ADHM 360 Final: Exam 1 filled study guide
20 Jun 2018
School
Department
Course
Professor
Chapter 1
•
Key Lodging Demand Factors
Overall Economy
○
Oil Prices
1% Increase in the price of crude oil results in .06-.09% decline in lodging
demand
§
Airline Ticket Prices
§
○
Population Demographics
People above 45 years of age tend to be the most intensive consumers of
lodging.
§
○
•
Typical Lodging Customers
Business Travelers 40%
Characteristics:
Primary Market for hotels
1.
More than 35 million people take business trips/year
2.
Male dominant, but increasing number of females
3.
Travel alone 68%
4.
Location is a key lodging selection factor
5.
Pays $129/ night
6.
MORE LOYAL BECAUSE THEY AREN'T PRICE SENSITIVE
7.
§
○
Leisure Travelers 60%
Characteristics:
More price conscious than business travelers
1.
Travel by auto (81%)
2.
Two adults (50%)
3.
Less loyal than business travelers
4.
Pay $109/ night
5.
§
○
•
History of American hotels-the first
The first modern hotel- "City Hotel" 1794
○
First chain hotel- "Hotel Statler" 1907
○
Franchise hotel- "Howard Johnson" 1954
○
The first casino- "The Flamingo" 1946
○
•
Chapter 2
Organizational Chart: A schematic representation of the relationships between
positions within an organization
○
Elements of an organizational structure
Organizational structure can be established through
Job specialization- the process of focusing one's occupational
concentration on a specific area of expertise
Specialization increases worker productivity and efficiency
®
Some concerns of over-specialization:
Lowered employee satisfaction, motivation, and morale
◊
More need for managerial control and coordination
◊
Reduction in service quality
◊
®
□
Departmentalization- As facilities grow in size, more need for
efficient control and coordination. Group certain jobs or functions
(Departmentalization)
Classifying functional areas:
Front of house vs. Back of house
◊
Revenue center vs support center
◊
Departments
◊
®
Functional Organizational Design
Pros:
Specialized skills and knowledge
}
Efficient and productive
}
Training becomes easier
}
Supervision is easier
}
◊
Cons
Functionality can exclude the totality concept of
activities to satisfy the guest in a hotel
Coordination of service processes is critical
–
}
◊
®
Rooms Division:
The front office
Most visible department
}
Guest reception
}
Registration
}
Room assignment
}
Tracking the status of rooms
}
Maintaining guest accounts and monitor credit
limits
}
Handling guest inquiries
}
Reservation
Receiving and processing reservation
requests
–
Managing the hotel's reservation channels
–
Contributing to maximize occupancy and
room revenue
–
}
Telecommunications
Also called PBX (private branch exchange)
–
Answering and distributing calls
–
Coordinating
–
}
Uniformed service
Provide the most personalized service
–
Bell attendants
–
Door attendants
–
Valet parking attendants
–
Concierges
–
}
House Keeping
Most important support function for the
front office
–
Cleaning occupied and rated rooms
–
Inspecting rooms before releasing them for
sales
Effective communication between
house keeping and front desk is
critical
w
–
}
Security
Security and safety problems by:
Guest
w
Employees
w
Uninvited intruders
w
–
Depending on the size of the facility,
security function may be handled by:
A fully staffed department
w
An outside security company
w
Assigned to designated staff
members or a department
w
–
}
Engineering & Maintenance
Typically responsible for
Preventive maintenance
Repair and replace furniture,
fixtures, and equipment (FFE)
w
Ensuring uninterrupted
provision of utilities
w
w
–
}
Food & Beverage
Ranks second to rooms division in terms of
total revenue
–
Providing food and drink to hotel guests
through
Coffee shops, specialty restaurants,
poolside snack bars, lounges,
banquets, nightclubs
w
–
}
Sales & Marketing
The size of the department can vary widely
depending on the hotel size
–
Major functions within the sales and
marketing department
Sales
w
Convention and meeting services
w
Advertising
w
Public relations
w
–
}
Human Resources
Major responsibilities
Recruitment
w
Selection and placement
w
Training
w
Compensation management
w
–
}
Accounting
Major responsibilities
Recording financial transactions
w
Preparing and interpreting financial
statements
w
Providing other departments with
timely reports
w
–
Additional activities
Payroll preparation
w
Accounts receivable
w
Accounts payable
w
–
}
General Manager
Oversees all departments
–
Defines and interprets the policis
established by top management
–
Liaison to the owner or corporate parent
–
Establish hotel wide goals and strategy
–
Coordinate activates between departments
–
Arbitrates interdepartmental disputes
–
}
◊
®
□
Establishment of Patterns of authority
Chain of command
Formal channel of authority from top to bottom
◊
Formal reporting relationship
◊
®
Decentralization vs. Centralization of Authority
Decentralization
Distributing authority throughout an organization
}
◊
Centralization
Retention of decision-making authority by a high-
level manager
}
◊
®
□
Span of Control
Number of people who report to one manager
Flat organization (Wide span of control)
A large number of employees report ton one
manager
}
◊
Tall organization (Narrow span of control)
A small number of employees report to one
supervisor
}
◊
®
Ideal # in a span of control depends on a variety of factors
such as:
Task similarity (High = Wide)
◊
Training and professionalism (High = Narrow)
◊
Task certainty ( High = Wide)
◊
Frequency of interaction (High = Narrow)
◊
®
□
§
○
•
Chapter 11•
Ownership & Affiliation
Independent hotels
No identifiable ownership or management affiliation with other
properties
§
Advantages: autonomy, flexibility, no fees
§
Disadvantages-limited advertising exposure, limited management
consultancy, limited economies of scale
Economies of scale = savings in cost due to level of production□
§
○
Chain hotels
Hotels affiliated and operated with a group of other hotel properties
under an identifiable brand name
§
Branded hotels
§
○
•
Management Arrangement
Management Contract
Agreement between hotel owner and hotel management company under
which, for a fee, the management company operates the hotel on behalf
of the owner
The owner:
Legal owner of the property
®
Retains the financial and legal responsibility for the property
®
□
Management company
Serves as an agent of the ownership
Operates the property on behalf of the owner
◊
®
□
§
Types of management companies
Type 1 (Brand Operators)
High level of name recognition
®
Manage some properties but primarily serve as a franchise
®
Ex: Marriott, Hilton, intercontinental
®
□
Type 2 (Independent operators or third party operators)
Do not provide name recognition
®
Usually operate properties as franchised hotels
®
Ex: First call Hospitality, Discover Lodging management, TMI
Hospitality
®
□
§
Advantages:
Management companies can grow with a low level of investment□
Rarely does the operator participate in operating deficits
Owner assumes the financial risk
®
□
Owners can benefit from expertise and know-how of management
companies
□
§
Disadvantages
The operator will not gain financially if the property is sold
Retains little control over the transfer of ownership
®
The creditworthiness of the owner is critical to the
management company
®
There may be a cancellation provision by either party
®
□
§
○
•
Franchise Agreement
A business strate
§
Largest francised chains
McDonalds□
KFC□
Burger King□
Subway□
Eleven 1-
§
Reasons to join a hotel franchise
Operational assistance- operating manuals, training programs, job
descriptions, quality assurance
□
Technical - pre opening service, architure design, suppliers, purchasing
powers FILL THIS IN!!!
