HOTEL FRONT OFFICE MANAGEMENT
HOTEL FRONT OFFICE MANAGEMENT
THIRD EDITION
To Linda
Your love and encouragement made this book possible.
and
Maria, Ryan, and David
The joy of sharing this book with you makes it all worthwhile.
Contents
Preface ix
Acknowledgments xi
Chapter 1 Introduction to Hotel Management 1
Chapter 2 Hotel Organization and the Front Office Manager 33
Chapter 3 Effective Interdepartmental Communications 71
Chapter 4 Property Management Systems 93
Chapter 5 Reservations 127
Chapter 6 Yield Management 161
Chapter 7 Guest Registration 181
Chapter 8 Processing Guest Charge Payments 221
Chapter 9 Guest Checkout 237
Chapter 10 Night Audit 261
Chapter 11 Managing Hospitality 305
Chapter 12 Training for Hospitality 333
Chapter 13 Promoting In-House Sales 359
Chapter 14 Security 379
Glossary 409
Index 425
Preface
The third edition of Hotel Front Office Management continues to address 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 international applications.
This edition continues to encourage students to take an active role in applying
these concepts to the exciting world of hotel operations.
The emphasis on management continues to play a central role in this third edition.
The structure presented in this text will assist students as they prepare for positions as
entry-level managers. The logical presentation of chapters in order of operations—overview
of lodging hospitality, tour of the front office, review of the guest cycle, and analysis
of guest services—will allow students to gain insight into a front office manager’s role in
the hotel.
The “Front Office Essentials” chapter from the second edition has been deleted because
a majority of hotels employ a property management system as opposed to a manual front
office operation. Those portions of the chapter that referred to a property management
system are included in the new Chapter 4, “Property Management Systems.”
The third edition contains updated pedagogical features, including an “Opening Dilemma,”
which presents students with a mini–case study problem to solve with the help
of material presented in the chapter; a “Solution to Opening Dilemma” is included at the
end of each chapter. “Hospitality Profiles”—commentaries from hotel front office managers,
general managers, and other department managers in hotels—add an extra human
relations element to the text. “International Highlights”—articles of interest that accentuate
the international workforce and international career opportunities for graduates—
provide a forum for professors and students to discuss this aspect of hotel management.
“Frontline Realities” includes unexpected yet very predictable situations. Students are
asked to discuss those situations and develop methods for handling them. More “Case
Studies” have been added to each chapter, allowing students to apply theory. A glossary
x P R E F A C E
of terms has been included, summarizing terms introduced in each chapter (which appear
in boldface in the text).
The author is very pleased to have the opportunity for instructors and students to use
instructional software with this text. Dr. Sheryl Fried Kline of Purdue University and
William Sullivan of Widener University and University of Delaware have prepared an
excellent new book and CD-ROM package, Hotel Front Office Simulation: AWorkbook
and Software Package (New York: John Wiley & Sons, 2003) (ISBN 0-471-20331-9).
This simulation has been reflected in chapters dealing with reservations, registrations,
customer service, posting, and the night audit. This combination of the third edition of
Hotel Front Office Management and Kline and Sullivan’s software simulation will allow
hospitality professors to offer their students an optimal learning opportunity.
A completely revised instructor’s manual is available for the third edition for qualified
adopters of the book. Please contact your Wiley sales representative for details.
Will you like the third edition of Hotel Front Office Management? I think you will,
and I would appreciate hearing your comments ([email protected]).
My very best to the future professionals of the hotel industry.
Acknowledgments
The author wishes to acknowledge the following professors who provided insightful
reviews of individual chapters of this and previous editions. Without your concern
and thoughtful commentary, this effort for our students would not have been possible:
Thomas Jones, University of Nevada at Las Vegas; Robert McMullin, East Stroudsburg
State University; and James Reid, New York City Technical College.
I would like to express my appreciation to the following hospitality professionals who
provided commentary for the Hospitality Profiles included in this third edition: Dulcie
Baker, director of sales, Tide Water Inn, Easton, Maryland; Kevin Corprew, director of
rooms operation, Marriott, Overland Park, Kansas; Michael DeCaire, food and beverage
manager, Houston Hilton, Houston, Texas; Doug Gehret, director of rooms, Waldorf
Astoria, New York City; Charles Gellad, general manager, Homewood Suites, Alexandria,
Virginia; Greg Goforth, general manager, Best Western Merry Manor, South Portland,
Maine; James Heale, controller, Sheraton Reading Hotel,Wyomissing, Pennsylvania; Lee
Johnson, director of corporate sales, Pier 5 Hotel and Brookshire Suites, Inner Harbor,
Baltimore, Maryland; John Juliano, director of safety and security, Royal Sonesta Hotel,
Cambridge, Massachusetts; Eric Long, general manager, WaldorfAstoria, New York,
New York; Joseph Longo, general manager, The Jefferson Hotel, Richmond, Virginia;
Patrick Mene, vice president of quality, The Ritz-Carlton Hotel Company, L.L.C.; Thomas
Norman, C.H.A., general manager, Holiday Inn Grenada, Grenada, Mississippi;
Randy Randall, general manager, Eldorado Hotel, Santa Fe, New Mexico; Todd Sheehan,
managing partner, Lincoln Plaza Hotel&Conference Center, Reading, Pennsylvania; and
Mike Schofield, general manager, Holiday Inn Express, Salem, Oregon.
One additional acknowledgment is offered to Dr. Trish Welch of Southern Illinois
University, who was instrumental in the first edition of Hotel Front Office Management.
Her words of support to Van Nostrand Reinhold for the initial prospectus and sample
chapter are still greatly appreciated.
C H A P T E R 1
Introduction to Hotel Management
CHAPTER FOCUS POINTS
• Historical overview of the
hotel industry
• Hotel classification system
• Trends that foster growth
and employment in the
hotel industry
• Career development
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 that 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 concept 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. Communication 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 department inquiries concerning guest reservations are but a
few of the routine tasks performed almost constantly by a hotel front desk in its role as
communications hub. Accounting procedures, involving charges to registered and non-
2 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
registered hotel guest accounts, are also very 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 upon
our heritage. Learning about the founding giants such as Statler, Hilton, Marriott,Wilson,
and Schultz, to name a few, allows a student of the hotel industry to discover the interesting
lineage of hoteliers. The insights afforded by the efforts of these 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 some of
the forerunners in the industry who were entrepreneurs 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. He built and operated a hotel in Buffalo, New York, at the Pan-
American Exposition of 1901. Among his hotels were ones located in Boston, Cleveland,
Detroit, New York City, and St. Louis. In 1954, he sold the Statler chain of hotels 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 temporary 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 Mobley
Hotel in Cisco, Texas. In 1925, he built the Hilton Hotel in Dallas, Texas.4 His acquisitions
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 WaldorfAstoria
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 all of which follow standard operating
F O U N D E R S O F THE HOTEL I N D U S T R Y 3
procedures such as marketing, reservations, quality of service, food and beverage operations,
housekeeping, and accounting. Hilton Hotels have expanded their entrepreneurship
to include 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 WaldorfAstoria 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. It is interesting
to note that President Hoover became a permanent resident of the Waldorf Towers,
the luxurious “hotel within a hotel” that occupies the twenty-eighth through the fortysecond
floors. The hotel was purchased in 1949 by Conrad N. Hilton, who then purchased
the land it stood on in 1977. In 1988, the hotel underwent a $150 million restoration.
It was designated a New York City landmark in January 1993.7
Kemmons Wilson
Kemmons Wilson started the Holiday Inn chain in the early 1950s, opening his first
Holiday Inn 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
to be a very successful combination for Wilson.
Wilson blazed a formidable path, innovating all along the way with amenities and
high-rise architecture, including a highly successful round building concept featur-
4 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
ing highly functional pie-shaped rooms.Wilson also introduced the unique in-house
Holidex central-reservation system that set the standard for the industry 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
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 (Washington, D.C., area). 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 Howard
Johnson Company; he sold the hotels to Prime Motor Inns and kept 350 restaurants and
68 turnpike units. In 1987, Marriott completed expansion of its Worldwide Reservation
Center in Omaha, Nebraska, making it the largest single-site reservations operation in
U.S. hotel history. Also in 1987, Marriott acquired the Residence Inn Company, an allsuite
hotel chain targeted toward extended-stay travelers. With the introduction of limited-
service hotels—hotels built with guest room accommodations and limited food service
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, before long, 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.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, which was a company
in the Holiday Inn Corporation. This type of hotel was tagged as limited-service,
meeting the needs of cost-conscious business travelers and pleasure travelers alike. His
pioneering efforts in developing a product and service for these market segments have
proved to be a remarkable contribution to the history of the hotel industry.
H I S T O R I C A L DEVELOPMENTS 5
Historical Developments
The history of the hotel industry is also filled with notable concepts that shaped the
products and services offered.
The atrium concept design, limited-service hotels, and technology were notable innovations.
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
reorganization in the late 1980s shaped the way hotels could become profitable. Also, in
the 1990s, a new term appeared that changed the financial structuring and operation of
hotels—real estate investment trusts (REITs).
Also, the terrorist events of September 11, 2001, will have an impact on how hotels
market their products and services and deliver hospitality.
Atrium Concept
The hotel industry has had many notable developments over the past years. The atrium
concept, a 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
soaring 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 excitement, fun, relaxation and entertainment.11
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 and meeting space—became prominent in the early 1980s, when many of the
major chains adopted this concept for business travelers and travelers on a limited budget.
Technological Advances
Technology has played a major role in developing the products and services offered to
guests. Recent adaptations of reservations systems, property management systems, and
in-room guest checkout are only the successors of major advances in technology. Notable
“firsts” in the adaptation of technology to the hotel industry can be reviewed in Figure
1-1. It is interesting to note how many of the developments we call technology were
adapted in recent times.
6 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
Figure 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 systems
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)
Sources: American Hotel and 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.
H I S T O R I C A L DEVELOPMENTS 7
Marketing Emphasis
An emphasis on marketing to guest niches was the theme in the 1970s era. This technique
surveyed potential guest markets and built systems around guests’ needs.
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
reservation and feel confident of the quality of accommodations expected.12
Total Quality Management
Total quality management (TQM), a management technique that helps managers to
look at processes used to create products and services with a critical eye on improving
those processes, is being practiced in many hotels today. This emphasis on analysis of the
delivery of services and products with decision making at the front lines has created a
trend in the 1990s. This concept will be 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 unravelled 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 simply abandoned their properties to their mortgage holders—
which in many cases turned out to be Uncle Sam, because of the simultaneous S&L
debacle.13
Hotel Investment
Real estate investment trusts (REITs) have provided an investment opportunity for
hoteliers. In the spring 2000 Virginia Hospitality and Leisure Executive Report, P. Anthony
Brown of Arthur Andersen writes the following about the U.S. Tax Relief Extension
Act of 1999. It is important to note that this information is useful as you plan your career
direction.
8 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
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 operating lodging facilities for any person other than the REIT.
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 tenants: 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.14
September 11, 2001
The tragic terrorist events of September 11, 2001, will have a lasting effect on how a hotel
markets its products and services and delivers hospitality. The immediate impact of the
terrorist attacks has resulted in a decreased number of people willing to fly and, thus, a decrease
in a need for renting hotel rooms. Hoteliers (as well as restaurateurs, tourist attractions,
government agencies, and the like) and the federal, regional, and state tourism associations
have banded together to address the issue of fear as it relates to travel and tourism.
Hoteliers have to review their marketing plans and determine how the corporate traveler
can be attracted back into their properties. The corporate guest who was always
viewed as a huge market can no longer be taken for granted. Corporate executives, travel
planners, and traffic managers have to be greeted personally by hotel staff to ask for their
business and inquire about when to expect business as usual. While the efforts of attracting
and maintaining corporate travelers are assessed, new methods to attract other markets,
such as local and nearby residents, have to be developed. These efforts take the form
of 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 it is not; yet it is one that future hoteliers will have
to grasp with eagerness and enthusiasm in order to succeed.
T Y P E S O F L O D G I N G F A C I L I T I E S 9
The delivery of hospitality in hotels has also come under review. For example, hoteliers
are reviewing security plans to include the frontline employee who has to take immediate
action based upon observations at the front desk, in the dining room and recreational
areas, and on guest and public floors. The frontline employee who sees uncommon activities
has to know the importance of reporting concerns to supervisors. Special training
on what to look for with regard to guest interactions in public areas and on guest floors
will assist the frontline person in becoming proactive.
Hoteliers must also be concerned with how to support hospitality as part of being
responsible citizens in their communities. Hotel general managers should develop emergency
plans to allow for offering immediate 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 for displaced members of the community
are just some of the issues faced by the hotel industry.
These issues of marketing and delivering hospitality as well as other issues will emerge
as we prepare to respond to the events of September 11, 2001.
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.
Figure 1-2 will serve as a reference point throughout this discussion.
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 entertainment
areas, room service, cable television, personal computers, 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.
10 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
Figure 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
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. These properties sometimes specialize
in catering to particular interests, such as conventions or gambling. Casino hotels
usually take a secondary role to the casino operation, where the emphasis is on profitable
gaming operations.
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
T Y P E S O F L O D G I N G F A C I L I T I E S 11
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
typically stay overnight or a few days. Motels may be located near a freestanding restaurant.
All-Suites
The all-suites concept, a new addition to the hotel industry, developed in the 1980s as
a separate marketing concept, offers guests a wide range of services, which may include
reservations, living room and separate bedroom, kitchenette, optional public dining room
and room service, cable television, videocassette players and recorders, specialty shops,
personal services valet and laundry, swimming pool, and ground transportation to and
12 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
H O S P I T A L I T Y P R O F I L E
?Joseph Longo is the general
manager of The Jefferson
Hotel, a 265-room historic
property in Richmond, Virginia.
As 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 services available, with a
strong commitment to warm, genuine, and gracious
service.
Mr. Longo obtained a B.S. degree in both 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 professional 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 inWashington, D.C.,
and from there 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 Field Hotel Association
in Valley Forge, Pennsylvania.
The sales and marketing effort for this independently
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 restaurants, one
an AAA Five Diamond Award winner.
Mr. Longo encourages students who are pursuing
a hospitality management career to remember that,
as innkeepers, your hotel is like your home, where
all of your guests are made to feel welcome. This
involves 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.
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 this type of accommodation
with in-room kitchenette and sitting rooms since the early 1900s. Now with
mass marketing—advertising products and services through mass communications such
as television, radio, and the Internet—this type of hotel is considered new.
Limited-Service Hotels
Limited-service hotels appeared on the hotel scene 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, personal
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
T Y P E S O F L O D G I N G F A C I L I T I E S 13
H O S P I T A L I T Y P R O F I L E
?Charles Gellad is the general
manager of the Homewood
Suites in Alexandria, Virginia.
He began his career at the
Hampton Inn in Alexandria, Virginia, 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, Virginia.
He was on board as director of sales prior to
the opening of the Homewood Suites in Alexandria,
Virginia.
Mr. Gellad said his market for guests includes
those persons who are going to be in town for an
extended period of time because of government contracts,
special projects, training, or relocation in the
military or in the private sector. Relocation is the
common characteristic with this market.
His extended-stay hotel offers a breakfast 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 that is
equipped with a fax machine, personal computer,
copying machine, and other office amenities; a convenience
store called a “Suite Shop”; free parking;
and free local, credit-card, and collect calls.
Mr. Gellad’s entry-level experience has provided
him with many opportunities to learn how to deal
with different personalities. He says that when you
become a supervisor of people, those people want to
be treated as individuals, but you have to do so by
being 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 have to take time
to develop a life outside the hotel.
long-term. These properties sometimes specialize in catering to the business traveler and
offer special business technology centers.
Extended-Stay Hotels
In “Survey Results of the Extended Stay Lodging Industry,” The Highland Group of Atlanta,
Georgia, reports the following information, about this newest hotel product on the
market which includes the 31 extended-stay brands as well as some independent hotels.
Extended-stay hotel room supply in the United States increased more than 50 percent
in 1997 over 1996. There will be more economy-price than upscale extendedstay
rooms before the end of 1998. This is a significant reversal from prior years
and indicates a change in the way extended-stay lodging is used by American travelers.
Projected extended-stay hotel supply will be more than half a million rooms
through 2002. At this level, extended-stay hotel rooms will represent some 12 percent
of total lodging inventory.
Assuming supply growth projections are fully realized through 2002, this represents
a significant change from the current price distribution of extended-stay
hotels and marks a change in the way Americans use extended-stay lodging. Use
of extended-stay lodging will have expanded from the corporate expense-account
14 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
H O S P I T A L I T Y P R O F I L E
?Mike Schofield, general manager
of the Holiday Inn Express
in Salem, Oregon, feels
that the crux of the hotel business
focuses on friendliness, service, and extension of
courtesy to the guest. He also stresses that a manager
has to impress the importance of extending courtesy
to employees.
Most of the guests at the Holiday Inn Express are
transient leisure travelers, although some are business
travelers. Those guests are looking for cleanliness,
a good and convenient location, and amenities
such as a continental breakfast, a pool and a spa, and
a business center. About 60 percent of those guests
arrive at the Holiday Inn Express because of brand
recognition, another 25 percent to 35 percent use the
reservation system, and a final 5 percent stay at Mr.
Schofield’s hotel because of his property’s local marketing
efforts.
Mr. Schofield attended Cypress College in Cypress,
California. He started in the hotel business in
1985 at the Riverside Inn in Grants Pass, Oregon,
doing accounting and taxes and then serving as general
manager. He continued his career as general
manager with Sea Venture Resort in Pismo Beach,
California; as general manager at The Inn at Otter
Crest near Newport, Oregon; and as general manager
of Super 8 Motel in Grants Pass, Oregon.
market to encompass most demographic segments. Corporations are taking advantage
of the availability of these facilities for training, relocation and temporary
assignments at all levels.15
At Hilton’s Homewood Suites, the following room amenities are included: kingsize
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 dining 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 facilities,
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.
Commercial properties service the transient guest, whose stay is short in duration.
S A L E S I N D I C A T O R S 15
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. They may be located almost anywhere.
It is essential to note the very gray areas in using these two types of categories. 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
need to 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 means for
describing hotels. This information is necessary for business investors to estimate the
profitability of a hotel.
There are four factors that measure a hotel’s degree of financial success: occupancy
percentage, average 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. Average 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 available 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 (excluding 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 front office in its external and internal marketing efforts. Occupancy
percentage is also used by investors to determine the potential gross income, which is the
amount of sales a hotel might obtain at a given level of occupancy, average daily rate,
and anticipated yield. However, it is also important not to assume that occupancy is
standard each night. Variations occur on a daily basis and by season.
Average Daily Rate
The average daily rate (sometimes referred to as average room rate) is also used in
projecting 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 $150 per
night is expected to offer more services than a hotel in the same geographic area with a
16 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
rate of $55 per night. These expectations have been extensively capitalized upon by major
hotel chains, by developing different properties to meet the expectations of various segments
of the hotel market, as discussed earlier in the chapter.
Yield Percentage
Yield percentage measures a hotel manager’s efforts in achieving maximum occupancy
at the highest room rate possible. Since this term will be discussed more fully in Chapter
6, it is sufficient to note 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
meeting 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
number of rooms available in the hotel for that day. The formulas for determining
RevPAR are as follows:
room revenue
number of available rooms
or
hotel occupancy average daily rate
For example, RevPAR for a hotel that has $10,000 in room revenue for the night of
September 15 with 200 rooms available would equal $50 ($10,000 200 $50).
This same hotel on September 15 with 200 rooms, room revenue of $10,000, 125
rooms sold, an average daily rate of $80 ($10,000 125 $80), and hotel occupancy
of 62.5 percent (125 rooms sold 200 rooms available 100 62.5 percent) would
still produce the same RevPAR (.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, “Yield Management,” discusses the importance
of considering the potential income from room and food and beverage sales.
Consider the following article, “January RevPAR Grows Nearly Ten Percent at Suburban
Lodge Company-Owned Hotels,” which was published on-line. It shows Suburban
Lodges of America’s use of RevPAR to inform its shareholders. (Suburban Lodges of
America owns, franchises, and manages Suburban Lodge hotels, the nation’s largest chain
of economy extended-stay hotels, and franchises GuestHouse International hotels, the
midmarket nightly-stay hotel chain with the franchisee-friendly franchise agreement.)
L E V E L S O F S E R V I C E 17
ATLANTA—(BUSINESS WIRE)—Feb. 8, 2001—Suburban Lodges of America,
Inc. (NASDAQ: SLAM) announced today that weekly revenue per available room
(“RevPAR”) for Company-owned Suburban Lodge hotels increased 9.7%, to
$145.07, for the month of January 2001 in comparison to RevPAR of $132.26 in
January 2000. The increase in current year RevPAR was attributable primarily to
a 9.0% increase in the hotels’ average occupancy rate, to 73.8% from 67.7% in
January 2000, combined with a small increase in average weekly rate (“AWR”) to
$197.68 from $196.75 in January 2000. The Company believes that its January
2000 RevPAR and occupancy rates were negatively impacted by reduced travel
resulting from Y2K-related concerns.
In commenting on the release of this information, Chief Financial Officer Chuck
Criscillis stated, “Like many other companies, we are looking for ways to better
communicate our progress with our shareholders. Reporting our hotels’ operating
data on a monthly basis is one way to accomplish this. By releasing these numbers,
we are not intimating that similar RevPAR increases will be achieved for the balance
of the year. While we are anticipating RevPAR growth for the balance of 2001, we
don’t view the January growth rate as sustainable because of the weakness in January
2000 occupancy rates. Nonetheless, our January 2001 statistics provide strong
evidence that our strategy of focusing on occupancy more than on room rates can
yield meaningful revenue growth.”
The matters discussed in the foregoing paragraphs of this news release include
forward-looking statements that involve risks and uncertainties that could cause
results to differ from anticipated results, including, but not limited to, general economic
conditions, weather patterns, individuals’ plans for business and personal
travel, and other risks indicated in the Company’s filings with the Securities and
Exchange Commission.16
This article addresses the importance of using RevPAR to present a fuller financial
picture that is based on factors that impact room sales, such as economic conditions,
weather patterns, and business and personal travel.
Levels of Service
The four commonly used market segments—identifiable groups of customers with
similar 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 confusion,
some of which occurs because leaders in the hotel industry do not agree on terminology.
Some industry leaders avoid the “budget” tag because of its connotations of cheapness
and poor quality. Others welcome the label because it appeals to those travelers who are
looking for basic accommodations at very inexpensive rates. Nevertheless, the following
definitions provide some idea of what is offered at each level of service.
18 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
H O S P I T A L I T Y P R O F I L E
?Greg Goforth is the general
manager of the Best Western
Merry Manor in South Portland,
Maine. The Merry Manor is a
full-service hotel with 151 guest rooms, 6 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
management from the University of New
Hampshire. He says that guests are looking for the
basic comforts of home—clean, comfortable, wellequipped
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 machines, and easy and fast
Internet access are also a necessity for attracting a
corporate clientele.
Mr. Goforth indicates that the 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. The greatest challenge for hospitality in the
next few years will be attracting and retaining qualified
help.
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-premise dining, banquet and
meeting facilities, and recreational facilities. Examples of a full-service hotel include Marriott
Hotels and Resorts, Renaissance Hotels, and Holiday Inns.
As discussed earlier, all-suites indicates a level of service for a guest who will desire a
more at-home atmosphere. Services include separate sleeping and living areas or working
areas, kitchenette facilities, wet bars, and other amenities at the midprice level. This concept
appeals to the business traveler as well as to families. Marriott Suites and Embassy
Suite Hotels are examples of all-suite hotels. It is interesting to note that this concept is
also employed in older center-city commercial hotels, in which adjoining rooms alongside
the bedroom and bath have been remodeled into 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 Ramada
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
extended period of time. A fully equipped kitchenette allows international guests to prepare
foods that provide comfort in a new environment. Also, the spacious bedrooms and
living areas provide work and recreational areas. Light breakfast and evening meals are
also included. An example of this level of service is Hilton’s Homewood Suites hotels.
B U S I N E S S A F F I L I A T I O N S 19
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 ambience.
Long-lasting marketing effects develop a brand loyalty and acceptance that are
most important in 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 beverage
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, which will be
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; theWall Street Journal;
and other newspapers, magazines, and Web sites.
Chain affiliations, which include hotels that purchase operational and marketing services
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 start-up, rental of signs
and other equipment, use of the corporation’s reservation referral system, and national
advertising, among others.17
Anyone wishing to enter the hotel business by investing personal funds wants to be
sure a profit will be realized. Perhaps because of a lack of experience in operating a hotel
or motel or a lack of business acumen, a poor credit rating, or limited knowledge of real
estate development, 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.
Referral Property
Sometimes a hotel organization will choose to become a referral property, a hotel
operating as an independent that wishes to be associated with a certain chain. Since the
property has been physically developed, the entrepreneur may only want assistance with
management, marketing and advertising, and/or reservation referral. Likewise, the fees
are based on services required. The chain’s quality assurance standards must, however,
also be met by the referral property.
20 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
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
talented 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 franchises so that a majority of the properties remain company-owned.
Management Contract Property
A management contract property, a hotel that is operated by a consulting company
that provides operational and marketing expertise and a professional staff, is similar to
a referral property. There are several management contract organizations that 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.
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 that is associated with a chain.
Independent hotels have particular characteristics, which 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, suburbia, 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 service, banquets, gift shop, beauty shop, athletic facilities, swimming
pool, theaters, valet services, concierge, and airport shuttle service. Some older independent
hotels have refurbished their suites to capture their share of the all-suites market.
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 properties
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
T R E N D S THAT F O S T E R GROWTH 21
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 with any financial investment,
the entrepreneur will seek a professional to manage and operate the establishment.
The person chosen for this job must manage all aspects of the business—room,
food and beverage, 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 (size, density, distribution,
vital statistics of a population, broken down into, for example, age, sex, martial status,
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 why
customers purchase a product—what trends will increase or decrease the need for hotel
facilities? Such factors include the growth of leisure time, the development of the “me/
pleasure” concept, the increase in discretionary income, the trend toward smaller families,
the changes in business travel, and the expansion of the travel experience. Other economics
and political trends—such as public liability, insurance costs, overbuilding, the value
of the U.S. dollar overseas, gasoline prices, safety from random danger while traveling,
and legislation—affect 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
vacations and personal days, a workweek of 40 hours or less, and early retirement—has
set 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 different culinary trends,
participate in sporting events, and just relax, the customer base of the hotel industry
expands.
22 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
Workers are spending fewer years in the labor force as the concept of early retirement
becomes more popular. And as the population segment known as the baby boom ages,
the number of retirees is projected to soar. Many of these people 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 had evolved over the years. The work ethic of the eighteenth and nineteenth
centuries strongly influenced the way Americans play, as recreation and leisure were considered
privileges reserved for the wealthy. Today, most workers enjoy vacations and
experience the feeling of getting away from it all. This trend toward self-gratification will
continue into the twenty-first century. The idea that satisfying personal needs is a prerequisite
to satisfying the needs of others has a good hold in American society.
The isolated nature of many jobs increases the need for respite. As more and more
people find themselves spending more time communicating via computers and other machinery
rather than face-to-face, social needs will continue to grow stronger. Workers
need the away-from-job experience to balance their social and mental needs with their
demands. Travel helps to 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 discretionary
income of American families is the emergence of the two-income family. An
almost double-income family unit had emerged over the years as more married women
joined or stayed in the labor force. The strong growth in this segment of the labor force
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.
Discretionary income is not a constant. It is definitely affected by various economic
factors: an economic downturn with increased unemployment reduces discretionary income,
for example. And different economic conditions tend to favor different ways of
spending discretionary 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 a recession or the energy crisis of the 1970s to
see how quickly discretionary income formerly directed to the hospitality industry can
evaporate.
T R E N D S THAT F O S T E R GROWTH 23
Family Size/Household Size
The current trend toward smaller families also indicates growth for the hospitality
industry. 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
number of persons in a home—has continued to decrease 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, those who
live in smaller households are more likely to dine out, travel, and participate in quality
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 budget more for travel.
When travel costs increase, less travel is done and the necessity of any business travel is
reviewed. Executives will no longer hop the next plane to clinch a deal if the same task
can be accomplished via a phone call, a (conference call), in which three or more persons
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.
The volume created by 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 are on the rise and represent an increasing segment of the
corporate travel market. As previously discussed, their travel is also affected by energy
prices and speedy communication. This particular market segment requires close attention
to fulfilling special needs. Female travelers request particular amenities and demand close
attention to safety. Marketing and sales managers need to develop products and services
that will 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 and/or world history and want
24 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
to see the places that they have read about. Cultural pursuits—art, theater, music, opera,
ballet, and museums—can attract a constant flow of people into an area. 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 development/enrichment courses, whether to update professional
skills or to increase knowledge of a particular hobby. Ecotourists, tourists 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 in hotel management would not be complete without attention
to career development. Those who are planning a career in the hotel industry need to
review the fundamentals of career development, which revolve around five very important
concepts: educational preparation, practical experience, membership in professional organizations,
ports of entry, and growth areas for the industry.
Educational Preparation
As you enter the twenty-first century, the educational base you build now will serve
you well. The classes you are taking in your major course of study—including management
and supervision, cost control, human resources management, quantity food production,
hotel management, purchasing, sanitation, layout and design, accounting, and
marketing—will build a strong foundation for your continued development of technical
skills. Courses outside your major—such as English, speech communication, computer
training, arts, economics, psychology, 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 environment 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.
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 graduation
day. There are many opportunities for in-service education, which include courses
that update a professional’s educational background for use in current practice; these are
offered by such groups as professional organizations, sponsors of trade shows, community
colleges and universities, technical schools, correspondence schools, trade journals,
C A R E E R DEVELOPMENT 25
and other industry groups. These organizations offer the professional an opportunity to
stay up to date 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
the ever-changing technology in the computer industry; even recent graduates are not
always aware of the most current trends and advances. The professional has the choice
of overlooking this need or enrolling in computer applications courses to explore these
concepts. The next choice is to determine whether these new procedures and equipment
are applicable to his or her particular establishment.
Professional organizations—such as the American Hotel & Lodging Association;—
the Hotel Sales and Marketing Association, International; and the National Restaurant
Association—offer professionals continuing education opportunities through correspondence
courses and seminars. The American Hotel & Lodging Association offers opportunities
for hotel employees to earn certification as Certified Hotel Administrator (CHA)
and Certified Rooms Division Executive (CRDE) as well as 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 colleges and technical schools offer special-interest courses in management
and skills application to keep you and your staff abreast of new areas and to review basic
concepts. Attending these courses can provide new insight into particular operational
problems.
Correspondence courses are another way to learn new skills and understand new areas.
New technology in distance learning—learning that takes place via satellite broadcasts,
cable, PictureTel, or on-line computer interaction—is offered by various colleges, universities,
and professional groups to encourage members to remain current.
Trade journals are also extremely helpful in keeping professionals up to date on new
management concepts, technical applications, marketing principles, equipment innovations,
and the like. The isolation experienced by managers in out-of-the-way hotel establishments
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.
Education is a lifelong venture: it does not stop with the attainment of a degree from
a university or community college. It 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
groundsperson—will be invaluable to you as you begin to plan and develop your career
26 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
in the hotel industry. It will give you an opportunity to learn what these people do and
how departments interact, as well as expose you to the momentum of a hotel—the time
frame of service available for the guest, management applications, and service concept
applications, 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 work experiences with 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, to evaluate equipment proposals, to reorganize work
areas for efficiency, or to achieve cost-effective spending. It is this work experience that
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 have voluntarily pooled
their efforts to achieve a set of goals. These goals may have a political nature, such as
lobbying legislators or providing certification of achievement.
Professional trade organizations in the hospitality industry serve its members in many
ways. First and foremost, they are a political voice for you in government. Through use
of membership fees, these organizations are able to lobby local, state, and federal legislators
to be sure the entrepreneur’s views are recognized. 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 very costefficient
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 that there are 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, and controller. It is impossible to say which is the best port of entry; all
are avenues for career development.
The hotel industry demands a great deal from 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 personal
life. It demands that the professional understand the entrepreneurial role of the
corporate 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
C A R E E R DEVELOPMENT 27
I N T E R N A T I O N A L H I G H L I G H T S
wStudents of hotel management should consider international employment opportunities. A
recent listing of international hotel openings in Hotel & Motel Management included Global
Hotel Development Group’s efforts to construct six hotels in Poland in 2001. Jones Lang LaSalle
Hotels offered research concerning a $700 million addition to the Indian hotel industry. “An additional
4,000 upscale and upper-upscale rooms are expected by 2004, and room supply will be driven by growth in
Mumbai, Delhi, and Chennai.”18
trying to decide where to begin, consider reviewing the job responsibilities of various
department managers, to learn what types of 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 you take 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 need to be explored. Since such areas
change frequently, it is not possible to list the most current trends in a textbook. However,
some of the trends that support continued growth and strong business activity are regularly
reported in such publications as Trends in the Lodging Industry by Pannell, Kerr,
and Forster. They usually cover such issues as new hotel developments; hotels under
consideration; activities of convention and visitors’ bureaus; strength of local economies;
development of business, recreation, and arts activities; and need for office space; as well
as area hotel occupancy percentages and average room rates. This information is listed
for selected cities both within the United States and at international sites.
The Internet is increasingly being used as a method for researching career opportunities
in hospitality management. Various 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 Web sites.
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 management.
This information will assist a job applicant in exploring the employment possibilities
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 selected features of its profit-andloss
statement. This information is available on computerized business databases. Take
28 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
F R O N T L I N E R E A L I T I E S
6Esther, 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 renovating
some of the rooms to reach the guest who wants to stay for 5 to 15 days. How would you prepare for this
meeting?
the time to research the economic potential of the company you are considering. Your
preinterview preparations should include reviewing the regional economic prospects and
the company’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. Some typical questions you could use when
visiting with a representative from 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 for visiting with a
representative from a full-service hotel could include, “What size staff is employed in
your hotel? Do you have any convention hotels in your portfolio? What are the services
that you typically include in a hotel in your organization?” These types of questions will
open the lines of communication for you and help you present yourself as a future professional.
Chapter Recap
This chapter introduced the future professional to the hotel industry. It began with a
historical review, including founders of the hotel industry—Statler, Hilton, Ritz, Astor,
Waldorf, 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 such as the atrium
concept, marketing and operational emphasis, geographic relocation, the emergence of
limited-service hotels, the major reorganization of 1987–1988, adoption of total quality
management, and various technological advances in the hotel industry. It provided an
E N D O F CHAPTER Q U E S T I O N S 29
overview of the hotel industry in terms of types of hotels; market orientation/location—
residential, commercial, airport, and highway; sales indicators of occupancy, average
daily rate, and RevPAR; levels of service—full-service, all-suites, limited-service, and extended-
stay; and type of affiliation or nonaffiliation—franchise, referral, companyowned,
management contract, or independent ownership. A review of trends that foster
growth in the hotel industry was presented—leisure time, me/pleasure concept, discretionary
income, family size, household size, business travel, female business traveler, and
travel as an experience. Factors affecting a student’s career development choice were
discussed, 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 were some of the exciting things
you noticed 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?
3. Investigate some of the properties in your area. In what year were they built? What
kind of competition did they have? What services or facilities did they introduce to
your community?
4. How do residential and commercial properties differ?
5. What are the four most common locations for hotel properties? What determines the
end destination of the guest?
6. Define sales indicators. Give working examples of these concepts.
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.
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. 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.
12. List the local attractions in your area that may entice visitors. Do these attractions
provide education, culture, or personal development? What makes them attractions?
30 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
13. 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?
14. Go to a current hospitality-related Web site 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?
15. Go to the Web site 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 future career.
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 setting
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 WideWorld Airport. Ryan,
another student, has worked at a limited-service
property in his hometown. He understands there is
another hotel in that chain 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 there is a new extended-stay hotel
in town and wants to know what makes that type of
hotel 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 discussion.
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?
C A S E S T U D Y 1 0 2
A recent survey in a suburban community has revealed
that there will be an influx of new citizens into
the area. Several computer industries will be relocating
to this area, and they are expected to employ
25,000 persons at all levels of the organizations.
Also, one of these computer companies will locate its
corporate headquarters here, with an additional 500
executives arriving soon.
The local hotel association has contacted Professor
Catherine Vicente of the HRI program at City
College to assist them in determining the impact
these new residents of the area 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?
K E Y WORDS 31
Notes
1. Madelin Schneider, “20th Anniversary,” Hotels & Restaurants International 20, no. 8 (August
1986): 35–36.
2. 1993 Grolier Electronic Publishing.
3. Paul R. Dittmer and Gerald G. Griffin, The Dimensions of the Hospitality Industry: An
Introduction (New York: John Wiley & Sons, 2002), 56.
4. 1993 Grolier Electronic Publishing.
5. 1993 Grolier Electronic Publishing.
6. Dittmer and Griffin, Dimensions of the Hospitality Industry, 41–43.
7. John Meyjes, Lou Hammond & Associates, 39 E. Fifty-first Street, New York, N.Y. 10022.
8. Ray Sawyer, “Pivotal Era Was Exciting,” Hotel & Motel Management 210, no. 14 (August
14, 1995): 28
9. Marriott Corporate Relations, Marriott Drive, Department 977.01, Washington, D.C.
20058.
10. ITT Sheraton Corporation, Public Relations Department, 60 State Street, Boston, Mass.
02109.
11. Saul F. Leonard, “Laws of Supply, Demand Control Industry,” Hotel&Motel Management
210 no. 14 (August 14, 1995): 74.
12. Ibid., 74, 80.
13. Ibid., 80.
14. P. Anthony Brown, “Hotel REITs—Legislation Heralds a New Era,” Virginia Hospitality
and Leisure Executive Report (spring 2000), as reported for Arthur Andersen at hotel-online.com:
www.hotel-online.com/Neo/Trends/Andersen. (Copyright 2000 Andersen.)
15. Highland Group, “Survey Results of the Extended Stay Lodging Industry,” 1111 Rosedale
Drive, Atlanta, Ga. 30306, as reported in www.hotel-online.com/Neo/News/PressReleases1998/
ExtendedStaySurvey_March98.html.
16. Paul Criscillis Jr., “January RevPAR Grows Nearly Ten Percent at Suburban Lodge Company-
Owned Hotels,” Suburban Lodges of America (120 Interstate N. Parkway SE, Atlanta, Ga.
30339).
17. Tony Lima, “Chains vs. Independents,” Lodging Hospitality 43, no. 8 (July 1987): 82.
18. “International News,” Hotel & Motel Management 216, no. 2 (February 5, 2001), 6.
Key Words
all-suites
American Hotel & 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
32 CHAPTER 1 : I N T R O D U C T I O N T O HOTEL MANAGEMENT
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
C H A P T E R 2
Hotel Organization and the Front Office
Manager
CHAPTER FOCUS POINTS
• Organization of lodging
properties
• Organization of the front
office department
• Staffing the front office
• Function of the front office
manager
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
that 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 onWednesday
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
bus group’s original hotel. The front office manager indicated that something must have
34 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
gone awry in the computer system. After all, this was a good opportunity to bring in 26
additional room nights.
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 and stylizes
organization charts that fit his or her plan to meet the goals of the particular company.
The organization charts—schematic drawings that list management positions in an organization—
that are included in this chapter are offered only as instructional examples.
An organization chart represents 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 upon 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 you develop or regroup. 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 typical managerial duties of the people within the
organization.
It is not uncommon for a general manager of a property to move people around in
various departments of the hotel. This is done for many reasons. A 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 that a
candidate 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 some
of the busywork of the controller’s office to the front office manager. The front office
manager might also spend some slack periods with the director of marketing and sales—
the person who analyzes available markets, and sells these 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 will reinforce the management
team concept. By exposing interested employees to the responsibilities of other departments
and by keeping the staff informed of the current situation of the property, the
general manager is enabling staff members to meet their career goals within the organization.
O R G A N I Z A T I O N C H A R T S 35
Flexibility is the key to hospitality organization. On the operations level, familiarity
with the staff’s strengths and weaknesses is essential to meet the demands of a particular
situation. When the property experiences an expected slow period, regrouping may be
necessary 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 with the controller. This interdepartmental
cooperation provides the backdrop for a smooth-running organization. Such flexibility
prevents departmental jealousies and territoriality from becoming roadblocks to communication.
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
• (ADR) $110 average daily rate—number of rooms sold versus room income
• 70 percent occupancy—number of rooms sold versus number of rooms available
• 58 percent yield—number of rooms sold at average daily rate versus number of
rooms available at rack rate, the highest room rate category offered by a hotel
• $18.5 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
To function as a well-run lodging facility, this property requires the following department
heads:
Figure 2-1. The organization of a large, full-service hotel requires many positions to provide service to the guest.
38 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
• General manager
• Assistant general manager
• Controller
• Plant engineer
• Executive housekeeper
• Human resources manager
• 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, human resources manager, recreation 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 physical plant engineer, the person responsible for the operation and
maintenance of the physical plant, establishes an effective preventive maintenance program.
The 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, keeps on top of new trends in controlling costs and effective use of personnel. 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 who is 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 to
ensure a safe and interesting guest stay.
Figure 2-2 outlines the organization of a somewhat smaller lodging property. This
hotel features:
• 200 rooms in a commercial property
• Suburban location
• 65 percent occupancy
• 53 percent yield
O R G A N I Z A T I O N C H A R T S 39
Figure 2-2. Notice that several of the positions listed in the full-service hotel organization
chart have been eliminated from this one for a medium-size lodging property.
• $4.5 million in revenues
• $75 average daily rate
• Full service
• Chain—franchise
• Corporate guests
• Local-community guests
• Dining room
• Lounge
• Outdoor pool
• Referral reservation service
The department heads required include:
• General manager
• Maintenance/groundskeeper
• Front office manager
• Controller
40 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
Figure 2-3. The organization chart for a small, limited-service lodging property includes
only minimal staffing. Several duties have been combined under various positions.
• Restaurant manager
• Housekeeper
This managerial staff seems somewhat skeletal when compared to that of a large hotel
or resort. This type of organization chart is possible because the level of service provided
to guests has been reduced. At this property, the guest’s stay is one to two nights, and a
dining room and lounge are provided for convenience. Many of the department heads
are working supervisors, which means they participate in the actual work performed
while supervising. Laundry and other services are contracted out. The controller provides
accounting services as well as human resources management. The maintenance/groundskeeper
oversees indoor and outdoor facilities. The front office manager and the clerks
take care of reservations as well as registrations, posting, checkout, and the like. The
restaurant manager works very 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.
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
• 51 percent yield
• $2.2 million in revenues
• $65 average daily rate
• Limited service
• Chain—franchise
• In-house laundry
• Vacation travelers
• Business travelers
• Complimentary continental breakfast—juice, fruit, sweet roll, and/or cereal
T Y P I C A L J O B R E S P O N S I B I L I T I E S O F DEPARTMENT MANAGERS 41
• Referral reservation service
• Business services and communications center—guest services that include copying,
computers, fax, and so forth
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 auditor and desk clerks.
The housekeeper, also a working supervisor, assists the room attendants, employees who
clean and maintain guest rooms and public areas.
The organization charts shown here have been developed by evaluating the needs of
the guests. The organization of departments and the subsequent staffing are influenced
by the labor pool available, economic conditions of the region, and the financial goals of
the organization. Each organization chart varies depending on the factors influencing a
particular lodging establishment. Flexibility is essential in providing service to the guest
and leadership to the staff.
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, holds one of
those positions that seems to be performed behind the scenes, and little is obvious as to
his or her role. The security director seems to be everywhere in the hotel, but what does
this person do, and for what is he or she responsible? The food and beverage director
holds a very visible position that seems to encompass much. The general manager must
see 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
manager of a local inn in our community. He was very well prepared for the lecture and
42 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
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 type of honest question has always made me terribly aware
that the role of the general manager is not easy to understand. Indeed, detailing this
managerial role could fill volumes, encompassing decades of experience. However, the
legitimacy of the question still compels me to be specific in describing this very important
job in the organization chart.
The leadership provided by the general manager is undoubtedly the most important
quality a person brings to this position. He or she orchestrates the various department
directors in meeting the financial goals of the organization through their employees. The
general manager is required to use the full range of managerial skills—such as planning,
decision making, organizing, staffing, controlling, directing, and communicating—to develop
a competent staff. Performance is judged according to how effectively supervisors
have been 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 formulated.
