Hospitality Today Introduction to the Hotel Industry

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Hospitality TodayIntroduction to the Hotel
Industry
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What to know

• Competencies
• Explain how a hotel is organized, distinguish
  revenue centers from cost centers, and describe
  the rooms division.
• Describe a hotels food and beverage division,
  and describe the following hotel revenue centers
  telecommunications department concessions,
  rentals, and commissions and fitness and
  recreation facilities.
• List hotel cost centers describe the marketing,
  engineering, accounting, human resources, and
  security divisions and give examples of what a
  hotel must do to comply with the Americans with
  Disabilities Act.
• Describe hotel control systems, give examples of
  financial controls used in hotels, and summarize
  the need for (and give examples of) quality
  controls in hotels.

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How is a Hotel Organized?

• Organized by what the facility provides
• Food/Beverage Division
• Room Division reservations, check-in/out,
  housekeeping tasks, uniformed staff,
  telecommunications service.

General Manager
Front Office
Housekeeping
Food Beverage
Building Maintenance
Page 188 - 189
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Revenue Centers VS. Cost Centers

• Revenue Centers
• Rooms
• Food and Beverage
• Telecommunications
• Concessions
• Rentals
• Commissions
• Fitness/Recreation Facilities

• Cost Centers
• Marketing
• Engineering
• Accounting
• Human Resources
• Security

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Two Main Revenue Centers

• A. Room Division
• Single largest source of revenue
• Room revenue less operating expenses
• For every 1.00 spent on guestrooms, 74 cents is
  available for general overhead after deducting
  the direct rooms division expenses. (See
  Exhibit 3 on Page 191 next slide)
• Organization of the Rooms Divisions (See
  Exhibit 4)
• Front Office
• Reservations
• Housekeeping
• Uniformed Service

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Two Main Revenue Centers

• A. Room Division
• Front Office
• The command post for processing reservations,
  registering guests, settling guest accounts
  (cashiering), and checking out guests.
• Distribution of mail, keys, messages and
  information for guests.
• Duties include greeting guests, establishing a
  method of payment, assigning rooms that are
  unoccupied and have been cleaned, communicating
  hotel facilities and surrounding community,
  calling a bell person.

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Two Main Revenue Centers

• A. Room Division
• Reservations
• Should be staffed by skilled telemarketing
  personnel
• Must be handled with skill and efficiency,
  provide immediate and correct information
• The largest volume of customers comes from
  individuals or direct inquiry. The remainder are
  received through the following sources
• The hotels reservation system
• Travel agents
• Hotel representatives
• The internet
• Tour operators
• Independent reservation systems
• Airlines, cruise lines, and other transportation
  companies

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Two Main Revenue Centers

• A. Room Division
• Housekeeping
• Responsible for cleaning the hotels guestrooms
  and public areas.
• Includes Executive Housekeeper, Assistant
  Housekeeper, Room Inspectors, Room Attendants,
  House person crew, Linen room Supervisor and
  Attendants, Laundry Employees, Personnel in
  charge of employee uniforms
• Duties include removing soiled linen and towels
  and replacing them with fresh ones, checking the
  bed and blankets for damage, making beds,
  emptying trash, checking for any broken
  appliances, damage to shades or blinds, leaky
  faucets, checking closets and drawers for items
  forgotten, cleaning the room and bathroom,
  replacing bathroom towels and amenities

See Page 202
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Two Main Revenue Centers

• Room Division
• Measuring the Performance of the Rooms Division
• Average Daily Rate
• Rooms Revenue divided by
  Rooms Occupied
  Average Daily Rate
• Monday 23,800 170
  140.00
• Tuesday 30,000 185
  162.16
• Wednesday 29,000 178
  162.92
• 3 Day Figures 82,800
  533 155.03

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Two Main Revenue Centers

• Room Division
• Measuring the Performance of the Rooms Division
• Occupancy Percentage
• Rooms Occupied divided by
  Rooms Available
  Occupancy Percentage
• Monday 170 200
  85.0
• Tuesday 185
  200 92.5
• Wednesday 178
  200 89.0
• 3 Day Figures 533
  200 88.8