□
Marketing assistance
Nucleus of any lodging franchise program is the central reservation
system
®
An extensive integrated advertising program
®
A sales network- regional and national sales office
®
Brand reputation
®
□
§
Advantage
Buy a proven formula□
§
Disadvantage
Loss of autonomy; brand standards are required
Physical characteristics
Size of rooms and beds, the amount of furniture, F&B outlets,
parking spaces, amenities, ect.
◊
®
Large amount of requirments and cirtea of standards
®
□
§
Franchise Fees
Initial fee
Non refundable
®
A dollar amount plus a per room add-on
®
□
Continuing fee
Usually paid monthly
®
Types of continuing fees
Royalty fee
◊
Advertising contribution fee
◊
Reservation fee
◊
Frequent traveler program fee, etc.
◊
®
□
§
•
CHAPTER 3•
RESERVATION•
Major responsibilities
Receiving and processing reservation requests
§
Generating reservation records
§
Confirming the reservation records
§
Maintaining up-to-date room availability and rate information
§
Producing reservation and forecast reports etc.
§
•
Types of reservations
Guaranteed reservations
Prepayment guaranteed- requires payment in full prior to the day of
arrival
§
Payment card guaranteed- puts ahold of some $ amount on the guest's
payment card
§
Advance deposit -requires payment of a specific amount of money prior
to arrival
§
Voucher or miscellaneous charge order (MCO) travel agent guarantee
§
Corporate- a corporations payment agreement
§
○
Non-Guaranteed reservation
The hotel agrees to hold a room for the guest until a stated reservation
cancellation hour on the day of arrival
§
Not guarantee that the hotel will receive payment for no-shows
§
Hotels planning on full occupancy can accept only guaranteed reservation
§
○
Reservation channels
The more channels, the more opportunities
Property reservations department
Telephone, email, website
®
Reservation staff sales process
Greet the caller
◊
Identify the callers needs
◊
Provide an overview of the hotels features and benefits
◊
Make a room recommendation
◊
Close the sale
◊
Gather the reservation information and then thank the
caller
◊
®
□
§
Central reservation systems
Maintain a room availabity inventory for each property participating
in the system
□
Affiliate reservation network-chain hotels reservation network
All franchisees are contractually relates
®
□
Non-affiliate reservation network- a subscription system designed
to connect independent or non-cahin properties
□
§
Global distribution system (GDS)
Connected to the central reservation system and travel agency
terminals
□
Provide automated reservation service for the hotel and travel
agencies
□
SABRE, Galileo, Amadeus, WorldSpan□
§
Internet booking sites
§
○
•
Some terminologies
Transient guests- non group guests□
Block-rooms set aside for a group□
Booked -rooms within a block reserved for specific guests in the group□
Wash down- reducing a block based on the groups history □
•
REGISTRATION
7 steps
Pre-registration
Produces a registration document in advance of guest arrival
Creation of a guest account□
Room and rate assignment□
Helps facilitate the registration process□
Helps provide more sophisticated services□
Some hotels limit pre-registration only to VIP guests or groups□
§
Creating registration record
Collecting important guest info
Verify personal data and other info (eligibility for
discount or tax exempt)
®
Confirm payment method
Incorrect payment method set up is a common
service failure
◊
Ex) failure to verify direct billing application,
charge to incorrect credit cards, incorrect billing
address
◊
®
□
Obtaining guest's signature to indicate acceptance of the
room rate and date of departure
□
§
§
Assigning guest room and rate
Involves identifying and allocating an available room in specific
room category to a guest
§
Room status
Occupied□
Vacant□
On-change□
Out-of-order□
V/O- vacant and on-charge□
V/C- vacant and cleaned□
V/I- Vacant and inspected□
O/C- Occupied and cleaned□
§
Room status discrepancies
Sleeper- guest has settled his or her account and left the
hotel, but the hotel has failed to properly update the room's
status
□
Skipper- guest left hotel without settling their account, office
still shows room as occupied
□
§
Room rates
Typically confirmed as part of reservation process□
Assigning rates for walk-in guest the responsibility of front
desk staff
□
§
Type of rates
Rack rate- standard rate□
Seasonal rate□
American plan, (AP), European Plan (EP), and all inclusive rate□
Corporate rates, group rates, day rates, frequent traveler
rates, etc.