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 evaluation
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 meet the demands of a leader of operations? What skills and strengths are necessary
to get the job done? What business acumen must this person have? What vision does this
person bring 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.
The operational reports—operational data on critical financial aspects of hotel operations—
that a general manager must review can be overwhelming. However, the efficient
general manager should know 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 a profitable hotel?
Each general manager has developed key indicators that measure the financial success
and operational success of various department directors. These concepts are flexible, depending
on the goals the corporate ownership has 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 communication
process. Each department director takes the lead from communications received
(or not received) from the general manager.Weekly staff meetings serve as a major vehicle
for sharing communication. In addition, individual meetings with department directors
enable the communication process to become more effective. At these one-on-one meet-
T Y P I C A L J O B R E S P O N S I B I L I T I E S O F DEPARTMENT MANAGERS 43
ings, the department director can transform organizational goals into operational functions.
The general manager offers supervisory training to his or her staff in practical terms.
For example, the director of marketing and sales may have set a goal of increasing guest
room sales by 10 percent for the next quarter. At an individual meeting with the general
manager, the director of marketing and sales will agree to meet that goal over the next
four months.
What does a general manager do? He or she provides leadership to meet organizational
goals of profitability and service. It is acquired by studying theories of management and
the behavior of other managers as well as actually practicing leadership and receiving
constructive criticism from superiors on efforts expended. The role of general manager
is a professional position. It is a career goal 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 limitedservice
property may perform additional hands-on responsibilities, but he or she is re-
Figure 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.)
44 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
quired to provide leadership to the other members of the management team. The use of
total quality management (TQM) concepts, which involve application of managerial concepts
to understand operational processes and develop methods to improve those processes
(described in Chapter 11), allows managers in full-service and limited-service properties
to extend their role of leadership to frontline 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
developing and executing plans developed by the corporate owners, 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 communications.
The assistant general manager works with department directors to meet
their respective goals and objectives through efficient operations. Often he or she is the
liaison between management and operations. The more the assistant general manager is
informed of 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 rooms division manager, who is responsible for the entire front office operations,
which includes front desk, housekeeping, bell staff, concierge, and parking garage.
The assistant general manager often must oversee the beginning of a job and ensure
that others complete it. This position also requires the completion and review of statistical
reports, which the assistant general manager summarizes and shares 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 previous operational skills, such as front office, food and beverage, marketing
and sales, and accounting. Depending on the size of the operation and the personnel
available, a large property may divide these responsibilities into rooms division manager
and operations division manager.
Limited-service hotels usually do not have this type of 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 limited-service
property may perform additional hands-on responsibilities, 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 multitude
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
T Y P I C A L J O B R E S P O N S I B I L I T I E S O F DEPARTMENT MANAGERS 45
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 quality products and services
on a 24-hour basis, every day of the year. Constant supervision of products, employees,
and services is required to ensure a fair return on investment.
Although food and beverage are served for a continental breakfast or cocktail hour at
a limited-service property, there is no food and beverage director position. 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, marketing, standards
of service, and so forth need to be followed to provide good service to the guest.
Physical Plant Engineer
The plant engineer is very important in the overall delivery of service to the guest. This
person oversees a team of electricians; plumbers, heating, ventilating, and air-conditioning
contractors; and general repairpeople to provide behind-the-scenes services to the guests
and employees of the lodging property.With today’s emphasis on preventive maintenance
and energy savings, he or she must be able to develop a plan of action that will keep the
lodging property well maintained, within budget targets. Knowledge of current advances
in equipment and machinery is essential. This position requires a range of experience in
general maintenance 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 the lodging business.
A role similar to that of the plant engineer in a limited-service property is that of
maintenance 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 of personal comfort to the guest. The limited-service property
emphasizes quality in guest service, which is delivered by an efficient staff.
Executive Housekeeper
The executive housekeeper is responsible for the upkeep of the guest rooms and public
areas of the lodging property. This person truly 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, however.) Speed and
efficiency are paramount in performing the very important service of maintaining guest
rooms and public areas.
Skill in supervising unskilled labor is essential. Survival-fluency in foreign languages is
46 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
I N T E R N A T I O N A L H I G H L I G H T S
wManagers in a hotel have a particular responsibility to prepare their employees to communicate
with their guests. This is very important for international guests. Frontline employees can
assist an international guest by adopting an attitude of “hospitality without question.” This
simple concept encompasses a frontline employee’s maintaining a watchful eye for guests who appear confused,
express difficulty in communicating in the local language, or seem hesitant about responding to inquiries.
Training programs that include 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 frontline employees to
practice hospitality without question. This concept can be further advanced when a front office manager
maintains an inventory of current employees who speak various international languages.
important to the executive housekeeper, who needs to communicate effectively with employees.
Accurate scheduling of employees is also necessary to maintain control over labor
costs. The executive housekeeper is also responsible for maintaining and controlling an
endless inventory, which includes linens, soap, guest amenities, furniture, in-house marketing
materials, live and artificial plants, and more. The executive housekeeper, like the
plant engineer, must keep abreast of new ideas and techniques through trade journals and
continuing education courses.
If the lodging property operates an in-house laundry, this is also supervised by the
executive housekeeper. 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 a staff that provides clean rooms and operates an in-house laundry. This handson
supervisor works with the staff to provide the many behind-the-scenes guest services
required. Because many limited-service properties are fairly small, the housekeeper travels
the elevators of these high-rise buildings, stopping at each floor to provide employees
with constant supervision and motivation.
Interdepartmental cooperation and communication with the front desk and maintenance
department in full-service and limited-service hotels are vital for the executive
housekeeper. The release of cleaned rooms for occupancy and the scheduling of periodic
maintenance are only two functions demonstrating why interdepartmental cooperation
is critical. In addition, the marketing and sales efforts in both types of hotels depend on
the housekeeper to enforce cleanliness and appearance standards in the public areas so
that guests are attracted to and impressed by the property.
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-
T Y P I C A L J O B R E S P O N S I B I L I T I E S O F DEPARTMENT MANAGERS 47
viewing, selecting, orienting, training, and evaluating employees. Each department director
can rely on the human resources manager to provide leadership in the administration
of complex personnel.
Staffing a food and beverage or housekeeping department involves many timeconsuming
tasks:
• Writing and placing classified ads
• Preinterviewing, 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 employee
within a hotel 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 elect to
divide the responsibilities among department heads. Although emphasis remains on wellplanned
and -delivered human resources activities, the streamlined limited-service property
relies on interdepartmental cooperation to accomplish its objectives.
Marketing and Sales Director
Notice that in the title of this position, “marketing” is emphasized. The person in this
position plays an essential role in all departments of the hotel. An effective director of
marketing and sales will not only want to attract external sales such as conventions, small
business conferences, wedding receptions, and dining room and lounge business but will
also provide direction for promoting in-house sales to the guests.
This is an exciting position that requires endless creativity. The director of marketing
and sales is constantly evaluating new markets, reviewing the needs of the 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 promotional
efforts, and following up on details, details, 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. This position may also be shared by the general manager and front office man-
48 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
F R O N T L I N E R E A L I T I E S
6Afuture 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 banquet
manager has left the property for a few hours. What would you suggest that the front desk
clerk do to assist this future guest?
ager. The previous discussion of duties (with the exception of soliciting food and beverage
business) performed by the marketing and sales director in a full-service hotel is also a
good indicator of what is required in a limited-service hotel. Competition for room sales
to the corporate, group, and pleasure travel markets is enormous, and each hotel has to
address this planning need.
Front Office Manager
Given the significance of the role of the front office manager in this text, it will be
detailed more completely later on in this chapter. Some of 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 analysis 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 assistant 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. It requires an individual who can manage the many details of
guest needs, employee supervision, interdepartmental communication, and transmittal of
financial information. This exciting position enables the person to 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 on a daily basis in the hotel.
In the lodging property, daily financial status must be available to corporate owners,
management, and guests. This requires a well-organized staff, not only to prepare oper-
T Y P I C A L J O B R E S P O N S I B I L I T I E S O F DEPARTMENT MANAGERS 49
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 to provide
financial insight into the operations of the property. These include cash flow, discounts,
evaluation of insurance costs, fringe-benefit cost analysis, investment opportunities, computer
technology applications, banking procedures, and more.
This 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 that the controller uses to organize the financial activities
of the hotel; statement of cash flows—a projection of income from various incomegenerating
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 position
of the hotel at a particular point in time. It is a busy department that provides
financial information to all department directors.
The general manager of a limited-service property acts as the controller with the assistance
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.) Also, the ownership of a limited-service property hotel may be a part of a
larger financial portfolio of a business, which assists the general manager to perform the
controller’s responsibilities.
Director of Security
The director of security works with department directors to develop cost-control procedures
that help ensure employee honesty and guest safety. This person supervises an
ongoing training program in cooperation with department directors to instruct employees
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 to 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
or she has usually developed an understanding of the criminal mind and the practices of
criminals. This person is constantly on the lookout for suspicious people and circumstances.
This necessary position in a limited-service property is shared by the front office manager
and the general manager. Outsourcing of security services for on-site and parkinglot
patrol is also used. The outsourcing of this vital guest service does not relieve the
general manager of the need to develop and provide ongoing procedures to train employees
to become security-minded.
50 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
Parking Garage Manager
The responsibility of ensuring a safe environment for guests’ vehicles falls to the parking
garage manager, the person responsible for supervising the work of garage attendants
and maintaining 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 out parking spaces to local businesses and
professional people. The accounting process associated with this service involves the accurate
billing and recording of funds and subsequent deposits. This person also has to
develop budgets and recruit and train employees. The garage manager often provides
driver assistance to guests when their cars break down. Providing directional information
to departing guests is also a frequent task of the garage manager. Even though these 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
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 employ the complete
staff as listed.
Staffing the front desk positions incurs a cost to the lodging establishment. The front
office manager, in consultation with the general manager, usually prepares a personnel
budget that is related to salary levels 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,
registering guests, assigning rooms, distributing keys, communicating with the housekeeping
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 to make the front desk workload manageable when a full house, a hotel that
has all its guest rooms occupied (sometimes referred to as 100 percent occupancy) is
checking out. Given the possibility that a 400-guest convention could all check out in a
short time period, this division of labor is a well-planned concept. Even with the bestplanned
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
O R G A N I Z A T I O N O F THE F R O N T O F F I C E DEPARTMENT 51
H O S P I T A L I T Y P R O F I L E
?Eric O. Long, general manager
of the WaldorfAstoria in
New York City, has been employed
with Hilton Corporation
for 30 years. He served in various management positions,
including the Hilton Short Hills, Chicago
Hilton and Towers, HiltonWalt Disney Village, Fontainebleau
Hilton Resort, and the Palmer House.
His well-thought-out career with Hilton has 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 he has persons assigned
to work on the day-to-day administration of
those departments, he feels he is ultimately responsible
for the success of those departments. For example,
he wants to ensure that a marketing and sales
plan is current and operating. He also attends an
8:00 a.m. customer feedback meeting each day to review
feedback on the previous day’s efforts to provide
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 encouraged
him to gain expertise in any three areas of the hotel
and a solid working knowledge in all the other areas.
He feels this has been an overriding factor in his career
progression. He encourages future hoteliers who
are entering the field “to take complete ownership
and responsibility for your own career. Don’t take
promotions just for the sake of the promotion; be
selective of the moves that you make. Each move
should be weighed against the potential that it will
have in growing your career.”
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 when a guest is in a hurry.
The reservations manager is a position that 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 communicate very effectively with the marketing and sales department. Peak
as well as slow periods 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 is also expected to be able to deal with crises such as life-threatening
emergencies.With the introduction of call accounting, a computer technology application
that tracks guest phone calls and posts billing charges to lodging establishments, the
52 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
Figure 2-5. This organization chart lists positions found in a front office.
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 the entourage 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
security measures. Often he or she will sort incoming mail for registered guests and the
management staff. This position has become obsolete in most hotels.
The elevator operator, a person who manually operates the mechanical controls of the
elevator, is almost an extinct species in the lodging establishment. This person has been
replaced by self-operated elevators and escalators. Some of these people have been relocated
to 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; often the
confusion of check-ins and checkouts can be lessened when he or she is on duty.
The concierge (Figure 2-6) provides extensive information on entertainment, sports,
amusements, transportation, tours, church services, and baby-sitting in the area. He or
she must know the area intimately and must be able to meet the individual needs of each
O R G A N I Z A T I O N O F THE F R O N T O F F I C E DEPARTMENT 53
Figure 2-6. The concierge provides information on tourist attractions and entertainment in
the area to hotel guests. (Photo courtesy of Lincoln Plaza Hotel & Conference Center,
Reading, Pennsylvania.)
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.
The organization chart in Figure 2-7 portrays a much more simplified workforce than
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 provide hospitality
with efficiency and professionalism. 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.
The night auditor’s role in a limited-service property is very different from that of his
or her counterpart 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 utilization 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.
54 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
Figure 2-7. The front office staff in a limited-service hotel includes a minimal number of
employees.
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
management system (PMS), a hotel computer system that networks the software and
hardware 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
management 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
employee knows how to do certain tasks. Every employee needs instructions and guidance
in how to provide hospitality; front office employees’ attitudes are of utmost importance
to the industry. To ensure that the proper attitude prevails, the atmosphere in which
employees work must motivate them to excel and nurture morale and teamwork.
The equipment available to the front office manager is varied. With the advent of
computers, the property management system has provided the front office manager with
an unlimited opportunity for managerial control. He or she can now easily track information
such as zip codes of visitors, frequency of visits by corporate guests, and amount
of revenue a particular conference 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
F U N C T I O N O F THE F R O N T O F F I C E MANAGER 55
challenges of the front office manager. Cooperation between the marketing and sales
department and the front office is necessary to develop profitable advertising and pointof-
sale strategies. The subsequent training of front office personnel to seize every opportunity
to sell vacant rooms helps to 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, since 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 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
follow. The assistant manager offers the various 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 provide essential services to the guest.Without cooperation and communication
among these departments and the front office, hospitality cannot be delivered. The director
of marketing and sales develops programs to attract guests to the lodging property.
These programs 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 performed in a front office manager’s 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 procedures, along with typical responsibilities and interdepartmental
relationships involved in a job, form the basis for the job description. The future
professional will find this management tool very helpful in preparing orientation and
training programs for employees. It also helps the human resources department ensure
that each new hire is given every opportunity to succeed, by laying a foundation for a
job specification. 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.
56 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
8:00 a.m. 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 any potential problem areas of
which the front office staff should be aware. Meets with the plant engineer
to identify any 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.
1:00 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 any 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.
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.
F U N C T I O N O F THE F R O N T O F F I C E MANAGER 57
6:00 p.m. 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 the various
department heads in 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 would be easily
prepared, as shown in Figure 2-8. The job description is an effective management tool
because it details the basic tasks and responsibilities required of the front office manager.
These guidelines allow the individual to apply management principles in the development
of an effective 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 experiences.
Management experts have analyzed some of the complexities of supervising employees.
Some of your other management courses will explain in detail the concept of
management. This chapter 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 a manager’s position in
the scheme of the management team. As the front office manager, you are assigned certain
responsibilities along with 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 to clarify managerial practice. At this time, 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. This information will help you to understand which of the various areas of
the hotel will provide 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 personal growth.
The first concept a new supervisor (whether 20 or 60 years of age) 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 second-shift desk clerk may have no effect on the part-time night
auditor who is a moonlighter, a person who has a full-time job at another organization
58 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
Figure 2-8. This 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—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 any 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 time 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)
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 the schedule better fits his or her lifestyle
will not be inspired by the possibility of working the first shift. Tuition reimbursement
may motivate the recent graduate of an associate degree program who wants to
continue toward a four-year degree. This same incentive will mean little to someone
uninterested in higher education. The possibility of promotion to reservations clerk may
not have the same motivating effect on a telephone operator who is a recently displaced
worker concerned about a schedule that meets the needs of a young family as it does on
F U N C T I O N O F THE F R O N T O F F I C E MANAGER 59
a front desk clerk who has no dependents. There are other cases in which a supervisor
cannot figure out what motivates a person. It is a manager’s ultimate 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 is jockeying for position with the new boss. This is common practice
and a situation that needs to be addressed as part of the job. Once the new supervisor
shows himself or herself capable and competent, the supervisor can move on to the day-today
tasks. The staff needs this time to learn their new manager’s reactions under stress.
They also want to make sure that their supervisor will be their advocate with top management.
All new supervisors will be tested in this way. You should not be discouraged
by this challenge but embrace it as the first of many challenges to come.
After working out whatever personality clashes may exist among the employees, the
manager must be objective about the strengths and weaknesses of the staff. Who is the
unofficial 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 co-workers. They also know whom they can
rely on 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 will 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 that 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 followed up, 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 the gray areas of different tasks of a job.
They 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 will always have special scheduling needs as well as other job-related requests.
Supervisors should try to accommodate their needs. The new hire who has made
commitments 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
60 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
shifts because of difficulties with another person on the job may just need advice on
how to handle the other 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 is in need of additional income may have requested overtime hours. Later on, 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
establishment. 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 concerned.
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 on various shifts
can record important messages. This communication tool is vital to keeping all front
office personnel informed of additions, changes, and deletions of information and activities
that affect the operation of a front office. Additionally, daily function sheets, listing
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 complaint
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, and/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 know to whom they should be referred.
Some of this advice is based on my own experiences. One of the jobs I was responsible
for as a front desk clerk included manning 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 conveyed inaccurately
or if an employee fails to complete the communication process, hospitality is not
projected to the guest.
Ways of applying employee empowerment concepts will be explored in chapter 12.
The contemporary front office manager needs extensive training and experience in this
CHAPTER R E C A P 61
vital 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 who have been accustomed to direct
supervision on all matters will not readily adapt to a work environment that requires
independent thinking to solve 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 information
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 will show if the front office manager has adhered to the
projected budget. Table 2-1 (page 65) 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.
Solution to Opening Dilemma
Communication in a hotel is paramount to efficiency, delivery of quality service, and
profit making. In this particular case, the front office staff failed to place a room block
in the computer system for the additional 26 rooms. Does this happen frequently in the
hotel business? Unfortunately, it does. However, the delivery of quality service is dependent
on the upkeep of a hotel’s physical property, and this is an important operational
procedure. The front office manager and the director of housekeeping have to cooperate
in setting 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.
Chapter Recap
This chapter outlined the organizational structure of various 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 em-
62 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
ployees, equipment, room inventory, finances, and sales opportunities. After analyzing
these resources, the front office manager can direct the department more effectively; the
objectives 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 various departmental relationships involved.
The many positions found on 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, balancing
staff personalities, delegating tasks, training, and effectively communicating are only
a few of the skills a good supervisor must master. It is a lifelong effort 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 manager
performs on a daily basis. Describe the tasks your department director performs on
a daily basis. What relationship do both of these departments have to the overall
success of the hotel?
4. How are the positions in a front office organized? Describe the positions found at a
front office in a full-service hotel. Which positions are most crucial to providing 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.
6. What are the resources 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 management
staff? Give examples.
E N D O F CHAPTER Q U E S T I O N S 63
8. Why should the 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 three 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 for developing your supervisory style?
11. What does “the art of supervision” mean to you? Reflect upon your answer and
highlight which concepts are important to your future supervisory style.
12. Why does trying to understand individual motivations 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 some examples of how the front office is responsible for communication with
other departments, with hotel guests, and with the public.
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. There was Milo
Diaz, personnel manager, who 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 communication
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 children.
Eric Jones, food and beverage manager, continued to
blame 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
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 registering
or checking out. The front desk clerks have
made some major errors in checking guests into room
that are not ready, but she offers, “It must be that
the computer system gives them the wrong information.”
The elevator issue wasn’t the front desk
64 CHAPTER 2 : HOTEL O R G A N I Z A T I O N A N D THE F R O N T O F F I C E MANAGER
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, general
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 decision
could be made on whether to continue Ana in the
role of front office manager. Ana was very uneasy
knowing that her colleagues had reported major errors
on her behalf. However, Margaret Chu took an
approach that was very different from that of other
general managers with whom Ana had worked. Margaret
asked her to prepare a list of strategies that she
could 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 developing
strategies to use for improving her ability in the art
of supervising employees. What would you suggest?
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 very explicit in writing the job descriptions. The
description of the hotel is similar to the 500-
room full-service hotel as depicted in Figure 2-1.
Prepare job descriptions for the following management
positions:
• General manager
• Front office manager
• Executive housekeeper
• Food and beverage director
Key Words
accounts payable
accounts receivable
assistant general manager
athletics director
average daily rate
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
Table 2-1. Front Office Scheduling Process
Step 1. Estimate Needs (Review Front Office Forecast First)
10/1 10/2 10/3 10/4 10/5 10/6 10/7
Desk Clerks
Night Auditors
Cashiers
Concierges
Telephone Operators
Bell Captain
Bellhops
Step 2. Develop Schedule
10/1 10/2 10/3 10/4 10/5 10/6 10/7
Desk 1 7–3 7–3 7–3 7–3 X X 7–3
Desk 2 9–5 X 9–2 10–6 X 7–3 9–Noon
Desk 3 3–11 3–11 3–11 3–11 3–11 X X
Desk 4 X X X 3–7 7–3 3–11 3–11
Aud. 1 11–7 11–7 11–7 X X 11–7 11–7
Aud. 2 X X X 11–7 11–7 X X
Cash. 8–Noon X 9–2 9–Noon X X 11–3
Concierge 1 Noon–8 Noon–8 Noon–8 Noon–5 Noon–5 X X
Concierge 2 X X X X X Noon–5 Noon–8
Tel. 1 7–3 X X 7–3 7–3 7–3 7–3
Tel. 2 3–11 3–11 3–11 X X 3–11 3–11
Tel. 3 X 7–3 7–3 3–11 3–11 X X
Bell Capt. 7–3 7–3 7–3 7–3 X 7–3 X
Hop 1 9–5 X X 10–6 7–3 3–11 7–3
Hop 2 3–11 X 3–11 3–11 3–11 X 3–11
Hop 3 X 3–11 8–2 X X X 11–5
Table 2-1. (Continued)
Step 3. Calculate Anticipated Payroll
10/1 10/2 10/3 10/4
Category: Desk Clerk $1,300.00
8 hrs. @ $ 9.50 $ 76.00 8 hrs. @ $ 9.50 $ 76.00 8 hrs. @ $ 9.50 $ 76.00 8 hrs. @ $ 9.50 $ 76.00
8 hrs. @ $11.00 $ 88.00 8 hrs. @ $11.00 $ 88.00 8 hrs. @ $11.00 $ 88.00 8 hrs. @ $11.00 $ 88.00
8 hrs. @ $ 8.00 $ 64.00 5 hrs. @ $ 8.00 $ 40.00 8 hrs. @ $ 8.00 $ 64.00
4 hrs. @ $ 8.00 $ 32.00
$228.00 $164.00 $204.00 $260.00
Category: Night Auditor $704.00
8 hrs. @ $13.00 $104.00 8 hrs. @ $13.00 $104.00 8 hrs. @ $13.00 $104.00 8 hrs. @ $11.50 $ 92.00
$104.00 $104.00 $104.00 $ 92.00
Category: Cashier $128.00
4 hrs. @ $ 8.00 $ 32.00 0 hrs. @ $ 0 $ 0.00 5 hrs. @ $ 8.00 $ 40.00 3 hrs. @ $ 8.00 $ 24.00
$ 32.00 $ 0.00 $ 40.00 $ 24.00
Category: Concierge $501.00
8 hrs. @ $11.00 $ 88.00 8 hrs. @ $11.00 $ 88.00 8 hrs. @ $11.00 $ 88.00 5 hrs. @ $11.00 $ 55.00
$ 88.00 $ 88.00 $ 88.00 $ 55.00
Category: Telephone Operator $920.00
8 hrs. @ $ 8.00 $ 64.00 8 hrs. @ $ 9.00 $ 72.00 8 hrs. @ $ 7.50 $ 60.00 8 hrs. @ $ 8.00 $ 64.00
8 hrs. @ $ 9.00 $ 72.00 8 hrs. @ $ 7.50 $ 60.00 8 hrs. @ $ 9.00 $ 72.00 8 hrs. @ $ 7.50 $ 60.00
$136.00 $132.00 $132.00 $124.00
Category: Bell Staff $720.00
8 hrs. @ $ 7.00 $ 56.00 8 hrs. @ $ 7.00 $ 56.00 6 hrs. @ $ 7.00 $ 42.00 8 hrs. @ $ 7.00 $ 56.00
8 hrs. @ $ 7.50 $ 60.00 8 hrs. @ $ 7.50 $ 60.00 8 hrs. @ $ 7.50 $ 60.00
$116.00 $ 56.00 $102.00 $116.00
Category: Salaries—Front Office $1,757.00
Front Office Manager: $807/wk.
Reservations Manager: $575/wk.
Bell Captain: $375/wk.
Table 2-1. (Continued)
10/5 10/6 10/7
8 hrs. @ $ 8.00 $ 64.00 8 hrs. @ $ 8.00 $ 64.00 8 hrs. @ $ 9.50 $ 76.00
8 hrs. @ $11.00 $ 88.00 8 hrs. @ $ 8.00 $ 64.00 8 hrs. @ $ 8.00 $ 64.00
3 hrs. @ $ 8.00 $ 24.00
$152.00 $128.00 $164.00
8 hrs. @ $11.50 $ 92.00 8 hrs. @ $13.00 $104.00 8 hrs. @ $13.00 $104.00
$ 92.00 $104.00 $104.00
0 hrs. @ $ 0 $ 0.00 0 hrs. @ $ 0 $ 0.00 4 hrs. @ $ 8.00 $ 32.00
$ 0.00 $ 0.00 $ 32.00
5 hrs. @ $11.00 $ 55.00 5 hrs. @ $11.00 $ 55.00 8 hrs. @ $ 9.00 $ 72.00
$ 55.00 $ 55.00 $ 72.00
8 hrs. @ $ 8.00 $ 64.00 8 hrs. @ $ 8.00 $ 64.00 8 hrs. @ $ 8.00 $ 64.00
8 hrs. @ $ 7.50 $ 60.00 8 hrs. @ $ 9.00 $ 72.00 8 hrs. @ $ 9.00 $ 72.00
$124.00 $136.00 $136.00
8 hrs. @ $ 7.00 $ 56.00 8 hrs. @ $ 7.00 $ 56.00 8 hrs. @ $ 7.00 $ 56.00
8 hrs. @ $ 7.50 $ 60.00 8 hrs. @ $ 7.50 $ 60.00
6 hrs. @ $ 7.00 $ 42.00
$116.00 $ 56.00 $158.00
Table 2-1. (Continued)
Step 4. Summary
Desk Clerks $1,300.00
Night Auditors 704.00
Cashiers 128.00
Concierges 501.00
Telephone Operators 920.00
Bell Staff 720.00
Salaries 1,757.00
Subtotal $6,030.00
Taxes/Fringe Benefits .27
$1,628.10
6,030.00
Total Projected Payroll for Week $7,658.10
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%
K E Y WORDS 69
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
telephone operator
total quality management (TQM)
traffic managers
working supervisors
C H A P T E R 3
Effective Interdepartmental Communications
CHAPTER FOCUS POINTS
• Role of the front office in
establishing and
maintaining effective
communications with
other departments
• Discussion and application
of total quality
management techniques
used in improving
interdepartmental
communication
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 very anxious about
his program today. After noticing that 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!”
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 anxious to
proceed 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
72 CHAPTER 3 : E F F E C T I V E I N T E R D E P A R T M E N T A L C O M M U N I C A T I O N S
Figure 3-1. The front office serves as a clearinghouse for communication activities.
doorman, 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 knowledgeable.
These employees are believed to have their finger on the pulse of the organization
and the community. Their responses to the guests’ requests for information on
public transportation, location of hotel facilities, special events in the community, and
the like indicate how well the hotel has prepared the front office staff for this important
role. Front office managers must take an active role 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 directors
and their employees are vital to gathering information for guests. Developing positive
personal relationships is part of the communication process, but it cannot be relied on to
ensure that accurate and current information has been relayed. How does the front office
manager encourage effective interdepartmental communication (communication between
departments)? This chapter provides some background for you as you begin your professional
career. It is also important to note that intradepartmental communication (communication
inside a department) is applicable to this discussion.
Figure 3-1 shows the various departments in a hotel that interact with the front office.
The front office is at the center of this diagram to illustrate the many interdepartmental
lines of communication that exist. These lines are based on the direction each department
has been given to provide hospitality in the form of clean rooms, properly operating
equipment, safe environment, well-prepared food and beverages, efficient table service,
professional organization and delivery of service for a scheduled function as well as accurate
accounting of guest charges, and the like. These general objectives help department
F R O N T O F F I C E I N T E R A C T I O N WITH OTHER DEPARTMENTS I N THE HOTEL 73
directors organize their operations and meet the overall goal of delivering professional
hospitality. However, in reality, it requires constant effort to manage the details of employees,
materials, procedures, 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.
Marketing and Sales Department
The marketing and sales department relies on the front office to provide data on guest
histories, 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
public, to relay messages, and to meet the requests of guests who are using the hotel for
meetings, 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.
The process of completing the booking of a special function (such as a wedding reception,
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,
six, or even twelve months 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 knowledgeable
about hotel operations and personnel will make a good first impression, conveying
to the prospective client that this hotel is competent. When the guest finally arrives for
the function, the first 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.
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Messages for the marketing and sales department must be relayed completely, accurately,
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 personnel in the front office 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, managers
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, a person who is responsible for fulfilling the details
of service for a banquet or special event, or sales associate, a person 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 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, housekeeping,
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 will save the time involved in
tracking down the salesperson in charge.
Housekeeping Department
Housekeeping and the front office communicate with each other 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
• 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, mouthwash,
and 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 house-
F R O N T O F F I C E I N T E R A C T I O N WITH OTHER DEPARTMENTS I N THE HOTEL 75
keeper 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,
occupied, 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
occasions, the front desk clerk will have to 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 any unusual circumstances
that may indicate a violation of security for the guests. For example, if a maid or
houseman 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, will
relay the problem 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
on a regular basis to check activity on the guest floors.
Guest requests for additional or special amenities and guest room supplies may be
initiated 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.
Food and Beverage Department
Communication between the food and beverage department and the front office is also
essential. Some of this communication is conveyed by relaying messages and providing
accurate information on transfers, which are forms used to communicate a charge to a
guest’s account. 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 manager, restaurant manager,
or banquet captain meet the demands of the public.
Incoming messages for the food and beverage manager and executive chef from vendors
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 will 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
76 CHAPTER 3 : E F F E C T I V E I N T E R D E P A R T M E N T A L C O M M U N I C A T I O N S
posted to a guest’s folio, his or her record of charges and payments. When a hotel does
not have point-of-sale terminals that interface with PMS point-of-sale terminals, the desk
clerk is responsible for posting accurate charges on the guest folio and relies on transfer
slips. Also, the night auditor’s job is made easier if the transfer slip is accurately prepared
and posted. The front office manager should work with the 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 will want 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 will 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 other 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 to
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
information 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. Since the
majority of banquet guests may not be registered guests in
the hotel, the front office provides a logical communications
center.
The daily posting of scheduled events on a felt board or
an electronic bulletin board provides all guests and employees
with information on 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.
Figure 3-2.
Front desk
clerks must be
able to provide
immediate responses
to
guests’ requests
for information.
(Photo courtesy
of Radisson
Hospitality
Worldwide.)
F R O N T O F F I C E I N T E R A C T I O N WITH OTHER DEPARTMENTS I N THE HOTEL 77
H O S P I T A L I T Y P R O F I L E
?Michael DeCaire is the food
and beverage manager at
the Houston Hilton, Houston,
Texas. His previous experience
includes positions as executive 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 accurate
forecasting of arrivals, notification of VIPs and Hilton
Honors Club members, communication of complaints
and positive comments concerning food and
service, and processing of guest bills. He also works
with the front desk on obtaining 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 beverage,
front desk, housekeeping, sales, etc.) participate in
learning the basics of each department. This training
effort allows the salesperson to appreciate the duties
of a cook, the waiter or waitress 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 students
wanting to make a career in the hotel industry:
take an entry-level job in the hospitality industry so
you can understand the work requirements of weekends,
holidays, and nights prior to investing in a college
education. This effort will pay big dividends for
your career growth.
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 able
to 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.
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 measure
management ability to meet budget targets. Since the front office provides the controller
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.
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H O S P I T A L I T Y P R O F I L E
?James Heale is the controller at
the Sheraton Reading Hotel,
located in Wyomissing, Pennsylvania.
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
statements. 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 mistakes, 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 forecast room
sales and do the auditing of 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 any 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 salesperson.
Selling is a big part of his job through fostering a
good relationship with local vendors. His efforts may
encourage vendors to become customers of the hotel.
Maintenance or Engineering Department
The maintenance or engineering department and front office communicate on room
status and requests for maintenance service. Maintenance employees must know the occupancy
status of a room before attending to plumbing, heating, or air-conditioning problems.
If the room is reserved, the two departments will work out a time frame so the guest
will be able to enter the room or be assigned to another room. Cooperative efforts produce
the best solutions to sometimes seemingly impossible situations. Figure 3-3 depicts the
essential communication and planning by departmental managers to provide guest services
at a time that will not interfere with delivering hospitality.
Likewise, the requests from guests for the repair of heating, ventilating, and airconditioning
units; plumbing; televisions; and other room furnishings are directed to the
front desk. These requests are then communicated to the maintenance department. The
front desk clerk must keep track of the repair schedule, as guests want to be informed of
when the repair will be made.
Security Department
Communications between the security department and the front office are very important
in providing hospitality to the guest. These departments work together very
closely in maintaining guest security. Fire safety measures and emergency communication
F R O N T O F F I C E I N T E R A C T I O N WITH OTHER DEPARTMENTS I N THE HOTEL 79
Figure 3-3. Coordination of maintenance service requires cooperation between the
maintenance and front office departments. (Photo courtesy of Host/Racine Industries, Inc.)
systems as well as procedures for routine investigation of guest security concerns require
the cooperation of these departments.
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
methods must be provided.
Some directors of human resources management depend on the front office to distribute
application forms and other personnel-related information to job applicants. The
80 CHAPTER 3 : E F F E C T I V E I N T E R D E P A R T M E N T A L C O M M U N I C A T I O N S
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. For example, the guidelines may include
concerns about personal hygiene, completion of an application, education requirements,
experience, and citizenship status. This information will help the executives in the human
resources management department interview potential job candidates.
Analyzing the Lines of Communication
This section is devoted to reviewing some situations in which communications between
the front office and other departments play a role. Each situation will describe some
communication problems between departments, trace the source of miscommunication,
analyze the communication system, and present methods that will help improve communications.
The purpose of this method of presentation is to help future professionals
to develop a systematic way of continually 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 dinner?
Have the flowers that were flown in from Holland arrived? Mr. Gerard says, “Gee, you’ll
have to speak with Andre´, our banquet captain. He knows everything.”
When Andre´ arrives on the scene, 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 walkin.
Mrs. Magnate declares that this party will be a disaster. Mr. Magnate decides to
proceed with the party and take up the lack of professional service later.
Later has arrived: Mr. Magnate has complained to the general manager and I. M.
Owner—owner of City Hotel—and both are upset about the situation. Mr. Magnate and
I. M. Owner are coinvestors 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.
A N A L Y Z I N G THE L I N E S O F C O M M U N I C A T I O N 81
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 that 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 Andre´, the banquet manager,
in scheduling employees and receiving and storing the flowers. AlthoughMr. 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 will fail 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, associations,
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 manager
can ensure that the initial guest contact will be professional by reviewing the function
board with each front desk employee on each shift. The manager can then help the front
office staff focus on the upcoming events of the day. Weekly staff meetings may also
provide 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, any special requests for VIP
treatment could be noted.
Situation 2: Why Can’t Those 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 beginning
to arrive for registration. Yesterday, the president of Rosebud, Jose´ Rodri´guez, 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,
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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 the
rooms until 2:30 p.m. When the housekeeper relays this information to the front office
manager, a nasty exchange takes place between these two managers concerning the delivery
of professional hospitality.
It is now 3:15 p.m., and the hotel lobby is jammed with people checking out and
checking 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 coffee shop and lounge in the hotel to the waiting
guests. The front office manager feels that 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. Samantha opens it
and reads the card out loud: “Extra thanks to you for your kind consideration.” The
front office manager reminds Samantha that gifts from registered guests are not encouraged.
Samantha replies that this is from a former guest—“You know, that nice Mr.
Rodri´guez 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 operational
policies and procedures and documented training enable communications to flourish. For
example, new employee orientation would include a discussion on the policy 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:
1. Consult with the reservations manager to determine the expected time of departure
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
A N A L Y Z I N G THE L I N E S O F C O M M U N I C A T I O N 83
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 responding
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.
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
fifth-floor hallway. Prior to making this assignment, he checked with the reservations
manager, Keith Thomas, for approval to place the fifth-floor 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.
At 1:00 p.m., Sam receives a call from Keith asking if it would be 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 had 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 clarified.
In this case, the person who booked the convention said that there were confirmations
for 100. Was this 100 guests for 50 rooms or 100 guests for 100 rooms? This lack
of clarification 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 in the hotel. 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 will be more
effective managers. Training employees in proper procedures for dealing with other em-
84 CHAPTER 3 : E F F E C T I V E I N T E R D E P A R T M E N T A L C O M M U N I C A T I O N S
I N T E R N A T I O N A L H I G H L I G H T S
wJustin, the front desk clerk on duty, cannot speak Spanish fluently but knows how to communicate
phonetically with the Spanish-speaking housekeeping staff. When Victorio, the
houseman, 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)
ployees as well as their own departments will help improve the delivery of professional
hospitality.
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 frontline employees and supervisors to question each step in the methods they
use in providing hospitality for guests. Some examples would be “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
theorist, 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 his principles 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 specific components and then focusing on the segments of processes that produce
the end product.
The most important aspect of total quality management, which results in improving
products and services for guests in the hotel industry, is the interaction that occurs between
frontline employees and their supervisors. The interaction of employees in a group
setting and/or on a one-on-one basis to determine “what is the root of the problem” and
THE R O L E O F T O T A L Q U A L I T Y MANAGEMENT I N E F F E C T I V E C O M M U N I C A T I O N 85
Figure 3-4. Group analysis of jobs is an essential element in total quality management.
(Photo courtesy of Radisson Hotels.)
“how can we achieve the end result” thrusts employees into an atmosphere 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 common concerns about
serving the guest. In the situation presented earlier, housekeeping and front desk employees
would realize that a guest’s request for a late checkout plays havoc with delivery of
hospitality. Total quality management practices would ensure that the front office would
check with housekeeping to determine room availability in such a situation. The bottom
line is that interdepartmental communication is enhanced each time a team composed of
members of various departments meets to analyze a challenge to the delivery of hospitality.
Figure 3-4 provides a view of the interaction that is necessary to make total quality
management a success.
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
receptacles are overflowing. The front office manager recruits a total quality management
team, which consists of a front desk clerk, a maid, a waiter, a cashier, and the director of
86 CHAPTER 3 : E F F E C T I V E I N T E R D E P A R T M E N T A L C O M M U N I C A T I O N S
F R O N T L I N E R E A L I T I E S
6While a guest in room 421 is checking out, she indicates that there is 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?
marketing and sales. The team meets and discusses how the lobby area could be better
maintained. The maid says her colleagues are overworked and are only allotted 15
minutes to clean up the public areas on the day shift. The front desk clerk says that 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 that 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 several
times a day.” All of the team members realize that 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 do add a decorative
touch to the environment, but they are usually scattered about. The waiter jokingly says,
“Let’s sew them to the back and arms of the sofa!” Might the ashtrays be removed and
receptacles added for a guest 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
very 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 appointments
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 what’s 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 would seem to be that all employees should be encouraged
to be more willing to assist guests in an emergency. However, in this case, the desk
clerk has a “perception problem” concerning his job. This shortsightedness probably
E N D O F CHAPTER Q U E S T I O N S 87
results from poor training and a dearth of opportunities for employees from various
departments to exchange ideas and socialize. 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 that their employees will likewise concentrate on the 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 departments—
marketing and sales, housekeeping, food and beverage, banquets, controller,
maintenance, security, and human resources. Guest needs are met when employees cooperate
and communicate to provide hotel services. However, when these lines of communication
break down, so, too, does the 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 the segments of the communication system will seem overwhelming, but the professional
hotelier improves with each new challenge.
Situations illustrating communication lapses and their subsequent analysis provided
insights into the complex process of communicating. Each employee must develop an
appreciation for the jobs of other departmental employees to promote an understanding
of how each employee’s activities affect the delivery of hospitality. Well-developed operational
policies and training programs will 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 some examples.
2. Give some 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?
88 CHAPTER 3 : E F F E C T I V E I N T E R D E P A R T M E N T A L C O M M U N I C A T I O N S
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 operations
and communications process?
8. What does “tracing and analyzing the lines of communication” mean to you? Do
you think this 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?
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 reservations
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 supposed 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 into the early hours of Thursday morning.
Several of the guests posted do not disturb 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 investigated the
problem 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. Meanwhile,
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
worksheets 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.
E N D O F CHAPTER Q U E S T I O N S 89
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 that
the person who organized this conference specifically
told the participants that 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 attendants 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 that it will need about two more hours before
the first 75 rooms can be released.
The switchboard has been bombarded with telephone
calls for the Pet Owners. The chef is anticipating
his call from the vendor for the Swiss chocolate
ice cream cake roll. He finally calls the supplier
and finds out that 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. 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 manager
instructs the setup crew to take the ice sculptures
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 discuss
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
90 CHAPTER 3 : E F F E C T I V E I N T E R D E P A R T M E N T A L C O M M U N I C A T I O N S
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 business 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 business 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.
Frank Goss (director of maintenance): I agree. Those
new parking customers are littering all over the
garage. They dump their cigarette butts and fastfood
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 lightbulbs in your department.
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 followup
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 problem first.
What do all of you suggest we do about the parking
problem? Should we abandon a very 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 offpremises
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 security
problem, let’s discuss my need to cover the second
shift over the weekend. That is an impossible request,
because I am so understaffed. Do any of
you have any extra employees 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 dollars to pay
overtime. Let’s think about it and put a hold on
scheduling a person for the second 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 great
jobs. However, from what I am hearing today, we
need to start anticipating problems before they
K E Y WORDS 91
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?
Key Words
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
C H A P T E R 4
Property Management Systems
CHAPTER FOCUS POINTS
• Physical structure and positioning
of the front desk
• Selecting a property management
system (PMS)
• Using PMS applications
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 that 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 understanding 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 modern hotels.
For new properties, computers are standard pieces of equipment; for existing hotels,
computers are being integrated into everyday operations to assist in providing hospitality
to guests. Computer applications include routinely processing reservations as well as handling
registrations, guest charges, guest checkout, and the night audit. Interfacing, electronic
sharing of data, of hotel departments such as food and beverage and the gift shop
through point-of-sale, an outlet in the hotel that generates income (restaurant, gift shop,
spa, garage); maintenance through monitoring of energy and heating and cooling systems;
94 CHAPTER 4 : P R O P E R T Y MANAGEMENT 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 particular
computer hardware or software system; your training at any lodging property will
include specific operating procedures to produce various 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 encompassed by the term property management system (PMS), a generic term used
to describe 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 housekeeping,
food and beverage, marketing and sales, gift shop, controller, engineering, safety
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. It is the front office staff which coordinates the
communications, 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
considerations 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
This revision of Hotel Front Office Management includes references to a student manual
for a hotel front office software simulation prepared by Dr. Sheryl Fried Kline and
William Sullivan. This tutorial will allow students to process reservations and registrations,
post guest charges, handle customer service issues, and perform the night audit
procedure. It is a great opportunity for students to practice capturing and maintaining
the many details of managing the guest experience in a hotel front office and then understand
how those details support the administrative function of the hotel. The application
of this student manual and software simulation will begin in Chapter 5.
Physical Structure and Positioning of the Front Desk
Figure 4-1 shows the layout of a computerized front office. While manual equipment is
still being used in some independent properties, the computerized system has become the
system 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
P H Y S I C A L S T R U C T U R E A N D P O S I T I O N I N G O F THE F R O N T D E S K 95
Figure 4-1. The layout of computerized equipment centers on guest service and employee
efficiency.
the tone for the hotel. Neatness, orderliness, attractiveness, quality, and professionalism
are just a few of the impressions that the front desk should convey to a guest. The guest
wants to feel important, safe, and in the hands of professionals. The impression the physical
layout of the desk creates will assist the front office in creating a positive image for
the operation. 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 for these objectives to 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, to 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 monitored.
