
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C A S E S T U D Y 1 0 0 3
DEPARTMENTAL DAILY SALES REPORT
DATE _____________
$ Actual $ Budget Goal (%)
Restaurant 1 850.00 650.00
Restaurant 2 1,034.00 1,200.00
Restaurant 3 2,896.00 3,200.00
SALES TAX (rate = 5%)
Rest Tips 1 127.50 97.50
Rest Tips 2 155.10 180.00
Rest Tips 3 434.40 480.00
REST TIPS (rate = 15%)
Room Srv 1 456.87 500.00
Room Srv 2 355.00 450.00
Room Srv 3 760.75 1,000.00
SALES TAX (rate = 5%)
Room Srv 1 Tips 91.37 100.00
Room Srv 2 Tips 71.00 90.00
Room Srv 3 Tips 152.15 200.00
ROOM SRV TIPS (rate = 20%) 314.52 390.00
Banq Bkfst 890.00 450.00
Banq Lunch 1,785.71 2,500.00
Banq Dinner 4,951.76 7,500.00
Banq Bkfst Tips 160.20 81.00
Banq Dinner Tips 891.32 1,881.00
Banq Lunch Tips 321.43 450.00
BANQ TIPS (rate = 18%) 1,372.95
Banq Bar Lunch 508.75 350.00
Banq Bar Dinner 1,907.25 2,500.00
ROOM RENTAL 2,000.00 500.00
Lounge 1 495.00 500.00
Lounge 2 2,951.50 3,500.00
Lounge 3 724.75 450.00
Lounge 4 805.00 750.00
Lounge Tips 1 49.50 50.00
Lounge Tips 2 295.15 350.00
Lounge Tips 3 72.48 45.00
Lounge Tips 4 80.50 75.00
LOUNGE TIPS (rate= 10%) 497.63 520.00
The Canton Hotel has collected the following data,
which represent the financial transactions in the
hotel today. Assemble this information into a night
audit report, using the format shown in Figure 10-11
(a blank worksheet for you to fill in, which follows
the data).
CASE STUDY 301
(continues)
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$ Actual $ Budget Goal (%)
VALET 350.00 400.00
Tele Local 85.00 150.00
Tele Long Dist 241.00 350.00
GIFT SHOP 650.00 500.00
SALES TAX (rate = 5%) 32.50 25.00
VENDING 190.00 250.00
SPA 293.00 650.00
PARKING 627.00 750.00
Paid-outs
Valet 256.00
Tips 0.00
Discounts
Room 85.00
Food 46.95
Write-offs
Room 0.00
Food 0.00
Total Cash Sales 3,759.32
Today’s Outstd A/R 36,851.24
Yesterday’s Outstd A/R 64,258.18
CREDIT CARD REC’D A/R 22,681.15
CASH REC’D A/R 5,390.97
BAL A/R 73,037.30 90,000.00
ANALYSIS OF A/R
City Ledger 14,671.05
Direct Bill 12,784.09
Visa 29,712.01
MC 10,254.81
JCB 5,615.34
Total A/R 73,037.30
BANK DEPOSIT ANALYSIS OF BANK DEPOSIT
Cash $9,150.29 Total Cash Sales $3,759.32
Visa $15,685.26 Credit Card Rec’d A/R $22,681.15
MC $4,230.88 Cash Red’d A/R $5,390.97
JCB $2,765.01
$31,831.44
302 CHAPTER 10
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C A S E S T U D Y 1 0 0 3 ( c ont i nued)
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Cashier’s Report
Actual Amount POS Amount Difference
Shift 1
Cash $6,862.72 $6,861.05
Cr Cd 17,010.86 17,010.86
TOTAL 1 $23,873.58 $23,871.91
Shift 2
Cash $1,830.06 $1,829.83
Cr Cd 4,536.23 4,536.23
TOTAL 2 $6,366.29 $6,366.06
Shift 3
Cash $457.51 $457.51
Cr Cd 1,134.06 1,134.06
TOTAL 3 $1,591.57 $1,591.57
TOTALS $31,831.44 $31,829.54
Analysis Cash Report
Cash Sls $3,759.32
Cr Cd A/R 22,681.15
Cash A/R 5,390.97
TOTAL $31,831.44
Manager’s Report
Actual Budget Difference
ROOMS AVAIL 200 200 0
ROOMS SOLD 135 150 –15
ROOMS VAC 65 50 –15
ROOMS OOO 0 0 0
ROOMS COMP 0 0 0
ROOM INC $10,500.00 $11,200.00 700
ROOM TAX $1,050.00 $1,120.00 70
NO GUESTS 155 225 70
RACK RATE $105.00 $105.00 $0.00
NO-SHOWS 4 2 –2
CASE STUDY 303
C A S E S T U D Y 1 0 0 3 ( c ont i nued)
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FI GURE 10- 11 Canton Hotel night audit.
Night Audit Date __________
$ Actual $ Budget Goal (%)
ROOM __________ 11,200.00 __________
TAX __________ 1,120.00 __________
Restaurant 1 __________ 650.00 __________
Restaurant 2 __________ 1,200.00 __________
Restaurant 3 __________ 3,200.00 __________
TOTAL REST SALES __________ 5,050.00 __________
SALES TAX __________ 252.50 __________
Rest Tips 1 __________ 97.50 __________
Rest Tips 2 __________ 180.00 __________
Rest Tips 3 __________ 480.00 __________
TOTAL REST TIPS __________ 757.50 __________
Room Srv 1 __________ 500.00 __________
Room Srv 2 __________ 450.00 __________
Room Srv 3 __________ 1,000.00 __________
TOTAL ROOM SRV __________ 1,950.00 __________
SALES TAX __________ 97.50 __________
Room Srv 1 Tips __________ 100.00 __________
Room Srv 2 Tips __________ 90.00 __________
Room Srv 3 Tips __________ 200.00 __________
TOTAL ROOM SRV TIPS __________ 390.00 __________
Banq Bkfst __________ 450.00 __________
Banq Lunch __________ 2,500.00 __________
Banq Dinner __________ 7,500.00 __________
TOTAL BANQ __________ 10,450.00 __________
Banq Bkfst Tips __________ 81.00 __________
Banq Lunch Tips __________ 450.00 __________
Banq Dinner Tips __________ 1,350.00 __________
TOTAL BANQ TIPS __________ 1,881.00 __________
Banq Bar Lunch __________ 350.00 __________
Banq Bar Dinner __________ 2,500.00 __________
TOTAL BANQ BAR __________ 2,850.00 __________
ROOM RENTAL __________ 500.00 __________
Lounge 1 __________ 500.00 __________
Lounge 2 __________ 3,500.00 __________
Lounge 3 __________ 450.00 __________
Lounge 4 __________ 750.00 __________
TOTAL LOUNGE SALES __________ 5,200.00 __________
Lounge Tips 1 __________ 50.00 __________
Lounge Tips 2 __________ 350.00 __________
304 CHAPTER 10
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10_4612.qxp 1/11/06 3:39 PM Page 304
$ Actual $ Budget Goal (%)
Lounge Tips 3 __________ 45.00 __________
Lounge Tips 4 __________ 75.00 __________
TOTAL LOUNGE TIPS __________ 520.00 __________
VALET __________ 400.00 __________
Tele Local __________ 150.00 __________
Tele Long Distance __________ 350.00 __________
TOTAL PHONE __________ 500.00 __________
GIFT SHOP __________ 500.00 __________
GIFT SHOP SALES TAX __________ 25.00 __________
VENDING __________ 250.00 __________
SPA __________ 650.00 __________
PARKING __________ 750.00 __________
TOTAL REVENUE __________ 45,293.60 __________
Less Paid-outs
Valet __________
Tips __________
TOTAL PAID-OUTS __________
Less Discounts
Room __________
Food __________
TOTAL DISCOUNTS __________
Less Write-offs
Rooms __________
Food __________
TOTAL WRITE-OFFS __________
Total Paid-out and Noncollect Sales __________
Total Cash Sales __________
Today’s Outstd A/R __________
Total Revenue __________
Yesterday’s Outstd A/R __________
TOTAL OUTSTD A/R __________
CREDIT CARD REC’D A/R __________
Cash Rec’d A/R __________
BAL A/R __________ 90,000.00 __________
ANALYSIS OF A/R
City Ledger __________
Direct Bill __________
Visa __________
MC __________
JCB __________
Total A/R __________
CASE STUDY 305
FI GURE 10- 11 (continued)
(continues)
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BANK DEPOSIT ANALYSIS OF BANK DEPOSIT
Cash __________ Total Cash Sales __________
Visa __________ Credit Card Rec’d A/R __________
MC __________ Cash Rec’d A/R __________
JCB __________
TTL BANK DEP __________
AMT TR A/R __________
Cashier’s Report
Actual Amount POS Amount Difference
Shift 1
Cash __________ __________ __________
Cr Cd __________ __________ __________
TOTAL 1 __________ __________ __________
Shift 2
Cash __________ __________ __________
Cr Cd __________ __________ __________
TOTAL 2 __________ __________ __________
Shift 3
Cash __________ __________ __________
Cr Cd __________ __________ __________
TOTAL 3 __________ __________ __________
TOTALS __________ __________ __________
Analysis Cash Report
Cash Sls __________
Cr Cd A/R __________
Cash A/R __________
TOTAL __________
Manager’s Report
Actual Budget Difference
ROOMS AVAIL __________ __________ __________
ROOMS SOLD __________ __________ __________
ROOM VAC __________ __________ __________
ROOMS OOO __________ __________ __________
ROOMS COMP __________ __________ __________
OCC % __________ __________ __________
DBL OCC % __________ __________ __________
YIELD % __________ __________ __________
REVPAR __________ __________ __________
ROOM INC __________ __________ __________
NO. GUESTS __________ __________ __________
AV. RATE __________ __________ __________
RACK RATE __________ __________ __________
NO-SHOWS __________ __________ __________
306 CHAPTER 10
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PREPARATI ON AND REVI EW OF THE NI GHT AUDI T
FI GURE 10- 11 (continued)
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Key Words
KEY WORDS 307
aging of accounts
cashier’s report
credit balance
cumulative total feature
daily flash report
daily sales report
departmental accounts
manager’s report
master credit card account
night audit
operational effectiveness
room sales figure
surcharge rates
tax cumulative total feature
total restaurant sales figure
trial balance
10_4612.qxp 1/11/06 3:39 PM Page 307
O P E N I N G D I L E M M A
Upon check-in, a guest indicates that the national reservation agent
misquoted his room rate at $95 when it should have been $85 per
night. The front desk clerk responds, “Sir, you will have to discuss that
with the cashier when you check out in three days. I can only register
you with the rate that was entered into the computer. What’s $30 to a
businessperson on a budget?”
The concept of hospitality, the generous and cordial provision of services to a
guest, is at the heart of our industry. These services can include room accom-
modations, food and beverages, meeting facilities, reservations, information on
hotel services, information on local attractions, and the like. Hospitality is a
subjective concept, and the degree of hospitality a guest perceives has implica-
tions for the overall financial success of the hotel. Guests who feel they are not
treated with respect or have not received full value for their dollar will seek out
other hotels they believe will provide hospitality. This chapter is intended to
instill in you, the future professional in the hospitality industry, a sense of
responsibility for providing professional hospitality. As you prepare for a
career in an industry that may differentiate its product by continual and effi-
cient delivery of professional hospitality service, this material will serve as a
primer for your development (Figure 11-1).
C H A P T E R 1 1
Managing Hospitality
C H A P T E R F O C U S P O I N T S
?
Importance of hospitality
to the hotel guest and the
hotel entrepreneur
?
Managing the delivery of
hospitality
?
Total quality
management (TQM)
applications
?
Developing a service
management program
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This chapter was inspired by a book entitled Service America! (Dow Jones–Irwin,
1985) by Karl Albrecht and Ron Zemke. These management consultants were early pro-
ponents of the service concept in business. Their writings, as well as my own professional
experience in hotels and restaurants, are the basis of this chapter. A chapter devoted to
hospitality seems essential because the staff of the front office is often the only direct con-
tact the guest has with the hotel. A recent job advertisement for a total quality manager
was offered by the InterContinental Hotels Group.
1
This emphasizes the continued
importance this concepts plays in the hotel industry.
Importance of Hospitality
Hospitality is an important consideration for both the guest and the hotel entrepreneur.
Every guest expects and deserves hospitable treatment. Providing hospitality to meet
guests’ needs involves not only a positive attitude but an array of services that make the
guest’s stay enjoyable. If the market being served by a hotel is composed of business trav-
elers, a hotel staff will find that their needs revolve around schedules and flexible deliv-
ery of hotel services. The business traveler may arrive late and leave early. The hotel
restaurant must be organized to provide a healthy and quick breakfast. Wake-up services
must be located within the room or provided by an efficient staff. The hotel should also
offer office services, such as word processing capabilities, advanced telephone systems,
I MPORTANCE OF HOSPI TALI TY 309
FI GURE 11- 1
A well-informed
hotel staff
contributes to an
enjoyable guest
stay. Photo
courtesy of
Wyndham
Reading Hotel,
Reading,
Pennsylvania.
11_4612.qxp 1/11/06 3:40 PM Page 309
fax and photocopying facilities, and computers. The guest who is associated with a con-
vention may want early check-in, late checkout, and a full range of hotel services. If the
convention starts at noon on Tuesday, the guest may arrive at 9 A.M., wanting to unload
and set up before the noon starting time. If the convention ends on Thursday at 3 P.M.,
the guest may want to retain occupancy of the room beyond the normal checkout time.
While the guest is in the hotel, he or she may require flexible scheduling hours of the
swimming pool, health club facilities, lounge and live entertainment, gift shops, coffee
shop, and other hotel services. International guests may require assistance with using elec-
trical appliances, converting their national currency into local currency, or interpreting
geographic directions.
Success or failure in providing hospitality often determines the success or failure of the
hotel. Capitalizing on opportunities to provide hospitality is essential. The failure to
make the most of these chances directly affects the hotel’s financial success, as Albrecht
and Zemke indicate in Service America!:
The average business never hears from 96% of its unhappy customers. For every com-
plaint received the average company in fact has 26 customers with problems, 6 of
which are “serious” problems. Complainers are more likely than noncomplainers to
do business again with the company that upset them, even if the problem isn’t satis-
factorily resolved. Of the customers who register a complaint, between 54 and 70%
will do business again with the organization if their complaint is resolved. That figure
goes up to a staggering 95% if the customer feels that the complaint was resolved
quickly. The average customer who has had a problem with an organization recounts
the incident to more than 20 people. Customers who have complained to an organi-
zation and had their complaints satisfactorily resolved tell an average of five people
about the treatment they received.
2
What do these issues of delivering hospitality to the guest mean to the entrepreneur?
They emphasize that the guest who is not treated with hospitality (remember that the def-
inition of hospitality is subjective) will choose to do business with a competitor and may
also influence others not to try your hotel for the first time or not to continue to do busi-
ness with you. The entrepreneur who is aware of the competition realizes that this nega-
tive advertising will severely affect the profit-and-loss statement. Albrecht and Zemke
extended their concept mathematically. Let’s examine the cumulative effects of poor serv-
ice in the following example.
If a hotel does not provide the desired level of service to 10 guests on any given day,
only 1 of the guests will bring the complaint to the attention of the hotel staff. If the com-
plaint is resolved quickly, this person will almost surely do business again with the hotel.
He or she will also have occasion to influence 5 people to use your hotel. On the other
hand, the 9 guests who did not bring their complaints to the attention of the hotel staff
will probably not do business with the hotel again, and each of them may tell approxi-
mately 20 people—a total of 180 people will hear their negative account of the hotel. If
this model is extended to cover a whole year of dissatisfied guests, 68,985 people will
have a negative impression of the hotel ([180 people told + 9 original dissatisfied cus-
310 CHAPTER 11
?
MANAGI NG HOSPI TALI TY
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tomers] × 365 days in a year), and 2,190 will have a positive impression ([5 people told
+ 1 original satisfied customer] × 365 days in a year).
The financial ramifications of so many people negatively impressed with your hotel are
clearly disastrous. Hospitable treatment of guests must be more than just an option; it
must be standard operating procedure. It is a concept that must be adopted as a corpo-
rate tenet and organized for effective delivery.
Managing the Delivery of Hospitality
It is not enough for the front office manager to decide that the members of the front office
staff should provide good service and display hospitality to guests. To provide satisfactory
hospitality to all guests at all times, front office managers must develop and administer a
service management program, which highlights a company’s focus on meeting customers’
needs and allows a hotel to achieve its financial goals. This program must be based on
sound management principles and the hotel’s commitment to meeting those needs.
Management’s Role
This may seem an odd place to start a discussion of delivering hospitality. After all,
aren’t the front desk clerks, switchboard operators, and bellhops the people who meet
and greet guests and fulfill their needs at the front desk? Yes, these employees do provide
hospitality directly, but management must work behind the scenes to develop a plan that
ensures that the employees’ efforts are continuous and professional. For example, man-
agement may decide to implement one or two specific, immediate changes on learning
that a guest’s needs were overlooked. Management may feel that the negative impact of
the rude, lazy, or careless employee has unnecessarily caused bad public relations. If a
group of employees is not performing to management’s standards, the cumulative effects
of the group are perceived negatively by guests. This negative impression takes a toll in
the long run. Although one or two directives may correct an individual guest’s problems,
that hotel will reap only short-lived gains. A comprehensive program aimed at meeting
MANAGI NG THE DELI VERY OF HOSPI TALI TY 311
I N T E R N A T I O N A L H I G H L I G H T S
H
otels throughout the world differ in the level of service they offer their guests. Some hotels
provide the basic elements of service within standard operating procedures, while other hotels
focus their efforts on delivering service. Much of the explanation for the differences relates to a
nation’s culture of service. Cultures of countries that regard service as subservience may produce employ-
ees who operate within standard operating procedures. But when service is viewed as a profession, the cul-
ture produces professionals as well as employees who welcome the opportunity to tend, facilitate, and
care for the guest. Hotels that operate in countries where service is not part of the culture must develop
systems that support employee success in the delivery of hospitality.
u
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the needs of a hotel’s prime market—guests who continue to do business with the hotel—
provides the foundation for long-term successful delivery of hospitality. This is what
makes a hotel profitable.
Management’s commitment to a service management program must be as integral to the
organization as effective market planning, cost control programs, budgeting, and human
resources management. In fact, service management is the most visible responsibility
because it affects all the other objectives of the hotel. Often the people in staff positions in
hotels become so involved with their day-to-day paper shuffling and deadlines that they for-
get why they are in business. They may not mean to forget, but it happens all too often. Ser-
vice management ensures a commitment to long-range effort by appointing someone within
the organization to be responsible for developing, organizing, and delivering it.
John W. Young, retired executive vice president of human resources at the Four Sea-
sons Hotels and Resorts, tells us:
We expect our general managers to respect the dignity of every employee, to under-
stand their needs and recognize their contributions, and to work to maintain their job
satisfaction with us—and to encourage their growth to the maximum extent their
ability and desire allows. General measurement is based on detailed employee attitude
surveys, conducted by an outside firm, as well as such factors as employee turnover
[and] employee promotions, both within the hotel and to other hotels. Also specific
people-related goals are set according to the hotel’s needs or the manager’s personal
needs, and measured, e.g., implementing a planned change in response to concerns in
an attitude survey.
3
The front office manager usually supervises service management efforts. Other key
department heads who supervise employees who deal with guests, such as the food and bev-
erage manager and director of marketing and sales, rely on the organizational leadership of
the front office manager. It is important to note that responsibility for delivering hospitality
to the guest is always a part of the job of each department’s supervisor or shift leader, the per-
son responsible for directing the efforts of a particular work shift. The organizational efforts
provided by the front office manager serve as the basis for a homogeneous plan for the hotel.
The owner and general manager must make a financial commitment to ensure the
success of the program. An important component is motivating employees to deliver hos-
pitality on a continual basis through incentive programs. Incentive programs are manage-
ment’s organized efforts to determine employees’ needs and develop programs to help
employees meet their needs and the needs of the hotel. Such programs reward employees
for providing constant and satisfactory guest service and often involve money, in the form
of bonuses, which must be budgeted in the annual projected budget. These incentives may
involve the employees’ choice of a monetary bonus, higher hourly rates, shift preference,
or additional holiday or vacation days.
Mark Heymann, chairman and CEO of UniFocus, based in Carrollton, Texas, indi-
cates that customer satisfaction and employee satisfaction (in hotels) should be consid-
ered simultaneously. He says, “Given today’s extraordinarily tough labor market,
dissatisfied workers don’t stick around. So a happy staff is the key to happy campers.”
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Mr. Heymann also reports on feedback from hotel property clients with UniFocus, say-
ing, “Money is not the key driver when it comes to holding on to staff. It’s the interac-
tion with management and the environment.”
4
The goal of every lodging establishment should be to extend the same degree of hos-
pitality to a guest who arrives on a busy Monday morning and to a guest who arrives on
a slow Saturday night. Management’s ideological and financial commitment, along with
the organizational efforts of the front office manager, will ensure that both of these
guests are treated equally.
The Service Strategy Statement
To produce an effective service management program, management must devise a serv-
ice strategy statement, a formal recognition by management that the hotel will strive to
deliver the products and services desired by the guest in a professional manner. To accom-
plish this, management must first identify the guest’s needs.
Those of you who have entry-level jobs in a hotel as a bellhop, desk clerk, switchboard
operator, table attendant, housekeeping attendant, or gift shop clerk may have some feel
MANAGI NG THE DELI VERY OF HOSPI TALI TY 313
F R O N T L I N E R E A L I T I E S
T
he daughter of an international guest approaches a front desk clerk and indicates that her
mother is experiencing chest pains. What hospitality opportunities are available to the front
desk clerk?
q
FI GURE 11- 2
Owners and
managers must
commit financial
resources and
establish
priorities for the
operation of a
successful service
management
program. Photo
courtesy of
Radisson
Hospitality
Worldwide.
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for what guests want. They want quick and efficient service. They want to avoid long lines.
They want to find their way easily around the hotel and the immediate vicinity. They want
the products and services in the hotel to work. They want to feel safe and secure while
residing in the hotel. If you use these observations as a basis for understanding guests’
needs while they are away from home, you will be able to better satisfy their needs.
John Young reports, “Market research, internal guest comments and our regular
employee attitude surveys all confirm that what has set and will continue to set Four Sea-
sons apart from our competitors is personal service.”
5
As Eric Johnson and William Layton note, “It is only through the eyes of a customer that
a definition of service quality can be obtained. Senior management cannot adequately deter-
mine what is desired at the customer level until a comprehensive evaluation of customer
preference is established through a systematic consumer research study.”
6
Thus, in addition
to identifying generally what guests want, management should survey guests about the par-
ticular property to determine what services they expect and how they want these services
delivered. The general manager of the hotel may assign this task to the marketing and sales
director, who may start by reviewing and summarizing customer comment cards, which are
usually held on file for six months to a year. A review of the areas in which the hotel has
disappointed its guests, like that shown in Figure 11-3, provides a basis for determining
314 CHAPTER 11
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MANAGI NG HOSPI TALI TY
FI GURE 11- 3 The report highlights areas of customer service and customer feedback.
The Times Hotel
CUSTOMER COMMENT CARD SUMMARY, SEPT.–DEC.
Product/Service Sept. Oct. Nov. Dec.
Overbooked 41 20 8 20
Slow check-in 50 31 12 25
Slow checkout 10 15 10 4
Room rate too high 10 7 9 8
Delay getting into room 35 12 18 5
Slow room service 90 3 3 10
Poor food in restaurant 6 10 2 8
Poor selections on menu 2 5 7 12
High prices on menu 2 10 10 20
Dirty room 3 4 8 15
Poor selection of amenities — — 5 —
Bedding insufficient 10 10 12 5
Lack of response from housekeeping 9 15 7 9
Rudeness from bell staff 1 — 5 —
Rudeness from dining room staff 1 — 10 —
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where to begin a guest survey. The problem areas identified from this study are then used
as the focus of a simple survey form similar to that shown in Figure 11-4.
The survey may be administered by a member of the marketing and sales department
at various times during the day. This information, as well as that gleaned from the com-
ment cards, gives a general indication of what the guest wants. Sometimes pinpointing
guest needs is not easy, because they change over time. In the example shown in Figure
11-3, speed of service delivery, high prices, poor selection of products, low-quality prod-
ucts, and rude personnel are problem areas. These areas, then, should be the focus of the
service strategy statement, as they appear to be the primary guest concerns.
Ernest Cadotte and Normand Turgeon analyzed a survey concerning the frequency
and types of complaints and compliments received from guests of members of the
National Restaurant Association and the American Hotel & Motel Association (now the
American Hotel & Lodging Association). They report:
The data seem to fall into a four-fold topology that compares how likely an attribute
is to garner compliments versus the frequency of complaints.
1. Dissatisfiers—complaints for low performance, e.g., parking.
2. Satisfiers—unusual performance apparently elicits compliments, but average per-
formance or even the absence of the feature will probably not cause dissatisfaction
or complaints, e.g., atrium-type lobbies.
MANAGI NG THE DELI VERY OF HOSPI TALI TY 315
FI GURE 11- 4 This individual hotel guest survey asks guests for their opinions on delivery of service.
The Times Hotel
GUEST SURVEY
1. List and rate the services provided by the bell staff.
__________________________________________________________ excellent good fair poor
__________________________________________________________ excellent good fair poor
2. List and rate the services provided by the front desk.
__________________________________________________________ excellent good fair poor
__________________________________________________________ excellent good fair poor
__________________________________________________________ excellent good fair poor
3. List and rate the services provided by housekeeping.
__________________________________________________________ excellent good fair poor
__________________________________________________________ excellent good fair poor
4. List and rate the services provided by the food and beverage department.
__________________________________________________________ excellent good fair poor
__________________________________________________________ excellent good fair poor
__________________________________________________________ excellent good fair poor
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3. Critical variables—capable of eliciting both positive and negative feelings,
depending on the situation, e.g., cleanliness, quality of service, employee knowl-
edge and service, and quietness of surroundings.
4. Neutrals—factors that received neither a great number of compliments nor many
complaints are probably either not salient to guests or easily brought up to guest
standards.
7
Albrecht and Zemke also identify general guest expectations as follows:
?
Care and concern from service providers
?
Spontaneity—people are authorized to think
?
Problem solving—people can work out the intricacies of problems
?
Recovery—will anybody make a special effort to set a problem right?
8
Their conclusions add another dimension to the service strategy statement. In addition to
certain recognizable products and services delivered at a certain speed and level of qual-
ity, guests expect employees to accept the responsibility for resolving problems. The guest
should not encounter unconcerned staff or be bounced from employee to employee in
order to have a problem solved. Management must develop a staff whose members can
think and solve problems. This dimension to the service strategy statement makes the
delivery of professional hospitality a challenge!
Developing the Once management identifies what guests want, it can develop a service strategy state-
Service Strategy ment. The statement should include:
Statement
?
A commitment to make service from top-level ownership and management a top
priority in the company
?
A commitment to develop and administer a service management program
?
A commitment to train employees to deliver service efficiently
?
A commitment of financial resources to develop incentives for the employees who
deliver the services
These directives serve as guidelines in the development of a service management program.
More important, they force management to think of service as a long-range effort and not
as a quick fix.
John W. Young states that the service strategy of the Four Seasons Hotels and Resorts
centers on offering
. . . exceptional levels of personal service. People are our most important asset. Each
person has dignity and wants a sense of pride in what they do and where they work.
Success in delivering excellent service depends on working together as a team and
understanding the needs and contributions of our fellow employees. [We must] train
and stimulate ourselves and our colleagues. [We must] deal with others as we would
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have them deal with us. [We must] avoid compromising long-term goals in the inter-
est of short term profit.
9
Here is one example of a service strategy statement:
The owners of fictitious The Times Hotel, management, and staff will combine forces
to establish a Service to Our Guests program, administered by management and deliv-
ered by staff. Delivery of service to our guests is crucial to the economic viability of our
hotel. The owners of the hotel will provide financial support to the people who deliver
hospitality on a daily basis.
Another version of the service strategy statement is as follows:
The hotel, in its continual efforts to maintain a leadership position in the hotel indus-
try, will develop a VIP Guest Service program. The administration and delivery of this
program are essential to the financial success of the hotel. This program will include
incentives and has received a priority budget line for this fiscal year.
These statements, however worded, convey the message from owners and management
that a successful service management program depends on the support of all levels of
management and staff.
Financial Commitment
Throughout the preceding discussion on service management, financial commitment from
management was stressed. Managers who want to develop and deliver a successful serv-
ice management program must provide adequate staff time to think through a plan and
to develop methods to motivate their employees. Scheduling time for planning and strat-
egy sessions can increase the labor budget. Determining and offering motivational oppor-
tunities also increases the financial investment. Often, lack of planning for these financial
considerations impedes the desire to implement a service management program.
MANAGI NG THE DELI VERY OF HOSPI TALI TY 317
F R O N T L I N E R E A L I T I E S
A
general manager has proposed a service management program to the owner of her hotel.
The front office manager has developed a plan with a $7,500 budget that includes incentives
for employees. The owner of the hotel likes the program but wants the budget scaled down to
$0. The owner feels that employees should be responsible for their own motivation. If you were the front
office manager, how would you justify the budget in your plan?
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Total Quality Management Applications
The previous discussion of developing a background for managing the delivery of hospi-
tality is essential for adopting total quality management (TQM) practices, as discussed in
chapter 2. Hotel owners and managers who fail to develop a clear service strategy state-
ment and make a financial commitment to delivering hospitality experience extreme dif-
ficulty in applying TQM. TQM requires an immense commitment of labor to analyze
guest and employee interaction, the reallocation of responsibilities and authority to fos-
ter an improvement in services, and a long-term commitment to learning a new method
of management. Preparation for adopting TQM is a requisite for success.
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H O S P I T A L I T Y P R O F I L E
?
P
atrick Mene is vice president of
quality for The Ritz-Carlton
Hotel Company, L.L.C. His organ-
ization is the winner of the 1992 and 1999 Mal-
colm Baldrige Award, a prestigious recognition of
excellence in overall performance, leadership,
profitability, and competitiveness. After he gradu-
ated from college, Mr. Mene went to work as a
management trainee at Hilton. He has also
worked in management positions at Hyatt, Westin
International, Omni, Portman Hotel in San Fran-
cisco, and L’Ermitage Hotels. He has performed a
great deal of research, particularly on the teach-
ings of Joseph Juran, a management specialist in
quality planning, improvement, and control.
Mr. Mene states that competing for the
Baldrige Award provided great feedback for the
hotel. He explains that the hotel was organized
vertically; it is now organized horizontally to con-
centrate more on the critical processes that drive
the company and to provide more employee
empowerment. For example, a traditional hotel
may have 30 departments, while the Ritz-Carlton
has only four; each one is run by a horizontally
organized team. One team focuses on the prear-
rival process (customer contact with the sales
office; making reservations; planning meetings,
conferences, and banquets), one team focuses on
arrival (laundry, housekeeping, front desk), one
team runs the restaurant, and one team is respon-
sible for banqueting. This horizontal structure cre-
ates a “leaner, linked, empowered organization.”
Mr. Mene describes the managers in this type of
organization as “coaches and advisers,” while
managers in traditional organizations are more
“chief technicians and problem solvers.”
Mr. Mene reports that customer dissatisfaction
has decreased. The new structure has resulted in
fewer breakdowns and less need for rework. In the
past, the hotel experienced problems with incor-
rect or late honor bar billings; guest rooms were
always clean but were sometimes missing supplies;
and, at times, when guests called for information
or assistance, agents were not available and calls
went unanswered. These problems have been dra-
matically reduced.
He states that quality management science is a
new branch of knowledge. Traditional methods of
management that concentrate on selling hard, rais-
ing prices, and forcing a profit cannot identify and
eliminate waste. He adds that, in any hotel, 30 per-
cent of expenditures are the result of quality fail-
ures and are unnecessary. He feels that TQM is the
most effective way to achieve revolutionary results.
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W. Edwards Deming’s principles of TQM
10
can be applied to front office management
practices. Managers must focus on a distinct level of service at the front office. Managers
and frontline employees must view the interaction between customers and service
providers. A front office team develops a flowchart, an analysis of the delivery of a par-
ticular product or service, to illustrate what occurs after a customer has verbalized a
request for a product or service. Analysis of this interaction by the group of people who
deliver the product or service allows for suggestions for improvement. A key component
of TQM is a commitment to continuous analysis of the delivery of guest services and
plans for improvement.
Developing a Service Management Program
Employee involvement in planning a service management program is as important as
obtaining a financial commitment from owners in establishing such a program. Too
often, when the employees are not included in the planning stages, they look at the final
plan and remark, “This is ridiculous; not for me. Let the people in marketing and sales
worry about it.” In many cases, service is perceived as just another fancy concept pro-
posed by management. Management must address this attitude from the outset. When
employees are involved early, they are much more likely to buy into the program because
they are already a part of it.
DEVELOPI NG A SERVI CE MANAGEMENT PROGRAM 319
FI GURE 11- 5
This TQM team is
analyzing the
delivery of a
particular service
to a guest.
Managers and
front-line
employees
provide an
objective review.
Photo courtesy of
Radisson
Hospitality
Worldwide.
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Guest Cycle
The front office manager responsible for developing an effective service management
program, along with other department directors, should first look at the employees they
supervise. Representatives from all job categories and shifts should be included on the
planning committee. Planning by committee can be cumbersome (scheduling, planning
meetings, incurring additional payroll, etc.), but it can ensure that an effective program
is developed. It allows a drafted plan to be altered in the planning stages by those who
must implement it and ensures clear, workable operational methods. It gives the employ-
ees time to adjust to the new concept while allowing time to develop adoption proce-
dures. At each planning phase, employees learn how they will benefit from the program.
This is a realistic way to focus management’s efforts to promote this important concept.
Once the members of the planning committee are chosen, their first step is to analyze
the guest’s perception of the hospitality system:
Visualize your organization as dealing with the customer in terms of a cycle of serv-
ice, a repeatable sequence of events in which various people try to meet the customer’s
needs and expectations at each point. It may be the instant at which the customer sees
your advertisement, gets a call from your sales person, or initiates a telephone inquiry.
It ends only temporarily, when the customer considers the service complete, and it
begins anew when he or she decides to come back for more.
11
Figure 11-6 illustrates the cycle of service, the progression of a guest’s request for
products and services through a hotel’s departments. This outline is presented as a work-
320 CHAPTER 11
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MANAGI NG HOSPI TALI TY
FI GURE 11- 6 This review of the cycle of services the guest may encounter is the
basis for developing a service management program.
Marketing
• Customer surveys (before and after stay)
• Advertising: billboards, direct mail, radio, television, print, Internet; incentive promotions, solo and
with other hospitality organizations
Reservations
• Toll-free numbers, fax, national reservation system (ease of access), Internet
• Telephone manner of reservationists
• Cancellation policy (reasonable restrictions)
• Credit card acceptance
• Accommodation availability (value and cost considerations)
• Complimentary services/products (value and cost considerations)
• Information on hotel shuttle and public transportation
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DEVELOPI NG A SERVI CE MANAGEMENT PROGRAM 321
Registration
• Hotel shuttle and public transportation
• Greetings (doorman, bell staff, front desk personnel)
• Assistance with luggage
• Check-in procedure (length of time in line, ease of check-in with preprinted registration cards or self-
registration machine)
• Room accommodations (value and cost considerations)
• Credit card acceptance
• Complimentary services/products (value and cost considerations)
• Room status/availability
• Information on other hotel services
• Cleanliness and interior design of lobby, elevators, room
• Operation of air conditioning, heat, television, radio, plumbing in room
• Amenities available
Guest Stay
Other hotel departments:
• Food service department (menu offerings, hours of operation, prices, service level, ambience)
• Gift shop (selection, souvenirs, value/price)
• Lounge (prices, entertainment, hours, service level)
• Room service (menu offerings, prices, hours of availability, promptness in delivery and pickup of trays)
• Valet service (pickup and delivery times, prices, quality of service)
• Housekeeping services (daily room cleaning, replenishment of amenities, cleanliness of public areas,
requests for directions in hotel)
• Accommodation availability (value and cost considerations)
• Security (24-hour availability, fire safety devices, anonymous key blank and distribution, key and
lock repair service, requests for directions in hotel)
Front office:
• Requests for information and assistance (wake-up calls, hours of operation of other departments,
transmittal of requests to other departments)
• Telephone system (assistance from staff)
• Update of guest folio
• Extension of stay
Checkout
• Reasonable and flexible checkout time deadlines
• Assistance with luggage
• Elevator availability and promptness
• In-room video checkout
• Length of time in line
• Immediate availability of guest folio printout; accuracy of charges
• Additional reservations
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ing tool for front office managers to use in analyzing the hotel services the guest encoun-
ters, not as a complete listing. It is important to remember that these services are provided
by the employees of the hotel. In developing a list for a specific hotel property, employee
input is vital.
Another benefit of analyzing the cycle of service is that the analysis may reveal ineffi-
ciencies built into the system. Rectifying these will assist in delivering first-rate hospital-
ity, as the following example, reported by Nancy J. Allin and Kelly Halpine of the quality
assurance and training department at the Waldorf-Astoria in New York, indicates:
While there can be many reasons to combine the positions of registration clerk and
cashier, and many aspects were considered at the Waldorf=Astoria, the decision was
driven by a desire to improve guest service where its impact is most obvious—at the
front desk. Cross-trained employees speed the check-in and checkout process by per-
forming both functions, as the traffic at the desk dictates. Registration clerks can cash
checks and cashiers can issue duplicate room keys, in many cases eliminating the
necessity of having the guest wait in two lines.
12
Moments of Truth in Hotel Service Management
Central to the development of a guest service program is the management of what
Albrecht and Zemke call moments of truth: “episode in which a customer comes into
contact with any aspect of the company, however remote, and thereby has an opportu-
nity to form an impression.”
13
Every time the hotel guest encounters some aspect of the
hotel, he or she judges its hospitality. Guests who are told by a reservationist that they
must “take this room at this rate or stay elsewhere” will not feel that hospitality is a pri-
mary consideration at this hotel. When a potential guest calls and asks to speak with Ms.
General Manager and the switchboard operator answers, “Who is that?” the guest will
expect the same kind of careless, impersonal treatment when (or if) he or she decides to
stay at the hotel. The guest who is crammed into an elevator with half the housekeeping
crew, their vacuum cleaners, and bins of soiled laundry will not feel welcomed. All these
impressions make the guest feel that service at this hotel is mismanaged.
These examples are only some of the moments of truth that can be identified from an
analysis of the guest service cycle. Whether a guest considers an event a moment of truth
or barely notices, it is a cumulative review of the delivery of hospitality. Albrecht and
Zemke tell us that each guest has a “report card” in his or her head that is the basis of a
grading system that leads the customer to decide whether to partake of the service again
or to go elsewhere.
14
If a guest is to award an A+ to the hotel’s hospitality report card, it
is essential that all moments of truth be well managed. This challenge is not to be viewed
as an impossible mission but rather as an organized and concerted effort by owners, man-
agement, and employees. Keep this customer report card concept in mind as you develop
your ideas about service management.
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Employee Buy-in Concept
As Albrecht and Zemke note, “in any kind of retail or service business, the factor that has
the biggest effect on sales is the ‘last four feet.’ It’s up to the people in the store to take
over at the last four feet.”
15
In other words, all the sophisticated marketing programs,
well-orchestrated sales promotions, outstanding architectural designs, and degreed and
certified management staff form only the backdrop for the delivery of hospitality. The
frontline employee is the link in the service management program. He or she must deliver
the service. It’s a simple fact that still amazes many people. How can front office man-
agers ensure that frontline employees deliver a consistently high level of service?
Albrecht and Zemke offer the following suggestions:
To have a high standard of service, it is necessary to create and maintain a motivating
environment in which service people can find personal reasons for committing their ener-
gies to the benefit of the customer. People commit their energies to the extent that what
they do brings them what they want. What they want may be psychological—a feeling, a
status, or an experience. Or it may be material—greenbacks are an excellent form of feed-
back. In any case the job of management is to engineer a motivating environment.
16
John W. Young echoes their ideas: “The challenge is to motivate your employees to
deliver the required level of service to your customers, and do it consistently . . . . If we
are to succeed in delivery of exceptional service, we have to convince every new employee
of the benefit of ‘buying in’ to our philosophy and standards.”
17
In short, a consistently high level of service is provided only by employees who are
committed to the service management program. This commitment is fostered by man-
agement. It is such commitment that allows the front desk clerk to tell the newly regis-
tered guest about the special musical combo group playing in the lounge or to ask how
the traffic coming in from the airport was or to suggest consulting the concierge in the
lobby for directions to points of interest in the city. Chapter 12 further discusses
DEVELOPI NG A SERVI CE MANAGEMENT PROGRAM 323
F R O N T L I N E R E A L I T I E S
S
hortcomings in providing guest services at the front office in The Times Hotel have become
critical in one particular aspect—knowledge of special events in the local area. Guests have
complained that front desk clerks do not give clear directions, estimates of travel time, infor-
mation on timing of events, cost of admission, or suggestions for public transportation. Guests approach
desk clerks and receive only a brief response to their questions.
The front office manager has decided to use total quality management principles to resolve this situa-
tion. The hotel has stated a commitment to service and a financial commitment to this goal.
If you were the front office manager, how would you proceed?
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employee motivation; those concepts are crucial to the development and administration
of a service management program.
Consider each employee in each hotel and determine how to stimulate his or her com-
mitment to service. If money motivates them, financial incentive programs that reward
positive expressions of hospitality are in order. Employee stock ownership programs also
provide an incentive for employees to realize financially the importance of delivering a
consistently high level of hospitality. Other reward systems may include preferential
treatment in scheduling shifts, longer vacations, and extra holidays. Long-range rewards
may include promotion opportunities.
Screening Employees Who Deliver Hospitality
Another factor to consider in developing a service management program is the employee
character traits needed to provide hospitality. When candidates for frontline service posi-
tions are evaluated, interviews should be structured to screen out employees who are not
able or willing to deal with the demands of guest service. Albrecht and Zemke offer these
considerations for choosing frontline employees: “A service person needs to have at least
an adequate level of maturity and self-esteem. He or she needs to be reasonably articu-
late, aware of the normal rules of social context, and be able to say and do what is nec-
essary to establish rapport with a customer and maintain it. And third, he or she needs to
have a fairly high level of tolerance for contact.”
18
And John W. Young notes:
The motivation process begins with the selection of employees, which is all important.