□
§
§
Establishing payment method
Cash- pay during registration in advance
§
Personal checks- some won't accept
§
Credit/debit- check expiration date and location validation, and
then validate payment cards (through online authorization
approval) and put a hold of specified amount on guest's card
§
Direct billing- bill the guest or guest's company direction based on
agreement made in advance. Guest is only responsible for
incidental charges
§
Payment issues for groups
Guests room and tax charges are direct-billed to a group
master account
□
Other charges may be the guest's responsibility (incidental
charges)
□
Credit for incidental charges needs to established for each
member of the group
□
§
§
Verifying identity
Many hotels require positive identification- ask for photo
identification
§
Common in Europe and Asia, especially for international guests
§
Become common at u.s hotels after 9/11
§
§
Issuing the room key
Complete the registration process by issuing a room key
§
Should never announce the room number when handing a
guestroom key to a guest for security reasons
§
Arrange bell attendant service if requested
§
§
Filing special requests
Acknowledge and act on special requests that guests make.
§
Some specials requests that may involve guest
Locations□
Amenities□
§
§
Registrations options
Registering group guests or VIPs at special location
§
Registering off-site such as airports and shuttle vans, allowing
guests to check in without being present at the front desk
§
Self check-in
§
Self check-in kiosks
§
Self check-in apps
§
§
□
•
Competition analysis
Competition Analysis
An assessment of the strengths and weaknesses of direct and indirect
competitors
○
An important part of the situation analysis in a strategic (marketing) plan
○
Significant because
○
□
Competitor profiling
Identify all direct and indirect competitors; a competitor set
Generally based on customer base; those serving the same
customer base with similar products and services
§
Lodging properties serving several markets
§
Indirect competitors
§
1.
Create detailed profiles on each of the major competitors in terms of
Background: ownership and management
§
Product and services: location, number of rooms, a range and
quality of facilities and room amenities, services offered…
§
Marketing: Market segments, promotional mix
§
Human Resources: # of employees, compensation and benefits,
management style, employee retention rate, morale…
§
Financial Performance: revenue, operating income, occupancy rate,
RevPAR, etc.
§
2.
Identify strengths and weaknesses, compared to others in competitor set
Relative strengths and weaknesses
§
Depending on market segments
§
Competitors strengths and weakness can be your threats and
opportunities in SWOT analysis
Strength
Characteristics of the property that give it an advantage
over others
®
□
Weakness
Characteristics of the property that give it a
disadvantage relative to others
®
□
Opportunities
External environments that the property could exploit
to its advantage
®
□
Threats
External environments that’s could cause trouble for
the property
®
□
§
(strength is unique to location, weakness = all competitors have)
§
3.
□
•
Environmental analysis
A tool used to analyze external business environments
Political: tax, labor law, trade restrictions, environmental law
§
Economical: economic growth, interest rates, inflation rate
§
Sociocultural: population growth, age distribution, health consciousness,
environmental consciousness, changing life style
§
Technological: Technological changes
§
○
•
Marketing 4ps
Product
Tangible goods and intangible services that cater to the needs and wants
of the target market
§
For a lodging prosperity, product strategy concerns;
Facilities and amenities- F&B, shops, meeting, and banquets,
fitness, spa, business center, executive lounge, pools
Room size, layout, amenities, menu service format,
®
Ancillary services- valet parking, bell & door attendants,
transportation, concierge
®
□
§
○
Place
"distribution"
§
Does not exclusively mean "location" of the property
§
Determines distribution (reservation) channels or intermediaries that are
most effective in selling to the target market
§
Massive (intensive), selective, exclusive distribution
§
Thorough reservation office, central reservation system, travel agencies,
OTA
§
Strategic approach is needed as it generates costs.
§
○
Price
Pricing strategy to effectively sell to the target market
§
Used to help customer to have an image of the standards the property
offers
§
Significantly affects value perception- "good, but too expensive"
§
Critical aspect of marketing when competition is intense
§
Price comparisons are easy today
§
Need to understand price sensitivity of the target market (price elasticity)
§
Skimming, high-low pricing, loss leader, cost plus, penetration pricing
§
○
Promotion
Advertising, PR, sales promotion, personal selling, direct marketing
§
Determine an optimum mix to effectively sell to the target market
§
Marketing budget is a limiting factor
§
○
•
•
Exam 1 filled
Tuesday, February 13, 2018
11:06 AM
Chapter 1•
Key Lodging Demand Factors
Overall Economy
○
Oil Prices
1% Increase in the price of crude oil results in .06-.09% decline in lodging
demand
§
Airline Ticket Prices
§
○
Population Demographics
People above 45 years of age tend to be the most intensive consumers of
lodging.
§
○
•
Typical Lodging Customers
Business Travelers 40%
Characteristics:
Primary Market for hotels1.
More than 35 million people take business trips/year2.
Male dominant, but increasing number of females3.
Travel alone 68%4.
Location is a key lodging selection factor5.
Pays $129/ night6.
MORE LOYAL BECAUSE THEY AREN'T PRICE SENSITIVE 7.
§
○
Leisure Travelers 60%
Characteristics:
More price conscious than business travelers1.
Travel by auto (81%)2.
Two adults (50%)3.
Less loyal than business travelers4.
Pay $109/ night5.