In all three settings, the front desk clerk has a view of who is coming into the hotel
96 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
Figure 4-2. Front office staff have a clear view of persons entering the lobby from the street
entrance or elevator.
H O S P I T A L I T Y P R O F I L E
?Kevin Corprew, director of
rooms operation at the Marriott
in Overland Park, Kansas,
is a graduate of the University of
Houston in hotel and restaurant management. Mr.
Corprew has worked with Marriott Hotels in various
places and positions, 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 HiltonWashington and Towers inWashington,
D.C., in sales.
Mr. Corprew indicates that setting 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 will allow them to pass in front of and behind
the desk to accommodate guests. Also, the front desk
and lobby are to be considered together in design and
function.
The organization of the front desk, with its computers
and vast amounts of details, revolves around
an uncomplicated guideline: keep it simple. Mr. Corprew
provides plenty of key machines (electronic devices
to make electronic guest room keys); ensures
that all staff follow standard operating procedures,
such as keeping faxes and mail in one location; and
requires associates to be considerate of guests’ needs.
His organizational principle is continued at the time
of check-in, when a 100 percent automated use of a
property management system only requires the associate
to swipe a credit card and to prepare 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 standards and
not to be something that they are not. He encourages
students to start in entry-level jobs so they will have
a basis for dealing with employees.
S E L E C T I N G A P R O P E R T Y MANAGEMENT SYSTEM 97
I N T E R N A T I O N A L H I G H L I G H T S
wInternational 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 very helpful.
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.
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 frontline staff members. The needs analysis should focus
on the flow of the guests through the hotel and interdepartmental communication 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 the
operational needs, it must objectively determine whether a computer will help to 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 maintenance agreement
and the very important financial payback complete the discussion of selecting a PMS.
Importance of a Needs Analysis
Selecting new equipment for a hotel property is best done after a needs analysis is
performed.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
owners and managers is cost, both initially and over the long term. As the technology
evolves and the equipment becomes more common, the cost of computerizing a hotel has
decreased and the payback period has shortened. However, even with these lower costs,
98 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
installing and operating a PMS is not inexpensive, and the cost of installing and operating
a system that does not meet the specific needs of a particular property is exorbitant.
A system that works very well for one downtown hotel may not meet the needs of a
downtown 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 therefore become limited, and the cost of the system exceeds its value. For
example, a hotel owner who believes that a PMS would speed up 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
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, communication,
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.
P R O C E D U R E F O R P E R F O R M I N G A N E E D S A N A L Y S I S 99
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 very 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 very 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
marketing efforts.)
Issues that can be analyzed are quite diverse. They include analyzing the ease with
which the telephone 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 finding 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 checkout. How are the daily room charges and taxes posted to the rooms? How
long does it take to do this? Are there any vital statistics that are 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 coming 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? A good PMS can embrace all of these lines of communication.
100 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
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 information
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 was 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 information
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
reservations compare with the number of confirmed reservations? Why are guaranteed
reservations not requested by the night auditor?
Assessing Needs Based on Findings
The final step in the analysis is to combine various operational and administrative
needs to determine 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, computer-designed applications that process data such as guest
information and aid in financial transactions and report generation, is more important
P R O C E D U R E F O R P E R F O R M I N G A N E E D S A N A L Y S I S 101
than selecting hardware, computer equipment such as central processing units, keyboards,
monitors, and printers. The effectiveness of a PMS depends on selecting software that
allows management to increase guest satisfaction and to access financial and informational
data for control purposes. The information obtained from the needs analysis will
provide a framework for evaluating the numerous software packages on the market today.
Each software package offers numerous features; it is important to choose one package
that is most appropriate for your needs. Software on the market today includes those
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. If you feel that 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 beneficial, then you should not adopt that
particular PMS. You control the software selection; its function is to assist you in doing
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.
Choosing Hardware
Choosing hardware for a PMS is not as difficult as choosing software.Today most available
hardware is compatible with standard computer operating systems (such as Microsoft
Windows). This consideration is essential because most software programs are written to
run on these standard operating systems. In short, you must choose your hardwarebasedon
its ability to handle the software; check on 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 second;
expressed in MHz (the abbreviation for “megahertz”)
Disk drive: a place in the computer where data is stored or read; hard or floppy—31/2-
inch versus Zip 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 electronic
connections
I/O ports (input/output devices): keyboards, monitors, modems, mouse, joystick, light
pen, printers, and track balls
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
102 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
Figure 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
P R O C E D U R E F O R P E R F O R M I N G A N E E D S A N A L Y S I S 103
Keypad: a numeric collection of 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 operator
to enter or retrieve data
Printer: computer hardware that produces images on paper:
Dot-matrix: produces small dots printed with an inked ribbon on paper
Ink-jet: produces small dots printed with liquid ink on paper
Laser: produces photo images on paper
Letter-quality: a better type of dot-matrix print
Draft-style: a good type of dot-matrix print
Tractor-fed: a type of printer that uses a continuous roll of paper
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
Zip drive: a computer accessory that holds data; a 100-megabytes Zip drive holds an
equivalent of 70 floppy diskettes
The front office manager must be aware of the operational capabilities of the PMS.
Computer texts and trade journals can help you understand the various hardware options
available; Personal Computer magazine, in particular, is very helpful for keeping up to
date on hardware configurations and software applications. Visits to hospitality industry
trade shows will also 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 various points-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.
The ability to interface among computer databases (sharing or networking of information)
is very important. As computer applications become more sophisticated, sharing
104 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
Figure 4-4. Computer
hardware includes a
keyboard, monitor, central
processing unit, and printer.
(Photo courtesy of IBM.)
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 positioning of the hardware at workstations should be based on the same workflow
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 have gained 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. The requirement for air-conditioned atmospheres for proper computer functioning
should also be investigated; 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
consideration 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 to eliminate these
problems. Pain in the wrist may also occur if the keyboard is positioned above the waist
of the operator. Carpal tunnel syndrome, compression of a nerve in the wrist and fingers,
OTHER PMS S E L E C T I O N C O N S I D E R A T I O N S 105
is another unfortunate result of overuse of computer keyboards. Because carpal tunnel
syndrome causes extreme pain for a computer operator, the keyboard should be positioned
at waist level. Also, pains 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, training,
backup power sources, and maintenance.
Vendor Claims
The prospective PMS purchaser should contact current users of the system being considered
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
emergency service? Answers such as “I don’t know how the property could manage without
it” or “It is very 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 that
you consider unimportant is meaningless for your purposes.) Consider the amount of
time these properties spent on needs analyses. A visit to the hotel property is worth the
effort invested. 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 get a feeling for how guest services are affected.
Hardware Installation Plans
A careful plan for hardware installation will help the management maintain guest
service 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 on-line, 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 on-line 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
106 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
Figure 4-5. Employees need time to practice using computer hardware and software. (Photo
courtesy of Red Lion Hotels.)
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 will lend a
dummy computer setup to a lodging property so that the staff can experiment with the
training modules (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 training program that is very user-friendly. The
team concept will help employees to 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 fruition. Also, 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 technology.
Backup Power Sources
What happens if the power goes out? This concern, as well as the possibility of brownouts,
partial loss of electricity, or blackouts, total loss of electricity, has been addressed
F I N A N C I A L C O N S I D E R A T I O N S 107
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 experienced
power losses are well versed in maintaining communication among the various
departments 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. When loaner or backup equipment is available, it enhances the attractiveness of
the agreement.
Financial Considerations
Purchasing or leasing a PMS for hotel use is a major financial decision. Such an investment
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 needs with computer applications by going through
this process will achieve the most realistic assessment of costs versus benefits when adopting
computers.
The controller of a lodging property has usually prepared a budget in consultation
with the general manager. Sales of room nights, food and beverages, and other products
and services 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 very 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 considerations
have to be weighed against continuance of cash flow, application of lease payments to
the purchase price, and tax advantages of leasing.
108 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
Determining the 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—will also assist management in deciding whether to install
computers. 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
• Ten 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.
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
system 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 that are available to hoteliers. For purposes of this review, assume that
the lodging property has been equipped with a state-of-the art PMS and the system is up
and running. The software program main menu lists on the screen all the available individual
programs (modules) that are included in the system. Refer to Figure 4-6.
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
keystrokes or following directions on a touch screen, a type of computer monitor screen
that allows the operator to input data by the touch of a finger. The documentation, which
consist of either printed or on-screen (monitor) instructions, explains how to operate the
hardware or software that accompanies a specific PMS. This documentation will consist
of written step-by-step instructions as well as a flowchart of individual programs and
subprograms, all of which is very valuable in training staff. The flowcharts are comparable
to the blueprints of a building. The following discussion of individual modules and subprograms
will highlight the applications of these software options in a property management
system.
PMS A P P L I C A T I O N S 109
Figure 4-6. Main menu of a property management system.
1. Reservations
2. Yield Management
3. Registration
4. Room Status
5. Posting
6. Call Accounting
7. Checkout
8. Night Audit
9. Inquiries/Reports
10. Back Office
11. Housekeeping
12. Food and Beverage
13. Maintenance
14. Security
15. Marketing and Sales
16. Personnel
17. Electronic Mail
18. Time Clock
Reservations
The reservations module (refer to Figure 4-7) consists of subsystems that can receive
individual 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 or through another computer in the referral system. All of the possibilities 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 captured
at this time. Details on deposits, blocking, times of arrival and departure, VIP guest
lists, 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. Similar procedures are followed by
other referral agencies. (Further examples of computerized reservations options are
provided in Chapter 5.)
110 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
Figure 4-7. Reservations module.
1. Guest Data
2. Room Inventory
3. Deposits
4. Special Requests
5. Blocking
6. Arrivals
7. Departures
8. VIP
9. Projected Occupancy
10. Travel Agents
11. Guest Messages
12. Reports
Figure 4-8. Yield management module.
1. Master Rate Table
2. Per-Person Increments
3. Guest Type Increments
4. Yield Management
Yield Management
Yield 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 reservations module—room inventory, room rates, reservation status, and
guest information. If a hotel is entering a maximum demand sales period, the yield
management module will allow the reservations manager to block out that time period
to prevent guest requests for room reservations for less than the minimum time
period. Also, the computer will prompt 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 beverage also assists sales
and marketing managers in determining if a group reservation has potential for profitability.
PMS A P P L I C A T I O N S 111
Figure 4-9. Registration module.
1. Reservations
2. Guest Data/Registration
3. Room Inventory
4. Room Status
5. Security
6. Reports
7. Self-Check-in
F R O N T L I N E R E A L I T I E S
6The general manager of the hotel asks you to help determine the payback period for a $20,000
PMS. How would you begin?
Registration
Guest registration modules have greatly improved the check-in process. Because information
has already been captured at the time of reservation, less time is required for
registration. 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-plastic 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-checkin
process, a procedure that requires the guest to insert a credit card having a magnetic
stripe containing 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.)
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
of the room, and receives a key—check-in is complete. All guest information was captured
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. Reser-
112 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
Figure 4-10. Room status module.
1. Room Inventory
2. Availability
3. Reports
Figure 4-11. Posting module.
1. Point-of-Sale
2. Room
3. Tax
4. Transfer
5. Adjustment
6. Paid-out
7. Miscellaneous Charges
8. Phone
9. Display Folio
10. Reports
vation 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 department
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
(Figure 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,
provides very useful reports used by the housekeeper, front office manager and staff, maintenance
engineer, 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 in advance for routine painting and refurbishing; the night auditor must
verify which rooms have been sold to complete the night audit; the reservations clerk
needs information on the availability of guest rooms; and the marketing and sales department
must have current information on room availability for conventions.
Posting
The posting module of a PMS often supplies one of the first benefits realized by the
front office manager, because it allows immediate posting of charges incurred by the
guests (Figure 4-11). Not only is the posting operation streamlined, but accuracy is ensured.
A PMS allows the posting to occur at the point-of-sale in the restaurant, lounge,
PMS A P P L I C A T I O N S 113
Figure 4-12. Call-accounting module.
1. Guest Information
2. Employee Information
3. Post Charges
4. Messages
5. Wake-up Calls
6. Reports
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 are retrieved
after an inquiry, during report generation, or at checkout. The accuracy of these charges
still depends on the employee operating 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 deliveryperson,
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.
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
subscriber 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 electronic
posting, has made the call-accounting option very desirable. However, with the increased
use of cell phones, phone cards, and personal digital assistants (PDAs), telephone 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 callaccounting
feature.
114 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
Figure 4-13. Checkout module.
1. Folio
2. Adjustments
3. Cashier
4. Back Office Transfer
5. Reports
6. Guest History
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 within 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 prepayment
has occurred. The floor limit, a dollar amount of credit allowed by the credit-card
agency, and house limit, a dollar amount of credit allowed by the hotel, have been monitored
by the PMS. These controls help to 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 the possibility of 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 well as other information
about the day’s checkouts (such as number of guest departures and time of departures).
A PMS can generate a paid in advance (PIA) listing, which monitors guests
who paid cash at check-in. The PIA prevents guests from charging any 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 a hotel. For this process, the night desk staff slips a copy of an updated guest folio
under the door the night prior to checkout. The guest enters a few digits on the television
control panel to start the process. After he or she answers a few questions (regarding
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.
PMS A P P L I C A T I O N S 115
Figure 4-14. Night audit module.
1. Guest Charges
2. Department Totals
3. City Ledger
4. Cashier
5. Financial Reports
6. Housekeeping
Night Audit
The night audit has always been very 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 on a daily basis. The debits originating
from the various departments must be checked against the totals posted to the various
guest folios. The credits, in the form of guest payments, 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.Various financial information
is then used in the daily report. The daily report is used by the management of the lodging
property to determine the financial success of a particular day.
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 number
of available rooms in the room inventory for a particular night, the status of the
number of guests to be checked in, the number of guests to be checked out for the day,
the current 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 current 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).
PMS simplifies the accounting processes. These include: the labor-intensive posting procedure
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
116 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
Figure 4-15. Inquiries/reports module.
1. Reservations
2. Registrations
3. Checkouts
4. Housekeeping
5. Credit Balances
Figure 4-16. Back office module.
1. Accounts Payable
2. Acounts Receivable
3. Payroll
4. Budgets
5. General Ledger
6. Reports
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 listing
of assets, liabilities, and owner’s equity at a certain point in time. For example, financial
information concerning a certain vendor is entered once on a terminal located in the back
office (controller’s office). This information is then reflected throughout various parts 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 streamlining
the accounting process.
Housekeeping
Obtaining current information concerning guest room status has always caused problems
for the front desk staff. Guests become very impatient when they are delayed in the
check-in process. 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 immediately 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.
Personnel assignments of room attendants for cleaning rooms can also be made very
PMS A P P L I C A T I O N S 117
Figure 4-17. Housekeeping module.
1. Room Availability
2. Personnel Assignment
3. Analysis
4. Housekeeper’s Report
5. Equipment/Supplies Inventory
6. Maintenance Requests
Figure 4-18. Food and beverage module.
1. Point-of-Sale
2. Posting
3. Cashier Reports
4. Food/Beverage Inventory
5. Recipes
6. Sales Control
7. Sales Production Analysis
8. Labor Analysis
easily. Labor analysis of number of guest rooms cleaned by room attendants and amount
of labor hours required to clean guest rooms is performed faster, and the daily housekeeper’s
report is quickly generated. Inventory of equipment and guest room supplies is
also readily available.
Maintenance requests for guest rooms can be communicated through the PMS. The
maintenance department staff can also check room status information to determine
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
module.
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 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 projections. Sales production analysis and labor analysis are also possible
with this module.
118 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
Figure 4-19. Maintenance module.
1. Review Work Order
2. Room Status
3. Cost/Labor Analysis
4. Inventory
5. Repair Cost Analysis
6. Energy Usage Analysis
7. Guest Room Power Start
Figure 4-20. Security module.
1. Keys
2. Fire Alarm
3. Burglar Alarm
4. Security Code Transactions
Maintenance
Using a PMS streamlines the processing of work orders. Repair orders are entered by
various department members. Incomplete jobs can be prioritized, and completed jobs can
be analyzed for cost. Inventories of equipment and parts can be maintained. This 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 (Figure 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
combination 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 systems
in guest rooms, public areas, and operational areas are kept under constant surveillance
via a fire-safety display terminal, a device that ensures a constant surveillance
of sprinkler systems and smoke detectors. An alarm system or a voice telephone monitoring
system will alert guests to a fire anywhere on the property. Elevators return automatically
to the main lobby area or other designated floor. Burglar alarms are also
monitored through this module. The security feature of a PMS monitors the use of security
codes in other modules as well (Figure 4-20).
PMS A P P L I C A T I O N S 119
Figure 4-21. Marketing and sales module.
1. Guest History
2. Word-processing
3. Client Files
4. Banquet Files
5. Desktop Publishing
6. Reports
7. Travel Agencies
8. Room Status—Meeting Rooms
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, personal room accommodation preferences, and the like—from reservation and
registration files. The source of the reservation (secretary, group, travel agent), type of
accommodation 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 (newspapers read on a regular basis, radio stations listened to on a regular basis,
source of recommendation) can be collected at the time of registration to give the marketing
and sales department information on advertising media for target markets.
Another PMS application that the marketing and sales department can use is the ability
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, receptions, and so forth, can be produced by assessing
various individual 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 competition. In addition, monthly newsletters can be produced through
the word-processing and desktop-publishing applications. This module provides a great
organizational feature in maintaining reserved occupancy status of meeting and banquet
rooms.
Personnel
The maintenance of personnel files is greatly enhanced by using a PMS (Figure 4-22).
Information 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
will assist management in developing a well-operated human resources department. The
120 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
Figure 4-22. Personnel module.
1. Employee File
2. Job Control List
3. Word-processing
4. Analysis
5. Reports
Figure 4-23. Electronic mail module.
1. Security Codes
2. Mail
3. Hard Copy
amount of paper involved in employee recordkeeping can be kept to a minimum. The
word-processing application 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 E-mail, is a communication system that uses
an electronic network to send messages via computers. It is very helpful in distributing
current information on policies and procedures to a large staff as well as communicating
with current and former hotel guests. When E-mail is used, security codes are issued to
maintain privacy. Staff members are able to check their E-mail at the computer terminal.
Copies of E-mail can be printed if needed for future reference (Figure 4-23).
In a large corporation with many company-owned properties or franchises, E-mail
allows for communication among establishments. In a hotel with many operating departments
and thus many department heads, this feature is a great asset to the communication
process.
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
number of hours an employee worked on any given day (Figure 4-24).
CHAPTER R E C A P 121
Figure 4-24. Time clock module.
1. Security Codes
2. Personal Identification Number
3. Time In
4. Time Out
5. Analysis
6. Reports
Solution to Opening Dilemma
Prior to the 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, management,
and operations change over time. Forming a team of frontline employees and supervisors
will allow 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
technology. Because the team is composed of employees from different departments, other
departmental requirements, including administrative paperwork, will also need to be discussed.
These discussions will enable the team to prepare a list of needs that will enhance
the guest’s stay, assist departments in preparing reports, and improve communications
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, finding out about
the availability of backup power sources, and securing a reasonable maintenance agreement.
Financial considerations will include cost-benefit analysis, the decision to purchase
or lease, and working out a realistic payback period.
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.
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
122 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
applications best meet the needs of a particular property. The front office manager will
also want to 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 financial considerations of purchasing or leasing will 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 to provide hospitality to a guest?
5. Why should a needs analysis be performed before computers are purchased? What
are the components of a needs analysis?
6. Why are computer software considerations more important than computer hardware
considerations?
7. If you are employed at a hotel that uses a property management system, which of
the software options listed in the text do you use? Explain the advantages of these
modules.
8. If you are employed in a hotel with a property management system, discuss computer
hardware descriptions with your front office manager. What 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?
SOFTWARE S I M U L A T I O N E X E R C I S E 123
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 a property management system?
15. If you are employed in a hotel, ask your front office manager if there is a maintenance
agreement for the property management system. What items are covered? 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.
Software Simulation Exercise
Review Chapter 1, “Getting Started,” of Kline and Sullivan’s Hotel Front Office Simulation:
A Workbook and Software Package (New York: John Wiley & Sons, 2003),
and work through the various concepts as presented in the chapter.
• How to Use This Demonstration Software
• Using the Innstar Program
• How to Exit Innstar
• Printing from Innstar
• Clerk ID Number
• Description of the Hotel Property
• Summary of the Basics
• System Requirements
• Chapter 1 Exercises
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 take a look at the latest property management
systems for hotels. Ana is very enthusiastic
about updating and adopting front office applica-
124 CHAPTER 4 : P R O P E R T Y MANAGEMENT SYSTEMS
tions for reservations, 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 modules
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 purchase
of a PMS, how should Ana and Lorraine proceed?
Whom should they include in developing a
PMS adoption plan and why? What areas should
they investigate?
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 some consensus
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 marketing
and sales department. Eric Jones, food and beverage
manager, says the point-of-sale module will pay
for itself in six months because guests are walking
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 recommend
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
brownouts
call accounting
computer supplies
CPS (characters per second)
credit
cursor
debit balance
direct-mail letters
disk drive
dot-matrix
K E Y WORDS 125
draft-style
ergonomics
fire-safety display terminal
floor limit
flow analysis processes
function sheets
gigabyte
guest histories
hardware
house limit
ink-jet
inquiries/reports
in-room guest checkout
interfacing
Internet
I/O ports (input/output devices)
keyboard
keypad
laser
letter-quality
main menu
megabyte
megahertz
modem
monitor
needs analysis
on-line
outstanding balance report
paid in advance (PIA)
payback period
point-of-sale
posting
printer
processor speed
profit-and-loss statement
property management system (PMS)
ppm (pages per minute)
rack rate
room status
self-check-in process
single-sheet
software
tickler files
touch screen
tractor-fed
yield management
Zip drive
C H A P T E R 5
Reservations
CHAPTER FOCUS POINTS
• Importance of guest reservations
to travelers and
lodging establishments
• Overview of reservation
system
• Sources of reservations
• Forecasting reservations
• Overbooking (occupancy
management)
• Processing guest
reservations
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 or on the Internet to ensure a well-planned trip. 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 will be negatively affected. For example, while overbooking reservations
may guarantee a full house for the hotel, it will also leave 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.
128 CHAPTER 5 : R E S E R V A T I O N S
Figure 5-1. A
reservation clerk is
ready to process a
guest’s request for a
room reservation.
(Photo courtesy of
Radisson Hospitality
Worldwide.)
Importance of a Reservation System
Profitable business ventures rely on effective marketing principles, which include reviewing
people who are in need of hotel products and services, determining their needs, developing
products and services that meet their 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 offer their members the ability to fill 30 percent or
more of available rooms on a nightly basis. Independent hoteliers have the onerous responsibility
of creating 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 Rev-
PAR. A reservation system represents 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 that are derived from the use of computerized
reservations systems. The following information on Choice Hotels International, Six Con-
OVERVIEW O F THE R E S E R V A T I O N SYSTEM 129
H O S P I T A L I T Y P R O F I L E
?Dulcie Baker, director of sales
at the Tidewater Inn, Easton,
Maryland, has been in the hotel
industry for more than 25 years.
Ms. Baker’s duties include responsibility for room
sales for groups, banquet coordination, and managing
the sales staff.
She began her career at the front desk, reservations,
and sales at the Wilmington Hilton, Wilmington,
Delaware, and continued developing her
sales expertise at the Bay Valley Hotel & Resort,
Bay City, Michigan; the Holiday Inn in Coral
Springs, Florida; The Abbey in Lake Geneva, Wisconsin;
the Holiday Inn in Greenbelt, Maryland; and
the Days Inn at the Inner Harbor in Baltimore, Maryland.
The Tidewater Inn is privately owned and does
not participate in a national reservations system. Its
focus is on delivering quality hospitality in its trademark
operation. However, it does practice yield management
and works from yearly budget projections
to produce the targeted volume in sales.
Ms. Baker extends her best wishes to future professionals
who are studying hotel management and
says, “Good luck. It’s a great business if you’re
people-oriented.”
tinents Hotels (formerly Bass Hotels & Resorts), Carlson Hospitality Worldwide, and
Pegasus Solutions provides a concise view of the importance of computerized reservation
systems to the hospitality industry.
Choice Hotels International
Choice Hotels International, with its 5,000 franchisees in 42 countries, operates under
the Comfort, Quality, Clarion, Sleep, 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
Six Continents Hotels
Six Continents Hotels (formerly Bass Hotels & Resorts) operates 3,200 hotels and
resorts in nearly 100 countries and territories on six continents under the Inter-
Continental, Crowne Plaza, Holiday Inn, Express by Holiday Inn, and Staybridge Suites
130 CHAPTER 5 : R E S E R V A T I O N S
brands. This corporation has 490,000 guest rooms and hosts more than 150 million
guests each year. Six Continents Hotels reservations system Holidex processes more than
100 million reservations per year.2
Carlson Hospitality Worldwide
Carlson Hospitality Worldwide’s central reservation system is called Curtis-C (pronounced
“courtesy”). It 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 management
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 KnowledgeNet, which
provides hotels with easy access to valuable company information (corporate policies,
forms, reports, hotel procedures, and newsletters) and also eliminates monthly printing
of hotel reports and distribution to the properties. The benefits of this interfacing 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 markets and
technologies.3
Role of the Internet in Securing Reservations
In a Hotel & Motel Management article by Bruce Adams, Alan White, from the application
service provider Pegasus Solutions, discusses ResView, the company’s central
reservation system (CRS) offered on the application-service-provider model.
“Today, you need photos,” he said. “We also are pushing a shopping engine for a
softer search, which wants to know what experience customers are looking for.”
They could search by summer and the beach, for example, or for family-oriented
experiences or for winter skiing. “We want to build more intelligence into it for
the more savvy consumer,” he said. White said that the number of corporate customers
booking through the Web has doubled in the last year. Those customers
want to be able to use negotiated rates, which adds another level of complexity.
“The use of negotiated rates on the Web has doubled in the last year [2000],” he
said. “We see increased booking volume on the Web, which slightly erodes Global
T Y P E S O F R E S E R V A T I O N SYSTEMS 131
Distribution System and voice bookings.” Despite the increase there are still 1,000
Web hits for a singleWeb booking. For voice reservations, it is fewer than 100 calls
for every booking, he said. “Our Web sites are extremely busy, so we have to use
different architectures to handle all the volume,” he said. “Many, many people
shop on the Web and book elsewhere.” “Direct to hotel is still the most popular
booking channel, claiming about 62 percent of reservations,” White said. Hotels
using the new Web-booking model also want an increased emphasis on preferred
guest handling. “They want to be able to keep track of guests, know where they
are from, why they have come, how they got them and when they come back,” he
said. “They also want more sorting of data and delivering of extracts.”4
This Hotel&Motel Management article focuses the reader on several important issues
that hotel front office managers and general managers should consider in maintaining a
marketing edge with reservations. The use of the Internet in making room reservations is
becoming a part of the natural way of doing business. Potential business and pleasure
traveler guests want to see what your hotel offers in the form of guest rooms, amenities,
food and beverages, and other services as well as related prices. Likewise, the hotel managers
seek feedback data on the customers who may visit their Web site and hopefully
their hotel. It is interesting to note that, at the time of this writing, out of 1,000Web hits
made by consumers, only one customer sale is made, as compared to the 100 incoming
calls processed for every one reservation completed. Perhaps the softer touch still has its
place in hospitality.
Types of Reservation Systems
Franchisee
The 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
advertising, and group purchasing. A franchise member of a reservation system or
a member of a referral system gains significant advantages from combined efforts of
interhotel property referrals, a system 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 reservation system are more than able to justify these costs: for example, a chain
property may obtain 15 percent to 30 percent of its daily room rentals from the national
reservation system, depending on local economic and market conditions. Compared to
132 CHAPTER 5 : R E S E R V A T I O N S
the costs incurred by an independent property that must generate every single room sale
with individual marketing and sales efforts, franchise referral costs seem minimal.
Hotel & Motel Management reports that use of the reservation system by franchises
and referral properties involves various fees, such as royalty, marketing, and reservations.
For example, a royalty fee could include 50 cents per day per room, or $1,000.00 plus
$75.00 per room per year, or 5 percent of the gross room rate. A marketing fee may
include $3.00 per room per month or a $480.00 sign fee. A reservations fee could include
25 cents per minute for use of a toll-free number or $12.00 per room per year or $5.50
per delivered reservation or 5 percent per room night booked.5
Sources of Reservations
Guest reservations come from a variety of market segments. Some of the more common
groups include corporate clients, group travelers, pleasure travelers, and current guests
who want to return to the same hotel. This is only one way of classifying guest reservations.
The purpose of analyzing these segments is to understand the needs of each group
and provide reservation systems to meet their needs.
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 normally be flat. For example, a hotel
located in an area popular with weekend tourists would operate at a loss if an aggressive
marketing 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 well structured in advance,
with detailed agendas and itineraries. Such structured schedules suggest that the corporate
guest will need reservations to ensure a productive business visit.
The reservation for the corporate guest may be initiated by a secretary or an administrative
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 very 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 various 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.
S O U R C E S O F R E S E R V A T I O N S 133
A toll-free phone number assists the cost-conscious corporate client by giving corporate
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 an expense. The corporate client can then match travel needs with the available
lodging properties.
The corporate client can also place the reservation through the reservation/referral
system of the chain organization. The large chains, through their radio, television, billboard,
and print advertising, offer the corporate client the opportunity to make a reservation
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’sWeb site to obtain information on the hotel
and make a room reservation.
Group Travelers
Group travelers are persons who are traveling as a group either on business or for
pleasure. Convention guests and seminar attendees are examples of groups that travel on
business. Participants in organized tours tend to pursue recreation, education, and hobbies,
and special interests constitute some of the pleasure 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 beverage programs, transportation reservations, meeting facilities, registration
procedures, tours, and information on sightseeing, as well as maintaining a budget
for group travelers. 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 leader of group travelers begin?
Some of the options available for the tour or meeting planner include tapping into the
bus association network, an organization of bus owners and tour operators who offer
transportation and travel information to groups, using directories listing various lodging
properties, communicating with hotel representatives of various 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
134 CHAPTER 5 : R E S E R V A T I O N S
and conventions. Usually these associations organize conventions of their own by working
with various 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 specific accommodations information, also provide the group travel planner
with the opportunity to match facilities with the needs of the group. The most common
of these directories is the Hotel & Travel Index. Other directories include the following:
AAA Tour Books and Travel Guides
Consortium Guide
Destination-specific Directory
Michelin Guide
Mobil Travel Guides
OAG Business Travel Planner
OAG Gazetters
Official Hotel Guide
Official Meeting Facilities Guide North America
Premier
Star Service
The Hotel Guide (THG)
Weissmann Travel Reports6
These valuable publications enable the planner to check the features of different lodging
properties with great ease.
Working with a hotel representative, a member of the hotel’s marketing and sales
department who actively seeks out group activities planners, is another method the group
planner may find quite appropriate. Armed with the 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. This active solicitation of group business can
prove to be very profitable 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 promoters,
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
divisions who contact various 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
S O U R C E S O F R E S E R V A T I O N S 135
more readily available the information concerning the lodging property, tourist attractions,
and the community, the easier it will be for the planner to choose a property.
Pleasure Travelers
Pleasure 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;
however, some of the people in this group may want to obtain guaranteed reservations
to ensure a trip with no surprises. This group is very fragmented and consists of many
subgroups, including singles, married couples, young families, senior citizens, and students.
Some of the various methods the pleasure 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 pleasure
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. Melinda
Bush of Murdoch magazines states, “Hotels are viewing [travel] agents as extensions
of their sales and marketing departments.”7 The fee a lodging facility pays for accepting
a reservation placed by a travel agent is usually 10 percent 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 pleasure traveler to make reservations is the toll-free
phone number. Calling these numbers, which are listed in travel guides and the phone
book, provides pleasure travelers with up-to-the-minute room rates and reservation availability
status.
The third method available for the pleasure 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 trips for a long period
of time or visits to unfamiliar areas usually prefer some semblance of assurance that
accommodations will be available, clean, safe, and comfortable. The quality assurance
provided by name recognition built up over a period of time by a chain convinces the
traveler to place room reservations through its reservation/referral system.
A fourth method used by the pleasure market segment to make reservations is via the
Internet. Travelers can visit the Web site of the participating hotels to investigate accommodations
and pricing as well as to make reservations. Considering the popularity of
home computers and their connection to the Internet, this method will grow.
Current Guests
One of the often overlooked areas for attracting room reservations is through current
guests, guests who are registered in the hotel. (Although this topic is covered in more
136 CHAPTER 5 : R E S E R V A T I O N S
detail in Chapter 13, it is important to mention it briefly here as a source of reservations.)
This potential market is a promising source of repeat business. The people in this group
have already experienced the services and facilities of a lodging property and may be quite
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 for booking 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.
Likewise, 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.
Forecasting Reservations
Forecasting or rooms forecasts, which involves projecting room sales for a specific period,
is a natural next step after the data from the reservation process have been collected. 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 indicates 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
the hotel managers to determine projected income and related expenses for a certain time
period. The front office manager, who has estimated total room occupancy to be 100
rooms with an average room rate of $75 for a seven-day period, can project a revenue
of $52,500 (100 $75 7) from room sales. Budgeted cost-control policies allow the
front office manager to allocate a certain amount of that income for front office staff.
This process of projecting sales and related expenses is very 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. This refers to the number of persons registered in a
hotel on a specific night. This is important for scheduling labor, using facilities, planning
improvements 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, extra wait staff must be scheduled in the dining room. Employees in the
housekeeping department may be refused vacation during certain periods when a full
house is expected. Other contingencies include a maintenance department’s need to schedule
major repairs and preventative maintenance, annual cleaning, and remodeling of guest
rooms when occupancy is low; a controller’s need to prepare a cash flow estimate; an
executive housekeeper’s need to schedule adequate staff based on guest room occupancy;
O V E R B O O K I N G ( O C C U P A N C Y MANAGEMENT) 137
Figure 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
FRONT OFFICE MGR
SWITCHBOARD
MAINT ENGR
GARAGE MGR
RESTAURANT MGR
GENERAL MGR
DIR MKTG AND SALES
FOOD AND BEV MGR
EXEC CHEF
BANQ MGR
HOSTESS A.M./P.M.
LOUNGE MGR
a security department’s requirement 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 will want to determine 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 very 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 financial projections.
Overbooking (Occupancy Management)
The concept of overbooking—accepting reservations for more rooms than are available
by forecasting the number of no-show reservations, stayovers, understays, and walk-ins,
138 CHAPTER 5 : R E S E R V A T I O N S
Figure 5-3. The front office forecast is issued to all department heads in the hotel.
TIMES HOTEL
Weekly Room Sales 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 Committee (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.
with the goal of attaining 100 percent occupancy—is viewed with skepticism. As future
hoteliers, you will face the onerous task of developing a policy on overbooking. The front
office manager has the responsibility of 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 operating
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.8 Hoteliers and front office managers who practice overbooking do so to
meet an organization’s financial objectives. They do not intentionally overbook to cause
O V E R B O O K I N G ( O C C U P A N C Y MANAGEMENT) 139
problems for the traveler. Rex S. Toh reports “the no-show rate is anywhere between 5
and 15% in most markets.”9
This financial loss due to no-shows could add up to a substantial amount of money
for a hotel. 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 would amount to $127,750. Lost revenues of this
volume virtually force the hotelier to develop an aggressive occupancy management policy
to manage no-shows. This policy is based on management of the various occupancy
categories into which guests are placed: those with confirmed reservations, those with
guaranteed reservations, stayovers, understays, and walk-ins.
Confirmed reservations, prospective guests who have a reservation for accommodations
that is honored until a specified time, represent the critical element in no-shows.
After that time, the hotel is under no obligation to hold a reservation. The front office
manager must keep accurate records of no-shows in this group. Various types of travelers
with confirmed reservations—corporate, group, or pleasure—have varying no-show
rates. For example, corporate confirmed reservations may have a 1 percent overall noshow
rate. Group travelers may have a 0.5 percent no-show rate, with no-shows all
coming from one or two particular bus companies. Pleasure travelers may have a 10
percent no-show rate. The 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 reported that the no-show rate for guaranteed
reservations was 2 percent, compared to 10 percent for confirmed reservations.10
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 on various traveler categories (corporate,
group, or pleasure) will reveal their stayover rates. For example, employees of a
corporation who travel with spouses may extend a Thursday and Friday business trip to
include a Saturday. 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. Pleasure 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 will help the front office manager to predict
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 the
activity in the local area. Heavy tourist seasons, special tourist events, conventions, and
the like will increase the number of potential guests in the area. Awareness of such possibilities
helps the front office manager plan accordingly. Walk-in numbers are often
140 CHAPTER 5 : R E S E R V A T I O N S
higher if the front office manager maintains good relations with the front office managers
of other nearby hotels, who refer guests to other properties when theirs are fully booked.
Sending guests who cannot be accommodated to nearby hotels ensures a win-win situation
for guests and hotels.
When these occupancy categories have been tracked, the front office manager can more
accurately 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 time period. Also, the front office manager should check the tourist activity in
the area, business events planned in other hotels, and other special events happening
locally.
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 additional
room reservations needed to achieve 100 percent occupancy. No-show factors
are based on prior experience with people with confirmed or guaranteed reservationswho
did not show up.
total number of rooms available
confirmed reservations no-show factor
guaranteed reservations no-show factor
predicted stayovers
predicted understays
predicted walk-ins
number of additional room reservations
needed to achieve 100 percent occupancy
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 noshow
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 available
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 category. A very
Y I E L D MANAGEMENT 141
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 current
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 time period—using historical records
and available information concerning tourist events, activity at other hotels, attractions
in nearby communities, and the like—is 8.
The arithmetic for this example works out as follows:
200 rooms available
71 confirmed reservations (75 [75 0.05])
98 guaranteed reservations (100 [100 0.02])
4 stayovers
5 understays
8 walk-ins
24 number of additional room reservations needed
to achieve 100 percent occupancy
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 in advance, the front office manager has reasonable flexibility in accepting 24
additional reservations for the evening.
Yield Management
Yield 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. Yield management
is part of 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 time periods with minimum length of reservations
142 CHAPTER 5 : R E S E R V A T I O N S
F R O N T L I N E R E A L I T I E S
6As front office manager of The Times Hotel, you want to project the number of additional
rooms you will need to book 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 percent
no-show history, 200 guaranteed rooms with a 2 percent no-show history, 15 stayovers, 10 understays, and
45 walk-ins.
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.
Processing Guest Reservations
Means of communication with the client; room inventory data banks; systems for reservation,
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 efficient
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 in providing an effective room reservation processing system.
Computerized Reservations 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 has been
widely distributed by the marketing and sales departments of the corporation. The potential
guest who dials this toll-free number will be 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
P R O C E S S I N G G U E S T R E S E R V A T I O N S 143
has rooms available for those nights, the request can be processed. If it does not have
space available, the operator can suggest properties in the reservation/referral system that
do have rooms available.
After the operator has determined that the guest’s room request can be satisfied, he or
she will ask when the arrival time will be. The many lodging properties in the industry
have different policies 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
that are 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 enough 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 both the hotel and the guests. Both
computerized and traditional reservations systems can offer various levels of reservation
assurance to accomplish this goal via advanced, confirmed, and guaranteed reservations.
Outsourcing Reservations
In addition to central reservation systems (CRS) operated by hotels, there are outsourcing
providers of central reservation systems that are available for hotel managers.
This new breed of CRS and service provider processes voice, Internet and Global
Distribution 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 throughWeb-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; alternatedistribution-
system connectivity; 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 GDSes and enables consumers to book hotel reservations
online through the hotel’s Web site.
Sally Payze, vice president of operations at SynXis, indicates “It consolidates
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 profiles,
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,
provides immediate confirmation numbers and reduces data-entry errors.”11
144 CHAPTER 5 : R E S E R V A T I O N S
Types of Reservations
ADVANCED RESERVATIONS
A guest usually chooses the advanced reservation option when he or she is in transit
and is calling to determine if a property has rooms available for a particular time period.
The guest does not want any commitment from the hotel to secure the room reservation.
The hotel will hold the reservation until a specified time. This type of reservation has
been dropped by some lodging reservation systems in favor of confirmed reservations,
which specify a certain arrival deadline with no commitment by the guest to pay if he or
she does not show.
CONFIRMED RESERVATIONS
The confirmed reservation is comparable to a contract that becomes void at a certain
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 that room to walk-in guests or to accept overflow guests from another property. 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.)
GUARANTEED RESERVATIONS
Guaranteed reservations enable lodging establishments to predict revenue even more
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
matter when the guest arrives on the reserved night, the hotel must have the reserved
accommodation 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 methods
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.) This 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 necessarily
have any meaning to the guest, may identify the hotel in the chain/referral group, the
P R O C E S S I N G G U E S T R E S E R V A T I O N S 145
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 sequential
number of the reservation. The organization that develops the code will include
information in the code that is 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 shorter 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
communicate 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 may be misplaced.
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 methods.
Sometimes the guest will send a bank check or deliver cash to secure a reservation. A
bank check is acceptable, as long as adequate time is available to process the check. 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 total final bill is essential. The folios
of guests who pay cash in advance must be monitored.
Cancellations
Cancellations due to the guest’s change in plans are easily handled by a computerized
reservations system. The guest calls the central reservation system or the hotel where the
reservation has been made. Some lodging organizations stipulate a time 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 sys-
146 CHAPTER 5 : R E S E R V A T I O N S
tems, 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.) This 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
digits 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 cancellations.
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
Blocking Procedure
After a reservation has been 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 various participating
properties require the computer to block (or reserve) those rooms at the appropriate
hotels. If additional 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, however, tell the computer terminal operator that a hotel in the same geographic
area does have vacancies. This is undoubtedly one of the major advantages of participating
in a reservation/referral system. This type of blocking is usually referred to as
blocking on the horizon—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.
P R O C E S S O F C O M P L E T I N G R E S E R V A T I O N S THROUGH A PMS 147
Figure 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:
ADDRESS:
AGENT: ID #:
ZIP:
Process of Completing Reservations through a PMS
The previous discussion has focused on processing guest reservations through a central
reservation headquarters. However, the individual PMS at a member hotel of a reservation/
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 selected option 1, “guest data,” the
screen on the video display terminal would look like that in Figure 5-4. The clerk would
enter the data into the PMS as requested. That data would then be cleared through the
rooms reservations bank to confirm the availability of the room requested.
Other options in the menu would be accessed as needed. For example, option 2, “room
inventory,” would list the reservation status, a term used to indicate the availability of a
guest room to be rented on a particular night, that is, open (room is available for renting),
confirmed (room has been reserved until 4:00 p.m. or 6:00 p.m.), guaranteed (room
has been reserved until guest arrives), and repair (room is not available for guest rental)
(Figure 5-5). Option 3, “deposits,” would be accessed when the clerk needed to 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 that 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
148 CHAPTER 5 : R E S E R V A T I O N S
Figure 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.
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.
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 will assign a guest or guests to a specific room. Option 6, “arrivals,” lists
the individuals or groups that are expected to arrive on a specific date (Figure 5-9). Option
7, “departures,” 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 those 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.
P R O C E S S O F C O M P L E T I N G R E S E R V A T I O N S THROUGH A PMS 149
Figure 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: 447 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
Figure 5-7. The special requests screen assists reservationists in meeting a guest’s request for various room
accommodation.
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
150 CHAPTER 5 : R E S E R V A T I O N S
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
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.”
These examples provide only a brief overview of the capabilities of a reservation module
of a PMS. Your hands-on experience with a PMS will provide you with real-life
applications of a very valuable management tool. Managing reservation data allows the
front office manager to organize hundreds of details into usable information—informa-
Figure 5-8. The blocking report
screen provides front office staff
with room reservation status on
the horizon.
P R O C E S S O F C O M P L E T I N G R E S E R V A T I O N S THROUGH A PMS 151
Figure 5-9. The arrival report screen lists incoming guests with reservations.
RESERVATIONS INCOMING 02 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
Figure 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
326 BAKER, P. JOHNSON TOURS
152 CHAPTER 5 : R E S E R V A T I O N S
Figure 5-11. The VIP information screen lists details of special needs of guests.