The average person applying for a job is interviewed by at least four people. When
Four Seasons opens a property every single employee hired is interviewed by the hotel
general manager. First we look for people who are already motivated. Our compen-
sation policies have been designed to support and reinforce our efforts in hiring, train-
ing, and development. We look on them not only as a motivator, but as a way of
sending signals to our employees consistent with our philosophy and business strat-
egy—almost as an employee communication program itself.
19
Group discussions among the managerial staff help highlight the attributes of a person
able to deliver hospitality. These discussions should lead to a rather informal procedure for
screening employees. Questions that determine whether candidates display maturity and
self-esteem, are articulate, possess social graces, and have a high level of tolerance for con-
tinued guest contact can be discussed in group settings. Managers who are aware of what
they are looking for in employees are better able to secure the right people for the right jobs.
Empowerment
Empowerment—management’s act of delegating authority and responsibility to frontline
employees, those people who deliver service to guests as front desk clerks, cashiers,
switchboard operators, bellhops, concierge, and housekeeping employees—is the bedrock
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of service management programs. The process of empowering employees requires front
office managers to analyze the flow of guest services and determine how the frontline staff
interact with the guest. Are there any points of service at which the guest may request
variations in the level of service provided? Might there be times when a guest questions
standard operating procedures, such as billing, guest room access, or room accommoda-
tions? Do frontline employees constantly inform guests, “I don’t have the authority to
rectify this matter. You’ll have to see the manager”? If the review of the guest cycle
reveals opportunities for delegating responsibility and authority, then empowerment
should be exercised.
Adopting Front office employees who are not accustomed to solving problems and are not treated
Empowerment as members of the management team may be reluctant to suddenly take charge and make
into Front decisions. Employees who have become comfortable with having their managers solve all
Office the problems may see no need to change the established routine. However, it is becoming
Management increasingly apparent to front office managers that a supervisory style that does not
allow for employees to be involved in the decision-making process will not be successful.
The challenge to the front office manager, then, is to begin to introduce empowerment
into the front office.
The analysis of the guest flow (described earlier in this chapter) is the best way to start
the empowerment process. However, this analysis must be performed by the front office
manager in conjunction with frontline employees. If input from frontline employees is not
included in the analysis, valuable data may be overlooked and an opportunity for
employee ownership lost. The opportunity for employees to participate in the decision-
making process ensures positive initiation of empowerment.
Parameters of The authority and responsibility that underlie employee empowerment must be fully arti-
Employee culated and communicated to employees. If an analysis of the guest flow reveals oppor-
Empowerment tunities for a guest to question a billing amount, then the billing amount must be dis-
cussed. If the amount in question is less than $5, do cashiers have the authority to credit
the guest account for that amount? Or the amount in question is less than $25; do
cashiers have the authority to credit the guest account for that amount? Or the amount
in question rises to more than $25; do cashiers have the authority to credit the guest
account for that amount? Along with setting parameters for employee empowerment is
DEVELOPI NG A SERVI CE MANAGEMENT PROGRAM 325
F R O N T L I N E R E A L I T I E S
A
guest in room 284 calls to the front desk and wants to order pizza from room service, but
there is no room service menu in the guest room. The desk clerk relays the request to house-
keeping, only to have the phone call go unanswered. Next, the desk clerk calls the restaurant
and asks the hostess to call the guest and take care of the request. What underlying total quality man-
agement efforts are working in this situation?
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a management feedback system that provides information on cashier financial activity
and guest satisfaction. For example, a cumulative tally as well as individual tallies of a
front desk clerk’s authorization of refunding charges that have been disputed by guests
should be reviewed by front office managers. Financial totals that exceed the parameters
of employee empowerment should be questioned.
Training for Employees need training sessions to prepare for empowerment. Training sessions should
Empowerment cover the feeling that management has abandoned its responsibility by asking employees
to resolve guest concerns. Employees may also experience anxiety in dealing with guests
who are upset. Front office managers must develop flexible but relatively routine meth-
ods for employees to use to achieve a uniform delivery of service.
Training for empowerment begins by asking employees how they feel about providing
guests with good service. Front office managers might ask employees how they think the
hotel can make the guest feel most comfortable in this environment. Questions that per-
tain to employees’ recent personal experiences at the time of check-in or checkout may
yield some opportunities for discussion. Training continues with a list of empowerment
policy standards, which describe the authority and responsibility included in their job
description. Employee-manager dialog about these standards helps clarify employee
understanding and concerns and identify manager communication issues. The manager
should demonstrate and have employees go over the use of empowerment policy stan-
dards. Managers should also hold follow-up training sessions that include reviews of
employee performance and opportunities for employee feedback.
Training for Hospitality Management
Part of a service management program involves employee training to deliver hospitality.
Just as managers discuss what they want in an employee, they decide what must be done
to convey hospitality to travelers who are away from home. Of course, this discussion is
not performed in isolation and requires input from employees. Using the guest service
cycle (see Figure 11-6), the planning group determines what each frontline employee
must do at each point to extend hospitality.
The key to making training pay off is knowing what we want the trainees to be able
to do when they have finished the program. An effective training process starts with a
performance analysis. We must analyze the various jobs to be done in serving the cus-
tomer well, and then spell out the knowledge, attitudes, and skills required of the per-
son doing the job.
20
You cannot take it for granted that the desk clerk knows to maintain eye contact with
the guest during the check-in procedure while using a computer, that the switchboard
operator knows to alert a security supervisor when a guest mysteriously hangs up in the
middle of a call for information, or that a bellhop knows to check the operating condi-
tions of the heating, ventilating, and air-conditioning unit and television when he or she
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brings the guest’s luggage to the room. The expressions of hospitality must be identified
so that each employee can be trained to convey them.
Evaluating the Service Management Program
Any program requires methods for evaluating whether the program has successfully
achieved its goals. This chapter opened by defining hospitality as the generous and cor-
dial provision of service to a guest. How do the owners and managers of a hotel know
that hospitality is being delivered?
Albrecht and Zemke base the development of a sound evaluation procedure on iden-
tifying the guest’s moments of truth.
21
Figure 11-6 outlines the moments of truth in the
guest service cycle. This outline can serve as a guideline for what should be evaluated. The
more work done to identifying the components of the guest service cycle for a specific
hotel property, the more effective its managers and employees will be in evaluating serv-
ice delivery. Specific desired behaviors can be identified and measured. For example, if
part of the registration process depends on a prompt hotel shuttle van to pick up and
deliver guests to the hotel, then complaints from guests about late or slow service tell the
owners, managers, and employees that frontline employees are not delivering the neces-
sary service correctly. Customer comment cards are one way hotel management and staff
can receive feedback. However, not all satisfied or dissatisfied guests complete these
cards. Owners, managers, and employees who are committed to a service management
program must develop additional methods for determining guest satisfaction.
Another method that can be used to obtain useful feedback is to have frontline staff,
such as a desk clerk, inquire about the guest’s visit during checkout. Simply asking “Was
everything all right?” is not sufficient. If the guest folio indicates the guest charged meals,
beverages, room service, long-distance calls, or valet services, the front desk clerk should
inquire about the delivery of service for each: “Was your food delivered hot, on time,
removed from the hallway promptly?” or “How did you enjoy the live entertainment in
the lounge?” A method of communicating guest responses to the appropriate depart-
ments, which can rectify the errors or reward the frontline employee, completes the
process of evaluating the success of a service management program. For example, a quick
call to the manager on duty that relates the information received from the guest can assist
in remedying a potential guest service problem.
An inquiry from the desk clerk at checkout provides feedback about service quality
after the fact. Supervisors of the dining room, lounge, bell staff, housekeeping depart-
ment, maintenance crew, and the like must develop communication procedures with
their employees to monitor the guest’s experience as it occurs. The host or hostess must
develop a sensitivity to a guest’s reaction to menu items and prices; the bellhop must con-
stantly be aware of the guest’s needs for information, directions, or assistance with lug-
gage; the housekeeping employee must be aware of the guest’s needs for additional
amenities, linens, or cleanliness of the public areas. All feedback must be communicated
to the frontline employee for continuous improvement of service.
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Follow-Through
Vital to every service management program is the continued management of the program
over time. In the hospitality industry, continued management can be difficult. A hotel
operates every hour of every day, and innumerable jobs are involved in keeping it running
smoothly and profitably. Managers can begin a service management program with the
best of intentions, but too often it is dropped or neglected in the day-to-day flurry of
operations. Albrecht and Zemke remind us that “isolated change and improvement pro-
grams tend to run their course and then to run downhill toward the performance levels
that existed before the program. The difference between a program and continuous com-
mitment is management.”
22
Management is the key to implementing an effective guest
service program. The commitment to hospitality is not a casual one; it requires constant
attention, research, training, and evaluation. Only with this commitment can a hotel
ensure hospitality every day for every guest.
Interfacing with Other Departments in Delivering Hospitality
One of the many benefits of employing total quality management is the participant’s abil-
ity to understand fellow team members’ job responsibilities. Teams composed of various
departments in the hotel provide opportunities for insights into other employee’s jobs.
Sometimes the process of TQM can seem like a maze of charts, processes, interactions,
and the like, which tend to confuse the uncommitted. But from that process rises a thor-
ough understanding of how the guest moves through the hospitality system and the jobs
of the providers of these services. Participants in TQM come to realize that the delivery
of hospitality is not the responsibility of any one person. This may come as a startling rev-
elation to employees who feel alone in bearing the responsibility for guest satisfaction.
TQM allows all participants the opportunity to see how employees from other depart-
ments share in the hospitality activity.
The “that’s not my job” attitude is easy to adopt in a management system in which
TQM is not used. Employees who feel they have distinct job duties within and between
departments and are not paid to venture beyond them may contribute to the delivery of
unacceptable service. Department managers who use TQM have the opportunity to prior-
itize service concepts and methods to deliver service with employees. This interaction gives
managers and employees the occasion to air concerns about how restrictions resulting from
narrowly written job descriptions affect their ability to provide service to the guest.
A typical TQM team assigns representatives from various departments in a hotel to
work on improving a particular guest service. For example, guests may complain that
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F R O N T L I N E R E A L I T I E S
A
guest in room 1104 has requested that housekeeping tidy up after a cocktail reception in his
room. He is expecting additional business guests within two hours. He wants you to ensure
that the housekeeping department will respond within the next half-hour. What should you do?
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there are not enough towels in a guest room. This complaint, especially after housekeep-
ing has closed down for the evening, causes a reduction in guest satisfaction and addi-
tional work for the lone front desk clerk on duty.
At the outset, the answer may be to “just put a few more towels in each guest room.”
The controller of the hotel may see this as additional costs of inventory purchase and laun-
dry. Housekeepers realize that excess supplies in guest rooms have a tendency to vaporize
and result in an increase in costs. However, a team approach to this seemingly simple
problem uncovers a list of possible solutions that an individual employee might overlook.
A team of desk clerks, housekeepers, bellhops, servers, cooks, switchboard operators,
cashiers, and supervisors reviews this particular service and how it is delivered. Objective
analysis of the components of the service gives employees insight into how departments
interact to accomplish their tasks. Brainstorming sessions identify possible improvements
that can be debated by team members. Additional meetings find team members crystalliz-
ing concepts and gaining insights and respect for jobs performed by team members.
The team may decide to have front desk clerks alert the housekeeping staff when more
than two people check into a guest room. The housekeeping staff can then routinely bring
additional towels. This decision not only solves the problem of guest dissatisfaction
caused by too few towels but provides an opportunity for frontline employees to develop
and deliver a guest service. It is no longer a front desk problem or a housekeeping prob-
lem but a team effort to produce a satisfied guest.
An example of a service management program is Hilton’s “Hilton Pride Program,”
which recognizes exceptional hotel performance and customer satisfaction. “The Pride
Program reinforces our pledge to maintain exceptional levels of customer satisfaction
while building pride in the workplace. This sense of pride enables us to create a level of
service that brings our customers back,” says Dieter H. Huckestein, executive vice pres-
ident, Hilton Hotels Corporation, and president of the company’s owned and managed
hotel operations.
The performance criteria include the following items:
?
Customer satisfaction tracking studies
?
Guest comment card responses
?
Mystery shopper evaluations
?
Team member surveys
?
EBITDA (earnings before interest, taxes, depreciation, and amortization)
?
Room RevPAR
?
RevPAR index
?
Brand management and product standard”
23
Delta Hotels received the Canada Awards for Excellence Trophy 2000 from the
National Quality Institute (NQI). John Johnston, president, Delta Hotels, remarked,
“Not only does this award recognize our ongoing commitment to excellence, but more
importantly our commitment to our guests.” The selection process included “[NQI]
assessors [who] visited six Delta hotels and the Corporate office to review examples of
quality in action. Delta Hotels met the rigorous criteria in the Excellence Framework by
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demonstrating outstanding continuous achievement in Leadership, Planning, Customer
Focus, People Focus, Supplier Focus, and Performance.” Prior to this award, Delta Hotels
established an internal quality control program called Quality Business Assessment.
“With this process, Delta Hotels trains internal assessors to conduct individual hotel
assessments and develop a quality improvement plan. Every two years, a hotel will
undergo an initial three-day assessment and a subsequent five-day assessment to ensure
that ongoing quality measures are incorporated into Delta’s culture and all aspects of [its]
operations. External assessors are also invited to conduct assessments, ensuring that
assessments meet the professional standards of NQI.” William Pallett, senior vice presi-
dent, people and quality, says, “Our goal is to ensure a seamless approach to quality, so
that it is part of our culture. Problem Solving Teams regularly monitor process for
improvement opportunities.” Tangible results of Delta’s program include a one-minute
check-in guarantee for guests and a guarantee for employees “to receive their review
within 30 days of their anniversary date or receive one week’s vacation with pay.”
24
Customer Relationship Management
Customer relationship management (CRM) is a system that allows hotel managers to
integrate technology to support customer service techniques that lead to top-notch cus-
tomer service. The technology that is so apparent in CRM has to play a secondary role
because one-on-one interaction with the guest continues to support reasons for return vis-
its. Neil Holm, president of hypen, describes CRM as follows.
Often referred to as a type of technology, CRM is first and foremost a business phi-
losophy—a way to consistently treat your guests right. Technology is the enabler that
helps get useful information into the hands of your management and staff so that they
can more powerfully foster guest satisfaction and loyalty.
25
Haley and Watson list (1) guest recognition, (2) data capture and maintenance, (3) chan-
nel integration and consistency, (4) ranking and discrimination, and (5) two-way per-
sonalized dialogs as the five elements of CRM. Guest recognition on a routine basis is
easy, but when the guest customer base is sporadic or international, then we need assis-
tance with data on relevant information. This is where the computerized information of
the guest’s coffee or golf time preferences is important. Data capture and maintenance is
essential to keeping this system working properly. Every time a guest indicates that some-
thing has changed, it should be reflected in the system. Channel integration and consis-
tency means that we have to provide guest recognition depending upon the various
channels guests choose to use—the property level or Internet. Guests want that same type
of recognition. Ranking and discrimination is a business decision; some guests will bring
more profit into your organization, and you must decide how you are going to use your
financial resources to attract them. (Author’s note: In the business world you should treat
all customers equally; you never know who your kindness has affected.) Finally, two-way
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personalized dialogs allow for a communication process between the customer and the
hotel. Yes, the customer is asked to take action to the specialized sales offers produced by
the hotel. Many computer programs interface with a hotel’s PMS, and a student of hos-
pitality management can easily locate them on the Internet.
26
Solution to Opening Dilemma
An immediate response to correct this guest service situation is to have the desk clerk reg-
ister the guest at $95 per night, discuss the situation with the supervisor after the guest
leaves the front desk, and then have the front desk clerk call the guest to confirm the
room rate. However, a more effective way to handle future situations is to work with the
general manager and owner to develop a service strategy statement and obtain financial
resources to support a service management program. Exploration and application of
employee motivation and empowerment are necessary to make a service management
program work. Total quality management teams will help employees determine tasks
required to deliver service. New front office managers should not take the delivery of
good service for granted. Quality service is planned, not happenstance.
Chapter Recap
This chapter stressed the importance of delivering continuous high-quality service in
hotels, as defined by the guest. Successful extension of hospitality starts with manage-
ment’s commitment to a service management program. Preparing a service strategy state-
ment focuses the planning efforts of owners, management, and employees. Principles of
total quality management provide a manager with an opportunity to involve frontline
employees in analyzing the components of delivery of service and methods to improve
existing services. The development of the service management program requires the
involvement of frontline employees, discussion of the guest cycle, moments of truth,
employee buy-in concept, screening of potential employees prior to hiring, empowerment,
training, evaluation of the service management program, follow-through, and interfacing
with other departments in delivering hospitality. A long-term commitment to a success-
ful service management program is necessary.
End-of-Chapter Questions
1. How important do you think hospitality is to guests in a hotel? If you are
employed in a hotel, ask your manager how he or she feels about the importance
of providing hospitality to guests.
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2. How would you develop a service strategy statement? Why is this an important
first step in the managing hospitality planning process?
3. Why should frontline employees be involved in the development of a service
management program?
4. How would you apply TQM to a particular situation at your place of employ-
ment? What challenges do you think will be presented in the application of this
management concept? What suggestions will you make to your manager to
resolve these challenges?
5. If you are employed in a hotel, prepare an outline, similar to that in Figure 11-6,
of the guest service cycle there.
6. What are “moments of truth” in a service delivery occasion? How can a front
office manager identify them?
7. Why must an employee buy in to a service management program? What would
you do to ensure employee commitment?
8. Discuss techniques that are useful in determining whether or not prospective
employees have the attributes needed to extend hospitality.
9. Why is training an important component of the service management program?
How could a front office manager begin to identify the skills needed for delivery
of hospitality? If you are employed in a hotel, did you receive training in deliver-
ing hospitality?
10. How can a front office manager measure the effectiveness of a service manage-
ment program?
11. Why is follow-through so necessary in the continued delivery of hospitality?
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C A S E S T U D Y 1 1 0 1
The new owners of The Times Hotel have just
boarded a plane at a city in Asia. Their stay in the
Mandrian Hotel was superb. The attention to serv-
ice was excellent, and they felt pampered. During
the flight, one of the owners reads an article in a
popular magazine concerning the mediocre service
in hotels in the United States. The article details the
lack of concern for the guest in many properties, the
high cost of hotel rooms, and the abrupt attitudes of
the hotel staff. The owners realize that many of the
problems mentioned in the article can be found at
The Times Hotel.
The next day, at the general staff meeting, the
owners share their concerns with the management
staff. As the group listens attentively, they cannot
help but think, “We have heard this before—another
idea from the owners that will make more work for
our already overworked staff.” However, this time
the owners declare they don’t know where to begin;
they feel overwhelmed by the size of the problem.
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CASE STUDY 333
C A S E S T U D Y 1 1 0 1 ( c ont i nued)
C A S E S T U D Y 1 1 0 2
Ana Chavarria, front office manager of The Times
Hotel, and Lorraine DeSantes, the hotel’s director of
marketing, learn that their city will be hosting the
next Olympic Games. The city council and the
tourism board are planning to develop a program to
ensure that high-quality service will be delivered by
all agencies, private and commercial, to the many
guests. Individual groups (hotels, restaurants, public
transportation, etc.) will meet and decide on a
course of action. Margaret Chu, general manager of
The Times Hotel, wants Ana and Lorraine to repre-
sent the hotel on the Hotel Hospitality Commission.
Because the Games are several years away, there is
ample time to involve various constituencies in
developing a plan for implementation.
After a few meetings with the commission, the
group feels it should break into smaller teams to dis-
cuss developing specific components of delivering
quality service. Ana and Lorraine are heading the
Service to the International Visitor planning team.
What suggestions would you give Ana and Lorraine
as they lead this team? Prepare an agenda for the
team’s first meeting.
“Let’s develop a plan,” they suggest. All managers
must do some research on this topic and return for a
brainstorming session in two weeks.
The front office manager, Ana Chavarria, finds
this a challenge! She has read some of the articles on
service management in the trade journals and
decides to do more research on the topic.
Through her reading, Ms. Chavarria learns that
there must be a financial commitment by the owners
and a managerial commitment by the staff to make
this work. If the employees become involved in the
planning stages, it should work just fine. She thinks
that getting the cooperation of the employees will be
easy if the owners pledge their financial commit-
ment. She guesses that the rest of the management
staff will probably halfheartedly go along with the
project—if it is forced on them.
At the scheduled brainstorming session, Ana out-
lines her findings. The owners are reluctant to incur
additional expenses to motivate employees. They
respond, “Let’s find some more creative ways.” The
other managers suggest preparing posters with pho-
tos of employees who do a good job, placing names
of employees who do a good job on the marquee,
and placing a suggestion box in the employee lunch-
room. Continued focus on the financial aspects dis-
tracts the group from discussing the content of a
service management program. After two hours of
futile effort, the owners decide to table the service
management program.
If you were the front office manager, what would
you have included in your presentation about devel-
oping an effective service management program?
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Notes
1. InterContinental Hotels Group, Total Quality Manager, http://ph.jobstreet.com/
jobs/2005/3/default/20default/20/372616.htm.
2. Karl Albrecht and Ron Zemke, Service America! (New York: Dow Jones–Irwin,
1985), 6–7.
3. John W. Young, “Four Seasons Expansion into the U.S. Market,” paper deliv-
ered at the Council on Hotel, Restaurant, and Institutional Education, Toronto,
Canada, July 30, 1988; edited July 17, 2001, p. 29.
4. Cheryl Hall, “Data Crunchers at Irving-based UniFocus Help Hotels Improve
Customers Service, Maintain Employee Morale,” Dallas Morning News, July 16,
2000. Reprinted with permission of the Dallas Morning News.
5. Young, “Four Seasons,” 22.
6. Eric J. Johnson and William G. Layton, “Quality Customer Service, Part II,”
Restaurant Hospitality (October 1987): 40.
7. Ernest R. Cadotte and Normand Turgeon, “Key Factors in Guest Satisfaction,” Cor-
nell Hotel Restaurant Administration Quarterly 28, no. 4 (February 1988): 44–51.
8. Albrecht and Zemke, Service America!, 33–34.
9. Young, “Four Seasons,” 9–10.
10. Don Hellriegel and John W. Slochum, Management (New York: Addison-
Wesley, 1991), 697.
11. Albrecht and Zemke, Service America!, 37–38.
12. Nancy J. Allin and Kelly Halpine, “From Clerk and Cashier to Guest Agent,”
Florida International University Hospitality Review 6, no. 1 (Spring 1988): 42.
13. Albrecht and Zemke, Service America!, 27.
14. Ibid., 32.
15. Ibid., 96–97.
16. Ibid., 107–108.
17. Young, “Four Seasons,” 14, 35.
18. Albrecht and Zemke, Service America!, 114.
19. Young, “Four Seasons,” 25–26.
20. Albrecht and Zemke, Service America!, 112–113.
21. Ibid., 139.
22. Ibid., 144.
23. Jeanne Datz, “Hilton Hotels Corporation Selects 16 out of More than 300 U.S.
Hilton and Hilton Garden Inn Hotels for the 2000 Hilton Pride Customer Satis-
faction Awards,” Hilton Hotels Corporation, Beverly Hills, CA, April 16, 2001.
24. Catherine Mattice, “Delta Hotels Receives Canada Awards for Excellence Tro-
phy 2000,” Delta Hotels, Toronto, Ontario, September 26, 2000.
25. Neil Holm, “Understanding the Power of CRM,” http://www.hotel-online.com/
News/PR2003_4th/Nov03_UnderstandingCRM.html.
26. Mark Haley and Bill Watson, “The ABCs of CRM,” http://www.hotel-online.com/
News/PR2003_1st/Mar03_CRMHaley.html
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Key Words
KEY WORDS 335
customer relationship management
(CRM)
cycle of service
empowerment
flowchart
frontline employees
hospitality
incentive programs
moments of truth
service management program
service strategy statement
shift leader
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O P E N I N G D I L E M M A
Enrique Garcia, a hotel general manager, has heard the last complaint
about his staff! He is tired of writing letters of apology and comping
guest stays because of poor delivery of service. Recently, a guest
complained that after he left the front desk area in his wheelchair, a
desk clerk was overheard making an unkind remark. Two days before
that, another hotel employee took 45 minutes to respond to a guest’s
request for assistance in moving a heavy box from his room to the
lobby area, and that same person said it took 10 minutes to go through
the check-in process. Mr. Garcia wants to contact an advertising
agency that will assist him in cleaning up the hotel’s image.
C H A P T E R 1 2
Training for Hospitality
C H A P T E R F O C U S P O I N T S
?
Determining employee
hospitality qualities
?
Screening for hospitality
qualities
?
Developing an
orientation program
?
Developing a training
program
?
Cross-training
employees
?
Developing a trainer
?
Practicing empowerment
?
Applying the Americans
with Disabilities Act
(ADA)
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Determining Employee Hospitality Qualities
Assessing personnel needs requires identifying the skills and character traits required to
do a particular job. Frequently, the front office manager can recite a list of problems with
front desk personnel but cannot identify their strengths. The ability to recognize positive
traits—skills of present employees as well as skills a potential employee should have—
helps not only in choosing the right candidate for a particular position but also in assign-
ing tasks to employees that match their abilities. If you do not know the skills of your
current staff and the skills future staff will need, you cannot assemble a staff that will
meet your needs or make effective use of their skills.
Job Analysis and Job Descriptions
A front office manager should begin by preparing job analysis and descriptions of each
position in a department. Identify the responsibilities and objectives of each and then con-
sider the personal qualities, skills, and experience needed to perform those duties. For
example, a front office manager may want front desk clerks to sell the more expensive
suites or rooms and other services of the hotel. To accomplish this objective, an individ-
ual must have an outgoing personality or be willing to accept new responsibilities as a
challenge or an opportunity to grow. The front office manager may wish the front desk
clerks to be more efficient in handling clerical duties neatly and accurately. These quali-
ties may be found in a person with prior experience in other clerical or sales positions.
Previous experience outside the labor force—for example, as an officer in a service club
or a community group—may indicate the person’s leadership skills and ability to organ-
ize projects. These and other traits should be viewed as a whole. The motivational con-
cepts discussed later in the chapter will help a front office manager identify and develop
an employee’s positive attributes.
Positive Hospitality Character Traits
A front office manager must think about the character traits necessary to deliver hospi-
tality on a daily basis. These traits include maturity, an outgoing personality, and
patience as well as a willingness to accept constructive criticism. The employee should
also feel comfortable selling, as he or she must promote the hotel’s services.
Outgoing employees are able to seek out other individuals and make the initial effort
to set a relationship in motion. Employees who are extroverts enjoy meeting guests and
making them feel welcome. This is the type of employee who, in many cases, can turn a
difficult situation into a challenge. For example, if a guest says there is no way he or she
will be walked to another hotel—“After all, a reservation is a commitment”—an outgo-
ing person may be better at persuading the guest that the alternative hotel will surely
“meet your highest standards” than saying nothing at all.
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Mature employees are able to assess the big picture and quickly analyze a situation
before acting. Instead of reacting to a situation, this type of employee allows a guest to
vent his or her concerns before offering a response. Mature employees also possess and
exhibit patience in situations that require guests be allowed time to think or carry out a
request. Guests may be confused about geographic directions in an unfamiliar surround-
ing; a mature employee gladly repeats and offers written directions or sketches to allow
the guest time to absorb the information.
Practicing Promotional Skills
Employees who possess a positive attitude toward constructive criticism prosper and
progress in a hotel career. All employees occasionally make errors in judgment and fail
to meet standards. Employees who want to continue to learn seek a supervisor’s insights
into why a particular situation resulted from their actions.
Front desk clerks who are comfortable with practicing promotional skills are a great
asset to a front office manager. This type of person accepts the challenge to sell products
and services throughout the hotel and seek ways to meet or exceed sales quotas. This
quality allows a front desk clerk to understand the total effort necessary to produce a
profit for a hotel.
Screening for Hospitality Qualities
Composing questions prior to interviewing to determine if an applicant has the personal
qualities needed to fulfill a job’s requirements is usually effective. The interview should
have some structure but be flexible enough for both the interviewer and the applicant to
freely express their concerns.
The front office manager begins to develop a list of questions based on the job descrip-
tion to guide the interview. He or she wants to determine if the candidate has an outgo-
ing personality, patience, the ability to accept constructive criticism, and the ability to sell.
These are only a few of the qualities for which a front office manager wants to screen in
an interview.
An Outgoing Personality
The first question attempts to determine if the applicant is outgoing. Although observing
the person during the interview gives some indication of how he or she deals with others,
you could get more insight with this question: “Tell me about the last time you went out
to dinner. What did you like about the host or hostess?” A response that indicates appre-
ciation for a friendly welcome shows the candidate is aware of the concept of hospitality.
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Patience
To learn about the level of patience a job candidate possesses, ask a question such as
“Tell me about your recent participation in an event (sporting, social, work) at which you
received less than what you had expected.” A response that indicates that small details
were overlooked but overall the experience was rewarding may indicate the person is
willing to be a team player.
Ability to Accept Constructive Criticism
To assess a candidate’s ability to accept constructive criticism, a question such as “At
your previous job, how did your manager handle a situation in which you did not meet
stated goals?” may be used. A candidate’s response to this reflects the degree of under-
standing the interviewee had about why he or she was reprimanded, and how the situa-
tion was corrected may indicate how the person accepts constructive criticism.
Interest in Selling
A question that allows a candidate to express his or her openness to soliciting donations
for a charity assists an interviewer in understanding the applicant’s desire to sell products
and services for the hotel.
These questions do not guarantee that the front office manager will choose wisely, but
the effort will produce a more effective track record of screening for hospitality.
Developing an Orientation Program
The person who is hired to work in the front office is in a unique position. In no other
department of the hotel is each employee expected to know the operations, personnel,
and layout of the facilities of every other department. The front office employee is con-
stantly bombarded with questions from guests and other employees concerning when a
certain banquet or reception is being held, where key supervisors are, or how to find the
lounge or pool area. The orientation process introduces new hires to the organization and
work environment and is vital in providing employees with background information
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F R O N T L I N E R E A L I T I E S
Y
ou have scheduled three job interviews for tomorrow. In the past six months, you have lost
six front desk clerks. As a front office manager, how will you prepare for the interviews to
ensure that you choose the best employee?
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about the property. This program helps new hires become aware of the activities, proce-
dures, people, and layout of the hotel. It is a critical first step in training new employees.
Of the utmost importance is ensuring that orientation is thorough and well designed.
An employee who is given a brief introduction to the people who work the same shift, a
quick tour of the location of the guest rooms, and information concerning the time clock
can hardly be expected to be competent. By the time orientation is complete, new employ-
ees should be able to answer guests’ questions easily. If they don’t have answers at their
fingertips, they should know how to find them quickly. For example, if someone asks for
the general manager by name and the new front desk clerk responds, “Who is that?” an
inefficient and unprofessional image of the organization is conveyed. The new employee
should know who that person is and how to reach him or her. Moreover, orientation
should prepare all new hires to provide correct and complete information to guests, the
general public, or other employees.
Orientation programs for front office employees differ from one establishment to
another. However, the following outline can be used to develop a program for any estab-
lishment. This outline incorporates factors common to all properties, such as economic
position of the establishment in the community, overview of the hotel, the employee
handbook, the policy and procedure manual, and an introduction to the front office
environment.
Economic Position of the Property in the Community
A new employee benefits from knowing how a hotel fits into the economic scheme of the
community and the region. He or she may be impressed to learn, for example, that a par-
ticular hotel is responsible for 10 percent of the employment in the area. Information con-
cerning the value of the tax dollars generated by employees, significance of the tourism
market, number of conventions and subsequent guests who rely on the services of the
operation, significant growth accomplishments, and other economic contributions not
only reassure new employees that they have chosen the right employer but also instill a
sense of pride in the organization. These and other economic indicators help the new hire
think of the employer as a well-respected member of the business community. Larger
organizations can prepare a slide or multimedia presentation to demonstrate their com-
mitment to the business area.
Overview of the Lodging Establishment
An overview of the lodging establishment includes the number of rooms (accompanied by
a detailed printed handout concerning layout), a list of services offered in the establish-
ment, an organization chart of the staff in the various departments, and, of course, a tour
of the property.
Guest Rooms The guest rooms are an important part of the day-to-day activity of the front office staff.
The sooner the employee is aware of the location and contents of the rooms, the quicker
he or she feels comfortable with the job. Floor plans for each floor and a printed sum-
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mary of the typical contents of the rooms are handy references that the new person can
review at a later time. For instance, if the odd-numbered floors have three suites and the
even-numbered floors have study areas for businesspersons, including this information in
the printed material assists in the training process.
Service Areas The services offered by the hotel (restaurants, banquet facilities, room services, lounges,
pool, athletics room, and gift shops) should be identified during the orientation program
so the new employee can assist and direct guests. Listing the hours of operation for each
department helps the new employee learn about the systematic operation of the hotel.
The people listed on the organization chart should be pointed out to the new hires.
These people and their responsibilities should be explained. This background information
assists in decision making and communication of information to department heads. It
also gives the new hire a sense of belonging to the group.
Tour of the The overview of the lodging establishment is not complete without a tour of the property.
Property This tour should include the guest rooms and guest room areas, major departments, and
service areas such as restaurants, banquet rooms, gift shops, and recreational facilities.
The tour can be informal yet specific in content. It allows the new employee to see the
establishment as a place of work and a place of recreation for the guest. These tours also
help the employee understand the front office’s relationship to the entire establishment.
Employee Handbook
The employee handbook provides general guidelines concerning employee conduct and is
a valuable resource for new hires. In this publication, hotel managers describe many top-
ics related to personnel issues, including:
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Pay categories
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Evaluation procedures
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Vacation time
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Sick leave
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Holidays
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Paydays
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Use of controlled substances
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Social interaction with guests
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Resolving disputes with guests and other employees
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Insurance benefits
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Uniform requirements
Sometimes people being interviewed for positions at an establishment or new hires do
not ask questions about these policies because they feel the employer may think them
greedy, lazy, or overconcerned with a certain issue. On the contrary, these questions form
the basis for a good employment contract. Employers should make the effort to discuss
and explain their personnel policies.
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Policy and Procedure Manual
The policy and procedure manual outlines how the specific duties of each job are to be
performed (this is also known as standard operating procedures [SOPs]). This is another
specific set of guidelines that is valuable for employee training. The policy and procedure
manual addresses such concepts as the following:
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Operation of the PMS and other equipment in the front office
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Reservations
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Registrations
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Posting
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Written and oral communications with guests and other employees of the hotel
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Checkouts
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Preparation of the night audit
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Safety and security measures
The front office manager who takes the time to develop these guidelines will have pre-
pared a useful supervisory tool. Providing materials in writing to supplement the spoken
training session allows new employees to review the skills they must master and to retain
more of what they are taught.
Introduction to the Front Office Staff
The final segment of the orientation process is an introduction to the front office itself.
This introduction prepares new hires for the training program that will follow. It famil-
iarizes them with coworkers, equipment they will be using, personnel procedures, and
interdepartmental relations.
New employees should be introduced to the current staff of front desk clerks, bellhops,
telephone operators, reservation clerks, night auditors, supervisors, and others. A little
planning on the front office manager’s part is required to ensure that the new employee
meets the entire staff in the first few days. Saying a few words about the role of each
employee during the introductions not only makes new hires feel more comfortable with
their coworkers but also makes each current staff member feel like a special part of the
team. Current staff members also appreciate meeting the new addition. This procedure is
often overlooked, and new employees feel awkward for days or weeks.
Equipment Overview
The equipment in the front office should be described and shown to the new employee.
Brief remarks about each piece serve as a reference point when needed skills are explained
in detail during the training program. This part of the orientation program can be slowed
somewhat to allow the new hire to become familiar with the equipment. The operator of
the call-accounting system may have the new person pull up a chair to watch how calls
are handled. The new employee may be encouraged to observe how a fellow desk clerk
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processes registrations and checkouts. The front office manager should assure the new
employee that specific training will follow. This is a time for familiarization only.
The new employee should be shown how to check in for a shift on the PMS or the time
clock. The location and timing of the posted schedule of shift coverage should also be
indicated. The importance of reporting for duty on time and its effect on fellow employ-
ees should be explained at this time.
Interdepartmental Cooperation
Interdepartmental cooperation must be stressed during the introduction to the front office.
This is an ideal time to establish the importance of harmony among the housekeeping, main-
tenance, marketing and sales, food and beverage, and front office departments. The front
office must take the lead in establishing good communications among departments. Because
the front office is the initial contact for the guest, obtaining status reports, maintaining com-
munications, and knowing the functions being hosted each day are the responsibilities of the
front office staff. Overlooking trivial misunderstandings with other departments sometimes
takes colossal effort, but the front office must keep the communication lines open. Guests
benefit from and appreciate the work of a well-informed front office.
Administering the Orientation Program
Administering the orientation program requires planning by the front office manager.
The front office is a hectic place, and there is much for the new employee to learn. Con-
cern for the guests and the services and information they require must be a priority. A
standard orientation checklist should be prepared that summarizes all items that must be
covered during orientation; Figure 12-1 shows an example. The checklist ensures that the
new employee is properly introduced to the front office. It should be initialed by both the
new employee and the orientation supervisor after the program is complete to verify that
all policies were covered. Thus, no one can claim to be ignorant because there is written
evidence that the material was covered in the orientation program.
Selection of Orientation Leader
The orientation program should be delivered by a member of the supervisory staff or a
trained senior staff member in the front office. This person must have the ability to con-
vey the attitude of the organization as well as the tasks of the employees. Whoever han-
dles the orientation should not be on duty at the same time; it is impossible to explain so
much about the property to a new employee while performing other tasks as well.
The orientation program helps the employer-employee relationship begin on the right
foot. It introduces the workplace, guidelines and procedures, coworkers, and manage-
ment staff to the new hire. The orientation program also introduces new employees to
their work environment and encourages them to be a part of it.
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FI GURE 12- 1 An orientation checklist is a useful tool that assists in providing a
comprehensive orientation.
___ Economic position in community
___ Community geography
___ Printed floor plan of hotel
___ Visits to guest rooms
___ Hours for guest services
___ Organization chart
___ Explanation of key management personnel
___ Interdepartmental relations
___ Visits to:
• Food and beverage areas • Controller
• Housekeeping • Human resources department
• Maintenance • Gift shop
• Marketing and sales • Pool and athletics area
___ Sample restaurant menus
___ Employee handbook:
• Dress code • Sick leave
• Hygiene • Holiday policy
• Benefits • Drug and alcohol policy
• Pay rate • Social interaction with guests
• Paydays • Schedules
• Evaluation procedures • Grievances
• Vacation policy
___ Policy and procedure manual
___ Coworkers in front office
___ Equipment in front office
___ Time clock
___ Fire and safety procedures
___ Training program
____________________________ ____________________________
Orientation Supervisor/Date) (Employee/Date)
F R O N T L I N E R E A L I T I E S
I
n your new role as front office manager, you remember reading about the importance of an
orientation program to new hires with disabilities, and you also remember the lack of an ori-
entation experienced by a friend of yours with a disability. You want to organize a thorough
orientation program and present it to the general manager. How would you proceed?
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Developing a Training Program
Training is an important management function and is required to develop and ensure
high-quality performance.
1
In the hospitality industry, some hotel organizations take
training seriously; others talk about it extensively but have no real program in place.
Those that have developed, instituted, and continued to update their training programs
consider them great assets in human resources management. They allow the management
team to develop qualified employees who can perform jobs according to predetermined
standards. A good training program ensures that errors are reduced because all proce-
dures are explained and demonstrated.
Planning and developing a training program for front office employees includes iden-
tifying the tasks performed by the front office staff, preparing step-by-step procedures for
each task, determining who will train employees, administering the training program, and
reviewing the steps in the training process.
Identification of Tasks and Job Management Skills
The tasks performed by each employee are usually identified through the job description.
The job description is based on the job analysis (discussed in chapter 2), which lists, in
chronological order, the daily tasks performed by the employee. For example, the front
desk clerk performs the following tasks on the day shift:
6:00 A.M. Enters start time with PMS.
6:05 Talks with night auditor about activities on the 11:00 P.M. to 7:00 A.M.
shift; checks the front desk message book for current operational notes.
6:10 Obtains cash bank, a specific amount of paper money and coins issued
to a cashier to be used for making change, from controller; counts and
verifies contents.
6:30 Reviews daily report concerning occupancy rate and daily room rate.
6:35 Obtains function sheet (list of activities and special events, receptions,
and the like) for the day.
6:37 Obtains housekeeper’s report for the previous day.
6:40 Calls housekeeping and maintenance departments to determine the
communications list (a log of unusual occurrences or special messages
that the front office personnel should know about) from the previous
shift(s).
6:45 Calls restaurant to learn specials for lunch and dinner.
6:50 Reviews expected checkouts and reservations for the day.
6:55 Checks out guests until 9:30 A.M.
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All of the tasks identified in the job analysis must then be broken down further into
specific skills to build a sound training program. This may seem like a laborious proce-
dure. It is! But the first step is always the most cumbersome. Using the job analysis for
each of the jobs in the front office ensures that all tasks required to deliver hospitality to
the guest are included in the training program.
Preparing Step-by-Step Procedures
Step-by-step procedures for each task help the trainee understand how to perform tasks
correctly. This approach also helps the trainer prepare and deliver training sessions more
efficiently.
If a hotel front office has a PMS, the operator of the computer terminal must learn to
enter data or commands sequentially. Documentation, written instructions on how to
operate computer software, accompanies all property management systems. Documenta-
tion can be used as a basis for developing the step-by-step training procedure for using the
PMS, and it can serve as a model for preparing step-by-step procedures for other tasks.
A step-by-step procedure to complete a guest checkout on the PMS might include the
following:
1. Inquire about the guest’s accommodations.
2. Enter the guest’s room number.
3. Inquire about late charges.
4. Confirm method of payment.
5. Print a hard copy of the folio.
6. Allow the guest to review the folio.
7. Accept cash or credit card or bill-to-account.
8. Enter amount of payment.
9. Enter method of payment.
10. Enter department code.
11. Check for zero balance.
12. Give the guest a copy of the folio.
13. Inquire if additional reservations are needed.
14. Make farewell comments.
Each of these procedures can be subdivided as necessary. For example, as part of step
6, the new desk clerk could be trained to point out major sections of the folio and charges
incurred by the guest so the guest is aware of all the charges that make up the total. The
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guest can then ask questions about any of the charges at this time, rather than after the
bill is produced, thus eliminating extra work for the controller’s department.