§
○
•
History of American hotels-the first
The first modern hotel- "City Hotel" 1794
○
First chain hotel- "Hotel Statler" 1907
○
Franchise hotel- "Howard Johnson" 1954
○
The first casino- "The Flamingo" 1946
○
•
Chapter 2
Organizational Chart: A schematic representation of the relationships between
positions within an organization
○
Elements of an organizational structure
Organizational structure can be established through
Job specialization- the process of focusing one's occupational
concentration on a specific area of expertise
Specialization increases worker productivity and efficiency
®
Some concerns of over-specialization:
Lowered employee satisfaction, motivation, and morale
◊
More need for managerial control and coordination
◊
Reduction in service quality
◊
®
□
Departmentalization- As facilities grow in size, more need for
efficient control and coordination. Group certain jobs or functions
(Departmentalization)
Classifying functional areas:
Front of house vs. Back of house
◊
Revenue center vs support center
◊
Departments
◊
®
Functional Organizational Design
Pros:
Specialized skills and knowledge
}
Efficient and productive
}
Training becomes easier
}
Supervision is easier
}
◊
Cons
Functionality can exclude the totality concept of
activities to satisfy the guest in a hotel
Coordination of service processes is critical
–
}
◊
®
Rooms Division:
The front office
Most visible department
}
Guest reception
}
Registration
}
Room assignment
}
Tracking the status of rooms
}
Maintaining guest accounts and monitor credit
limits
}
Handling guest inquiries
}
Reservation
Receiving and processing reservation
requests
–
Managing the hotel's reservation channels
–
Contributing to maximize occupancy and
room revenue
–
}
Telecommunications
Also called PBX (private branch exchange)
–
Answering and distributing calls
–
Coordinating
–
}
Uniformed service
Provide the most personalized service
–
Bell attendants
–
Door attendants
–
Valet parking attendants
–
Concierges
–
}
House Keeping
Most important support function for the
front office
–
Cleaning occupied and rated rooms
–
Inspecting rooms before releasing them for
sales
Effective communication between
house keeping and front desk is
critical
w
–
}
Security
Security and safety problems by:
Guest
w
Employees
w
Uninvited intruders
w
–
Depending on the size of the facility,
security function may be handled by:
A fully staffed department
w
An outside security company
w
Assigned to designated staff
members or a department
w
–
}
Engineering & Maintenance
Typically responsible for
Preventive maintenance
Repair and replace furniture,
fixtures, and equipment (FFE)
w
Ensuring uninterrupted
provision of utilities
w
w
–
}
Food & Beverage
Ranks second to rooms division in terms of
total revenue
–
Providing food and drink to hotel guests
through
Coffee shops, specialty restaurants,
poolside snack bars, lounges,
banquets, nightclubs
w
–
}
Sales & Marketing
The size of the department can vary widely
depending on the hotel size
–
Major functions within the sales and
marketing department
Sales
w
Convention and meeting services
w
Advertising
w
Public relations
w
–
}
Human Resources
Major responsibilities
Recruitment
w
Selection and placement
w
Training
w
Compensation management
w
–
}
Accounting
Major responsibilities
Recording financial transactions
w
Preparing and interpreting financial
statements
w
Providing other departments with
timely reports
w
–
Additional activities
Payroll preparation
w
Accounts receivable
w
Accounts payable
w
–
}
General Manager
Oversees all departments
–
Defines and interprets the policis
established by top management
–
Liaison to the owner or corporate parent
–
Establish hotel wide goals and strategy
–
Coordinate activates between departments
–
Arbitrates interdepartmental disputes
–
}
◊
®
□
Establishment of Patterns of authority
Chain of command
Formal channel of authority from top to bottom
◊
Formal reporting relationship
◊
®
Decentralization vs. Centralization of Authority
Decentralization
Distributing authority throughout an organization
}
◊
Centralization
Retention of decision-making authority by a high-
level manager
}
◊
®
□
Span of Control
Number of people who report to one manager
Flat organization (Wide span of control)
A large number of employees report ton one
manager
}
◊
Tall organization (Narrow span of control)
A small number of employees report to one
supervisor
}
◊
®
Ideal # in a span of control depends on a variety of factors
such as:
Task similarity (High = Wide)
◊
Training and professionalism (High = Narrow)
◊
Task certainty ( High = Wide)
◊
Frequency of interaction (High = Narrow)
◊
®
□
§
○
•
Chapter 11•
Ownership & Affiliation
Independent hotels
No identifiable ownership or management affiliation with other
properties
§
Advantages: autonomy, flexibility, no fees
§
Disadvantages-limited advertising exposure, limited management
consultancy, limited economies of scale
Economies of scale = savings in cost due to level of production□
§
○
Chain hotels
Hotels affiliated and operated with a group of other hotel properties
under an identifiable brand name
§
Branded hotels
§
○
•
Management Arrangement
Management Contract
Agreement between hotel owner and hotel management company under
which, for a fee, the management company operates the hotel on behalf
of the owner
The owner:
Legal owner of the property
®
Retains the financial and legal responsibility for the property
®
□
Management company
Serves as an agent of the ownership
Operates the property on behalf of the owner
◊
®
□
§
Types of management companies
Type 1 (Brand Operators)
High level of name recognition
®
Manage some properties but primarily serve as a franchise
®
Ex: Marriott, Hilton, intercontinental
®
□
Type 2 (Independent operators or third party operators)
Do not provide name recognition
®
Usually operate properties as franchised hotels
®
Ex: First call Hospitality, Discover Lodging management, TMI
Hospitality
®
□
§
Advantages:
Management companies can grow with a low level of investment□
Rarely does the operator participate in operating deficits
Owner assumes the financial risk
®
□
Owners can benefit from expertise and know-how of management
companies
□
§
Disadvantages
The operator will not gain financially if the property is sold
Retains little control over the transfer of ownership
®
The creditworthiness of the owner is critical to the
management company
®
There may be a cancellation provision by either party
®
□
§
○
•
Franchise Agreement
A business strate
§
Largest francised chains
McDonalds□
KFC□
Burger King□
Subway□
Eleven 1-
§
Reasons to join a hotel franchise
Operational assistance- operating manuals, training programs, job
descriptions, quality assurance
□
Technical - pre opening service, architure design, suppliers, purchasing
powers FILL THIS IN!!!
□
Marketing assistance
Nucleus of any lodging franchise program is the central reservation
system
®
An extensive integrated advertising program
®
A sales network- regional and national sales office
®
Brand reputation
®
□
§
Advantage
Buy a proven formula□
§
Disadvantage
Loss of autonomy; brand standards are required
Physical characteristics
Size of rooms and beds, the amount of furniture, F&B outlets,
parking spaces, amenities, ect.
◊
®
Large amount of requirments and cirtea of standards
®
□
§
Franchise Fees
Initial fee
Non refundable
®
A dollar amount plus a per room add-on
®
□
Continuing fee
Usually paid monthly
®
Types of continuing fees
Royalty fee
◊
Advertising contribution fee
◊
Reservation fee
◊
Frequent traveler program fee, etc.
◊
®
□
§
•
CHAPTER 3•
RESERVATION•
Major responsibilities
Receiving and processing reservation requests
§
Generating reservation records
§
Confirming the reservation records
§
Maintaining up-to-date room availability and rate information
§
Producing reservation and forecast reports etc.