VIP INFORMATION
BLAKELEY, 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 BABY-SITTER (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.
BLAKELEY.
DIRECT BILL (TIMES HOTEL ACCT. NO. 420G) TO GRANITE DEVELOPMENT
COMPANY, 301 THOMPSON DRIVE, GRANITE, IN 00000
Figure 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.
P R O C E S S O F C O M P L E T I N G R E S E R V A T I O N S THROUGH A PMS 153
Figure 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
#4591
32 KAVE
SIMINTON, NJ 00000
000-000-0000
BLANT, E.
#4512 B
GUAR 5
@70
PD 09 30
09 30 MENTING
#4591
CROSS, L.
#4501 B
GUAR 10
@65
PD 10 05
02 01 MENTING
#4591
CROSS, L.
#4501 B
GUAR 20
@75
PD 02 10
02 05 MENTING
#4591
BROWN, A.
#4522 B
GUAR 10
@70
PD 02 15
Figure 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 GEN 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. 01 02 1:38 P.M.
JENNIFER HOWE 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
tion that will help provide hospitality to guests and financial success to the lodging property.
Database Interfaces
Department managers rely on information captured at the time a reservation is made
to plan their work. Database interfaces, which transfer shared information among computers,
allow managers to retrieve this information at will. Marketing directors need
current data to monitor projected sales, while sales representatives in the marketing department
need immediate information on room availability for specific time periods.
154 CHAPTER 5 : R E S E R V A T I O N S
Housekeeping staff members can plan routine care and maintenance activities depending
on projected occupancy. Maintenance crews can 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 in planning fiscal budgets.
True Integration
It is interesting to note that there is a technological advancement being developed that
integrates a hotel’s central reservations system and property management system. Rebecca
Oliva reports the term true integration, in which the CRS and PMS use the same database
for processing reservations.12 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.
Current software providers include MICROS Systems, through OPERA, and AREMIS
(AremisSoft Corporation).
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 reservations
manager, front office manager, or manager on duty. However, a front office manager
has to handle this challenge by having his or her staff check out the room availability
in nearby hotels and notify guests that their room reservations 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 has addressed hotel reservation systems. As the popularity of computerized
reservation systems increases, chains and referral properties have adopted them to meet
the needs of the traveling public.
Reservations ensure that corporate, group, and pleasure travelers will 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
E N D O F CHAPTER Q U E S T I O N S 155
H O S P I T A L I T Y P R O F I L E
?Thomas Norman, CHA, is the
general manager of the Holiday
Inn Grenada, in Grenada,
Mississippi. This hotel is a 130-
room property with seating for 275 banquet guests
as well as a Holidome with pool and recreational spa
area. After Mr. Norman graduated with a baccalaureate
degree from Henderson State University, he
continued his interest in the hotel industry with various
entry-level hotel supervisory positions. His re´sume
´ includes hotel general manager positions with
Wilson World Hotel in Dallas, Texas; Radisson
Marque in Winston-Salem, North Carolina; various
Holiday Inns and Ramada Inns; The Inn at Reading
in Wyomissing, Pennsylvania; and the Mountain
Laurel Resort in the Pocono Mountains; as well as
consulting work in Texas.
Mr. Norman, in reflecting on the manual system
versus the property management system of processing
and controlling reservations, feels that although
the front-end cost of a computerized system
is not inexpensive, the hotel recovers the cost “in
a hurry,” especially in a property that manages a
high volume of group business. (Consider the processing
of reservations for each person in a large
group, with the information being individually handwritten
onto reservation cards, which are then handfiled
and processed.) He estimates that the payroll
work hours for reservations are cut by more than
half with the implementation of a computerized
system. He explains that the computerized system
provides much faster call-up of information, and easier
review of reservations and room availability, versus
the manual system, in which a clerk must go to
the proper book to locate and pull out the information.
hotel. Overbooking, used to balance no-shows and understays, can be carefully structured
using the occupancy management formula. Computerized reservation systems also help
front office managers to 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 prepay. 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 technique for marketing rooms for the hotel. The front office manager is
responsible for providing this service to the guest.
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 needs of the traveler for assured reservations?
3. What advantages does a hotel belonging to a reservation/referral system enjoy?
4. What are some major sources of guest reservations? What information does this
analysis reveal?
156 CHAPTER 5 : R E S E R V A T I O N S
5. Discuss the nature of a typical corporate client’s travel plans and explain how these
plans are related to a well-organized reservation system. What are some reservation
access methods available to the corporate client?
6. Why are tour or meeting planners important to the hotel with regard to group reservations?
What are some reservation access methods available to the planner of
group tours?
7. How does the pleasure traveler differ from the corporate client and group traveler?
What are some reservation access methods available to the pleasure 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 reservation.
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 some examples.
18. How do you think true integration of the central reservation system and a hotel’s
property management system will affect guest satisfaction and the hotel’s financial
success?
E N D O F CHAPTER Q U E S T I O N S 157
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 available
rooms. Reservations are composed of 60 percent
confirmed and 40 percent guaranteed.
In the past six months, about 5 percent of the confirmed
reservations have been no-shows, resulting in
a financial loss of about 500 room nights. No analysis
of the confirmed reservations that resulted in noshows
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 concepts: the
legality of overbooking, the need to maintain an accurate
accounting of the financial impact of noshows,
and the management of the different reservation/
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
158 CHAPTER 5 : R E S E R V A T I O N S
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
Software Simulation Exercise
Review Chapter 2, “Reservations,” of Kline and Sullivan’s Hotel Front Office Simulation:
A Workbook and Software Package (New York: JohnWiley & Sons, 2003), and work
through the various concepts as presented in their chapter.
• Reservation Process in INNSTAR
• How to Make a Basic Reservation
• How to Retrieve and Display a Reservation
• How to Cancel a Reservation
• How to Reactivate a Reservation
• How to Make a Group Block
• How to Book a Room from a Room Block
• Analyzing Reservation Status Screens
• Special Situations
• Chapter 2 Exercises
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
no-show factor
occupancy management formula
outsourcing
overbooking
pleasure traveler
referral member
reservation code
reservation referral system
reservation status
N O T E S 159
room forecasts
stayovers
travel directories
true integration
understays
walk-in guests
Notes
1. “Choice Hotels Offers Wireless Reservations via Palm Handhelds” (October 19, 2000),
Choice Hotels, Silver Spring, Md.
2. Six Continents Hotels, 3 Ravina Drive, Suite 2900, Atlanta, Ga.
3. Betsy Day, Public Relations Director, Carlson Hospitality Worldwide, Minneapolis, Minn.,
personal communication to author, June 26, 2001.
4. Hotel & Motel Management, vol. 216, no. 10 (June 4, 2001), p. 50, “Second Generation
of Web Bookings Offer Special Searches,” by Bruce Adams.
5. “Hotel&Motel Management’s 2001 Franchising-Fees Guide,” Hotel&Motel Management
216, no. 9 (May 21, 2001): 26.
6. Hotel Sales & Marketing Association International 1999 Survey of Travel Agents, North
America segment.
7. Melinda Bush, “Hotel Booking—Information Is Critical,” Lodging Hospitality 44, no. 7
(June 1988): 2.
8. Rex S. Toh, “Coping with No-Shows, Late Cancellations, and Oversales: American Hotels
Out-do the Airlines,” International Journal of Hospitality Management 5, no. 3 (1986): 122.
9. Ibid., 121.
10. Ibid., 122.
11. Bruce Adams, “Baby Grows Up,” Hotel & Motel Management 216, no. 10 (June 4, 2001):
50.
12. Rebecca Oliva, “Singular Solution,” Hotels 35, no. 7 (July 2001): 99.
C H A P T E R 6
Yield Management
CHAPTER FOCUS POINTS
• Occupancy percentage
• Average daily rate
• RevPAR
• History of yield
management
• Use of yield management
• Components of yield
management
• Applications of yield
management
O P E N I N G D I L E M M A
The assistant sales manager has left a message for the front office manager and
the food and beverage 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 assistant sales manager.
As mentioned in earlier chapters, yield management is the technique of planning
to achieve maximum room rates and most profitable guests. This concept appeared
in hotel management circles in the late 1980s; in fact, it 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 this concept has
been slow in the hotel industry, it offers far-reaching opportunities for hoteliers in the
twenty-first century. This chapter explores traditional views of occupancy percentage and
average daily rate, goals of yield management, integral components of yield management,
and applications of yield management (Figure 6-1).
Occupancy Percentage
To understand yield management, we will first review some of the traditional measures
of success in a hotel. Occupancy percentage historically revealed the success of a hotel’s
162 CHAPTER 6 : Y I E L D MANAGEMENT
Figure 6-1. A front office manager discusses the elements of yield management in a training
session. (Photo courtesy of Hotel Information Systems.)
staff in attracting 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 such questions as 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 newspaper 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
competent were front office staff members in making the sale? While interpretations of
occupancy percentage are still good indicators of the staff’s efforts, in this chapter we
will focus on applications of yield management.
The occupancy percentage for a hotel property is computed daily. The method used
to determine it is as follows:
number of rooms sold
100 single occupancy %
number of rooms available
To see how this formula works, consider a hotel that sold 75 rooms with a room
inventory of 100 rooms; this would yield a 75 percent occupancy percentage:
75
100 75%
100
OCCUPANCY P E R C E N T A G E 163
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:
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 also important not to assume that occupancy is standard each night.
Variations 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:
Monday–Wednesday: 100 0.65 $89 156 (52 3) $902,460
Thursday–Saturday: 100 0.40 $89 156 (52 3) $555,360
Sunday: 100 0.50 $89 52 $231,400
Total: $1,689,220
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 will require 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:
100 double occupancy %
number of guests number of rooms sold
number of rooms sold
If a hotel sold 100 rooms to 150 guests, then the double occupancy percentage is 50
percent, computed as follows:
150 100
100 50%
100
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 a walk-in guest,
are typically answered when the ADR is reviewed.
164 CHAPTER 6 : Y I E L D MANAGEMENT
The method to compute the ADR is as follows:
total room sales
number of rooms sold
If a hotel has daily room sales of $4,800 with 60 rooms sold, the ADR is $80, computed
as follows:
$4,800
$80
60
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 yield 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
understand one of the financial determinants that hoteliers use. 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:
room revenue
number of available rooms
or
hotel occupancy average daily rate
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
success. RevPAR asks the question “How many dollars is each room producing?” If there
are certain rooms that 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 the concept of yield management,
which turns the passive efforts of hoteliers into aggressive financial strategies.
History of Yield Management
The airline industry instituted the first use of yield management after deregulation in the
late 1970s.1 The airlines blocked out certain time periods when seats on flights were priced
U S E O F Y I E L D MANAGEMENT 165
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 share similar operational features with airlines. Each has a fixed number of
products (hotel rooms and airline seats) that, if not sold on a certain day or flight, cannot
be resold. Airlines and hotels sell to market segments that have distinct needs in product
and service level. Each has demand periods (holidays, weekdays, and weekends in hotels;
holidays, weekdays, and time of day for airlines), which place the provider in a favorable
position. Airlines and hotels have various rates from which guests can choose. Reservations
are the key operational concept that allows managers to use yield management.2 By
using computers to track a database of products (hotel rooms and airline seats) and to
process reservations, each has the ability to look at a sales horizon of 45 to 90 days and
to set price and reservation policies that will allow managers to predict profitability.
One of the major differences in how yield management is used in airlines and hotels
is that at the hotel, the guest will also spend money within the hotel for various products
and services. The airline passenger usually does not have an opportunity to spend large
amounts of money during a plane flight. Because of this unique difference, hoteliers have
to consider the financial potential of one prospective guest over another in determining
reservation policies. For example, one group that is requesting to block a group of 500
rooms with a $50,000 value may also want to book banquets and other food service
events that total $25,000, while another group may want to book a block of 600 rooms
with a value of only $60,000.
Use of Yield Management
The goal of yield management is twofold: to maximize profit for guest 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 yield management.
The following information shows how yield management is used in the hotel industry.
As you read through this information, note how the management staff is using technology
to make informed decisions, which will reflect favorably on the bottom line. The real
challenge of developing any computer application is to support the goals of the management
staff. The following quote from the International Hotel Association summarizes the
importance of using yield management as a business tool: “Yield Management is the musthave
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 control, a hotelier can maximize
profits from the sale of rooms and services.”3
166 CHAPTER 6 : Y I E L D MANAGEMENT
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 some examples:
OPERA—a Revenue Management System (Yield Management) is one of the
smartest and most informed strategies for increasing sales and raising profits.
OPERA Revenue Management System is powered by OPUS 2 Revenue Technologies,
a subsidiary of MICROS Systems, Inc. By synthesizing the hospitality industry’s
most sophisticated technologies for sales forecasting, analysis and rate quotation
in an easy-to-use format, this revolutionary revenue management system
guides personnel in offering rates and dates that will maximize revenues.
Designed to work in concert with the OPERA, CRS (Centralized Reservation
System), and PMS applications, Windows-based revenue management systems
are fully integrated, thereby eliminating the need for duplicate data entry. All reservation
transactions are automatically and seamlessly communicated, allowing the
system to deliver rate quotations every hour, so personnel can make appropriate
adjustments as demand patterns shift. After gathering data from all reservation
transactions, group blocks, and inventory changes, the system creates rate hurdles,
which guide reservations agents to sell the most profitable stays at the most profitable
rates. During high demand, for example, the rate hurdle will be high, shutting
off discounted rates. During low demand, the hurdle will be lower, encouraging
agents to sell to even the most price-sensitive guests. As a result, revenues are optimized
while rate resistance is minimized.
OPERA Revenue Management Systems powered by OPUS 2 Revenue Technologies
automatically evaluates a group’s total contributions by analyzing all revenue
sources including room rates, food and beverage, conference facility, equipment
rentals, etc. These revenues are then compared to the net cost of the group and the
impact the group may have on transient revenue, including how it may disrupt
typical transient stay patterns. After analyzing these factors, if the group is considered
not profitable, the system prompts the sales manager with alternative rate
guidelines and stay dates in an attempt to accommodate the customer profitably,
thereby gaining incremental business as opposed to turning the customer away.
The built-in incentive program is driven by the profitability of the groups that
the establishment hosts. The system allows management to institute a range of
incentives for sales managers based on the group business they capture. While the
system is easy to use and understand, its depth of analysis allows a direct link to
the performance of individual sales managers to each property’s profitability.4
PROS Revenue Management can help hotels gain substantial incremental revenues
while simplifying decision making for individual and group reservations, promotions,
walk-in acceptance, network rerouting, and contract negotiations. Linked to
property management and centralized reservations systems, The PROS Forecaster
obtains historical and current booking information to forecast future demand by
such factors as day of arrival, product (room type, rate), and length of stay. Its split
U S E O F Y I E L D MANAGEMENT 167
history functionality defines multiple non-contiguous periods of history to use as
bases for forecasting when data from a previous year reflects unusual influences.
Hotels can also specify periods of the year with unique demand profiles, such as
holidays and special events, to forecast from very specific history pools. The PROS
Forecaster can combine such alternative data sets and incorporate data weighting
to improve forecast accuracy.
The PROS Optimizer uses forecaster results to set the most revenue-beneficial
room rates and allocations based on the forecast demand at each price point. Many
factors influence the bid price (minimum acceptance price) for a hotel’s fixed inventory.
Doubles have more value than singles especially when the actual rooms
are identical. Extended stays are usually preferable to one-nighters, except when
the latter leaves free capacity for an upcoming high-demand period. If a hotel has
a party room or ballroom, people attending a function there have added incentive
to stay at the hotel, raising bid prices for rooms during that period.
Vacancies and room spoilage are serious problems in the hospitality industry.
Even with credit card–guaranteed reservations, a room that goes empty for a night
represents a lost opportunity. The PROS Optimizer automatically sets overbooking
levels to gain the most revenue possible while avoiding denials of guests with reservations.
PROS can also assess the revenue value of prospective groups and provide minimum
bid prices for their acceptance. Its systems track the rate at which preliminary
requests from a travel agent or group manager become firmed reservations, and
the rate these reservations materialize into paying guests at the front desk.5
maxim automated revenue management system is a state-of-the-art yield management
solution for the hospitality industry. It interfaces with a property management
system (PMS) and/or Centralized Reservation System (CRS) to obtain upto-
date information on transient and group bookings, rates, room types and other
data. Property history and current booking information is used to forecast future
demand for products by arrival date, rate, room type, and length of stay. The system
generates recommended yield actions, including changes to length-of-stay
availabilities at the level of rate category and room type. A graphical user interface,
in an easy-to-use windows environment, allows users to review the forecast
and recommend revenue actions, make adjustments to the forecast if appropriate
and transmit yield actions to the PMS and/or CRS. maxim’s revenue actions
can be implemented by a hotel’s revenue manager, the management company’s
remote revenue support staff, or by the Yield Management Systems support
team.
Some of the features of this system include the following.
• Forecasting accuracy achieved by incorporating activity related to the initial
reservation, denied reservations, cancellations, modifications, no shows,
check-ins, and check-outs.
168 CHAPTER 6 : Y I E L D MANAGEMENT
Table 6-1. Occupancy Percentage Comparison
Hotel
No. Rooms
Available
No. Rooms
Sold Rate Income
Occupancy
%
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
• Identifies the mix and price of bookings that will generate maximum profits
for each hotel.
• Accurately determines which customer reservation requests to accept and
which to decline.
• Considers competitive pressures and economic cycles with daily analysis and
updates.
• Assesses the impact of prospective groups on overall property net revenue
and provides guidelines on minimum room rates for groups.
• Tracks planned and actual group block materialization and identifies deviations
from forecast.
• Performs a complex optimization of data every night, processing every booking
transaction and updating large forecast data sets.
• Forecasts transients up to a year and half into the future.6
Components of Yield Management
To understand yield management, it is important that you know its interrelated components.
Each part of yield management feeds into a network, which 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 this venture? For example, Table 6-1 shows
Hotel ABC which has 500 rooms. It sells 200 rooms at $80 and 200 rooms at $95 (rack
COMPONENTS O F Y I E L D MANAGEMENT 169
Table 6-2. Yield Comparison
Hotel
Revenue
Realized
Revenue
Potential Yield %
ABC $35,000 $47,500* 73.68
XYZ $36,500 $47,500* 76.84
*500 rooms $95 (rack rate) $47,500
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), earning
$36,500 and achieving the same 80 percent occupancy. This additional income ($1,500)
earned on a daily basis 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:7
yield
revenue realized
revenue potential
Table 6-2 demonstrates the effects of yield 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.
200 $85 $17,000
100 51.51%
300 $110 $33,000
The determination of yield provides a better measure of a hotel staff’s effort to achieve
maximum occupancy than the traditional view of occupancy percentage. The 51 percent
yield means the staff’s effort in achieving maximum occupancy could have been improved
by using effective strategies to sell more $110 rooms. Thus, the goal of yield management
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.
170 CHAPTER 6 : Y I E L D MANAGEMENT
Table 6-3. Yield Management Strategies
Demand Strategy
High Maximize rates, require minimum stays
Low Maximize room sales, open all rate categories
Optimal Occupancy and Optimal Rate
Achieving the best yield involves redefining the use of 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 yield 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 $76.00, 150 rooms at $84.00, and 35 rooms
at $95.00 (rack rate). The yield for this combination is 83 percent. If yield management
were in use and the daily report revealed 200 rooms sold at $90.00 and 85 rooms at
$95.00, a 91 percent yield could have been realized. Not only could an additional eight
percentage points have been achieved, but an additional $2,550.00 could have been
earned. In both situations, 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 optimal 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.8
These concepts are portrayed in Table 6-3. Orkin also offers some 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 characteristically
rate sensitive, and promote limited-availability low-cost packages to local market.”9 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 if this
aggressive marketing tactic would work. Some hoteliers were setting reservation policies
that required minimum length of stay during heavy demand periods. The procedure rec-
COMPONENTS O F Y I E L D MANAGEMENT 171
ommended for low demand (special promotional rates and soliciting group and local
business) was the strategy used during any demand period. As yield management continues
to be tried and tested in hotels, various combinations of maximizing room rates and
room sales will continue to challenge hoteliers.
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 developing
a particular strategy.10 Accurate forecasting of transient demand will assist 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 time period would not be advisable.
If the period following the group business is low, then advance knowledge of this information
will allow time for marketing and sales to develop special promotional packages
aimed at the transient and local markets.
Block-Out Periods
The strategies just discussed for high-demand periods require 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 reservation for October 25, but that
date falls in a block-out period of October 24, 25, and 26, the reservation agent will
have to 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 periods will allow
a hotel to develop standardized reservation operating procedures for a 24-hour-a-day
reservation system. Forecasting of these time 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 will process reservations, track demand, and block out room
availability during certain time periods.11 The details of operating a reservation system
for a 500-room hotel on a 365-day basis that uses yield management would be overwhelming
if left to manual calculation. He also advises initiating specific rate-setting
policies that will ensure profitability. Establishing block-out periods will require an ongoing
marketing effort by the hotel to ensure sales in projected low-demand periods. He
also urges front office managers to develop a well-trained staff, who will understand and
use yield management procedures. Training is another key element in making a very
complicated system workable (Figure 6-2).
Those of you who have experience in the hotel industry will appreciate Orkin’s last
172 CHAPTER 6 : Y I E L D MANAGEMENT
Figure 6-2. A
front office
manager encourages
discussion
of the application
of
yield management
in a training
session.
(Photo courtesy
of IBM.)
caution—be adaptable to changes in demand. If a four-day convention has booked 90
percent of the rooms for arrival on April 5 and 25 percent of those reservations have
canceled by March 30, the front office manager should drop the restrictions for a fourday
stay and encourage reservation agents to offer promotional packages to transient
guests.
Feedback
Feedback on decisions employed in yield management is essential in any new venture
in management. A record of the date and amount of turnaway business is vital for hoteliers
to assess the viability of yield management and to update yield management and
marketing strategies for the future.12 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 will have to 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.
COMPONENTS O F Y I E L D MANAGEMENT 173
Table 6-4. Turnaway Business Report
Date
Yield
%
No. Rooms
Turned Away
Dollars Lost
[@ $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 8,550
May 5 50 88 8,360
H O S P I T A L I T Y P R O F I L E
?Doug Gehret is the director of
rooms at the WaldorfAstoria
in New York City. Prior to
his graduation from Penn State
in hotel, restaurant, and institutional management in
the early 1990s, he did an internship with Walt Disney
World. His first job after graduation was with
the Hilton Short Hills in Short Hills, New Jersey, as
a management trainee in the front office.
Mr. Gehret relates that he uses yield management
“every hour of every day” with a revenue management
department at the WaldorfAstoria. This interaction
focuses on its room pricing versus the competition’s
room pricing and the number of confirmed
and number of regrets that are based on price and
availability. Reviewing this data allows the Waldorf
Astoria to maximize business. He also says
that the key to understanding the rooms operation is
to understand the components of yield management.
In today’s hotel business, you have to increase topline
revenues such as room sales because there is minimal
opportunity to reduce expenses in order to grow
profit levels.
Mr. Gehret interacts with other departments in
the hotel by supporting the activities of the sales and
convention team. The efforts of his front desk staff
in delivering quality communications and service
promote repeat business with groups. Housekeeping
depends on the front office in preparing accurate
room blocks and changes to those blocks of rooms
as well as accurate forecasting of room sales for preparation
of employee scheduling.
Mr. Gehret is responsible for delivering VIP service
to various guests. TheWaldorfAstoria has created
a “Diamond Reception” service for VIP guests
and Diamond Travelers. This service consists of reception
service that is similar to boutique hotels—
seated registration and a personal staff who assist
guests in acclimating themselves to the new environment.
Mr. Gehret urges students of hospitality management
to think of the “big picture” as you develop
your career by taking jobs and positions that will
broaden your experience and prepare you for positions
of responsibility and authority. He advocates
commitment and gaining every possible bit of knowledge
so you can learn about the business and yourself.
174 CHAPTER 6 : Y I E L D MANAGEMENT
Table 6-5. Considerations of Food and Beverage Income in Setting Yield Management Strategies
Group No. Rooms Rate
Room
Income
Food and
Beverage
Income
Projected
Income
A 350 $110 $38,500 $18,750 $57,250
B 300 $100 30,000 62,500 92,500
Management Challenges in Using Yield Management
An enormous problem facing hotels that employ yield management is alienation of
customers.13 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 gouging
may not choose that hotel or any hotel in that chain the next time they are visiting that
particular area. It is important that employees be well trained in presenting reservation
policies to the public.
Considerations for Food and Beverage Sales
The previous discussion on yield management focused on rates, room availability,
minimum stay, and the like. However, there is another issue that assists hoteliers in setting
yield management policies that cannot be overlooked—potential food and beverage
sales.14 Certain market segments have a tendency 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.
Let’s 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 beverage 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 will 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 yield
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 who are attending a conference. Developing effective yield management
policies, which identify groups who may yield additional income (or expense),
is necessary to make yield management work. This is indeed a challenge to you as you
begin your career as a hotelier.
S O L U T I O N T O O P E N I N G DILEMMA 175
Applications of Yield Management
The best way to understand yield management is to apply it to various situations. Try
your hand at the following scenarios to become familiar with the basics of yield management.
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, which will include a kickoff breakfast
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
entertain, and the projected food and beverage expenditure per person is quite significant.
During that same three-day time period, there is a jazz concert 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 positive 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 will want to check the room availability for this time period in
the reservation module. She will want to determine if any block-out periods already exist
and, if so, what minimum room night restrictions are in force. The front office manager
176 CHAPTER 6 : Y I E L D MANAGEMENT
H O S P I T A L I T Y P R O F I L E
?Randy Randall graduated from
Cornell University’s School of
Hotel Administration in 1968.
He served as director of operations
for Wintergreen Resort in Wintergreen, Virginia.
He also spent six years with the Sea Pines Resort
company as director of operations for Palmas
del Mar resort in Humacao, Puerto Rico; was manager
of the Hilton Head Inn; and held a variety of
other management positions at the Sea Pines resort
in Hilton Head Island, South Carolina. In 1986, he
moved to the corporate office as a senior vice president
of operations at Richfield Hospitality Management,
Denver, Colorado. In 1994, he became general
manager of the Eldorado Hotel in Santa Fe, New
Mexico. He is responsible for all aspects of the dayto-
day operation of the hotel.
Mr. Randall decided to use yield management in
managing his reservation system. He feels yield management
maximizes revenue at times when demand
is low because it allows the hotel to sell rooms at a
lower rate and when demand is high because it allows
it to sell rooms at the highest rate. Since 1994,
the average rate in the hotel has increased by $34.49
through 2000, with an increase experienced every
year. This represents a 23.3 percent increase. With
regard to the Santa Fe, New Mexico, market, it has
seen a $6.42 increase for the same period, which represents
5.8 percent. The average rate for downtown
Santa Fe properties that are directly competitive to
the Eldorado Hotel has increased $20.54, for 15.7
percent. He attributes this performance ahead of the
market in large part to the successful implementation
and consistent use of the yield system. The hotel also
includes all availability in the global distribution system
(GDS), a travel agent system, which gives the
travel agency more ability to sell its rooms. Many
other hotels restrict availability in the GDS and Internet
sales locations, hoping to avoid commissions,
and as a result tend to lose overall occupancy and
rate.
He forecasts the desired average rate and the number
of occupied rooms for individual and group business
for every day of the year. Once a week, his staff
inputs the actual bookings, and he updates them on
a rolling six-month system. They make a strategic
rate decision for every day—either high, medium,
low, or D (for “disastrous”)—or close out certain
dates. This gives the hotel’s reservations office the
flexibility to play a rate game. It factors together the
current bookings and room sales forecast. The yield
management strategy session occurs every week and
includes the general manager, front office manager,
director of sales and marketing, leisure sales manager,
and rooms division manager.
Mr. Randall relates that some of the initial challenges
included learning the system and learning to
rely on it. The staff had to stop second-guessing it.
It took about 90 days to get comfortable with the
system, and overall it was relatively painless. He
urges all general managers to adopt yield management.
He feels that those who do not use it can’t
make effective rate decisions and maximize revenue.
For example, he says that Santa Fe is a destination
location and he often gives complimentary rooms to
meeting planners and charities. But now he doesn’t
give away a room unless he knows there will be one
available.
will check with the food and beverage manager, who will want to determine the availability
of banquet facilities and food services and the financial implications that may
influence the decision. If the decision leans toward rejection of the offer, the assistant sales
manager should consider public relations implications.
E N D O F CHAPTER Q U E S T I O N S 177
F R O N T L I N E R E A L I T I E S
6The controller of the hotel has asked the front office manager to project room sales for 45
days in the future. 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 yield management assist the front office
manager in making an accurate projection?
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 new tool hoteliers can use in developing
guest room sales strategies and evaluating potential food and beverage purchases,
which will 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.
End of Chapter Questions
1. Explain in your own words the concept of yield management.
2. What does occupancy percentage tell the owner of a hotel? Discuss the shortcomings
of this concept in measuring the effectiveness of a general manager.
3. Similarly, discuss the use of occupancy percentage in determining the effectiveness of
a general manager versus the concept of average daily rate (ADR). What impression
does quoting only the ADR give the owner of a hotel?
4. How can the use of RevPar assist hotel managers in measuring the effectiveness of
front desk staff and marketing managers?
5. What similarities in operational design do the airline industry and the hotel industry
share?
6. What are the goals of yield management? If you are employed at a front desk in a
hotel, do you see these goals being achieved?
7. Determine the yield for a hotel that has 200 rooms available for sale with a rack rate
of $80 and sold 200 rooms at $55.
178 CHAPTER 6 : Y I E L D MANAGEMENT
8. Determine the yield for a hotel that has 275 rooms available for sale with a rack rate
of $60 and sold 150 rooms at $55.
9. Determine the yield for a hotel that has 1,000 rooms available for sale with a rack
rate of $135 and sold 850 rooms at $100.
10. Discuss the concepts of yield and occupancy percentage as revealed in questions 7,
8, and 9.
11. Discuss strategies to use when demand is high.
12. Discuss strategies to use when demand is low.
13. Why should a front office manager set daily rate strategies as opposed to general
period rate strategies?
14. Explain in your own words the term block-out period.
15. Why is training front office staff in the use of yield management so essential for it to
succeed?
16. What role does the transient guest play in the success of achieving yield?
17. 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?
18. Why should turnaway business be reviewed on a daily basis? What should a hotel
staff do with this information?
19. What role do potential food and beverage sales play in yield management? What are
your thoughts on rejecting the role of this concept in achieving yield?
C A S E S T U D Y 6 0 1
Ana Chavarria, front office manager at The Times
Hotel, has completed a yield management seminar at
Keystone University and is preparing an argument to
adopt this concept at The Times Hotel to present to
Margaret Chu, general manager. She begins by compiling
a history of room occupancy and ADRs, which
she hopes will reveal areas in which yield 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
N O T E S 179
knows that occupancy percentage, ADR, and
RevPAR are all that you need to be efficient today,
so why change?
Ana passes Ms. Chu in the lobby, and Ms. Chu
indicates her distrust of the yield 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 adoption of yield management?
C A S E S T U D Y 6 0 2
Suggest yield management strategies to use under the
following circumstances at The Times Hotel:
Situation 1: The Train Collectors are coming
to town from November 10 through November
15 and will draw 50,000 people. Every room in
town is expected to be taken for that time period.
What policy should the hotel develop for guests
who want to reserve a room for the following
time 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 very slow period for room sales, but a local
Snow and Ice Festival will attract visitors who may
request reservations for single overnight accommodations.
What policy should the hotel develop for
accepting room reservation?
Notes
1. S. E. Kimes, “Basics of Yield Management,” Cornell Hotel and Restaurant Administration
Quarterly 30, no. 3 (November 1989): 15.
2. Ibid, 15–17.
3. “The ABCs of Yield Management,” Hotels: International Magazine of the Hotel and Hotel
Restaurant Industry 27, no. 4. (April 1993): 55. Copyright Hotels magazine, a division of Reed
USA.
4. MICROS systems, Inc., 7031 Columbia Gateway Drive, Columbia, MD 21046–2289.
5. PROS Revenue Management Inc., 3100 Main Street, Suite 900, Houston, TX 77002.
6. Yield Management Systems, (YMSI, L.C.C), 2626 N. Lakeview Avenue, Suite 3009, Chicago,
IL 60614.
7. E. Orkin, “Boosting Your Bottom Line with Yield Management,” Cornell Hotel and Restaurant
Administration Quarterly 28, no. 4 (February 1988): 52.
180 CHAPTER 6 : Y I E L D MANAGEMENT
8. Ibid., 53.
9. Ibid., 54.
10. Ibid., 53
11. Ibid.
12. Ibid., 56.
13. Kimes, “Basics of Yield Management,” 19.
14. Ibid., 18–19.
Key Words
average daily rate (ADR)
double occupancy percentage
occupancy percentage
optimal occupancy
optimal room rate
revenue potential
revenue realized
yield
C H A P T E R 7
Guest Registration
CHAPTER FOCUS POINTS
• Importance of the first
guest contact
• Capturing guest data
• Guest registration
procedures
• Registration with a property
management system
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 now 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 time, 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 registration process must be able to portray
the hotel in a positive manner. This good first impression will help ensure an enjoyable
visit.
The first step in the guest registration process begins with capturing 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 application, the opportunity to sell hotel
services, room key assignment, and folio processing. Continually efficient performance
182 CHAPTER 7 : G U E S T R E G I S T R A T I O N
of the registration process is essential to ensuring hospitality for all guests and profitability
for the hotel.
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 relationship.
The guest who is warmly welcomed with a sincere greeting will respond positively
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 lodging
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 of hospitality? 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 transportation. The hotel employee who is considerate of the traveler under these
circumstances will be more likely to recognize anxiety, restlessness, and hostility and
respond to them in a positive, understanding manner.
A typical scenario might be 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 a very 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 there are no clean
rooms available 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 relates Mr. Traveler’s
situation. The bellhop calls the doorman to obtain a taxi, gives Mr. Traveler a receipt for
his luggage, and then escorts him to the main entrance of the hotel. Then he takes Mr.
Traveler’s luggage to the storage area. These few time-saving practices allow Mr. Traveler
to arrive at the presentation within 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
available 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 availability
of other room accommodations in the area, he returns after the presentation and
COMPONENTS O F THE R E G I S T R A T I O N P R O C E S S 183
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.
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 essential
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
ultimately 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,
and later on respond to any inquiries with regard to financial concerns or follow up on
service.
The registration process follows a rather 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
operational policies and procedures are developed to support the ease of 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 will be used to transfer messages to the guest, to inform the staff of the
guest’s needs, to check credit background, and to process charges.
Guests will undoubtedly receive phone calls, phone messages, mail, and/or fax transmissions
that the hotel must deliver. Recording the proper spelling of a guest’s name,
including the middle initial, during registration will assist the telephone operator and
bellhop in locating the correct 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 also need to know who each person is in the hotel so standard op-
184 CHAPTER 7 : G U E S T R E G I S T R A T I O N
erating procedures can be carried out. For example, the director of security will want the
housekeeping staff to be on the alert for unusual circumstances that indicate that more
people are staying in a room than are registered for that room. Not only will this information
assist in providing security to registered guest, but it will provide the hotel with
additional income.
Guests’ special needs—such as certain room furnishings (cribs or rollaway beds), facilities
for the physically challenged, separate folios for guests splitting costs, wake-up calls,
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 expedite
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 that 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 information
from walk-ins or guests with confirmed reservations will aid 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, will
allow management to ensure a pleasant, efficient, and safe visit. The guest registration
process involves the following steps and will be discussed generally 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.
COMPONENTS O F THE R E G I S T R A T I O N P R O C E S S 185
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 the like. As mentioned earlier, the importance of a warm welcome to a guest’s
positive impressions of the hotel and its staff cannot be overemphasized. Most travelers
expect common courtesy along with a quality product and a well-developed delivery
system.
Inquiry about Reservation
After the front desk clerk has welcomed the guest, he or she asks if a reservation has
been 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 of registered guests. 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 will want information
on the guest’s car for security and control purposes. Obtaining complete and
accurate information is very important in hotels that use a PMS, this form is preprinted.
Review Completeness of Registration Card
The front desk clerk should quickly review the completeness of the registration card.
For example, handwriting should be legible. If the card needs a corrected printed revision,
it should be done at this time. The guest may forget to fill in a zip code, which is often
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 should indicate to the guest that this
186 CHAPTER 7 : G U E S T R E G I S T R A T I O N
Figure 7-1. A registration
form is used
in a PMS and is often
preprinted for
guests who have
reservations.
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 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 will more than likely 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 verifying
the cardholder’s identification.
COMPONENTS O F THE R E G I S T R A T I O N P R O C E S S 187
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 bank
cards. Commercial 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 company. 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.
Each of these issuing agencies has 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 have done this, as have smaller hotels that
are willing 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 convenience of accepting credit cards, the issuing agency requires. 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 controller and front office manager, works with each creditcard–
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 more profitable, it may not be the credit card preferred
by the hotel. The Bank Card 2 credit-issuing agency may stipulate a seven-day turnaround
time, so that 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.
188 CHAPTER 7 : G U E S T R E G I S T R A T I O N
I N T E R N A T I O N A L H I G H L I G H T S
wIn 2000, JCB (an international credit card company) reported annual sales volume of ¥4,827
billion (approximately U.S. 44 billion) in 7.96 million merchant outlets in the United States,
Germany, the Netherlands, Spain, Switzerland, the United Kingdom, Australia, China, Hong
Kong, Indonesia, Japan, Korea, the Philippines, Singapore, Taiwan, Thailand, New Zealand, and Malaysia,
with 38.08 million cardholders.1
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 acceptable to the guest.
This small procedure could mean more profit for the hotel over a fiscal year.
Credit-Card Processing
The credit-card imprinter, a machine that makes an imprint of the credit card the guest
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 concerning the customer’s current
balance 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 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
provides 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
has been reported stolen and should be retained by the hotel. Established procedures for
handling fraud will indicate how hotel security should be alerted in this case.
Proof of Identification
Some hotels require proof of identification when a credit card is presented, whereas
others 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 the non-
COMPONENTS O F THE R E G I S T R A T I O N P R O C E S S 189
photo identification is all too common, making it less than reliable. Hotel security departments
must 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 most often used form of establishing 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 schedule. The guest or the employer would complete a standard credit application.
The controller would evaluate the completed form, considering outstanding financial
obligations, liquid financial assets, credit-card balances, and other credit concerns.
If the applicant is deemed creditworthy, 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 responsible
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 evaluated when
deciding if the 3–10 percent discount charged by the credit-card–issuing agency is more
cost-effective than internal accounting of guest charges. Since some of the 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 includes 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 selection
involves blocking guest rooms prior to a guest’s arrival, meeting the guest’s needs, and
maintaining 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 PROCEDURE
The blocking procedure is very important in ensuring an even flow of processing guests
who want to 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 available room inventory. Otherwise, desk clerks would have to review reservations
and available rooms at the guest’s arrival.
The blocking procedure begins with a review of confirmed and guaranteed reservations
as well as expected checkouts for a particular day. For example, if a 200-room hotel has
190 CHAPTER 7 : G U E S T R E G I S T R A T I O N
125 rooms occupied on the night of November 1 with 25 room checkouts scheduled for
the morning of November 2, the front office manager would determine 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 for sale on Nov. 1
25 room checkouts on Nov. 2
100 rooms available for sale on Nov. 2
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 the previous 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
person 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
will provide a list to front desk clerks that indicates that certain rooms with two double
beds, king-size bed, facilities for the handicapped, and the like, are held for guests with
reservations. Hence, the first-come, first-served concept of matching reservation with
available room is followed.
Meeting Guest Requests
Guests’ needs usually include bed requirements, room location, floor plan arrangements,
ancillary equipment, rooms designed and equipped for special needs, immediate
availability, and price. If the guest has a reservation, the room selection will be blocked
prior to the guest’s arrival. The walk-in guest presents opportunities to the front desk
clerk to optimize a sale and meet the needs of the guest. Opportunities to sell are discussed
later in this section.
SPECIAL ACCOMMODATIONS
The first issue in room selection is meeting the guest’s requests for special accommodations.
The general trend in designing hotel rooms includes placing two beds, usually
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 more freedom in assigning a
room, since so many different needs can be met. Hotels with some rooms containing 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-
COMPONENTS O F THE R E G I S T R A T I O N P R O C E S S 191
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 various bed sizes
and rate flexibility. The front office manager who discusses guest preferences 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
parking 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 this 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 will usually promote these rooms very 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.
LAYOUT AND DECOR
The guest may request a certain floor plan or room decor. If a businessperson wants
to 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 wallbed), 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 a room in which the sleeping and living areas
are separate. The newly revived suite design meets various guest needs. Rooms with
balconies or various 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/or 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,
and popular weekly magazines—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.
192 CHAPTER 7 : G U E S T R E G I S T R A T I O N
Figure 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.)
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 very 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 constitute 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 very vulnerable at this time, often willing to accept
a room with a higher rate that meets his or her immediate needs. Nevertheless, the front
COMPONENTS O F THE R E G I S T R A T I O N P R O C E S S 193
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 very 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 very complex. When the reputation
of the hotel is at risk, a quick conference with the front office manager may speed up 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 any rough spots and streamline
the communication system between housekeeping and the front office.
PRICE CONSTRAINTS
Price is often another guest concern. Guests with budget constraints may request a
room 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
percent less than the designated rates is better than several rooms left unsold. Communication
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.
Room Inventory
Maintaining a room inventory system involves constantly updating and checking a
database 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.
194 CHAPTER 7 : G U E S T R E G I S T R A T I O N
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 creates
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 accurate,
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 any 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 telephone,
PMS, or personal visits to the front desk—is necessary to maintain the integrity
of the system. Delays in transferring this information will slow down the process of
providing hospitality 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 confirmation
when the reservation is made. Adequately meeting these requests is important to
delivering hospitality to the guest. When the guest arrives to register and finds that 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 will include pricing programs for room rates, based on
many intricate and market-sensitive factors. Courses in hospitality marketing and hotel
operations will help you develop an understanding of their relationship to price. This
introduction to room rates discusses the importance of establishing and monitoring effective
room rates to ensure maximization of profit.
COMPONENTS O F THE R E G I S T R A T I O N P R O C E S S 195
Figure 7-3. Room sales projections are based on room rates and market sensitivity to these rates.
SPRING TIME HOTEL PROJECT—ROOMS 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 60 70 70 80 90 100 70 70 50 40
Rooms sold/
day
80 80 120 140 140 160 180 200 140 140 100 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
$70 rate
$3,337,600
47,680
$85 rate
$4,052,800
10%
(loss in sales because
of higher rate)
47,680
$90 rate
$4,291,200
15%
(loss in sales because
of higher rate)
ESTABLISHING ROOM RATES
The rental charge for a room provides income to pay for hotel expenses generated in
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 restaurant.
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 profitability
of the enterprise on sales projections and other related factors, such as investment opportunities,
investment portfolio balance, and current income tax laws. A consulting firm
will survey market demand for room sales and room rates, which will 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
196 CHAPTER 7 : G U E S T R E G I S T R A T I O N
operations are able to produce and service the sales. The investors in the Spring Time
Hotel project will want to determine projected sales in all departments (such as food and
beverage, garage, gift shop, athletic facilities, and rentals). This total income figure will
provide 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, overhead, utilities, and advertising. These costs are assembled in a standard
profit-and-loss statement. With the computer application of electronic 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 will 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 pricesensitive
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 manipulation of projected sales
and related expenses along with realistic considerations of market competition, marketing
and sales efforts, operations, price sensitivity, and tax investment opportunities. The room
rate set for one season may be adjusted up or down for a different season. If a competitor
lowers or raises room rates, the front office manager will have to consult with the owners,
general manager, and other department heads. The decision to lower or raise rates or
offer a special package will depend on the effect this action will have on the profit-andloss
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 oversaturation of rooms in an area at a later time. When room rates are adjusted to
compete with those of other hotels, hotel revenues will be affected. Other hotel operations
that are not cost-effective will then drain the profits from the total operation.