Management Concepts
In addition to task performance, other, less tangible skills must be addressed in a training
program for front office employees. Stress management, time management, and organiza-
tional skills are some of the areas that should be discussed. Although these skills are often
covered in seminar formats, they cannot be considered in isolation. These skills are better
understood when integrated into the training program as a whole, so they can be applied
to task performance. For example, the employee being trained to check out a guest should
be made aware that this process may occur under stressful conditions; he or she could face
long lines, many guests questioning charges, and pressure from other guests to keep the
line moving. Learning to remaining calm under these circumstances does come with expe-
rience, but the tenets of stress management will help even the new employee handle diffi-
cult situations. Self-control and concern for the guest’s welfare are paramount.
Mastering time management is another important skill that enables employees to per-
form particular tasks at required times. For example, various departments depend on
front office employees on a regular basis to relay messages to guests and other depart-
ments; if the front office does not come through, a great deal of confusion results for all
concerned. Organizational skills help employees deal with their workload systematically
rather than jumping from one task to another without completing any of them. Com-
pleting paperwork on a regular basis, rather than allowing it to mount into an intimi-
dating pile, is one example of an organizational skill that can improve performance.
Steps in the Training Process
The recommended steps in the training process include preparation, delivery, trial and
error, and follow-up.
Preparation: Get Ready
Behavioral The trainer must plan the details of the training session. The first step is to prepare
Objectives: behavioral objectives for trainees. These objectives identify what trainees should know
What do you when the session is over and allow the trainees to achieve expected changes in behavior.
want them They assist trainees in building their knowledge base as they develop skills. Behavioral
to do? objectives define what the trainee should be able to do, how effectively he or she should
do it, and when the task should be complete. For example, a behavioral objective for a
training session on guest check-in might be: “The trainee will be able to perform the guest
check-in procedure for a guest with a prior reservation on the PMS with 100 percent
accuracy in five minutes.” This focuses the trainer on the task of training a desk clerk in
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completing a check-in for a guest with a reservation, not a check-in for a guest without a
reservation. The trainee must also have already mastered the step-by-step procedure for
operating the registration module on the PMS. The goal of 100 percent accuracy in five
minutes may be unrealistic to achieve during the actual training session because practice
is required. The desk clerk must practice to achieve the speed.
Train the In addition to preparing behavioral objectives for each training session, the trainer must
Trainer: The know how to present the new skill to the trainee, relate the skill to other parts of the
trainer must employee’s job, review the presentation area and scheduling for the session, and supply
be ready. ancillary materials, such as audiovisual presentation equipment and printed matter.
Presenting a skill requires the trainer to demonstrate the step-by-step procedure with
the needs of the trainee in mind. This is not the time to show off how quickly the trainer
can check in a guest. The trainer must be patient and consider the task from a beginner’s
point of view. First, the trainer must explain what the trainee is expected to learn. Next,
he or she must repeat key instructions, particularly when demonstrating complicated
equipment. The trainee must also be informed about where he or she can find assistance
if help is needed (in printed instructions, with the user-friendly Help program on the ter-
minal, or from another employee). Trainers should always explain slowly and check that
the trainee understands all explanations as he or she goes along.
The trainer should also keep in mind what is best presented to trainees in various areas
of the front office or hotel and at specific times of the day. Will the area be free of dis-
tractions and available for training? Is the time to present this skill better scheduled for
the midmorning, early afternoon, or late evening? Training a new employee to use the
PMS at the height of the morning rush almost guarantees failure. Of course, new employ-
ees must work under distracting and disorderly conditions, but during training they
require a distraction-free, orderly area so they can concentrate on mastering skills.
The trainer should also be sure the materials needed to deliver the session are in order.
Have DVDs, CDs, and videotapes been ordered and received? Have they been previewed?
Does the VCR work? Has the room been scheduled for the satellite or PictureTel reception,
the use of telephone lines to send and receive video and audio impressions? Have telephone
initiation and reception agreements, contracts between senders and receivers of PictureTel
concerning specifications of the telephone call and who pays for the call, been set? Have the
coordinates been set for the satellite dish reception? Has the printed material required for
training and follow-up been duplicated? Are enough copies available? These preparations
are essential to a professional presentation. They allow in-depth training to take place with-
out interruption and provide the trainee with a means for review after the session is over.
Training Is a Explaining how the skill being presented relates to other parts of the employee’s job
Communication improves learning, enabling the trainee to understand how a particular task fits into the
Process: You job as a whole. Trainees remember more when they understand why a task is important.
have to help Such explanations also teach new employees the importance of performing individual
them think tasks correctly; this, in turn, forms the basis for a series of jobs.
through it.
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Delivery: Show Me
Adopt the Point When demonstrating skills, the trainer must consider the presentation from the trainee’s
of View of the point of view. For example, present the skill with the trainee to your right or left so the
Trainee: He or trainee can observe as it is presented. The trainee who cannot see the skill being presented
she will learn has a much harder time understanding and retaining the skill. If the trainee is left-handed,
better. special presentation planning is required. Perhaps standing in front of the left-handed per-
son for the presentation will allow him or her to reverse some of the items mentally. If the
trainer is aware that the trainee is left-handed (in a right-handed operation), training time
and employee errors decrease.
Trainers The trainer must speak clearly and distinctly. Mumbling or talking too quickly only con-
Communication fuses the trainee. The trainer must consider not only what he or she says but also how it
Techniques: is stated. If the trainer’s tone of voice implies that the trainee is incompetent, he or she
Master a clear alienates the trainee. Instead, the trainer should encourage the trainee’s efforts, offer
speaking praise when a skill is mastered, and always be patient.
presentation Every industry has its own jargon. Trainees should learn hotel jargon during training.
style, explain For example, house count, no-show, sleeper, full house, and late arrival are all terms used
jargon, and in the industry. Even if the trainee has previous experience at another lodging property,
present in it is still necessary to review these terms to be sure he or she understands each term as it
logical steps. is used at the current establishment. For example, at a former job, the term late arrivals
may have referred to guests who arrive after 9:00 P.M.; at the current establishment, how-
ever, late arrival may refer to anyone arriving after 4:00 P.M.
The presentation should be broken into logical, sequential steps. The step-by-step pro-
cedure that was previously prepared allows the front office manager to present the mate-
rial in an orderly fashion. Trainees understand such straightforward instructions as
“Press this key on the keyboard to activate the registration menu” more easily than they
understand “Here is the registration menu. . . . Oh, wait a minute. Let’s go back to the
reservation menu for a minute . . .” Printed material that outlines the procedure helps the
trainee learn the skill with practice.
Relax as a The trainer is encouraged to think out loud, explaining every step and its importance as
Presenter: It’s the associated skill is demonstrated. The trainer might want to tell a story or two about
OK to make how he or she performed at a first training session. The trainee can then logically follow
mistakes. the demonstration and feel more comfortable asking questions. This communication
process also encourages the trainer, who can observe whether or not the trainee is pick-
ing up on the skill. The more the trainee is involved in the process, the more likely learn-
ing will occur.
After training is complete, the front office manager should watch how the employee
performs on the job. Skills performed correctly are a good indication that the training was
successful. Conversely, if the employee is confused or makes mistakes, it is possible that
a trainer wasn’t stopping to make sure the trainee was following along. As is true of all
skills, being a good trainer comes with experience.
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Methods of The methods a trainer selects to train an employee depend on the particular topic being
Presentation presented. Clerical and computer skills are usually taught by demonstration and on-the-
job training. Maintaining customer relations is usually handled with role-playing, video-
taping and subsequent analysis of role-playing, or viewing and analysis of commercially
prepared videos or cable network programs.
Skill In skill demonstration, the trainer demonstrates specific tasks required to complete a job.
Demonstration The trainer performs a task in a sequential manner and provides the trainee with an
opportunity to practice, with the benefit of the trainer’s being there to offer constructive
feedback.
On-the-Job On-the-job training is a process in which the employee observes and practices a task while
Training performing his or her job. This method is a mainstay of training in the hospitality indus-
try. Planned training sessions must be incorporated into on-the-job training if this
approach is to be successful. This method trains the new employee to perform tasks on
an as-needed basis; the employee learns a skill only when he or she has to use it on the
job. With this method, however, the demands of the business come first, and training
takes a back seat. A consequence of failing to follow through is that the employee is never
taught the correct procedures for performing a task. When this occurs, it means that the
ground on which a good training program is founded—planning, development, organi-
zation, delivery, and follow-up procedures—is undermined. The consequence is an
employee who does not have all the skills necessary to do the most efficient job.
Role-Playing Role-playing gives the trainee an opportunity to practice a customer service situation by
acting out the role before actually being required to do the job. The front office staff must
often act as a sounding board for complaints and as a problem solver, even when the
problem has nothing to do with the front office. Experience teaches that, sooner or later,
every front desk clerk will have a customer with a guaranteed reservation when there are
no vacancies, a customer who was given a key to a room that was not cleaned, or a cus-
tomer who must wait a long time to gain admittance to a guest room. The options avail-
able for handling such situations are often not communicated to new employees. Only by
trial and error do they learn to find accommodations at another hotel when the hotel is
overbooked, to offer a sincere apology and provide another room to the guest who was
sent to a dirty room, or to suggest a snack in the dining room or provide directions to the
patio lounge to the guest who must wait an hour to get into a room. Role-playing allows
the new employee to confront these situations before they actually occur. The goal is that
when such situations really do crop up, the employee is able to act professionally and
offer service with a smile.
If the hotel has the equipment to videotape employees, trainees can be taped during role-
playing sessions. The tape can then be reviewed with the employee to provide feedback on
his or her performance. The trainer can analyze the employee’s eye contact, clarity of dic-
tion, talking speed, poise, manner of dress, and posture. This method is valuable in prepar-
ing new employees to handle the stress of a busy front desk or an irate telephone caller.
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Commercial Several commercially prepared videotapes are offered by the Educational Institute of the
Videos American Hotel & Lodging Association to front office managers to use in training front
office employees. These tapes show customer service situations, enabling the new
employee to see how other front office employees handle customer relations. The trainer
should preview the tapes and prepare a list of discussion questions to be sure the
employee understands the purpose of the tape and can apply on the job what he or she
observes.
Distance New inroads have been made in distance learning, providing educational and training
Learning opportunities anywhere, anytime, and at any place, through HSA International, a com-
mercial hospitality educational organization based in Pembroke Pines, Florida. HSA
International offers 24/7 distance learning salesperson skill training in reservations via the
Internet for front office and marketing and sales office personnel. “A major capability of
the new online learning system is that a hotel’s team members can select the language in
which they feel most comfortable reviewing and experiencing the material. English, Ger-
man, and Spanish were available in 2003. Mandarin (Chinese), French, and Italian were
introduced in 2004.”
2
Trial and Error: At this stage of the training process, the new employee demonstrates the skill to the
Let Me Do It trainer, who observes the attempt and offers constructive criticism. Here, the behavioral
objective is useful, as the trainer can use it to determine whether or not the employee is
performing the skill according to desired standards.
The trainee should be encouraged to perform the procedure as often as necessary to
master it and meet the objective. The trainer may note how much practice other employ-
ees needed to learn this particular skill; for example, saying “Many employees must prac-
tice this five or six times before they catch on and come up to speed” lets the trainee know
that instant mastery of the skill is not expected. The trainer should specify how long the
trial-and-error period will last. Additional training may be required.
The step-by-step training procedure is helpful to the trainee in learning to perform the
skill. The parts of the skill demonstration that were confusing or fuzzy are clarified
through individual effort.
Follow-up: The trainer must follow up with trainees after the program is completed. This is a neces-
Check My sary final element in a sound training program. The trainer may develop a training tick-
Progress ler file, a database that keeps track of training sessions and alerts trainers to important
upcoming dates for each new employee, listing the name of the training session, date of
the session, comments, and date for follow-up. Figure 12-2 demonstrates how this man-
agement tool can be used. This type of information can be processed in a separate data-
base program on the PMS or maintained in an index card file.
The follow-up completes the training session because it provides the feedback the
trainee needs to meet the behavioral objective. It also assures management that the
skills necessary to deliver hospitality have been planned, demonstrated, practiced, and
mastered.
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Administering a Training Program
Planning the training program includes making provisions for administering it. Many
details must be coordinated. Accurate but flexible schedules for training sessions must be
set and maintained. Progress charts on employee training should be produced and dis-
played. Content preparation and duplication of training materials must be completed in
a timely fashion.
The responsibility for administering the training program rests with the front office
manager. If this responsibility is delegated to an assistant in the front office or human
resources department, details of administration must be discussed with that person.
Effective training for front office positions is not easy to apply in the hospitality indus-
try. The constant flow of people at the front desk, registrations and special events, tele-
phone calls, emergencies, vendor calls, and other demands require the front office
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FI GURE 12- 2 The tickler files help the front office manager check up on
employee training.
Training File Employee Name: _________________________
Session Orientation Program
Date: 12/1
Comments: Employee very enthusiastic; possible interest in reservationist position
Follow-up: 12/5 Show rooms again.
12/6 Meet night auditor.
Trainer: JB
Session: Guest Check-in
Date: 12/6
Comments: Rated 80%, 1st attempt on 12/6
Rated 85%, 4th attempt on 12/9
Follow-up: 12/15 Check to see if flow has picked up.
Trainer: JB
F R O N T L I N E R E A L I T I E S
Y
ou have been asked by the front office manager of a local hotel to offer tips on training new
employees at the front desk. What guidelines would you offer?
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manager to balance the needs of the moment with those of the future. However, if high-
quality hospitality services and products are to be available, training procedures for new
employees must be well planned and developed.
Cross-training
Even the most basic training programs must make provisions for developing employee
skills that are useful to the organization. The unpredictable nature of business volume
and employee availability in the hotel industry calls for a versatile staff. Cross-training,
which means training employees for performing multiple tasks and jobs, is key. A front
office staff member who is able to perform multiple jobs has rescued many a front office
manager during a crisis. The front office manager who discovers that one front desk clerk
and one telephone operator are unexpectedly absent on the same day can attest to the
value of cross-training. If a bellhop knows how to operate the PMS and the reservation-
ist is trained to use the switchboard, the day can be saved. However, cross-training will
get a front office manager out of a tight situation only if he or she has planned for it. If
cross-training is to be provided, it should be built into a job description and pay rate.
Note, however, before planning for cross-training, that some labor unions prohibit the
practice of assigning noncontractual duties; in this case, cross-training is not viable.
Developing a Trainer
Careful consideration should be given to selecting the individual who trains new employ-
ees. This person should have a professional attitude and provide trainees with a positive
attitude and enthusiasm for their positions. The selected person should be in management
or be a senior staff employee. The trainer must also be well versed in all procedures per-
taining to the employee’s job and familiar with training methods.
Job Knowledge
Knowledge of performing tasks comes with practice after formal training. There is no
substitute for experience. The trainee inevitably has specific questions about particular
tasks, and the trainer must be able to answer them accurately and completely. Such
answers are not always found in policy manuals and training handbooks; they are often
learned only through hands-on experience.
Ability to The ability to teach is important. The trainer must be able to plan the session in a logi-
Teach cal, incremental fashion. It is also critical that the trainer possess good communication
skills. The training session may include demonstrations, discussions, and workshops.
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The trainer should be familiar with all front office equipment and know how to prepare
printed instructions and how to operate audiovisual equipment. He or she should be
familiar with the basic steps of the training process (discussed earlier in this chapter).
Finally, trainers should try to empathize with the new employee, perhaps by recalling
how inadequate they felt when they were new on the job. Patience is important, as is care-
ful explanation. Trainers who give hurried explanations discourage questions and, as a
result, end up with trainees who feel unprepared to do their jobs.
Professional The trainer must have a professional and positive personal view that supports the orga-
Attitude nization’s goals of providing high-quality services and products, maximizing profits, and
controlling costs. A professional attitude is evident in the way an employee handles his or
her job responsibilities: explaining a foul-up in a room reservation, helping a guest locate
another department in the hotel, participating in programs to increase room rates, and
controlling operating expenses. The desk clerk whose responses to these duties are “This
company always overbooks at this time of the year,” “Follow the signs on the wall to find
the restaurant,” “I wouldn’t help this place get higher room rates,” and “Take an extra
15 minutes on your break—this place can afford it” does not exhibit a professional
attitude.
Experienced managers are well aware of the skilled senior employee who has mastered the
skills involved in a job but holds a negative attitude toward the company or the management
that represents the company. It is best not to enlist the assistance of such employees in train-
ing new hires. Managers are responsible for molding attitudes, teaching skills, and passing
knowledge on to their employees. Exposing new employees to an unprofessional, negative
attitude during training undermines the purpose of the training sessions. The trainer should
represent the company and demonstrate good employer-employee relations.
Training for Empowerment
Empowerment, which was discussed in chapter 11, must be applied to training employees.
The act of delegating authority and responsibility concerning specific tasks to frontline
employees, empowerment is an essential element in operating an efficient front office. As
part of the training program, a front office manager must specify the dollar amount within
which an employee can credit a guest’s folio without the intervention of the front office
manager. The trainer must discuss this empowerment concept so the employee knows
when the dollar amount and the guest’s satisfaction are in harmony. Yes, there are times
when the front desk clerk may have to stretch the dollar amount because of extenuating
circumstances. However, a daily review of credits that allows an opportunity for employee
explanation makes empowerment work for the guest, the employee, and the front office.
According to Lawrence E. Sternberg, “Contemporary management thinking is that the
greatest gains in efficiency, productivity, and guest satisfaction are generated by making
improvements in the system. Those improvements are most likely to occur when employ-
ees are empowered to recommend and implement changes on their own.”
3
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Americans with Disabilities Act
The Americans with Disabilities Act (ADA) is a U.S. law enacted in 1990 that protects
people with disabilities from being discriminated against when seeking accommodations
and employment. There are two parts to this act: accommodations for people who are
physically challenged and employment practices concerning hiring of them. Because the
rhetoric of the law is still being reviewed in the courts, it is important to review employ-
ment practices and implications. Not only is it important to adhere to the principles of the
law but also the opportunity to employ an individual based solely on his or her talents is
rewarding.
The ADA states that employers must make “reasonable accommodations” to the known
disabilities of the person unless the employer demonstrates that this would constitute an
“undue hardship.” Section 1211 states that making “reasonable accommodations”
includes making existing facilities used by employees readily accessible to people with
disabilities and considering accommodations such as job restructuring, part-time or
modified work schedules, reassignment, and provision of readers or interpreters.
4
Current information on this important law can be obtained from state and U.S. legisla-
tive agencies as well as the Internet.
Front office managers must focus on the abilities of every job applicant regardless of
physical challenge. Well-written job descriptions should outline the specific tasks required
to perform a job. These tasks provide the background for evaluating all job candidates.
If a certain required task is physically impossible for an applicant to perform, then the
front office manager should consult with the general manager on rearranging the work
environment so the applicant can succeed. For example, if an applicant in a wheelchair
applies for a job as a front desk clerk, initial reactions may be “It just won’t work,”
“There’s no room for the wheelchair,” or “Too much movement is required between
pieces of equipment.” The front office manager should analyze how the physical work
environment could be adjusted to meet the needs of this employee. Could pieces of equip-
ment be clustered to provide easy access for an employee in a wheelchair? Could counter
height be adjusted via a front desk that allows for vertical raising and lowering? All of
AMERI CANS WI TH DI ABI LI TI ES ACT 355
I N T E R N A T I O N A L H I G H L I G H T S
F
ront office employees must become aware of the importance of greeting international visitors
who have needs such as information on currency, local geography, or local time. They may
be unfamiliar with smoking regulations, operation of dining facilities, or observance of local cus-
toms. A training program for greeting international visitors includes trainee role-playing and employee
sharing of relevant prior experiences. Sensitization of employees to the needs of international guests goes
a long way in ensuring hospitality.
u
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this must be evaluated in terms of associated financial costs. But these financial costs also
must be evaluated against the costs of recruiting employees and paying for incentive pro-
grams, the expense of new trainee mistakes, and the like.
Training an employee with physical disabilities is no different than training any other
new employee, in most cases. All the same methods are required. While the trainer may
have to rethink the four steps involved in training, the opportunity to look at a familiar
situation from another perspective may lead to improved routines for all.
The Marriott Foundation for People with Disabilities has made an exemplary effort in
providing guidelines for working with people with handicaps and has developed a list
entitled “Fears vs. Realities About Employing People with Disabilities.”
The Marriott Foundation developed the list after interviewing employers and cowork-
ers of young people with disabilities who participate in the Foundation’s “Bridges . . .
from school to work” program. “Bridges . . . from school to work” fosters the employ-
ment of young people with disabilities by facilitating paid internships for students with
disabilities who are in their final year of high school. [Between 1989 and 2001,]
Bridges has placed more than 5,000 students in paid internships with over 1,300
employers. Eighty-seven percent of the students completing the program have received
offers of continued employment. “Finding meaningful employment can be hard
enough for young people, not to mention young people with disabilities,” said Richard
E. Marriott, chairman of the Marriott Foundation. “By working with school districts
and employers, the Foundation’s Bridges program is helping these young people and
their employers break through the ‘fear’ barrier and think in terms of ‘ability’ versus
‘disability,’ “
5
[Author’s note: The Bridges program has placed over 6,000 youth with
over 1,500 employers as of early 2005.]
The seven “Fears vs. Realities About Employing People with Disabilities” are as
follows:
1. Fear—People with disabilities need expensive accommodations.
Reality—Often, no accommodation is needed. When necessary, most accommo-
dations cost very little or nothing at all.
2. Fear—I’ll have to do more work.
Reality—Not true, especially when the abilities and skills of the individual are
matched with the needs of the job. More effective matching up front will make
disabilities largely irrelevant.
3. Fear—I’ll have to supervise more.
Reality—Most employees with disabilities do their jobs as well as, or better than,
other employees in similar jobs, and often seem more motivated and dependable.
4. Fear—Turnover and absenteeism will be high.
Reality—Studies show that employees with disabilities rate average to above aver-
age on attendance.
5. Fear—People with disabilities may not be able to do the job.
Reality—Because people with disabilities often have to work harder to get the job
they want and, therefore, appreciate what having a job means, they typically per-
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form up to and beyond expectations. The key is effectively matching skills to job
needs, focusing on ability.
6. Fear—People with disabilities need preferential treatment.
Reality—People with disabilities neither require [n]or want to be treated any dif-
ferently than employees without disabilities. What people with disabilities do
need is an equal opportunity.
7. Fear—Will people with disabilities fit in?
Reality—As part of a diverse workforce, employees with disabilities often bring
unique life experiences which can be a shot in the arm for the entire workplace.
Their perspectives on and approach to their jobs can be contagious, creating a
positive ripple effect.
6
Solution to Opening Dilemma
Although an advertising agency may be part of the answer to this hotel’s image problem,
the real problem lies with the people who are delivering hospitality. Determining the
qualities required to provide hospitality in a hotel and screening job candidates for those
qualities are essential in order to present an image that reflects the enthusiasm and pro-
fessionalism of individuals who truly want to deliver hospitality.
Chapter Recap
If front office managers want to ensure that their employees deliver hospitality, they
must begin by hiring people with character traits they feel are necessary to handle front
office responsibilities. This chapter began with a review of those character traits—extro-
version, maturity, patience, positive attitude toward constructive criticism, and an abil-
ity to sell. Finding these qualities in job candidates can be accomplished by developing
interview questions based on these traits. An orientation program is necessary to begin
the process of training hospitality employees. An orientation checklist that tracks com-
pletion of the explanation of such matters as the economic position of the property in the
community, an overview of the hotel’s physical layout, services, and coworkers, and a
tour of the property can be helpful. The orientation should also include a review of the
SOLUTI ON TO OPENI NG DI LEMMA 357
F R O N T L I N E R E A L I T I E S
T
he front office manager has a difficult time deciding which employee to hire. Mark and Tse
have similar qualifications. Mark has two years’ experience as a front desk clerk, but he was
recently in an auto accident, which left him with a paralyzed right leg and dependent on a
wheelchair for mobility. Tse has two years’ experience as a salesperson with an electronics firm and
expressed interest in learning all he can in the hotel business. How would you proceed?
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employee handbook and policy and procedure manual. The new employee’s introduction
to the front office staff and general management staff completes the orientation. Admin-
istering an orientation program provides a check on the continual planning and delivery
of this personnel function.
Training practices were also discussed. The front office manager would start by iden-
tifying tasks and job management skills required to perform an entry-level front office
job. Preparing step-by-step procedures is necessary to assist the trainer in developing a
training session. The four-step training process—get ready, show me, let me do it, and
check my progress—assists the trainer in working through the details of the training ses-
sion. A discussion of methods of presentation included skill demonstrations, on-the-job
training, role-playing, videotaping of role-playing, commercially prepared video training
films, and distance learning via the Internet. Administration of the training program is an
essential element that allows the continual delivery of quality hospitality.
Cross-training of employees assists the front office manager in handling the daily for-
mation of a front office team. Employees who are cross-trained in various tasks and jobs
allow the front office manager to deliver service as required.
Developing a trainer is an important part of training for hospitality. The selection of
a trainer should be based on this person’s knowledge of the tasks and jobs, ability to
teach, and possession of a professional attitude that represents the hotel.
Empowerment was discussed as an essential element in the training process that lets
hospitality flourish.
A discussion of the Americans with Disabilities Act provided the background, con-
cepts, and applications of this important U.S. legislation. It stressed the value of provid-
ing the opportunity for physically challenged candidates to be offered employment and
the benefits of hiring these candidates.
End-of-Chapter Questions
1. How does assessing personnel needs lead to a more efficiently managed front
office?
2. How would you prepare to interview a front office job candidate? Develop a list
of questions to use in interviewing an applicant for the position of front desk clerk.
3. If you are currently employed in the hospitality industry, describe the orientation
you received. What would you have added to the program if you were the manager?
4. If you are currently employed in the hospitality industry, describe the training
you received. How does it compare with what was recommended in this chapter?
5. Prepare a mock training session on how to check a guest out of a hotel room.
Where would you begin? Incorporate the four-step training method into your train-
ing session. Have a group evaluate your success in delivering the training session.
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6. How do you feel about the concept of using the Internet as a 24/7 resource for
training?
7. How important is cross-training to operating a front desk?
8. If you were asked to choose a trainer, what qualities would you specify? Why are
these qualities vital to the success of a training session?
9. What does empowerment mean to you? Have you ever experienced empower-
ment on the job? How did you feel? How did the customer feel?
10. If you had the opportunity to hire a physically challenged job applicant as a
cashier, what would you consider as a realistic assessment of the situation?
CASE STUDY 359
C A S E S T U D Y 1 2 0 1
Ana Chavarria, front office manager of The Times
Hotel, is in the process of organizing an orientation
program for the new front office staff. As part of the
orientation program, she will introduce the front
office equipment and the associated paperwork. Fur-
ther training on each piece of equipment will be
scheduled at a later time.
She begins by listing and describing the functions
of all the equipment. She also spells out how each
piece of equipment relates to the overall function of
the front office. Because most of her front office staff
are relatively new (turnover is high), she decides she
must deliver the orientation program herself.
Paolo and Brian have been hired at The Times
Hotel as desk clerks. Paolo will start training on Mon-
day at 7:00 A.M., and Brian will start on Monday at
3:00 P.M.
On Monday, a full house is going to check out by
11:15 A.M., and another full house will check in at
2:00 P.M. Ana greets Paolo at 6:45 A.M., only to find
that the PMS is malfunctioning and a switchboard
operator has called in sick. After attending to these
crises, she receives a request for 20 additional rooms
for today. By 1:30 P.M., Paolo, who has helped out
where he could, still has received no orientation.
Ana feels that all is not lost—yet. Brian will be in at
2:45 P.M. She will keep Paolo on for another hour
and deliver the orientation program to both new
hires at once.
Brian shows up at 2:45 P.M. ready to go to work.
Ana takes both Paolo and Brian to the coffee shop
and begins a brief orientation to The Times Hotel.
Returning to the front office half an hour later, she
finds a long line of people waiting to check in. She
tells Paolo, “Check out on the time clock; I will
catch up with you tomorrow,” and asks Brian to
work with the switchboard operator “until we get
this mess straightened out.”
At 5:00 P.M., things have calmed down, and Brian
is eager to learn his way around the front desk. In
desperation, Ana writes up a quick checklist and
tells Brian to go to Kris, the switchboard operator,
and Hoang, the front desk clerk, and have them
explain how to operate the switchboard and the
PMS registration module.
How does Ms. Chavarria’s view of the orientation
program compare to that presented in this chapter?
What has she omitted from the program? How real-
istic is her scheduling of this orientation program? Is
it possible to have a senior employee conduct the ori-
entation program? Under what circumstances? Do
you think Ms. Chavarria’s turnover rate has anything
to do with her approach to orientation?
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Notes
1. The content of this section relies on ideas found in Supervision in the Hospital-
ity Industry, 4th ed., Chapter 6, “Developing Job Expectations” (New York:
John Wiley & Sons, 2002), by Jack E. Miller, John R. Walker, and Karen Eich
Drummond.
2. Brad Smith, “New Reservations Training Program Designed to Improve Agent
Performance Any Time . . . All the Time,” http://www.hotel-online.com/News/
PR2003_2nd/Jun03_RezTraining/html
3. Lawrence E. Sternberg, “Empowerment: Trust vs. Control,” Cornell Hotel and
Restaurant Administration Quarterly 33, no. 1 (February 1992): 72.
4. J. Deutsch, “Welcoming Those with Disabilities,” New York Times, February 3,
1991, quoted in John M. Ivancevich, Human Resource Management, 6th ed.
(Chicago: Richard D. Irwin, Inc., 1995), 75.
5. Marriott Foundation, “ ‘Fear of the Unknown’ Invisible Barrier to Employment,
says Marriott Foundation for People with Disabilities,” Washington, D.C., Sep-
tember 30, 1997; edited July 23, 2001. Copyright Marriott Foundation for Peo-
ple with Disabilities.
6. Ibid.
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C A S E S T U D Y 1 2 0 2
Ana Chavarria, front office manager of The Times
Hotel, is participating on a team in her professional
organization—Regional Hotel Administrators (RHA)
—to develop a procedure to screen candidates for
front office employment that other front office man-
agers will be able to use. A few of the team members
feel this procedure will probably end up being tossed
out by the general membership because interviewing
has so many variables.
Ana disagrees and says that if team members look
at common characteristics of their successes and fail-
ures in hiring, they may be on the road to producing
something really useful. Teresa Valquez, the repre-
sentative from the RHA Southern Chapter, feels this
might work, but she still thinks it is an overwhelming
task. Steve Harp, the representative from the RHA
Western Chapter, says, “We have to do something.
Our regional unemployment rate is so low that we
have a hard time finding employees, so our decisions
have to be good ones.” It seems there is sufficient
energy in the team to begin planning to produce such
a document. The group has elected Ana as team
leader, and she begins with a brainstorming session.
Play the roles of five team members (all front
office managers) who have the goal of identifying
desirable qualities in employees that reflect the abil-
ity to deliver hospitality and determining how to use
that information in a screening interview.
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Key Words
KEY WORDS 361
Americans with Disabilities Act (ADA)
cash bank
cross-training
distance learning
documentation
employee handbook
HSA International
on-the-job training
orientation checklist
orientation process
PictureTel
policy and procedure manual
role-playing
skill demonstration
telephone initiation and reception
agreements
training tickler file
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O P E N I N G D I L E M M A
The food and beverage manager has spent several thousand dollars on a
marketing study to determine the dining needs of in-house guests. The
chef has rewritten each menu to reflect those needs. However, the bell
staff and front desk clerks continue to recommend the MidTown Deli
around the corner as “a nice place to get something good to eat
anytime of the day.”
As the hospitality industry grows more sophisticated, with greater concern for
delivering high-quality services, maximizing sales in all profit centers of the
hotel is important. Additional sales to current guests—in the form of future
reservations, in-house dining, room service, lounge and entertainment patron-
age, gift shop purchases, and the like—assists in producing a favorable profit-
and-loss statement. The front office plays a key role in promoting these sales,
and the front office manager must develop and implement a plan to optimize
the sales opportunities available to the front office staff. This plan includes
focusing on areas for promotion; developing objectives and procedures, incen-
tive programs, training programs for personnel, budgets, and tracking systems
for employee feedback; and profitability.
C H A P T E R 1 3
Promoting In-House Sales
C H A P T E R F O C U S P O I N T S
?
Role of the front office in
a hotel’s marketing
program
?
Planning a point-of-sale
front office
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The Role of the Front Office in Marketing and Sales
The front office is often seen as an information source and a request center for guests and
hotel employees. Front office staff may need to field questions such as “Has the front
office manager produced the room sales forecast yet?” “Is a block of rooms available for
June 3 to 7?” “To which rooms is this seminar group assigned?” “Is someone on duty
who can greet and provide information for the tourist group arriving this afternoon?”
“Has the daily event board been set up in the lobby?” and “Has the daily message been
set on the great sign?” These are typical questions asked of the front office by other
departments in the hotel. Answering them is a necessary part of any hotel’s operations.
Today, more than ever, hotel management demands a great deal of the front office.
In an article published in Canadian Hotel and Restaurant, Avinash Narula reports:
As market conditions have changed, the nature and importance of the functions per-
formed by the front office have also changed from being an order-taking department
to an order-generating or sales department. If one looks at the balance sheet of any
hotel, it will become obvious that the major portion of the profits, on average 60 per-
cent, come from room sales.
1
This change in the nature of the front office’s role, from a passive order taker to an active
order generator, challenges the front office manager to review the front office staff’s
THE ROLE OF THE FRONT OFFI CE I N MARKETI NG AND SALES 363
FI GURE 13- 1
Displays such as
this one alert
guests to in-
house
entertainment.
Photo courtesy of
Wyndham
Reading Hotel,
Reading,
Pennsylvania.
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established routine. The front office manager must figure out the best way to direct the
energies of the staff to support the efforts of the marketing and sales department.
The front office manager must first consider the attitude of the front office staff. These
employees have been trained and rewarded for accurate performance of clerical tasks,
playing a passive role in the sales of services. How easy will it be to transform them into
active salespeople, persuading guests to purchase additional reservations, services in the
dining room and lounge, or products in the gift shop? At the outset, most front office
managers would say this is a tall order. Established, routine habits are comfortable and
unstressful. However, the front office manager is a member of the management team and
must interact with members of the team as well as the employees as a plan is developed.
Planning a Point-of-Sale Front Office
To be a point-of-sale front office, a front office staff must promote profit centers of the
hotel. Planning includes setting objectives, brainstorming areas for promotion, evaluating
alternatives, drawing up budgets, and developing an evaluation tool for feedback. With-
out a plan, a point-of-sale front office has little chance of success. The plan should be
developed in consultation with hotel management, department managers, and frontline
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H O S P I T A L I T Y P R O F I L E
?
L
ee Johnson is director of corpo-
rate sales at Pier 5 Hotel and
Brookshire Suites at Baltimore,
Maryland’s Inner Harbor. After he graduated from
Penn State Berks’ associate degree program in hotel,
restaurant, & institutional management, he worked
in Reading, Pennsylvania, as a senior sales manager
at the Sheraton Berkshire Hotel and as director of
sales and marketing at the Riveredge.
Mr. Johnson relates the two primary ways in
which he relies on the front office to do his job:
communicating the needs of a group and opera-
tional issues. First, his office prepares a group
resume of an incoming group that outlines the
details of paying the bill, approvals of persons
allowed to bill to master accounts, and descrip-
tions of concierge service for the front office staff
as well as other details of the group’s nature and
needs. His department also prepares a banquet
event order that summarizes the details of a ban-
quet, such as location, time, and menu. Second, a
daily “coaches meeting” is held early in the day
with department heads to discuss check-in and
checkout patterns, storage requirements, and com-
ment card review.
His department relies on the front desk staff to
screen phone calls and channel them to the right
person. This saves valuable time for the sales staff
so they can spend their time selling instead of
screening. Because it is on the frontline of hospital-
ity, Mr. Johnson relies on the front desk to deliver
on promises made in sales negotiations. He also
depends on the front desk staff to load accurate
details of a group registration into the computer.
Mr. Johnson encourages students of hospitality
management to keep their career options open and
to investigate the many opportunities both in the
front and the back of the house.
?
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employees from various departments. Team members are selected to assist in ensuring
that a workable, profitable plan is developed.
Some of the goals Narula provides for the front office as it adopts a sales department
attitude include the following:
?
Sell rooms to guests who have not made prior reservations.
?
Upsell (encourage a customer to consider buying a higher-priced product or serv-
ice than originally anticipated) to guests with prior reservations.
?
Maintain the inventory of the product—that is, the rooms.
?
Convey information to guests about other products available for sale at the prop-
erty—for example, food and beverages. The objective of the front office is to sell all
available facilities at the hotel to the guests. Front office staff are probably the most
important means of letting the guest know what services are available.
?
Ensure that maximum revenue is generated from the sale of rooms by striking a bal-
ance between overbooking and a full house.
?
Obtain guest feedback.
2
If we take these goals as well as Narula’s other goal of increasing communication
between the front office and marketing and sales, then the planning can begin. Valuable
information about the guest, essential for formulating an effective marketing strategy, can
be conveyed by the front office staff. Changing market conditions require that such infor-
mation be used by the marketing and sales division.
3
Based on this suggestion, we can
infer that the marketing and sales department needs the vital feedback regarding cus-
tomer satisfaction with the availability of hotel products and services.
Set Objectives
The ultimate goal of a sales-oriented front office is an increase in revenue from room
sales, food and beverage sales, and sales in other hotel departments. A front office man-
ager who wants to develop a plan for a point-of-sale front office must set realistic objec-
tives. What is it that he or she wants to accomplish? Should restaurant sales be increased
by 10 percent, lounge sales by 15 percent, gift shop sales by 20 percent, or business cen-
ter sales by 25 percent? Developing these objectives is carried out in consultation with the
general manager and other department managers. The result of these consultations may
be one realistic objective that states: “Increase profit center sales by 15 percent.” This may
be the objective for the next several months. A new objective is then planned for future
months.
Brainstorm Areas for Promotion
When developing a program to increase front office sales activity, the front office man-
ager, in conjunction with other department directors and employees, should identify as
specifically as possible the hotel products and services to be promoted. A typical outline
of promotional areas follows:
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I. Front office
A. Reservations
1. Upselling when reservation is placed
2. Additional reservations during registration and checkout
B. Rooms
1. Upgrading reservation during registration
2. Promotional packages
3. Office rentals
4. Movie library rental
5. Computer games for children
C. Office services
1. Photocopies
2. Dictation
3. Typing
4. Fax transmission
5. Laptop computer rental
6. In-room videocassette recorder rental
D. Personal services
1. Babysitting
2. Shopping
3. Bell staff assistance with luggage and equipment
4. Concierge
a. Theater/music/art tickets
b. General tourist information
c. Tours of the area
d. Airline reservations
e. Emergency services
f. Information on local transportation
II. Food and beverage department
A. Restaurants
1. Special menu items of the day
2. Signature menu items
3. Special pricing combinations for diners
4. Reservations
5. Gift certificates
B. Room service
1. Meals
2. Early-bird breakfast service
3. Party service
4. Snacks
5. Beverages/alcohol
C. Banquet service
D. Lounge
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1. Specials of the day
2. Special theme of the day
3. Featured entertainer
4. Promotional package
III. Gift shop
A. Emergency items
1. Clothing
2. Toiletries
B. Souvenirs
C. Promotional sales in progress
IV. Health facilities
A. Swimming pool
1. Availability to guests
2. Memberships/gift certificates
B. Jogging paths and times of organized daily group runs
C. Health club
1. Availability to guests
2. Memberships/gift certificates
Evaluate Alternatives
Planning teams must determine which concepts produced in a brainstorming session war-
rant further consideration. This task is not always easy, but if the team refers to stated
goals and objectives, then the job is much simpler. In this case, the overall purpose of the
program is to maximize sales by the front office staff of front office, food and beverage
department, gift shop, and health facilities products and services. The team must decide
which area or areas will be most profitable to the hotel and to the employees.
Devise Incentive Programs
During the brainstorming part of planning for a point-of-sale front office, the team
should consider supporting incentives as an important part in the success of a sales pro-
gram. The point-of-sale plan should include an incentive program, which entails under-
standing employees’ motivational concerns and developing opportunities for employees
to achieve their goals. This encourages cooperation among the frontline employees who
must implement the point-of-sale plan.
The front office manager is responsible for determining how each employee is moti-
vated. Many motivational strategies require a financial commitment by management.
These costs must be included as a budget line item. When the owner can see additional
sales being created as a result of these programs, the idea of sharing some of the profit is
more acceptable.
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Motivation, or understanding employee needs and desires and developing a frame-
work for meeting them, is an essential part of developing a point-of-sale front office. The
question becomes, How does a front office manager discover what employees want? A
number of theorists have explored this area; the theories of Douglas McGregor, Abraham
Maslow, Elton Mayo, and Frederick Herzberg provide insight into what motivates
employees to behave in desired ways (see Table 13-1). Once a front office manager knows
what employees want, he or she must develop a means of meeting these needs in return
for the desired behavior. The front office manager must work with the general manager
and human resources department to develop effective programs that meet the employees’
needs. In this process, effective programs are defined by the employee.
The objective of the sales incentive program for front office employees is to encourage
the front office to promote products and services in various areas of the hotel, including
the front office, the food and beverage department, the gift shop, and the health facilities.
Each promotional area may be considered, or the front office manager might choose only
a few areas, perhaps those that generate the most profit, as incentive targets. A few exam-
ples follow:
1. Upgrading a reservation during registration: If a desk clerk can sell a room pack-
age costing $95 to a guest who has a reservation for a $75 room, a percentage of
that $20 increase in sales is awarded to the desk clerk.
2. Selling a meal in the hotel’s restaurant: If a desk clerk successfully encourages a
guest to patronize the hotel’s restaurant, a percentage of the guest’s check is
rebated to the desk clerk. At the restaurant, when the guest presents the VIP
368 CHAPTER 13
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TABLE 13- 1 Theories of Motivation
McGregor Theory X Human beings have an inherent dislike of work.
Theory Y Work is as natural as play or rest.
Maslow Satisfying Used a triangle to indicate various levels of
individual human needs; the most basic needs of food,
needs clothing, and shelter must be met before higher-
level needs such as self-actualization.
Mayo Recognition of Supervisors who recognize each employee as
individuality being special will achieve greater results than
in employees supervisors who treat employees as a group.
Herzberg Hygiene factors The only factors that lead to positive job
attitudes are achievement, recognition for
achievement, responsibility, interesting work,
personal growth, and advancement.
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Guest Card signed by the desk clerk to the waiter or waitress and receives VIP
service, the desk clerk receives the rebate.