§
•
Types of reservations
Guaranteed reservations
Prepayment guaranteed- requires payment in full prior to the day of
arrival
§
Payment card guaranteed- puts ahold of some $ amount on the guest's
payment card
§
Advance deposit -requires payment of a specific amount of money prior
to arrival
§
Voucher or miscellaneous charge order (MCO) travel agent guarantee
§
Corporate- a corporations payment agreement
§
○
Non-Guaranteed reservation
The hotel agrees to hold a room for the guest until a stated reservation
cancellation hour on the day of arrival
§
Not guarantee that the hotel will receive payment for no-shows
§
Hotels planning on full occupancy can accept only guaranteed reservation
§
○
Reservation channels
The more channels, the more opportunities
Property reservations department
Telephone, email, website
®
Reservation staff sales process
Greet the caller
◊
Identify the callers needs
◊
Provide an overview of the hotels features and benefits
◊
Make a room recommendation
◊
Close the sale
◊
Gather the reservation information and then thank the
caller
◊
®
□
§
Central reservation systems
Maintain a room availabity inventory for each property participating
in the system
□
Affiliate reservation network-chain hotels reservation network
All franchisees are contractually relates
®
□
Non-affiliate reservation network- a subscription system designed
to connect independent or non-cahin properties
□
§
Global distribution system (GDS)
Connected to the central reservation system and travel agency
terminals
□
Provide automated reservation service for the hotel and travel
agencies
□
SABRE, Galileo, Amadeus, WorldSpan□
§
Internet booking sites
§
○
•
Some terminologies
Transient guests- non group guests□
Block-rooms set aside for a group□
Booked -rooms within a block reserved for specific guests in the group□
Wash down- reducing a block based on the groups history □
•
REGISTRATION
7 steps
Pre-registration
Produces a registration document in advance of guest arrival
Creation of a guest account□
Room and rate assignment□
Helps facilitate the registration process□
Helps provide more sophisticated services□
Some hotels limit pre-registration only to VIP guests or groups□
§
Creating registration record
Collecting important guest info
Verify personal data and other info (eligibility for
discount or tax exempt)
®
Confirm payment method
Incorrect payment method set up is a common
service failure
◊
Ex) failure to verify direct billing application,
charge to incorrect credit cards, incorrect billing
address
◊
®
□
Obtaining guest's signature to indicate acceptance of the
room rate and date of departure
□
§
§
Assigning guest room and rate
Involves identifying and allocating an available room in specific
room category to a guest
§
Room status
Occupied□
Vacant□
On-change□
Out-of-order□
V/O- vacant and on-charge□
V/C- vacant and cleaned□
V/I- Vacant and inspected□
O/C- Occupied and cleaned□
§
Room status discrepancies
Sleeper- guest has settled his or her account and left the
hotel, but the hotel has failed to properly update the room's
status
□
Skipper- guest left hotel without settling their account, office
still shows room as occupied
□
§
Room rates
Typically confirmed as part of reservation process□
Assigning rates for walk-in guest the responsibility of front
desk staff
□
§
Type of rates
Rack rate- standard rate□
Seasonal rate□
American plan, (AP), European Plan (EP), and all inclusive rate□
Corporate rates, group rates, day rates, frequent traveler
rates, etc.
□
§
§
Establishing payment method
Cash- pay during registration in advance
§
Personal checks- some won't accept
§
Credit/debit- check expiration date and location validation, and
then validate payment cards (through online authorization
approval) and put a hold of specified amount on guest's card
§
Direct billing- bill the guest or guest's company direction based on
agreement made in advance. Guest is only responsible for
incidental charges
§
Payment issues for groups
Guests room and tax charges are direct-billed to a group
master account
□
Other charges may be the guest's responsibility (incidental
charges)
□
Credit for incidental charges needs to established for each
member of the group
□
§
§
Verifying identity
Many hotels require positive identification- ask for photo
identification
§
Common in Europe and Asia, especially for international guests
§
Become common at u.s hotels after 9/11
§
§
Issuing the room key
Complete the registration process by issuing a room key
§
Should never announce the room number when handing a
guestroom key to a guest for security reasons
§
Arrange bell attendant service if requested
§
§
Filing special requests
Acknowledge and act on special requests that guests make.
§
Some specials requests that may involve guest
Locations□
Amenities□
§
§
Registrations options
Registering group guests or VIPs at special location
§
Registering off-site such as airports and shuttle vans, allowing
guests to check in without being present at the front desk
§
Self check-in
§
Self check-in kiosks
§
Self check-in apps
§
§
□
•
Competition analysis
Competition Analysis
An assessment of the strengths and weaknesses of direct and indirect
competitors
○
An important part of the situation analysis in a strategic (marketing) plan
○
Significant because
○
□
Competitor profiling
Identify all direct and indirect competitors; a competitor set
Generally based on customer base; those serving the same
customer base with similar products and services
§
Lodging properties serving several markets
§
Indirect competitors
§
1.
Create detailed profiles on each of the major competitors in terms of
Background: ownership and management
§
Product and services: location, number of rooms, a range and
quality of facilities and room amenities, services offered…
§
Marketing: Market segments, promotional mix
§
Human Resources: # of employees, compensation and benefits,
management style, employee retention rate, morale…
§
Financial Performance: revenue, operating income, occupancy rate,
RevPAR, etc.
§
2.
Identify strengths and weaknesses, compared to others in competitor set
Relative strengths and weaknesses
§
Depending on market segments
§
Competitors strengths and weakness can be your threats and
opportunities in SWOT analysis
Strength
Characteristics of the property that give it an advantage
over others
®
□
Weakness
Characteristics of the property that give it a
disadvantage relative to others
®
□
Opportunities
External environments that the property could exploit
to its advantage
®
□
Threats
External environments that’s could cause trouble for
the property
®
□
§
(strength is unique to location, weakness = all competitors have)
§
3.