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Two Main Revenue Centers

• Room Division
• Measuring the Performance of the Rooms Division
• Revenue Per Available Room
• Occupancy Percentage divided by
  Average Daily Rate
  Revenue Per
• Available
  Room
• Monday 85.0 140.10 119.00
• Tuesday 92.5 162.16 150.00
• Wednesday 89.0 162.92 145.00
• 3 Day Figures 88.8 155.03 138.00

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Two Main Revenue Centers

• A. Room Division
• Uniform Services
• Also called guest service department. Includes
  bell persons, concierge, transportation/valet-park
  ing employees, and door attendants.
• Bell person moves luggage and guest to their
  rooms
• Concierge is the main source of information about
  the hotel.
• Measuring the Performance of the Rooms Division
• See Page 200

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Two Main Revenue Centers

• B. Food and Beverage Division
• May produce as much or more than room division
• Is paramount to the success of the operation
• Not just a convenience for guests anymore.
• Capture rate the percentage of guests who eat
  meals at the hotel is measured regularly by
  many hotels.

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Two Main Revenue Centers

• B. Food and Beverage Division
• Catering plans food for
• Conventions and smaller hotel groups
• Local banquets
• Room Service
• Delivery time plays a role in quality
• Food items must be charged more for

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Two Main Revenue Centers

• B. Food and Beverage Division
• Support and control services
• Receiving clerks verify quality
• Storing supplies
• Cashiers who control the payment
• Costing and pricing menus
• Conducting monthly inventory
• Creating monthly and daily reports on food and
  beverage costs

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Two Main Revenue Centers

• B. Food and Beverage Division
• Problems in Food and Beverage Operations
• Long Hours of Operation
• Low check Averages
• Too many facilities
• High turnover
• Costly Entertainment
• Insufficient Marketing

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Other Revenue Centers
Telecommunications Department See Page 214
Voice Mail, Beeper Service, Internet
Service Concessions, Rentals, and
Commissions See Page 214-215 Gift Shops,
Newsstands, Flower Shops, Laundry, Dry Cleaning
Services, Beauty salons, Jewelry stores,
Secretarial Services, and even Office
space. Fitness and Recreational Facilities See
Page 215 - 216 health clubs, spas, exercise
facilities, rental bicycles, luxury spas.
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Cost Centers
Marketing and Sales Division The mission of a
hotels marketing and sales division is
to.. 1. identify prospective guests for the
hotel 2. shape the products and services of
the hotel as much as possible to meet the
needs of those prospects 3. persuade
prospects to become guests
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Cost Centers

• The marketing and sales division is charged with
  the responsibility of keeping the rooms in the
  hotel occupied at the right price and with the
  right mix of guests. It accomplishes this
  through many activities, including
• Contacting groups and individuals
• Advertising in print and on radio, television,
  and the Internet
• Creating direct mail and public relation
  campaigns
• Participating in trade shows
• Visiting travel agents
• Participating in community activities
• Arrange familiarization tours

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Cost Centers
Marketing Division See Page 218
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Cost Centers

• Engineering Division
• Takes care of the hotels physical plant and
  controlling energy costs are the responsibilities
  of the engineering division.
• Slow a hotels physical deterioration
• Preserve the original hotel image established by
  management
• Keep revenue-producing areas operational
• Keep the property comfortable for guests and
  employees
• Preserve the safety of the property for guests
  and employees
• Create savings by keeping repairs and equipment
  replacements to a minimum

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Cost Centers

• Accounting Division
• A hotels accounting division is responsible for
  keeping track of the many business transactions
  that occur in the hotel.
• Forecasting and budgeting
• Managing what the hotel owns and what money is
  due form guests
• Controlling Cash
• Controlling costs in all areas of the hotel
  revenue centers as well as cost centers and
  payroll
• Purchasing, receiving, storing, and issuing
  operating and capital inventory such as food and
  beverages, housekeeping supplies, and furniture
• Keeping records, preparing financial statements
  and daily operating reports, and interpreting
  these statements and reports for mangement

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Cost Centers

• Human Resources Division
• Security Division
• Security Officers rooms, parking areas, pool,
  bars, restaurants, shopping areas, etc.
• Equipment two-way radios, closed-circuit tv
  motion sensors, elevators, smoke detectors,
  fire-alarms, interior/exterior lighting.
• Master keys to guestrooms, storerooms, and
  offices at all times.
• Safety procedures fire, bomb threats,
  terrorism, etc.
• Identification procedures photo identification
  for all employees, name tags, etc.