Several methods are used to establish room rates. Each provides guidelines for the
hotel real estate developer. These are only guidelines 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 general rule-of-thumb
method for determining room rates stipulates that the room rate should be $1 for every
$1,000 of construction costs. (This figure is from the 1960s; the current figure is $2 for
every $1,000 of construction costs.) For example (using the $1 for every $1,000 of construction
costs formula), if a new hotel is constructed at a cost of $45,000 per room, the
room rate would initially be $45 per night. Clearly, this is a very general method of
guesstimating room rates and should not be relied on alone.
The Hubbart formula considers such factors as operating expenses, desired return on
investment, and income from various departments in the hotel to establish room rates.
This method relies on the front office to produce income that will 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 (various departmental operating
expenses and overhead), a desired return on investment of $1,500,000 and additional
COMPONENTS O F THE R E G I S T R A T I O N P R O C E S S 197
Figure 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 $110 $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
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.
room rate
(operating expenses desired ROI) other income
projected room nights
$113
($4,017,236 $1,500,000) $150,000
47,680
Once again, these methods are guidelines only. Room rates must be constantly monitored
with regard to market conditions of supply and demand. The front office manager
will have to actively survey the room rates of competing hotels to determine the competitiveness
of the hotel’s rates. Figure 7-4 is an example of a weekly room rate survey.
This subsection on room rates is presented to show you, firsthand, the complexities of
establishing a room rate. The market factors, construction costs, operating expenses,
desired return on investment, efficiencies of operations, and marketing programs combine
to produce a very complex concept. Front office managers must constantly monitor the
effects of established 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 ROOM RATES
Hotels have developed various room rate categories to attract different markets. These
rates will depend on seasons, number of potential sales in a market, and other factors.
198 CHAPTER 7 : G U E S T R E G I S T R A T I O N
Providing constant feedback on the effectiveness of room rates in attracting business and
evaluating the continued need for each of these categories are the responsibilities of the
front office manager and 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
necessarily 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
category can be further broken down into businesspeople who are frequent guests (a
specified number 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 who represent a company and
have infrequent or sporadic patterns of travel. Collectively this group can be a major
segment of hotel guests and thus warrants a special rate. The peddler’s club, a marketing
program to encourage repeat business by frequent business guests, was developed to
encourage businesspeople who do not have any set schedule for visiting a city to stay at
a specific hotel. A card is issued, which is validated with each visit. After a specified
number of visits, the guest is awarded a free room night. Currently, there are many variations
of this concept. Marketing and sales departments of large hotel corporations have
developed sophisticated 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 priceconscious.
These groups are a source of significant room sales because their frequent visits
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 with a 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 very lucrative source of
potential business for a hotel.
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 have promoted
this concept very well 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 during
low sales periods. A bridal suite package may include complimentary champagne, a
cheese-and-cracker basket, flowers, and/or a complimentary breakfast. AWeekend in the
COMPONENTS O F THE R E G I S T R A T I O N P R O C E S S 199
City package may include lunch in the hotel dining room, tickets to the theater, a latenight
snack, and/or tickets to an art gallery or a sporting event. If these packages are
advertised and promoted, they will 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 very common in
resorts, where there is a more leisurely pace. (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 halfday
rate must establish reservations blocking procedures that indicate which rooms are
available for half-day rentals. If rooms will be 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), a rate for which 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/or bus drivers of the tour group, travel agents, tour operators, and
local dignitaries 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 ROOM RATES
The front desk clerk and reservationist have the opportunity to present various room
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 opportunity to
participate in the sales decision. Guests who may want to enjoy the best accommodations
might look as though they could afford only the lowest-priced room. Other guests who
look as though they could afford the Governor’s Suite may have budgeted only enough
for the lowest-priced room. Reservations that are placed by telephone do not bias the
reservationist according to the personal appearance of the future guest. A preplanned
200 CHAPTER 7 : G U E S T R E G I S T R A T I O N
sales pitch to maximize room rates for all guests must be formulated and taught to the
front office staff.
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 reservation,
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 person
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 copies of general categories of room
inventories that note the various room furnishings, special features, and floor diagrams.
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 communicated to the
special staff. The front office manager must develop case studies that illustrate 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 kingsize
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.
Not everyone, of course, is a born salesperson. Indeed, most people are generally shy
about selling. Desk clerks who are not comfortable selling rooms must be encouraged to
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 will relate to guest
satisfaction. For example, if the clerk promotes a guest room with an additional small
meeting room (at a higher rate) as an attractive feature, the person who is registering 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
people recognize these clues because they are not trained to listen for them. A training
procedure 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
COMPONENTS O F THE R E G I S T R A T I O N P R O C E S S 201
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
mentions 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 on or the beautiful mountain ranges of the Poconos in Pennsylvania.”
A front office manager should also devise an incentive program for the staff to maximize
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 that 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 will maximize 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 achieving
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 a marketing
as well as a front office focus will understand 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 additional
room reservations.
FUTURE RESERVATIONS
The front office manager should consider developing procedures for front desk clerks
to follow that encourage a guest to book additional reservations during the check-in
process. Suggesting additional reservations during registration may remind the businessperson
of the need for room accommodations the following week, when he or she will
visit a city with a hotel that is 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 very
attractive to stay in a chain member property. This promotion of member properties can
be a very profitable marketing concept. Front office managers in independent hotels will
also find this concept profitable. Independent hotels have the advantage of offering unique
202 CHAPTER 7 : G U E S T R E G I S T R A T I O N
F R O N T L I N E R E A L I T I E S
6As 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 that spark that they used to display several months ago. How
would you handle this situation?
lodging experiences. Guests who are frequent visitors to a city may want to secure reservations
for their next trip. Unless the request for a future reservation is made, it probably
will not be received.
Developing a Plan for Promoting Future Reservations
Maximizing sales opportunities also requires a program in which the front desk clerks
actively participate, making it profitable for the hotel. The previous discussion on sales
opportunities also applies to developing a plan for promoting future 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, salesmanship
skills, incentive plans, and effects on the profit-and-loss statement. During registration,
the front desk clerk should ask guests if they will need additional reservations
for the remainder of their trips. Again during the 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 and offer an incentive
to make additional reservations, or if repeat business is rewarded with a frequentvisitor
incentive program, then the possibility of securing additional reservations is realistic.
If desk clerks encourage future reservations because they believe they are helping
the guest with travel plans, they will be more comfortable and successful in persuading
guests to make reservations.
The front office manager should develop an incentive program that will assist desk
clerks in trying to achieve 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 will generate 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.
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 has determined the room assignment and the guest has agreed
COMPONENTS O F THE R E G I S T R A T I O N P R O C E S S 203
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 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 written 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 special
waiting period or a certain-colored indicator light on the guest room door, this should be
pointed out.
Security of the Key System
Maintaining the security of the keys requires that they be stored in a safe place. The
familiar pigeonhole key and mail rack system is still common in some hotels. Some have
adopted a key drawer, located beneath the front desk. Other hotels with electronic locking
systems 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. Proof of identification and proof of registration should be required. This protects
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
underneath 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
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 controller, 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-
204 CHAPTER 7 : G U E S T R E G I S T R A T I O N
Figure 7-6. Electronic key cards are used to protect guests.
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 electronic
combination will be set and an electronic key will be issued. Encoding the electronic
combination 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
Figure 7-5. A
key fob and
guest room key
are used in hotels
with mechanical
locks.
R E G I S T R A T I O N WITH A PMS 205
Figure 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
PHONE NUMBER: 000-000-0000
ARLINGTON, LA ZIP: 00000
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:
ADDRESS:
AGENT: ID #:
ZIP:
Retrieving Reservation Form
The registration module is put to use before the guest arrives at the hotel to register.
The 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 illustrated 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 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 have been 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. 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 available,
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.
206 CHAPTER 7 : G U E S T R E G I S T R A T I O N
Figure 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 122JB03090311MC80K98765R 722 80.00
GUEST INFO NO. GUEST CREDIT CARD
Blackwright, Samuel
Hannington Accounting
467 West Ave.
Arlington, LA 00000
000-000-0000
1 MC 000000000000000000000
Guest Signature
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 very simple for
the tour director and the front office.
Checking Room Inventory Option
What happens if there is a name 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 will try 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, which can
be determined by activating the room status option of the PMS (Figure 7-12). This option
R E G I S T R A T I O N WITH A PMS 207
Figure 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. ROOMS: 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
208 SAMSET, O. 32
Figure 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
208 CHAPTER 7 : G U E S T R E G I S T R A T I O N
Figure 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
is similar to the room inventory option but does not include rates and has a column on
status, 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.
If a room is available and the front desk clerk is fairly sure that the hotel will not be
full that night, the guest without a confirmation number or reservation would be handled
as a walk-in guest. The guest data option of the registration module allows the front desk
clerk to 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 there are no rooms available. When
overbooking has produced more guests than there are rooms available, a guest will be
R E G I S T R A T I O N WITH A PMS 209
Figure 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
walked to another hotel, where the guest is provided with 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 will try to accommodate the guest to ensure positive guest relations.
While the guest is usually not satisfied with this 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 verbal quoted rate at the time of registration that is not
on the confirmation form or in the PMS. It is wise to discuss any discrepancies with the
210 CHAPTER 7 : G U E S T R E G I S T R A T I O N
Figure 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.:
guest to avoid problems at checkout. The guest who thought she was being charged for
an $85 room rate when in fact it was a $125 room rate 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 guests to initial the room rate on the registration
form. It is also important to discuss room taxes or any local municipal charges, which
may be added to the room rate.
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
provide 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
R E G I S T R A T I O N WITH A PMS 211
Figure 7-14. An electronic device is used to prepare new electronic room keys for guests.
(Photo courtesy of Lincoln Plaza Hotel and Conference Center, Reading, Pennsylvania.)
of the guests with reservations who are expected to arrive (Figure 7-16). The group arrivals
report option lists the various groups with reservations that are expected to arrive
(Figure 7-17).
These data can be arranged by different categories—room number, date of registration,
checkout date, room rate, guest name—according to the front office manager’s 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 inventory
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 might 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 would sort all rooms that are ready,
on change, occupied, or out of order.
Self-Check-in
The PMS allows guests to check themselves in with a credit card. The guest with a
reservation 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
212 CHAPTER 7 : G U E S T R E G I S T R A T I O N
Figure 7-15. Registered guests can be listed alphabetically with a PMS.
REGISTERED GUESTS 0215
ROOM NAME ADDRESS
DATE
IN
DATE
OUT RATE
NO.
GUESTS
205 ARRISON, T. RD 1 OLANA, AZ 00000 0215 0216 75 2
312 CRUCCI, N. 414 HANOVER ST.,
CANTON, OH 00000
0205 0217 70 1
313 DANTOZ, M. 102 N FRONT ST.,
LANGLY, MD 00000
0213 0216 70 1
315 FRANTNZ, B. 21 S BROADWAY,
NY, NY 00000
0211 0216 75 2
402 HABBEL, B. BOX 56, LITTLEROCK,
MN 00000
0215 0217 75 2
403 IQENTEZ, G. HOBART, NY 00000 0213 0216 70 1
409 JANNSEN, P. 87 ORCHARD LA.,
GREATIN, NY 00000
0215 0222 90 1
410 ROSCO, R. 98 BREWER RD.,
THOMPSON, DE 00000
0213 0221 70 1
411 SMITH, V. 21 ROSE AVE.,
BILLINGS, TN 00000
0215 0218 70 1
501 ZUKERMEN, A. 345 S HARRY BLVD.,
JOHNSTOWN, CA 00000
0215 0219 85 2
Figure 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 0919 09180919JCB75K8401L
LOTTER, M. GUAR 0918 0922 09180922V80K8455L
R E G I S T R A T I O N WITH A PMS 213
Figure 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
20/2
55/1
65/2
42
JOHNSON HS BAND 0918 0921 02/1
13/4
45/1
60/4
54
MIGHTY TOURS 0918 0919 02/1
20/2
55/1
65/2
42
Figure 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
streamlining 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 occupancy 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 the room. The efficiency of
the housekeeping 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.
Figure 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
Figure 7-20. A guest may choose to use the self-check-in option of a property management
system. The process is initiated with a credit card. (Photo courtesy of Hyatt Hotels and
Resorts.)
S O L U T I O N T O O P E N I N G DILEMMA 215
I N T E R N A T I O N A L H I G H L I G H T S
wJudy 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
accessible from every guestroom.
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.2
An article by Rick Bruns in Lodging magazine describes the latest technology that is
being tried in hotels to streamline the registration process:
Walk into the lobby of the Wyndham Garden Hotel–Dallas Market Center, and
before you reach the front desk, an employee greets you, holding a special wireless
communications device. She types in your name, swipes your credit card and encodes
your magnetic room key card. The 250-room, full service property is the final
test site for the Dallas-based chain’s next step in creating the handheld hotel.
“We’ll be the first hotel group by far to have wireless check-in and key cards
with our handheld device,” says a Wyndham International spokesperson.
It’s already possible for travelers to make reservations at any Wyndham using a
Web-enabled PDA [personal digital assistant], like a Pocket PC, or an internetenabled
cell phone. Members of Wyndham’s By Request frequent guest program
can also log onto its website from a PDA, check their account status, and change
their preferences.3
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 in order
to determine 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.
216 CHAPTER 7 : G U E S T R E G I S T R A T I O N
Chapter Recap
This chapter has 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
complete guest information during registration serves as the basis for a sound communication
system for all the departments in the hotel that provide services to the guest.
Registering the guest involves extending credit to the guest, selecting a room, constructing
and applying room rates, selling hotel services, and assigning a room key.
End of Chapter Questions
1. How important do you think the guest’s first contact with the hotel is in providing
hospitality? Give some examples from your experiences as a guest in a hotel.
2. Why is obtaining guest data accurately during the registration process so important?
Who uses these guest data besides the front office? Give some 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 some examples.
5. What are some of the hidden costs 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 a guest will have with regard to room selection. How
can a front desk clerk be attuned to the needs of a guest?
7. Why are establishing and monitoring room rates so essential to the hotel’s profitand-
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
of room rates should be initiated, how would you proceed?
E N D O F CHAPTER Q U E S T I O N S 217
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 important 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.
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
about the purchase; the capital investment, although
reasonable, is still significant and will affect the cash
flow. Margaret Chu, the general manager, 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
service in registration? Consider such aspects of
the registration 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 this 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.
218 CHAPTER 7 : G U E S T R E G I S T R A T I O N
Software Simulation Exercises
Review Chapter 3 of Kline and Sullivan’s Hotel Front Office Simulation: A Workbook
and Software Package (New York: John Wiley & Sons, 2003) and work through the
various concepts as presented in their chapter.
• What Is the Registration Process?
• How to Register a Guest with a Reservation
• How to Register a Guest without a Reservation (Walk-in)
• How to Find and Change a Reservation for a Future Date for a Guest Who Arrives
Today
• Chapter 3 Exercises
Review Chapter 5, “Guest Services,” of Kline and Sullivan’s Hotel Front Office Simulation:
A Workbook and Software Package (John Wiley & Sons) and work through the
various concepts as presented in their chapter.
1. Housekeeping
2. Work Orders
3. Telephone Services
4. Chapter 5 Exercises
Notes
1. JCB International Credit Card Co., Ltd., 626 Wilshire Boulevard, Suite 200, Los Angeles,
California 90017.
2. Judy Colbert, “The Do’s and Don’ts of Attracting International guests,” Lodging 25, no. 8
(April 2000): 33–34.
3. Rick Bruns, “Long Awaited Wireless Checks In,” Lodging 26, no. 8 (April 2001): 103.
Key Words
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
K E Y WORDS 219
electronic key
fax machine
European plan
family rates
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
Peddler’s Club
private label cards
rack rate
registration card
rule-of-thumb method for determining
room rates
sleeper
top down
walking a guest with a reservation
C H A P T E R 8
Processing Guest Charge Payments
CHAPTER FOCUS POINTS
• Common bookkeeping
practices performed in the
front office
• Forms used to process
guest charges and
payments
• Account ledgers
• Procedures for processing
guest charges and
payments
• Procedures for transferring
guest and city ledgers
to accounts receivable
• Importance of standard
operating procedures for
posting and the night
audit
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 staff person.
The lodging industry has always prided itself on its ability to maintain up-todate
records of outstanding guest balances (Figure 8-1). The front office processes
a multitude of charges and payments on any given day, requiring a wellorganized
bookkeeping system to process the guests’ bills and maintain the
integrity of the hotel’s financial records. This chapter addresses how those guest
charges are processed.
Common Bookkeeping Practices
Knowledge of basic bookkeeping methods enables the front office manager to
understand the reasons for following particular procedures when handling financial
transactions. This ability will greatly assist 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, explaining why a charge must be posted in a certain
way will facilitate 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.
222 CHAPTER 8 : P R O C E S S I N G G U E S T CHARGE PAYMENTS
Figure 8-1. The electronic folio displays all the data on a guest’s stay that is held within the
PMS. (Photo courtesy of Lincoln Plaza Hotel and Conference Center, Reading,
Pennsylvania.)
The concept of assets refers to items that have monetary value. The concept of liabilities
refers to financial or other contractual obligations or debts. These two concepts
provide the basics for a bookkeeping system. Examples of assets include items such as
ownership of a class ring, a textbook, or two tickets to a concert. Examples of liabilities
include a contract to pay for the class ring in three months, a contract to pay for a car,
or a promise to pay a friend for typing a term paper. Guest charges are financial obligations
that are owed to a hotel; these are considered an asset for the hotel. If a guest
prepays an account, this is a liability to the hotel because the hotel will have to return
the money to the guest at the time of checkout.
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.
Debits 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. These 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 these definitions with regard to the type of account, you should have
no problem. The following examples demonstrate how to apply debits and credits.
ACCOUNT L E D G E R S 223
Table 8-1. Effects of Debits and Credits on Assets and Liabilities
DEBIT CREDIT
ASSETS increases decreases
LIABILITIES decreases increases
If a guest charges $100 on a credit card for goods and services in the hotel on any one
day, the individual charges would be processed as a debit (an increase) to the guest account,
an asset to the hotel’s accounts receivables. A credit (an increase) of an equal value
would be 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 would be 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 would be applied to the hotel’s cash account (an asset).
Forms Used to Process Guest Charges and Payments
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 prenumbered
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
to a vendor or an employee for a quick purchase of materials for the hotel. In a hotel
with a PMS that interfaces with the various 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 auditor
can then track the procedures that the front desk clerk used in posting. These forms assist
in maintaining control of bookkeeping activities in the front office.
Account Ledgers
The guest ledger is a collection of folios (guests’ records of charges and payments) of
current guests of the hotel. The city ledger is a collection of folios of unregistered hotel
224 CHAPTER 8 : P R O C E S S I N G G U E S T CHARGE PAYMENTS
Figure 8-2. The front desk clerk will post a credit-card payment on a guest’s folio. (Photo
courtesy of The Breakers.)
guests 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 businesspeople in the
city, who are also part of the city ledger. These unregistered hotel guests may keep open
accounts for entertaining clients, for example. The folio well, a device that holds the
individual guest folios and city ledger folios, or bucket provides the physical dimensions
of the guest ledger and city ledger.
The accurate and timely processing of all these accounts assists the front office
manager 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, following
the activities of the nonregistered guest shows how city ledger accounts are affected
(Table 8-3).
ACCOUNT L E D G E R S 225
Table 8-2. Transactions Affecting the Guest Ledger
Stage 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
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
226 CHAPTER 8 : P R O C E S S I N G G U E S T CHARGE PAYMENTS
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 in 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.
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 various 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 various 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 computers
in the various departments in the hotel. 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.)
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 can automatically post the charges to the 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 to collect sales and occupancy taxes from
the hotel guests. The tax option posts the appropriate taxes to the guest folio when the
room charge is posted.
P O S T I N G G U E S T C H A R G E S A N D PAYMENTS 227
TIMES HOTEL
403 75.00 OCT 23 OCT 24
Gray, T. K. Great Tire Co., 49 W. 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 Gift Shop 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
Gift Shop
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.
Olivers
10/24 Food 10.00
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.
Phone 403 Gray, T.
10/23 Local .50
Olivers
10/23 Food 23.09
Grat 5.00
403 Gray, T.
Figure 8-3. Posting charges electronically to a folio.
228 CHAPTER 8 : P R O C E S S I N G G U E S T CHARGE PAYMENTS
Figure 8-4. Guests who incur charges in the dining room will have these charges
immediately posted electronically to their guest folios via the point-of-sale terminal. (Photo
courtesy of Omron Systems, Inc.)
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 will at times have to be transferred to another folio, or adjustments to the amounts
will have to 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
P O S T I N G G U E S T C H A R G E S A N D PAYMENTS 229
F R O N T L I N E R E A L I T I E S
6Aguest 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?
room. In this case, the front desk clerk would adjust (remove) the charge from one guest
folio and transfer it to the other guest folio.
There will be times when a guest questions charges for a phone call, movie viewing,
or other services. The desk clerk can immediately adjust the account, depending on the
authorized financial correction flexibility policy. Such a policy spells out the guidelines
that a desk clerk can use in adjusting a guest’s account. For example, a guest may refuse
to pay for a charge 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 influence a guest’s perception of a hotel’s service. The
policy on authorized financial correction 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 adjustments
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 verifying
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 services
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.
Miscellaneous Charges
The miscellaneous charges option is included in a PMS to allow the desk clerk to post
charges that are atypical to the majority of hotel properties. If a hotel has, for example,
a recreational facility that does not have 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.
230 CHAPTER 8 : P R O C E S S I N G G U E S T CHARGE PAYMENTS
Phone
The phone option is included in a PMS for those 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, will be posted automatically.
Without the interface, 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
current balance on his or her folio, the desk clerk can produce a hard copy of the folio
with a few keystrokes. After the guest has reviewed the hard copy, he or she may indicate
that a certain 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
useful to the controller and the management team. The night auditor can cross-check
departmental 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 the various
department managers to provide feedback for evaluating marketing programs and costcontrol
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 transferred
to the master accounts receivable for the hotel. If a guest’s folio shows a debit
balance (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.
Another type of transaction involves the back office accounts payable, amounts of
money that have been prepaid on behalf of the guest for future consumption of goods or
services (sometimes 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 December 21 must be credited first to the
T R A N S F E R R I N G G U E S T A N D C I T Y L E D G E R S T O A C C O U N T S R E C E I V A B L E 231
Figure 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
ROOM 1/28 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
232 CHAPTER 8 : P R O C E S S I N G G U E S T CHARGE PAYMENTS
hotel’s back office accounts payable or back office cash account and then to the guest’s
folio. This amount of money will be held for the guest’s arrival on December 21. When
the guest arrives on December 21, the guest folio will be brought to the front of the folio
well and activated 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.
This error can usually 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 very difficult to detect if a desk clerk
used an incorrect folio (room 626 instead of room 625). An experienced night auditor
can usually 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 correctly.
This training program must include a statement of behavioral objectives, preparation
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 will pay off in reduced bookkeeping
errors and better customer service.
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.
E N D O F CHAPTER Q U E S T I O N S 233
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 provide 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 adhering
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 also mentioned as a way to ensure that this goal is achieved. These operating
procedures are essential to maintaining the integrity of the guest’s bill and streamlining
the bookkeeping process for the hotel.
End of Chapter Questions
1. List some assets that a student may hold. List some liabilities that 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.
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 various financial transactions that may occur during a guest
stay.
8. Give examples of the various financial transactions in which the nonregistered guest
may be involved.
234 CHAPTER 8 : P R O C E S S I N G G U E S T CHARGE PAYMENTS
9. If you are employed in a hotel that uses a property management system that interfaces
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?
C A S E S T U D Y 8 0 1
Ana Chavarria, front office manager, has just finished
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 prepayment 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,
these mistakes are usually the result of improper
training of new front desk clerks. Ana
thanked Cynthia for the information and told her
that 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 understand
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 management
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 prepare
an effective training program that teaches new front
desk clerks why and how to post guest charges and
payments?
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 have been
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
K E Y WORDS 235
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 supervisor
on duty, which made both guests very 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 authorizing
adjustment of guest accounts. Give her
some guidelines on dollar amounts that can be adjusted
without the supervisor’s approval and describe
some situations in which adjustments can be
applied.
Key Words
accounts receivable
assets
back office accounts payable
credit
debit
folio well
liabilities
paid-out slips
posting
revenue account
transfer slip
C H A P T E R 9
Guest Checkout
CHAPTER FOCUS POINTS
• 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
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 that 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)
and the director of marketing and sales to prepare a list of questions for the
vendor that will help you determine whether the purchase of the guest history
module for the hotel is justified.
Guest checkout can indeed 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 hospitable? If not, were you
angry because of his or her indifference? Always remember what it is like to be a guest.
It will serve you well throughout your career in the hospitality industry.
This chapter will assist 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.
238 CHAPTER 9 : G U E S T 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
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, adjustments,
cashier, back office transfer, reports, and guest history.
Organizing Late Charges to Ensure Accuracy
As you have learned in earlier chapters, throughout the guest’s stay, various charges for
room, tax, food and beverages, valet, and other services are posted to the guest folio as
they are incurred when a hotel utilizes all modules in the PMS. At the time of checkout,
late charges, guest charges that might not be included on the guest folio because of a
delay in posting 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 for lost revenue. For example, a lodging property that
fails to post 20 phone calls per day, at an average cost of fifty cents each, would lose
$3,650 per year.
Front offices with property management systems that can interface the posting module
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 will ensure a quick and accurate relay
of information about last-minute charges.
G U E S T CHECKOUT P R O C E D U R E 239
Guest Checkout Procedure
If front office personnel have collected and posted guest late charges in an appropriate
and timely manner, then the guest checkout can proceed without any bottlenecks. However,
when the cashier or front desk clerk must make several phone calls to the restaurant,
gift shop, and switchboard 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 departments 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.
240 CHAPTER 9 : G U E S T CHECKOUT
Figure 9-1. Guest checkout is a time for inquiring about guest services and determining
method of payment. (Photo courtesy of Lincoln Plaza Hotel and Conference Center,
Reading, Pennsylvania.)
Incidental comments about a cold room, low water pressure, leaky plumbing, or damaged
furniture should be noted and passed along to the appropriate department heads.
Because guests often do not verbalize complaints or compliments, all lodging properties
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 any minor problems experienced by the guest that might
indicate lack of concern. Also, concern for guest satisfaction impacts 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 mandates
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 will find that a great deal of money is being spent
G U E S T CHECKOUT P R O C E D U R E 241
F R O N T L I N E R E A L I T I E S
6Upon checkout, a front desk clerk asks a guest if his accommodations were acceptable. The
guest says that the heater in the room didn’t work last night. Since the hotel has a 100 percent
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?
to maintain the key supply. Some properties require a key deposit, returnable upon 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 investment
in such a system is substantial, security is the ultimate objective in adopting this
technology.
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 obvious
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, or purchases
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 any other hotel
department or if any 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 provide cashiers with a list of procedures to follow if charges are questioned.
Typical questions concern charges for phone calls that were not made, meals that
were not eaten, gifts that were not purchased, flowers that were not received, laundry
that was not sent out, or in-room movies that were not viewed. Using the list provided
by the front office manager, 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 to keep such adjustments in line. Large dollar amounts
that are questioned 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 these changes.
In-Room Guest Checkout
Before proceeding further 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
242 CHAPTER 9 : G U E S T CHECKOUT
guests to settle their accounts from their rooms (Figure 9-2). In some PMSs that feature
in-room guest checkout, the guest can initiate the guest checkout the night before departing
by following 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 expedites the process by alerting the front office to have a hard copy ready
for payment. If the guest has indicated 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 a cash customer 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 indicated the method of payment he or she planned to use.
Possibilities include credit cards, direct billing (bill-to-account), cash or personal check,
traveler’s checks, or debit cards. During checkout, the guest confirms the method of payment.
Credit Cards
Today’s business and pleasure 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
difficult 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 reimbursement period can
be reduced to none—the hotel is immediately credited with
payment. 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 system for accepting credit cards,
based on cash flow requirements and the effect of the discount
rate offered. The average guest will probably not be
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
Figure 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.)
D E T E R M I N I N G METHOD O F PAYMENT A N D C O L L E C T I O N 243
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 might include the following 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 has been 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 incentive system for cashiers and front desk clerks can be built into the procedure for
processing 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.
However, it is important to note that hotels should develop a procedure for retrieval of
fraudulent credit cards. 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 billto-
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
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
corporation requesting direct billing will complete an application for credit approval. The
controller in the lodging establishment will then perform 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, can vary, 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 will play
a large part in assigning a credit limit.
The application usually will list 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 will not have to pay a 3–8 percent discount rate to the credit-card
244 CHAPTER 9 : G U E S T CHECKOUT
agency, the cost incurred by the controller’s office (credit checks, billing, postage, collection
of bad debts) must be considered. The question of cash flow—almost immediate
payment 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 also deserve attention. The status conferred by this option may be very 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 any credit limit per employee.
4. Note any 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 identification.
Once this information is entered into the POS, it becomes entered into an electronic
folio in the city ledger of PMS.
Cash and Personal Checks
When guests indicate during registration that they will pay their bills with cash or a
personal check, the front desk clerk should immediately be on the alert. Such a guest may
very 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, since the guest has not established any
credit rating 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 will not be allowed charge
privileges at other departments in the hotel. In properties with a PMS, the guest name
and room number will be 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 will
have to 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 that 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.
D E T E R M I N I N G METHOD O F PAYMENT A N D C O L L E C T I O N 245
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; there is too great an
opportunity for fraud. This policy often comes as a surprise to guests, who may protest
that this is the only means of payment they have. However, there are commercial check
authorization companies that a hotel can employ and credit-card companies that will
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 commercial
check authorization company or credit-card company.
Traveler’s Checks
Traveler’s checks are prepaid checks that have been 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 has already been established, and there is no payment
of a percentage of the sale to a credit-card agency by the hotel, as the guest has 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.
246 CHAPTER 9 : G U E S T CHECKOUT
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
commercial organization’s bank account for purchase of goods and services. Some examples
of debit cards are MAC, NYCE, MOST, and PLUS. These are similar to credit
cards in that they guarantee creditworthiness, against which the hotel charges the bill;
however, the payment 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 acceptable 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 experience a situation in which 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 will want to be ready
to offer the following services.
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
well established as an option for a guest. The front office manager should develop and
communicate 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 truly down-andout
traveler beset by an unexpected emergency in an unfamiliar city. The phone number
A S S I S T I N G THE G U E S T WITH METHOD O F PAYMENT 247
and address of this organization must also be established and 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 the lodging establishment that it will be paid.
The method of payment in the end can affect your bottom line. The “preapproval” 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 also important, however, to show concern for the guest whose luck has 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, which 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 creditcard–
issuing agency will process the payment according to the current exchange rate
between countries. If a guest wants to pay in his or her national currency, the cashier will
have to compute the exchange. The daily international exchange rate can be found by
calling 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,
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.
Also, the euro will provide ease in traveling throughout Europe, since a traveler will not
have to exchange currency at each participating country.
The goal in computing the exchange is to determine how much of the international
visitor’s national currency is required to pay the bill in our country. 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 $1.00, then the cashier would use the following formula to compute the exchange of
Canadian dollars for U.S. dollars:
625.00 Canadian dollars required to pay the bill at a U.S. hotel
U.S. $500.00
U.S. $0.80
248 CHAPTER 9 : G U E S T CHECKOUT
F R O N T L I N E R E A L I T I E S
6Aguest 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?
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 U.S. $2.00, then the cashier would use the following formula
to compute the exchange of English pounds for U.S. dollars:
250 English pounds required to pay the bill at a U.S. hotel
$500.00 U.S.
$2.00 U.S.
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 English pounds from an English tour group thinking it
will receive U.S. $20,000.00 (2.00 U.S. dollars for each English pound), but three weeks
later, when the transaction occurs, the exchange rate may be U.S. $1.90 for 1 English
pound. In this case, the U.S. hotel would receive approximately U.S. $19,000.00 (10,000
1.9 19,000.00) instead of the U.S. $20,000.00 originally computed at the time of
deposit. To compensate for this, the hotel must consider adding a surcharge to the rate
used that day as well as a transaction fee charge by banks. For example, in the case in
which a U.S. hotel anticipates receiving U.S. $20,000.00 for a deposit of 10,000 English
pounds based on a current exchange rate of 1 English pound for each U.S. $2.00, it may
be better for the hotel to use 1 English pound for each U.S. $1.90 to cover a volatile
exchange rate and a banking fee. The U.S. hotel would collect £10,526 (U.S. $20,000.00
1.90 (£10,526) at the time of checkout to compensate for the float time of the
international currency.
Obtaining Future Reservations
Checkout, the last contact point with the guest, provides the best opportunity for securing
additional 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. Maintain
good eye contact and listen very closely.
R E L A Y I N G G U E S T D E P A R T U R E S T O OTHER DEPARTMENTS 249
2. Ask if the guest will be returning to this 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 at a later time.
If the guest is in a hurry, the reservation staff can follow up later. Your role is to plant
the seed for a future sale as well as to accommodate a guest.
3. Continue to check out the guest. Again, make eye contact. If the guest has not responded
positively to the first inquiry, offer a departure brochure or directory that
includes information about making additional reservations at the hotel’s property or
those 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 any 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 using 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 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 after a guest has checked out to ensure
smooth operation of the hotel. The PMS allows the front desk clerk and the housekeeping
employees to inform one another of guest departures, stayovers, room availability status,
and other occupancy details as they occur. As mentioned earlier in the text, once the
250 CHAPTER 9 : G U E S T CHECKOUT
electronic folio is cleared from active memory after checkout, the guest departure will be
indicated on all other modules of the system. The front desk clerk does not have to
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, will also be notified so that a guest who has
already checked out will no longer be 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
further enhanced by employees who care about doing their jobs right. Desk clerks will
want to ensure that rooms showing a ready-to-be-occupied 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 communication 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. This data is stored for future processing by the accounting office
(see the following section) as well as the marketing and sales department for developing
guest histories (discussed later in the chapter).
Transfer of Guest Accounts to the Back Office
Some methods of payment require transferring folio balances to the back office for further
processing. Credit-card payments will be 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 will process the account according to standard
G U E S T H I S T O R I E S 251
Figure 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
operating 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 will want to review and analyze various 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 also 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 marketing 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.
Guest Histories
Guest histories are marketing analyses of guests’ geographic and demographic information
that also provide information about guest activities while staying at the hotel. This
252 CHAPTER 9 : G U E S T CHECKOUT
Figure 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
Figure 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
analysis is simplified by the use of a PMS. The guest history option of the checkout module
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 registration
cards and the reservation system.
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
marketing 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 Web site, radio, television, and newspapers,
that are available in that area and with demographic (age, sex, income, occupation,
marital status, etc.) and psychograpic (lifestyle) data. Matching, web site, radio
stations, television stations, and newspapers to a group that constitutes the hotel’s prime
G U E S T H I S T O R I E S 253
Figure 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
market as well as developing well-structured direct-mail campaigns can be a very profitable
marketing strategy. Defining the market for continued business is part of a sound
business plan.
The front office manager who reviews the registration cards and reservation cards for
group affiliations will find potential data for development of potential guests by the marketing
and sales department. Follow-up by the marketing and sales department to various
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
procedures, 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.
The guest history will also provide 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 marketing and sales department will want to maintain a strong relationship with that
agency and to develop relationships with other agencies within that particular point of
origin as well. FAM (familiarization) tours—complimentary visits sponsored by the lodging
property that host representatives of travel organizations, bus associations, social and
nonprofit organizations, and local corporate traffic managers—can produce an increase
in future room revenue. During these tours, representatives can see firsthand what the
property has to offer.
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 reservation. If this is the case, the lodging establishment
254 CHAPTER 9 : G U E S T CHECKOUT
Figure 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
Web site 600 38
should put in place a program that encourages these people to call it. Incentive programs
that reward those who make a certain number of reservations over a specified time 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 personnel would be effective.
Data from the guest histories concerning frequency of visits will also reveal some areas
for follow-up (Figure 9-8). The frequent guest, defined as a person who stays at the
establishment more than a specified number of times per month or year, might be offered
a free accommodation 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.
The guest history is also useful in determining the types of rooms requested. Are rooms
with two double beds being requested more often than rooms with one king-size bed?
Are rooms designated as nonsmoking being requested more often than rooms designated
as smoking? Are suites with cooking facilities being requested by corporate clients for
long-term guests? Such hard, quantifiable data are what hotel owners use to make construction
and purchasing decisions.
Reviewing room rates can also assist the controller and director of marketing and sales
in forecasting profit-and-loss statements. The frequency with which certain price categories
of rooms are rented will indicate 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 will help the front office manager to schedule person-
G U E S T H I S T O R I E S 255
Figure 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
I N T E R N A T I O N A L H I G H L I G H T S
wHotels that provide service to international visitors must prepare front desk staff to deal with
various languages, cultures, money exchanges, and the like. The U.S. Department of Commerce,
with the support of DRI-WEFA, a global insight company with products and services
that include data and software, economic and industry analysis, and consulting made the following predictions
for total visitors from various countries by 2004: visitors from Europe are expected to surpass 13
million; from Asia, almost 9.3 million; from South America, 3.6 million; from the Caribbean, 1.5 million;
and from Central America, nearly 1 million.1
The implications of this report are that students who are 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 will 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 will greatly improve the chances that this guest will return.
256 CHAPTER 9 : G U E S T CHECKOUT
nel. In selected corporate-market properties, the hotel may be full from Sunday through
Thursday nights but be nearly empty on Friday and Saturday. A lodging establishment
with a large volume of tourist business on weekends will experience just the opposite.
The front office manager will want to schedule staff accordingly.
The guest history of the PMS checkout module gives the front office manager a sophisticated
method of drawing upon these data from a database of reservations and
registrations. It is easy to group marketing patterns. The concepts already discussed will
help in developing the data that are readily available.
Solution to Opening Dilemma
The following list of questions to ask the vendor may help to 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 upon registration, such as radio, television,
newspaper, billboard, web site, 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 various point-of-sale areas about checkouts was discussed.
The procedure for checking out a guest was reviewed, with attention given to sales and
hospitality 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.
E N D O F CHAPTER Q U E S T I O N S 257
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?
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 various methods of payment available to the guest. Why does the hotel
not consider these payment options financially equal?
7. Discuss the various 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 U.S. $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 will 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 various point-ofsale
areas not interfaced with a PMS?
16. What types of guest accounts would be transferred to the back office?
17. List the various 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.
258 CHAPTER 9 : G U E S T CHECKOUT
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 that there was 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 manager,
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 reservations
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 association.
There was a presentation by the head of the
state government agency on international tourism,
who asked the attendees to support the state’s efforts
to secure international visitors to the area. He said
that 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 students 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 questions
to use in their meeting with Ana Chavarria.
Software Simulation Exercise
Review Chapter 4, “Posting and Folio Management,” of Kline and Sullivan’s Hotel Front
Office Simulation: AWorkbook and Software Package (New York: JohnWiley and Sons,
2003) and work through the various concepts as presented in their chapter.
• Posting to a Folio Directly from the PMS
• Posting to a Folio via an Interface
K E Y WORDS 259
• Correction to a Posting
• Transfer of a Posting
• Check-out
• Cashier End-of-Shift Reporting
• Chapter 4 Exercises
Note
1. “[U.S.] Commerce Department Predicts Record-Setting Travel to U.S. This Year” (June 13,
2001), http://tinet.ita.doc.gov/tinews/archive.
Key Words
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
C H A P T E R 1 0
Night Audit
CHAPTER FOCUS POINTS
• Importance of the night
audit in a hotel
• Night audit process
• The daily flash report
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 that 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 accurate and timely processing
of guest accounts. This chapter addresses the assembling and balancing of all financial
transactions in the guest accounts and hotel departments for each day of the year. This
can be a very 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 payments (debits and credits)
and the departmental receipts and charges on a daily basis. This working definition en-
262 CHAPTER 1 0 : N I G H T A U D I T
Figure 10-1. The night auditor provides a financial check on guest folios and departmental
activities. (Photo courtesy of Lincoln Plaza Hotel & Conference Center, Reading,
Pennsylvania.)
compasses not only the mechanical proofing of totals of charges and payments but the
further review of account activity by management. The front office manager will be able
to monitor the credit activity of guests, project daily cash flow from room sales, and
monitor projected and actual sales for the various departments.
Learning the process of the night audit can provide valuable information for someone
who plans to continue in the hotel industry. It will also provide 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 it 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 operational
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
THE N I G H T A U D I T P R O C E S S 263
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 position also includes checking in and checking out guests who arrive or depart after
11:00 p.m., processing reservations, performing the duties of security guard, monitoring
fire safety systems, acting as cashier for banquet functions, and performing the duties 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 a very important position
within the front office.
The Night Audit Process
The night audit is not one of those reports that is put on the shelf and forgotten. Management
uses it to verify the integrity of the guest accounts and to review the operational
effectiveness, which is the ability of a manager to control costs and meet profit goals.
Therefore, accuracy is extremely important.
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 help guide you through the seemingly endless proofing of totals and crosschecking
of entries, and expedite the completion of the process.
The night audit process described in this chapter provides information on performing
the night audit with a property management system. It is important to note that learning
the mechanical or “hand method” of doing the night audit will assist the front office
manager in understanding the intricacies of following a paper trail of guest and depart-
264 CHAPTER 1 0 : N I G H T A U D I T
H O S P I T A L I T Y P R O F I L E
?Todd Sheehan is the managing
partner of Lincoln Plaza Hotel
& Conference Center in
Reading, Pennsylvania. Previous
to this position, he held supervisory positions in reservations,
the controller’s office, banquets, and food
and beverage at The Inn at Reading, Wyomissing,
Pennsylvania, as well the position of general manager
of three Hampton Inns located in Reading and Allentown,
Pennsylvania, and Flint, Michigan.
Mr. Sheehan summarizes the night auditor’s role
as one that is very important to maintain the financial
success of the hotel. Although this person’s role as
night auditor is routine, his or her efforts to produce
the trial balance provide feedback on each department’s
financial activities.
Each morning, Mr. Sheehan looks at the reports
that are included in the night audit. The weekly flash
report provides a cumulative review of rooms, average
daily rate, food and beverage counts, banquet
business, and so forth. The daily flash report provides
period-to-date and month-to-date financial review of
individual department cost centers. The trial balance
report focuses on totals of receivables (how much
guests owe the hotel) with regard to front desk, advance
deposits, and checkouts. The revenue report
shows more of a breakdown of various revenueproducing
centers. There is also an adjustment report,
which assists in maintaining control over financial
adjustments that may seem insignificant but can
add up over time. The cash deposit report allows him
to maintain the integrity of banking activity by the
hotel staff. Then there is the 14-day forecast report,
which assists him and his sales staff in developing
yield management actions to address slow periods
and peak periods, with regard to room availability
and rates. Also included in the night audit report is
the housekeeping report, which assists him in gaining
insight into room activity, such as rooms that are out
of order. This report also ensures that each room occupied
has a credit card responsible for payment. He
uses the guest summary to determine how long guests
are staying, what company they represent, and if correct
rates have been applied. A detailed restaurant
report is included, which centers on sales data and
checks these amounts on inventory pars. This report
also reviews the corrections that would have been
made to guest checks as well as a check against the
banquet business for the day. And finally, he reviews
the accounts receivables report to retain control on
amounts of money that people owe the hotel.
In summary, Mr. Sheehan indicates, “The night
audit report gives you operational tools to maximize
revenues on a daily basis. This effort allows you to
spot revenue shortages and inefficiencies in sales activities.”
mental transactions. Undoubtedly, the more modern 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 has reviewed any messages from other front office staff, reviewed
guests who checked out of the hotel, extended any guest stays, reviewed all room
rates, and printed a variance report, his or her first task is to post room and tax charges
to all accounts. The PMS can easily post room and tax charges to the electronic folios,
with the room and tax options.
THE N I G H T A U D I T P R O C E S S 265
Assembling Guest Charges and Payments
The various 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 will be 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 incomegeneration
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 that have been 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 will 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
be a great inconvenience because of the distance of the various restaurants, lounges, and
266 CHAPTER 1 0 : N I G H T A U D I T
Figure 10-2. The departmental totals option of a PMS lists amounts generated by each
department. (Information courtesy of Lincoln Plaza Hotel Conference Center, Reading,
Pennsylvania.)
Departmental Totals
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
THE N I G H T A U D I T P R O C E S S 267
Figure 10-3. The cashier’s report maintains a control on cashier activity. (Courtesy of
Lincoln Plaza Hotel & Conference Center, 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
268 CHAPTER 1 0 : N I G H T A U D I T
F R O N T L I N E R E A L I T I E S
6Afront 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 proceed to correct the error?