□
•
Environmental analysis
A tool used to analyze external business environments
Political: tax, labor law, trade restrictions, environmental law
§
Economical: economic growth, interest rates, inflation rate
§
Sociocultural: population growth, age distribution, health consciousness,
environmental consciousness, changing life style
§
Technological: Technological changes
§
○
•
Marketing 4ps
Product
Tangible goods and intangible services that cater to the needs and wants
of the target market
§
For a lodging prosperity, product strategy concerns;
Facilities and amenities- F&B, shops, meeting, and banquets,
fitness, spa, business center, executive lounge, pools
Room size, layout, amenities, menu service format,
®
Ancillary services- valet parking, bell & door attendants,
transportation, concierge
®
□
§
○
Place
"distribution"
§
Does not exclusively mean "location" of the property
§
Determines distribution (reservation) channels or intermediaries that are
most effective in selling to the target market
§
Massive (intensive), selective, exclusive distribution
§
Thorough reservation office, central reservation system, travel agencies,
OTA
§
Strategic approach is needed as it generates costs.
§
○
Price
Pricing strategy to effectively sell to the target market
§
Used to help customer to have an image of the standards the property
offers
§
Significantly affects value perception- "good, but too expensive"
§
Critical aspect of marketing when competition is intense
§
Price comparisons are easy today
§
Need to understand price sensitivity of the target market (price elasticity)
§
Skimming, high-low pricing, loss leader, cost plus, penetration pricing
§
○
Promotion
Advertising, PR, sales promotion, personal selling, direct marketing
§
Determine an optimum mix to effectively sell to the target market
§
Marketing budget is a limiting factor
§
○
•
•
Exam 1 filled
Tuesday, February 13, 2018 11:06 AM
Chapter 1•
Key Lodging Demand Factors
Overall Economy
○
Oil Prices
1% Increase in the price of crude oil results in .06-.09% decline in lodging
demand
§
Airline Ticket Prices
§
○
Population Demographics
People above 45 years of age tend to be the most intensive consumers of
lodging.
§
○
•
Typical Lodging Customers
Business Travelers 40%
Characteristics:
Primary Market for hotels1.
More than 35 million people take business trips/year2.
Male dominant, but increasing number of females3.
Travel alone 68%4.
Location is a key lodging selection factor5.
Pays $129/ night6.
MORE LOYAL BECAUSE THEY AREN'T PRICE SENSITIVE 7.
§
○
Leisure Travelers 60%
Characteristics:
More price conscious than business travelers1.
Travel by auto (81%)2.
Two adults (50%)3.
Less loyal than business travelers4.
Pay $109/ night5.
§
○
•
History of American hotels-the first
The first modern hotel- "City Hotel" 1794
○
First chain hotel- "Hotel Statler" 1907
○
Franchise hotel- "Howard Johnson" 1954
○
The first casino- "The Flamingo" 1946
○
•
Chapter 2
Organizational Chart: A schematic representation of the relationships between
positions within an organization
○
Elements of an organizational structure
Organizational structure can be established through
Job specialization- the process of focusing one's occupational
concentration on a specific area of expertise
Specialization increases worker productivity and efficiency
®
Some concerns of over-specialization:
Lowered employee satisfaction, motivation, and morale
◊
More need for managerial control and coordination
◊
Reduction in service quality
◊
®
□
Departmentalization- As facilities grow in size, more need for
efficient control and coordination. Group certain jobs or functions
(Departmentalization)
Classifying functional areas:
Front of house vs. Back of house
◊
Revenue center vs support center
◊
Departments
◊
®
Functional Organizational Design
Pros:
Specialized skills and knowledge
}
Efficient and productive
}
Training becomes easier
}
Supervision is easier
}
◊
Cons
Functionality can exclude the totality concept of
activities to satisfy the guest in a hotel
Coordination of service processes is critical
–
}
◊
®
Rooms Division:
The front office
Most visible department
}
Guest reception
}
Registration
}
Room assignment
}
Tracking the status of rooms
}
Maintaining guest accounts and monitor credit
limits
}
Handling guest inquiries
}
Reservation
Receiving and processing reservation
requests
–
Managing the hotel's reservation channels
–
Contributing to maximize occupancy and
room revenue
–
}
Telecommunications
Also called PBX (private branch exchange)
–
Answering and distributing calls
–
Coordinating
–
}
Uniformed service
Provide the most personalized service
–
Bell attendants
–
Door attendants
–
Valet parking attendants
–
Concierges
–
}
House Keeping
Most important support function for the
front office
–
Cleaning occupied and rated rooms
–
Inspecting rooms before releasing them for
sales
Effective communication between
house keeping and front desk is
critical
w
–
}
Security
Security and safety problems by:
Guest
w
Employees
w
Uninvited intruders
w
–
Depending on the size of the facility,
security function may be handled by:
A fully staffed department
w
An outside security company
w
Assigned to designated staff
members or a department
w
–
}
Engineering & Maintenance
Typically responsible for
Preventive maintenance
Repair and replace furniture,
fixtures, and equipment (FFE)
w
Ensuring uninterrupted
provision of utilities
w
w
–
}
Food & Beverage
Ranks second to rooms division in terms of
total revenue
–
Providing food and drink to hotel guests
through
Coffee shops, specialty restaurants,
poolside snack bars, lounges,
banquets, nightclubs
w
–
}
Sales & Marketing
The size of the department can vary widely
depending on the hotel size
–
Major functions within the sales and
marketing department
Sales
w
Convention and meeting services
w
Advertising
w
Public relations
w
–
}
Human Resources
Major responsibilities
Recruitment
w
Selection and placement
w
Training
w
Compensation management
w
–
}
Accounting
Major responsibilities
Recording financial transactions
w
Preparing and interpreting financial
statements
w
Providing other departments with
timely reports
w
–
Additional activities
Payroll preparation
w
Accounts receivable
w
Accounts payable
w
–
}
General Manager
Oversees all departments
–
Defines and interprets the policis
established by top management
–
Liaison to the owner or corporate parent
–
Establish hotel wide goals and strategy
–
Coordinate activates between departments
–
Arbitrates interdepartmental disputes
–
}
◊
®
□
Establishment of Patterns of authority
Chain of command
Formal channel of authority from top to bottom
◊
Formal reporting relationship
◊
®
Decentralization vs. Centralization of Authority
Decentralization
Distributing authority throughout an organization
}
◊
Centralization
Retention of decision-making authority by a high-
level manager
}
◊
®
□
Span of Control
Number of people who report to one manager
Flat organization (Wide span of control)
A large number of employees report ton one
manager
}
◊