3. Selling room service: If a desk clerk succeeds in convincing a guest to use room
service, a percentage of the guest check is rebated to the clerk. The guest presents
a VIP Guest Card signed by the desk clerk to the room service person, which
proves the sale was the result of that clerk’s efforts.
Theories of Motivation
Douglas McGregor
Douglas McGregor theorized that management views employees in one of two ways.
These theories are referred to as Theory X and Theory Y. Theory X states that the aver-
age human being has an inherent dislike of work and will avoid it if he or she can.
4
The-
ory Y states that the expenditure of physical and mental effort in work is as natural as
play or rest.
5
These two views of how human beings approach their jobs are vastly different. The-
ory X states that the supervisor must constantly expend direct effort to force the
employee to do the job. Theory Y states that the employee brings to the job innate skills
and talents that the supervisor can develop through an effective administrative and com-
munication network. Supervisors who give serious thought to these two views discover
that sometimes they feel that one employee works best under Theory X, another
employee works best under Theory Y, and yet another requires a combination of Theory
X and Theory Y. This is exactly the intent of McGregor’s efforts. He wants the supervi-
sor to look at each employee as an individual who responds to a particular type of super-
vision.
Abraham Maslow
Abraham Maslow theorized that an individual’s needs can be categorized by levels of
importance, with the most basic need being the most important. The hierarchy of needs
he identified was:
Fifth level: self-actualization, self-realization, and self-accomplishment
Fourth level: self-esteem and the esteem of others
Third level: love, affection, and belonging
Second level: safety (security and freedom from fear, anxiety, and chaos)
First level: physiological (food, clothing, and shelter)
6
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Maslow further theorized that individuals strive to meet the first level of needs before
even considering the second, and so on up the ladder. The physiological needs of food,
clothing, and shelter must be provided for (by the paycheck) before the employee can be
concerned with safety, stability, and security. The need for love cannot be a concern until
the individual has satisfied his or her physiological and safety needs.
The front office manager can use Maslow’s theory to identify the needs of individual
employees and design programs that are appropriate. If an employee’s wages do not
cover his rent, he will want this physiological need for shelter met and will find a tuition-
assistance program meaningless.
Through formal and informal communications, the employer should learn which
needs are of utmost importance to each employee. Every employee has reached a differ-
ent level in the hierarchy of needs, and it is important that supervisors recognize this. The
front office manager should consider what levels of need each employee has met before
attempting to provide for the next level of needs.
Elton Mayo
Experiments conducted at the Hawthorne plant of the Western Electric Company in
Chicago, Illinois, from 1927 to 1932 led Elton Mayo to conclude that supervisors who
recognize each employee as being special will achieve greater results than supervisors who
treat employees as a group.
7
The employee who is recognized for special talents and skills
will find this recognition an incentive to continue to do a good job. The front desk clerk
who is recognized for being able to sell additional services in the hotel may find this
rewarding; it may fit into his or her career progression plan. This recognition may moti-
vate the employee to duplicate the task in other areas and at other times.
Frederick Herzberg
Frederick Herzberg contends that factors such as “supervision, interpersonal relations,
physical working conditions, salary, company policies and administrative practices, ben-
efits, and job security are actually dissatisfiers or hygiene factors. When these factors dete-
riorate to a level below that which the employee considers acceptable, then job
dissatisfaction ensues. The factors that lead to positive job attitudes do so because they
satisfy the individual’s need for self-actualization in his work.”
8
According to Herzberg, minimum hygiene factors must be set to prevent a nonpro-
ductive environment. He believes organizations that provide less than these create an
atmosphere for dissatisfied employees. However, a truly productive organization requires
improvement in the motivation factors: achievement, recognition for achievement,
responsibility, interesting work, personal growth, and advancement. Herzberg questions
whether, if a hotel provides five vacation days a year, that will be a motivational factor
for a front desk clerk if all other hotels in the area also offer five vacation days to their
front desk clerks.
9
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Applying Motivation Theories
Applying these motivation theories is a managerial challenge for the front office manager.
It offers the opportunity to review the needs of the employees to establish a framework
for day-to-day contact and incentive programs.
Maslow
The front office manager who reviews these motivational principles learns that each
member of his or her staff requires a different style of motivation. For example, Maslow’s
hierarchy of needs provides a way to determine motivational techniques based on level of
need. The employee who works to be with people, the employee who is moonlighting to
earn additional income for a family, and the employee who is working toward becoming
a supervisor of the department each require different motivational strategies. Someone
who works to maintain social relationships is not concerned with an additional 50 cents
per hour; this person might be more motivated by knowing that he or she can work the
holiday shift. The person who is moonlighting is not motivated by health insurance ben-
efits if his or her primary job provides that benefit. An additional 50 cents per hour will
motivate this person, as will the assurance of a specified number of scheduled work
hours. The person working toward a supervisory position is not motivated by a better
work schedule, but rather the chance to be trained in all the various jobs in the front
office or the opportunity to sit in on a general staff meeting.
Mayo
Mayo’s work in recognizing the efforts of the individual gives the front office manager the
opportunity to explore the connections among communication, satisfaction, and cost sav-
ings. A few words of encouragement about continuing to do a good job, an expression
of personal concern about the employee’s family or close friends, or recognition of an
outstanding performance makes the employee feel special, even in a large hotel.
Herzberg
Herzberg offers the supervisor a different approach to motivation. He claims that the
chance for self-actualization—personal growth and fulfillment—improves performance.
While the employee needs an adequate salary, job security, benefits, and the like, these are
expected to be present in the job. Anything less than what is expected causes dissatisfac-
tion. Applying this theory requires the supervisor to analyze both the hygiene factors of
a job and the opportunities for self-actualization. What is the hotel providing that should
be appreciated but is not? Why doesn’t the company picnic or holiday party get the
group together? The answers to these questions are at the crux of employee motivation.
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Training Programs for a Point-of-Sale Front Office
Another supportive concept to consider during the brainstorming part of planning is the
training required to allow the successful delivery of sales techniques.
Train in Salesperson Skills
It is not safe to assume that all front office personnel are born salespeople; indeed, it is
probably safer to assume that no one is a born salesperson. The fear of rejection or of
intruding on others when pitching a sale is far too real for many people. The front office
manager must reduce this negative perception of sales by training and encouraging the
staff; otherwise, the program is doomed to failure. The objective of training is to develop
and teach employees methods to use to promote various profit centers of the hotel.
Develop an Attitude of Presenting Opportunities
The job of selling is more attractive if employees believe they are presenting opportuni-
ties to the guest. Front desk personnel who believe their suggestions are intended prima-
rily to improve the guest’s visit feel more comfortable with the idea of selling. Confidence
in selling develops if the point-of-sale program is introduced gradually, promotion by
promotion, giving employees a chance to try out various techniques. Incentive programs
strengthen employees’ commitment.
Let Employees Experience Hotel Services
An often overlooked but effective practice is to allow front office employees to experience
the services and products they sell. Familiarity with and appreciation for the chef’s spe-
cials, the luxury of an upgraded room, the equipment in the health club, the new mer-
chandise in the gift shop, and the personal assistance provided by the concierge enable the
employee to promote these areas knowledgeably and enthusiastically.
Training concepts for each of the areas listed in the promotion target outline must be
detailed. It is not sufficient simply to tell a front desk clerk to sell a higher-priced room
to a guest with a reservation during registration. Employees should receive suggestions on
what to say and when to say it; timing is an important part of the sales opportunity.
Use Role-Playing to Create Your Own Training Video
Using the video techniques discussed in chapter 12, such as videotaping role-playing
episodes of the desk clerks promoting hotel products and services within the hotel to the
guest, is an extremely effective training procedure. These episodes do not have to be elab-
orate. They only need to highlight simple approaches to presenting opportunities that
enhance the guest experience.
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The front office manager who wants to use video as a training option must do a little
homework first. Preparation for video training requires some thought as to just which
skills and behaviors call for teaching or reinforcement. Discussions with the directors of
other hotel departments (marketing and sales, food and beverage) provide a basis for pro-
motional concepts. The front office manager should take an objective look at the sales-
manship skills of the front office staff. How outgoing are they? How adept are they at
recognizing the needs and wants of the guests?
The front office manager must then decide which specific promotional areas to high-
light in the video. At the outset, the front office manager may want to choose only one
or two areas. With these promotional areas in mind, the front office manager should
write a script for the role-playing episode. It should include the specific behaviors or skills
the employee is expected to master.
Producing the video involves scheduling a time that is conducive to shooting.
Employee work shifts must be adjusted accordingly. Time for rehearsal must also be
planned. The planning should take into consideration budgetary issues regarding the
rental or purchase of a video camera and related equipment.
TRAI NI NG PROGRAMS FOR A POI NT- 0F- SALE FRONT OFFI CE 373
FI GURE 13- 2
Planning the
videotaping of a
training session
will assist in
developing a
unique aid. Photo
courtesy of
Radisson Hotels.
F R O N T L I N E R E A L I T I E S
A
few of the senior desk clerks have expressed distaste for having to promote future reserva-
tions at checkout. What do you think is the basis for their view? How would you handle the
situation?
q
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Budgeting for a Point-of-Sale Front Office
The front office manager incurs costs in operating a point-of-sale front office, including
expenses involved in implementing incentive programs, producing training materials,
and spending time to plan. These costs, while not overwhelming, should be anticipated.
If all appropriate steps are taken, the income from increased sales should far outweigh the
additional costs. The projection of sales and related expenses is useful when deciding
which marketing ideas to explore.
Feedback
Feedback on the evaluation of the success of the front office staff in promoting other
areas of the hotel is an important consideration in preparing a point-of-sale front office
program. How can the front office manager know if the staff is using the sales techniques
in which they were trained? How does the front office manager determine how the staff
feels about this program after the novelty wears off? How does the guest feel about being
presented with all these alternatives? How financially successful is the program? Front
office managers cannot tell exactly how effective this promotional strategy is, but they
must make an effort to obtain as much feedback as possible from staff and guests. This
information is valuable in planning future promotional ideas, incentive programs, and
training programs. The objective for this part of the plan could be stated thus: “To
develop feedback systems concerning employee performance, employee attitude, guest
perception, and profitability.”
Guest Test
The standard guest test is one in which an outside person (known as the plant) is hired
by the hotel to experience hotel services and report the findings to management. This test
enables the front office manager to evaluate the sales performance of the front desk clerk.
If an unknown plant presents herself with a reservation and is greeted with “Yes, we have
a reservation; please sign in,” the front office manager knows the front desk clerk is dis-
regarding the sales procedure. The front office manager should discuss with the employee
why the procedure was not followed. Perhaps the goals of the employee have shifted from
a larger paycheck to a more reasonable work schedule. Or maybe he or she forgot there
was a choice of incentives for the job. Perhaps too many guests were responding nega-
tively to the promotion, and the clerk gave up trying. This information may indicate that
unwanted goods or services are being targeted for promotion.
When the management of the hotel prepares the written information on the guest com-
ment cards, questions concerning alternative promotion targets should be listed. Choices
offered by hotel staff, such as upgrading reservations or information received about
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restaurants, gift shops, additional reservations, or other areas of the hotel may be
included. This yields feedback as to whether the suggestions were made and how they
were received. There is always the chance that guests may perceive an offer as pushy.
Financial Results
Another method for evaluating the program is reckoning the actual financial results.
Were the anticipated profits outlined in the budget achieved? Use of a VIP Guest Card
indicates to the restaurant manager that the guest was referred by the front desk clerk.
Similar types of controls enable management to pinpoint the origins of room reservations,
gift shop purchases, and other sales. A recordkeeping system must be established to
reflect the amount of money awarded to front office employees as incentives to increase
sales in targeted areas. The details of this recordkeeping system must be worked out with
the department directors and the controller.
Planning a Point-of-Sale Front Office—An Example
A typical session for preparing a point-of-sale plan might be as follows: The front office
manager has scheduled an informal meeting with the director of marketing and sales, the
director of food and beverage, and a few frontline employees from each of the respective
areas. Prior to the meeting, she has asked each of these members of the planning team to
think of a few promotions they would like to stress in the next quarter. The food and bev-
erage director begins the discussion by mentioning the following promotions that will run
in the dining room:
1. Eat Wisely in January: Choice of entrée from the Eat Wisely lunch or dinner
menu includes a free pass to the hotel health club.
2. Valentine Special in February: Dinner for two with choice of appetizer, dessert,
or house wine at no charge.
3. Luncheon Special in March: Soup and salad bar free with entrée.
The director of marketing and sales wants to increase room sales during this quarter
and suggests the following:
1. Increase convention bookings with I’ve Been There referrals.
2. Develop Weekend in the City packages.
After discussing these promotions, all team members agree that the Eat Wisely menu
and the I’ve Been There promotions should be the targets of front desk sales efforts.
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Incentives such as cash awards to front office employees for participation in Eat Wisely
and I’ve Been There will be used. The team agrees that an in-house video should be devel-
oped to assist in training employees.
The front office manager has scheduled a time to shoot the training video, selected and
scheduled a few senior employees to be the actors, arranged for rental of a video camera
and related equipment, and received approval for the projected costs. After several days
of writing and editing, the following script is ready:
Desk clerk: Good morning! Welcome to The Times Hotel. Did you have a pleasant trip
to our city?
Guest: The airport was pretty busy, and getting a cab was unreal. Is it always this busy
out here?
Desk clerk: At this time of year, there are usually several conventions in town. The city
schedules extra public transportation, but sometimes delegates who arrive early get
caught in the crunch. Do you have a reservation?
Guest: Yes, I’m Thomas Renton, with the Investment Group Conference. My reservation
is for a room to be shared with Michael Dodson.
Desk clerk: Yes, Mr. Renton, I have a reservation for you, with departure scheduled for
Friday, January 28. Mr. Dodson will be joining you tomorrow. All charges will be
billed to Lawson Brothers Investment Firm. I have your room ready for you. Please
sign the registration card.
Guest: Thank you. That certainly didn’t take long. After that wait for a cab at the airport,
I do appreciate this service.
Desk clerk: We appreciate your deciding to stay at The Times Hotel. Sir, I see from your
reservation that you are on the board of directors of the Investment Group Confer-
ence. Our marketing and sales department is pleased to provide you with this special
weekend pass, good for room and meals on another weekend. Perhaps you will be able
to return to see how our new convention hall is progressing. It’s scheduled to open this
summer. The general manager told us that it will hold up to 10,000 delegates.
Guest: That sounds great. I’ll have some free time later this month to use that weekend
pass.
A budget for this plan includes the following revenue and expense categories. When
the hard facts of projected revenues and related expenses are visualized, the plan
becomes more concrete and realistic. Projected budgets that show how a small cash out-
lay can produce significant revenue are effective in convincing owners and senior man-
agement that a point-of-sale front office program is a realistic and potentially profitable
concept.
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TIMES HOTEL
SALES BUDGET—FRONT OFFICE
Anticipated Increase in Sales
10 lunches @ $10 = $100/day × 365 $36,500
15 dinners @ $25 = $375/day × 365 136,875
5 room service @ $20 = $100/day × 365 36,500
5 room reservations @ $90 = $450/day × 365 164,250
5 gift shop referrals @ $20 = $100/day × 365 36,500
TOTAL $410,625
Anticipated Increase in Costs
Incentives (cash awards for lunches, dinners, room service,
room reservations, gift shop referrals) $ 15,000
Management planning time 5,000
Employee overtime for producing three videos 4,000
Photocopies 300
Rental of video equipment 500
Hardware accessories 50
Purchase of VCR and monitor 500
Miscellaneous 500
Subtotal $ 26,850
Related cost of goods sold:
? Lunches 36,500 × .35 = $12,775?
Food
? Dinners 136,875 × .35 = 47,906?
$73,456
? Room service 36,500 × .35 = 12,775?
? $73,456?
Room prep [5 × 365 = 1,825 × $15 = $27,375] $ 27,375
Merchandise 10,950
$111,781
TOTAL [$26,850 + $111,781 = $138,631] $138,631
ANTICIPATED PROFIT [$410,625 – $138,631 = $138,631] $271,994
PLANNI NG A POI NT- OF- SALE FRONT OFFI CE—AN EXAMPLE 377
The data the team gathered in deciding to use the two promotional concepts are also
useful in deciding whether or not these ideas will produce a profit for the efforts involved.
The incentives, training, and budgets developed support the operational efforts of the
plan. Feedback mechanisms include the standard guest test, comment cards, and moni-
toring of the source of sales for both promotions.
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Solution to Opening Dilemma
Recommending outside restaurants is common in many hotels. The reason is that front
office employees have not bought in to the hotel’s profitability goal. It is management’s
responsibility to include frontline employees in developing a point-of-sale front office. In
this situation, promoting the hotel’s restaurant facility becomes the focus of the point-of-
sale. Frontline employees also should have the opportunity to decide which promotional
programs will be most beneficial to the hotel and to each employee.
Chapter Recap
Front office management includes helping promote the overall profitability of a hotel.
Developing a point-of-sale front office involves developing a plan of action, which
includes setting goals and objectives, brainstorming areas for promotion, evaluating alter-
natives, discussing supportive areas for consideration such as incentive programs and
training programs, projecting anticipated revenues and related expenses in a budget, and
preparing feedback mechanisms. This simple framework for planning allows front office
managers the opportunity to gain a larger perspective on the issue rather than pushing
forward with desperate efforts to produce sales.
A team of managers from various departments who select a few promotional strate-
gies and explain them to the front office staff generate additional income. The front
office manager is responsible for developing a plan for a point-of-sale front office that
provides the basis for a successful and continuous program. This plan must include goods
and services to be promoted, objectives and procedures, incentive programs, training
programs, budgets, and tracking systems for employee performance, guest response, and
profitability. Students beginning a career in the hotel industry will find that promoting in-
house sales is high on the front office manager’s agenda for success.
End-of-Chapter Questions
1. Why is the front office often considered an extension of the marketing and sales
department?
2. Is it possible to direct the energies of the front office staff to support the efforts
of the marketing and sales department? Explain.
3. If you are employed at the front desk of a hotel, do you feel you are an extension
of the marketing and sales department? Explain.
4. What is a point-of-sale front office?
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5. How would you begin to develop a point-of-sale front office?
6. What are the major goals and objectives of a point-of-sale front office program?
7. Discuss the areas for maximizing sales opportunities outlined in the text.
8. How important are incentive programs to the operation of a point-of-sale front
office? Give examples.
9. How would you go about developing a video program for training front office
employees in sales techniques?
10. With a classmate, do a mock training session, using the video script in the text.
Have several other students observe your performance. Ask them to react to
what they learned. Do you feel this is what you want to convey to train an
employee in a point-of-sale front office? Explain your answer.
11. Why is budgeting so important to the success of this program?
12. How do well-constructed feedback systems help the point-of-sale front office pro-
gram? What should they cover? What do they tell management?
13. If you are employed at a hotel front office and the hotel has a website, discuss
feedback options on the website.
CASE STUDY 379
C A S E S T U D Y 1 3 0 1
The message at the staff meeting of The Times Hotel
was loud and clear: Increase sales! Ana Chavarria,
front office manager, and other members of the
management staff meet informally late that evening
to brainstorm ideas for increasing sales for the hotel.
Eric Jones, food and beverage manager, has brought
along a copy of a recent hospitality publication that
includes an article on increasing promotional efforts
within the hotel as well as increasing marketing
efforts outside the hotel. This concept gives Ana an
idea: Maybe the front office employees, as well as
other employees in the hotel, have some ideas about
promoting sales. Eric dismisses that thought, stating
that management is the only group paid or trained
to think. Frank Goss, director of marketing and
sales, wants Ana to explain her idea further.
She feels the front office is a focal point for infor-
mation for all guests. Maybe having her staff act as
internal sales agents can increase sales in the hotel.
She has a good rapport with her employees and feels
they will give it a try. She is willing to put in the
effort required to develop a plan.
How should Ana Chavarria proceed to develop
an internal sales agents plan?
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Notes
1. Avinash Narula, “Boosting Sales Through the Front Office,” Canadian Hotel
and Restaurant (February 1987): 37.
2. Ibid., 38.
3. Ibid.
4. Douglas McGregor, The Human Side of Enterprise (New York: McGraw-Hill,
1960), 33–34.
5. Ibid., 47–48.
6. Abraham H. Maslow, Motivation and Personality, 3d ed. (New York: Harper &
Row, 1987), 15–22.
7. Elton Mayo, The Human Problems of an Industrial Civilization (New York:
Viking, 1960).
8. Frederick Herzberg, B. Mausner, and B. B. Snyderman, The Motivation to Work,
2d ed. (New York: Wiley, 1967), 113–114.
9. Frederick Herzberg, personal communication with the author.
Key Words
380 CHAPTER 13
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C A S E S T U D Y 1 3 0 2
Cynthia Restin, night auditor at The Times Hotel,
has been discussing the decreased sales in the restau-
rant with Lorraine DeSantes, director of marketing
and sales. Ms. DeSantes recently developed a plan
whereby the front office staff would start promoting
restaurant sales. This plan was well thought out and
even included an incentive plan in which all front
desk clerks (several of whom are college students)
would receive dental care.
Lorraine approaches Ana Chavarria, front office
manager, and asks her, “What’s the problem with
your staff? Why aren’t they pushing restaurant sales
like we planned?” Ana asks Lorraine what plan she
is referring to. Lorraine reminds her of the plan to
increase sales in the restaurant with the assistance of
her front desk clerks. Ana says she vaguely remem-
bers her talking about this at a staff meeting, but
there wasn’t any follow-up.
What parts of Lorraine DeSantes’s plan were
missing? How would you revise her plan for reim-
plementation?
guest test
incentive program
motivation
plant
point-of-sale front office
upsell
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O P E N I N G D I L E M M A
The general manager has been considering establishing an in-house
security department. Security at the hotel has been outsourced in the
past five years with minimal concern. However, with the recent media
emphasis on the safety of both guests and employees, the general
manager thinks it is time to prepare a plan of action to investigate the
possibility of an in-house security department.
The act of delivering hospitality is thought to occur naturally. However, through-
out this text, delivering hospitality is discussed as a planned concept, complete
with research on guests’ needs, policy and program development, establishment
and delivery of training programs, and follow-up information systems. Hospi-
tality also includes providing a safe environment for guests, which requires a
well-organized department to oversee and implement safety programs. The secu-
rity department of a hotel is vital to delivering hospitality to guests. This depart-
ment is responsible for establishing the details of the following systems:
?
Guest and employee safety
?
Emergency evacuation plans
?
Room key security
?
Employee safety training plans
?
Fire safety systems
?
Emergency communication plans
?
Bomb threat action
C H A P T E R 1 4
Security
C H A P T E R F O C U S P O I N T S
?
Importance of a security
department to effective
front office management
?
Organization of a
security department
?
In-house security
department versus
contracted security
services
?
Hotel law
?
Room key security
system
?
Fire safety
?
Emergency
communication
procedures
?
Employee safety
programs
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These operational procedures are never really appreciated until a crime occurs or a dis-
aster strikes a hotel. They are assumed to be in place but somehow take second place to
accommodating guests’ more immediate needs and meeting the financial objectives of the
organization. The terrorist attacks of September 11, 2001, in New York City and Wash-
ington, D.C., have affected security concerns like no other situation. Rebecca Oliva
reports the following.
[A] recent survey of hoteliers found that one in three hoteliers fear for the safety of
their properties. Even more shocking was the fact that nearly 50% of respondents
admitted they had not increased investments in security—more than a year after 9/11.
The security survey was conducted by Hotel Asia Pacific magazine and Pertlink, hos-
pitality technology consultants.
Even so, many hotels are working to make their properties more secure in other
ways—installing state-of-the-art camera surveillance systems in public spaces and con-
ducting more staff security briefings. Properties have hired extra security guards, cre-
ated security desks and are asking guests for identification cards. Results of these
processes are twofold: they create an awareness of security issues among staff; and
they tell guests that the hotel is concerned about their safety and security.
1
National, state, and local safety codes and ordinances require the hotelier to provide a
safe environment for guests. This chapter discusses safety awareness as it relates to the front
office manager’s job and how the front office helps provide this essential service to guests.
Importance of a Security Department
The front office is a hotel’s communication center; it is the vital link between the hotel
management and the guest. When a guest calls for assistance because of fire, illness,
theft, or any other emergency, it is usually the front office that must respond. The staff
on duty at the front office cannot leave and resolve the emergency because they must con-
tinue to provide communication services and process financial transactions. The security
department staff must react with speed and efficiency to serve the guest.
The security department is often regarded as a passive department, acting only when
called on. In reality, it is an active department, setting policies, organizing programs, and
delivering training programs to promote guest and employee safety. The director of secu-
rity is a trained professional who must ensure that a busy hotel filled with guests, employ-
ees, and equipment stays safe. One of the department’s goals is to prevent emergencies
through planning. Another goal, however, is to train all hotel employees to respond to
emergencies.
The importance of security to a hotel is emphasized in the following Hotel Security
Report article by Patrick M. Murphy, CPP, director of loss prevention services at Mar-
riott International, Inc., Washington, D.C., who reports on Marriott International’s
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adoption of Crime Prevention Through Environmental Design (CPTED) in its chain of
1,900 owned and managed properties worldwide:
CPTED is part of a total security package. It can include anything and everything from
the presence of security or loss prevention officers at a property to plans for protect-
ing the interior, lobby, and guestrooms; exterior and parking area; and the surround-
ing neighborhood. Its goal is to keep the criminals from breaking into any area of the
property; it accomplishes this by subtly making the environment uncomfortable for
them.
The hotel priority areas in CPTED include the following.
?
Building entrances—When reviewing a property we look to see that all entrances
are inviting, brightly lit with no obstructing shrubbery. At night, side entrances
should be restricted by use of card readers so that non-registered guests must pass
through the lobby and past the main check-in desk.
?
Hotel lobbies—They should be designed to be visually open, with minimal blind
spots for front desk employees. Lobbies also should be designed so that persons
walking through the front door must pass the front desk to reach the guestroom
corridors or elevators.
?
Guestrooms—These [electronic locking systems] create an environment where keys
are automatically changed when a new guest checks in; locks also can be interro-
gated to determine the last person to enter the room.
?
Guest amenities—Marriott designs its new properties with glass doors and walls to
allow for maximum witness potential when providing swimming pools, exercise
rooms, vending areas, and laundry facilities. Adding house phones in these areas
makes it possible for guests to call for help if they feel uncomfortable or threatened
by anyone.
?
Exterior of the property—CPTED principles call for bright lighting at walkways
and entrances. Traffic should be directed to the front of the hotel property to make
would-be criminals as visible as possible. Entrances to the hotel grounds should be
limited. Landscaping, such as hedges and shrubbery, can also create aesthetically
pleasing barriers to promote the desired traffic and pedestrian flow.
?
Parking—The preferred lighting is metal halide. High-pressure sodium should be
avoided because it casts a harsh yellow light. The optimal parking lot or garage has
one entrance and exit with well-marked routes of travel for both cars and pedes-
trians. Garages need to be as open as possible, encouraging clear lines of sight. Ele-
vators and stairwells that lead from the garage into the hotel should terminate at
the lobby level, where a transfer of elevators or a different set of stairs should be
required to reach guestroom floors. Other CPTED features in the garage should
include CCTV (closed-circuit television) cameras, installation of emergency call
boxes, and painting the walls white to increase the luminosity of light fixtures
while creating an atmosphere that is appealing to the eye.
2
I MPORTANCE OF A SECURI TY DEPARTMENT 383
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In today’s litigious society, an environment in which consumers sue providers of prod-
ucts and services for not delivering those products and services according to expected
operating standards, it is important to maintain a well-organized security department.
The cost of a human life lost because of negligence or the financial loss due to a fire far
outweighs the expense incurred in operating a security department.
The following case illustrates the expense that can result from security breaches:
Perhaps the most significant [of high-visibility hotel crimes] was the 1974 rape of
singer/actress Connie Francis in a Westbury, N.Y., hotel, which resulted in a much-
publicized trial culminating in a multimillion-dollar verdict against the hotel. The case
is still considered the industry’s “wake-up call” in terms of legal liability.
3
Organization of a Security Department
The security department of a hotel is organized like any other department. At the head of
the department is the director of security, who is responsible for maintaining a safe envi-
ronment for guests and employees. The security director needs personnel, technology, and
a budget to operate a 24-hour control system for the hotel. Depending on the size of the
hotel, there may be an assistant director of security who acts in the absence of the direc-
tor and assists in the administrative and supervisory functions of the department. The
director of security reports to and works with the general manager and interacts with
each department director. Each of the shifts (7 A.M. to 3 P.M., 3 P.M. to 11 P.M., and 11
P.M. to 7 A.M.) is staffed with shift supervisors and security guards who are responsible
for patrolling the grounds to watch the activities of the guests and employees and check
on safety and security equipment. The number of people required to staff this department
depends on the size of the hotel. Figure 14-1 is an organization chart of a security depart-
ment for a large hotel.
384 CHAPTER 14
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SECURI TY
FI GURE 14- 1 Organization chart for a security department.
Director of Security
Assistant Director of Security
Security Guards
2d Shift
Supervisor
Security Guards
2d Shift
Supervisor
Security Guards
2d Shift
Supervisor
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Job Analysis of the Director of Security
The job analysis of a director of security outlines the administrative and supervisory
tasks of this member of the management team. Active planning to ensure quick and
effective reactions to problems and emergencies is the basis for successful job perform-
ance. A typical job analysis is as follows:
8:00 A.M. Reports to the hotel.
8:05 Discusses the activities of the previous night with the parking garage
attendant.
8:15 Discusses the activities of the previous night with the security shift
supervisor or security guard on duty.
8:30 Obtains notes concerning the activities of the previous night from the
night auditor. Obtains the daily function sheet, which lists the events of
the day.
8:40 Checks the audit report of fire and safety equipment located at the front
desk.
8:45 Discusses the status of heating, ventilating, and air-conditioning
equipment with the director of maintenance.
9:00 Meets with the security shift supervisor or security guards for the first
shift to communicate activities and duties of the day.
9:30 Meets with the executive chef to be updated on special functions of the
day and incidental activities in that department.
10:00 Meets with the housekeeper to discuss incidental activities in that
department.
10:30 Returns to the office to review the daily security shift reports.
10:45 Updates the general manager on the status of security within the hotel
and incidental departmental activities of importance.
11:00 Discusses the activities of the day with the restaurant manager.
11:30 Returns to the office to prepare the weekly schedule.
11:45 Responds to a call from the front office that a guest is stranded in the
elevator. Assists maintenance in keeping order.
12:45 P.M. Meets with the director of marketing and sales to determine the security
needs for an upcoming high school prom and an insurance executives
convention.
1:00 Returns to the office to work on the budget for the next fiscal year.
1:30 Lunches with the city fire marshal to discuss plans for renovating the
sprinkler system in the new wing.
2:15 Meets with the front office manager to discuss the fire emergency and
bomb threat action plan for front office personnel.
J OB ANALYSI S OF THE DI RECTOR OF SECURI TY 385
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2:45 Meets with the security shift supervisors for the first and second shifts to
discuss operational procedures.
3:15 Conducts a fire emergency training program for fourth- and fifth-floor
housekeeping personnel.
4:15 Returns to the office to revise the fire emergency and bomb threat action
plan for front office personnel.
5:00 Meets with the general manager to discuss the status of fire safety
training in all departments.
5:30 Responds to a call from the front office that a guest has fallen on hotel
property. Assists the guest with first aid and arranges for transportation
to a medical facility. Completes an accident report. Assists the family of
the guest in making arrangements for an extended stay.
6:00 Confers with maintenance personnel on the operational status of fire
safety equipment.
6:15 Prepares a to-do list for the next day.
6:30 Checks with the banquet captain on the status of guests at scheduled
banquets.
6:45 Checks with the lounge manager on the status of guests.
6:55 Checks with the front office manager on the status of guest check-in.
7:00 Checks with the garage attendant for an update on activities.
7:05 Checks with the shift security supervisor for an update on patrol
activities.
7:10 Departs for the day.
This job analysis shows the security director to be involved with managing details con-
cerning the whereabouts of people and showing a proactive concern for their safety. The
job calls for constant interaction with department directors, employees, government offi-
cials, guests, and operational equipment. All of these tasks add up to a highly responsi-
ble position in the hotel. The following comment on hotel guest safety outlines the
objective of a hotel’s obligations to guests:
The hotel is not the insurer of guest safety but it must exercise the care of a reasonable
and prudent operator in protecting the guest. This duty extends to an innkeeper’s obli-
gation to protect guests from
• negligent or deliberate acts of hotel employees
• acts of other guests
• acts by nonguests committed on the premises
Failure to conform to the reasonableness standard in these three areas provides a
liability risk for the hotel.
4
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The responsibilities outlined in the job description for the director of security may
be assigned to other workers in some hotels due to budgetary reasons. The general man-
ager in a limited-service property, for example, may assign the crisis management role
of maintaining control of an emergency situation to the manager on duty. The adminis-
trative role may be shared with the assistant manager, reservations manager, or
housekeeper.
J OB ANALYSI S OF THE DI RECTOR OF SECURI TY 387
F R O N T L I N E R E A L I T I E S
A
guest calls down to the front desk indicating that her son has not returned from the vend-
ing machine area. He has been gone for 25 minutes. How should the desk clerk respond?
What systems must be in place to assure prompt, efficient actions?
q
H O S P I T A L I T Y P R O F I L E
?
J
ohn Juliano is director of safety
and security at the Royal Sonesta
Hotel, Cambridge, Massachusetts.
After earning a bachelor’s degree in criminal jus-
tice, he worked in private security and then went
on to work in hotels for the past 17 years.
Mr. Juliano feels a safe, secure environment is
very important to travelers. He has been told by
guests that they feel as if they are at home when
they stay at the Royal Sonesta Hotel; they want to
feel as safe there as they do in their own house.
He is responsible for the day-to-day operations
of the security department, including scheduling
and management. He investigates incidents (theft,
damaged property, etc.) and acts as a liaison with
the hotel’s safety committee. He is involved with
employee training (CPR, airborne antigens, etc.);
disseminates information on state, federal, and
Occupational Safety and Health Administration
(OSHA) requirements to supervisors; and helps
implement new safety procedures.
Mr. Juliano says his job requires more in the
way of management than operations. He develops
protective/preventative measures to keep the hotel
from experiencing security problems and liability
lawsuits. He must be knowledgeable about local
ordinances as well as state laws and OSHA regu-
lations. Mr. Juliano’s department is as involved
with guest relations as the front desk, guest serv-
ices, and the concierge are. He maintains a good
relationship with the front office manager, whom
he provides informational guidelines. By follow-
ing these guidelines, the front office manager and
staff develop an understanding of what to do in
certain situations. While Mr. Juliano does not
interact with the front office manager every day,
the front office manager calls him about situations
that occur and asks for his feedback. Mostly, he
deals directly with guests or with a hotel employee
when something goes wrong.
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In-House Security Departments versus Contracted Security
Services
The events of September 11, 2001, urged hotel operators to take the responsibility of
guest security very seriously. However, general managers of hotels must determine how
to make operating an in-house security department cost-effective. Operating a well-
organized security department must be the primary concern when considering hiring an
outside security firm. As the job analysis for the director of security indicates, there is
more to the position than patrolling the halls and grounds of the hotel. Foot patrol—
walking the halls, corridors, and outside property of a hotel to detect breaches of guest
and employee safety—is an important feature of security, but it is a preventive measure,
not an active means of organizing security. However, in some situations, a general man-
ager is forced, for economic reasons, to consider the purchase of an outside service.
Administrative and planning procedures for operating a security department are dele-
gated to other department heads. The cost consideration must be weighed against plan-
ning and coordinating a safe environment for the guest and employee.
The hourly rate charged by the security service for security escort service, or having a
uniformed security guard escort a hotel employee to a financial institution to make bank
deposits; for performing regular hall patrol; and for maintaining surveillance of the park-
ing garage may seem attractive compared to the annual salaries and administrative over-
head associated with operating an in-house security department 24 hours a day. But
more than cost must be considered. Who will work with the other department directors
to establish fire safety and security procedures? Who will plan and deliver fire safety and
security training sessions? Who will monitor fire safety devices? Who will work with city
officials in interpreting fire and safety codes? Who will update management on the latest
technology to ensure a safe environment? These and other questions must be answered if
owners and management are committed to security.
If an outside security service is hired, the role of maintaining security is parceled out
to the department directors. The director of maintenance operates the fire safety and
security equipment, maintains operating records of fire safety equipment and elevators,
and reacts to hazardous situations. The general manager, if time permits, establishes a
safety committee that responds to government guidelines and potential hazards. Each
department director, if time permits, establishes security guidelines based on personal
experience. Under these circumstances, safety and security become low priorities. The
lack of coordination almost guarantees disaster when an emergency strikes.
The following excerpt discussing a bombing in a hotel in Jakarta, Indonesia, empha-
sizes the wisdom of adopting a proactive operational position on guest security.
As terrorism continues to pose a threat to soft targets such as hotels, as evidenced by
the recent bombing outside the JW Marriott in Jakarta, security has never been more
important. With this reality, global hotel companies are no doubt concerned with how
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to strike that delicate balance between security and guest convenience. Although this
is an issue that hoteliers grapple with daily, many hotel companies continue to shy
away from talking about their security procedures. Understandably, part of the issue
is that hotels do not want to compromise their security by disclosing what measures
they are taking. However, another issue is that hoteliers must learn to think of secu-
rity as a positive rather than as a necessary evil.
“Our challenges far exceed appearing to be negative or painting dooms-day sce-
narios,” says Jimmy Chin, director of risk management, The Peninsula New York.
“We need to hammer away at the message that something else can happen, and we
need to address it and examine what steps we can take to either protect or respond to
it. It should be positive because guests see us as a deterrent against possible crime and
terrorism. Guests today expect to be protected. The hotel industry should be dis-
cussing security measures openly, sharing best practices instead of worrying about
how it looks.”
5
Meeting the challenges of providing security for guests and employees requires a full-
time approach. Part-time efforts to control crises in a hotel may be shortsighted. The fol-
lowing story shows the consequences of not providing adequate security.
I N- HOUSE SECURI TY DEPARTMENTS VERSUS CONTRACTED SECURI TY 389
FI GURE 14- 2
The security
department in a
hotel works
closely with the
front office
manager. Photo
courtesy of
Pinkerton
Security and
Investigation
Services.
14_4612.qxp 1/11/06 3:43 PM Page 389
The verdict against Hilton Hotels Corp. in the Tailhook case could have far-reaching
implications for hotel liabilities in providing security for guests, according to hospitality
legal experts. In this case, former Navy Lt. Paula Coughlin sued Hilton for failing to pro-
vide adequate security during the Tailhook Association convention at the Las Vegas
Hilton in 1991. Jurors awarded Coughlin $1.7 million in compensatory damages and $5
million in punitive damages. Hilton claimed that three security guards were adequate for
the 5,000 people at the event.
6
Room Key Security
One of the responsibilities of the director of security is to establish and maintain a room
key control system, an administrative procedure that authorizes certain personnel and
registered guests to have access to keys. One court found that “as a general proposition,
a guest has an expectation of privacy in his or her room and a hotel has an affirmative
duty not to allow unregistered guests, unauthorized employees, and third parties to gain
access to a guest’s room.”
7
Although issuing and filing keys are duties of front office employees, there is more to
room key control than these two tasks.
According to Rizwan Saferali, owner of Super 8 Motel Kissimmee in the Orlando,
Florida, area, who recently installed eSecure and Gibraltar locks from SAFLOK,
“Having electronic locks has improved all aspects of the property, from guest services
to employee satisfaction. We are proud to have been able to guide the property
through its electronic access management experience.”
eSecure [is] a user-friendly, Windows-based front desk system [that] requires no
capital investment—properties just pay a monthly usage fee and receive the system
software and electronic locks. The system works in conjunction with the Gibraltar
170
lock by SAFLOK, an extremely durable lock that provides unparalleled electronic
security. SAFLOK will install the system and locks and provide technical support and
service for the entire system throughout the life of the program contract.
A significant benefit of eSecure is the fact that the monthly usage fees are based
strictly on occupancy; therefore, properties pay only when they are receiving revenue
from bookings. This structure is even more beneficial for properties operating on only
a partial year business cycle.
To make keys or perform other transactions on eSecure, a user simply logs into
SAFLOK’s remote server via dial-up or other Internet connection and follows the
point-and-click prompts. The request to encode a new keycard is completed within
seconds.
With eSecure, SAFLOK can offer the opportunity to upgrade guest security to
properties who may otherwise lack the immediate capital to do so. The combination
of an advanced front desk system, top-of-the-line locks and affordable monthly pric-
390 CHAPTER 14
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ing truly demonstrates that SAFLOK delivers access management solutions based on
customer needs.
8
Usually one of two lock systems is used—the hard-key system or the electronic key sys-
tem. Hard-key systems consist of the traditional large key that fits into a keyhole in a
lock; preset tumblers inside the lock are turned by the designated key. The electronic key
system is composed of:
battery-powered or, less frequently, hardwired locks, a host computer and terminals,
keypuncher, and special entry cards which are used as keys. The host computer gen-
erates the combinations for the locks, cancels the old ones and keeps track of master
keying systems. The front desk staff uses at least one computer terminal to register the
guest and an accompanying keypuncher to produce the card. An electronic locking
system allows the hotel to issue a “fresh” key to each guest. When the guest inserts his
or her key into the door, the lock’s intelligent microchip scans the combination
punched on the key and accepts it as the new, valid combination for the door, regis-
tering all previous combinations unacceptable.
9
Smart Card
Another version of the electronic key is the smart card, an electronic device with a computer
chip that allows a hotel guest or an employee access to a designated area, tracking, and debit
card capabilities for the guest. Bruce Adams reports the following on smart cards:
Keeping track of room access by hotel management has never been easier. Employees
have smartcards that grant them access to different levels of security. The cards track
what level of key was used, who was there, and creates an audit trail that is easy to
manage.
Beyond state-of-the-art locking and tracking capability, the smartcards serve as
guest identification cards, which include the guest’s name and dates of stay at
Portofino Bay Hotel at Universal Studios theme park. “Their card functions as an ID
card, which gives them special privileges at the theme park,” [said Michael] Sansbury
[regional vice president for Loews Hotels]. “Some of those benefits include front-of-
line privileges at rides and events, early admission to the park and priority seating in
restaurants. The smart cards also serve as charge cards at the hotel and park.” “The
smartcard is linked to the guest account in the hotel,” Sansbury said. “The credit limit
in the hotel is transmitted to the smartcard. Merchants at any shop or restaurant at
Universal Studios can swipe the smartcard the same way they swipe a credit card. It
works the same way as a credit card,” [reports Sansbury]. “If they lose their smart-
card, it is very easy to invalidate,” Sansbury said.