F R O N T L I N E R E A L I T I E S
6The front office manager asks you to retrieve a total for the VISA credit card balance in the
accounts receivable. How would you proceed?
gift shops from the front office. It also requires additional personnel in the various departments
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 will report 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 who has been
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 will treat 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 a hotel 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,
P R E P A R I N G THE N I G H T A U D I T R E P O R T 269
this figure is reduced. It will rise again when new charges are posted to a guest’s folio.
When 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
will produce 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
against 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 reason,
it is important that the night auditor compare the departmental totals against any transfers
and paid-out slips for each department processed by desk clerks and cashiers.
Goal of Preparing the Night Audit Report
Students studying hotel front office management may ask, “Why should the night audit
report be prepared?” It offers a massive amount of daily operational financial feedback
that provides an immediate opportunity for managers to react and respond. The night
audit report is key in maximizing the efficiency of a hotel. The daily figures regarding
room occupancy, yield percentage, average daily rate, and revenue per available room
(RevPAR) provide managers with daily 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. It will provide a capsule review of
the importance of departmental financial activities and their role in delivering hospitality.
This background will also provide you with insight into the decision-making process,
which, in turn, helps various 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 establishment.
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 figure 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
270 CHAPTER 1 0 : N I G H T A U D I T
Figure 10-4. A trial balance report lists the debit and credit activity of the front desk,
receivables, and payables. (Courtesy of Lincoln Plaza Hotel & Conference Center, 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
want a cumulative figure reported each day, to gain a more comprehensive overview of
the achievement 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
document in separate parts, each of which provides feedback on daily operational per-
P R E P A R I N G THE N I G H T A U D I T R E P O R T 271
Figure 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 RST SALES 3,950.00 3,825.00 103.27
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 RST 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 85.00 147.06
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
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
272 CHAPTER 1 0 : N I G H T A U D I T
Figure 10-5. (Continued)
$ Actual $ Budget Goal (%)
Tele Local 110.00 125.00 88.00
Tele Long Dist 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
Bal A/R 49,852.53 75,000.00 66.47
ANALYSIS OF A/R
City Ledger 12,045.15
Direct Bill 3,958.55
Visa 19,681.01
MC 13,788.24
JCB 4,939.03
Total A/R 54,411.98
P R E P A R I N G THE N I G H T A U D I T R E P O R T 273
Figure 10-5. (Continued)
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 $46,919.44 $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
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
274 CHAPTER 1 0 : N I G H T A U D I T
formance. Daily review of the reported figures will allow management the opportunity
to be flexible in meeting financial goals.
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 success of marketing programs.
Bank Deposit
Bank deposits are also part of the night audit. In large hotels, bank deposits are made
several 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.
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
providing 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 have 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, there may be several cashiers
per 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,
discussed 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
manager and the controller will review this part of the night audit and look for discrepancies
between the actual amount received and the PMS total. They will 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
P R E P A R I N G THE N I G H T A U D I T R E P O R T 275
viable business. The general manager, controller, front office manager, and director of
marketing and sales will review these statistics on a daily basis.
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
total revenue yesterday’s outstanding A/R
paid-outs and noncollect sales today’s outstanding A/R income
daily revenue total outstanding A/R
total cash income credit card received and applied to A/R
today’s outstanding A/R income cash received and applied to A/R
0 balance of A/R
Formula to Balance Bank Deposit
total bank deposit
total cash sales
credit card received A/R
cash received A/R
0
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. Since a large
portion of room income is considered profit, management will watch this figure closely.
The room sales figure is verified by the housekeeping report, which lists the occupancy
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.
276 CHAPTER 1 0 : N I G H T A U D I T
Total Restaurant Sales and Sales Tax
The total restaurant sales figure comprises all sales incurred at restaurants or food
outlets 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-ofsale
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.
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
necessary, then the night auditor will report this figure. Room service 1 may represent
breakfast sales only; 2, lunch sales; and 3, dinner sales.
Banquet Sales
Hotels with large banquet operations will 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 will also check 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. They 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 provide 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
P R E P A R I N G THE N I G H T A U D I T R E P O R T 277
obligations due on Monday, depending on method of payment. The controller in a hotel
will therefore watch room and banquet sales very 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 various outlets that serve alcoholic beverages
are reported to the front office on a daily sales report after each shift. Each report
is accompanied by the cash register tapes or audit tapes.
These sales figures from the various lounges and banquets are reported separately because
the food and beverage manager will want to determine how well cost-control efforts
have been maintained for that department, and the director of marketing and sales may
want to know how successful certain marketing and merchandising campaigns have been.
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 will crosscheck
these guest checks against the daily function sheet to be sure the banquet manager
has charged room rentals to the appropriate guests.
This figure is reported separately at those 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. Since room rental represents a potentially
large profit area (especially during slow banquet sales periods), general managers
will want to know how effective the marketing and sales department has been 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,
278 CHAPTER 1 0 : N I G H T A U D I T
rates for adding service charges for out-of-state long-distance telephone service. The telephone
department became a very profitable area in the hotel business. Since 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 will accompany the report. The general manager will
want to examine the financial activity of this profit center. This is 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 will 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.
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 of equipment—are sold to
the guest. These costs will usually be charged to the guest folio. A daily sales report will
be prepared at each of the health/recreation facilities. Some hotels offer their health/
recreation facilities 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
will acquire 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 will have this amount charged to their accounts. The parking
garage manager will prepare a daily report of the cash and charge activities for each shift
of the day. Supporting documentation, including parking tickets, cash register tapes,
transfer slips, and monthly parking permit renewals, accompany the daily report. The
night auditor will prepare a summary total of this account from these reports.
P R E P A R I N G THE N I G H T A U D I T R E P O R T 279
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 will
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 will authorize 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 will maintain strict control over
these figures. 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 various 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, total
discounts, and total write-offs have been subtracted from that figure. Today’s outstanding
accounts receivable figure is added to yesterday’s outstanding accounts receivable (Yesterday’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 will request front desk clerks
or cashiers to post business checks and cash received from credit-card companies, directbilling
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. It
will indicate the source of the account receivable—city ledger, direct billing, or various
credit cards. (It is important to note here that city ledger accounts may have a credit
balance but are maintained as an account receivable. For example, if a guest pays a $500
deposit on a future banquet, a credit balance will be maintained on the account. When
this credit balance is computed with other debit balances, a debit balance is realized.)
280 CHAPTER 1 0 : N I G H T A U D I T
F R O N T L I N E R E A L I T I E S
6The PMS is down, and the night auditor has to prepare the night audit report. How would
you suggest the night auditor proceed?
The controller will use 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 operate 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 will
provide 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 creditcard
voucher is considered cash at the time of deposit. The cash and various credit-card
totals that have been deposited must match the total cash sales plus the cash received and
applied to outstanding 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, will match the total bank deposit figure. The amount transferred to accounts
receivable (AMT TR A/R) will correspond to today’s outstanding accounts receivable
(Today’s Outstd A/R).
Cashier’s Report
In some hotels, the front desk clerk or cashier is responsible for proofing and collecting
the various departmental daily reports. In those situations, the cash and credit-card
vouchers are added into 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 vouchers, and accounts receivable cash and credit-card check transactions.
These figures must be verified in the daily bank deposit.
The cashier’s report will also note any variances in actual totals and PMS totals. Usually,
the hotel will set a policy regarding the front desk clerk or cashier’s liability for these
variances. 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. Amounts significantly larger than one dollar will be investigated to see
P R E P A R I N G THE N I G H T A U D I T R E P O R T 281
if such losses are regular occurrences. When the actual amount collected is more than the
amount obtained in the cashier’s report, the extra money will be maintained 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 will prepare the daily operating statistics for the general manager
and the various department directors. This quick summary provides a review of the day’s
activities and the hotel’s success in meeting financial budget targets. Hotel general managers
rely on these statistics as operational feedback mechanisms because they provide
information on the need to modify existing operational procedures and offer insight into
budgeting for future operational procedures. Also, 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 reservations,
registration cards, and folios. A quick method used to determine occupancy
percentage, double occupancy percentage, yield, average daily rate, and RevPAK is shown
in Figure 10-7.
Room income for the day is obtained from the total room charges that were posted
after a certain time in the evening (between 11 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 very time-consuming. However, with
a great deal of cooperation, planning, and organization, combined with the use of a PMS
that interfaces with a point-of-sale system, 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 a very useful report for general managers and department managers and
supervisors. This report is reviewed on a daily basis to indicate how successful a department
manager was the previous day in achieving sales. This tool is important in discussing
strategies for the successful achievement of financial goals. Figure 10-8 provides an illustration
of the major components of a flash report.
282 CHAPTER 1 0 : N I G H T A U D I T
Figure 10-6. The housekeeper’s report provides a verification of 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
CHAPTER R E C A P 283
Figure 10-7. These formulas offer an easy method for determining operating statistics.
Statistic Method
Occupancy percentage number of rooms sold
100
number of rooms available
Double occupancy percentage number of guest number of rooms sold
100
number of rooms sold
Yield number of rooms sold average daily rate
100
number of rooms available rack rate
Average daily rate room income
number of rooms sold
RevPAR room revenue
number of available rooms
or
hotel occupancy percentage average daily rate
Solution to Opening Dilemma
It is important to prepare a training outline that will maximize the front office manager’s
efforts in training 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, reconciling
departmental financial activities, reconciling the accounts receivable, running 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.
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
284 CHAPTER 1 0 : N I G H T A U D I T
Figure 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. (Information courtesy of Lincoln Plaza Hotel & Conference Center, 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
E N D O F CHAPTER Q U E S T I O N S 285
guest charges and payments, reconciling departmental financial activities, reconciling the
accounts receivable, running the trial balance, and preparing the night audit report. Finally,
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.
End of Chapter Questions
1. Why does a hotel have to balance its financial transactions each day?
2. What is the night audit? What are the steps 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. Why should the accounts receivable be analyzed?
9. Why should the bank deposit and amount transferred to accounts receivable be listed
on the night audit? What does each figure represent?
10. How can the front office manager control the cash in the front office cash drawer?
11. Why is it important to prepare hotel operating statistics?
12. Discuss the procedure to determine occupancy percentage, double occupancy percentage,
and average daily rate.
13. Discuss the procedure to determine yield. How important is this to the general manager?
14. Discuss the procedure to compute RevPAR.
15. What use is the daily flash report to a general manager? To a front desk manager?
To a food and beverage manager?
286 CHAPTER 1 0 : N I G H T A U D I T
C A S E S T U D Y 1 0 0 1
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).
Departmental Daily Sales Report
Date
$ Actual $ Budget Goal (%)
Restaurant 1 300.00 825.00
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
RST 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 3 295.00 450.00
Lounge 4 420.00 575.00
E N D O F CHAPTER Q U E S T I O N S 287
Departmental Daily Sales Report (Continued)
$ Actual $ Budget Goal (%)
Lounge Tips 1 16.50 8.50
Lounge Tips 2 34.68 95.00
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 47,280.28 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 7,137.82
BANK DEPOSIT
Cash $5,005.61
Visa $3,532.98
288 CHAPTER 1 0 : N I G H T A U D I T
Departmental Daily Sales Report (Continued)
$ Actual $ Budget Goal (%)
MC $1,656.69
JCB $1,845.09
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
E N D O F CHAPTER Q U E S T I O N S 289
Figure 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 RST SALES 3,825.00
SALES TAX 191.25
Rest Tips 1 123.75
Rest Tips 2 225.00
Rest Tips 3 225.00
TOTAL RST 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
Lounge Tips 3 45.00
Lounge Tips 4 57.50
TOTAL LOUNGE TIPS 206.00
VALET 250.00
290 CHAPTER 1 0 : N I G H T A U D I T
Figure 10-9. (Continued)
$ Actual $ Budget Goal(%)
Tele Local 125.00
Tele Long Dist 300.00
TOTAL PHONE 425.00
GIFT SHOP 350.00
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
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
E N D O F CHAPTER Q U E S T I O N S 291
Figure 10-9. (Continued)
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
ROOMS VAC
ROOMS OOO
ROOMS COMP
OCC %
DBL OCC %
YIELD %
REVPAR
ROOM INC
ROOM TAX
NO. GUESTS
AV. RATE
RACK RATE
NO-SHOWS
292 CHAPTER 1 0 : N I G H T A U D I T
C A S E S T U D Y 1 0 0 2
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).
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
RST 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
E N D O F CHAPTER Q U E S T I O N S 293
Departmental Daily Sales Report (Continued)
$ Actual $ Budget Goal (%)
Lounge Tips 1 35.00 40.00
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
294 CHAPTER 1 0 : N I G H T A U D I T
Departmental Daily Sales Report (Continued)
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
E N D O F CHAPTER Q U E S T I O N S 295
Figure 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 RST SALES 3,330.00
SALES TAX 166.50
Rest Tip 1 71.25
Rest Tip 2 113.25
Rest Tip 3 315.00
TOTAL RST 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 1,000.00
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
Lounge Tips 3 67.50
Lounge Tips 4 85.00
TOTAL LOUNGE TIPS 392.50
VALET 350.00
296 CHAPTER 1 0 : N I G H T A U D I T
Figure 10-10. (Continued)
$ Actual $ Budget Goal (%)
Tele Local 125.00
Tele Long Dist 300.00
TOTAL PHONE 425.00
GIFT SHOP 450.00
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
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
E N D O F CHAPTER Q U E S T I O N S 297
Figure 10-10. (Continued)
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
ROOMS VAC
ROOMS OOO
ROOMS COMP
OCC %
DBL OCC %
YIELD %
REVPAR
ROOM INC
ROOM TAX
NO. GUESTS
AV. RATE
RACK RATE
NO-SHOWS
298 CHAPTER 1 0 : N I G H T A U D I T
C A S E S T U D Y 1 0 0 3
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).
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
RST 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 Lunch Tips 321.43 450.00
Banq Dinner Tips 891.32 1,881.00
BANQ TIPS (rate 18%) 1,372.94 1,881.00
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
E N D O F CHAPTER Q U E S T I O N S 299
Departmental Daily Sales Report (Continued)
$ Actual $ Budget Goal (%)
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
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
300 CHAPTER 1 0 : N I G H T A U D I T
Departmental Daily Sales Report (Continued)
$ Actual $ Budget Goal (%)
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
E N D O F CHAPTER Q U E S T I O N S 301
Figure 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 RST SALES 5,050.00
SALES TAX 252.50
Rest Tips 1 97.50
Rest Tips 2 180.00
Rest Tips 3 480.00
TOTAL RST 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
Lounge Tips 3 45.00
Lounge Tips 4 75.00
TOTAL LOUNGE TIPS 520.00
VALET 400.00
302 CHAPTER 1 0 : N I G H T A U D I T
Figure 10-11. (Continued)
$ Actual $ Budget Goal (%)
Tele Local 150.00
Tele Long Dist 350.00
TOTAL PHONE 500.00
GIFT SHOP 500.00
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
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
E N D O F CHAPTER Q U E S T I O N S 303
Figure 10-11. (Continued)
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
ROOM AVAIL
ROOMS SOLD
ROOMS VAC
ROOMS OOO
ROOMS COMP
OOO %
DBL OCC %
YIELD %
REVPAR
ROOM INC
ROOM TAX
NO. GUESTS
AV. RATE
RACK RATE
NO-SHOWS
304 CHAPTER 1 0 : N I G H T A U D I T
Software Simulation Exercise
Review Chapter 6, “Night Audit,” of Kline and Sullivan’s Hotel Front Office Simulation:
AWorkbook and Software Package (New York: JohnWiley and Sons, 2003) and work
through the various concepts as presented in their chapter.
• Room Rate Report
• Post Room and Tax
• Postings Report
• Revenue Report
• Check-out Report
• No-Show and Cancellation Report
• Comp Rooms Report
• Deposit Report
• Maintenance Report
• Message Reports
• File Maintenance
• Chapter 6 Exercises
Key Words
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
C H A P T E R 1 1
Managing Hospitality
CHAPTER FOCUS POINTS
• 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
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, in the hotel industry, can
include room accommodations, food and beverages, meeting facilities, reservations, information
on hotel services, information on local attractions, and the like. Hospitality is
a very subjective concept, and the degree of hospitality a guest perceives has implications
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 others who they believe
do 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 efficient delivery of professional hospitality service, these basic rudiments will serve
as a primer for your development (Figure 11-1).
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
proponents of the service concept in business. Their writings, as well as my own profes-
306 CHAPTER 1 1 : M A N A G I N G H O S P I T A L I T Y
Figure 11-1 A well-informed hotel staff contributes to an enjoyable guest stay. (Photo
courtesy of Lincoln Plaza Hotel & Conference Center, Reading, Pennsylvania.)
sional experience in hotels and restaurants, are the basis of this chapter. A chapter devoted
to hospitality seems essential, since the staff of the front office very often represents the
only direct contact the guest has with the hotel.
Importance of Hospitality
Hospitality is a very 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
travelers, a hotel staff will find that their needs revolve around schedules and flexible
delivery 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,
fax and photocopying facilities, and computers. The guest who is associated with a convention
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
I M P O R T A N C E O F H O S P I T A L I T Y 307
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
electrical appliances, converting their national currency into local currency, or interpreting
geographic directions.
The 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
complaint 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 satisfactorily 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 organization and had their complaints satisfactorily resolved tell
an average of five people about the treatment they received.1
What do these issues of delivering hospitality to the guest mean to the entrepreneur?
They emphatically imply that the guest who is not treated with hospitality (remember
that the definition of hospitality is very 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 business with you. The entrepreneur who is aware of the competition
realizes that this negative advertising will severely affect the profit-and-loss statement.
Albrecht and Zemke extended their concept mathematically. Let’s examine the cumulative
effects of poor service 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
complaint 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 approximately
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
customers] 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
308 CHAPTER 1 1 : M A N A G I N G H O S P I T A L I T Y
I N T E R N A T I O N A L H I G H L I G H T S
wHotels 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 employees
who operate within standard operating procedures. But when service is viewed as a profession, the culture
will produce professionals as well as employees who welcome the opportunity to minister, to attend, to
facilitate, and to care for the guest. Hotels that operate in countries where service is not part of the culture
have to develop systems that support employee success in the delivery of hospitality.
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 corporate
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, management
may decide to implement one or two specific, immediate changes on learning
that a guest’s needs have been 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 will be perceived negatively by guests. This negative impression will take 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 the needs of a hotel’s prime market—guests who continue to do business with
M A N A G I N G THE D E L I V E R Y O F H O S P I T A L I T Y 309
F R O N T L I N E R E A L I T I E S
6The daughter of an international guest approaches a front desk clerk and indicates that her
mother is experiencing chest pains. What hospitality opportunities are available for the front
desk clerk?
the hotel—provides the foundation for long-term successful delivery of hospitality. This
is what will make 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 forget why they are in business. They may not necessarily mean to forget, but it
happens all too often. Service management ensures that there is a commitment to a longrange
effort by appointing someone within the organization to be responsible for developing,
organizing, and delivering it.
John W. Young, executive vice president of human resources at the Four Seasons Hotels,
tells us:
We expect our general managers to respect the dignity of every employee, to understand
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, 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.2
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
beverage manager and director of marketing and sales, rely on the organizational leadership
of the front office manager. It is important to note that the responsibility of delivering
hospitality to the guest in each department is always a part of the job of each
supervisor or shift leader, the person 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 of the program is motivating employees
to deliver hospitality on a continual basis through incentive programs. Incentive programs
310 CHAPTER 1 1 : M A N A G I N G H O S P I T A L I T Y
Figure 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.)
are management’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, managing partner of UniFocus, based in Irving, Texas, indicates that
customer satisfaction and employee satisfaction (in hotels) should be considered 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.” Mr. Heymann also
reports on feedback from hotel property clients with UniFocus, saying, “Money is not
the key driver when it comes to holding on to staff. It’s the interaction with management
and the environment.”3
The goal of any lodging establishment should be to extend the same degree of hospitality
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.
M A N A G I N G THE D E L I V E R Y O F H O S P I T A L I T Y 311
The Service Strategy Statement
To produce an effective service management program, management must devise a
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. To
accomplish this, management must first identify the guest’s needs.
Those of you who may have taken entry-level jobs in a hotel as a bellhop, desk clerk,
switchboard operator, table attendant, or clerk in a hotel gift shop may have some feel
for what guests want. They want quick and efficient service. They want to avoid long
lines. They want to find their way 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 baseline for beginning to understand
guests’ needs while they are away from home, you will be able to better satisfy their
needs.
John Young, of the Four Seasons Hotels, reports, “Market research, internal guest
comments and our regular employee attitude surveys all confirm that what has set
and will continue to set Four Seasons apart from our competitors is personal service.”
4
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
determine what is desired at the customer level until a comprehensive evaluation of customer
preference is established through a systematic consumer research study.”5 Thus, in
addition to identifying generally what guests want, management should survey guests
about the particular 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, will
provide a basis for determining 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 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 comment
cards, will give 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 products,
and rude personnel are problem areas in which the hotel failed to meet guest expectations.
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 have 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. They
report:
312 CHAPTER 1 1 : M A N A G I N G H O S P I T A L I T Y
Figure 11-3. This report highlights areas of customer service and customer feedback.
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 —
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
performance or even the absence of the feature will probably not cause dissatisfaction
or complaints, e.g., atrium-type lobbies.
3. Critical variables—capable of eliciting both positive and negative feelings, depending
on the situation, e.g., cleanliness, quality of service, employee knowledge
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.6
Albrecht and Zemke also identify general guest expectations as follows:
• Care and concern from service providers
• Spontaneity—people are authorized to think
M A N A G I N G THE D E L I V E R Y O F H O S P I T A L I T Y 313
Figure 11-4. This individual hotel guest survey asks guests for their opinions on delivery of
service.
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
• Problem solving—people can work out the intricacies of problems
• Recovery—will anybody make a special effort to set a problem right7
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
quality, 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 that can think and
solve problems. This dimension to the service strategy statement will make the delivery
of professional hospitality a challenge!
DEVELOPING THE SERVICE STRATEGY STATEMENT
Once management has identified what guests want, it can develop a service strategy
statement. The statement should include:
• A commitment to make service from top-level ownership and management a top
priority in the company
314 CHAPTER 1 1 : M A N A G I N G H O S P I T A L I T Y
• 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 will 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 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
have them deal with us. [We must] avoid compromising long-term goals in the
interest of short term profit.8
Here is one example of a service strategy statement:
The owners of The Times Hotel, management, and staff will combine forces to
establish a Service to Our Guests program, administered by management and delivered
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
industry, 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 previous discussion on service management, financial commitment
from management was stressed. Managers who want to develop and deliver a successful
service 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 strategy
D E V E L O P I N G A S E R V I C E MANAGEMENT PROGRAM 315
F R O N T L I N E R E A L I T I E S
6Ageneral 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?
sessions can increase the labor budget. Determining and offering motivational opportunities
will also increase the financial investment. Often, lack of planning for these financial
considerations will impede the desire to implement a service management program.
Total Quality Management Applications
The previous discussion of developing a background for managing the delivery of hospitality
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
statement and make a financial commitment to delivering hospitality experience extreme
difficulty in applying the principles of TQM. TQM requires an immense commitment of
labor to analyze guest and employee interaction, reallocation of responsibilities and authority
to foster an improvement in services, and a long-term commitment for learning a
new method of management. Preparation for adopting TQM is a requisite for success.
W. Edwards Deming’s principles of TQM9 have many aspects that can be applied to
front office management practices. Deming’s principles require managers to 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 particular 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
316 CHAPTER 1 1 : M A N A G I N G H O S P I T A L I T Y
H O S P I T A L I T Y P R O F I L E
?Patrick Mene is vice president
of quality for The Ritz-
Carlton Hotel Company, L.L.C.
His organization is the winner of
the 1992 and 1999 Malcolm Baldrige Award. After
he graduated 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 Francisco,
and L’Ermitage Hotels. He has performed a
great deal of research, particularly on the teachings
of Joseph Juran.
Mr. Mene states that in addition to the Malcolm
Baldrige Award’s being a prestigious recognition of
excellence in overall performance, leadership, profitability,
and competitiveness, the participation in the
competition for the award provided great feedback
for the hotel. He continues by explaining that the
hotel was organized vertically; it is now organized
horizontally to concentrate 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 prearrival
process (customer contact with the sales
office; making reservations; preplanning meetings,
conferences, or banquets), one team focuses on
arrival (laundry, housekeeping, front desk), one team
runs the restaurant, and one team is responsible for
banqueting. This horizontal structure creates 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 incorrect
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 dramatically
reduced.
He states that quality management science is a
whole new branch of knowledge. Traditional methods
of management that concentrate on selling hard,
raising prices, and forcing a profit cannot identify
and eliminate waste. He adds that, in any hotel, 30
percent of expenditures are the result of quality failures
and are unnecessary. He feels that for those organizations
that participate in TQM and make it
work, it is the most effective way to achieve revolutionary
results.
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 proposed by
management. Management needs to address that attitude from the outset. When employees
are involved early, they are much more likely to buy into the program, since they
are already a part of it.
Guest Cycle
The front office manager responsible for developing an effective service management
program, along with other department directors, should first take a look at the employees
they supervise. Representatives from all job categories and various shifts should be in-
D E V E L O P I N G A S E R V I C E MANAGEMENT PROGRAM 317
Figure 11-5 This TQM team is analyzing the delivery of a particular service to a guest.
Managers and frontline employees provide an objective review. (Photo courtesy of
Radisson Hospitality Worldwide.)
cluded on the planning committee. Planning by committee can be cumbersome(scheduling,
planning meetings, incurring additional payroll, etc.), but it can ensure thataneffectiveprogram
is developed. It allows the plan to be altered in the planning stages by those whomust
implement it and ensures clear, workable operational methods. It gives the employees time
to adjust to the new concept while allowing time to develop adoption procedures. At each
planning phase, employees learn how they will benefit from the program. This is a realistic
approach to focus management’s efforts in adopting this important concept.
Once the members of the planning committee have been chosen, the next 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
service, 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.10
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 only as a
318 CHAPTER 1 1 : M A N A G I N G H O S P I T A L I T Y
Figure 11-6. This review of the cycle of services that the guest may encounter provides 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
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 selfregistration
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
working tool for front office managers to use in analyzing the hotel services the guest will
encounter. It is not intended 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 will be very useful.
Another benefit of analyzing the cycle of service is that it may highlight inefficiencies
built into the system. Rectifying these inefficiencies will assist in delivering first-rate hospitality,
as the following example, reported by Nancy J. Allin and Kelly Halpine of the quality
assurance and training department at theWaldorfAstoria 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 WaldorfAstoria, the decision
was driven by a desire to improve guest service where its impact is most obvious—at
D E V E L O P I N G A S E R V I C E MANAGEMENT PROGRAM 319
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)
• 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
the front desk. Cross-trained employees speed the check-in and checkout process
by performing 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.11
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[s] in which a customer comes into
contact with any aspect of the company, however remote, and thereby has an opportunity
to form an impression.”12 Every time the hotel guest comes in contact with some aspect
of the hotel, he or she judges its hospitality. Guests who are told by a reservationist that
320 CHAPTER 1 1 : M A N A G I N G H O S P I T A L I T Y
F R O N T L I N E R E A L I T I E S
6Shortcomings 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, information
on timing of events, cost of admission, or suggestions for public transportation. Guests approach
desk clerks and are given a brief response to their questions.
The front office manager has decided to use total quality management principles to resolve this situation.
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?
they must “take this room at this rate or stay elsewhere” will not feel that hospitality is
a primary 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, which is the basis
of a grading system that leads the customer to decide whether to partake of the service
again or to go elsewhere.13 If a guest is to award an A to the hotel’s hospitality report
card, it is essential that these moments of truth be well managed. This challenge is not to
be viewed as mission impossible but rather as an organized and concerted effort by owners,
management, and employees. Keep this “customer report card” concept in mind as
you develop your ideas about service management.
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.”14 In other words, all the sophisticated marketing programs,
well-orchestrated sales promotions, outstanding architectural designs, 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 managers
ensure that frontline employees deliver a consistently high level of service?
Albrecht and Zemke offer the following suggestions:
D E V E L O P I N G A S E R V I C E MANAGEMENT PROGRAM 321
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 energies 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 feedback. In any case the job of management is to
engineer a motivating environment.15
John W. Young, of the Four Seasons Hotels, 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.”
16
In short, a consistently high level of service will be provided only by employees who
are committed to the service management program. This commitment is fostered by management.
It is such commitment that allows the front desk clerk to tell the newly registered
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 employee
motivation, and 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 their commitment
to service. If money will motivate 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 evaluating candidates for
frontline service positions, 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
articulate, aware of the normal rules of social context, and be able to say and
do what is necessary 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.”17 And John W. Young,
of the Four Seasons Hotels, notes:
322 CHAPTER 1 1 : M A N A G I N G H O S P I T A L I T Y
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 compensation policies have been designed to support and reinforce our efforts
in hiring, training, 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 strategy—almost as an employee communication program itself.18
Group discussions among the managerial staff will help to highlight the attributes of
a person who will be 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 continued 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 certain 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
one of the rudiments 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 may question standard operating procedures, such as billing, guest room
access, or room accommodations? 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 EMPOWERMENT INTO FRONT OFFICE MANAGEMENT
Front office employees who are not accustomed to solving problems and are not
treated as members of the management team may be reluctant to suddenly take charge
and make decisions. Employees who have become comfortable with having their managers
solve all the problems may see no need to change the established routine. However,
it is becoming 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
D E V E L O P I N G A S E R V I C E MANAGEMENT PROGRAM 323
F R O N T L I N E R E A L I T I E S
6Aguest 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 housekeeping,
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 management
efforts are working in this situation?
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 will be lost. The opportunity for an employee to participate in the
decision-making process will ensure positive initiation of empowerment.
PARAMETERS OF EMPLOYEE EMPOWERMENT
The authority and responsibility that underlie employee empowerment must be fully
articulated and communicated to employees. If an analysis of the guest flow reveals opportunities
for a guest to question a billing amount, then the billing amount needs to be
discussed. If the amount in question is less than $5, do cashiers have the authority to
credit the guest account for that amount? What if the amount in question is less than
$25; do cashiers have the authority to credit the guest account for that amount? Or what
if 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 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 EMPOWERMENT
Employees need training sessions to prepare for empowerment. Some issues that training
sessions will cover include 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 will need to develop
flexible but relatively routine methods 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-
324 CHAPTER 1 1 : M A N A G I N G H O S P I T A L I T Y
tain to some of the employees’ recent personal experiences at the time of check-in or
checkout may initiate some opportunities for discussion. Training continues with a list of
empowerment policy standards, which describe the authority and responsibility that are
included in their job description. Employee-manager dialogue about these standards will
help clarify employee understanding and concerns and identify manager communication
issues. The manager will want to demonstrate and have employees go over the use of
empowerment policy standards. Managers will also want to have follow-up training sessions
with review 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, managers 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 customer well, and then spell out the knowledge, attitudes, and skills required
of the person doing the job.19
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 conditions
of the heating, ventilating, and air-conditioning unit and television when he or she brings
the guest’s luggage to the room. The communications 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 cordial
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 identifying
the guest’s moments of truth.20 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 research put into identifying the components of the guest service cycle for a
specific hotel property, the more effective managers and employees will be in evaluating
D E V E L O P I N G A S E R V I C E MANAGEMENT PROGRAM 325
service 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 will
tell the owners, managers, and employees that frontline employees are not delivering the
necessary service correctly. Customer comment cards provide one of the ways 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 will develop additional methods for determining guest satisfaction.
One other method that can be used to obtain useful feedback is by having 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
departments, which can rectify the errors or reward the frontline employee, will complete
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 department,
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 constantly
be aware of the guest’s needs for information, directions, or assistance with luggage; while
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.
Follow-through
Vital to any service management program is the continued implementation of the
program over time. In the hospitality industry, continued implementation can be very
difficult. A hotel operates every hour of every day, and innumerable jobs are involved in
keeping it running smoothly and profitably. Management can begin a service management
program with the best of intentions, but too often it is dropped or neglected in the dayto-
day flurry of operations. Albrecht and Zemke remind us that “isolated change and
improvement programs 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 commitment is management.”21 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.
326 CHAPTER 1 1 : M A N A G I N G H O S P I T A L I T Y
F R O N T L I N E R E A L I T I E S
6Aguest 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?
Interfacing with Other Departments in Delivering Hospitality
One of the many benefits of employing total quality management is the participant’s
ability to understand fellow team members’ job responsibilities. Teams that are composed
of various departments in the hotel provide opportunities for insights into fellow members’
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 thorough 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 revelation to some employees because they feel alone in bearing the responsibility
for guest satisfaction. TQM allows all participants the opportunity to see how each
employee from the other departments shares in the hospitality activity.
The “that’s not my job” syndrome is a very easy attitude 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 those guidelines may contribute
to the delivery of unacceptable service. Department managers who useTQMhave
the opportunity to prioritize 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 will assign representatives from various departments in a hotel
to work on improving a particular guest service. For example, guests may complain that
there are not enough towels in a guest room. This complaint, especially after housekeeping
has closed down for the evening, causes a reduction in guest satisfaction and additional
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
laundry. 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 will provide 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 will review this particular service and how it is delivered.
Objective analysis of the components of the service will give employees insight
into how departments interact to accomplish their tasks. Brainstorming sessions identify
D E V E L O P I N G A S E R V I C E MANAGEMENT PROGRAM 327
possible improvements that can be debated by team members. Additional meetings will
find team members crystallizing 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 problem,
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 crate a level of
service that brings our customers back, said Dieter H. Huckestein, executive vice president,
Hilton Hotels Corporation and president, hotel operations owned and managed.
“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”22
Delta Hotels received the Canada Awards for Excellence Trophy 2000 from the National
Quality Institute (NQI). Mr. 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
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—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.” Mr. William Pallett, senior vice president, 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 oppor-
328 CHAPTER 1 1 : M A N A G I N G H O S P I T A L I T Y
tunities.” 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.”23
Solution to Opening Dilemma
An immediate response to correct this guest service situation is to have the desk clerk
register the guest at $95 per night, discuss the situation with the supervisor after the guest
departs from 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 has stressed the importance of delivering continuous quality service in hotels,
as defined by the guest. Successful extension of hospitality starts with management’s commitment
to a service management program. Preparing a service strategy statement will
focus the planning efforts of the 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 successful service
management program is necessary.
End of Chapter Questions
1. How important do you think hospitality is to a guest 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 a guest.
E N D O F CHAPTER Q U E S T I O N S 329
2. How would you develop a service strategy statement? Why is this an important first
step in the 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 employment?
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 at your place of employment.
6. What are “moments of truth”? 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 some techniques that are useful in determining whether 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 delivering hospitality?
10. How can a front office manager measure the effectiveness of a service management
program?
11. Why is follow-through so necessary in the continued delivery of hospitality?
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 service
was excellent, and they felt quite 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 think of their hotel and 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.
“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
330 CHAPTER 1 1 : M A N A G I N G H O S P I T A L I T Y
this to be 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 commitment.
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 outlines
her findings. The owners are reluctant to incur
additional expenses to motivate employees. The
owners respond, “Let’s find some more creative
ways.” The other managers suggest preparing posters
with photos 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
lunchroom. Continued focus on the financial
aspects distracts 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 for
developing an effective service management program?
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 meet to work on a program
to ensure that quality service will be delivered
by all agencies, private and commercial, to the many
guests. There will be individual groups (hotels, restaurants,
public transportation, etc.) that will meet
and decide on a course of action. Margaret Chu, general
manager of The Times Hotel, wants Ana and
Lorraine to represent the hotel on the Hotel Hospitality
Commission. Since the next 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 discuss
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 first
meeting of their team.
Notes
1. Karl Albrecht and Ron Zemke, Service America! (New York: Dow Jones—Irwin, 1985), 6–
7.
2. John W. Young, “Four Seasons Expansion into the U.S. Market” (paper delivered at the
Council on Hotel, Restaurant and Institutional Education, Toronto, Canada, July 30, 1988; edited
July 17, 2001), 29.
3. 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.
K E Y WORDS 331
4. Young, “Four Seasons,” 22.
5. Eric J. Johnson and William G. Layton, “Quality Customer Service, Part II,” Restaurant
Hospitality (October 1987): 40.
6. Ernest R. Cadotte and Normand Turgeon, “Key Factors in Guest Satisfaction,” Cornell Hotel
Restaurant Administration Quarterly 28, no. 4 (February 1988): 44–51.
7. Albrecht and Zemke, Service America!, 33–34.
8. Young, “Four Seasons,” 9–10.
9. Don Hellriegel and JohnW. Slochum, Management (New York: Addison-Wesley, 1991), 697.
10. Albrecht and Zemke, Service America!, 37–38.
11. Nancy J. Allin and Kelly Halpine, “From Clerk and Cashier to Guest Agent,” Florida International
University Hospitality Review 6, no. 1 (spring 1988): 42.
12. Albrecht and Zemke, Service America!, 27.
13. Ibid., 32.
14. Ibid., 96–97.
15. Ibid., 107–108.
16. Young, “Four Seasons,” 14, 35.
17. Albrecht and Zemke, Service America!, 114.
18. Young, “Four Seasons,” 25–26.
19. Albrecht and Zemke, Service America!, 112–113.
20. Ibid., 139.
21. Ibid., 144.
22. 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 Satisfaction Awards,” Hilton Hotels
Corporation, Beverly Hills, Calif., April 16, 2001.
23. Catherine Mattice, “Delta Hotels Receives Canada Awards for Excellence Trophy 2000,”
Delta Hotels, Toronto, Ontario, September 26, 2000.
Key Words
cycle of service
empowerment
flowchart
frontline employees
hospitality
incentive program
moments of truth
service management program
service strategy statement
shift leader
C H A P T E R 1 2
Training for Hospitality
CHAPTER FOCUS POINTS
• 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)
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 so 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, one 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.
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
334 CHAPTER 1 2 : T R A I N I N G F O R H O S P I T A L I T Y
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 in assigning
tasks to employees that match their abilities. If you do not know the skills of your current
staff and the skills that potential staff will need, you cannot assemble a staff that will
meet your needs or make effective use of their skills.
A front office manager should begin by preparing job analyses and descriptions of each
position in a department. Identify the responsibilities and objectives of each and then
consider 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 individual
must have a very outgoing personality or be willing to accept new responsibilities as a
challenge or an opportunity to grow. Or the front office manager may wish the front desk
clerks to be more efficient in handling clerical duties neatly and accurately. These qualities
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 provide some idea about the person’s leadership skills and
ability to organize projects. These and other traits should be viewed as a whole. The
motivational concepts discussed later in the chapter will help a front office manager
identify and develop an employee’s positive attributes.
A front office manager must think about some character traits necessary to deliver
hospitality 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 will be promoting the hotel’s services.
When employees have outgoing personalities, in most cases they are able to seek out
other individuals and to make the initial effort to set a relationship in motion. Employees
who are extroverts will enjoy meeting guests and will make them feel welcome. This is
the type of employee who in many cases can turn a potentially impossible 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 outgoing person may be
better at persuading the guest that the alternative hotel will surely “meet your highest
standards.”
Mature employees will be 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 that guests be allowed time to think or
carry out a request. Guests may be confused about understanding geographic directions
in an unfamiliar surrounding, but a mature employee will repeat and offer written directions
or sketches to allow the guest time to absorb the information.
Employees who possess a positive attitude toward constructive criticism will prosper
and progress in a hotel career. Employees who are able to learn and practice their job
tasks will occasionally make errors in judgment and not meet standards. Employees who
want to continue to learn will seek a supervisor’s insights into why a particular situation
resulted from their actions.
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F R O N T L I N E R E A L I T I E S
6You 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?
Front desk clerks who are comfortable with practicing promotional skills while at the
front desk are a great asset to a front office manager. This type of person will accept the
challenge to sell products and services throughout the hotel and seek ways to meet or
exceed sales quotas. This quality will allow 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 very effective. The interview will
have some structure but will 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 description
to guide the interview. He or she wants to determine if the candidate has an
outgoing 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 will want
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 will give 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 appreciation for a friendly welcome shows the candidate is aware of the concept
of hospitality.
Patience
To obtain some insight into 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
336 CHAPTER 1 2 : T R A I N I N G F O R H O S P I T A L I T Y
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 gain some insight into 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 will reflect
the degree of understanding the interviewee had about why he or she was reprimanded,
and how the situation was corrected may indicate how this 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 will assist an interviewer in understanding the applicant’s desire to sell
products and services for the hotel.
These questions may not always guarantee that the front office manager will choose
wisely, but this 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 in every other department. The front office employee is constantly
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
about the property. This program will help new hires to become aware of the activities,
procedures, people, and layout of the hotel. This is a critical first step in training new
employees.
Of the utmost importance is ensuring that orientation is thorough and well thought
out. 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 employees should be able to answer guests’ questions competently. If they don’t have
answers at their fingertips, they should know how to find the answers quickly. For example,
if someone asks for the general manager by name and the new front desk clerk
D E V E L O P I N G A N O R I E N T A T I O N PROGRAM 337
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 general outline can be used to develop a program for any
establishment. 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 will benefit from knowing how a hotel fits into the economic scheme
of the community and the region. He or she may be very impressed to learn, for example,
that a particular hotel is responsible for 10 percent of the employment in the area. Information
concerning 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
will 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
will 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 commitment to the business area.
Overview of the Lodging Establishment
An overview of the lodging establishment will include the number of rooms (accompanied
by a detailed printed handout concerning the layout of the rooms), a list of services
offered in the establishment, an organization chart of the people in the various departments,
and of course, a tour of the property.
The guest rooms are a very 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 will feel comfortable with the job. Floor plans for each floor and a
printed summary of the typical contents of the rooms will serve as 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 will assist in the training process.
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 that the new employee can assist and direct guests. Hours of operation for
each department listed will help the new employee learn more about the systematic operation
of the hotel.
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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
will assist in decision making and communication of information to various department
heads. It will also give the new hire a sense of belonging to the group.
The overview of the lodging establishment is not complete without a tour of the property.
This tour should include the guest rooms and guest room areas, major departments,
service areas such as restaurants, banquet rooms, gift shops, and recreational facilities.
This tour can be informal yet specific in content. It will allow the new employee a chance
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
topics related to personnel issues, including:
• Pay categories
• Evaluation procedures
• Vacation time
• Sick leave
• Holidays
• Paydays
• Use of controlled substances
• Social interaction with guests
• Resolving disputes with guests and other employees
• Insurance benefits
• 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.
Policy and Procedure Manual
The policy and procedure manual provides an outline of 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:
D E V E L O P I N G A N O R I E N T A T I O N PROGRAM 339
• Operation of the PMS and other equipment in the front office
• Reservations
• Registrations
• Posting
• Written and verbal communications with guests and other employees of the hotel
• Checkouts
• Preparation of the night audit
• Safety and security measures
The front office manager who takes the time to develop these guidelines will have
prepared a very useful supervisory tool. Providing materials in writing to supplement the
verbal training session allows new employees to review the skills they must master and
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 will prepare new hires for the training program that will follow. It
familiarizes them with co-workers, 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 will not only make new hires feel more comfortable
with their co-workers but also make each current staff member feel like a special part of
the team. The current staff will also appreciate meeting the new addition to the staff.
Very often, this procedure is overlooked, and new employees feel awkward for days or
weeks.
The various pieces of equipment in the front office should be described and shown to
the new employee. Brief remarks about each piece of equipment will serve as a reference
point when needed skills are explained in further detail during the training program. This
part of the orientation program can be slowed down 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 see how calls are handled. The new employee may
be encouraged to observe how registrations and checkouts are handled by using the PMS.
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.
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 house-
340 CHAPTER 1 2 : T R A I N I N G F O R H O S P I T A L I T Y
keeping, maintenance, marketing and sales, food and beverage, and front office departments.
The front office must take the lead in establishing good communications with the
various departments. Since the front office is the initial contact for the guest, obtaining
status reports, maintaining communications, and knowing the functions being hosted
each day are the responsibilities of the front office staff. Overlooking trivial misunderstandings
with other departments takes colossal effort on some days, but the front office
must keep the communication lines open. The guest will benefit from and appreciate the
efforts 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. Concern
for the guests and the services and information they require must be a priority. A standard
orientation checklist should be prepared, which summarizes all items that must be covered
during orientation, such as that shown in Figure 12-1. This will ensure that the new
employee has been properly introduced to the front office. This checklist should be initialed
by both the new employee and the orientation supervisor after the program is
complete, to verify that all policies have been covered. This ensures that no one can claim
to be ignorant because there is written evidence that the material was covered in the
orientation program.