Tall organization (Narrow span of control)
A small number of employees report to one
supervisor
}
◊
®
Ideal # in a span of control depends on a variety of factors
such as:
Task similarity (High = Wide)
◊
Training and professionalism (High = Narrow)
◊
Task certainty ( High = Wide)
◊
Frequency of interaction (High = Narrow)
◊
®
□
§
○
•
Chapter 11•
Ownership & Affiliation
Independent hotels
No identifiable ownership or management affiliation with other
properties
§
Advantages: autonomy, flexibility, no fees
§
Disadvantages-limited advertising exposure, limited management
consultancy, limited economies of scale
Economies of scale = savings in cost due to level of production□
§
○
Chain hotels
Hotels affiliated and operated with a group of other hotel properties
under an identifiable brand name
§
Branded hotels
§
○
•
Management Arrangement
Management Contract
Agreement between hotel owner and hotel management company under
which, for a fee, the management company operates the hotel on behalf
of the owner
The owner:
Legal owner of the property
®
Retains the financial and legal responsibility for the property
®
□
Management company
Serves as an agent of the ownership
Operates the property on behalf of the owner
◊
®
□
§
Types of management companies
Type 1 (Brand Operators)
High level of name recognition
®
Manage some properties but primarily serve as a franchise
®
Ex: Marriott, Hilton, intercontinental
®
□
Type 2 (Independent operators or third party operators)
Do not provide name recognition
®
Usually operate properties as franchised hotels
®
Ex: First call Hospitality, Discover Lodging management, TMI
Hospitality
®
□
§
Advantages:
Management companies can grow with a low level of investment□
Rarely does the operator participate in operating deficits
Owner assumes the financial risk
®
□
Owners can benefit from expertise and know-how of management
companies
□
§
Disadvantages
The operator will not gain financially if the property is sold
Retains little control over the transfer of ownership
®
The creditworthiness of the owner is critical to the
management company
®
There may be a cancellation provision by either party
®
□
§
○
•
Franchise Agreement
A business strate
§
Largest francised chains
McDonalds□
KFC□
Burger King□
Subway□
Eleven 1-
§
Reasons to join a hotel franchise
Operational assistance- operating manuals, training programs, job
descriptions, quality assurance
□
Technical - pre opening service, architure design, suppliers, purchasing
powers FILL THIS IN!!!
□
Marketing assistance
Nucleus of any lodging franchise program is the central reservation
system
®
An extensive integrated advertising program
®
A sales network- regional and national sales office
®
Brand reputation
®
□
§
Advantage
Buy a proven formula□
§
Disadvantage
Loss of autonomy; brand standards are required
Physical characteristics
Size of rooms and beds, the amount of furniture, F&B outlets,
parking spaces, amenities, ect.
◊
®
Large amount of requirments and cirtea of standards
®
□
§
Franchise Fees
Initial fee
Non refundable
®
A dollar amount plus a per room add-on
®
□
Continuing fee
Usually paid monthly
®
Types of continuing fees
Royalty fee
◊
Advertising contribution fee
◊
Reservation fee
◊
Frequent traveler program fee, etc.
◊
®
□
§
•
CHAPTER 3•
RESERVATION•
Major responsibilities
Receiving and processing reservation requests
§
Generating reservation records
§
Confirming the reservation records
§
Maintaining up-to-date room availability and rate information
§
Producing reservation and forecast reports etc.
§
•
Types of reservations
Guaranteed reservations
Prepayment guaranteed- requires payment in full prior to the day of
arrival
§
Payment card guaranteed- puts ahold of some $ amount on the guest's
payment card
§
Advance deposit -requires payment of a specific amount of money prior
to arrival
§
Voucher or miscellaneous charge order (MCO) travel agent guarantee
§
Corporate- a corporations payment agreement
§
○
Non-Guaranteed reservation
The hotel agrees to hold a room for the guest until a stated reservation
cancellation hour on the day of arrival
§
Not guarantee that the hotel will receive payment for no-shows
§
Hotels planning on full occupancy can accept only guaranteed reservation
§
○
Reservation channels
The more channels, the more opportunities
Property reservations department
Telephone, email, website
®
Reservation staff sales process
Greet the caller
◊
Identify the callers needs
◊
Provide an overview of the hotels features and benefits
◊
Make a room recommendation
◊
Close the sale
◊
Gather the reservation information and then thank the
caller
◊
®
□
§
Central reservation systems
Maintain a room availabity inventory for each property participating
in the system
□
Affiliate reservation network-chain hotels reservation network
All franchisees are contractually relates
®
□
Non-affiliate reservation network- a subscription system designed
to connect independent or non-cahin properties
□
§
Global distribution system (GDS)
Connected to the central reservation system and travel agency
terminals
□
Provide automated reservation service for the hotel and travel
agencies
□
SABRE, Galileo, Amadeus, WorldSpan□
§
Internet booking sites
§
○
•
Some terminologies
Transient guests- non group guests□
Block-rooms set aside for a group□
Booked -rooms within a block reserved for specific guests in the group□
Wash down- reducing a block based on the groups history □
•
REGISTRATION
7 steps
Pre-registration
Produces a registration document in advance of guest arrival
Creation of a guest account□
Room and rate assignment□
Helps facilitate the registration process□
Helps provide more sophisticated services□
Some hotels limit pre-registration only to VIP guests or groups□
§
Creating registration record
Collecting important guest info
Verify personal data and other info (eligibility for
discount or tax exempt)
®
Confirm payment method
Incorrect payment method set up is a common
service failure
◊
Ex) failure to verify direct billing application,
charge to incorrect credit cards, incorrect billing
address
◊
®
□
Obtaining guest's signature to indicate acceptance of the
room rate and date of departure
□
§
§
Assigning guest room and rate
Involves identifying and allocating an available room in specific
room category to a guest
§
Room status
Occupied□
Vacant□
On-change□
Out-of-order□
V/O- vacant and on-charge□
V/C- vacant and cleaned□
V/I- Vacant and inspected□
O/C- Occupied and cleaned□
§
Room status discrepancies
Sleeper- guest has settled his or her account and left the
hotel, but the hotel has failed to properly update the room's
status
□
Skipper- guest left hotel without settling their account, office
still shows room as occupied
□
§
Room rates
Typically confirmed as part of reservation process□
Assigning rates for walk-in guest the responsibility of front
desk staff
□
§
Type of rates
Rack rate- standard rate□
Seasonal rate□
American plan, (AP), European Plan (EP), and all inclusive rate□
Corporate rates, group rates, day rates, frequent traveler
rates, etc.