10
Terence Ronson reports on an additional security measure—biometrics—that hotels
are considering and some are using to control access to.
ROOM KEY SECURI TY 391
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Biometrics is a term used to describe a measurement of uniqueness of a human being
such as voice, hand print or facial characteristics. Some of you may have seen mock-
examples of such devices in James Bond movies, Mission Impossible and Star Trek.
Card-based access systems have been around for a long while and control access using
authorized pieces of plastic, but not who is in actual possession of that card. Systems
using PINs (personal identification numbers) such as ATM’s only require that an indi-
vidual knows a specific number to gain entry. Who actually enters that code cannot be
determined. Biometrics devices, on the other hand (no pun intended), verify who a per-
son is by what they are, whether it’s their hand, eye, fingerprint or voice. I expect
Hotels would be more inclined to be interested in fingerprint or hand-recognition
access control systems—probably because of the cost and relative simplicity in which
they can be implement[ed] into an existing operation.
For example, when captured, a fingerprint image is converted into a digital form by
extracting a set of unique characteristics. The abstract data taken from the recording
is then encrypted and stored in the database as a template, to be later used as a refer-
ence for comparison purposes.
Users are authenticated by extracting and comparing information derived from
unique arches, loops, markings, and ridges of a fingerprint. This set of information,
called minutia, is a mathematical representation captured as a series of numbers and
relationships of the whorls and ridges of the fingerprint. No actual image of the fin-
gerprint is stored, ensuring privacy and security, the prime concern of users.
11
Hard-Key System
The hard-key system is less expensive at the time of initial purchase. However, the costs
of purchasing additional keys and rekeying locks must be considered over the long run.
Also, reissuing the same key to guest after guest presents a security problem. Often, the
guest fails to return the key at the time of checkout. If a careless guest discards a room
key or a criminal steals a key, guest safety is jeopardized. If regular maintenance and
rekeying lock tumblers are not part of the preventive maintenance plan (and budget),
guest security is compromised.
The electronic key system, smart card, and biometrics can be used for guest rooms as
well as other areas of the hotel; they are an investment in guest security and safety. As
each new guest registers, a fresh plastic key or minutia is produced. The new combina-
tion for the guest room lock or public/storage area responds only to the new guest room
key or pass key. This procedure almost guarantees guest and employee safety. The initial
investment in these types of systems must be evaluated against overall maintenance and
replacement costs of a hard-key system and increased guest and employee security.
Electronic key access is one of many alternatives from which facility managers can
choose. The system includes an electronically coded key and door controllers that can
be easily programmed to recognize one or more codes. Since the electronic keys are
assigned codes from one of several billion possible combinations, they are virtually
impossible to duplicate.
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High-end electronic access control systems can be equipped with numerous . . .
features . . . [such as] recording who entered an area and at what time . . . [and can]
link this information with a central computer, allowing facility managers to provide
reports on the activities of thousands of users through thousands of doors. These
reports are extremely helpful during the investigation phase of a crime incident. Access
control systems also can be equipped with a panic alert that allows the individual to
send a distress signal in the event they are being coerced to open the door.
12
While the hard-key system is the traditional method that hotels have been using for
many years, its cumbersome and costly maintenance indicates that it should be replaced
with advanced technology. This may be a slow process, but it will greatly improve guest,
employee, and inventory safety. The economies of scale make the electronic key system
an affordable necessity.
Fire Safety
Hearing someone shout “Fire!” panics anyone who is unprepared to deal with this dan-
gerous situation. Well-orchestrated safety procedures that are well managed at the onset
of a fire can save the lives of guests and employees. The front office manager and the
director of security must develop effective fire safety and evacuation plans as well as
training programs for employees to ensure their effectiveness.
Fire Code General Requirements
Fire safety plans begin with the fire safety codes of the municipality where the hotel is
located. These codes stipulate construction materials, interior design fabrics, entrance and
exit requirements, space limitations, smoke alarm installation and maintenance, sprinkler
system installation and maintenance, fire drill testing, fire alarm operation and mainte-
nance, and the like. These extensive codes were developed to ensure guest safety. They
may require extra financial investment, but they are intended to protect the guest and the
occupants of the building.
Guest Expectations
Hotel guests expect, either consciously or unconsciously, to find a safe environment dur-
ing their visit. Some guests may ask for a room on a lower level or inquire if the rooms
have smoke alarms. However, most guests are concerned about other matters and do not
ask about fire safety procedures. When the guest settles into a guest room, he or she may
give a passing glance at the fire evacuation procedure posted behind the door. Some
guests may even count the number of doors to the nearest exit. Is this enough? Will
human lives be in jeopardy because guests’ pressing concerns have caused them to place
their safety in the hands of the management and employees of the hotel?
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Fire Safety Plan
The front office manager who wants to take active measures to ensure guest safety must
develop a simple fire safety plan, communicate it to employees and guests, and train
employees and guests to handle a stressful situation. This includes the following com-
monsense elements:
1. Equip all guest rooms and public areas with smoke detectors that are tied to a
central communications area.
2. Regularly test and maintain smoke detectors; keep up-to-date records of the tests,
as shown in Table 14-1.
3. Install, maintain, and test fire alarms as required by local fire code regulations;
again, keep up-to-date records of the tests, as shown in Table 14-2.
4. Constantly monitor smoke detectors and fire alarm systems, preferably at the
front desk.
5. Prepare and post floor plans showing fire exit locations by area—public areas,
work areas, and guest room areas (see Figures 14-3 and 14-4).
6. Tell employees and guests where the nearest fire extinguishers and fire alarms are
located and how to evacuate the building. Instruct them in fire safety guidelines
(Figure 14-5).
7. Develop a fire action communication procedure for front office personnel.
394 CHAPTER 14
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TABLE 14- 1. Maintenance Records for Smoke Detector Tests
401 12/1 OK JB inspector 1/10 OK JB inspector
402 12/1 OK JB inspector 1/10 OK JB inspector
403 12/1 bat. repl. JB inspector 1/10 OK JB inspector
404 12/2 OK JB inspector 1/10 OK JB inspector
405 12/2 OK JB inspector 1/10 OK JB inspector
406 12/2 OK JB inspector 1/10 OK JB inspector
407 12/2 OK JB inspector 1/10 OK JB inspector
408 12/2 OK JB inspector 1/13 OK JB inspector
409 12/2 OK JB inspector 1/13 OK JB inspector
410 12/2 OK JB inspector 1/13 OK JB inspector
411 12/2 OK JB inspector 1/13 OK JB inspector
412 12/2 OK JB inspector 1/13 OK JB inspector
413 12/3 bat. repl. JB inspector 1/15 OK JB inspector
414 12/3 bat. repl. JB inspector 1/15 OK JB inspector
415 12/3 OK JB inspector 1/15 OK JB inspector
JB = inspector’s initials
bat. repl. = batteries replaced
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FI RE SAFETY 395
TABLE 14- 2. Maintenance Records for Fire Alarm Tests
Floor 1, station A 4/10 OK JB inspector
Floor 1, station B 4/10 OK JB inspector
Floor 2, station A 4/10 OK JB inspector
Floor 2, station B 4/10 OK JB inspector
Floor 3, station A 4/10 OK JB inspector
Floor 3, station B 4/10 OK JB inspector
Floor 4, station A 4/10 OK JB inspector
Floor 4, station B 4/10 OK JB inspector
Floor 5, station A 4/10 no sound; repaired 4/10 JB inspector
Floor 5, station B 4/10 no sound; repaired 4/10 JB inspector
Floor 6, station A 4/10 OK JB inspector
Floor 6, station B 4/10 OK JB inspector
Kitchen 4/10 OK JB inspector
Bakery 4/10 OK JB inspector
Banquet A 4/10 OK JB inspector
Banquet B 4/10 OK JB inspector
Lounge 4/10 OK JB inspector
Lobby 4/10 OK JB inspector
Laundry 4/10 OK JB inspector
Gift Shop 4/10 OK JB inspector
FI GURE 14- 3 Well-marked exits from public areas are very important.
Meeting Room
Elevators
EXIT
EXIT
701 703 705 707 709 711
702 704 706 708 710 712
YOU ARE HERE
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Employee Training in Fire Safety
Providing training programs for employees on the locations of the fire exits, fire extin-
guishers, and fire alarms and on methods of building evacuation greatly increases the
chances that all occupants will escape the building safely when necessary. After new and
current employees are taught the locations of fire exits, extinguishers, and alarms
throughout the building, supervisors can spot-check the effectiveness of the training with
random questions such as: “Where is the nearest fire exit when you are cleaning room
707? Where is the nearest fire extinguisher when you are in the bakery? Where is the
nearest fire alarm when you are in the laundry?” These simple questions, repeated often
enough, impress employees with the importance of fire safety.
Local fire departments or the director of security can train employees to use fire extin-
guishers. These informal training sessions should include operational procedures and
information on applying the appropriate type of fire extinguisher. The time to start read-
ing directions is not during the fire. These training sessions give employees confidence in
their ability to handle an emergency.
Guest Instruction in Fire Safety
Often, instructing guests on fire safety is overlooked. They are at the hotel for a relaxing,
enjoyable visit. But fire can strike at any time, even during relaxing, enjoyable visits. Inform
each guest that all rooms are equipped with smoke detectors, that the nearest fire exit from
any room is, at the most, four doors to the right of the room, that a fire extinguisher is
396 CHAPTER 14
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FI GURE 14- 4 Signs such as this one are mounted on the back of doors to guest
rooms to provide fire safety information for guests.
Elevators
EXIT
EXIT
501 503 505 507 509 511
502 504 506 508 510 512
YOU ARE HERE
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FI RE SAFETY 397
FI GURE 14- 5 Hotel fire safety procedures should be displayed in guest rooms.
1. When you check into any hotel or motel, ask for a copy of the fire procedures plan. If they do not
have one, ask why.
2. Check to see if there is a smoke detector in your room. If there isn’t any, ask for a room that has one.
3. Familiarize yourself with the locations of the fire exits and count the number of doors from your
room to the nearest fire exit. (If the corridor is smoky, you may not be able to see the exit, but you
can feel your way along the floor.)
4. Get into the habit of keeping your key in the same place every time you stay at a motel or hotel so
that you’ll always know exactly where it is. Then, if you have to leave your room, be sure to take
your key with you. (If you cannot reach the exit, you may have to return to your room because of
fire or smoke in the hallway.)
5. If you wake up and find your room is beginning to fill with smoke, grab your key, roll off the bed,
and head for the door on your hands and knees. You’ll want to save your eyes and lungs as long as
possible, and the air five or six feet up may be filled with odorless carbon monoxide.
6. Before leaving your room, feel the door with the palm of your hand. If it is hot, or even warm, do
not open it! If it is not warm, slowly open it a crack, with the palm of your hand still on the door
(in case you have to slam it shut), and peek into the hallway to see what’s happening.
7. If the coast is clear, crawl into the hallway, feeling your way along the exit side of the wall. It’s
easy to get lost or disoriented in smoke. Count the doors as you go.
8. Do not use an elevator as a fire exit. Smoke, heat, and fire may put it out of operation.
9. When you reach the exit, walk down the stairs to the first floor. (Exit doors are locked on the
stairwell side, so you cannot enter any other floor.)
10. If you encounter smoke in the stairwell on the way down, the smoke may be “stacking” on the
floors under it, and the stairwell would be impassable. Do not try to run through it. Turn around
and go up to the roof.
11. When you reach the roof, open the door and leave it open so the stairwell can vent itself. find the
windward side of the building so you won’t be caught up in the smoke. Then, have a seat and wait
for the firefighters to find you.
12. If you cannot get out of your room safely, fill the bathtub or sink with water. Soak towels and stuff
them under the door and between the cracks to keep the smoke out. With your ice bucket, bail
water onto the door to keep it cool. If the walls are hot, bail water on them, too. Wet your
mattress and put it up against the door. Keep everything wet.
13. If smoke does begin to seep into your room, open the window. (Keep the window closed if there is
no smoke. There may be smoke outside.) If you see the fire through the window, pull the drapes
down so that they will not catch fire. Also, wet a handkerchief or washcloth and breathe through it.
14. DO NOT JUMP unless you are certain of injury if you stay in your room one minute longer. Most
people hurt themselves jumping, even from the second floor; from the third floor, quite severely. If
you’re higher than the third floor, chances are you will not survive the fall. You would be better off
fighting the fire in your room.
Source: National Safety Council. Courtesy of Knights Inn. Cardinal Industries, Inc., Reynoldsburg, OH © 1989 Cardinal
Lodging Group, Inc., management company for Knights Inns and Arborgate Inns.
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located next to the elevator on each floor, and that a fire can be reported by dialing 0 for
the hotel operator. Guests appreciate that the hotel cares about their well-being and that
it has taken every precaution to ensure equipment is available and in working order. Man-
agement may want to encourage guests to read the fire evacuation guidelines posted on the
door of the guest room by offering enticing promotions. For example, on registering, the
guest is informed of a special coupon attached to the fire evacuation plan located on the
door. This coupon may be redeemed for a two-for-one breakfast special, a free cover
charge in the lounge, a free morning newspaper, a discount in the gift shop, or some other
incentive.
Accommodations for guests who are physically challenged should also be a concern
for hotel managers. Visual alarm systems, flashing lights that indicate a fire or other
emergency in a hotel room, should be installed to alert hearing-impaired guests. A report
of the locations of physically challenged guests should be easy to retrieve from the PMS
registration module in case of an emergency.
Fire Action Communication Procedure
The front office employees must take the lead in controlling the panic that may arise
when a fire strikes. The fire communications training program developed by the front
office manager must be taught to all front office personnel. If fire strikes during the mid-
dle of the day, more than one person will probably be available to assist in maintaining
control of the situation. But if the disaster occurs at 10:30 P.M., there may be only one
person on duty to orchestrate communications.
The communications procedure begins when a guest or an employee calls the switch-
board to report a fire. Unfortunately, in many cases, some time has already been wasted
in attempts to extinguish the fire. Seconds are important in reporting the fire to the local
fire company. At some properties, the fire company is immediately notified via the inter-
face of the hotel’s fire alarm with the municipal or private monitoring station. But front
office personnel should never assume that the fire company has been notified and should
immediately call the fire station to report the fire. The call may duplicate an earlier
report, but it is better to have two notifications than none.
After the fire is reported, security and management should be alerted. Guest and
employee evacuation procedures must be initiated and organized. Established procedures
stipulating who should be informed and in what manner, as well as who is to assist the
guests and employees in evacuating, result in an efficient evacuation. The front desk
clerk must produce a list of occupied guest rooms immediately. The rooms located on the
floor where the fire is reported and the rooms located on the floors immediately above
and below the fire room are of vital importance to firefighters and volunteers who assist
in the evacuation.
On arrival, firefighters immediately report to the front desk. They need to know where
the fire is located and what guest rooms are occupied. Copies of the list of occupied
rooms and special notes on whether the occupants are children or physically challenged
aid in the rescue effort.
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Front office personnel must remain calm throughout the ordeal. The switchboard will
be active, with calls from inside and outside the hotel. Requests for information from the
fire emergency crew and first-aid and rescue squad will be mixed with phone calls from
the media and persons related to hotel guests. Switchboard operators should keep phone
calls brief so the phone lines are open.
Security should not be forgotten during crises. Some people take advantage of such
confusion to loot and pilfer. Cash drawers and other documents should be secured.
Each hotel must develop its own communications procedure for a fire. Each plan will
vary based on the strengths of the employees in the front office. Training the staff with
fire drills aids all employees in handling the emergency; everyone must be part of the drill,
no matter how calmly they react to ordinary crises. Holding fire drills on each shift gives
employees practice and is worth the effort.
The following stories highlight the importance of being prepared to react in an emer-
gency situation:
[James T. Davidson, executive director, Training Services, Educational Institute] was
working as a front desk clerk in Bermuda during the arson riots in 1976. Rioters set
fire to the top floor of the hotel. [The hotel’s] communications tower was on the roof
and [it] lost communications within moments, even though [the hotel’s management]
thought [that it] had a fool-proof system. Several people were killed, including some
guests who tried to use the elevator—it took them straight to the blaze. There was an
emergency plan for evacuating guests, but no real plan for getting them a safe distance
away from the burning building.
Years later, [he] was general manager of a property on the Seychelles Islands dur-
ing two attempted coups d’etat. A total curfew was imposed during both coup
attempts, but the second was worse because it happened during the middle of the night
when [the] staff was limited. For six days, [the hotel] made do with a staff of 13 for
300 guests and lived off the food that was at the hotel. The 13 staff members worked
in just about every department at one time or another. [They] enlisted guests to help
keep the hotel running, and most were glad to pitch in.
Each incident taught [him] the importance of planning and communications, and
how essential it is to have regular emergency procedure drills.
13
Even though these stories are pre–September 11, 2001, planning for a general disaster
and communications within that disaster were and are still very important.
FI RE SAFETY 399
F R O N T L I N E R E A L I T I E S
A
guest calls the front desk and reports that an iron has overheated and set the bedspread on
fire. What action should the front desk clerk take? What previous fire safety planning
would ensure prompt, efficient action?
q
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Emergency Communication
There are times when guests and employees must evacuate a building in a nonemergency
situation. Although it is imperative that the building be emptied, evacuation is not as
urgent as it is during a fire. Examples of such situations include a bomb threat, a fire in an
adjacent building, a gas leak, or an electrical power outage. When these situations occur,
an emergency communication system must be in place to ensure an efficient evacuation.
The director of security, in conjunction with the front office manager and civil author-
ities, should develop a plan for all departments. The role of the front office is essential in
directing communications with guests and employees. The front office staff is responsi-
ble for alerting employees and guests that an emergency situation exists. The emergency
communication plan should establish a communications hierarchy, which is a listing of
the order in which management personnel may be called on to take charge; emphasize
cooperation between the hotel and civil authorities; and provide training.
The 1993 bombing of the World Trade Center provides a cautionary lesson in
preparedness:
When disaster strikes, inadequate or incomplete preparation becomes painfully evi-
dent—and costly. These hard lessons became clear in the immediate aftermath of the
February 26, 1993, bombing of New York’s World Trade Center, when the staff of
the adjacent Vista Hotel reacted heroically to a very daunting situation. Loss of the
facility’s main telephone switch made it impossible to communicate with management
and arrange emergency recovery services. Cellular phones could have fetched thou-
sands of dollars apiece that day. Drawings illustrating how the hotel was built were
not easily accessible, creating confusion among the rescue teams.
14
Here is another incident of a more urgent nature:
A natural gas explosion tore through the [Embassy Suites Outdoor World at Dallas/Ft.
Worth International Airport] swimming pool maintenance room at 6:25 P.M., August
6, 2000, just four days after the hotel’s opening, forcing guests to flee the property.
Rapid response by the hotel’s staff, led by GM Bill Bretches, as well as police, fire-
fighters and paramedics, helped clear the property swiftly and minimize injuries. Two
hundred fifteen of the hotel’s 329 guest suites were occupied at the time of the explo-
sion, with many of the guests in the property’s atrium for the evening reception.
Guests were brought to the hotel’s parking lot, where they were given water and
clothing provided by Bass Pro Shops Outdoor World, a part of the hotel complex. Staff
accounted for guests by matching names with the registration list. All guests, accom-
panied by Embassy Suites staff, were relocated within 90 minutes to nearby hotels.
15
The following discussion of planning for effective emergency communication outlines
the most important features of such a plan.
400 CHAPTER 14
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Developing the Emergency Communication Plan
The emergency communication plan is developed in cooperation with the director of
security, the front office manager, and local civil authorities. These individuals are
responsible for developing a plan to be used in the event of an impending life-threatening
emergency that includes training staff and employees.
Emergency The job description of each management position includes a task entitled “emergency
Communications communications manager on duty.” This duty requires the person to act as the liaison
Manager on between the hotel and the civil authorities. Each member of the management staff receives
Duty adequate training in the responsibilities of the job.
The role of emergency communications manager on duty is assumed in the following
order:
General manager
Assistant general manager
Director of security
Director of maintenance
Food and beverage manager
Banquet manager
Restaurant manager
Director of marketing and sales
Controller
Housekeeper
Front office manager
Front desk clerk on duty
Night auditor
Responsibilities On receipt of a call informing the hotel that the guests and employees are in danger, these
of the Front procedures are to be followed (Figure 14-6):
Office
1. Remain calm. Write down the name, phone number, affiliation, and location of
the person making the call.
2. Immediately alert the emergency communications manager on duty to the
impending danger. If main telephone service to the hotel is inactivated, use a cel-
lular phone.
3. Inform the front desk clerk of the impending danger. Produce a room list of all
registered guests in the hotel. Produce a list of all social functions in progress.
4. Alert the emergency communications leaders on duty in each hotel department.
These people report to the front office immediately. Hold an emergency action
EMERGENCY COMMUNI CATI ON 401
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meeting with the emergency communications manager on duty. The lists of reg-
istered guests and social functions in progress will assist in the evacuation.
5. The emergency communications manager on duty will advise you which author-
ities should be alerted.
?
Police department: 000–000–0000
?
Fire department: 000–000–0000
?
Bomb squad: 000–000–0000
?
Electric company: 000–000–0000
?
Gas company: 000–000–0000
?
Water company: 000–000–0000
?
Rescue squad: 000–000–0000
?
Red Cross: 000–000–0000
?
Owner of hotel: 000–000–0000
?
General manager: 000–000–0000
402 CHAPTER 14
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FI GURE 14- 6
The switchboard
operator plays a
pivotal role in an
emergency
communication
plan. Photo
courtesy of
Northern
Telecom.
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6. Respond to phone inquiries as directed by the emergency communications man-
ager on duty.
7. Remain at the front office to manage emergency communications until directed
to evacuate by the emergency communications manager on duty.
Responsibilities Delegating the task of emergency communications leader on duty to other responsible
of Other Hotel members of a department requires the following considerations:
Departments
?
Each department director develops a hierarchy of positions to assume the respon-
sibility of emergency communications leader.
?
Each emergency communications leader on duty receives adequate training in the
responsibilities of this job duty.
?
Upon receiving information indicating that the hotel guests and employees are in
immediate danger, immediately relay the information to the front office—dial 0.
?
All emergency communications leaders on duty report to the front office for an
emergency communications meeting. Directions are given for assisting guests and
employees to evacuate.
?
Employees on duty take direction from the emergency communications leaders on
duty on assisting guests and employees in evacuating the hotel.
Training The emergency communications managers on duty should receive ten or more hours of
training in leading a crisis situation. This training must be documented, with two hours
of refresher training every year.
Current employees receive two hours of training in emergency evacuation procedures.
New employees receive training in emergency evacuation at the time of orientation.
Refresher training, two hours every year, is required of all employees.
EMERGENCY COMMUNI CATI ON 403
H O S P I T A L I T Y P R O F I L E
?
J
ohn Juliano, the director of safety
and security at the Royal Sonesta
Hotel in Cambridge, Massachu-
setts, mentioned his participation in the Security
Directors’ Network, a group of hotels that gather
and share information on security issues. For
instance, if an incident occurs at the Royal Sonesta
Hotel involving a nonpaying guest, he fills out a
report and faxes it to the director of security at the
Boston Marriott Copley Place, who then faxes the
information to 30–35 other hotels in the greater
Boston area. This is especially helpful when a per-
son goes from hotel to hotel causing problems. For
example, several years ago in Boston, a man went
to several hotels and set off fire alarms (he actually
set a fire at one hotel); when the unsuspecting and
panicked guests ran from their rooms, he would
enter and steal the guests’ possessions. The net-
work was helpful in tracking his actions. How-
ever, nine of ten times when he receives a request
for information about a specific person, Mr.
Juliano has no information to supply.
?
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Employee Safety Programs
The hospitality industry is rife with opportunities for employee accidents. Behind the
scenes are many people crowded into small work areas, busy preparing food and bever-
ages and performing other services for the guests. The employees who are most in dan-
ger include those whose equipment is in need of repair, who work in areas that are too
small, or who depend on other employees who are not attentive to the job at hand. The
front of the house also provides opportunities for accidents. Employees and guests must
use public areas that may be overcrowded or worn from continual use. The following
information on hotel law provides insight into an innkeeper’s responsibility:
The innkeeper must periodically inspect the facility to discover hidden or latent defects
and then to remove or repair those defects. During the time prior to repair the innkeeper
has a duty to warn the guests about the existence and location of the dangers.
16
How does hotel management begin to develop guidelines for employee safety?
Employee Safety Committee
The best way to begin is to establish a safety committee, a group of frontline employees
and supervisors who discuss safety issues concerning guests and employees. Frontline
employees know the details of day-to-day hazards. They deal with the faulty equipment,
traverse the crowded banquet rooms, work next to one another in a poorly laid-out
kitchen, process soiled laundry, push carts through busy public corridors, and hear guest
complaints during checkout. Moreover, these people make up part of the group that
employee safety procedures are supposed to protect. Why not give them an opportunity
to make their environment better? Although some employees do not want this responsi-
bility, other employees will welcome the opportunity. With positive results, there may be
a few more volunteers the next time. Management is a necessary part of the committee,
not only because it is used to carrying out long-range plans but because it supplies the
clout and support needed to implement the procedures.
Composition and Activities of the Safety Committee
The safety committee should include representatives from all departments in the hotel. If
this is not possible, then co-committees for each shift might be an option. Management
should convey the importance of the safety committee. Every comment received from the
members is worthwhile and should be noted in the minutes of the meeting (Figure 14-7).
Checklists with assignments for fact-finding tours, to be reported on at the next meeting,
should be distributed to begin the process. The meetings should not be mere formalities,
quickly conducted with little thought about their content. At each meeting, the minutes
of the previous meeting should be read, and progress made in accomplishing goals should
be reported. Members should see that the tiles in the laundry room, the leak in the stack
steamer, and the worn rug in the lobby have been repaired or replaced as suggested.
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EMPLOYEE SAFETY PROGRAMS 405
FI GURE 14- 7 Minutes from a safety meeting keep participants on track.
Hotel Safety Committee Minutes 5/19
Members present:
1. The minutes from the 4/12 meeting were read. M. Benssinger noted that the minutes stated that
Johnson Rug Inc. was in the process of repairing the rug in the lobby. This was not the case at all.
No one to her knowledge has repaired the seams on the rug. The minutes were corrected.
2. B. Lacey gave an update regarding the progress on suggestions for improving safety, compiled at the
3/01 meeting.
• The safety valves on the steam pressure equipment in the kitchen have all been replaced.
• The electrical cords on the vacuum cleaners on the 11th and 15th floors have been repaired.
• Five of the kitchen employees have been enrolled in a sanitation correspondence course. T.
Hopewell is monitoring their progress.
• The basement has been cleaned up, and excess trash has been removed. Old furniture that was
stored near the heating plant has been removed and will be sold at an auction.
• A new trash removal service has been selected. Regular trash removal will occur daily, instead of
three times a week.
• The lights in the east stairwell have been replaced. Maintenance has initiated a new preventive
maintenance program for replacement of lights in stairwells and the garage.
• Three employees have volunteered to enroll in a substance abuse program. Their enrollment is
anonymous to management and other employees.
3. M. Povik reported that the beer coolers are not maintaining the proper temperature. Several requests
for service from the Gentry Refrigeration Service have been ignored. The director of maintenance
will be informed of the situation.
4. A. Gricki reported that her efforts to reach Johnson Rug Inc. to repair the rug have not been
successful. The situation is dangerous. One guest almost tripped in the lobby yesterday. The director
of housekeeping will be informed of the situation.
5. A. Johnson would like support from the committee to request the purchase of two training films on
the correct procedure for heavy lifting and the proper use of chemicals. The committee agreed to
write a memo to the general manager in support of this motion.
6. Members of the committee will meet at convenient times to do an informal safety survey of the
maintenance department, housekeeping department, and kitchen. These surveys will provide
feedback for department directors. All surveys are to be returned by June 1.
7. Meeting was adjourned at 4:42 P.M. Next meeting will be held June 10.
A. Johnson, Housekeeping
S. Thomas, Housekeeping
L. Retter, Food Production
K. Wotson, Food Production
M. Benssinger, Front Desk
V. Howe, Front Desk
F. Black, Gift Shop
B. Lacey, Director of Security
T. Hopewell, Food and
Beverage Manager
J. Harper, Banquets
T. Senton, Restaurant
M. Povik, Lounge
A. Smith, Maintenance
J. Hanley, Maintenance
D. Frank, Parking Garage
A. Gricki, Accounting
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Department Supervisors’ Responsibility
Each department director must encourage a safety-conscious attitude. Management members
can set an example by following safety procedures themselves when operating equipment and
by scheduling adequate staff during busy time periods and following up on requests for
repairs. If employees know that you place safety first, they will also adopt that attitude.
Safety Training Programs
Specific safety training programs should be developed by each department director. The
directors review their departments to determine where safety training is needed. Security,
equipment operation, sanitation, chemical use, transport of materials, and movement of
equipment are areas to examine in compiling a program. The orientation program is the
best opportunity for providing employees with safety training. Films, handouts, and
booklets produced specifically to teach the safe way to perform a task reinforce on-the-
job training and practice.
Regularly scheduled training sessions with notations of progress for use in the annual
employee review are a necessity; otherwise, the employee gets the impression that man-
agement is showing that same old film again just to meet the insurance company’s
requirements. Safety training sessions should be scheduled when the employee is able to
concentrate on the session and is not distracted by other duties. This may mean that ses-
sions must be scheduled before or after a shift, with additional pay. If management wants
to enhance safety with training programs, then this must be a budget item. Planning for
safety takes time and financial investment.
Solution to Opening Dilemma
The investigation of establishing an in-house security department could address the fol-
lowing topics:
?
How are communications with public safety officials regarding safety issues handled?
?
How are fire safety and emergency communication plans developed?
406 CHAPTER 14
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F R O N T L I N E R E A L I T I E S
A
fter slipping on debris while assisting a guest with his luggage, a front office employee
shrugs off the injury, saying, “I needed a few days off anyway.” Discuss the danger inher-
ent in this type of employee attitude.
q
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?
Who is responsible for establishing and maintaining an employee safety training
committee?
?
Who is responsible for maintaining the integrity of the key system in the hotel?
?
Who is responsible for the safe delivery of cash deposits?
?
How are smoke detector and fire alarm tests conducted and records maintained?
?
Who conducts fire and emergency evacuation training and drills?
?
How can all members of the hotel staff adopt a cautious attitude with respect to
potential terrorist activities?
Chapter Recap
The expense of the security department is a vital expenditure. This chapter examined
security as it relates both to the front office and to the overall objective of the hotel in pro-
viding a safe environment for guests and employees, especially in light of the September
11, 2001, disasters. The organization and operation of a security department, along with
a job analysis of the director of security, were outlined to demonstrate the many facets of
this department. The decision about whether to use an in-house security department or
to contract outside security services should be based on ensuring the safety and security
of hotel guests rather than on costs.
Both the front office and the security department are involved in room key security,
which is easier to guarantee with the new electronic key, smart card, and biometrics sys-
tems than it is with hard-key systems. Building evacuation requires that established pro-
cedures be in place and that both employees and guests receive instruction on how to
react during a fire. An employee safety program should involve both staff and manage-
ment and include a safety committee that addresses safety concerns on a regular basis and
a training program for all employees. Emergency communications procedures should be
developed, with a plan that involves management, employees, and civil authorities.
End-of-Chapter Questions
1. How does the security department interact with the front office? Give examples.
2. Visit a hotel that has an in-house security department. How is this department
structured? How many employees are needed to provide 24-hour coverage?
What are the typical job duties of employees in this department?
3. Visit a hotel that contracts with a private security agency for security services.
What services does this agency provide? How satisfied is management with the
level and range of services provided?
4. Compare your answers to questions 2 and 3.
END- OF- CHAPTER QUESTI ONS 407
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5. Contrast the level of security in a hotel that uses a hard-key system with that in
a hotel that uses an electronic key or smart card system.
6. Discuss the features of a hard-key system.
7. Discuss the features of an electronic key system.
8. Discuss the features of a smart card system.
9. What advantages does biometrics provide for guest and employee safety?
10. How can a hotel take a proactive stance on fire safety?
11. Why are testing and maintenance of smoke detectors and fire alarms so important?
12. Consider the fire safety procedures provided in guest rooms. How detailed do
you think they should be? How can hotels encourage guests to read them?
13. Why is it important for management to include employees when developing
safety programs?
14. Review the minutes of the safety committee meeting in Figure 14-7. What issues
do you feel are top priorities? Which are low priorities?
15. What value do you see in preparing an emergency communications system to be
used in a hotel?
16. Review the emergency communication plan presented in this chapter. What are
the important features of the plan?
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C A S E S T U D Y 1 4 0 1
Ana Chavarria, front office manager of The Times
Hotel, has scheduled an appointment with the direc-
tor of security, Ed Silver. Mr. Silver has just learned
that a nearby hotel, Remington Veranda, recently
received a bomb threat that required the evacuation
of all guests and employees. The situation caused a
great deal of confusion and panic. Several employees
were screaming, “Bomb! Bomb! Run for your life!”
while other employees and guests were absolutely
stunned and couldn’t move. Although the bomb
threat was of no substance, five guests and three
employees had to be treated in the emergency room
for shock and broken limbs caused by the crush to
evacuate the building.
After reviewing the files in the security depart-
ment, Ed Silver feels that he and Ana should develop
an emergency communication procedure to be sure
that the situation that occurred at Remington
Veranda will not be repeated at The Times Hotel.
Ana agrees; her prior experience at a hotel on the
East Coast makes her realize the importance of such
a plan.
Give Ana and Ed suggestions for developing an
emergency communication plan.
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Notes
1. Rebecca Oliva, “Scratching the Surface,” Hotels 37, no. 4 (April, 2003).
2. Patrick M. Murphy, “How Marriott Employs CPTED in Its Properties’ Total
Security Package,” Hotel Security Report 19, no. 2 (Port Washington, NY: Rust-
ing Publications, January 2001): 1–2.
3. Timothy N. Troy, “Keys to Security,” Hotel & Motel Management 209, no. 20
(November 21, 1994): 17.
4. Mahmood Khan, Michael Olsen, and Turgut Var, VNR’s Encyclopedia of Hos-
pitality and Tourism (New York: Van Nostrand Reinhold, 1993), 585.
5. Mary Gostelow, “Security Challenge: In Today’s Reality, Do Hotels Need to
Take a Stronger Stand?” Hotels, October, 10, 2003, http://www.hotelsmag.com/
archives/2003/10/gu-security-marriott-security-sheraton.asp.
6. Toni Giovanetti, “Looking at the Law,” Hotel Business 3, no. 23 (December
7–20, 1994): 1.
CASE STUDY 409
C A S E S T U D Y 1 4 0 2
Cynthia Restin, night auditor of The Times Hotel,
waited to see Ana Chavarria, front office manager,
after her shift was over. She related a few incidents
to Ana that occurred during her evening shift. She
said she received a call from a guest in room 470
who said that he had received a threatening call
from someone at 1:45 A.M. Cynthia discussed the
incident with the guest and said she would alert the
security guard on duty. At 2:05 A.M., Cynthia called
the guest to see if he was OK. He thanked her for her
concern and said he was ready to retire for the
evening.
At 2:35 A.M., a guest in 521 called Cynthia at the
front desk reporting a loud noise coming from the
room located below him. Cynthia alerted the secu-
rity guard on duty and asked him to go to room 421
to investigate the situation. The security guard found
the door ajar and the room vacant. There was no
sign of violence, and the guest’s belongings were
removed; otherwise, everything looked like a nor-
mal self-checkout.
At 3:29 A.M., Cynthia noticed a green sports car
circling the portico of the hotel. The driver stopped
the car once and drove off after 15 seconds. Cynthia
again alerted the security guard on duty.
Ana asked Cynthia to stay a few more minutes and
prepare a report of the three incidents for the file. She
said she would be talking with Ed Silver, The Times
Hotel’s director of security, later, and she wanted to
discuss the events with him. These incidents seem to
have been increasing over the past several weeks, and
Ana feels there could be some problem.
The discussion with Ed Silver was brief. He said
he feels these incidents are no cause for alarm but
that a training program for front desk personnel on
safety and security procedures should be initiated.
Ana indicated that similar situations have occurred
in other hotels where she worked and were the
beginning of large problems for those hotels. Ana
said she wanted the local police department involved
and agreed that a training program on safety and
security procedures is critical.
What do you think of Ana’s suggestion of involv-
ing the police? What major topics would you include
in a training program on safety and security proce-
dures for front office personnel?
14_4612.qxp 1/11/06 3:43 PM Page 409
7. Campbell v. Womack, 35 So. 2d 96 La. App. (1977), quoted in Khan, Olsen, and
Var, Encyclopedia of Hospitality and Tourism, 586.
8. Kali Steck, “SAFLOK’S eSECURE* Offers the Ultimate Security with No Capi-
tal Investment,” June 24, 2003, http://www.hotel-online.com/News/PR2003_
2nd/Jun03_SAFLOK.html.
9. “Securing Guest Safety,” Lodging Hospitality 42, no. 1 (January 1986): 66.
10. Bruce Adams, “A Few Hotels Are Reaping Benefits from Smartcards,” Hotel &
Motel Management 215, no. 12 (July 3, 2000): p. 62.
11. Terence Ronson, “Biometrics Lend a Hand to Hotel Security,” February 2002,
http://www.hotel-online.com/News/PR2002_1st/Feb02_HotelBiometrics.html.
12. Richard B. Cooper, “Secure Facilities Depend on Functional Design,” Hotel &
Motel Management 210, no. 9 (May 22, 1995): 23. Copyright Hotels magazine,
a division of Reed USA.
13. James T. Davidson, “Are You Ready for an Emergency?” Hotels 28, no. 10
(October 1994): 20. Copyright Hotels magazine, a division of Reed USA.
14. Michael Meyer, “Girding for Disaster,” Lodging Hospitality 50, no. 7 (July 1994):
42.
15. Stefani C. O’Connor, “Embassy Suites Hotel in Dallas Exhibits Exemplary Cri-
sis Management Skills,” Hotel Business, August 16, 2000, www.hotelbusiness.com.
16. Khan, Olsen, and Var, Encyclopedia of Hospitality and Tourism, 585.
Key Words
410 CHAPTER 14
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biometrics
communications hierarchy
crisis management
electronic key system
foot patrol
hard-key system
litigious society
room key control system
safety committee
security escort service
smart card
visual alarm systems
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O P E N I N G D I L E M M A
The general manager of the hotel has requested that you come to his
office to talk over last week’s lack of efficiency in your housekeeping
department. Your housekeepers have not met their quota of cleaning
18 rooms per day; they only cleaned 15.5 rooms per day. How are you
going to respond?
C H A P T E R 1 5
Executive Housekeeping
C H A P T E R F O C U S P O I N T S
?
Importance of the
housekeeping
department
?
Overview of a
housekeeping
department
?
Relationship of an
executive housekeeper
to the general manager
?
Managing a
housekeeping
department
Importance of the Housekeeping Department
Guests return to a hotel, in part, because of its cleanliness—not the initial
advertising efforts of the hotel marketing department to attract guests with
price, product, and service features. This basic operating concept therefore
requires a special consideration of how housekeeping fits into the marketing
effort. The focus of this chapter is the executive housekeeper’s management of
the people, processes, communications, and interactions that affect the guests’
stay. These operational procedures have an enormous impact on the financial
position of the hotel. Guests who have a negative first experience—a messy
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lobby, a dismal-looking bathroom, or worn bedding—will not be impressed; the possi-
bility of a return visit are minimal. Also, negative word-of-mouth advertising will become
another problem to manage.
John Hendrie reports that the major hotel chains are now using housekeeping concepts
in their marketing campaigns to attract customers:
In print and television, the consumer is no longer battered by the flash, pizzaz and glit-
ter for their travel dollars. Rather, we are now shown the “glamour” and receptivity
of a wonderful, welcoming, warm bed, home-like furnishings and restful color
schemes. Quite a turnaround in marketing strategy, but, after all, at the end of the day,
we travelers do spend significant time in our guest room, and it should be comfortable,
tasteful, clean and safe—a return to hospitality basics.
All Hospitality operators need to pay attention to what leading hotel companies,
such as Westin, Radisson, Sheraton and Hilton, are doing and demonstrating in the
marketplace. They have the marketing clout to research, in-depth, Guest Satisfaction
and expectation, gather reliable data, and present to the public what their research has
uncovered. For this round, the results show that the consumer wants a Quality Expe-
rience in their room. And, you know what, they are right! One large hotel concern,
Westin, even has beds and appropriate linens for sale on their Website, and these prod-
ucts have become a new cottage industry for them. Talk about Branding!
1
Barbara Worcester writes about the importance of housekeeping to the guest:
Sheets, blankets, pillows, towels and shower curtains aren’t just soft goods . . . If
sheets are soiled, blankets are rough and scratchy, pillows thin and nonsupportive and
shower curtains are moldy and stained, the entire image of the hotel is tarnished, and
the guest most likely will not return.
2
All of this advertising effort encourages a profitable financial bottom line for the hotel.
Now let’s review the organization of the housekeeping department.
Overview of a Housekeeping Department
The housekeeping department is usually organized with an executive housekeeper as its
leader. This person’s job, even in limited-service properties, is usually rather standard. In
full-service hotels, an assistant executive housekeeper with floor supervisors manages the
duties of the room attendants (housekeepers or housemen). Also, in limited service as well
as full-service hotels, additional housekeepers are assigned to clean and maintain public
areas. The responsibility for operating the in-house laundry also falls to the housekeep-
ing department. The staffing of this housekeeping subdepartment includes a supervisor,
shift supervisors, and attendants. Figure 15-1 is an organization chart of a housekeeping
department for a large hotel, while Figure 15-2 is one for a limited-service property. Both
properties operate an on-site laundry facility.
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Shifts vary from hotel to hotel because of guest checkout times. Some executive house-
keepers schedule a few room attendants from 7 A.M. to 3 P.M. and stagger the starting
time of other room attendants depending on the size or nature of the group in the hotel.
Laundry attendants may start earlier in the day depending on banquet and restaurant
linens that must be laundered or laundry that was held from a previous day.
Relationship of the Executive Housekeeper to the General Manager
The executive housekeeper facilitates the work of the general manager by coordinating
operational efforts that affect the customer satisfaction level—which, in turn, has an
enormous impact on the financial position of the hotel. For example, when a group of
businesspersons that represents $100,000 in gross sales to the hotel is pleased because the
I MPORTANCE OF THE HOUSEKEEPI NG DEPARTMENT 413
FI GURE 15- 1 Organization chart for a housekeeping department in a large hotel with in-house laundry.