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
convey the attitude of the organization as well as the tasks of the employees. Whoever
handles 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, co-workers, and management
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.
Developing a Training Program
Training is an important management function and is required to develop and ensure
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 give the management team an
opportunity to develop qualified employees who can perform jobs according to prede-
D E V E L O P I N G A T R A I N I N G PROGRAM 341
Figure 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 areas
___ 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
___ Co-workers in front office
___ Equipment in front office
___ Time clock
___ Fire and safety procedures
___ Training program
(Orientation Supervisor/Date) (Employee/Date)
termined standards. A good training program ensures that errors will be reduced because
the procedures have been explained and demonstrated.
Planning and developing a training program for front office employees includes identifying
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.
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F R O N T L I N E R E A L I T I E S
6In your new role as front office manager, you remember reading about the importance of an
orientation program to new hires, and you also remember the lack of an orientation at your
first front desk job. You want to organize a thorough orientation program and present it to the
general manager. How would you proceed?
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.
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 very laborious
procedure. 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.
D E V E L O P I N G A T R A I N I N G PROGRAM 343
Preparing Step-by-Step Procedures
Step-by-step procedures for each task help the trainee understand how to perform
tasks correctly. This procedure 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. Documentation
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 procedure 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 further 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 that the guest is aware of all the charges that make up
the total. The 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.
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Management Concepts
In addition to task performance, other, less tangible skills need to be included in a
training program for front office employees. Stress management, time management, and
organizational skills are some of the areas that need to 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 be in a situation in which there are long lines, many guests questioning charges,
and pressure from other guests to keep the line moving. Remaining calm under these
circumstances does come with experience, but the tenets of stress management will help
even the new employee handle difficult situations. Self-control and concern for the guest’s
welfare are paramount.
Mastering time management is another important skill that enables employees to perform
particular tasks at required times. For example, various departments depend on
front office employees to relay messages to guests and other departments on a regular
basis; otherwise, a great deal of confusion results for all concerned. Organizational skills
help employees deal with their workloads systematically rather than jumping from one
task to another without completing any of them. Completing paperwork on a regular
basis, rather than allowing it to mount into an intimidating pile, is one example of how
time management and organizational skills 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”
The trainer must plan the details of the training session. The first step is to prepare
behavioral objectives for trainees. These objectives will identify what trainees should
know when the session is over and will allow the trainees to achieve expected changes in
behavior. They will assist trainees in building their knowledge base as they develop skills.
Behavioral objectives should 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 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
S T E P S I N THE T R A I N I N G P R O C E S S 345
accuracy in five minutes may be unrealistic to achieve during the actual training session
because practice is required. The desk clerk will have to practice to achieve the speed.
In addition to preparing behavioral objectives for each training session, the trainer
must know how to present the new skill to the trainee, relate the skill to other parts of
the employee’s job, review the presentation area and scheduling for the session, and supply
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
terminal, or from another employee). Trainers should always explain slowly and check
that the trainee understands all explanations as he or she goes along.
Explaining how the skill being presented relates to other parts of the employee’s job
improves learning, enabling the trainee to understand how a particular task fits into the
job as a whole. Trainees remember more when they understand why a task is important.
Such explanations also teach new employees the importance of performing individual
skills correctly; this, in turn, forms a basis for a whole series of jobs.
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
distractions 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
employees will have to work under distracting and disorderly conditions, but during
training, they need to be in a distraction-free, orderly area so that 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 all essential to providing a professional presentation. They
allow in-depth training to take place without interruption and provide the trainee with
a means for review after the session is over.
Delivery: “Show Me”
When demonstrating skills, the trainer must consider the presentation from the
trainee’s point of view. For example, present the skill with the trainee to your right or left
346 CHAPTER 1 2 : T R A I N I N G F O R H O S P I T A L I T Y
so that the trainee can observe as it is presented. The trainee who cannot see the skill
being presented will have a much harder time understanding and retaining the skill. If
the trainee is left-handed, special presentation planning is required. Perhaps standing in
front of the left-handed person 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 righthanded
operation), training time and employee errors will decrease.
The trainer must speak clearly and distinctly. Mumbling or talking too quickly will
only confuse the trainee. The trainer must consider not only what he or she says but also
how it is stated. If the trainer’s tone of voice implies that the trainee is incompetent, he
or she will alienate the trainee. Instead, the trainer should encourage the trainee’s efforts,
offer praise when a skill is mastered, and always be patient.
Every industry has its own jargon. Trainees should learn the jargon during training.
For example, house count, reg card, no-show, sleeper, full house, late arrival are all terms
used in the industry. Even if the trainee has had previous experience at another lodging
property, it is still necessary to review these terms, to be sure that the trainee understands
each term as it is used at the establishment where he or she will be working. 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, however, late arrival may refer to anyone arriving after
4:00 p.m.
The presentation should be broken down into logical, sequential steps. The step-bystep
procedure that was previously prepared will allow the front office manager to present
the material in an orderly fashion. Trainees will understand such straightforward instructions
as “Press this key on the keyboard to activate the registration menu” more easily
than they will understand “Here is the registration menu . . . Oh,wait aminute. Let’s go
back to the reservation menu to see something . . .” Printed material that outlines the
procedure will help the trainee to learn the skill with practice.
The trainer is encouraged to think out loud, explaining every step and its importance
as the skill is demonstrated. The trainee can then logically follow the demonstration. If
there are questions, the trainee will feel more comfortable asking them. This communication
process also encourages the trainer, who can observe whether the trainee is picking
up on the skill. The more the trainee is involved in the process, the more likely learning
will occur.
After training is complete, a front office manager should watch how the employee
performs on the job. If skills are performed correctly, it is a good indication that the
training has been successful. Conversely, if the employee is confused or makes mistakes,
it is possible that a trainer wasn’t stopping to make sure that the trainee was following
along. As with anything else, being a good trainer comes with experience.
METHODS OF PRESENTATION
The methods a trainer selects to train an employee will depend on the particular topic
being presented. Clerical and computer skills are usually taught by demonstration and
on-the-job training. Maintaining customer relations is usually handled with role-playing,
S T E P S I N THE T R A I N I N G P R O C E S S 347
videotaping and subsequent analysis of role-playing, or viewing and analysis of commercially
prepared videos or cable network programs.
Skill Demonstration
In skill demonstration, the trainer demonstrates specific tasks required to complete a
job. The trainer will perform a skill in a sequential manner and provide the trainee with
an opportunity to practice, with the benefit of the trainer’s being there to offer constructive
feedback.
On-the-Job Training
On-the-job training is a process in which the employee observes and practices a task
while performing his or her job. This method has been a mainstay of training in the
hospitality industry. The planning and development of a training program and the organization
of training sessions must be incorporated into on-the-job training if they are
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 backseat.
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, organization, delivery, and
follow-up procedures—has been 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 had nothing to do with the front office. Experience has taught us that, sooner
or later, every front desk clerk will have a customer with a guaranteed reservation when
there are no vacancies, a customer who has been given a key to a room that has not been
cleaned, or a customer who must wait a long time to gain admittance to a guest room.
The options available to handle such situations are very often not communicated to new
employees. Only by trial and error do they learn to find other accommodations at another
hotel when the hotel is overbooked, to offer a sincere apology and provide another room
to the guest who has been sent to a dirty room, or to suggest a snack in the dining room
or provide directions to the patio lounge to a 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 occur, the employee will
be 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 diction, talking speed, poise, manner of dress, and posture. This method is very valu-
348 CHAPTER 1 2 : T R A I N I N G F O R H O S P I T A L I T Y
able in preparing new employees to handle the stress of a busy front desk or an irate
telephone caller.
Commercial Videos
Several commercially prepared videotapes are offered by the Educational Institute of
the 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 has seen.
Distance Learning
New inroads have been made in distance learning, providing educational and training
opportunities anywhere, anytime, and at any place, through Hospitality Television
(HTV), a commercial hospitality educational organization based in Louisville, Kentucky,
that provides satellite broadcasts to hotels, restaurants, and food service facilities. HTV
offers training segments on such topics as team building, marketing strategies, customer
service, and sales building in food and beverage areas that allow hospitality managers to
train their employees while on the job. This training has similar applications for front
office operations. For instance, a manager can choose a particular training session and
have several different shifts of employees watch it at various times throughout that week.
Later on, the manager can use this information as a basis for training sessions.
Trial and Error: “Let Me Do It”
At this stage of the training process, the new employee demonstrates the skill to the
trainer, who observes the initial attempt and offers constructive criticism of his or her
performance. Here, the behavioral objective is useful, as the trainer can use it to determine
whether 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 offer tips on how much practice other
employees needed to learn this particular skill. Also, by encouraging trainees, saying
things like, “Many employees must practice this five or six times before they catch on
and come up to speed” will let 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 will be very helpful to the trainee in performing
the skill. The parts of the skill demonstration that were confusing or fuzzy will be clarified
through individual effort.
Follow-up: “Check My Progress”
The trainer must follow up with trainees after the program has been completed. This
is a necessary final element in a sound training program. The trainer may develop a
A D M I N I S T E R I N G A T R A I N I N G PROGRAM 349
Figure 12-2. The tickler file helps the front office manager to check up on employee training
status.
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
training tickler 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 management tool can be used. This type of information can be processed in a separate
database 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.
Administering a Training Program
Planning the training program includes making provisions for administering it. Many
details must be coordinated. Accurate but flexible schedules for offering training sessions
must be set and maintained. Progress charts on employee training should be produced
and displayed. Content preparation and duplication of training materials must be completed
in a timely fashion.
350 CHAPTER 1 2 : T R A I N I N G F O R H O S P I T A L I T Y
F R O N T L I N E R E A L I T I E S
6You have been asked by the front office manager of a local hotel to offer some tips on training
new employees at the front desk. What guidelines would you offer?
The responsibility of 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 need to be discussed with that person.
Effective training for front office positions is not easy to apply in the hospitality industry.
The constant flow of people at the front desk, registrations and special events,
telephone calls, emergencies, vendor calls, and other demands require the front office
manager to be able to balance the needs of the moment with those of the future. However,
if 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 staff that is very versatile. Crosstraining,
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 reservationist has been trained to use the switchboard, the day can be saved. Crosstraining
will get a front office manager out of many tight situations only if he or she has
planned for it. Through training and maintaining accurate records that indicate which
employees can handle other job responsibilities, cross-training can be vital in the hotel
business. If cross-training is to be provided, this should be built into a job description
and pay rate. However, before planning for cross-training, all managers must be aware
that some labor unions prohibit the practice of assigning noncontractual duties, and in
this case, cross-training would not be viable.
Developing a Trainer
Careful consideration should be given to selecting the individual who will train new
employees. This person should have a professional attitude and provide trainees with
T R A I N I N G F O R EMPOWERMENT 351
positive attitudes and enthusiasm for their positions. The selected person should be in
management or be a senior staff employee. The trainer must also be very well versed in
all procedures pertaining to the employee’s job and familiar with training methods.
Knowledge of performing tasks comes with practice after formal training. In a training
session, there is no substitute for experience. The trainee will inevitably have 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.
The ability to teach is very important. The trainer must be able to plan the session in
a logical, incremental fashion. It is also critical that the trainer possess good communication
skills. The training session may include demonstrations, discussions, and workshops.
The trainer should also 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 careful explanation. Trainers who give hurried explanations discourage questions
and, as a result, end up with trainees who feel unprepared to do their jobs.
The trainer must also have a professional and positive personal view that supports the
organization’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 training 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 employeremployee
relations.
Training for Empowerment
Empowerment, which was discussed in Chapter 11, needs to be applied to training employees.
Empowerment, the act of delegating authority and responsibility concerning specific
tasks to frontline employees, is an essential element in operating an efficient front
352 CHAPTER 1 2 : T R A I N I N G F O R H O S P I T A L I T Y
I N T E R N A T I O N A L H I G H L I G H T S
wFront office employees must become aware of the importance of greeting international visitors,
who have additional 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 customs. Planning a training program for greeting international visitors will include trainee roleplaying
and employee sharing of prior experiences concerning these topics. Sensitization of employees to the
needs of international guests will go a long way in ensuring hospitality.
office. As part of the training program, a front office manager has to specify when an
employee can credit a guest’s folio within a certain dollar amount without the intervention
of the front office manager. The trainer has to discuss this empowerment concept so that
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 will make 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 employees
are empowered to recommend and implement changes on their own.”2
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 the physically
challenged and employment practices concerning hiring of the physically challenged. Because
the rhetoric of the law is still being reviewed in the U.S. courts, it is important to
review employment practices and implications. Not only is it important to adhere to the
principles of the law, but 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
A M E R I C A N S WITH D I S A B I L I T I E S ACT 353
F R O N T L I N E R E A L I T I E S
6The front office manager has a difficult time in 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 in a wheelchair.
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?
restructuring, part-time or modified work schedules, reassignment, and provision
of readers or interpreters.3
Front office managers who have not worked with physically challenged individuals
have to focus on the abilities of the job applicant. Well-written job descriptions should
outline the specific tasks required to perform a job. These tasks provide the background
to evaluate all job candidates. If there is a certain required task that is impossible for the
physically challenged 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 equipment 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 this has to be evaluated in terms of associated
financial costs. But these financial costs also have to be evaluated against the
costs of recruiting employees and paying for incentive programs, the expense of new
trainee mistakes, and the like.
Training a physically challenged employee is no different than training any other new
employee, in most cases. All the same methods are still required. While the trainer may
have to rethink the four steps involved in training, it will provide an opportunity for
looking at a familiar situation and perhaps rethinking a routine process from another
perspective.
The Marriott Foundation for People with Disabilities has made an exemplary effort
in providing guidelines for working with handicapped persons and has developed a list
of “Fears vs. Realities about Employing People with Disabilities.”
The Marriott Foundation developed the list after interviewing employers and coworkers
of young people with disabilities who participate in the Foundation’s
“Bridges . . . from school to work” program. “Bridges . . . from school to work”
fosters the employment of young people with disabilities by facilitating paid internships
for students with disabilities who are in their final year of high school.
354 CHAPTER 1 2 : T R A I N I N G F O R H O S P I T A L I T Y
Since the program’s creation in 1989, Bridges has placed more than 5,000 (as of
2001) students in paid internships with over 1,300 employers (as of 2001). Eightyseven
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,’ ”4
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 accommodations
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
average 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
perform 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
differently 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.5
CHAPTER R E C A P 355
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 have been 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
professionalism 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 that they feel are necessary to handle front
office responsibilities on a daily basis. This chapter began with a review of those character
traits—extrovertedness, maturity, patience, positive attitude toward constructive criticism,
and an ability 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 completion 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 employee handbook and policy and procedure manual. The new employee’s
introduction to the front office staff and general management staff would complete
the orientation. Administering 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 identifying
tasks and job management skills that are 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
session. A discussion of methods of presentation included skill demonstrations, on-thejob
training, role-playing, videotaping of role-playing, commercially prepared video training
films, and cable training television such as Hospitality Television. Administration of
the training program is an essential element to allow the continual delivery of quality
hospitality.
Cross-training of employees assists the front office manager in handling the daily formation
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.
356 CHAPTER 1 2 : T R A I N I N G F O R H O S P I T A L I T Y
Empowerment was discussed as an essential element in the training process that will
let hospitality flourish.
A discussion of the Americans with Disabilities Act provided the background, concepts,
and applications of this important U.S. legislation. It stressed the value of providing
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 training session.
Have a separate group evaluate your success in delivering the training session.
6. How do you feel about the concept of using cable television as a 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 empowerment
on the job? How did you feel? How did the customer feel?
10. If you had the opportunity to hire a physically chalenged job applicant as a cashier,
what would you consider as a realistic assessment of the situation?
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. Further
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 func-
E N D O F CHAPTER Q U E S T I O N S 357
tion of the front office. Since most of her front office
staff are relatively new (turnover is very 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
Monday 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 the crises
at hand, she receives a request for 20 additional
rooms for today that the marketing and sales office
just received a request to fill. 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 “Brian, go 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
her 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 her orientation program?
How realistic is her scheduling of this orientation
program? Is it possible to have a senior employee
conduct the orientation program? Under what circumstances?
Do you think Ms. Chavarria’s turnover
rate has anything to do with her approach to orientation?
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
managers 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 failures
in hiring, they may be on the road to producing
something really useful. Teresa Valquez, the representative
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 ability
to deliver hospitality and determining how to use
that information in a screening interview.
358 CHAPTER 1 2 : T R A I N I N G F O R H O S P I T A L I T Y
Notes
1. The content of this section relies on ideas found in Supervision in the Hospitality Industry,
2d ed., Chapter 5, “Developing Job Expectations” (New York: John Wiley & Sons, 1992), by Jack
Miller, Mary Porter, and Karen Eich Drummond.
2. Lawrence E. Sternberg, “Empowerment: Trust vs. Control,” Cornell Hotel and Restaurant
Administration Quarterly 33, no. 1 (February 1992): 72.
3. 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.
4. Marriott Foundation, “ ‘Fear of the Unknown’ Invisible Barrier to Employment, says Marriott
Foundation for People with Disabilities,” Washington, D.C., September 30, 1997; edited July
23, 2001. Copyright Marriott Foundation for People with Disabilities.
5. Ibid.
Key Words
Americans with Disabilities Act (ADA)
cash bank
cross-training
distance learning
documentation
employee handbook
Hospitality Television (HTV)
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
C H A P T E R 1 3
Promoting In-House Sales
CHAPTER FOCUS POINTS
• Role of the front office in a
hotel’s marketing program
• Planning a point-of-sale
front office
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 concern for delivering quality
services, maximizing potential 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 patronage, gift shop purchases, and the like—will assist 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 focusingonareas
for promotion, developing objectives and procedures, incentive programs, training programs
for personnel, budgets, tracking systems for employee feedback, and profitability.
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
360 CHAPTER 1 3 : P R O M O T I N G I N - H O U S E S A L E S
Figure 13-1. Displays such as this one alert guests to in-house entertainment. (Photo
courtesy of Lincoln Plaza Hotel & Conference Center, Reading, Pennsylvania.)
office manager produced the room sales forecast yet?”; “Is there a block of rooms available
for June 3–7?”; “To which rooms is this seminar group assigned?”; “Is there someone on
duty who can greet and provide information for the tourist group that is arriving this afternoon?”;
“Has the daily event board been set up in the lobby?”; or “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. These tasks are a necessary part of any hotel’s operations.However,
today more than ever, hotel management demands more 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
performed 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 percent, 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
established routine. The front office manager needs to figure out the best way to direct
the energies of the staff to support the efforts of the marketing and sales department.
THE R O L E O F THE F R O N T O F F I C E I N M A R K E T I N G A N D S A L E S 361
Figure 13-2. Advertising other
areas of the hotel at the front desk
is an opportunity for marketing
and sales to encourage profitability.
(Photo courtesy of Lincoln
Plaza Hotel & Conference Center,
Reading, Pennsylvania.)
The front office manager must first consider the attitudes 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
362 CHAPTER 1 3 : P R O M O T I N G I N - H O U S E S A L E S
H O S P I T A L I T Y P R O F I L E
?Lee Johnson is director of corporate
sales at Pier 5 Hotel
and Brookshire Suites at Baltimore,
Maryland’s Inner Harbor.
After he graduated from Penn State Berks’s 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 operational
issues. First, his office prepares a group re´sume´ of
an incoming group that outlines the details of paying
the bill, approvals of persons allowed to bill to
master accounts, and descriptions of concierge service
for the front office staff as well as other details
of the nature and needs of the group. His department
also prepares a banquet event order that summarizes
the details of a banquet, such as location,
time, and menu. Second, there is a daily “coaches
meeting” held early in the day with various department
heads to discuss check-in and checkout patterns,
storage requirements, and comment-card review.
His department also 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 the front desk is on the frontline
of hospitality, Mr. Johnson relies on the front
desk to deliver on promises that were 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.
less stressful. However, the front office manager is a member of the management team
and will need to interact with members of the team as well as the employees as a plan is
developed.
Planning a Point-of-Sale Front Office
To plan for a point-of-sale front office, a front office staff must promote other profit
centers of the hotel. This planning includes setting objectives, brainstorming areas for
promotion, evaluating alternatives, drawing up budgets, and developing an evaluation
tool for feedback. Without a plan, a point-of-sale front office will have little chance of
being successful. This plan should be developed in consultation with hotel management,
department managers, and frontline 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
P L A N N I N G A P O I N T - O F - S A L E F R O N T O F F I C E 363
service than originally anticipated] to guests who have made prior reservations.
• Maintain the inventory of the product, i.e., the rooms.
• Convey information to guests about other products available for sale at the
property, 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 is
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 balance 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 information
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 customer
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 manager
who wants to develop a plan for a point-of-sale front office must set realistic objectives.
What is it that he or she wants to accomplish? Should restaurant sales be increased
by 10 percent, lounge sales be increased by 15 percent, gift shop sales be increased by 20
percent, or business center sales be increased by 25 percent? Developing these objectives
is carried out in consultation with the general manager and other department managers.
The end result of these consultations may be one realistic objective that states: “Increase
business center sales by 15 percent.” This may be the objective for the next several
months. A new objective would then be planned for future months.
Brainstorm Areas for Promotion
When developing a program to increase front office sales activity, the front office
manager, 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 would be as follows:
I. Front office
A. Reservations
1. Upselling when reservation is placed
2. Additional reservations during registration and checkout
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B. Rooms
1. Upgrading of reservation during registration
2. Promotional packages
3. Office rentals
4. Movie library rental
5. Computer games for children
C. Secretarial services
1. Photocopies
2. Dictation
3. Typing
4. Fax transmission
5. Laptop computer rental
6. In-room videocassette recorder rental
D. Personal services
1. Baby-sitting
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
1. Specials of the day
2. Special theme of the day
3. Featured entertainer
4. Promotional package
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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 have to determine which concepts produced in a brainstorming session
warrant 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 would be 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 would be most profitable.
Devise Incentive Programs
During the brainstorming part of planning for a point-of-sale front office, the team
should also consider supporting concepts that will play an important part in the success
of a sales program—incentives. The point-of-sale plan should include an incentive program,
which entails understanding employees’ motivational concerns and developing opportunities
for employees to achieve their goals. This will encourage cooperation among
the frontline employees who will implement the point-of-sale plan.
The front office manager is responsible for determining how each employee is motivated.
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.
Motivation, understanding employee needs and desires and developing a framework
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? Anumber
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 em-
366 CHAPTER 1 3 : P R O M O T I N G I N - H O U S E S A L E S
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 individual needs Used a triangle to indicate various levels of human
needs; the most basic needs of food, clothing,
and shelter must be met before higher-level needs
such as self-actualization.
Mayo Recognition of individuality
in employees
Supervisors who recognize each employee as being
special will achieve greater results than 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.
ployees 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 revenue, as incentive targets. A few
examples follow:
1. Upgrading a reservation during registration: If a desk clerk can sell a room package
costing $95 to a guest who has a reservation for a $75 room, a percentage of that $20
increase in sales will be 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 will be rebated to
the desk clerk. At the restaurant, when the guest presents the VIP 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 that the sale
was the result of that clerk’s efforts.
T H E O R I E S O F M O T I V A T I O N 367
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 average
human being has an inherent dislike of work and will avoid it if he or she can.4 Theory
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. Theory
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 communication
network. Supervisors who give serious thought to these two views will discover that
sometimes they feel that one employee works best under Theory X, another employee
works best under Theory Y, and yet another will require a combination of Theory X and
Theory Y. This is exactly the intent of McGregor’s efforts. He wants the supervisor to
look at each employee as an individual who responds to a particular type of supervision.
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
Maslow further theorized that individuals will 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 theories 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 tuitionassistance
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 different level
in the hierarchy of needs, and it is important that supervisors recognize this. The front
368 CHAPTER 1 3 : P R O M O T I N G I N - H O U S E S A L E S
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 supervisorswho
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 her career progression plan. This recognition may motivate 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, benefits,
and job security are actually dissatisfiers or hygiene factors. When these factors
deteriorate 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 nonproductive
environment. He believes that organizations that provide less than these are creating
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
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 some framework
for day-to-day contact and incentive programs.
The front office manager who reviews these motivational principles will learn 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
T R A I N I N G PROGRAMS F O R A P O I N T - O F - S A L E F R O N T O F F I C E 369
toward becoming a supervisor of the department will 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 would not be motivated
by health insurance benefits 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; it is 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 that will
motivate this employee.
Mayo’s work on recognizing the efforts of the individual gives the front office manager
the opportunity to explore the connections among communication, satisfaction, and cost
savings. 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 will make the employee feel special, even in a large hotel.
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 will cause
dissatisfaction. 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.
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. 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
the negative perception about 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.
The job of selling is more attractive if employees believe they are presenting opportunities
to the guest. Front desk personnel who believe their suggestions are intended
primarily to improve the guest’s visit will feel more comfortable with the idea of selling.
Confidence in selling will develop if the point-of-sale program is introduced gradually,
promotion by promotion, giving employees a chance to try out various techniques. Incentive
programs will strengthen employees’ commitment.
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Figure 13-3. Planning the videotaping of a training session will assist in developing a unique
aid. (Photo courtesy of Radisson Hotels.)
An often overlooked but very effective practice is to allow front office employees to
experience the services and products they sell. Familiarity with and appreciation for the
chef’s specials, the luxury of an upgraded room, the equipment in the health club, the
new merchandise 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.
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
elaborate. They only need to highlight simple approaches to presenting opportunities that
enhance the guest experience.
The front office manager who wants to use video as a training option needs to do a
little homework first. Preparation for video training requires some thought as to just
which skills and behaviors need teaching or reinforcement. Discussions with the directors
of other hotel departments (marketing and sales, food and beverage) will provide a basis
for promotional concepts. The front office manager will want to take an objective look
F E E D B A C K 371
F R O N T L I N E R E A L I T I E S
6Afew of the senior desk clerks have expressed distaste for having to promote future reservations
at checkout. What do you think is the basis for their view? How would you handle the
situation?
at the salesmanship 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 will be
highlighted 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
that the employee is expected to master.
Producing the video will involve scheduling a time that is conducive to shooting a
video. Employee work shifts will have to be adjusted accordingly. Time for rehearsal will
also have to be planned. The planning will also need to take into consideration budgetary
issues regarding the rental or purchase of a video camera and related equipment.
Budgeting for a Point-of-Sale Front Office
The front office manager will incur 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 meant to be overwhelming, should be
anticipated. If all appropriate steps are taken, the income from increased sales should far
outweigh the additional costs. This projection of sales and related expenses is very 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 will 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 will not be able to tell exactly how effective this promotional strategy is,
but they must make an effort to obtain as much feedback from staff and guests as possible.
372 CHAPTER 1 3 : P R O M O T I N G I N - H O U S E S A L E S
This information will be very valuable in planning future promotional ideas, incentive
programs, and training programs. The objective for this part of the plan could be stated
as “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
will enable 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 that the front desk
clerk is disregarding 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 negatively 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
comment cards, questions concerning alternative promotion targets should be listed.
Choices offered by hotel staff, such as upgrading reservations or information received
about restaurants, gift shops, additional reservations, or other areas of the hotel, may be
included. This information provides 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 will 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 various department directors and the controller.
Planning a Point-of-Sale Front Office—An Example
A typical planning 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
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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 beverage director begins the discussion by mentioning the following promotions
that will run in the dining room:
1. Eat Wisely in January: Choice of entre´e 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 entre´e.
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 the various 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.
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
developed 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
374 CHAPTER 1 3 : P R O M O T I N G I N - H O U S E S A L E S
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 Conference.
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 will include the following revenue and expense categories.When
the hard facts of projected revenues and related expenses are visualized, planning takes
on a realistic dimension. Projected budgets that show how a small cash outlay can produce
significant revenue are effective in convincing owners and senior management that a
point-of-sale front office program is a realistic and potentially profitable concept.
Times Hotel
Sales Budget—Front Office
Anticipated Increase in Sales
10 lunches @ $8 $80/day 365 $ 29,200
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 $403,325
Anticipated Increase in Costs
Incentives (cash awards for lunches, dinners, room service,
room reservations, gift shop referrals)
$ 15,000
Management planning time 2,000
Employee overtime for producing three videos 3,000
Photocopies 300
Rental of video equipment 500
Hardware accessories 50
Purchase of VCR and monitor 500
Miscellaneous 500
Subtotal $ 21,850
CHAPTER R E C A P 375
Related cost of goods sold:
Lunches 29,200 .35 $10,220
Dinners 136,875 .35 47,906
Food
Room service 36,500 .35 12,775 $70,901
$ 70,901
Room prep [5 365 1,825 $15 $27,375] $ 27,375
Merchandise 10,950
$109,226
total [$21,850 $109,226 $131,076] $131,076
anticipated profit [$403,325 $131,076 $272,249] $272,249
The data that the team has gathered in deciding to use the two promotional concepts
are useful in deciding whether these ideas will produce a profit for the efforts involved.
The incentives, training, and budgets developed will support the operational efforts of
the plan. Feedback mechanisms will include the standard guest test, comment cards, and
monitoring of the source of sales for both promotions.
Solution to Opening Dilemma
Recommending restaurants outside of the hotel is a common occurrence in many hotels.
The reason for this 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 would become 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 to 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 alternatives,
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 will allow front
office managers the opportunity to gain a larger perspective on the issue rather than
pushing forward with desperate efforts to produce sales.
376 CHAPTER 1 3 : P R O M O T I N G I N - H O U S E S A L E S
A team of managers from various departments who select a few promotional strategies
and explain them to the front office staff will generate additional income. The front office
manager is responsible for developing a plan for a point-of-sale front office that will
provide 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?
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.
Several students should observe your performance. Ask them to react to what they
learned. Do you feel this is what you wanted 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 program?
What should they cover? What do they tell management?
13. If you are employed at a hotel front office and the hotel has a Web site, discuss
feedback options on the Web site.
N O T E S 377
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 information
for all guests. Maybe having her employees
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?
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 restaurant
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 remembers
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 reimplementation?
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.
378 CHAPTER 1 3 : P R O M O T I N G I N - H O U S E S A L E S
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 toWork, 2d ed. (New
York: Wiley, 1967), 113–114.
9. Frederick Herzberg, personal communication with the author.
Key Words
guest test
incentive program
motivation
plant
point-of-sale front office
upsell
C H A P T E R 1 4
Security
CHAPTER FOCUS POINTS
• 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
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,
throughout this text, delivering hospitality has been 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. Hospitality also includes providing a safe environment for
guests, which requires a well-organized department to oversee and implement
safety programs. The security department of a hotel is vital to delivering hospitality
to guests. This department is responsible for establishing the details of
the following systems:
• Guest and employee safety
• Room key security
• Fire safety systems
• Bomb threat action
• Emergency evacuation plans
380 CHAPTER 1 4 : S E C U R I T Y
• Employee safety training plans
• Emergency communication plans
These operational procedures are never really appreciated until a crime occurs or a
disaster strikes a hotel. They are assumed to be in place but somehow seem to take second
place to accommodating guests’ more immediate needs and meeting the financial objectives
of the organization.
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 to 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 continue 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, reacting only when
called on. In reality, it is a very active department, setting policies, organizing programs,
and delivering training programs to promote guest and employee safety. The director of
security is a trained professional who must ensure that a busy hotel filled with guests,
employees, 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 Marriott
International, Inc., Washington, D.C., who reports on Marriott International’s 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
protecting the interior, lobby, and guestrooms; exterior and parking area; and the
surrounding 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.
I M P O R T A N C E O F A S E C U R I T Y DEPARTMENT 381
• 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 interrogated 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 pedestrians. Garages need to be as open as possible, encouraging
clear lines of sight. Elevators 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.1
In today’s litigious society, an environment in which consumers sue providers of products
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 muchpublicized
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.2
382 CHAPTER 1 4 : S E C U R I T Y
Figure 14-1. Organization chart for
a security department.
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
environment 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 would act in the absence of
the director and assist 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 department
for a large hotel.
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 performance. A
typical job analysis might be 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.
J O B A N A L Y S I S O F THE D I R E C T O R O F S E C U R I T Y 383
8:30 a.m. 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 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.
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.
384 CHAPTER 1 4 : S E C U R I T Y
F R O N T L I N E R E A L I T I E S
6Aguest calls down to the front desk indicating that her son has not returned from the vending
machine area. He has been gone for 25 minutes. How should the desk clerk respond? What
systems need to be in place for prompt, efficient actions?
5:00 p.m. 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 very involved with managing details
concerning the whereabouts of people and showing a proactive concern for their safety.
There is constant interaction with various department directors, employees, government
officials, guests, and operational equipment. All of these job tasks describe a very responsible
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 obligation to protect guests from
• negligent or deliberate acts of hotel employees
• acts of other guests
• acts by nonguests committed on the premises.
I N - H O U S E S E C U R I T Y DEPARTMENTS V E R S U S C O N T R A C T E D S E C U R I T Y S E R V I C E S 385
H O S P I T A L I T Y P R O F I L E
?John Juliano is director of
safety and security at the
Royal Sonesta Hotel, Cambridge,
Massachusetts. After
earning a bachelor’s degree in criminal justice, 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 OSHA
requirements to supervisors; and helps to implement
new safety procedures.
Mr. Juliano says that 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 needs to be knowledgeable
about local ordinances as well as state laws and
OSHA regulations. Mr. Juliano’s department is as
involved with guest relations as the front desk,
guest services, or the concierge. He has a very good
relationship with the front office manager. He provides
the front office manager with informational
guidelines. By following these guidelines, the front
office manager and staff come to develop an understanding
of what to do in certain situations. While
Mr. Juliano does not interact with the front office
manager on a daily basis, the front office manager
will call him about situations that occur and ask
for his feedback. Mostly, he deals directly with
guests or with a hotel employee when something goes
wrong.
Failure to conform to the reasonableness standard in these three areas provides a
liability risk for the hotel.3
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 manager
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 administrative
role may be shared with the assistant manager, reservations manager, and/or housekeeper.
In-House Security Departments versus Contracted
Security Services
General managers of hotels must determine if operating an in-house security department
is cost-effective. Operating a well-organized security department must be the primary
concern when considering the hiring of an outside security firm. As the job analysis for
386 CHAPTER 1 4 : S E C U R I T Y
the director of security indicated, 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 manager will be forced, for economic reasons, to consider
the purchase of an outside service. Administrative and planning procedures for
operating a security department are delegated to other department heads. The cost consideration
must be weighed against planning and coordinating a safe environment for the
guest and employee.
The hourly rate charged by the security service for escort service, 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 parking garage
may seem very attractive compared to the annual salaries and administrative overhead
incurred by 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 will have to be answered
if owners and management are committed to the concept of security.
If an outside security service is hired, the role of maintaining security is parceled out
to the various department directors. The director of maintenance will operate the fire
safety and security equipment, maintain operating records of fire safety equipment and
elevators, and react to hazardous situations. The general manager will, if time permits,
establish a safety committee that reacts to government guidelines and potential hazards.
Each department director will, if time permits, establish security guidelines based on
previous personal experiences. Under such circumstances, safety and security become low
priorities. The lack of coordination almost guarantees disaster when an emergency strikes.
In an article concerning hotel security, a director of security reports the following:
“Creating the biggest security problems in the past several years are liability, risk
management and loss control,” according to Mark Beaudry, director of security at
the Westin Boston. “Crime prevention education and training have moved to the
forefront in order to prevent lawsuits when possible, especially when administrative
work from litigation can take up almost one-third of a security director’s time.
Directors of security have been assigned new duties such as risk management. They
must be the liaison with the police in defending the hotel and also must know civil
and criminal laws,” said Beaudry.4
Meeting the challenges of providing security for guests and employees requires a fulltime
approach. Part-time efforts to control crises in a hotel may be shortsighted. The
following story shows the consequences of not providing adequate security.
ROOM K E Y S E C U R I T Y 387
Figure 14-2. The security department in a hotel works closely with the front office manager.
(Photo courtesy of Pinkerton Security and Investigation Services.)
The verdict against Hilton Hotels Corp. in the Tailhook case could have farreaching
implications concerning 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 provide 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.5
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
388 CHAPTER 1 4 : S E C U R I T Y
duty not to allow unregistered guests, unauthorized employees, and third parties to gain
access to a guest’s room.”6
Although issuing and filing keys are duties of front office employees, there is more to
room key control. Room locks and keys are one of the single most effective ways to
ensure guest safety. According to an article in Hotel & Motel Management:
To minimize your risk and the potential for costly lawsuits, it is wise to invest in
electronic-locking systems. . . . And franchise hotel chains are responding to that
call in droves. Most refer to such franchise-hotel chain mandates as the “three-year
window,” where operators must implement improved locking systems or risk losing
their flags.
According to Ray Ellis, a former operations consultant to the American Hotel
& Motel Association, January 1, 1997, is the hallmark date for Sheraton, Hilton
Hotels, and Holiday Inn to implement electronic-locking systems. He added that
Quality Inns, Hotels & Suites, Days Inns of America, Super 8 Motels and Howard
Johnson Franchise Systems are planning similar mandates for their properties.7
Usually one of two different lock systems is used—the hard-key system or the electronic
key system. 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
generates 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, registering all previous combinations unacceptable.8
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
update on smart cards:
One of those enhancements is that 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 Por-
ROOM K E Y S E C U R I T Y 389
tofino 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 smartcard, it is very easy to invalidate,” Sansbury said.9
The hard-key system is less expensive at the time of initial purchase. However, over
the long run, the purchase of additional keys and the cost of rekeying locks need to be
considered. Also, reissuing the same keys 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 and smart card 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 is produced. The new combination for the guest room lock
will respond only to the new guest room key. This procedure almost guarantees guest
safety. The initial investment in this type of system has to be evaluated against overall
maintenance and replacement costs of a hard-key system and increased guest 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.
High-end electronic access control systems can be equipped with numerous . . .
features . . . [such as] recording who entered an area and at what time . . . [and]
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.10
While the hard-key system is the traditional method that hotels have been using for
many years, the cumbersome and costly maintenance of that system indicates that it
should be replaced with advanced technology. It will be a slow process but will greatly
390 CHAPTER 1 4 : S E C U R I T Y
improve guest, employee, and inventory safety. The economies of scale will make the
electronic key system an affordable necessity.
Fire Safety
Hearing someone shout “Fire!” will panic anyone who is unprepared to deal with this
dangerous situation. Well-orchestrated safety procedures that are well managed at the
onset of a fire can have lifesaving implications for 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 will 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
maintenance, 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
during their visit. Some guests may ask for a room on the lower levels or inquire if the
rooms have smoke alarms. However, most guests are concerned about other matters and
will 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’ other, more pressing concerns have caused
them to place their safety in the hands of the management and employees of the hotel?
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 will include the following commonsense
concepts:
1. Equip all guest rooms and public areas with smoke detectors that are tied in to a
central communications area.
F I R E S A F E T Y 391
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
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. Provide instructions for employees and guests on where the nearest fire extinguishers
and fire alarms are located, as well as procedures for building evacuation and fire
safety guidelines (Figure 14-5).
7. Develop a fire action communication procedure for front office personnel.
392 CHAPTER 1 4 : S E C U R I T Y
Table 14-2. Maintenance Records for Fire Alarm Tests
Location Date Status
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
Employee Training in Fire Safety
Providing training programs for employees on the locations of the fire exits, fire extinguishers,
and fire alarms and on methods of building evacuation will greatly increase
the chances that all occupants will escape the building safely when necessary. After new
and current employees have been 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.
F I R E S A F E T Y 393
Figure 14-3. Well-marked exits from public areas are very important.
Figure 14-4. Signs such as this one are mounted on the backs of doors to guest rooms to
provide fire safety information for guests.
Figure 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 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.OH1989 Cardinal Lodging
Group, Inc., management company for Knights Inns and Arborgate Inns.
F I R E S A F E T Y 395
Local fire departments or the director of security can train employees to use fire extinguishers.
These informal training sessions should include operational procedures and information
on applying the appropriate type of fire extinguisher. The time to start reading
directions is not during the fire. These training sessions will 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 located next to the elevator on each floor, and that a fire can be
reported by dialing “0” for the hotel operator. Guests will appreciate that the hotel cares
about their well-being and that the hotel has taken every precaution to ensure that the
equipment is available and in working order. Management 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 in case of an
emergency.
Fire Action Communication Procedure
The front office employees will have to 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 the fire strikes during
the middle 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 switchboard
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 interface
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.
396 CHAPTER 1 4 : S E C U R I T Y
F R O N T L I N E R E A L I T I E S
6Aguest calls the front desk and reports that an iron has overheated and set the bedspread on
fire. What action should the front desk clerk initiate? What previous fire safety planning
would ensure prompt, efficient action?
After the fire has been reported, security and management should be alerted. Guest
and employee evacuation procedures must be initiated and organized. Prior established
procedures stipulating who should be informed and in what manner, as well as who is to
assist the guests and employees in evacuating, will result in an efficient evacuation. The
front desk clerk will have to 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 will be of vital importance to firefighters and
volunteers who assist in the evacuation.
On arrival, firefighters will immediately report to the front desk. They will want to
know where the fire is located and what guest rooms are occupied. Duplicate copies of
the list of rooms occupied and any special notes on whether the occupants are children
or physically challenged will aid in the rescue efforts.
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 will take advantage of the
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 will aid all employees in handling the emergency; everyone must be part of the
drill, no matter how calmly they may react to ordinary crises. Holding fire drills on each
of the various shifts gives employees practice and is worth the effort.
The following stories highlight the importance of being prepared to react in an emergency
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.
EMERGENCY C O M M U N I C A T I O N 397
Years later, [he] was general manager of a property on the Seychelles Islands
during 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.11
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 authorities,
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 responsible
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 evident—
and costly. These hard lessons became clear in the immediate aftermath of
the February 26, 1993 bombing of New York’sWorld 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 thousands of dollars apiece that day. Drawings illustrating how the hotel
was built were not easily accessible, creating confusion among the rescue teams.12
Here is another incident of a more urgent emergency nature:
A natural gas explosion tore through the property’s [Embassy Suites Outdoor
World at Dallas/Ft. Worth International Airport] swimming pool maintenance
398 CHAPTER 1 4 : S E C U R I T Y
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, firefighters 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 explosion, 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
accompanied by Embassy Suites staff, were relocated within 90 minutes to nearby
hotels.13
The following discussion of planning for effective emergency communication outlines
the most important features of such a plan.
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 that will be used in the event of an impending lifethreatening
emergency and will also include considerations for training staff and employees.
EMERGENCY COMMUNICATIONS MANAGER ON DUTY
The job description of each management position will include a task entitled “emergency
communications manager on duty.” This duty requires the person to act as the
liaison between the hotel and the civil authorities. Each member of the management staff
will receive 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
EMERGENCY C O M M U N I C A T I O N 399
Figure 14-6. The switchboard operator plays a pivotal role in an emergency communication
plan. (Photo courtesy of Northern Telecom.)
Director of marketing and sales
Controller
Housekeeper
Front office manager
Front desk clerk on duty
Night auditor
RESPONSIBILITIES OF THE FRONT OFFICE
On receipt of a call informing the hotel that the guests and employees are in danger,
these procedures are to be followed (Figure 14-6):
400 CHAPTER 1 4 : S E C U R I T Y
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 has been inactivated, use a cellular
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 that are in progress.
4. Alert the emergency communications leaders on duty in each hotel department. These
people will report to the front office immediately. An emergency action meeting will
be held with the emergency communications manager on duty. The lists of registered
guests and social functions in progress will assist in the evacuation.
5. The emergency communications manager on duty will advise you which authorities
should be alerted.
• Police department: 000–0000
• Fire department: 000–0000
• Bomb squad: 000–0000
• Electric company: 000–0000
• Gas company: 000–0000
• Water company: 000–0000
• Rescue squad: 000–0000
• Red Cross: 000–0000
• Owner of hotel: 000–0000
• General manager: 000–0000
6. Respond to phone inquiries as directed by the emergency communications manager
on duty.
7. Remain at the front office to manage emergency communications until directed to
evacuate by the emergency communications manager on duty.