□
§
§
Establishing payment method
Cash- pay during registration in advance
§
Personal checks- some won't accept
§
Credit/debit- check expiration date and location validation, and
then validate payment cards (through online authorization
approval) and put a hold of specified amount on guest's card
§
Direct billing- bill the guest or guest's company direction based on
agreement made in advance. Guest is only responsible for
incidental charges
§
Payment issues for groups
Guests room and tax charges are direct-billed to a group
master account
□
Other charges may be the guest's responsibility (incidental
charges)
□
Credit for incidental charges needs to established for each
member of the group
□
§
§
Verifying identity
Many hotels require positive identification- ask for photo
identification
§
Common in Europe and Asia, especially for international guests
§
Become common at u.s hotels after 9/11
§
§
Issuing the room key
Complete the registration process by issuing a room key
§
Should never announce the room number when handing a
guestroom key to a guest for security reasons
§
Arrange bell attendant service if requested
§
§
Filing special requests
Acknowledge and act on special requests that guests make.
§
Some specials requests that may involve guest
Locations□
Amenities□
§
§
Registrations options
Registering group guests or VIPs at special location
§
Registering off-site such as airports and shuttle vans, allowing
guests to check in without being present at the front desk
§
Self check-in
§
Self check-in kiosks
§
Self check-in apps
§
§
□
•
Competition analysis
Competition Analysis
An assessment of the strengths and weaknesses of direct and indirect
competitors
○
An important part of the situation analysis in a strategic (marketing) plan
○
Significant because
○
□
Competitor profiling
Identify all direct and indirect competitors; a competitor set
Generally based on customer base; those serving the same
customer base with similar products and services
§
Lodging properties serving several markets
§
Indirect competitors
§
1.
Create detailed profiles on each of the major competitors in terms of
Background: ownership and management
§
Product and services: location, number of rooms, a range and
quality of facilities and room amenities, services offered…
§
Marketing: Market segments, promotional mix
§
Human Resources: # of employees, compensation and benefits,
management style, employee retention rate, morale…
§
Financial Performance: revenue, operating income, occupancy rate,
RevPAR, etc.
§
2.
Identify strengths and weaknesses, compared to others in competitor set
Relative strengths and weaknesses
§
Depending on market segments
§
Competitors strengths and weakness can be your threats and
opportunities in SWOT analysis
Strength
Characteristics of the property that give it an advantage
over others
®
□
Weakness
Characteristics of the property that give it a
disadvantage relative to others
®
□
Opportunities
External environments that the property could exploit
to its advantage
®
□
Threats
External environments that’s could cause trouble for
the property
®
□
§
(strength is unique to location, weakness = all competitors have)
§
3.
□
•
Environmental analysis
A tool used to analyze external business environments
Political: tax, labor law, trade restrictions, environmental law
§
Economical: economic growth, interest rates, inflation rate
§
Sociocultural: population growth, age distribution, health consciousness,
environmental consciousness, changing life style
§
Technological: Technological changes
§
○
•
Marketing 4ps
Product
Tangible goods and intangible services that cater to the needs and wants
of the target market
§
For a lodging prosperity, product strategy concerns;
Facilities and amenities- F&B, shops, meeting, and banquets,
fitness, spa, business center, executive lounge, pools
Room size, layout, amenities, menu service format,
®
Ancillary services- valet parking, bell & door attendants,
transportation, concierge
®
□
§
○
Place
"distribution"
§
Does not exclusively mean "location" of the property
§
Determines distribution (reservation) channels or intermediaries that are
most effective in selling to the target market
§
Massive (intensive), selective, exclusive distribution
§
Thorough reservation office, central reservation system, travel agencies,
OTA
§
Strategic approach is needed as it generates costs.
§
○
Price
Pricing strategy to effectively sell to the target market
§
Used to help customer to have an image of the standards the property
offers
§
Significantly affects value perception- "good, but too expensive"
§
Critical aspect of marketing when competition is intense
§
Price comparisons are easy today
§
Need to understand price sensitivity of the target market (price elasticity)
§
Skimming, high-low pricing, loss leader, cost plus, penetration pricing
§
○
Promotion
Advertising, PR, sales promotion, personal selling, direct marketing
§
Determine an optimum mix to effectively sell to the target market
§
Marketing budget is a limiting factor
§
○
•
•
Exam 1 filled
Tuesday, February 13, 2018 11:06 AM
Document Summary
1% increase in the price of crude oil results in . 06-. 09% decline in lodging demand. People above 45 years of age tend to be the most intensive consumers of lodging. More than 35 million people take business trips/year. Organizational chart: a schematic representation of the relationships between positions within an organization. Job specialization- the process of focusing one"s occupational concentration on a specific area of expertise. Departmentalization- as facilities grow in size, more need for efficient control and coordination. Functionality can exclude the totality concept of activities to satisfy the guest in a hotel. Maintaining guest accounts and monitor credit limits limits. Most important support function for the front office. Inspecting rooms before releasing them for sales w. Effective communication between house keeping and front desk is critical. Security and safety problems by: w w w. Depending on the size of the facility, security function may be handled by: w w w. Assigned to designated staff members or a department.