Attendant Supervisor
Executive Housekeeper
Floor Supervisor Laundry Supervisor
Room Attendant—AM Shift
Room Attendant—PM Shift
Public Area Attendant
Laundry Attendant—AM Shift
Laundry Attendant—PM Shift
FI GURE 15- 2 Organization chart for a housekeeping department in a limited-service hotel.
General Manager
Executive Housekeeper
Room Attendant—AM Shift Laundry Attendant—AM Shift Room Attendant—PM Shift
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executive housekeeper’s staff was able to provide quick turnaround service on room
entry the day they arrived, keep the hallways free of room service trays, respond rapidly
to requests for extra towels and toiletries, and maintain exceptionally clean bathrooms,
then the executive housekeeper’s staff can appreciate how important their role is in pro-
ducing a profit for the hotel.
Throughout this text, the job analysis is used to trace the administrative and supervi-
sory tasks of a member of the management team. The following job analysis portrays a
typical day in the life of an executive housekeeper.
6:30 A.M. Greets laundry staff; reviews banquet laundry; checks voice mail for
call-offs
Checks for room status to clean; assigns rooms to attendants
Calls extra people if needed
6:50 Checks with front office for updated room status report; assign rooms
to attendants
Conducts meeting with room attendants for announcements and five-
minute stretching/exercising routines
Lays out master keys by section and assignment sheets
7:00 Fills guest requests—toothbrushes, hairdryers, towels, cots
Checks emails
Checks deliveries of guest soap, toilet paper, chemicals, coffee, paper,
linen, etc.
Visits with room attendants at workstations
7:45 Works on projects such as employee schedules, employee insurance
9:00 Meets with laundry supervisor to discuss purchase of new dryer
9:30 Attends staff meeting—discusses upcoming events, occupancy,
successes, etc.
9:35 Attends meeting with general manager to discuss new advertising
program and how housekeeping department will be involved
11:15 Meets with assistant executive housekeeper on employee motivation
program
12:00 P.M. Lunches with front office manager
12:45 Visits with room attendants to discuss condition of bedding
1:15 Meets with director of security to update a fire safety training session
2:30 Meets with front office manager to discuss recent comments on guest
checkout
2:45 Prepares a to-do list for next day
3:00 Checks with front office manager on potential house count for
tomorrow and next few days
3:15 Revises room attendant schedule for next day
4:00 Departs for the day
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This job analysis indicates that the job of an executive housekeeper is focused on the
small details of running a department, yet at the same time is concerned with the depart-
ment’s interaction with others, such as the front office and security. The executive house-
keeper realizes that his or her department provides a service to the guest, and this service
relies on good communication efforts with staff and departmental managers.
Management of a Housekeeping Department
The executive housekeeper is a manager first and foremost. This department, like any other
in the hotel, requires the ability to plan, organize, control, direct, and communicate with
people. There are many systems to develop, details to oversee, and people to supervise to
I MPORTANCE OF THE HOUSEKEEPI NG DEPARTMENT 415
H O S P I T A L I T Y P R O F I L E
?
M
arti Cannon is the executive
housekeeper at the Reading
Sheraton Hotel in Reading, PA. She
graduated from the University of Nevada at Las
Vegas in Hotel Administration where some of
favorite courses were in foods, gaming, and hotel
entertainment. Some of the part-time jobs she held
while she was in college included front desk at the
former Sands Hotel, inventory control, mystery
shopper, and catering attendant in various hotels
in Las Vegas hotels.
Her lodging career began with Marriott as the
front desk manager at the 1000 room Los Angles
Marriott. She then traveled to New York and was
promoted to the front office manager position at
the 1800 room Marriott Marquis. She traveled
back to the west coast and went to work for the San
Antonio Marriott as the front office manager. As
Marriott began to expand their brand, Ms. Cannon
expanded her career and used her background to
become the training manager for Courtyard by
Marriott in Dallas, TX. Not wanting to reject a
challenge, she went into another segment of the hos-
pitality business and operated her own private busi-
ness for 10 years—Cannons’ Pub, which was an
Irish pub in New York City. Her next move was
back to the hotel business, but this time into the
role of executive housekeeper at the 250 room
Hotel Hershey in Hershey, PA. She continued build-
ing her career as executive housekeeper at the 750
room Hyatt Regency in San Francisco, CA and the
250 room Inn At Reading, located in Reading, PA.
Ms. Cannon describes her role as executive
housekeeper in relation to the general manager as
one that allows him to concentrate on issues of
operating the hotel. He knows that rooms will be
clean and guests will be satisfied with their rooms.
If her department was not run efficiently, then it
would take away time that the general manager
would have to use on other projects such as mar-
keting the hotel.
She belongs to the International Executive
Housekeepers Association (I.E.H.A.) and feels that
this organization provides useful information for
her through their monthly trade journa—Execu-
tive Housekeeping Today. She also remains cur-
rent by reading Hotel & Motel Management
Magazine, Laundry Today, and she logs on to the
web site www.hotel-online.com each day.
Some of the “big issues” she would like to pass
along to students who should consider the role of
an executive housekeeper on their way to the role
of a general manager include knowing how to pre-
pare budgets, costing payroll, and managing
employees. She elaborated on managing employ-
ees to include motivating employees, working with
them sometimes on the job, and developing loyalty
with them on a one on one basis.
?
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ensure a well-run department. The job analysis indicates a diverse array of staffpersons,
department heads, and hotel procedures that make up a typical day in the life of an execu-
tive housekeeper. In this section, we review topics that support management practices for
executive housekeeping, including:
?
Room assignment/workload
?
Training
?
Room inspection
?
Housekeepers report
?
Communication—English as a second language
?
Inventory control—linens, guest supplies, cleaning supplies, furniture
?
Cleaning control
?
In-house laundry versus outsource laundry
?
Occupational Safety and Health Administration
?
Material Safety Data Sheets
?
Going green
?
Professional associations
Room Assignment/Workload
The number of rooms assigned to a room attendant has particular significance to the hote-
lier and general manager, the executive housekeeper, and the room attendant. The hotelier
and general manager look at this number as a measure of effective use of human resources,
daily income, and guest hospitality. The executive housekeeper views the number as an indi-
cator of how efficient his or her staff are in meeting daily goals and providing guest hospi-
tality. The room attendant views the number of rooms assigned to him or her as “the work
of the day”—something that provides an opportunity for fulfillment of his or her biologi-
cal, safety, and social needs as well as an expression of hospitality to the guest.
Determining the number of rooms a room attendant can clean during a day takes
into consideration the design of the room, room furnishings, fabrics, number of people
occupying the room, nature of the guests in the room, training provided for employees, and
incentives. The usual number is between 15 and 20, depending on the hotel and its policies.
The method of assigning room attendants starts with the executive housekeeper or the
assistant to the executive housekeeper retrieving the number of rooms occupied the pre-
vious night (let’s say 180 rooms) from the PMS housekeeping module. This number is
divided by the number of rooms assigned to each room attendant (let’s say 18). This quo-
416 CHAPTER 15
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F R O N T L I N E R E A L I T I E S
E
mployees in your housekeeping department have indicated they are dissatisfied with their
hourly rate of pay. They tell you that in the hotel located next door, they could earn an
additional 50 cents per hour plus have one less room to clean per day. How would you respond?
q
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tient equals 10; therefore, the schedule for the day is adjusted to reflect the need for 10
room attendants. An executive housekeeper could prepare a chart like that shown in Fig-
ure 15-3 to assist in this daily room assignment. However, room characteristics like those
previously mentioned usually detract from the chart’s usefulness.
Training Training is an essential supervisory practice of the executive housekeeper. Each moment
and movement of the staff is under the watchful eye of the guest for the production of hos-
pitality and the hotel owner for efficiency and safety. Robert J. Martin, in his text Profes-
sional Management of Housekeeping Operations,
3
lists the following areas for skill
training: bed making, vacuuming, dusting, window and mirror cleaning, setup awareness of
the room, bathroom cleaning, daily routine of the worker, caring for and using equipment,
I MPORTANCE OF THE HOUSEKEEPI NG DEPARTMENT 417
FI GURE 15- 3 Room attendant staffing requirement chart.
No. Room
No. Rooms in Hotel Occupancy Percentage Attendants Required
180 100 10.00
180 99 9.90
180 98 9.80
180 97 9.70
180 96 9.60
180 95 9.50
180 94 9.40
180 93 9.30
180 92 9.20
180 91 9.10
180 90 9.00
180 89 8.90
180 88 8.80
180 87 8.70
180 86 8.60
180 85 8.50
180 84 8.40
180 83 8.30
180 82 8.20
180 81 8.10
180 80 8.00
Note: Each room attendant is required to clean 18 rooms per day.
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and industrial safety. These major areas provide focus points where time, labor, safety,
and cost savings can be evaluated. Training should be viewed as an objective of a goal for
delivering hospitality; a plan must be developed to carry out that objective.
How can the executive housekeeper most effectively train his or her staff? The answer
reflects such factors as time available, skilled people in the department to train, resources
for purchasing VCR or DVD equipment and materials, room available in which to hold
training sessions, etc. However, the underlying question is whether or not the hotel owner
or general manager believes training will improve hospitality. If so, then the small finan-
cial investment in training will pay large rewards.
It is important to provide training to both new and experienced employees. Training
gives new employees the opportunity to strengthen skills brought with them, and it helps
them adapt to their new environment. Training helps employees of all levels of experience
take on new responsibilities with confidence, helping them to be more productive.
4
Room If training is properly managed in the housekeeping department, then the task of room
Inspection inspection, a final review of the room to assure that all housekeeping tasks are completed
and room furnishings are in order, can be approached with a positive management strat-
egy. In some hotels, one person is appointed to inspect rooms in each area prior to releas-
ing them to the front desk for occupancy. This person, usually a supervisor, goes around
to the rooms and inspects their cleanliness, orderliness, and operational details. Although
this system may work well in some hotels, executive housekeepers should consider hav-
ing room attendants inspect their own work. This saves time and builds employee confi-
dence. If a motivational system is built into this option, then it will probably work. As for
any good plan, an evaluation mechanism must be in place; examples include guest com-
ment cards and a front desk staff who asks random guests at checkout for feedback on
cleanliness of bathroom, bedding, proper working order of electronics, etc.
Another department that works closely with housekeeping in producing hospitality is
maintenance. The following article describes how one hotel chain combines the talents of
the employees of both these departments to self-inspect guest rooms. An incentive pro-
gram is built in.
At PMHS hotels, managers empower their housekeepers. In addition to cleaning sup-
plies and fresh linen, housekeepers also carry a small yellow “Zero Defects” kit con-
taining fresh light bulbs and batteries for remote controls, and a small screwdriver to
fix a loose toilet seat. Although housekeepers never do major repair work, all are
equipped with the necessary training that allows them to discern what repairs they are
able to do, and what repairs need a work order.
Jim Lowe, Director of Facilities for PMHS, explains the logic behind Zero Defects.
“During the half-hour that a housekeeper spends cleaning a room, he or she uses all
of the appliances, remote control, air conditioner or heater, and the faucet. House-
keepers are in a better position than anyone to evaluate whether or not a room is func-
tional. And if there are any small repairs that need to be made, such as a new battery
in a remote or a new filter for an air conditioner, the housekeeper is in the prime posi-
tion to make them.”
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If there are any problems the housekeeper is not able to fix, he or she fills out a three-
part International Work Order. A maintenance technician takes it from there, treating
the work order as if it were a guest complaint. The Zero Defects program, [PMHS chief
operating officer Greg] Miller explains, anticipates and eliminates guest complaints.
To reward their housekeepers for taking a proactive stance, PMHS offers a bonus
for every room that is inspected and found to have zero defects. The housekeeping
department also receives a team bonus for every problem-free room. For every work
order completed in a timely manner, maintenance technicians receive the same bonus.
One result of the Zero Defects program has been greater unity between the house-
keeping and maintenance departments. “Instead of only communicating with each
other by paperwork, our employees are free to consult one another and work together
to make their jobs easier,” explains Miller. “These departments are indeed the ‘Heart
of the House,’ and the Zero Defects program really makes that clear.”
In addition to bonuses and other incentives, the Zero Defects program includes a yearly
event, the Heart of the House Olympics, in which staff from every hotel, as well as the
corporate office, gets together for games, prizes, food, and fun. These programs make sure
that keeping properties free of defects is profitable for both employees and employers.
5
Housekeeper’s Report
The housekeeper’s report was introduced in chapter 10. This report verifies the number
of rooms sold on a particular night as well as rooms vacant and rooms out of order. This
is an essential communication tool for the night auditor as he or she compiles the finan-
cial data for the current day’s activities.
This report is compiled from the housekeeping status transmissions that are relayed to
the front office throughout the day via the PMS or telephone calls, voice messages, text
messaging, emails, electronic data submission, or, in some hotels, a visit to the front desk
to transfer the current housekeeping status. The executive housekeeper or his or her rep-
resentative assembles data like that displayed in Figure 10-6. This function, provided by
the executive housekeeper, is a safeguard in the accounting process.
Communication
English as a The hospitality industry has always provided individuals with an initial access to their
Second careers. Working as a bellperson, front desk clerk, receptionist, or in the food service
Language (ESL) areas of the hospitality industry allows people to earn funds for furthering their academic
career or supporting a growing family. The hospitality industry also continues to attract
many people for whom English is a second language. Executive housekeepers are chal-
lenged to manage employees with limited English communication skills in areas such as
issuing daily duties, training, and communication. How can these communication bridges
be crossed with ease?
Some of the strategies that an executive housekeeper may develop would be to initially
locate an English-speaking group leader with whom the minority feels comfortable and
I MPORTANCE OF THE HOUSEKEEPI NG DEPARTMENT 419
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communicate with that person to get your strategy developed with others in the minority-
speaking group. Try to develop a rapport and a trust level that communication is impor-
tant for delivery of hospitality to the guest, performing their job, and their safety. Next
there are several English as second language resources on the market that could serve as
a reference for the minority-speaking employees. Also, there are many resources on the
market for foreign languages that an executive housekeeper could refer to in order to
develop training aids for phonetic pronunciation, such as that in Figure 15-4.
Communication Communication between the front office and the housekeeping department is most
Between important in the delivery of hospitality to the guest. After room attendants complete their
Departments tasks, they must relay this information to the PMS. If their work is delayed—and, hence,
the transfer of the information—then so is the delivery of hospitality. Review the following
scenario to see how a small gesture to fulfill a need for a group of guests caused great turmoil.
420 CHAPTER 15
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FI GURE 15- 4 Spanish numerals—English phonetics pronunciation.
Spanish English
Uno Oo no
Dos Dose
Tres Trese
Cuatro Quatro
Cinco Sin co
Seis Sais
Siete See eight a
Ocho Och oo
Nueve New vea
Diez De es
I N T E R N A T I O N A L H I G H L I G H T S
A
regional conference of meeting planners whose clientele is international is scheduled to take
place in your city. The general manager of your hotel, a member of the local visitors bureau,
agrees to host the event and requests that her team develop ways to show their welcome of inter-
national guests into the hotel. Some of the ways the executive housekeeper cites in his presentation are (1)
room attendants are made aware of international guests upon check-in; (2) room attendants can speak at
least two languages; and (3) room attendants inquire if international guests need additional travel acces-
sories to make their visit easier.
u
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Situation 1: Why Can’t Room Attendants in Housekeeping Get Those
Rooms Cleaned More Quickly, or, If That Guest Asks One More Time . . .
It is a busy Tuesday morning at the front desk. The Rosebud Flower Association (350
guests) is checking out of the hotel. The Franklin Actuary Society (250 guests) is begin-
ning to arrive for registration. Yesterday, the president of Rosebud, Jose Rodriguez,
requested a late checkout for all his members because they had to vote on an important
legislative issue. The president asked a desk clerk, Samantha (a new member of the front
office staff), to approve the late checkout. Samantha, unaware of any reason not to grant
this request, OK’d a 2:30 P.M. checkout time.
It is 11:15 A.M., and the front office manager is on the phone with the housekeeper
asking why some of the rooms have not been released. The housekeeper assures the front
office manager that he will investigate the situation immediately and goes to the first,
second, and third floors of the hotel to speak with the floor supervisors. They tell him
that there are DO NOT DISTURB signs on the doors of the majority of the rooms. One
of the guests told the supervisor on the second floor that he had permission to stay in
his room until 2:30 P.M. When the housekeeper relays this information to the front
office manager, a nasty exchange takes place concerning the delivery of professional
hospitality.
It is now 3:15 P.M., and the hotel lobby is jammed with people checking out and check-
ing in. Only about 20 percent of the rooms needed have been released by housekeeping.
The food and beverage manager arrives and suggests to the front office manager that he
announce the availability of the hotel coffee shop and lounge to the waiting guests. The
front office manager feels this is a good idea but that, with such chaos, no one would hear
the announcement. Therefore, he does not make the announcement.
At 7:20 P.M., the last guest is checked in. The front office manager breathes a sigh of
relief and happens to notice a gift box addressed to Samantha, who opens it and reads the
card out loud: “Extra thanks to you for your kind consideration.” The front office man-
ager reminds Samantha that gifts from registered guests are not encouraged. Samantha
replies that this is from a former guest—“You know, that nice Mr. Rodriguez from the
flower association. All he asked for was a late checkout time for his group.”
Analysis The miscommunication in this case was the fault of the front office manager. At some
time during the orientation and training of new employees, the front office manager
must communicate the policies, procedures, and limits of authority. Well-developed oper-
ational policies and procedures and documented training enable communications to
flourish. For example, new employee orientation should include a discussion on the pol-
icy for communicating requests for late checkout to the supervisor on duty. An in-depth
review of the clearance procedure that the supervisor on duty must follow would further
help the new employee understand that the front office does not act alone. A decision
made by one employee affects the work of many people. A typical review of procedures
could include the following:
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1. Consult with the reservations manager to determine the expected time of depar-
ture for the guests or groups of guests currently in the hotel and expected times
of arrival of those who will be registering the next day.
2. Consult with the director of marketing and sales to determine if any special group
requests concerning checkout departure on arrival times have been granted.
3. Consult with the housekeeper to determine the effect of a delayed checkout time
on daily operations of the housekeeping department.
4. If the request for a delayed checkout time will conflict with another group’s
check-in time but the situation warrants approval of the request, ask the food and
beverage manager to set up a special snack table in the lobby for guests unable
to check into their rooms.
When the front office manager takes the time to explain the policies and procedures
of the department, the new employee can think through situations rather than respond-
ing with a knee-jerk reaction. The delivery of service in a hotel requires the employee to
be able to meet the needs of the guests by exercising his or her authority and taking
responsibility for conveying an atmosphere of hospitality.
Inventory Control
Inventory control is a major responsibility of the executive housekeeper. Linens, guest
supplies, cleaning supplies, fixtures, and furniture all require attentive review for timely
replenishment and replacement.
Linen Control Linen control is based on a par system—an established level of inventory that provides
adequately for service. The par system is established by the hotel general manager because
linens are a major expense for the hotel. For example, if the hotel decided to have a par
of four (one set of sheets in the wash, one set of sheets on the bed, and two sets of sheets
on the shelf ready for use) rather than a par of three (one set of sheets in the wash, one
set of sheets on the bed, and one set of sheet on the shelf ready for use), the additional set
of sheets could tie up several thousands of dollars each year in inventory. The same rea-
soning is applied to bath towels, bath mats, hand towels, face cloths, pillowcases, blankets,
bedspreads, and so on.
Guest Supplies Guest supplies, more commonly referred to as guest amenities—personal toiletries or care
items—are another cost to the hotel that requires close attention because they support
guest hospitality but are open to theft. Guests enjoy and appreciate the small bottles of
shampoo, hair conditioner, lotion, soap, mouthwash, shoeshine cloth, mending kit, and
other amenities. However, supplying these goods costs the hotel at least $1.50 per guest
room per room-night. If this figure is extended for a hotel with 250 rooms and an annual
65 percent occupancy, the expense rises to $88,968.75.
(250 × 0.65 × 365 = 59,312 rooms × $1.50 = $88,968.75)
422 CHAPTER 15
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I MPORTANCE OF THE HOUSEKEEPI NG DEPARTMENT 423
FI GURE 15- 5 Inventory requisition for amenities.
The Times Hotel Housekeeping Department Requisition
Attendant Name I. Maid Floor # 2 Cart # 4
Amount ITEM # ITEM SIZE
24 4530 Deod. Soap 1.5 oz.
24 6309 Shampoo 2 oz.
12 6555 Cond. 2 oz.
6 9845 Sewing Kit Small
Issued by John Housekeeper Received by I. Maid
Today’s Date May 1
F R O N T L I N E R E A L I T I E S
O
ne of the housekeepers asks you where she can obtain more information on a certain chem-
ical included in a cleaning solution she uses for the bathroom tubs. Lately she has a rash on
her forearm, and she thinks this cleaner is causing the rash. How would you assist the house-
keeper in locating the information?
q
Keep in mind that this is a minimum, and some hotels spend more. Not only is the hotel
spending that amount of money on a guest service, these types of products are easily
removed from the premises by guests and employees from storage rooms and house-
keeper’s carts parked in hallways during cleaning time. For these reasons, a workable
inventory system must be initiated that ensures ease of use accountability. Figure 15-5
displays a simple inventory request, while Figure 15-6 displays a weekly inventory sheet.
[Author’s note: The definition of amenities has recently begun to include other guest
room equipment such as the items cited in the title of this article dated February 15, 2005:
“Hilton Garden Inn
®
Evolving with New Guest Room Amenities: 26?? Flat Panel High-
def TVs, Ergonomic Desk Chair and New Technology Air Cell Mattresses.”]
6
Cleaning Cleaning supplies for guest rooms include cleaners, disinfectants, and polishers for win-
Supplies dows, tile, bathroom fixtures, office furniture, kitchen equipment, living room furniture,
and so on. These may be purchased in one-gallon to five-gallon or larger containers for
economy, or in aerosol cans. The larger containers of the product are stored in the house-
keeping department area, while the usable sizes for guest room cleaning are stored on the
room attendant’s cart. The product is dispensed into these smaller, more usable contain-
ers for the room attendants. Dispensing must be controlled by the executive housekeeper
with a requisition and inventory sheet, as shown in Figures 15-7 and 15-8.
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Fixtures
Fixtures of all types, makes, and sizes make the guest rooms, lobby, and public spaces the
bright and inviting places that please the guest. However, all of these must be maintained. In
some hotels, this is the responsibility of the housekeeping department. The light bulbs that
go in the many lamps and chandeliers located throughout the hotel as well as the batteries
that operate hand-held devices and smoke alarms (if the property is not electrically wired for
such purposes) must be checked periodically to determine if they need to be replaced.
With respect to light bulbs and batteries, a preventative maintenance program must be
initiated to ensure that guests’ safety is at the forefront. For example, a room attendant
424 CHAPTER 15
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FI GURE 15- 7 Requisition sheet—cleaning supplies.
The Times Hotel Housekeeping Department Requisition
Attendant Name I. Maid Floor # 2 Cart # 4
Amount ITEM # ITEM SIZE
1 290 Window Cleaner Spray 12 oz.
2 387 Tile Cleaner Spray Can 12 oz.
1 6555 Spray Bottle 20 oz. 24 oz.
Issued by J. Housekeeper Received by I. Maid
Today’s Date May 1
FI GURE 15- 6 Weekly inventory—guest supplies.
The Times Hotel Housekeeping Department
Inventory Sheet
Category: _________________________
Beg. Amt.
ITEM # SIZE Inv. + Purch. – End Inv. Used Price/Unit Extension
4530 1.5 oz. 3 cs. 13 15 3 $40.00 $120.00
4535 1.5 oz. 3 cs. 7 6 4 $30.00 $120.00
4540 1.5 oz. 2 cs. 5 5 2 $45.00 $90.00
Counted by: L. Smith Recorded by: D. Manager
Today’s Date May 8
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may be assigned to go around regularly and check the level of energy in batteries in TV
remote controls instead of waiting for a guest to call the front desk and ask for a replace-
ment. These activities can be controlled through a computerized spreadsheet program that
tracks the replacement trail of light bulbs and batteries for a particular unit. The dispens-
ing of light bulbs and batteries requires control mechanisms (requisition sheets and inven-
tory sheets) similar to those used for dispensing guest room and other cleaning supplies.
Furniture Hotel basements are filled with used and worn-out furniture. These retired pieces of fur-
niture represent the many inventory dollars that were spent furnishing a guest room. Each
item in the room—pictures, beds, headboards, desk chairs, tables, arm chairs, desks,
portable closets, televisions, computers, armoires—represents an investment by the hotel
in a business venture. Therefore, this costly pursuit requires control in maintaining them
as new. Each piece of furniture should be cared for according to manufacturer’s recom-
mendation. This may be as simple as “Use a clean, damp cloth,” or “Polish wooden sur-
face with lemon oil polish as needed.” A system should be developed that identifies each
piece of equipment with its date of purchase, cost, its location/relocation, refurbishing,
and any other data the hotel wants to track. For example, if a hotel has a consistent group
of business travelers, it may consider relocating the pictures on the wall periodically.
Also, television sets have a certain life span; this should be tracked and that data used for
developing budgets.
Theft Control of Inventory
Unfortunately, theft by guests and employees in the housekeeping department is com-
monplace. “The American Hotel & Lodging Association estimates that theft in hotel
rooms—from towels to televisions—costs the lodging industry $100 million annually.”
Mark Snyder, senior vice president of brand management for Holiday Inn, says that
I MPORTANCE OF THE HOUSEKEEPI NG DEPARTMENT 425
FI GURE 15- 8 Weekly inventory—cleaning supplies.
The Times Hotel Housekeeping Department
Inventory Sheet
Category: _________________________
Beg. Amt.
ITEM # SIZE Inv. + Purch. – End Inv. Used Price/Unit Extension
387 12 oz. 5 13 15 3 $2.10 $6.10
Counted by: L. Smith Recorded by: D. Manager
Today’s Date May 8
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informal research estimates that 560,000 towels are stolen per year.
7
This should not be
accepted; rather, aggressive campaigns against theft should be developed. Small items
from attendants’ carts are an easy target for removal by guests passing in the hallway.
Usually these carts are overloaded with items exposed for viewing. Perhaps placing
tempting items in plastic see-through boxes would inhibit a passerby from picking them
up.
More important than developing ways to control theft is for the executive house-
keeper to calculate how much theft costs the hotel and then turn the challenge over to the
employees. For example, if a particular hotel is experiencing a theft of $45,000 per year
from towels, linens, toiletries, remote controls, toilet paper, tissue paper, light bulbs, bat-
teries, televisions, etc., the executive housekeeper could develop a committee to address
this challenge. The plan might include incentives so that a percentage of savings experi-
enced because of theft reduction is passed along to employees.
Cleaning Control
The mark of the housekeeping department is cleaning. Most housekeeping departments
have one standardized routine for cleaning rooms and another for deep cleaning—a more
thorough cleaning of furniture and accessories, windows, flooring, and walls. This
process encompasses the guest rooms and the public areas. It requires a plan of commu-
nication with the front office manager to determine when occupancy will be low; with the
maintenance engineer to identify scheduled repair dates; and with the food and beverage
manager to identify down times in which empty banquet rooms can be deep cleaned. The
plan is facilitated with a spreadsheet that outlines the room or area that needs to be deep
cleaned and the specific sections of the room or area that need attention; the date is
entered to maintain a continuous log of that particular deep cleaning activity. See Figure
15-9 for an example of a deep cleaning control log.
426 CHAPTER 15
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EXECUTI VE HOUSEKEEPI NG
FI GURE 15- 9 Deep cleaning log.
The Times Hotel Deep Cleaning Log
Window Mattress
Rug Wall Wall Wash Turning
Room Shampoo Wash Paint Outside Grout Date
101 Jan. 10 Dec. 15 July 1 Dec. 1 April 5
102 Jan. 10 Dec. 15 July 1 Dec. 1 April 7
103 Jan. 13 Dec. 15 July 1 Dec. 5 April 9
104 Jan. 13 Dec. 15 July 1 Dec. 5 April 20
105 Jan. 13 Dec. 15 July 1 Dec. 7 April 23
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In-house Laundry versus Outsourced Laundry
The decision of how to provide clean linens, uniforms, and other fabric items for the hotel
depends on several factors. According to Martin,
8
planning an in-house laundry should
include the following ten concepts: determination of needs; system definition and space
allocation; equipment layouts; equipment selection, specifications, and budgets; detailed
drawing and specification; equipment procurement and shipment coordination; installa-
tion scheduling and supervision; start-up, test, and demonstration; operator training,
maintenance; and after-sale service. These well-thought-out concepts are time-consuming
but assure the executive housekeeper that the in-house laundry will be operated correctly
and efficiently.
Why would a hotel consider outsourcing this function if it’s going to be operated so
well? Review the above list and note the required capital investment in equipment and
replacement of that equipment; the cost of maintaining the equipment; the cost of per-
sonnel to operate the facility; the cost of training personnel; and the initial investment in
linen and uniform inventory. On the plus side, the in-house laundry gives greater control
of where and when the inventory will be laundered, stored, and ready for use.
The outsourcing of laundry eliminates all the planning, with the exception of storage,
for the hotel. There is no initial cash outlay for equipment and inventory and no replace-
ment costs either. Also, preventive and emergency maintenance of equipment is not a con-
cern. However, some hoteliers still don’t adopt the outsourcing opportunity because they
feel they will lose control of their inventories through irregular pickup and deliveries and
through sorting mistakes at the cleaning plant.
9
Occupational Safety and Health Administration
The goal of the Occupational Safety and Health Administration (OSHA), in existence
since 1971, is to send every worker home whole and healthy every day. OSHA carries out
the following tasks, which are important in operating the housekeeping department:
?
Encourages employers and employees to reduce workplace hazards and to imple-
ment new safety and health programs or improve existing programs.
?
Develops mandatory job safety and health standards and enforces them through
worksite inspections, employer assistance, and, sometimes, by imposing citations or
penalties or both.
?
Establishes responsibilities and rights for employers and employees to achieve bet-
ter safety and health conditions.
?
Conducts research, either directly or through grants and contracts, to develop inno-
vative ways of dealing with workplace hazards.
?
Maintains a reporting and recordkeeping system to monitor job-related injuries and
illnesses.
?
Establishes training programs to increase the competence of occupational safety
and health personnel.
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?
Develops, analyzes, evaluates, and approves state occupational safety and health
programs.
?
Provides technical and compliance assistance, training and education, and cooper-
ative programs and partnerships to help employers reduce worker accidents and
injuries.
If you are an employer covered by OSHA, you must:
?
Meet your general duty responsibility to provide a workplace free from recognized
hazards.
?
Keep workers informed about OSHA and safety and health matters with which
they are involved.
?
Comply in a responsible manner with standards, rules, and regulations issued by
OSHA.
?
Be familiar with mandatory OSHA standards.
?
Make copies of standards available to employees for review upon request.
?
Evaluate workplace conditions.
?
Minimize or eliminate potential hazards.
?
Make sure employees have and use safe, properly maintained tools and equipment
(including appropriate personal protective equipment).
?
Warn employees of potential hazards.
?
Establish or update operating procedures and communicate them to employees.
?
Provide medical examinations when required.
?
Provide training required by OSHA standards.
?
Report within eight hours any accident that results in a fatality or the hospitaliza-
tion of three or more employees.
?
Keep OSHA-required records of work-related injuries and illnesses, unless other-
wise specified.
?
Post a copy of the OSHA 200—Log and Summary of Occupational Injuries and Ill-
nesses for the prior year each year during the entire month of February unless other-
wise specified.
?
Post, at a prominent location within the workplace, the OSHA poster (OSHA
2203) informing employees of their rights and responsibilities.
?
Provide employees, former employees, and their representatives access to the OSHA
200 form at a reasonable time and in a reasonable manner.
?
Provide access to employee medical records and exposure records.
?
Cooperate with OSHA compliance officers.
?
Not discriminate against employees who properly exercise their rights under OSHA.
?
Post OSHA citations and abatement verification notices at or near the worksite
involved.
?
Abate cited violations within the prescribed period.
10
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Material Safety Data Sheets
Material Safety Data Sheets (MSDS)—a listing of the chemical contents, relative hazards
to the users, and name and address of the producers of the contents—are a mainstay
in the housekeeping departments of hotels. MSD sheets are available for employees to
read in a readily available area. Each MSD sheet has specific requirements, including the
following.
11
Each Material Safety Data Sheet shall be in English, and shall contain at least the fol-
lowing information:
1. The identity (product name) used on the label, and chemical and common name(s)
of ingredients which have been determined to be health hazards, and which com-
prise 1% or greater of the composition, except carcinogens shall be listed if the
concentrations are 0.1% or greater; and,
2. The chemical and common name(s) of all ingredients which have been deter-
mined to present a physical hazard when present in the mixture;
3. Relevant physical and chemical characteristics of the hazardous chemical (such as
vapor pressure, flash point);
4. Relevant physical hazards, including the potential for fire, explosion, and
reactivity;
5. Relevant health hazards, including signs and symptoms of exposure, and any
medical conditions generally recognized as being aggravated by exposure to the
chemical;
6. The primary route(s) of entry into the body;
7. The OSHA permissible exposure limit and ACGIH Threshold Limit Value. Addi-
tional applicable exposure limits may be listed;
8. Whether the hazardous chemical is listed in the National Toxicology Program
(NTP) Annual Report on Carcinogens (latest edition) or has been found to be a
potential carcinogen in the International Agency for Research on Cancer (IARC)
Monographs (latest editions), or by OSHA;
9. Precautions for safe handling and use, including appropriate hygienic practices,
protective measures during repair and maintenance of contaminated equipment,
and procedures for clean-up of spills and leaks;
10. Appropriate control measures, such as engineering controls, work practices, or
personal protective equipment;
11. Emergency and first aid procedures;
12. The date of preparation of the Material Safety Data Sheet or the last change to it;
and,
13. The name, address and telephone number of the chemical manufacturer, importer,
employer or other responsible party preparing or distributing the Material Safety
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Data Sheet, who can provide additional information on the hazardous chemical
and appropriate emergency procedures, if necessary.
The history of the MSDS is as follows:
12
On November 25, 1983, OSHA published the Hazard Communication Standard as 29
CFR Part 1910, adding §1910.1200. This initial standard applied only to Standard
Industrial Classification (SIC) Codes 20 through 39. The requirement that manufac-
turers and distributors provide MSDSs to their customers became effective on Novem-
ber 25, 1985. The standard does not require a particular format for the MSDS but
does specify what information must be included. Effective September 23, 1987, the
requirements of the standard were extended to include “. . . all employers with
employees exposed to hazardous chemicals in their workplaces.”
In 1986, the U.S. Environmental Protection Agency (EPA) published the “Emer-
gency Planning and Community Right-to-Know Act of 1986,” and in 1988 “Toxic
Chemical Release Reporting: Community Right-to-Know.” The use and distribution
of MSDSs is an important part of these regulations. The “Toxic Chemical Release
Reporting” regulation requires that MSDSs for chemicals requiring reporting by these
regulations contain specific language notifying users that these chemicals are subject to
these regulations. These and other EPA regulations have been promulgated under
Title III C Emergency Planning and Community Right-to-Know Act of the Superfund
Amendments and Reauthorization Act of 1986 (EPCRA).
Going Green
Businesspersons should reflect carefully on the responsibility to take care of environ-
mental resources. This is not only a responsibility that organizations owe to future gen-
erations but also another opportunity to make profits for the organization. The money
saved in laundry cleaning products, energy to operate washers, dryers, and other pieces
of equipment in the laundry, water to launder bedding and towels, and labor in person-
hours can add up.
Many hotels place a printed card on the pillow of an unmade bed asking guests to indi-
cate their preference for bed making as an option. This can save many thousands of gal-
lons of water, energy, and cleaning products per day if guests are inclined to participate
with this program.
Ishmael Mensah reports, “Studies conducted by the International Hotels Environment
Initiative (IHEI) and Accor revealed that 90% of hotel guests preferred to stay in a hotel
that cared for the environment.” He says, “Cost savings seem to be the prime motivation
for the increasing adoption of environmental management practices [energy and water]
in hotels.”
13
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Americans with Disability Compliance
One part of the Americans with Disabilities Act (ADA) of 1990—adapting accommoda-
tions for people with physical challenges—should alert executive housekeepers to prepare
their staff for compliance with this law and delivery of hospitality. Curtis
14
has written a
thoughtful article for executive housekeepers on this topic. Highlights of the article include:
The foremost rule must always be to treat every guest with respect and dignity. Speak
directly to the guest, not to a companion. Just relax. People who are blind also say,
“Its nice to see you.”
Try hands-on training. Use a wheelchair to navigate through the hotel—or have one
employee try to help guide another while one is blindfolded. If a guest has a guide dog,
do not pet or play with the animal. It is performing a job and should not be distracted.
Training in the housekeeping department involves teaching housekeepers to leave
guests’ personal belongings precisely where they were found once the guestroom has
been cleaned. The hand-held showerhead must be left hanging, furniture must not be
repositioned, and hallways must be kept clear to allow movement.
If guests request a guide to get to their room, an employee should offer an arm or
shoulder and provide verbal commentary while proceeding through the hotel. For
example: “The elevator is 20 paces to your right. Your guest room is three doors past
the elevator on the left. The key card slot is located two inches above the door han-
dle.” Specific quantifiable directions are crucial to the visually impaired.
Staff should explain where emergency exits are located relative to the guest’s room
and note the numbers to dial on the telephone to reach the front desk and other serv-
ices. Be clear in terms of directions. Don’t say “over there.”
Professional Associations
The American Hotel & Lodging Association’s (AH&LA) Educational Institute (EI) offers
a Certified Hospitality Housekeeping Executive (CHHE) program for executive house-
keepers. AH&LA is headquarted in Washington, D.C., for its 10,000 property members,
and is prominent in supporting hoteliers with their operations, education, communi-
cations, and lobby efforts. The website for the AH&LA is http://www.ahla.com/
index.asp, and the website for the EI is http://www.ei-ahla.org/.
The International Executive Housekeepers Association (IEHA), located in Westerville,
Ohio, provides an opportunity for executive housekeepers to earn status in their profes-
sion as Certified Executive Housekeeper (CEH) and Registered Executive Housekeeper
(REH). Its membership in 2004 was 3,500 within 16 districts and 95 chapters. The IEHA
offers its membership Executive Housekeeping Today as their monthly trade publication
and newsletter. Their website address is http://www.ieha.org/.
CHAPTER RECAP 431
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Solution To Opening Dilemma
This is a common question. The industry norm of 18 rooms per housekeeper per day can
be maintained if proper training is implemented and maintained, adequate supervision
and motivation is provided, and adequate tools and equipment are available. If any of
these are missing on a daily basis, the overall picture will reflect the lapse.
Chapter Recap
This chapter focused on the executive housekeeper as the manager of many opportunities
to provide hospitality to guests. The first section discussed how the efforts of the house-
keeping department supplement the marketing efforts of the hotel. The organization of
the housekeeping department for full-service and limited-service properties was described.
The relationship of the executive housekeeper to the general manager was delineated with
a job analysis that traced his or her typical day. The final section of this chapter focused
on the management of a housekeeping department. Topics included the significance of
room assignment and workload of the staff to the hotelier, executive housekeeper, and
employee. The method of assigning room attendants was also discussed, as was the
importance of staff training. The key element of room inspection and how to organize
this practice was presented. The housekeeper’s report was presented as a crucial link in
the hotel’s communication chain. Communication in the housekeeping department with
regard to the important aspects of English as a second language and communication
between departments was offered. Inventory control of linens, guest supplies, cleaning
supplies, fixtures, and furniture, was presented with a focus on meeting goals of prof-
itability and guest service. Theft control of inventory was presented together with the sug-
gestion that employees work to resolve the problem. The master plan for cleaning control
or deep cleaning was described. A plan for developing an in-house laundry and a discus-
sion on the pros and cons of an in-house laundry versus outsourcing was included. Occu-
pational Safety and Health Administration and Material Safety Data Sheets were
presented with historical notes and a discussion of related administrative responsibilities.
Going green was introduced not only as a popular consumer trend but also as an oppor-
tunity to save money for the organization. The section on compliance with the Americans
with Disability Act encouraged future executive hoteliers to prepare their staff with prac-
tical tips on delivering guest hospitality to people with physical challenges. Certification
information offered through professional associations such as the American Hotel &
Lodging Association’s Educational Institute and the International Executive Housekeep-
ers Association was presented.
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End-of-Chapter Questions
1. Mr. Jones is a corporate executive traveling on an expense account. He finds that
his room has no extra towels, old socks are left under a chair, and the television
remote batteries are dead. How does this reflect on the importance of the house-
keeping department in the marketing plan of the hotel?
2. If you are employed in a full-service hotel, talk with the executive director of the
housekeeping department and ask him or her to outline the organization of the
department.
3. If you are employed in a limited-service hotel, talk with the executive director of
the housekeeping department and ask him or her to outline the organization of
the department.
4. What does the job analysis of an executive housekeeper tell you about his or her job?
5. How does the assignment of rooms differ to (1) hotelier and general manager; (2)
executive housekeeper; and (3) room attendant?
6. If you had to develop a list of skills in which to train a room attendant, what
would you include?
7. What is your opinion of having room attendants inspect their own rooms? What
built-in safeguards would you include to make the system work if you support it?
8. Why is the housekeeper’s report so important to the night audit?
9. Do you think offering English as a second language courses to housekeeping
staff will help them in performing their job?
10. Explain the par system for linen control. Do you think raising the par by one or
two items will be a problem for the hotel?
11. How should guest amenities be controlled?
12. How should cleaning supplies be controlled?
13. What would you include on a computerized spreadsheet program to control the
maintenance of the fixtures in a hotel?
14. How do you feel about including employees in developing a plan to decrease
theft in a hotel? What incentives would you include to make this plan work?
15. What does the term deep cleaning indicate, and how do executive housekeepers
organize it?
END- OF- CHAPTER QUESTI ONS 433
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C A S E S T U D Y 1 5 0 1
Margaret Chu, general manager of The Times Hotel,
asked Thomas Brown, executive housekeeper, to
review the most recent display copy for the new bill-
board. Tom looked at the copy and said, “Margaret,
what is it that you want me to say? I see our hotel, a
bellman opening the door. And there is the cap-
tion—Our House Is Your House. And that’s all.”