RESPONSIBILITIES OF OTHER HOTEL DEPARTMENTS
Delegating the task of emergency communications leader on duty to other responsible
members of a department requires the following considerations:
• Each department director will develop a hierarchy of positions to assume the responsibility
of emergency communications leader.
• Each emergency communications leader on duty will receive 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.”
EMPLOYEE S A F E T Y PROGRAMS 401
H O S P I T A L I T Y P R O F I L E
?John Juliano, the director of
safety and security at the
Royal Sonesta Hotel in Cambridge,
Massachusetts, mentioned
his participation in the Security Directors’
Network, which consists of 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 person 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 network was helpful in tracking
his actions. However, nine of ten times when he receives
a request for information about a specific person,
Mr. Juliano will have no information to supply.
• All emergency communications leaders on duty are to report to the front office for
an emergency communications meeting. Directions will be given for assisting guests
and employees to evacuate.
• Employees on duty will 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 will receive two hours of training in emergency evacuation procedures.
New employees will receive training in emergency evacuation at the time of
orientation. Refresher training, two hours every year, is required of all employees.
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 beverages
and performing other services for the guests. The employees who are most in danger
include those whose equipment is in need of repair or 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:
402 CHAPTER 1 4 : S E C U R I T Y
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.14
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 responsibility,
other employees will welcome this 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 will want to 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.
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.
Figure 14-7. Minutes from a safety meeting keep participants on track.
Hotel Safety Committee Minutes 5/19
Members present:
A. Johnson, Housekeeping T. Hopewell, Food and Beverage Manager
S. Thomas, Housekeeping J. Harper, Banquets
L. Retter, Food Production T. Senton, Restaurant
K. Wotson, Food Production M. Povik, Lounge
M. Benssinger, Front Desk A. Smith, Maintenance
V. Howe, Front Desk J. Hanley, Maintenance
F. Black, Gift Shop D. Frank, Parking Garage
B. Lacey, Director of Security A. Gricki, Accounting
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 this 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 this 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.
404 CHAPTER 1 4 : S E C U R I T Y
F R O N T L I N E R E A L I T I E S
6After slipping on some 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 inherent
in this type of employee attitude.
Safety Training Programs
Specific safety training programs should be developed by each department director. The
directors will 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 will help to
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 management
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
sessions must be scheduled before or after a shift, with additional pay. If management
wants to enhance safety with training programs, then this has to become a budget item.
Planning for safety takes time and financial investment.
Solution to Opening Dilemma
The plan of action to investigate the possibility of establishing an in-house security department
could address the following topics:
• How are communications with public safety officials regarding safety issues handled?
• How are fire safety and emergency communication plans developed?
• 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?
E N D O F CHAPTER Q U E S T I O N S 405
• How can all members of the hotel staff adopt an attitude to be cautious of 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 providing a safe environment for guests and employees. The organization and operation
of a security department, along with the job analysis of the director of security,
were all 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 and smart card systems than it
is with hard-key systems. Building evacuation requires that established procedures 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 management 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 has contracted 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.
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.
406 CHAPTER 1 4 : S E C U R I T Y
7. Discuss the features of an electronic key system.
8. Discuss the features of a smart card system.
9. How can a hotel take a proactive stance on fire safety?
10. Why are testing and maintenance of smoke detectors and fire alarms so important?
11. 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?
12. Why is it important for management to include employees when developing safety
programs?
13. Review the minutes of the safety committee meeting in Figure 14-7. What issues do
you feel are top priorities? Which are low priorities?
14. What value do you see in preparing an emergency communications system to be used
in a hotel?
15. Review the emergency communication plan presented in this chapter. What are the
important features of the plan?
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 director
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 department,
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 some suggestions for developing
an emergency communication plan.
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.
N O T E S 407
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 some loud noise coming from
the room located below him. Cynthia alerted the security
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 normal
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 on 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 that 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 involving
the police? What major topics would you include
in a training program on safety and security procedures
for front office personnel?
Notes
1. Patrick M. Murphy, “How Marriott Employs CPTED in Its Properties’ Total Security Package,”
Hotel Security Report 19, no. 2 (PortWashington, N.Y.: Rusting Publications, January 2001):
1–2.
2. Timothy N. Troy, “Keys to Security,” Hotel & Motel Management 209, no. 20 (November
21, 1994): 17.
3. Mahmood Khan, Michael Olsen, and Turgut Var, VNR’s Encyclopedia of Hospitality and
Tourism. (New York: Van Nostrand Reinhold, 1993), 585.
4. Shannon McMullen, “Loss Control, Risk Management Major Factors Affecting Hotel Security,”
Hotel Business 4, no. 3 (February 7–20, 1995): 8, 10.
5. Toni Giovanetti, “Looking at the Law,” Hotel Business 3, no. 23 (December 7–20, 1994): 1.
6. Campbell v. Womack, 35 So. 2d 96 La. App. (1977), quoted in Khan, Olsen, and Var, Encyclopedia
of Hospitality and Tourism, 586.
7. Troy, “Keys to Security,” 17.
8. “Securing Guest Safety,” Lodging Hospitality 42, no. 1 (January 1986): 66.
9. Hotel & Motel Management, vol. 215, no. 12 (July 3, 2000), p. 62, “A Few Hotels Are
Reaping Benefits from Smartcards,” by Bruce Adams.
10. 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.
11. James T. Davidson, “Are You Ready for an Emergency?” Hotels 28, no. 10 (October 1994):
20.
12. Michael Meyer, “Girding for Disaster,” Lodging Hospitality 50, no. 7 (July 1994): 42.
408 CHAPTER 1 4 : S E C U R I T Y
13. Stefani C. O’Connor, “Embassy Suiks Hotel in Dallas Exhibits Exemplary Crisis Management
Skills,” Hotel Business (August 16, 2000), www.hotelbusiness.com.
14. Khan, Olsen, and Var, Encyclopedia of Hospitality and Tourism, 585.
Key Words
communications hierarchy
crisis management
electronic key system
escort service
foot patrol
hard-key system
litigious society
room key control system
safety committee
smart card
visual alarm systems
Glossary
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 vendors
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 a more athome
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 owners, 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
410 G L O S S A R Y
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
back office: the accounting office of a hotel
back office accounts payable: amounts of money that have been 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 who is 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, which requires
the guest or the guest’s employer to establish a line of credit and to adhere to a regular
payment schedule
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 reference for a cancellation of a guaranteed reservation
G L O S S A R Y 411
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 guest 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
chain: a group of hotels that follow standard operating procedures such as marketing,
reservations, quality of service, food and beverage operations, housekeeping, and accounting
chain affiliations: hotels that purchase operational and marketing services from a corporation
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 less 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 for 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, amusements, transportation, tours, church services, and baby-sitting 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 normally be flat
412 G L O S S A R Y
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 concerning the customer’s current balance and security status
crisis management: maintaining control of an emergency situation
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 previously 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
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 to determine the financial success of the previous day
and the 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 transfer of funds from a customer’s bank account to the commercial organization’s
bank account for purchase of goods and services
G L O S S A R Y 413
demographic data: size, density, distribution, 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 services to meet the needs of those markets, and sells these products and
services at a profit
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 that is charged by the credit card agency to
the commercial enterprise for the convenience of accepting credit cards
discretionary income: the money remaining from wages after paying for necessities such
as food, clothing, and shelter
disk drive: a place in the computer where data is stored or read; hard or floppy—31/2-
inch versus 51/4-inch
distance learning: learning that takes place via satellite broadcasts, PictureTel, or on-line
computer interaction
documentation: printed or on-screen (monitor) instructions for operating hardware or
software that accompany a specific PMS
dot-matrix: a printer that produces small dots printed with an inked ribbon on paper
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:
100
number of guests number of rooms sold
number of rooms sold
draft-style: a good type of dot-matrix print
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
414 G L O S S A R Y
E-mail: 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
escort service: having a uniformed security guard escort a hotel employee to a financial
institution
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: a person who is 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 amenities 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 representatives of travel organizations, bus associations, social and nonprofit organizations,
and local corporate traffic managers
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 particular 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
G L O S S A R Y 415
food and beverage director: a person who is 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.
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 programs, transportation reservations, meeting facilities, registration procedures,
tours, and information on sightseeing, while maintaining a budget for group
travelers
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 affiliation, or special needs
416 G L O S S A R Y
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
hospitality: the generous and cordial provision of services to a guest
Hospitality Television (HTV): a commercial hospitality educational organization based
in Louisville, Kentucky, that provides satellite broadcasts to hotels, restaurants, and food
service facilities
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
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 employment 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.
G L O S S A R Y 417
ink-jet: 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 operations 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
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
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
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 numbers 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
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
418 G L O S S A R Y
litigious society: an environment in which consumers sue providers of products and services
for not delivering those products and services according to expected operating standards
main menu: on-screen list of all the available individual programs (modules) that are
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 that is 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 intersell credit cards such as Visa, MasterCard, and JCB
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
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
G L O S S A R Y 419
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 balanced on a daily basis
night auditor: a 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
occupancy management formula: calculation that considers confirmed reservations, guaranteed
reservations, 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
on-line: 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 performing 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 will 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
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
420 G L O S S A R Y
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: prenumbered 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
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
Peddler’s Club: a marketing program meant to encourage repeat business by frequent
business guests
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 behindthe-
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 who is hired by a hotel to experience hotel services and report
the findings to management
pleasure travelers: people who travel alone or with others on their own for visits to points
of interest, to relatives, or for other personal reasons
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
ppm (pages per minute): printing speed capability
G L O S S A R Y 421
predicted house count: an estimate of the number of guests expected to register based on
previous occupancy 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 used to describe applications of computer
hardware and software used to manage a hotel by networking reservation and
registration databases, point-of-sale systems, 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 who is in charge of developing and organization recreational
activities for guests
referral member: a hotel owner or developer who has access to the 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 franchisee 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 reference 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
422 G L O S S A R Y
reservation status: terminology used to indicate the availability of a guest room to be
rented on a particular night, i.e., open (room is available for renting), confirmed (room
has been reserved until 4:00 p.m. 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 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
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: employees who clean and maintain guest rooms and public areas
room blocking: reserving rooms for guests who are holding reservations
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 indicates 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, guaranteed, 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 $1 for every $1,000 of construction costs (this figure is from the 1960s;
the current figure is $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
sales indicators: number of guests and revenue generated
self-check-in process: a procedure that requires the guest to insert a credit card having 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
G L O S S A R Y 423
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 designated area, tracking, and debit-card capabilities for the hotel guest
software: computer-designed applications that process data such as guest information
and aid in financial transactions and report generation
statement of cash flows: a projection of income from various 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 previously 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 at processes used to produce products and services with a critical eye
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
tractor-fed: a type of printer that uses a continuous roll of paper
traffic managers: persons who direct hotel guests to available elevators in the lobby
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
424 G L O S S A R Y
travel directories: organized listings of hotel reservation access methods and hotel geographic
and specific 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 property 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 reservation 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 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.), which 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
yield percentage: the effectiveness of a hotel at selling its rooms at the highest rate available
to the most profitable guest
zip drive: a computer accessory that holds data; a 100-megabyte Zip drive holds an
equivalent of 70 floppy disks
zip or postal code: an individual local postal designation assigned by a country
Index
A
Access time, 101
Accounting, 1–2
back office accounts, 115–116,
230, 250–251
bookkeeping system, 221–223
call accounting, 51–52, 113
computer applications, 102, 115–
116
responsibilities of controller, 48–
49
See also Charges and payments;
Night audit
Account ledgers, 223–225
Accounts payable, 49, 115, 230–231
Accounts receivable, 49, 115–116
city ledger, 60, 114, 223–225, 230,
232, 268
night audit, 268–269, 274, 279–
280
transfer of guest accounts, 230,
250–251
Adams, Bruce, 130, 388
Advanced reservations, 144
Advertising, 253, 254
Airline industry, yield management
in, 164–165
Albrecht, Karl, 305, 307, 312–313,
319, 320–321, 324
Allin, Nancy J., 319
All-suite concept, 11–12, 18
Amenities
guest requests for, 74, 75, 191
in night audit, 277, 278
security of, 381
types of facilities, 9–14
American Hotel & Lodging Association,
25, 348
American plan, 199
Americans with Disabilities Act
(ADA), 352–354
Announcement board, daily, 76
Assets, 222
Assistant manager, responsibilities of,
44, 55
Astor, John Jacob V, 3
Astor, William Waldorf, 3
Athletics director, 38
Atrium concept, 5
Auto clubs, 247
Average daily rate (ADR), 15–16, 35,
163–164, 269
B
Back office accounts, 115–116,
230
transfer of, 250–251
Baker, Dulcie, 129
Balance sheet, 49, 116
Bank-card payments, 187, 246
Bank deposits, in night audit, 273,
274, 280
Banquet department, interdepartmental
communications of, 76–77
Banquet manager, 74
Banquet sales, in night audit, 271,
276–277
Banquet sheets, 119
Beaudry, Mark, 386
Beds, 190–191
Bell captain, 52
Bell staff, 52
Bill-to-account, 51, 189, 243–244,
250–251
Blocking on the horizon, 146, 150
Blocking procedures, 56, 142, 146,
148, 189–190
Block-out periods, 171, 172, 175
Book-A-Rez, 143
Bookkeeping methods, 221–223
Bottom up sales method, 201
Bristol Hotels and Resorts, 9
Brown, P. Anthony, 8–9
Brownouts/blackouts, 106–107
Bruns, Rick, 215
Budget
computer applications, 107–18
controller and, 48–49
front office manager and, 55, 56,
61
payroll, 61, 64–66
point-of-sale front office, 371, 374–
375
Burglar alarms, 118
426 I N D E X
Bus association network, 333–334
Bush, Melina, 135
Business affiliations, 19–21
Business services and communications
center, 41
Business travel, market growth and,
23
C
Cadotte, Ernest, 311
Call accounting, 51–52, 113
Canada Awards for Excellence Trophy,
327
Canadian guests, exchange rate for,
247–248
Canadian Hotel and Restaurant, 360
Cancellation code, 146
Cancellations, 145–146
Career development
educational experience in, 24–25
in growth areas, 27–28
human resources role in, 47
international opportunities for, 27
within organization, 34
ports of entry, 26–27, 77
professional memberships and, 26
questions at career fair, 28
work experience in, 25–26
Carlson Hospitality Worldwide, 130
Carpal tunnel syndrome, 104–105
Cash flow statement, 49
Cashier, responsibilities of, 50–51
Cashier’s report, 267, 274, 280–281
Cash payments, 114, 244–245, 265
Cash sales, 279
Certified Hotel Administrator
(CHA), 25
Certified Rooms Division Executive
(CRDE), 25
Chain affiliations, 19
Charges and payments, 221–235
back office accounts, 230, 232
bookkeeping procedures, 221–223
exchange rate and, 247–248
for food and beverage, 75–76, 112
forms, 223
for guaranteed reservation, 145
late charges, 238
methods of payment, 189, 242–
247
bill-to-account, 51, 189, 243–
244
cash, 114, 244–245, 265
debit cards, 246
emergency services and, 246–
247
personal checks, 145, 245
traveler’s checks, 245
See also Credit-card payment
night audit, 265
posting, 112–113, 226–230
review of, 241
standard operating procedures,
232
for telephone calls, 51–52, 113,
230
transfer to accounts receivable,
250–251
unauthorized, 250
Check-in
delays, 82–83, 116, 182–183, 193
payment in advance, 114
request for, 185
self-check-in process, 111, 211,
213, 214
training process, 344–345
See also Registration
Checkout, 237–259
computerized, 114
documentation filing system, 249
express, 50
folio review, 114, 241
guest feedback at, 239–240, 325
in-room, 114, 241–242
interdepartmental communications
on departures, 249–250
key retrieval, 240–241
late, 81–83
late charges at, 238
payment at, 242–248
emergency services and, 246–
247
exchange rate and, 247–248
methods of, 114, 242–246
transfer to back office, 250–
251
reports, 251
sales of additional reservations at,
114, 248–249
scheduled, 189–190
step-by-step procedure, 239, 343
training process, 344
Checks, payment with, 145, 245
Chef, executive, 75
Choice Hotels International, 129
City ledger, 60, 114, 223–225, 230,
232, 268
Colbert, Judy, 215
Collective bargaining unit, 47
Comment cards, 239–240, 312, 325
Commercial cards, 187
Commercial hotels, 14–15
Commercial rates, 198
Communications
for business travelers, 23
e-mail, 120
emergency procedures, 397–401
fire safety procedures, 393, 394,
395–397
front office role in, 1, 60, 71–72
with international guests, 46, 215
See also Interdepartmental communications
Communications hierarchy, 397
Company-owned property, 20
Complimentary rate (comp), 199
Computer supplies, 103
Computer system. See Property management
system (PMS)
Computer training, 25, 105–106
Concierge, 52–53
Conference call, 23
Confirmed reservations, 139, 144
Continental breakfast, 45
Controller, 34, 35, 38, 56
interdepartmental communications
of, 77, 78
responsibilities of, 40, 41, 48–49,
55
Convention guests, 35, 133
Corporate clients
guest histories, 253–254, 255
reservations methods, 132–133
room rates, 35, 198
Corporate rates, 198
Corprew, Kevin, 96
I N D E X 427
Coughlin, Paula, 387
CPS (characters per second), 103
Credit
balance, 268
bill-to-account, 51, 189
extension of, 186–189
floor limit of, 114
house limit of, 114, 243
information, 184
prior-approval, 50–51, 187–188,
247
Credit-card payment
in accounts receivable, 250–251,
268–269, 279
advantages of, 242
exchange rate and, 247–248
fraudulent, 243
processing of, 188, 242–243
proof of identification, 188–189
self check-in and, 111, 211, 213,
214
types of cards, 187–188
Credits and debits, 222–223, 230
Crime Prevention through Environmental
Design (CPTED), 380–
381
Criscillis, Chuck, 17
Crisis management, 385
Cross-training, 77, 350
Cumulative total feature, 275
Currency exchange, 247–248
Current guests, additional bookings
from, 109–110, 135–136
Cursor, 104
Customers. See Guests
Cycle of service, 316–319, 322–323
D
Daily announcement board, 76
Daily blocking, 146
Daily flash report, 264, 281, 284
Daily function sheets, 60
Database interfaces, 153–154
Data sorts, 211
Davidson, James T., 396
Days Inns, 388
Debit balance, 114
Debit-card payments, 187, 246
Debits and credits, 222–223, 230
DeCaire, Michael, 77
Delta Hotels, 327–328
Deming, W. Edwards, 84, 315
Demographic data, 21
Departmental accounts, 261
Departmental sales report, 265, 266,
274
Department heads, 38, 39–40
responsibilities of, 41–50
See also specific departments
Desk clerk, responsibilities of, 50,
51, 53
Direct-mail letters, 119
Disabled employees, 352–354
Disabled guests, 192
Discretionary income, market growth
and, 22, 23
Disk drive, 101
Distance learning, 25, 348
Documentation, 343
Dot-matrix printer, 103
Double occupancy percentage, 163
Draft-style printer, 103
E
Ecotourists, 24
Education
career development and, 24–25
See also Training
Educational rates, 198
Eldorado Hotel, Santa Fe, 176
Electronic key system, 203–204, 210,
211, 388–389
Elevator operator, 52
Ellis, Ray, 388
E-mail, 120
Embassy Suite Hotels, 18
Embassy Suites Outdoor World,
Dallas/Ft. Worth, 397–398
Emergency communication manager,
398–399, 401
Emergency communication plan, 8,
397–401
Employees
disabled, 352–354
empowerment of, 60–61, 322–324
files, 119–120
front office staff, 50–53, 54
handbook, 338
hiring
character traits and, 321–322,
335–336
disabled applicants, 353
human resource department
and, 46–47, 79–80
international opportunities, 27
hospitality qualities of, 321–322,
333–336
international guests and, 46, 215
job descriptions, 47, 334
job satisfaction, 310, 368
moonlighters, 57–58
motivation
defined, 365
sales incentives, 201, 202, 365–
366
service incentives, 309–310, 320–
321
supervision and, 57–59
theories of, 365, 366, 367–369
payroll, 61, 64–66
personality clashes among, 59
safety of, 401–404
scheduling, 59–60, 61
in service management planning,
315–317
time clock, 120
tipping, 271, 276
total quality management (TQM)
and, 84–87
trainers, 350–351
See also Career development;
Training
Empowerment, employee, 60–61,
322–323, 351–352
Engineering department. See Maintenance
department
Entrance design, security and, 381
Ergonomics, 104–105
Escort service, 386
Euro, 247
European Community, currency of,
247
European plan, 199
Exchange rate, international, 247–
248
428 I N D E X
Express checkout, 50
Extended-stay hotels, 13, 18, 28
F
Fairfield Inns, 4
FAM (familiarization) tours, 253
Family rates, 198
Family size, market growth and, 23
FelCor Lodging Trust, 9
Fire alarms, 118, 391, 395
Fire code, 390
Fire exits, 391
Fire safety, 390–397
Flash report, daily, 264, 281, 284
Float, 246, 248
Floor inspector, 45
Floor limit, 114
Flow analysis processes, 99
Flowchart, 315
Folios, guest
closing, 250
in ledgers, 223–225
posting charges to, 75–76, 113,
223, 226–230
retrieval/review, 241
Food and beverage department, 35,
38
computer applications, 102, 117
interdepartmental communications
of, 75–76
responsibilities of director, 44–45,
55
Food and beverage sales
night audit, 267, 271, 276–277
point-of-sale promotion and, 364,
366, 373
yield management and, 174, 175
Foot patrol, 386
Forecasts, room sales, 75, 136–137,
157–158, 171, 176
Foreign guests. See International
guests
Four Seasons Hotels, 309, 314
Franchise corporations, 19
Franchisee, in reservation system,
131
Francis, Connie, 381
Front desk, layout of, 94–97
Front desk clerk, responsibilities of,
50, 51, 53
Frontline employees, 322
Front office
communications role of, 1–2, 60,
71–72
functions of, 1–2
in limited-service hotel, 53, 54
organization of, 50–53, 54
point-of-sale. See Sales, front office
role in
scheduling, 61, 63
See also Check-in; Checkout; Registration;
Reservations
Front office manager, 34, 35, 38
budgetary role of, 55, 56, 61
job analysis, 55–57
job description, 57, 58
responsibilities of, 40, 48, 54–55,
58
supervisory role of, 57–61
Full house, 50
Full-service hotels, 18
Function sheets, 60, 119
G
Garage. See Parking garage
Gehret, Doug, 173
Gellad, Charles, 13
General ledger, 49
General manager
organization chart and, 34
ports of entry, 26–27
responsibilities of, 41–44, 49, 51
Gift shop manager, 38
Gift shop sales
night audit, 272, 278
promotion of, 365
Gigabyte, 101
Global distribution system (GDS),
176
Goforth, Greg, 18
Group planner, 133
Group rates, 198
Group registration, 206, 207
Group travelers, reservation marketing
to, 133–135
Guaranteed reservations, 139, 144
Guests
complaints, 60, 307, 312
corporate. See Corporate guests
expectations, 311–313
feedback from, 239–240, 312, 324–
325
fire safety and, 390, 395
first impressions of, 94–95, 182–
183
flow of, 99
frequency of visits, 254, 255
groups, 35, 133–135
histories, 73, 119, 250, 251–256
international. See International
guests
messages, 150, 153
moments of truth, 319–320, 324
occupancy categories, 139–140,
144
pleasure travelers, 135
price constraints of, 193
requests
for amenities, 74, 75, 191
for repairs, 78
room, 147–148, 149, 190–193
special needs, 192
safety, 95, 97
turnaway business, 171, 172,
174
VIP status, 148, 152, 173
walk-in, 139–140, 208
See also Charges and payments;
Check-in; Checkout; Registration;
Reservations
Guest test, 372
H
Half-day rate, 199
Halpine, Kelly, 319
Hampton Inns, 4, 12
Handicapped employees, 352–354
Handicapped guests, 192
Hard-key system, 202–203, 240–
241, 388, 389–390
Hardware, computer
installation of, 105
selection of, 101, 103–104
Heale, James, 78
I N D E X 429
Henderson, Ernest, 4
Herzberg, Frederick, 365, 366, 368,
369
Heymann, Mark, 310
Hilton, Conrad, 2–3
Hilton Hotels, 2–3, 14, 77, 327, 387,
388
Hiring
character traits and, 321–322, 335–
336
disabled applicants, 353
human resource department and,
46–47, 79–80
international jobs, 27
Holiday Inn, 3–4, 14, 18, 388
Holiday Inn Grenada, Mississippi,155
Homewood Suites, Alexandria, 13
Hoover, Herbert, 3
Hospitality, 305
See also Service management program
Hospitality Television (HTV), 348
Hotel & Motel Management, 27,
130–131, 132, 388
Hotel & Travel Index, 134
Hotel broker, 134
Hotel industry
accommodations and services, 9,
11
business affiliations, 19–21
classification of facilities, 9–14
concept development in, 5–7
growth trends in, 21–24
historical background, 2–4
investments, 8–9
levels of service, 17–18, 308
market orientation in, 14–15
reorganization of, 7–8
sales indicators in, 15–17
after September 11 terrorist attacks,
7–8
technological advances in, 5, 6
Hotel representative, 134
Hotels, 19
Hotels & Suites, 388
Hotel Sales and Marketing Association,
International, 25
Household size, market growth and,
23
Housekeeper’s report, 264, 282
Housekeeping department
computer applications, 102, 116–
117
interdepartmental communications
of, 46, 56, 61, 74–75, 81–83,
199, 215
key system maintenance, 203
responsibilities of executive housekeeper,
38, 45–46, 55
in Total Quality Management
(TQM) team, 326–327
Housekeeping status, 74–75, 81–82,
102, 112, 115, 116, 193–194,
206, 208, 214
House limit of credit, 114, 243
Houston Hilton Hotel, 77
Howard Johnson Franchise Systems,
388
Hubbart formula, 196–197
Human resources department
computer applications, 102, 119–
120
interdepartmental communications
of, 79–80
responsibilities of manager, 38, 46–
47
See also Employees
Hyatt Hotels, 5, 215
I
Incentive programs
motivation theory and, 365, 366,
367–369
sales, 201, 202, 365–366
service management, 309–310,
320–321
Independent hotels, 20–21
Ink-jet printer, 103
Input/output devices (I/O) ports,
101
Inquiries/reports, in property management
system (PMS), 115
In-room checkout, 114, 241–242
In-service education, 24–25
Interdepartmental communications,
35, 55, 71–87
with banquet department, 76–77
breakdown in, 80–84, 88–89
with controller, 77, 78
on departures, 249–250
emergency, 400–401
with food and beverage department,
75–76
with housekeeping department, 46,
56, 61, 74–75, 81–83, 199,
215
with human resources department,
79–80
with maintenance department, 78,
83
with marketing and sales department,
73–74, 80–81, 253
in needs analysis, 99
with security department, 78–79
in staff meeting, 89–91
total quality management (TQM)
and, 84–86
yield management and, 173
Interfacing, 93
Interhotel property referrals, 131
International guests
communications with, 46, 215
currency exchange, 247–248
greeting, 352
needs of, 255
International Hotel Association,
165
International job opportunities, 27
Internet
job search on, 27
reservations on, 130–131, 135
Intersell cards, 187
I/O ports (input/output devices), 101
J
Jefferson Hotel, Richmond, 12
Job analysis, 47, 55–57, 334, 342
Job description
front office manager, 57, 58
human resources department and,
47
preparation of, 55
training program and, 342
Job responsibilities, of department
heads, 41–50
430 I N D E X
Job satisfaction, 310, 368
Job search. See Career development;
Hiring
Job training. See Training
Johnson, Eric, 311
Johnson, Lee, 362
Johnston, John, 327
Juliano, John, 385, 401
Juran, Joseph, 316
K
Kapioltas, John, 4
Keyboard, 103, 104, 105
Key clerk, 52
Key control system
checkout procedures, 240–241
electronic key, 203–204, 210, 211,
241, 388–389
hard-key, 202–203, 240–241, 388,
389–390
registration procedures, 202–203,
210
security and, 118, 203, 387–388
Key fob, 203
Keypad, 103
Kline, Sheryl Fried, 94
L
Labor union, 47
Laser printer, 103
Las Vegas Hilton, 387
Late charges, 238
Laundry
contracted out, 40
in-house, 35, 46
valet services, 277
Layton, William, 311
Ledgers, guest/city, 223–225, 230,
232
Leisure time, market growth and, 21–
22
Letter-quality, 103
Liability, 222, 381, 387
Lighting, crime prevention and,
381
Limited-service hotels
concept of, 5, 12–13, 18
department managers in, 43–44,
45, 46, 47–48, 49
front office in, 53, 54
organization chart for, 40–41
Lincoln Plaza Hotel & Conference
Center, Reading, Pennsylvania,
264
Litigious society, 381
Lobby design, security and, 381
Lodging, 215
Long, Eric O., 51
Longo, Joseph, 12
M
McGregor, Douglas, 365, 366, 367
Main menu, 108, 109
Maintenance agreement, computer,
107
Maintenance department
computer applications, 102, 118
interdepartmental communications
of, 78, 83–84
responsibilities of plant engineer/
maintenance manager, 45
room status information and, 78,
83, 117
Malcolm Baldrige Award, 316
Management
department heads, 38, 39–40
emergency communications hierarchy,
397
general manager, 41–44
organization charts, 34, 35–41
responsibilities of department
heads, 41–50
service management program and,
308–310
total quality management (TQM),
7, 44, 84–87, 315, 316, 326–
328
working supervisors, 40
See also Career development
Management contract property, 20
Manager’s report, 273, 274–275
Marketing data, in guest histories,
73, 119, 250, 251–256
Marketing and sales department
computer applications, 102, 119
cooperation with front office manager,
54–55, 56
frequent-visitor programs, 198
group reservations and, 134–135
guest niches and, 7
interdepartmental communications
of, 73–74, 80–88, 253
responsibilities of director, 34, 38,
47–48
after September 11 terrorist attacks,
7–8
See also Sales
Market orientation, 14–15
Market segments, 17–18
Marquee, 76
Marriott, J.W., 4
Marriott, J.W., Jr., 4
Marriott Foundation for People with
Disabilities, 353–354
Marriott Hotels and Resorts, 4, 12,
18, 380–381
Maslow, Abraham, 365, 366, 367–
368
Master credit-card account, 250, 268–
269
maxim automated revenue management
system, 167–168
Mayo, Elton, 365, 366, 368, 369
Megabyte, 101
Megahertz (MHz), 103
Mene, Patrick, 316
Me/pleasure concept, 22
Merry Manor, Portland, Maine, 18
Message book, 60
Military rates, 198
Minimum stay restrictions, 171
Modem, 103
Modified American plan, 199
Moments of truth, guest’s, 319–320,
324
Money wire, 246
Monitor, 101
Moonlighters, 57–58
Moore, Robert, 4
Motels, accommodations and services,
11
Motivation
defined, 365
sales incentives, 201, 202, 365–366
I N D E X 431
service incentives, 309–310, 320–
321
supervision and, 57–59, 367, 368
theories of, 365, 367–369
Multilingual staff, 215
Murphy, Patrick M., 380
Murphy bed, 191
N
Narula, Avinash, 360, 362–363
Needs
analysis, 97–100, 121
Maslow’s hierarchy of, 367, 368–
369
Night audit, 261–304
computer applications, 102, 115,
264–269
accounts receivable, 268–269
charges and payments, 265
departmental totals, 265–268
posting charges, 264
controller and, 49
defined, 261
examples of, 289–291, 295–297,
301–303
front office manager and, 48, 55,
56
importance of, 262–263, 264
preparation of report, 264, 269–
282
responsibilities of night auditor,
51, 53, 263
standard operating procedures in,
232
steps in, 263
trial balance report, 264, 269, 270
Norman, Thomas, 155
No-show factors, 140
No-show reservation, 137–139, 143
O
Occupancy
categories of, 139–140, 144
double, 163
full house, 50
management formula, 140–141
marketing data on, 254–255
no-show rate and, 137–139
optimal, 170
percentage, 15, 35, 161–163
projected, 150, 152
yield percentage, 15, 16, 35
On-the-job training, 59, 347
OPERA Revenue Management System,
166
Operating statistics, in night audit report,
281, 283
Operational effectiveness, 263
Operational reports, 42
Optimal occupancy, 170
Optimal room rate, 170
Organization charts, 34, 35–41
front office, 50–53, 54
full-service hotel, 35–40
limited-service hotel, 40–41
security department, 382
Orientation, new employee, 82–83,
336–340, 341
Orkin, E., 170, 171–172
Outsourcing, 143
Outstanding balance report, 115
Overbooking, 137–141, 154, 208–
209
P
Package rates, 198–199
Paid in advance (PIA), 114
Paid-out slips, 75, 76, 223, 229
Pallett, William, 327–328
Parking garage
in night audit report, 272, 278
responsibilities of manager, 38, 50
security of, 381
Payback period, 108
Payments. See Charges and payments
Payze, Sally, 143
Peddler’s club, 198
Personal checks, payment with, 145,
245
Personality, hospitality qualities, 321–
322, 333–336
Personnel. See Employees
Personnel department. See Human
resources department
PictureTel, 23, 345
Plant, in guest test, 372
Plant engineer, 38, 45, 55, 56
Pleasure travelers, reservation methods,
135
PMS. See Property management systems
Point-of-sale front office. See Sales,
front office role in
Point-of-sale terminals, 75–76, 93,
113, 117, 226
Policy and procedure manual, 338–
339
Portman, John, 5
Postal code, 119, 252
Posting charges and payments, 112–
113, 226–230, 264
Power outages, computer system
and, 106–107
PPM (pages per minute), 103
Predicted house counts, 75
Printer, 103
Prior approved credit, 50–51
Private label cards, 187
Processor speed, 101
Professional trade organizations, 26
Profit-and-loss statement, 49, 108,
116, 187, 196, 254
Profit maximization, 165
Proof of identification, 188–189
Property management systems
(PMS), 54, 93–125
applications of
accounting, 115–116
call accounting, 113
charges, posting, 112–113, 226–
230
checkout, 241–242
checkout reports, 251
e-mail, 120
food and beverage, 117
guest histories, 251–256, 256
housekeeping, 116–117
human resources, 119–120
inquiries/reports, 115
maintenance, 118
marketing and sales, 119
night audit, 115, 265
registration, 111, 204–215
reservations. See Reservations,
computerized
432 I N D E X
Property management systems (continued)
room status, 112
security, 118
time clock, 120
yield management, 110, 165–
168
cost recovery and, 107–108
ergonomics and, 104–105
layout of front desk, 94–97
main menu of, 108, 109
needs analysis and, 97–100, 121
selection of
considerations in, 105–107
hardware, 101, 103–104
software, 100–101
training procedure, 343–344
PROS Revenue Management, 166–
167
Psychographic data, 21
Q
Quality Inns, 388
R
Rack rate, 35, 110, 198
Randall, Randy, 176
Real estate investment trusts (REITs),
8–9
Referral member reservation system,
131–132
Referral property, 19–20
Registration, 181–219
additional bookings at, 135–136,
201–202
computerized, 111, 204–215
credit extension, 186–189
first impressions during, 182–183
group, 206, 207
guest information at, 183–184,
185–186, 205
key assignment, 202–204, 210
room selection, 189–194
steps in, 184
upselling during, 362–363, 366
See also Room rates
Registration cards, 185–186, 252,
253
Renaissance Hotels, 18
Repair orders, 78, 118
Reservation codes, 144–145
Reservation manager, 51
Reservations, 127–159
additional bookings
at checkout, 248–249
at registration, 135–136, 201–
202
blocking procedure, 56, 142, 146,
148, 189–190
cancellations, 145–146
computerized, 102, 128–130
central system, 109–110, 142–
143
cost effectiveness of, 155
individual hotel PMS, 147–154
integrated CRS/PMS, 154
overview, 128–130
for corporate client, 132–133
forecasting, 136–137, 138
franchisee system, 131
for group travelers, 133–135
guest histories, 73, 119
importance of, 128
inquiry about, 185
Internet bookings, 130–131, 135
no-shows, 137–139, 143
outsourcing, 143
overbooking, 137–141, 154, 208–
209
payment method and, 145
referral system, 35, 131–132, 133,
135
on toll-free number, 133, 135
through travel agents, 133, 135,
153
types of, 139, 144–145
See also Yield management
Reservation status, 147, 194
Residence Inn, 4
Residential hotels, 14
Restaurant sales. See Food and beverage
sales
Revenue per available room
(RevPAR), 15, 16–17, 164,
269
Revenue potential, 169
Revenue realized, 169
Revenue report, 264, 279
RevPAR (revenue per available
room), 16, 164
Ritz, Cesar, 3
Ritz-Carlton Hotel Company, 316
Role-playing, in job training, 46, 347–
348, 370
Room
blocking procedure, 56, 61, 142,
146, 148, 189–190
design and layout, 190, 191
guest requests, 147–148, 149, 190–
193
inventory, 51, 190, 193–194, 206,
208
marketing data on, 254
rates. See Room rates
revenue, 15, 164, 281
sales. See Sales; Sales, front office
role in
selection, 189–194
Room attendants, 41, 116–117
Room rates, 194–201
average daily rate (ADR), 15–16,
35, 163–164
establishing, 195–197
marketing data on, 254
maximizing, 199–201
optimal, 170
price reduction, 193
rack rate, 35, 110
types of, 197–199
verifying, 209–210
See also Yield management
Room rental, night audit, 271, 277
Room sales figure, 275
Room service
night audit, 271, 276
promotion of, 366
Room status
housekeeping, 74–75, 81–82,
112, 116, 193–194, 206, 208,
214
reservation, 111–112, 194
Room tax, 226, 271, 275
Rule-of-thumb method for determining
room rates, 196
I N D E X 433
S
Safety, employee, 401–404
Safety committee, 402, 403
Sales
forecasts, 136–137, 157–158, 171,
176
indicators, 15–17
marketing data in guest histories,
73, 119, 250, 251–256
night audit, 271, 272, 276–277
projections, 75, 195–196
See also Marketing and sales department
Sales, front office role in, 359–378
additional reservations at checkout,
248–249
additional reservations at registration,
135–136, 201–202
bottom up vs top down methods,
201
budget for, 371, 374–375
character traits for, 335, 336
goals of, 362–363
incentive program, 201, 202, 365–
366
motivation theory and, 365, 367–
369
performance evaluation, 371–372
planning process, 372–374
promotional areas, 363–365, 366
training for, 200–201, 369–371
Sales associate, 74
Sales reports
daily, 274
departmental, 265, 266, 274
Sales tax, 226, 271, 276
Schofield, Mike, 14
Schultz, Ray, 4
Security department, 379–408
computer applications, 118
vs contracted services, 385–387
importance of, 380–381
interdepartmental communications
of, 78
operational procedures of, 379–
380
emergency communications, 397–
401
employee safety, 401–404
fire safety, 390–397
key control, 387–390
organization of, 382
responsibilities of director, 41, 49,
382–385
Security plans, 8
Self-actualization, 368, 369
Self-check-in process, 111, 211, 213,
214
September 11 terrorist attacks, 7–8
Service
hospitality defined, 305
levels of, 17–18, 308
See also Service management program
Service America! (Albrecht and
Zemke), 305, 307
Service management program, 305–
331
continuous commitment to, 325
customer survey in, 311–313
cycle-of-services analysis, 316–
319, 322–323
employees and
empowerment of, 322–324
motivation of, 309–310, 320–
321
planning role of, 315–317
screening for hospitality qualities,
321–322, 333–335
training of, 324
evaluation of, 324–325
financial commitment to, 314–315
importance of, 306–308
management’s role in, 308–311
moments of truth in, 319–320,
324
planning committee, 315–317
service strategy statement, 313–
314
total quality management (TQM)
practices in, 315, 316, 326–
328
Service strategy statement, 313–314
Sheehan, Todd, 264
Sheraton Hotels, 4, 78, 388
Sheraton Reading Hotel, Wymossing,
78
Shift leader, 309
Single-sheet printer, 103
Six Continents Hotel, reservations
system of, 129–130
Skill demonstration, 347
Sleeper, 194
Smart card, 388
Smoke alarms, 390
Smoke detectors, 390–391
Software, selection of, 100–101, 102
Spa sales, in night audit report, 272,
278
Staff. See Employees
Starwood Hotels & Resorts, 4
Statler, Ellsworth M., 2
Stayovers, 139, 193, 251
Step-by-step procedures, in training
program, 343
Sternberg, Lawrence E., 352
Stress management, training in, 344
Suburban Lodges of America, 16–17
Sullivan, William, 94
Super 8 Motels, 388
Supervisory style, 57–61
Surcharge rates, 277–278
Switchboard operator, 51–52, 73,
75
SynXis Agent, 143
T Tailhook case, 387
Tax Act of 1981, 7
Tax cumulative total feature, 275
Taxes
room, 226, 271, 275
sales, 226, 271, 275–276, 278
Tax Relief Extension Act of 1999, 8
Team approach. See Total quality
management (TQM)
Technological development, 5, 6
Telephone charges
call accounting, 51–52, 113
late charges, 238
manual posting, 230
night audit, 272, 277–278
Telephone initiation and reception
agreements, 345
Telephone operator, 51–52, 73, 75
434 I N D E X
Telephone reservations, toll-free
number, 133, 135
Terrorist attacks, 7–8
Theory X, 366, 367
Theory Y, 366, 367
Thomson, Gary, 129
Tickler files, 119, 349
Tidewater Inn, Easton, Maryland,
129
Time clock, 120
Time management, training in, 344
Tips, in night audit, 271, 276
Toh, Rex S., 139
Toll-free number, reservations on,
133, 135
Top down sales method, 201
Total quality management (TQM), 7,
44
application of, 85–86
background of, 84
communication and, 84–85
in service management program,
315, 316, 326–328
Total restaurant sales figure, 276
Touch screen, 108
Tractor-fed printer, 103
Traffic managers, 52
Training, 336–358
administration of, 349–350
in charge and payment processing,
232
computer, 25, 105–106
cross-training, 77, 350
disabled employees, 353–354
distance learning, 25, 348
in emergency communication, 401
for empowerment, 323–324, 351–
352
in fire safety, 392, 395
importance of, 340–341
in-service education, 24–25
international guests and, 46
methods of presentation, 346–348
new employee orientation, 82–83,
336–340
on-the-job, 59, 347
safety, 404
in sales, 200, 249, 369–371
selection of trainer, 350–351
in service management program,
324
steps-by-step procedures in, 344–
349
in stress/time management skills,
344
supervisory, 43
task performance skills, 340–343
Training tickler file, 349
Transfer slip, 223, 228–229
Travel
business, 132–133
group, 133–135
motivation for, 21–24
pleasure, 135
Travel agents, 133, 135, 150, 153
Travel directories, 134
Travelers Aid Society, 246–247
Traveler’s checks, 245
Trends in the Lodging Industry (Pannell,
Kerr, and Forster), 27
Trial balance report, 264, 269, 270
True integration, 154
Turgeon, Normand, 311
U
Understays, 139, 251
Upsell, 362–363, 366
V Valet services, 277
Vending machine sales, night audit,
272, 278
Video, job training, 348, 370–371,
373–374
VIP service, 148, 152, 173
Virginia Hospitality and Leisure Executive
Report, 8–9
Vista Hotel, New York, 397
Visual alarm systems, 395
Vouchers, 75, 76
W WaldorfAstoria Hotel, New York,
3, 51, 173, 319
Walking a guest with a reservation,
209
Walk-in guests, 139–140, 190, 208,
254
Wall Street Journal, 19, 247
Web site, 131
White, Alan, 130–131
Wilson, Kemmons, 3–4
Women guests
business travelers, 23
security of, 381, 387
Working supervisors, 40
Work orders, 118
World Trade Center
bombing (1993) of, 397
September 11 attack on, 7–8
Wyndham Garden Hotel, Dallas,
215
Y Yield, defined, 168–169
Yield management, 141–142, 164–
180
in airlines vs hotels, 164–165
applications of, 175
components of, 168–173
computer applications, 110, 165–
168
food and beverage considerations
in, 174, 175
goal of, 165
turnaway business and, 171, 172,
174
Yield percentage, 15, 16, 35, 269
Young, John W., 309, 311, 321–322
Z
Zemke, Ron, 305, 307, 312–313,
319, 320–321, 324
Zip code, 119, 252
Zip drive, 103
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