Margaret responded, “Tom, we put this billboard
together to not only get people in the door of The
Times Hotel, but to keep them here. Our marketing
department tells me that it is the cleanliness of the
hotel that will bring them back. Guests want a room
that is exceptionally clean—no excuses. Tom, can
you guarantee this? This billboard campaign is going
to cost us over $25,000. That’s a lot of money I am
allocating in the budget this quarter. Our owners are
depending on us to bring these corporate guests
back for the second, third, and fourth visits!” Tom
left the meeting with Margaret and decided that he
had to develop a plan to make his part of the adver-
tising campaign work. He wants to be sure his staff
of room attendants benefit from a plan for training
and motivation. If you were the executive house-
keeper, how would you proceed with such a plan?
C A S E S T U D Y 1 5 0 2
Thomas Brown, executive housekeeper of The
Times Hotel, has been reviewing the last five quar-
terly reports on linen costs from the supplier, and he
feels this cost is getting out of control. In addition to
that, the supplier was unreliable in over the busy
convention season. Mr. Brown scheduled a meeting
with Simon International Laundry Equipment in
two days to discuss the possibility of an in-house
laundry. What should he research prior to the
meeting?
16. Discuss what to include in planning an in-house laundry.
17. Discuss the pros and cons of an in-house versus an outsourced laundry.
18. What are the main features of the Occupational Safety and Health Administra-
tion law of April 28, 1971?
19. What are Material Safety Data Sheets? If you are employed in a hotel, ask your
executive housekeeper for a copy of one to bring to class.
20. How can going green be a win-win situation for a hotel’s marketing and house-
keeping departments?
21. What are some ways to comply with the Americans with Disability Act?
22. View the websites of the American Hotel & Lodging Association’s Educational
Institute and the International Executive Housekeepers Association to determine
the requirements for their certification of executive housekeepers. What is your
opinion of these requirements?
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Notes
1. John R. Hendrie, “Major Hotel Operators Have Rediscovered Hospitality Fun-
damentals by Revisiting the Guest Room,” Hotel Online, July 6, 2004. http://
www.hotel-online.com/News/PR2004_3rd/Jul04_RevisitGuestRooms.html
2. Barbara A. Worcester, November 1998, “Sheets, Blankets, Pillows, Towels and
Shower Curtains Are the Ambassador to the Hotel,” Hotel & Motel Manage-
ment, http://www.hotel-online.com/SpecialReports1998/Nov98_Linens.html.
3. Robert J. Martin, Professional Management of Housekeeping Operations, 3rd
edition (New York: John Wiley & Sons, 1998), 142.
4. Michael Hampton, “Optimizing New Employee Performance and Productivity
or Getting New Hires Up to Speed Quickly,” December 2003, http://www.hotel-
online.com/News/PR2003_4th/Dec03_NewHires.html.
5. Jessica Wilbanks, “PM Hospitality Strategies Zero Defects Program Increases
Unity Between the Housekeeping and Maintenance Departments,” August 3,
2001, http://www.hotel-online.com/News/PR2001_3rd/Aug01_ZeroDefects.html.
6. Agnes Sibal, “Hilton Garden Inn
®
Evolving with New Guest Room Amenities: 26??
Flat Panel High-def TVs, Ergonomic Desk Chair and New Technology Air Cell
Mattresses,” Hilton Garden Inn Brand Communications, February, 15, 2005,
http://www.hotel-online.com/News/PR2005_1st/Feb05_HiltonGardenInnEvolves
.html.
7. Cheryl Johnston, “Holiday Inn Wants Confessions, Declares Amnesty Day for
Towel Snatchers,” Baltimore Sun, Knight Ridder/Tribune Business News, August,
27, 2003, http://www.hotel-online.com/News/PR2003_3rd/Aug03_HITowels.html.
8. “Baring Laundry-Valet Profile,” Baring Industries, 655 NW 122 Street, Miami,
Florida, 33268, undated brochure. Quoted in Martin, Professional Management
of Housekeeping Operations, pp. 308–309.
9. D. E. Leger, “The Practice of Hoteliers Outsourcing Their Laundry Is Growing,”
The Miami Herald, Knight Ridder/Tribune Business News, March 29, 2004,
http://www.hotel-online.com/News/PR2004_1st/Mar04_LaundryOutsource.html.
10. U.S. Department of Labor, Occupational Safety and Health Administration, All
About OSHA, OSHA 2056, 2000 (Rev. ed.), 5, 6, 14.
11. Richard Gullickson, “Reference Data Sheet on Material Safety Data Sheets,”
May 1996, Meridian Engineering & Technology, Inc. http://www.msdssearch.com/
msdshistory.htm.
12. Ibid.
13. Ishmael Mensah, “Environmental Management Practices in US Hotels,” May
2004, Cecil B. Day School of Hospitality Administration, Robinson College of
Business, MSC 4A0310, Georgia State University, Atlanta, GA 30303 http://
www.hotel-online.com/News/PR2004_2nd/May04_EnvironmentalPractices.html.
14. Deborah T. Curtis, “ADA Compliant, But Ready?” May/June 2003, The Rooms
Chronicle, P.O. Box 2036, Niagara University, NY 14109-2036, 8.
NOTES 435
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amenities
room attendant
deep cleaning
Material Safety Data Sheets (MSDS)
par system
Key Words
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access time: the amount of time required for a processor to retrieve information from the hard drive;
recorded in milliseconds
accounts payable: financial obligations the hotel owes to private and government-related agencies and ven-
dors
accounts receivable: amounts of money owed to the hotel by guests
aging of accounts: indication of the stage of the payment cycle—such as 10 days old, 30 days overdue,
60 days overdue
all-suites: a level of service provided by a hotel for a guest who will desire an at-home atmosphere
amenities: personal toiletry items such as shampoo, toothpaste, mouthwash, and electrical equipment
American Hotel & Lodging Association: a professional association of hotel owners, managers, and
related occupations
American plan: a room rate that includes meals, usually breakfast and the evening meal, as well as room
rental in the room rate
Americans with Disabilities Act (ADA): a U.S. law enacted in 1990 that protects people with disabilities
from being discriminated against when seeking accommodations and employment
assets: items that have monetary value
assistant general manager: a person in the hotel who executes plans developed by the corporate own-
ers, general manager, and other members of the management staff
athletics director: the person responsible for supervising physical exercise facilities for guests
atrium concept: a design in which guest rooms overlook the lobby from the first floor to the roof
average daily rate (ADR): a measure of the hotel staff’s ability to sell available room rates; the method
to compute the ADR is:
room revenue
———––––––————
number of rooms sold
Glossary
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back office: the accounting office of a hotel
back office accounts payable: amounts of money prepaid on behalf of the guest for future consumption
of a good or service (sometimes referred to as back office cash accounts)
balance sheet: an official financial listing of assets, liabilities, and owner’s equity
bank cards: credit cards issued by banks, examples of which include Visa, MasterCard, and JCB
banquet manager: a person responsible for fulfilling the details of service for a banquet or special event
banquet sheet: a listing of the details of an event at which food and beverages are served
bell captain: the supervisor of the bell staff
bell staff: people who lift and tote baggage, familiarize guests with their new surroundings, run errands,
deliver supplies, provide guests with information on in-house marketing efforts and local attractions,
and act as the hospitality link between the lodging establishment and the guest
bill-to-account: an extension of credit to a guest by an individual hotel, that requires the guest or the
guest’s employer to establish a line of credit and to adhere to a regular payment schedule
biometrics: an individual electronic measurement of uniqueness of a human being such as voice, hand-
print, or facial characteristics
blackout: total loss of electricity
blocking on the horizon: reserving guest rooms in the distant future
blocking procedure: process of reserving a room on a specific day
bottom up: a sales method that involves presenting the least expensive rate first
brownouts: partial loss of electricity
bus association network: an organization of bus tour owners and operators who offer transportation
and travel information to groups
business affiliations: chain or independent ownership of hotels
business services and communications center: guest services that include copying, computers, fax, etc.
call accounting: a computerized system that allows for automatic tracking and posting of outgoing guest
room calls
cancellation code: a sequential series of alphanumeric combinations that provide the guest with a refer-
ence for a cancellation of a guaranteed reservation
cash bank: a specific amount of paper money and coins issued to a cashier to be used for making change
cashier: a person who processes guest checkouts and legal tender and makes change for guests
cashier’s report: a daily cash control report that lists cashier activity of cash and credit cards and
machine totals by cashier shift
Certified Hospitality Housekeeping Executive (CHHE): a certification for executive housekeepers offered
through the Educational Institute of the American Hotel & Lodging Association
chain: a group of hotels that follow standard operating procedures such as marketing, reservations,
quality of service, food and beverage operations, housekeeping, and accounting
438 GLOSSARY
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chain affiliations: hotels that purchase operational and marketing services from a corporation
channel management: objective review of the most profitable marketing approach for guest rooms—
central reservation system, GDS, third-party reservation system, toll-free phone reservation, travel agent,
etc.
city ledger accounts: a collection of accounts receivable of nonregistered guests who use the services of
the hotel
collective bargaining unit: a labor union
commercial cards: credit cards issued by corporations, an example of which is Diners Club
commercial hotels: hotels that provide short-term accommodations for traveling guests
commercial rates: room rates for businesspeople who represent a company but do not necessarily have
bargaining power because of their infrequent or sporadic pattern of travel
communications hierarchy: a listing of the order in which management personnel may be called on to
take charge in an emergency situation
company-owned property: a hotel that is owned and operated by a chain organization
complimentary rate (comp): a rate in which there is no charge to the guest
computer supplies: paper, forms, ribbons, ink cartridges, and floppy disks needed to operate the system
concierge: a person who provides an endless array of information on entertainment, sports, amuse-
ments, transportation, tours, church services, and babysitting in a particular city or town
conference call: a conversation in which three or more persons are linked by telephone
confirmed reservations: prospective guests who have a reservation for accommodations that is honored
until a specified time
continental breakfast: juice, fruit, sweet roll, and/or cereal
controller: the internal accountant for the hotel
convention guests: guests who attend a large convention and receive a special room rate
corporate client: a hotel guest who represents a business or is a guest of that business and provides the
hotel with an opportunity to establish a regular flow of business during sales periods that would nor-
mally be flat
corporate guests: frequent guests who are employed by a company and receive a special room rate
corporate rates: room rates offered to corporate clients staying in the hotel
CPS (characters per second): measure of the speed with which individual characters are printed
credit: a decrease in an asset or an increase in a liability, or an amount of money the hotel owes the guest
credit balance: amounts of money a hotel owes guests in future services
credit card imprinter: makes an imprint of the credit card the guest will use as the method of payment
credit card validator: a computer terminal linked to a credit card data bank that holds information con-
cerning the customer’s current balance and security status
crisis management: maintaining control of an emergency situation
GLOSSARY 439
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cross-training: training employees for performing multiple tasks and jobs
cumulative total feature: an electronic feature of a PMS that adds all posted room rate amounts previ-
ously entered into one grand total
current guests: guests who are registered in the hotel
cursor: a flashing point on a monitor that indicates where data can be entered on a computer screen
customer relationship management: a system that allows hotel managers to integrate technology to sup-
port customer service techniques that provide top-notch customer service
cycle of service: the progression of a guest’s request for products and services through a hotel’s
departments
daily announcement board: an inside listing of the daily activities of the hotel (time, group, and room
assignment)
daily blocking: assigning guests to their particular rooms on a daily basis
daily flash report: a PMS listing of departmental totals by day, period to date, and year to date, which
helps the manager determine the financial success of the previous day and current status in achieving
other financial goals
daily function sheet: a listing of the planned events in the hotel
daily sales report: a financial activity report produced by a department in a hotel that reflects daily sales
activities with accompanying cash register tapes or point-of-sale audit tapes
database interfaces: the sharing of information among computers
data sorts: report options in a PMS that indicate groupings of information
debit: an increase in an asset or a decrease in a liability
debit balance: an amount of money the guest owes the hotel
debit cards: embossed plastic cards with a magnetic strip on the reverse side that authorize direct trans-
fer of funds from a customer’s bank account to the commercial organization’s bank account for pur-
chase of goods and services
deep cleaning: a thorough cleaning on furniture and accessories, windows, flooring, and walls
demographic data: size, density, distribution, and vital statistics of a population broken down into, for
example, age, sex, marital status, and occupation categories
departmental accounts: income- and expense-generating areas of the hotel, such as restaurants, gift
shop, and banquets
desk clerk: the person who verifies guest reservations, registers guests, assigns rooms, distributes keys,
communicates with the housekeeping staff, answers telephones, gives information about and directions
to local attractions, accepts cash and gives change, and acts as liaison between the lodging establishment
and the guest as well as the community
direct-mail letters: letters sent directly to individuals in a targeted market group in a marketing effort
director of marketing and sales: the person who analyzes available markets, suggests products and serv-
ices to meet the needs of those markets, and sells these products and services at a profit
440 GLOSSARY
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director of security: the person who works with department directors to develop procedures that help
ensure employee honesty and guest safety
discount rate: a percentage of the total sale charged by the credit card agency to the commercial enter-
prise for the convenience of accepting credit cards
discretionary income: the money remaining from wages after paying for necessities such as food, cloth-
ing, and shelter
disk drive: a place in the computer where data is stored or read; CD drive, hard drive, or 3
1
?
2-inch floppy
drive
distance learning: learning that takes place via satellite broadcasts, PictureTel, or online computer inter-
action
documentation: printed or on-screen (monitor) instructions for operating hardware or software that
accompany a specific PMS
double occupancy percentage: a measure of a hotel’s staff ability to attract more than one guest to a
room; the method to compute double occupancy percentage is:
number of guests – number of rooms sold
—————————————————— × 100
number of rooms sold
ecotourists: tourists who plan vacations to understand the culture and environment of a particular area
electronic key: a plastic key with electronic codes embedded on a magnetic strip
electronic key system: a system composed of battery-powered or, less frequently, hardwired locks; a
host computer and terminals; a keypuncher; and special entry cards that are used as keys
elevator operator: a person who manually operates the mechanical controls of the elevator
email: a communication system that uses an electronic network to send messages via computers
employee handbook: publication that provides general guidelines concerning employee conduct
empowerment: management’s act of delegating certain authority and responsibility to frontline employees
ergonomics: the study of how people relate psychologically and physiologically to machines
euro: the accepted currency for some European states: Belgium, Germany, Spain, France, Ireland, Italy,
Luxembourg, the Netherlands, Austria, Portugal, Finland, and Greece
European plan: a rate that quotes room charges only
executive housekeeper: the person responsible for the upkeep of the guest rooms and public areas of the
lodging property as well as control of guest room inventory items
express checkout: means by which the guest uses computer technology in a guest room or a computer
in the hotel lobby to check out
extended stay: a level of service that attracts long-term guests by providing light food service and ameni-
ties that include fully equipped kitchenette, spacious bedrooms, and living areas for relaxation and work
FAM (familiarization) tours: complimentary visits sponsored by the lodging property that host repre-
sentatives of travel organizations, bus associations, social and nonprofit organizations, and local cor-
porate traffic managers
GLOSSARY 441
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family rates: room rates offered to encourage visits by families with children
fax machine: equipment for facsimile reproduction via telephone lines
fire safety display terminal: a device that ensures a constant surveillance of sprinkler systems and smoke
detectors
float: the delay in payment from an account after using a credit card or personal check
floor inspector: a person who supervises the housekeeping function on a floor of a hotel
floor limit: a dollar amount set by the credit card agency that allows for a maximum amount of guest charges
flow analysis processes: the preparation of a schematic drawing of the operations included in a partic-
ular function
flowchart: an analysis of the delivery of a particular product or service
folio: a guest’s record of charges and payments
folio well: a device that holds the individual guest folios and city ledger folios
food and beverage director: the person responsible for the efficient operation of the kitchen, dining
rooms, banquet service, room service, and lounge
foot patrol: walking the halls, corridors, and outside property of a hotel to detect breaches of guest and
employee safety
forecasting: projecting room sales for a specific period
franchisee: a hotel owner who has access to a national reservation system and receives the benefits of
the corporation’s management expertise, financial backing, national advertising, and group purchasing
frontline employees: employees who deliver service to guests as front desk clerks, cashiers, switchboard
operators, bellhops, concierge, and housekeeping employees
front office: the communication, accounting, and service center of the hotel
front office manager: the person responsible for leading the front office staff in delivering hospitality
full house: 100 percent hotel occupancy; a hotel that has all its guest rooms occupied
full service: a level of service provided by a hotel with a wide range of conveniences for the guest
function sheet: listing of the daily events in a hotel, such as meetings, etc.
Global Distribution Systems (GDS): distributors of hotel rooms to corporations such as travel agents
that buy rooms in large volume
going green: the responsibility to take care of the environment
general ledger: a collection of accounts that the controller uses to organize the financial activities of the hotel
general manager: the person in charge of directing and leading the hotel staff in meeting its financial,
environmental, and community responsibilities
gigabyte: 1,024 megabytes of formatted capacity
group planner: the person responsible for securing guest room accommodations, food and beverage pro-
grams, transportation reservations, meeting facilities, registration procedures, tours, and information on
sightseeing, while maintaining a budget for group travelers
442 GLOSSARY
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group rates: room rates offered to large groups of people visiting the hotel for a common reason
group travelers: persons who are traveling on business or for pleasure in an organized fashion
guaranteed reservations: prospective guests who have made a contract with the hotel for a guest room
guest folio: a form imprinted with the hotel’s logo and a control number and allowing space for room
number, guest identification, date in and date out, and room rate in the upper left-hand corner; it
allows for guest charges to be imprinted with a PMS and is filed in room-number sequence
guest histories: details concerning the guests’ visits, such as ZIP code, frequency of visits, corporate affil-
iation, or special needs
guest supplies: commonly referred to as guest amenities or personal toiletries; care items such as small
bottles of shampoo, hair conditioner, lotion, soap, mouthwash, shoeshine cloth, mending kit, etc.
guest test: evaluation procedure in which an outside person is hired by the hotel to experience hotel
services and report the findings to management
half-day rate: a room rate based on length of guest stay in a room
hard key: a metal device used to trip tumblers in a mechanical lock
hard-key system: a security device consisting of the traditional hard key that fits into a keyhole in a lock;
preset tumblers inside the lock are turned by the designated key
hardware: computer equipment used to process software, such as central processing units, keyboards,
monitors, and printers
HSA International: a commercial hospitality educational organization based in Pembroke Pines, FL.
HSA International offers 24/7 distance learning sales person skills in reservations via the Internet for
front office and marketing and sales office personnel.
HITEC: an acronym for Hospitality Industry Technology Exposition and Conference, which features all
the latest computer software for the hospitality industry
hospitality: the generous and cordial provision of services to a guest
hotel broker: a person who sells hotel room prize packages to corporations, sweepstakes promoters,
game shows, and other sponsors
hotel representative: a member of the marketing and sales department of the hotel who actively seeks
out group activities planners
house count: the number of persons registered in a hotel on a specific night
housekeeper’s room report: a daily report that lists the occupancy status of each room according to the
housekeeping department
housekeeping room status: terminology that indicates availability of a guest room such as available,
clean, or ready (room is ready to be occupied), occupied (guest or guests are already occupying a room),
dirty or stayover (guest will not be checking out of a room on the current day), on change (guest has
checked out of the room, but the housekeeping staff has not released the room for occupancy), and out
of order (the room is not available for occupancy because of a mechanical malfunction)
house limit: a dollar amount set by the hotel that allows for a maximum amount of guest charges
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Hubbart formula: a method used to compute room rates that considers such factors as operating
expenses, desired return on investment, and income from various departments in the hotel
human resources manager: the person responsible for administering federal, state, and local employ-
ment laws as well as advertising, screening, interviewing, selecting, orienting, training, and evaluating
employees
incentive program: an organized effort by management to understand employees’ motivational concerns
and develop opportunities for employees to achieve both their goals and the goals of the hotel
independent hotel: a hotel that is not associated with a franchise
in-house laundry: a hotel-operated department that launders linens, uniforms, bedspreads, etc.
inkjet: a printer that produces small dots printed with liquid ink on paper
inquiries/reports: a feature of the PMS that enables management to maintain a current view of opera-
tions and finances
in-room guest checkout: a feature of the property management system that allows the guest to use a
guest room television to check out of a hotel
in-service education: courses that update a professional’s educational background for use in current
practice
intranet: a computer network for in-house users to share timely operational information to conduct
business
interdepartmental communication: communication between departments
interfacing: the ability of computers to communicate electronically and share data
interhotel property referrals: a system in which one member-property recommends another member-
property to a guest
International Executive Housekeepers Association (IEHA): a professional organization for executive
housekeepers located in Westerville, Ohio; http://www.ieha.org/; it provides two opportunities for cer-
tifications—Certified Executive Housekeeper (CEH) and Registered Executive Housekeeper (REH)
Internet: a network of computer systems that share information over high-speed electronic connections
intersell cards: credit cards issued by a hotel corporation, similar to private label cards
intradepartmental communication: communication inside a department
I/O ports (input/output devices): keyboards, monitors, modems, mouse, joystick, light pen, printers, and
track balls
job analysis: a detailed listing of the tasks performed in a job, which provides the basis for a sound job
description
job description: a listing of required duties to be performed by an employee in a particular job
keyboard: a standard or Dvorak-type typewriter-style keypad that allows the operator to enter or
retrieve data
key clerk: a person who issues keys to registered guests and other hotel personnel and sorts incoming
mail for registered guests and management staff
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key drawer: a drawer located underneath the counter of the front desk that holds room keys in slots in
numerical order
key fob: a decorative and descriptive plastic or metal tag attached to a hard key
keypad: a numeric collection of typewriter keys and function keys that allows the operator to enter num-
bers or perform math functions in a computer
laser: a printer that produces photo images on paper
late charges: guest charges that might not be included on the guest folio because of a delay in posting
by other departments
letter-quality: a better type of dot-matrix print
leisure travelers: people who travel alone or with others on their own for visits to points of interest, to
relatives, or for other personal reasons
liabilities: financial or other contractual obligations or debts
limited service: a level of service provided by a hotel with guest room accommodations and limited food
service and meeting space
litigious society: an environment in which consumers sue providers of products and services for not
delivering them according to expected operating standards
main menu: on-screen list of all the available individual programs (modules) included in the software
system
maintenance manager: a staff member in a limited-service property who maintains the heating and air-
conditioning plant, produces guest room keys, assists housekeeping attendants as required, and assists
with guest safety and security
management contract property: a hotel operated by a consulting company that provides operational and
marketing expertise and a professional staff
manager’s report: a listing of occupancy statistics from the previous day, such as occupancy percentage,
yield percentage, average daily rate, RevPAR, and number of guests
market segments: identifiable groups of customers with similar needs for products and services
marquee: the curbside message board, which includes the logo of the hotel and space for a message
mass marketing: advertising products and services through mass communications such as television,
radio, and the Internet
master credit card account: an accounts receivable that tracks bank, commercial, private label, and inter-
sell credit cards such as Visa, MasterCard, and JCB
Material Safety Data Sheets (MSDS): a listing of the chemical contents, relative hazards to the users, and
name and address of the producers of the contents
megabyte: 1,024 kilobytes of formatted capacity
megahertz(mHz): one million cycles per second; indicates computer speed
message book: a loose-leaf binder in which the front desk staff on various shifts can record important
messages
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military and educational rates: room rates established for military personnel and educators
modem: computer hardware that allows for transfer of data through telephone lines, data expressed in
baud—information transfer—rates
modified American plan: a room rate that offers one meal with the price of a room rental
moments of truth: every time the hotel guest comes in contact with some aspect of the hotel, he or she
judges its hospitality
money wire: an electronic message that authorizes money from one person to be issued to another person
monitor: a television screen with color or monochrome capacity to view input and output data, control
column width and line length of display, adjust height of character display, and allow visual control
moonlighter: a person who holds a full-time job at one organization and a part-time job at another
organization
motivation: investigating employee needs and desires and developing a framework for meeting them
Murphy bed: a bed that is hinged at the base of the headboard and swings up into the wall for storage,
an example being the SICO brand wallbed
needs analysis: assessment of the flow of information and services of a specific property to determine if
proposed new equipment can improve the flow
night audit: the control process whereby the financial activity of guests’ accounts is maintained and bal-
anced on a daily basis
night auditor: the person who balances the daily financial transactions of guests who have used hotel
services, acts as a desk clerk for the night shift, and communicates with the controller
no-show factor: percentage of guests with confirmed or guaranteed reservations who do not show up
Occupational Safety and Health Administration: a U.S. government agency that provides oversight on
employee worksite safety
occupancy management formula: calculation that considers confirmed reservations, guaranteed reser-
vations, no-show factors of these two types of reservations, predicted stayovers, predicted understays,
and predicted walk-ins to determine the number of additional room reservations needed to achieve 100
percent occupancy
occupancy percentage: the number of rooms sold divided by the number of rooms available
online: operational and connected to the main computer system
on-the-job training: a training process in which the employee observes and practices a task while per-
forming his or her job
operational effectiveness: the ability of a manager to control costs and meet profit goals
operational reports: operational data on critical financial aspects of hotel operations
optimal occupancy: achieving 100 percent occupancy with room sales that yield the highest room rate
optimal room rate: a room rate that approaches the rack rate
organization charts: schematic drawings that list management positions in an organization
orientation checklist: a summary of all items that must be covered during orientation
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orientation process: the introduction of new hires to the organization and work environment, in order
to provide background information about the property
outsourcing: provision of service to the hotel—for example, a central reservation system—by an agency
outside of the hotel
outstanding balance report: a listing of guests’ folio balances
overbooking: accepting reservations for more rooms than are available by forecasting the number of no-
show reservations, stayovers, understays, and walk-ins, with the goal of attaining 100 percent occupancy
package rate: room rates that include goods and services in addition to rental of a room
paid in advance (PIA): guests who paid cash at check-in
paid-outs: amounts of monies paid out of the cashier’s drawer on behalf of a guest or an employee of
the hotel
paid-out slips: numbered forms that authorize cash disbursement from the front desk clerk’s bank for
products on behalf of a guest or an employee of the hotel
par system: a level of inventory established that provides adequately for service
parking garage manager: the person responsible for supervising garage attendants and maintaining
security of guests and cars in the parking garage
payback period: the period of time required for the hotel to recoup purchase price, installation charges,
financing fees, and so forth through cost savings and increased guest satisfaction; assists in deciding
whether to install computers
percent occupancy: the number of rooms sold divided by the number of rooms available multiplied by 100
percent yield: the number of rooms sold at average daily rate versus number of rooms available at rack
rate multiplied by 100
physical plant engineer: the person who oversees a team of electricians; plumbers; heating, ventilating,
and air-conditioning contractors; and general repair people to provide behind-the-scenes services to the
guests and employees of the lodging property
PictureTel: the use of telephone lines to send and receive video and audio impressions
plant: an outside person hired by a hotel to experience hotel services and report the findings to
management
point of sale: an outlet in the hotel that generates income, such as a restaurant, gift shop, spa, or garage
point-of-sale front office: a front office whose staff promotes other profit centers of the hotel
point-of-sale terminals: computerized cash registers that interface with a property management system
policy and procedure manual: publication that provides an outline of how the specific duties of each job
are to be performed
postal code: See ZIP or postal code
posting: the process of debiting and crediting charges and payments to a guest folio
potential gross income: the amount of sales a hotel might obtain at a given level of occupancy, average
daily rate, and anticipated yield
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ppm (pages per minute): printing speed capability
predicted house count: an estimate of the number of guests expected to register based on previous occu-
pancy activities
printer: computer hardware in dot-matrix, ink-jet, or laser models that produces hard copies of output
data in letter quality or draft style in various print fonts, with printing speed being expressed in CPS
(characters per second), number of characters per line, and pages per minute and paper insertion being
tractor-fed, single-sheet, or continuous-form
prior approved credit: use of a credit card to establish creditworthiness
private label cards: credit cards issued by a retail organization, such as a department store or gasoline
company
processor speed: how fast a CPU (central processing unit) makes calculations per second; expressed in
MHz (the abbreviation for megahertz)
profit-and-loss statement: a listing of revenues and expenses for a certain time period
property management system (PMS): a generic term for applications of computer hardware and soft-
ware used to manage a hotel by networking reservation and registration databases, point-of-sale sys-
tems, accounting systems, and other office software
psychographic data: emotional and motivational forces that affect a service or product for potential
markets
rack rate: the highest room rate category offered by a hotel
real estate investment trust (REIT): a form of financing an investment in real estate through a mutual fund
recreation director: the person in charge of developing and organization recreational activities for guests
referral member: a hotel owner or developer who has access to a national reservation system
referral property: a hotel operating as an independent that wishes to be associated with a certain chain;
uses national reservation system
referral reservation service: a service offered by a management company of a chain of hotels to fran-
chisee members
registration card: a form on which the guest indicates name, home or billing address, home or billing
phone number, vehicle information, date of departure, and method of payment
reservation code: a sequential series of alphanumeric combinations that provide the guest with a refer-
ence for a guaranteed reservation
reservation referral system: a worldwide organization that processes requests for room reservations at
a particular member-hotel
reservations manager: the person who takes and confirms incoming requests for rooms, noting special
requests for service; provides guest with requested information; maintains an accurate room inventory;
and communicates with marketing and sales
reservation status: terminology used to indicate the availability of a guest room to be rented on a par-
ticular night, i.e., open (room is available for renting), confirmed (room has been reserved until 4:00 P.M.
448 GLOSSARY
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or 6:00 P.M.), guaranteed (room has been reserved until guest arrives), and repair (room is not available
for guest rental)
residential hotels: hotels that provide long-term accommodations for guests
revenue account: part of owner’s equity
revenue management: a process of planning to achieve maximum room rates and most profitable guests
(guests who will spend money at the hotel’s food and beverage outlets, gift shops, etc.), that encourages
front office managers, general managers, and marketing and sales directors to target sales periods and
develop sales programs that will maximize profit for the hotel
revenue manager: a management position that provides oversight to room inventory and room rates
through various marketing channels
revenue per available room (RevPAR): the amount of dollars each hotel room produces for the overall
financial success of the hotel, determined by dividing room revenues received for a specific day by the
number of rooms available in the hotel for that day
room revenue
———––––––—————— or hotel occupancy × average daily rate
number of available rooms
revenue potential: the room revenue that could be received if all the rooms were sold at the rack rate
revenue realized: the actual amount of room revenue earned (number of rooms sold _ actual rate)
role-playing: acting out a role before actually being required to do the job
room attendants (housekeeping attendants): employees who clean and maintain guest rooms and pub-
lic areas
room blocking: reserving rooms for guests who are holding reservations
room inspection: a final review of the room to assure that all housekeeping tasks have been completed
and room furnishings are in order
room key control system: an administrative procedure that authorizes certain personnel and registered
guests to have access to keys
room revenues: the amount of room sales received
room sales figure: the total of posted daily guest room charges
room sales projections: a weekly report prepared and distributed by the front office manager that indi-
cates the number of departures, arrivals, walk-ins, stayovers, and no-shows
rooms forecast: the projection of room sales for a specific period
room status: information on availability of entry to a guest room—reservation (open, confirmed, guar-
anteed, or repair) or housekeeping (ready, on change, or out of order)
rule-of-thumb method for determining room rates: guideline stipulating that the room rate should be $2
for every $1,000 of construction costs
safety committee: a group of frontline employees and supervisors who discuss safety issues concerning
guests and employees
sales associate: a person who books the guest’s requirements for banquets and other special events
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sales indicators: number of guests and revenue generated
security escort service: having a uniformed security guard escort a hotel employee to a financial
institution
self-check-in process: a procedure that requires the guest to insert a credit card with a magnetic stripe
containing personal and financial data into a self-check-in terminal and answer a few simple questions
concerning the guest stay
service management program: a management program that highlights a company’s focus on meeting
customers’ needs and allows a hotel to achieve its financial goals
service strategy statement: a formal recognition by management that the hotel will strive to deliver the
products and services desired by the guest in a professional manner
shift leader: the person responsible for directing the efforts of a particular work shift
single-sheet: a type of printer that uses single-sheet paper
skill demonstration: demonstration of specific tasks required to complete a job
sleeper: a room that is thought to be occupied but is in fact vacant
smart card: an electronic device with a computer chip that allows a guest or an employee access to a des-
ignated area, tracking, and debit-card capabilities for the hotel guest
software: computer-designed applications that process data such as guest information and aid in finan-
cial transactions and report generation
statement of cash flows: a projection of income from income-generating areas of the hotel
stayovers: currently registered guests who wish to extend their stay beyond the time for which they
made reservations
surcharge rates: telephone rates for adding service charges for out-of-state long-distance telephone service
tax cumulative total feature: an electronic feature of a PMS that adds all posted room tax amounts pre-
viously entered into one grand total
telephone initiation and reception agreements: contracts between senders and receivers of PictureTel
concerning specifications of the telephone call and who pays for the call
telephone operator: the person who handles incoming and outgoing calls, locates registered guests and
management staff, deals with emergency communication, and assists the desk clerk and cashier when
necessary
tickler files: files used to prompt notice that certain events will be occurring
top-down: a sales method that involves presenting the most expensive rate first
total quality management (TQM): a management technique that encourages managers to look critically
at processes used to produce products and services
total restaurant sales figure: total of all sales incurred at restaurants or food outlets in the hotel
touch screen: a type of computer monitor screen that allows the operator to input data by touch
traffic managers: persons who direct hotel guests to available elevators in the lobby
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training tickler file: a database that keeps track of training sessions and alerts trainers to important
upcoming dates
transfer slip: a form used to transfer an amount of money from one account to another while creating
a paper trail
travel directories: organized listings of hotel reservation access methods and hotel geographic and spe-
cific accommodations information
traveler’s checks: prepaid checks that have been issued by a bank or other financial organization
trial balance: a first run on a set of debits to determine their accuracy against a corresponding set of credits
true integration: the sharing of a reservation database by a hotel’s central reservation system and prop-
erty management system
understays: guests who arrive on time but decide to leave before their predicted date of departure
upsell: to encourage a customer to consider buying a higher-priced product or service than originally
anticipated
visual alarm systems: flashing lights that indicate a fire or other emergency in a hotel room
walking a guest with a reservation: offering accommodations at another hotel to a guest who has a reser-
vation when your hotel is overbooked
walk-in guests: guests who request a room rental without having made a reservation
working supervisor: a person who participates in the actual work performed while supervising
yield: the percentage of income that could be secured if 100 percent of available rooms are sold at their
full rack rate
yield percentage: the effectiveness of a hotel at selling its rooms at the highest rate available to the most
profitable guest
ZIP or postal code: an individual local postal designation assigned by a country
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A
AAA (American Automobile
Association), 247
Access time, 106
Accounts. See also specific
accounts, e.g.: Departmental
accounts
aging of, 279
transfer of, 251
Accounting department, PMS
software options for, 105
Accounts payable, 119
back office, 233
as responsibility of controller,
53
Accounts receivable, 119, 226
amount transferred to, 279
analysis of, 279
Analysis of Accounts
Receivable, 287
bank deposit transferred to, 279
and cash, 279, 287
and credit cards, 279, 286
in night audit report, 274
reconciling, 266, 268
as responsibility of controller,
53
today’s outstanding, 286
total outstanding, 286
transferring ledgers to, 231–233
yesterday’s outstanding, 286
Accounts receivable balance,
278–279
ADA, see Americans with
Disabilities Act
Adams, Bruce, 391
Adjustments, posting charges for,
230
Administrative paperwork, for
needs analysis, 102
ADR, see Average daily rate
Aging of accounts, 279
AH&LA, see American Hotel
and Lodging Association
Alarm systems, visual, 398
Albrecht, Karl, 309, 310, 316,
322–324, 327, 328
Allin, Nancy J., 322
All-suites hotels, 12, 13, 19
Amenities, 77. See also Guest
supplies
inventory control of, 422
of room, 194
security design for, 383
American Automobile
Association (AAA), 247
American Hotel and Lodging
Association (AH&LA):
certification programs offered
by, 28
and compliments vs.
complaints, study, 315
Educational Institute, 431
American Hotel and Motel
Association, see American
Hotel and Lodging
Association
American plan, 201
American Resorts Group, 4
Americans with Disabilities Act
(ADA), 355–357
compliance with, by executive
housekeepers, 430–431
and front desk applicants,
355–357
Analysis Cash Report, 287
Analysis of Accounts Receivable,
287
Analysis of Bank Deposit, 287
Announcement boards, daily, 79
Assets, 223–224
Assistant general managers:
in limited-service hotels, 48–49
responsibilities of, 48–49
Astoria Hotel, 3
Astor, John Jacob IV, 3
Astor, William Waldorf, 3
Athletics director, 42
Atrium concept, 5
AT&T Language Line, 218
At Your Service, 256
Audit, night, see under Night audit
Auto clubs, 247
Automated check-in kiosks, 217
Availability, of rooms, 195
Average daily rate (ADR), 16
calculating, 39
formulas for, 168
as sales indicator, 16–17
Average room rate, see Average
daily rate
B
Back office:
PMS applications for, 119–120
transfer of guest accounts to,
251
Back office accounts payable, 233
Back office cash accounts, 233
Backup power sources, for PMS,
110
Balance accounts receivables, 287
Balance reports, outstanding, 119
Balance sheets, 53, 119
Index
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Balance, trial, 268–269
Bank cards, 190
Bank deposits:
Analysis of Bank Deposit, 287
formulas for balancing, 275
and night audit, 273, 287
transferred to accounts
receivable, 279
Banquet department:
interdepartmental
communications with, 79–80
promotional opportunities for
services of, 366
sales, in night audit report,
276, 285
Banquet manager, 76
Banquet sheets, 122
Bar and lounge sales, 276, 285
Bass Hotels & Resorts, 131
Bass Pro Shops Outdoor World,
400
Beatty, Brent, 139
Belden, Tom, 9–10
Bell captains, 56
Bell staff, 56
Best Western Merry Manor, 19
Beverage director, see Food and
beverage director
Bill-to-account, 56, 243–244
Bill-to-account credit, 192
Biometrics, 391–392
Blackouts, 110
Blocking, 60, 192–193
daily, 151
procedures for, 147, 151
Blocking on the horizon, 151
Block-out periods, 175
Book-A-Rez, 148
Boston Marriott Copley Place,
403
Bottom up, 203
Brands, hotel, 21–23. See also
specific brands, e.g.:
Marriott
Bretches, Bill, 400
“Bridges . . . from school to
work” program, 356
Brookshire Suites, 364
Brownouts, 110
Brown, P. Anthony, 8
Budgeting, for point-of-sale front
office, 374
Building entrances, security
design for, 383
Burns, John, 176
Bus association network, 138
Business affiliations, 20–24
brands, 21–23
chain affiliations, 20
company-owned properties, 21
independent properties, 23–24
management contract
properties, 21
referral property, 21
Business services and
communications center, 44
Business travel, 26–27
Business Travel Coalition, 10
C
Cadotte, Ernest, 315
Call accounting, 56
PMS applications for, 117
PMS software options for,
105
Call accounting module, 117
Canada Awards for Excellence
Trophy, 329
Cancellations, 150
Cancellation codes, 150
Cancellation numbers, see
Cancellation codes
Cannon, Marti, 415
Career development, in hotel
industry, 27–31. See also
Hospitality profile(s)
distance learning, 28
education preparation, 27–29
in-service education, 28
ports of entry, 30
professional memberships, 29
questions to ask for, 31
research growth areas for, 30,
31
work experience, 29
Carlson Hospitality Worldwide,
131, 132
Carlson Hospitality Worldwide
Reservation Services, 132
Carlson Hotels, 132
Cash, 244–245
Analysis Cash Report, 287
applied to accounts receivable,
279
from vending machines, 277
Cash bank, 345
Cash flows, statement of, see
Statement of cash flows
Cash sales:
in night audit report, 278–279
total, 286
Cashier, 56
Cashier’s report, 274, 280, 287
Cash received accounts
receivable, 287
Catering, 171. See also Banquet
department
CCTV (closed-circuit television),
383
CEH (Certified Executive
Housekeeper), 431
Central reservation systems (CRS),
3–4, 148
Certified Executive Housekeeper
(CEH), 431
Certified Hospitality
Housekeeping Executive
(CHHE) program, 431
Certified Hotel Administrator
(CHA), 28
Certified Rooms Division
Executive (CRDE), 28
CHA (Certified Hotel
Administrator), 28
Chain, 20
Chain affiliations, 20
Channel management, 175–177
Channel management software,
176
Characters per second (CPS), 106
Charges, see specific types, e.g.:
Guest charges
Charge sales, 278–279
Charts, organization, 39–45
Checks, 245–246
Check-in:
by automated kiosks, 217
remote, Web-based, 217
self-check-in, 114, 216–218.
See also Registration
454 I NDEX
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Checklist, orientation, 343
Checkouts:
in-room, 118, 241–242
PMS applications for, 117–118
procedure for, 239–241
with property management
system, 346
CHHE (Certified Hospitality
Housekeeping Executive)
program, 431
Chicago Hilton, 2
Chin, Jimmy, 389
Choice Hotels International:
brand hotels of, 22–23
reservation system in, 131
City ledger accounts, 64,
225–227, 266
formulas for balancing, 274
transferring to accounts
receivable, 231–233
Cleaning control, 426
Cleaning supplies, 423–424
Clients, see Guests
Closed-circuit television (CCTV),
383
Coaching, for sales, 202–203
Colbert, Judy, 218
Collective bargaining unit, 51
Commercial bank cards, 190
Commercial cards, 190
Commercial hotels, market
orientation of, 16
Commercial rates, 201
Commercial videos, for training,
351
Communications. See also
Interdepartmental
communications
emergency communications,
400–403
Guest Communication
Manager, 132
in housekeeping department,
419–422
with international guests, 50
intradepartmental, 74
role of TQM in, 87
Communications center, and
business services, 44
Communications hierarchy, 400
Comp (complimentary rate), 201
Company-owned properties, 21
Complimentary rate (comp), 201
Computer training programs, for
PMS, 109–110
Concierge:
promotional opportunities for,
366
responsibilities of, 57
Conferences:
guest histories information on,
253
market for, see MICE market
Conference call, 26
Confirmation numbers, see
Reservation codes
Confirmed reservations, 144, 148
Constructive criticism, as
employee trait, 339
Continental breakfast, 44
Contracted security, in-house
security departments vs.,
388–390
Controllers:
interdepartmental
communication with, 80
responsibilities of, 53
role in lodging properties
organization, 38
Convention guests, 39
Conventions, guest histories
information on, 253
Corporate guests:
defined, 39
reservations by, 137
Corporate rates, 201
Corprew, Kevin, 96
Correspondence courses, for
career preparation, 28
Coughlin, Paula, 390
Courtyard by Marriott, 4
CPS (characters per second), 106
CPTED (Crime Prevention
Through Environmental
Design), 383
CRDE (Certified Rooms Division
Executive), 28
Credit(s), 118. See also Guest
credit
Credit balance, 266
Credit cards, 190, 191, 243
applied to accounts receivable,
279
imprinter, 191
master credit card account, 266
validator, 191
Credit card imprinter, 191
Credit card received accounts
receivable, 286
Credit card validator, 191
Crime Prevention Through
Environmental Design
(CPTED), 383
Crisis management, 387
CRM, see Customer relationship
management
Cross-training, 353
CRS (central reservation
systems), 148
Cultures, international, 311
Cumulative total feature, 275
Currency exchange, international,
247–248
Current guests, reservations by,
140
Cursors, ergonomics issues of,
108
Curtis, 430
Curtis-C, 132
Customers, see Guests
CustomerKARE (Customer
Knowledge and Relationship
Enabling) system, 132
Customer relationship
management (CRM),
330–331
Cycle of service, 320
D
Daily announcement boards, 79
Daily blocking, 151
Daily flash report, 282–284
Daily function sheets, 64
Daily sales report, 275
Dallas/Ft. Worth International
Airport, 400
Database interfaces, for
reservation systems, 158
Data sorts, 215
Davidson, James T., 399
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Debit, 118
Debit balances, 118
Debit cards, 246
DeCaire, Michael, 78
Decor, of room, 194
Deep cleaning, 426
Delta Hotels, 329
Deming, W. Edwards, 87, 319.
See also Total quality
management (TQM)
Demographic data, 24
Departmental accounts, 261
Departmental financial activities,
264–267
Department managers. See also
specific positions, e.g.:
Executive housekeepers
in limited-service hotels, 48–49
responsibilities of, 46–55
Department supervisors, and
safety, 406
Departures, guest, see Guest
departures
Direct billing, see Bill-to-account
Direct mail letters, 122
Director of marketing and sales,
see Marketing and sales
directors
Director of security, 382
and interdepartmental
communications, 385
job analysis of, 385–387
responsibilities of, 53–54
and Security Directors’
Network, 403
Discounts, total, 286
Discount rate, 190
Discretionary income, trends in,
25–26
Disk drive, 106
Distance learning:
for hotel industry career
development, 28
for training, 351
Documentation, 346
Double occupancy percentage,
167
Dry cleaning and laundry
charges, 277
E
Earnings before interest, taxes,
depreciation, and
amortization (EBITDA), 329
EBITDA (earnings before interest,
taxes, depreciation, and
amortization), 329
Ecotourists, 27
Educational Institute (EI), 431
Educational market, see SMERF
market
Educational preparation, for hotel
industry, 27–29
Educational rates, 201
EI (Educational Institute), 431
Electronic folio access, 217
Electronic keys, 205
Electronic key preparation device,
213
Electronic key system, 391
Electronic mail (E-mail), 123,
124
Elevator operators, 57
Ellis, Bernard, 177
E-mail, see Electronic mail
Embassy Suites Outdoor World,
400
Emergencies:
interdepartmental
communications for, 400
preparedness, 400
training for, 403
Emergency communications,
400–403
plan, 401–403
responsibility of the front office
for, 401–403
Emergency communications
manager, 401
Emergency Planning and
Community Right to Know
Act, 430
Emergency procedure drills, 399.
See also Fire drills
Employees. See also specific
positions, e.g.: Front office
managers
and American with Disabilities
Act, 355–357
and employee empowerment,
324–326
motivation, 323
with physical disabilities, 356
promotional skills of, 338
role in service management
program, 323–326
screening for hospitality traits,
324
sensitization to needs of
international guests, 355
tasks performed by, 345–346
Employee empowerment, 325,
326. See also Empowerment
Employee handbook, 341
Employee safety committee, 404
Employee safety programs,
404–406
Employee traits:
for hospitality, 337–339
promotional skills of, 338
for sales, 338, 339
Employers, OSHA guidelines for,
427–428
Empowerment, 241, 324–326
adopting into front line
management, 325
employee, 325, 326
frontline, 324
training for, 326, 354
English as a Second Language
(ESL), 419
Environmental issues, 430
Environmental Protection Agency
(EPA), 429–430
Equipment:
overview in orientation
program, 342–343
positioning of, 98
in room, 194
Ergonomics, 108
Escort services, 388
eSecure, 390–391
ESL (English as a Second
Language), 419
Euro, 247–248
European plan, 201
Evaluation, of point-of-sale front
office, 374–375
456 I NDEX
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Event market, see MICE market
Exchange rates, currency,
247–248
Executive housekeepers. See also
Housekeepers; Room
attendants
and ADA compliance, 430–431
Certified Executive
Housekeeper, 431
Certified Hospitality
Housekeeping Executive
program, 431
and hospitality, 430–431
interdepartmental
communications of, 414
International Executive
Housekeepers Association,
431
and inventory control,
422–424
job analysis of, 414
Registered Executive
Housekeeper, 431
relationship to general
manager, 413–415
responsibilities of, 50, 51
role in full-service hotel/resort,
42
support management practices
for, 415
training duties of, 416–417
Executive Housekeeping Today,
431
Expedia, 134
Express checkout, 56
Extended-stay hotels, 14, 15,
19–20
Exterior, of property, 383
F
Fairfield Inn, 4, 136
Familiarization (FAM) tours,
253–254
Family/household size, trends in,
26
Family rates, 201
FAM tours, guest history
information on, 253–254
Fax machines, 194
Feedback:
evaluation and, 374–375
and revenue management,
177
Female business travel, 26–27
Financial activities, departmental,
264–267
Fingerprints, and security, 392
Fire action communication
procedure, 398–399
Fire code general requirements
for, 393
Fire display terminal, 121
Fire drills, 399
Fire safety, 393–399
employee training in, 396
fire action communication
procedure, 398–399
fire code general requirements
for, 393
guest expectations of, 393
guest instruction in, 396–398
plan, 394–396
procedures, 397
Fire safety display terminal, 121
First impressions (guest):
of front desk, 98
during registration, 185–186
Fixtures maintenance, 424–425
Flash report, 282–284
food and beverage charges in,
284
occupancy totals in, 284
room sales in, 284
Float, 246
Floor inspector, 50
Floor limit, 117–118
Flow analysis, guest, see Guest
flow analysis
Flow analysis processes, 101
Flowchart, 319
Folios, 78, 224–225
displaying, 231
electronic access to, 217
posting charges in, 227
retrieving/reviewing, 241
Folio well, 226
Food and beverage department:
charges, in flash report, 284
interdepartmental
communication with, 77–79
and PMS applications, 105,
120, 121
promotional areas within, 366
sales, and revenue
management, 178
Food and beverage director:
promotions, example, 375–377
responsibilities of, 49
Food and beverage module, 120,
121
Foot patrol, 388
Forecasting, rooms, 141, 174
Founders, of hotel industry, 2–5
Four Seasons Hotels and Resorts,
312, 316
Franchisee, 135
Francis, Connie, 384
Fraternal market, see SMERF
market
Frequent Traveler/Guest Reward
program, 136
Front desk:
guest first impressions of, 98
physical structure/positioning
of, 97–99
PMS software options for, 105
Front desk clerks, 80, 370
Frontline employees:
and empowerment, 325
and point-of-sale front office
development, 378
and service management
program, 323
Frontline empowerment,
324–325
Front office, 1
organization of, 55–68
point-of-sale, 364–369
promotional areas within, 366
sales-oriented, 365
scheduling for, 65–68
Front office managers, 58–65
job description for, 62
and Maslow’s theory, 370
responsibilities of, 52, 53
role in lodging properties
organization, 38
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Front office managers (cont.)
supervisory responsibilities of,
125
Full house, 56, 142
Full service, 19
Full-service hotel/resort,
organizational charts for,
39–42
Function sheets, 122
Furniture, maintaining, 425
Future reservations, 203–204, 249
G
GDS (Global Distribution
Systems), for reservations,
132–133
Gellad, Charles, 14
General ledgers, 53
General managers:
in limited-service hotels, 48–49
relationship to executive
housekeepers, 413–415
responsibilities of, 46–48
role in lodging properties
organization, 38
GenEx, 139
Gibraltar locks, 390–391
Gift shop:
promotional opportunities for,
367
sales, in night audit report,
277, 285
Gigabyte, 106
Global Distribution Systems
(GDS), for reservations,
132–133
Goforth, Greg, 19
Going green, 430
Grand National Hotel, 3
Griffith, Barry, 15
Gross income, potential, 16
Group planner, 138
Group rates, 201
Group travelers, 138–139
Guaranteed reservations, 144, 149
Guests. See also specific types,
e.g.: Corporate guests
assisting with method of
payments, 246–248
with budget constraints, 195
expectations of fire safety, 393
instruction in fire safety,
396–398
requests during registration,
193–195
unable to pay bill, 246–248
with VIP status, 155
Guest accounts, transfer of, 251
Guest amenities, see Amenities
Guest charges:
assembling during night audit,
264
forms used to process,
224–225
posting, 227–231
Guest checkout, see Checkouts
Guest Communication Manager,
132
Guest credit:
and bill-to-account credit, 192
with credit cards, 190, 191
and float, 246
guest, see Guest credit
prior approved, 56
processing, 191
and proof of identification,
191–192
registration process for,
189–192
Guest cycle, 320–322
Guest data:
capturing, 186–187
removing from PMS, 250
Guest departures, 250. See also
Checkouts
Guest flow:
analyzing, 101–102
and employee work, 98
and empowerment process, 325
Guest flow analysis:
for needs analysis, 101–102
in service management
program, 320–322
Guest histories, 75, 122,
253–256
conventions/conferences, 253
FAM tours, 253–254
origin of reservation, 254
room type requested, 255
use for marketing, 253
visit frequency, 254–255
zip/postal code, 253
Guest impressions, see
Impressions, guest
Guest ledgers, 225–226
formulas for balancing, 274
transferring to accounts
receivable, 231–233
Guest Payments, see Payments,
guest
Guest registration, see
Registration
Guest registration procedure, 187
Guest Reward program, 136
Guest rooms, see Rooms, guest
Guest supplies, 422–423
Guest test, 374–375
H
Haley, Mark, 330
Half-day rate, 201
Halpine, Kelly, 322
Hampton Inn, 4–6
Hands-on-training, for ADA
compliance, 430
Hanson, Bjorn, 18
Hard key, 205
Hard-key systems, 391–393
Hardware, PMS, 103
installation plans for, 109
selection for, 104, 106–108
HARMONY, 132
HARMONY database manager,
132
Heale, James, 81
Health facilities, promotional
opportunities for, 367
Heart of the House, 418–419
Henderson, Ernest, 4
Hendrie, John R., 412
Herzberg, Frederick, 368, 370, 371
Heymann, Mark, 312–313
Hilton, 136, 200
Hilton, Conrad N., 3
Hilton HHonors, 200
Hilton Hotels Corporation, 2–3,
329
458 I NDEX
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brand hotels of, 23
efficiency in registration,
216–217
Hilton Pride Program, 329
Hilton’s Homewood Suites, 14
Houston Hilton, 78
New York Hilton and Towers,
218
and Tailhook case, 390
Hilton International Company, 2
Hilton Pride Program, 329
Hilton’s Homewood Suites, 14
Historical developments, of hotel
industry, 5–10
between 1987–1988, 8
after September 11, 2001, 9–10
atrium concept, 5
limited-service hotels, 5–6
marketing, 6
and real estate investment
trusts, 8–9
technological advances, 6, 7
total quality management, 8
HITEC (Hospitality Industry
Technology Exposition and
Conference), 104
Holiday Inn, 3–4, 15, 425
Holiday Inn Corporation, 4
Holiday Inn Express Hotel &
Suites, 15
Holidex central reservation
system, 3
Holidex Plus, 131
Holm, Neil, 330
Hoover, Herbert, 3
Hospitality, 308–311
and customer relationship
management, 330–331
employee traits promoting,
337–339
of executive housekeepers,
430–431
financial commitment required
for, 317
international issues, 355
management role in, 311–313
during registration process,
187–188
and safety, 381
screening employees for traits
enhancing, 324
and security department, 381
service management program
for, 319–328
service strategy statement for,
313–317
services using Internet, 106
Hospitality Industry Technology
Exposition and Conference
(HITEC), 104
Hospitality management:
Internet use to research, 30
training in, 326–327
Hospitality profile(s):
of Marti Cannon, 415
of Kevin Corprew, 96
of Michael DeCaire, 78
of Charles Gellad, 14
of Greg Goforth, 19
of Barry Griffith, 15
of James Heale, 14
of Lee Johnson, 364
of John Juliano, 387, 403
of Eric O. Long, 54
of Joseph Longo, 13
of Patrick Mene, 318
Hospitality Sales & Marketing
Association International
(HSMAI), 135
Hospitality Technology
Consulting, 176
Hospitality traits, in employees:
constructive criticism, 339
patience, 339
personality, 338
Hotel Administrator, Certified, 28
Hotel and Travel Index, 139
Hotel broker, 139
Hotel industry, 11–24
business affiliations of, 20–24
founders of, 2–5
historical developments of, 5–10
levels of service in, 18–20
lodging facility types, 12–15
market orientation, 15, 16
sales indicators, 16–18
Hotel lobbies, security design for,
383
Hotel representative, 139
Hotel Sales and Marketing
Association International, 28
Hotels.com, 135
House counts, 77, 78, 142
Household size, trends in, 26
Housekeepers. See also Executive
housekeepers; Room
attendants
role in smaller lodging
properties, 45
and room inspections,
418–419
Housekeeper’s room report, 77,
419
Housekeeping attendant, see
Room attendants
Housekeeping department,
411–413
and cleaning control, 426
and fixtures maintenance,
424–425
interdepartmental
communication with, 76–77
management of, 415
PMS applications for, 120
PMS software options for, 105
professional associations for,
431
and theft, 425–426
training for ADA compliance
in, 430–431
Housekeeping module, 105, 120
Housekeeping room status, 76
Housekeeping status, 196
House limit, 118, 244
Housemen, see Housekeepers
Houston Hilton, 78
Howard Johnson Company, 4
HSA International, 351
HSMAI (Hospitality Sales &
Marketing Association
International), 135
Huckestein, Dieter H., 329
Human resources management
department:
interdepartmental
communication with, 83
PMS software options for, 105
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Human resources manager:
in limited-service properties, 51
responsibilities of, 51
role in full-service hotel/resort,
42
Humbart formula, 199–200
Hyatt Hotels & Resorts, 5, 12,
22, 218
Hyatt Regency, 5
Hygiene factors, for motivation,
370
hypen, 330
I
IEHA (International Executive
Housekeepers Association),
431
IHG, see InterContinental Hotels
Group
Impressions, guest:
first, 98, 185–186
last, 256
and moments of truth, 322
Incentive market, see MICE
market
Incentive programs, 312, 367. See
also Motivation
for point-of-sale plans, 367
for self-inspection of rooms,
418
Income, potential gross, 16
Independent hotels, 23–24
Independent properties, 23–24
In-house laundry:
defined, 39
outsourced laundry vs.,
426–427
In-house security departments,
contracted security vs.,
388–390
Ink-jet printer, 106
Input/output devices (I/O ports),
106
Inquiries/reports module, 119
In-room guest checkout, 118,
241–242
In-service education, for hotel
service career development,
28
InterContinental Hotels Group
(IHG), 12
brand hotels of, 22
and hospitality service, 309
reservation system in, 131–132
Interdepartmental
communications, 74–87
with banquet department, 79–80
with controllers, 80
in delivering hospitality,
328–330
for emergencies, 400
emphasis in orientation
program, 343
with executive housekeepers,
414
with food and beverage
department, 77–79
with housekeeping department,
76–77, 419
with human resources
management department, 83
with maintenance/engineering
department, 81–82
with marketing and sales
departments, 75–76
needs analysis focus on, 102
in relaying guest departures, 250
with security department, 82,
385
situational analyses of, 83–86
Interfacing, 95
Interhotel property referrals, 135
International Continental Hotels
Group, see InterContinental
Hotels Group (IHG)
International currency exchange,
247–248
International Executive House-
keepers Association (IEHA),
431
International issues:
communication with
international guests, 50
employment opportunities
across cultures, 31
guest folio review at checkout,
50
hospitality, 311, 355
in housekeeping, 420
international translation cards,
98
language barriers in
interdepartmental
communications, 86
multilingual staff, 218
sensitization of employees to,
355
International translation cards, 98
International Work Order, 418
Internet, 106. See also Third-
party reservation web sites
access in rooms, 217
design, 139, 202
as hospitality management
research tool, 30
hospitality services using, 106
and Lowest Internet Rate
Guarantee, 131
and PMS purchasing, 104
and reservations, 6, 133–135
and room rate offers, 133–134
and third-party web sites,
134–135
Intersell cards, 190
Intradepartmental
communications, 74
Intranet, 106
Inventory:
control, by executive
housekeepers, 422–424
and theft, 425–426
I/O ports (input/output devices),
106
ITT Corporation, 4
J
JCB, 191
Jefferson Hotel, 13
Job analysis(-es):
defined, 59
of director of security, 385–387
of front office manager, 60–61
for hospitality qualities, 337
Job descriptions:
defined, 59
for hospitality qualities, 337
Job management skills, 345–346
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Johnson, Eric, 314
Johnson, Lee, 364
Johnston, John, 329
Juliano, John, 387, 403
Juran, Joseph, 318
JW Marriott, 388–389
K
Kapioltas, John, 4
Keyboard, 106
Key clerk, 56, 57
Key drawer, 205
Key fob, 205
Keypad, 106
Key system:
maintaining, 205–206
security of, 205
Kline, Sheryl Fried, 97
KnowledgeNet, 132
L
Language. See also International
issues
and communicating with ESL
employees, 86
and communicating with
international guests, 50
Laser printer, 106
Last impressions (guest), 256
Late arrivals, 349
Late charges, 238
Laundry:
charges, 277
in-house, 39
Laundry attendants, 413
Layout, of rooms, 194
Layton, William, 314
Leader, orientation, 343
Ledgers, see specific types, e.g.:
Guest ledgers
Leisure time, trends in, 25
Leisure travelers, 139–140
Letter-quality printer, 106
Liabilities, 223–224
Limited-service hotels, 13
department managers in, 48–49
front office organization of,
57–58
general managers in, 48–49
historical development of, 5–6
human resource manager in, 51
marketing and sales directors
in, 52
service of, 19
Linen control, 422
LIRG (Lowest Internet Rate
Guarantee), 131
Litigious society, 384
Location, recorded in guest
histories, 253
Lodging facilities, 12–15
Lodging properties organization,
38–55
of department manager
responsibilities, 46–55
using organization charts, 39–45
Lodging properties, smaller, 45
Loews Hotels, 391
Long, Eric O., 54
Longo, Joseph, 13
Lounge:
promotional opportunities for,
366–367
sales, 276, 285
Lowe, Jim, 418
Lowest Internet Rate Guarantee
(LIRG), 131
M
McAuliffe, Sharon H., 133
MacGeoch, Andrew, 10
McGregor, Douglas, 368, 369
McMullin, Robert, 165
Main menu (PMS), 112
Maintenance:
of fixtures, 424–425
of furniture, 425
Maintenance agreements, for
PMS, 110
Maintenance/engineering
department:
interdepartmental communi-
cation with, 81–82
PMS applications for, 121
PMS software options for, 105
Maintenance managers, 49
Maintenance module, 121
Malcolm Baldrige Award, 318
Management:
revenue management
challenges, 177, 178
review for needs analysis,
102–103
role in hospitality, 311–313
role in training program, 347
Management contract properties,
21
Manager’s report, 274, 287
Marketing. See also Sales
historical development of, 6
Hospitality Sales & Marketing
Association International, 135
mass, 12, 13
role of front office in, 363–364
using guest histories, 253
Marketing and sales departments:
interdepartmental
communication with, 75–76
PMS applications for, 122, 123
PMS software options for, 105
Marketing and sales directors:
in limited-service properties, 52
responsibilities of, 51–52
role in lodging properties
organization, 38
Marketing and sales module,
122, 123
Marketing directors, see
Marketing and sales
directors
Market orientation, 15, 16
Market segments, 18
MICE market, 138
SMERF market, 138
Marquee, 79
Marriott Foundation for People
with Disabilities, 356
Marriott hotels, 12, 96
Boston Marriott Copley Place,
403
brand hotels of, 22
“Bridges . . . from school to
work” program, 356
Courtyard by Marriott, 4
JW Marriott, 388–389
Marriott Foundation for
People with Disabilities, 356
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Marriott hotels (cont.)
Twin Bridges Marriott Motor
Hotel, 4
At Your Service, 256
Marriott International, Inc., 256,
382
Marriott, J. W., 4
Marriott, J. W. Jr., 4
Martin, Robert J., 416, 426
Maslow, Abraham, 368–371
Mass marketing, 12, 13
Master credit card account, 266
Material Safety Data Sheets
(MSDS), 428–430
history of, 429–430
requirements of, 428–429
Maxim Revenue Management
Solutions (MaximRMS), 170
MaximRMS (Maxim Revenue
Management Solutions), 170
Mayo, Elton, 368, 370, 371
Meetings/incentive/conference/eve
nt (MICE) market, 138
Megabyte, 106
Megahertz (MHz), 106
Mene, Patrick, 318
Mensah, Ishmael, 430
Me/pleasure concept, 25
Message book, 64
Method of payments, 242–248.
See also Guest credit
assisting guests with, 246–248
bill-to-account, 243–244
cash, 244–245
credit cards, 243
debit cards, 246
personal checks, 245
traveler’s checks, 246
MICE (meetings/incentive/
conference/event) market,
138
MICROS, 170
MICROS Fidelio, 104
Military and educational rates,
201
Military market, see SMERF
market
Miller, Greg, 418
Mobley Hotel, 2
Modem, 106
Modified American plan, 201
Moments of truth, 322
Money wire, 247
Monitor, 106
Moonlighter, 62
Moore, Robert, 4
Motels, 12
Motivation, 367–369
for employees, 323
theories of, 368–371
using incentive programs, 312
MSDS, see Material Safety Data
Sheets
Muqbil, Imtiaz, 133–134
Murphy bed, 194
Murphy, Patrick M., 382
N
Narula, Avinash, 363, 365
National Quality Institute (NQI),
329
National Restaurant Association,
28, 315
Needs analysis, 124
and administrative paperwork,
102
communicating information
for, 102
guest flow analysis for,
101–102
management review for,
102–103
procedure for, 100–101
for selecting PMS, 100–108
team selection for, 101
New York Hilton and Towers,
218
Night audit, 261–262
and bank deposits, 273
defined, 52
filing documents from day,
249–250
PMS applications for, 118
PMS software options for, 105
process for, 263–269
standard operating procedures
for, 233
Night audit module, 118
Night auditor, 262–263
responsibilities of, 56
Night audit reports, 269
and daily flash report,
282–284
formulas for balancing,
274–275
preparing, 269–284
reading the, 284–287
1980s, hotel-industry historical
developments during, 8
Noncollect sales, 286
No-show rate, 143, 145–146
NQI (National Quality Institute),
329
O
Occupancy:
calculating, 39
100 percent, see Full house
totals, in flash report, 284
Occupancy management, see
Overbooking
Occupancy management formula,
145–146
Occupancy patterns, room rates
vs., 255–256
Occupancy percentages, 166–169
defined, 16
double, 167
Occupational Safety and Health
Administration (OSHA):
Hazard Communication
Standard, 429
and housekeeping department,
427–428
Office services, promotional
opportunities for, 366
Oliva, Rebecca, 158–159, 382
Oliver, Rebecca, 176–177
100 percent occupancy, see Full
house
Online (term), 109
OnQ, 136, 217
On-the-job training, 63, 350
O-O-O (out-of-order rooms), 284
Opera PMS, 104
Opera Revenue Management,
170–171
Opera Sales and Catering System,
171
Operating statistics, 280–282
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Operational effectiveness, 263
Operational reports, 47
Operations managers, see
Assistant general managers
Optimal occupancy, and yield, 173
Optimal room rate, and yield, 173
Opus 2 Revenue Technologies,
170
Organization charts, 39–45
for limited-service properties,
44–45
for smaller lodging properties,
43–44
Orientation checklist, 343
Orientation leader, 343
Orientation process, 339
Orientation program, 339–341.
See also Training programs
administering, 343–344
and employee handbook, 341
and equipment overview,
342–343
interdepartmental cooperation
emphasis in, 343
and knowledge of
establishment, 340
and policy and procedure
manual, 342–343
and staff introductions, 342
Origin of reservation, in guest
histories, 254
Orkin, E., 173–175
OSHA, see Occupational Safety
and Health Administration
Out-of-order rooms (O-O-O), 284
Outsourced laundry, in-house
laundry vs., 426–427
Outsourcing, reservations, 148.
See also Third-party
reservation web sites
Outstanding accounts receivable,
286
Outstanding balance reports, 119
Overbooking, 143–146
P
Package rates, 201
Pages per minute (PPM), 106
Paid in advance (PIA) listing, 118
Paid-outs, 78
Paid-out slips, 224, 230
Paid-outs, total, 286
Pallett, William, 330
Palmer House, 2
Parking garage manager, 54, 55
Parking services. See also Valet
charges in night audit report,
278, 286
security design for, 383
Par system, 422
Patience, as hospitality trait, 339
Payback period, 111
Payments, guest:
assembling during night audit,
264
and float, 246
forms used to process, 224–225
inability to pay, 246–248
method of, 242–248
posting, 227–231
Payroll, calculating, 65, 67, 68
Payze, Sally, 148
Pegasus Solutions, 131, 148
Percent occupancy, 39
Percent yield, 39
Personal care items, 422
Personal checks, 245
Personal identification numbers
(PINs), 392
Personality, for hospitality, 338
Personal services, promotional
opportunities for, 366
Personnel:
file management, with PMS,
123
issues in, 341
training, 63. See also Training
PhoCusWright, 6
Phone option, of PMS, 231
Physical plant engineer, 49
PIA (paid in advance) listing, 118
PictureTel, 26, 348
Pier 5 Hotel, 364
PINs (personal identification
numbers), 392
Plant, 374–375
Plant engineer, 42. See also
Physical plant engineer
Plaza Hotel, 2
Pleasure concept, 25
PMHS hotels:
Heart of the House, 418–419
Zero Defects, 418
PMS, see Property management
system
PMS applications, 112–124
accounting department options
in, 105
for back office use, 119–120
for call accounting, 105, 117
for electronic mail, 123, 124
for food and beverage
department, 105, 120, 121
front desk options in, 105
for guest checkout, 117–118
for guest registration, 114, 115
for housekeeping department,
105, 120
for human resources manage-
ment department, 105
inquiries/reports feature of, 119
for maintenance/engineering
department, 105, 121
for marketing and sales
departments, 105, 122, 123
for night audit, 105, 118
for personnel files
management, 123
posting module of, 116
for reservations, 105, 113
for revenue management, 114
for room status, 115, 116
for security department, 121,
122
for time clocks, 124
Pocono Raceway, 166
Point-of-sale:
defined, 95–96
and posting guest
charges/payments, 227, 229
Point-of-sale front office,
364–369
budgeting for, 374
and evaluation/feedback,
374–375
example, 375–377
frontline employees role in
developing, 378
training programs for,
372–373
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Point-of-sale terminals, 78
Policy and procedure manual,
342–343
Portman, John, 5
Portofino Bay Hotel, 391
Ports of entry, for hotel industry
careers, 30
Postal (zip) code, 253
Posting charges. See also
specific charges, e.g.: Room
charges
for adjustments, 230
in folios, 227
for guest charges, 227–231
for guest payments, 227–231
during night audit, 263
for paid-out slips, 230
with PMS, 229, 231
and point-of-sale, 227, 229
for room charges, 227, 263
standard operating procedures
for, 233
for taxes, 229, 263
for transfers, 230
Posting module, 116
Potential gross income, 16
PPM (pages per minute), 106
Predicted house counts, 78
Price, Jason, 134, 139
PriceWaterhouseCoopers:
Internet study on pricing,
133–134
RevPAR prediction, 17–18
Prime Motor Inns, 4
Printer, 106
Prior approved credit, 56
Private label cards, 190
Procedure manual, see Policy and
procedure manual
Processor speed, 106
Professional memberships, for
hotel industry careers, 29
Profit-and-loss statement, 53,
119
Projection of room sales, see
Room forecasts
Promotions, 365–367
Promus, 6
Proof of identification, 191–192
Property management system
(PMS), 96, 99–124. See also
PMS applications
and backup power sources,
110
for checking room status, 208,
210–212
computer training programs
for, 109–110
defined, 58
financial considerations
affecting, 111
guest checkout with, 346
hardware for, 104, 106–109
and maintenance agreements,
110
needs analysis for selecting,
100–108. See also Needs
analysis
posting charges with, 229, 231
for registration, 206–218
removing guest information
from, 250
reports in, 213–216, 251–252
and reservations, 151–159,
207–209
and room inventory, 208, 210
room rates verification using,
212
for self-check-in, 216–218
software selection for, 103–105
vendor claims for, 109
Property referrals, interhotel, 135
Psychographic data, 24
Q
Quality assurance, 8. See also
Total quality management
(TQM)
Quality Business Assessment, 330
R
Rack rates, 114, 201
Radisson, 22
Real estate investment trusts
(REITs):
as investment opportunity for
hoteliers, 8–9
Taxable REIT Subsidiary, 8
Recordkeeping system, 375
Recreation director, 42
Referral member, 135–136
Referral properties, 21
Referral reservation service, 39
Referral system, reservation, 135,
140
Registered Executive
Housekeeper (REH), 431
Registration. See also Check-in
blocking procedure for,
192–193
guest registration procedure,
187
meeting guests requests during,
193–195
with PMS, 114, 115, 206–218
and room selection, 192
Registration process, 186–206
capturing guest data for,
186–187
for guest credit, 189–192
guest hospitality during,
187–188
and guest registration
procedure, 187
and reservation card, 188–189
REH (Registered Executive
Housekeeper), 431
REITs, see Real estate investment
trusts
Religious market, see SMERF
market
Remote Web-based check-in, 217
Reports option, of PMS, 231
Reservations. See also specific
types, e.g.: Confirmed
reservations
cancellations of, 150
by corporate clients, 137
by current guests, 140
forecasting, 141–143
future, see Future reservations
by group travelers, 138–139
by leisure travelers, 139–140
by MICE market, 138
origin of, 254
outsourcing, 148
overbooking, 143–146
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processing, 147–159
promotional opportunities for,
366
and property management
system, 105, 113
and revenue management, 146
by SMERF market, 138
through a PMS, 151–159
upgrading, 368
using Global Distribution
Systems, 132–133
using Internet, 133–135
Reservation card, 188–189
Reservation codes, 149–150
Reservation forms, 207–209
Reservation referral system, 135,
140
Reservation service, referral, 39
Reservations manager, 56
Reservations module, 113
Reservation status, 151
Reservation systems, 130–136
in Carlton Hospitality
Worldwide, 132
in Choice Hotels International,
131
and database interfaces, 158
in InterContinental Hotels
Group, 131–132
systemwide, 147
true integration in, 158–159
types of, 135–136
using Global Distribution
Systems, 132–133
using Internet, 133–135
Residence Inn Company, 4
Residential hotels, market
orientation of, 15
Restaurants:
promotional opportunities for,
366
sales, in night audit report, 284
sales, total, 275
selling meals for, at front desk,
368–369
Revenue(s):
room, 16
total, 278, 286
Revenue account, 224
RevenueDASHBOARD, 170
Revenue management, 165–179.
See also Yield management
applications of, 178–179
and block-out periods, 175
and channel management,
175–177
components of, 171–178
and feedback, 177
and food and beverage sales,
178
management challenges, 177,
178
and occupancy percentage,
166–169
PMS applications for, 114
and reservations, 146
as term, 170
and yield management,
169–171
Revenue management module, 114
Revenue managers, 171
Revenue per Available Room
(RevPAR), 16
calculating, 39
formulas for, 168–169
PriceWaterHouseCoopers
prediction, 17–18
as sales indicator, 17–18
Revenue potential, 172
Revenue realized, 172
RevPAR, see Revenue per
Available Room
Ritz-Carlton Hotel Company,
L.L.C., 318
Ritz, Cesar, 3
Role playing:
as training technique, 350
for training video, 372
Ronson, Terence, 391
Rooms, guest, 340–341
availability of, 195
charges, 227, 275
designed to meet special needs,
195
equipment/amenities of, 194
layout/decor of, 194
location of, 193
price of, 195
promotional opportunities for,
366
security design for, 383
selection, 192
special accommodations in, 193
type requested, recorded in
guest histories, 255
Room assignment, for room
attendants, 416
Room attendants. See also
Housekeepers
assigning, 416
role in smaller lodging
properties, 45
room assignment/workload of,
416
Room blocking, see Blocking
Room forecasts, 141
Room inspections, 418–419
Room inventory:
checking, with PMS, 208, 210
system, 196–197
Room key control system, 390
Room keys:
assigning, 205
hard-key system, 392–393
issuing, 213
retrieving, 240
smart card, 391–392
Room key security, 390–393
Room rates, 197–202
Humbart formula for, 199–200
Internet offers of, 133–134
maximizing, 201–202
occupancy patterns vs., 255–256
optimal, 173
rule-of-thumb method for,
198–199
types of, 200–201
verifying, using PMS, 212
Room rentals, 276–277, 285
Room report housekeeper’s, 419
Room revenues, 16
Room sales:
figures, 275
in flash report, 284
in night audit report, 284
projections, 77
and yield management, 174
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Room service:
promotional opportunities for,
366
sales, in night audit report, 276,
285
selling, 369
Rooms forecasting, 141, 174
Room status, checking with PMS,
115, 116, 208, 210–212
Room status module, 115, 116
Rooms Division Executive,
Certified, 28
Rooms division managers, see
Assistant general managers
Royal Sonesta Hotel, 387, 403
Rule-of-thumb method for deter-
mining room rates, 198–199
S
Saferale, Rizwan, 390
Safety. See also Security
department(s)
department supervisors
responsibility for ensuring,
406
employee safety committee,
404
employee safety programs,
404–406
and front desk positioning, 98
and hospitality, 381
liability risk of hotel, 386
Safety committee, 404–405
Safety training programs, 406
SAFLOK, 390–391
Sales, 202–205. See also under
Marketing; specific types,
e.g.: Banquet sales
aptitude for, in employees, 339
charge, 278–279
coaching for, 202–203
Hospitality Sales & Marketing
Association International, 135
Opera Sales and Catering
Sytem, 171
opportunities for, 203–204
promotional skills of
employees, 338
role of front office in, 363–364
Sales associate(s):
for banquet sales, 76
shy, 202–203
Sales directors, see Marketing
and sales directors
Sales indicators, 16–18
average daily rate, 16–17
occupancy percentages, 16
RevPar, 17–18
yield percentage, 17
Sales-oriented front office, 365
Sales projections, 77
Sales taxes, 275
Sansbury, Michael, 391
Scheduling, of front office, 65–68
Schultz, Ray, 4–5
Security, see Safety
Security department(s), 382–384
contracted, 388–390
director of, see Director of
security
and emergency communication,
400–403
and fire safety, 393–399
goal of, 382
and hospitality, 381
in-house, 388–390
interdepartmental
communication with, 82
organization of, 384
PMS applications for, 121, 122
and room key security, 390–393
September 11, 2001 effects on,
82
Security department module, 121,
122
Security, director of, see Director
of security
Security Directors’ Network, 403
Security escort services, 388
Self-actualization, 371
Self-check-in, 114, 216–218
September 11, 2001 terrorist
attacks:
effects in security department,
82, 382
and guest security, 388
and historical developments of
the hotel industry, 9–10
Services. See also specific types of
services
in all-suites hotels, 19
cycle of, 320
in extended-stay hotels, 19–20
levels of, 18–20
promotional opportunities for,
366
Service America!, 309, 310
Service areas, 341
Service management program,
311, 319–328
continued management of, 328
employees role in, 323–326
evaluation methods for, 327
and guest cycle/flow, 320–322
and hospitality management
training, 326–327
and moments of truth, 322
Service quality, 8. See also Total
quality management (TQM)
Service strategy statement,
313–317
Seychelles Islands, 399
Sheraton, 4, 81
Sheraton Reading Hotel, 81
Shift leader, 312
Shoulder time, 166
Single-sheet printer, 106
Six Continents Hotels, 131
Skill demonstration, for training,
350
Sleeper, 196
Smart card, 391–392
SMERF
(social/military/educational/r
eligious/fraternal) market,
138
Smith Travel Research, 135
Snyder, Mark, 425
Social/military/educational/
religious/fraternal (SMERF)
market, 138
Software, for PMS, 103–105
SOPs (standard operating
procedures), 342
Spas:
promotional opportunities for,
367
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and Spa-related charges, 278,
285–286
Special accommodations, in room
selection, 193
Staff, introductions to, 342
Stafford, Leon, 14
Standard operating procedures
(SOPs), 342
Starkov, Max, 134, 139
Starwood, 22, 200
Starwood Hotels & Resorts
Worldwide, 4
Starwood Preferred Guest, 200
Statement of cash flows, 53
Statler, Ellsworth M., 2
Statlers, 1
Stayovers, 144
Sternberg, Lawrence E., 354
Stevens Hotel, 2
Sullivan, William, 97
Superfund Amendments and
Reauthorization Act of
1986, 430
Super 8 Motel, 390
Supplies, Guest, 422–423
Surcharge rates, 277
Swig, Rick, 9
SynXis Agent, 148, 177
Systemwide reservation systems,
147
T
Talihook Association, 390
Task identification, in training,
345–346
Taxes. See also Sales taxes
posting charges for, 229
U.S. Tax Relief Extension Act
of 1999, 8
Tax Act, 8
Tax charges, 275, 277
Tax cumulative total feature, 275
Taxable REIT Subsidiary, 8
Technological advances, in hotel
industry, 6, 7
Telephone charges, 277, 285
Telephone initiation and
reception agreements, 348
Telephone operators, 56
Theft, of inventory, 425–426
Theory X, 368, 369
Theory Y, 368, 369
Third-party reservation web sites:
consumer’s response to,
134–135
financial effects of, 135
resale reservations through, 139
Thomson, Gary, 131
Tickler files:
for marketing and sales,
122–123
training, 351
Time clocks module, 124
Tips, declared on night audit
report, 275
Today’s outstanding accounts
receivable, 286
Toh, Rex S., 143, 144
Toiletries, 422
Top down, 203
Total cash sales, 286
Total discounts, 286
Total outstanding accounts
receivable, 286
Total paid-outs, 286
Total quality management
(TQM):
in delivering hospitality, 318,
319, 328–330
example, 88–89
historical development of, 8
and interdepartmental
communication for
hospitality, 328
and Patrick Mene, 318
role in effective
communications, 87
used by general managers, 47
Total restaurant sales, 275
Total revenue, 278, 286
Total write-offs, 278, 286
Touch screen, for PMS, 113
Tourists:
ecotourists, 27
travelers, 138–140
Tour, of property, 341
TQM, see Total quality
management
Trade journals, for hotel industry
career preparation, 28, 31
Traffic managers, 57
Trainers:
and professional attitudes, 354
teaching ability of, 353
techniques for, 349
for training, 353–354
training of, 348
Training:
and cross-training, 353
duties of executive
housekeepers, 416–417
for emergencies, 403
employees with physical
disabilities, 356
for empowerment, 326, 354
in fire safety, 396
Hands-on-training, for ADA
compliance, 430
for hospitality management,
326–327
on-the-job, 63, 350
personnel, 63
safety training programs, 406
for sales, 202–203
in salesperson skills, 372
trainers for, 348, 353–354
Training programs, 345–353
administering, 352–353
and job management skills,
345–346
and management, 347
for point-of-sale front office,
372–373
step-by-step procedures for,
346–347
steps in, 347–352
and task identification,
345–346
Training Services, Educational
Institute, 399
Training tickler file, 351
Transfers:
defined, 77
posting charges for, 230
Transfer slip, 224
Travel agent, 137, 140
TravelCLICK, 133, 170
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Travel directories, 139
Travelers, 138–140
Travelers Aid Society, 247
Traveler’s checks, 246
Travel Industry Association of
America, 133–134, 256
Travelocity, 134
Trends, customer, 24–27
business travel, 26–27
discretionary income, 25–26
ecotourists, 27
family/household size, 26
female business travel, 26–27
leisure time, 25
me/pleasure concept, 25
Trial and error, training, 351
Trial balance, 268–269
True integration, 158–159
Turgeon, Normand, 315
Twin Bridges Marriott Motor
Hotel, 4
U
Understays, 144
UniFocus, 312–313
U.S. Environmental Protection
Agency (EPA), 429–430
U.S. Tax Relief Extension Act of
1999, 8
Universal Studios, 391
Upsell, 365
V
Valet charges, 285
for dry cleaning/laundry, 277
for parking, 278
Vending machines:
cash from, 277
in night audit report, 285
Verret, Carol, 174
Videos, for training, 351
VIP status, 155
Visit frequency, in guest histories,
254–255
Vista Hotel, 400
Visual alarm systems, 398
W
Waldorf-Astoria, 2, 3, 54, 322
Waldorf Hotel, 3
Waldorf Towers, 3
Walking a guest with a
reservation, 212
Walk-in guests, 144
Watson, Bill, 330
Web-based check-in, 217
Web Sites, see Internet; Third-
party reservation web sites
Wester Union, 247
Wilson, Kemmons, 3–4
Woodworth, R. Mark, 9
Work experience, for hotel
industry careers, 29
Working supervisors, 44, 45
Workload, of room attendants,
416
World Trade Center:
1993 bombing of, 400
September 11, 2001 attacks on,
see September 11, 2001
Worldwide Reservation Center,
4
Write-offs, total, 278, 286
Wyndham Hotels & Resorts, 23
X
xBase, 104–105
Y
Yesterday’s outstanding accounts
receivable, 286
Yield:
calculating, 39
definition of, 171–173
formula for, 172
and optimal occupancy, 173
and optimal room rate, 173
Yield management. See also
Revenue management
and forecasting room sales,
174
and revenue management,
169–171
strategies for implementing,
173–174
systems and procedures for,
175
as term, 170
use of, 169–171
Yield percentage, 16, 17
Young, John W., 312, 314, 316,
323, 324
Z
Zemke, Ron, 309, 310, 316,
322–324, 327, 328
Zero Defects, 418
Zip (postal) code, 253
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