Chapter 6
The Front Office Department
Learning Objectives
1.
2.
3.
To explain the main activities that occur in a hotel’s
front office.
To describe the process of forecasting hotel demand
and establishing room rates.
To review the major sources of hotel reservations.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Learning Objectives
n
n
To explain the role of the front office before, during,
and after a guest arrives at the hotel.
To examine how the front office manages guest and
hotel data, including performance of the night audit.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Front Office Responsibilities
Front Office: The department within the hotel
responsible for guest reservations, registration,
service, and payment.
Front Desk: The area within the hotel used for
guest registration and payment.
FOM: The hotel industry term for a front office
manager.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Front Office Responsibilities
◼
The front office is responsible for managing
three very important areas:
◼
◼
◼
The Property Management System (PMS)
Guest Services
Guest Accounting and Data Management
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Front Office Responsibilities
The Property Management System
Central reservations system (CRS): The
industry term for the computerized program
used to record guest room reservations.
Back-up system: Redundant hardware and/or
software operated in parallel to the system it
serves.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Front Office Responsibilities
Guest Services
◼
Front office should be ready to assist in a
variety of guest-related request, such as:
◼
◼
Transportation to and from an airport or other
transportation terminal
Handling luggage
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Front Office Responsibilities
Guest Services
◼
◼
Providing directions to attractions within the local
area
Conveying information about available hotel
services
◼
Taking messages for guests
◼
Routing mail
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Front Office Responsibilities
Guest Services
◼
Newspaper delivery
◼
Management of safety deposit boxes
◼
Arranging for wake-up calls
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Front Office Responsibilities
Guest Services
◼
◼
Providing guest security by the careful
dissemination of guest-related information
Handling guests’ concerns and payment disputes
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Front Office Responsibilities
Guest Accounting and Data Management
Night audit: The process of reviewing for
accuracy and completeness the accounting
transactions from one day to conclude, or
“close,” that day’s sales information in
preparation for recording the transactions of the
next day.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Front Office Responsibilities
Guest Accounting and Data Management
Night auditor: The individual who performs
the daily review of all the financial transactions
with hotel guests recorded by the front office.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Front Office Responsibilities
Guest Accounting and Data Management
◼
PMS would keep a record of:
◼
The name of the guest staying at the hotel
◼
The date of the guest’s last stay
◼
The guest’s address, telephone number, and credit
or debit card information
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Front Office Responsibilities
Guest Accounting and Data Management
◼
◼
◼
The room rate paid and room type occupied by
the guest during their last stay
A history of the guest’s prior folio charges
The form of payment used by the guest to settle
his or her account with the hotel
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Front Office Responsibilities
Guest Accounting and Data Management
◼
The guest’s membership in groups receiving a
discount from the hotel
◼
The guest’s company affiliation
◼
The guest’s room-type preferences
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Front Office Responsibilities
Guest Accounting and Data Management
Room type: Specific configurations of guest
rooms. For example, king-sized bed vs. doublesized bed, or parlor suite vs. standard sleeping
room.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Forecasting Demand
Effective front office staff must be able to
answer
How many rooms will the hotel sell tonight?
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Forecasting Demand
The Effect of Demand on Room Rates
RevPAR is a simple computation that can be
expressed algebraically as:
A () B = C
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Forecasting Demand
The Effect of Demand on Room Rates
Where:
A (Occupancy %) x B (ADR) =C (RevPAR)
Thus:
70 Occupancy % $90.00 ADR = $63.00 RevPAR
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Forecasting Demand
Estimating Demand
Sell-out
A situation in which all available rooms are
sold. A hotel, area, or entire city may, if
demand is strong enough, sell out.
A period of time in which management must
attempt to optimize ADR.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Forecasting Demand
Use of the PMS in Forecasting Demand
If a PMS is effective:
1.
2.
3.
1.
Information will be easily accessible.
Its information is readily compatible with
Windows Office products.
Internet connectivity will be easy and dependable
A strong revenue management component will be
included.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Establishing Room Rates
Revenue Management
Rack rate: The price at which a hotel sells its
rooms when no discounts of any kind are
offered to the guest. Often shortened to “rack.”
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Establishing Room Rates
Revenue Management
Editor: insert figure 7.2 (But label it Figure 6.1)
from page 189 of 1st. Edition here.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Establishing Room Rates
Revenue Management
Walk: A situation in which a guest with a
reservation is relocated from the reserved hotel
to another hotel because no room was available
at the reserved hotel.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Establishing Room Rates
Revenue Management
In most cases, the hotel that has walked a
guest will incur the following expense:
◼
◼
Transport guest to and from an alternative
property
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Establishing Room Rates
Revenue Management
◼
◼
◼
Telephone calls made by the guest to inform those
who need to know about the alternative lodging
accommodations
The cost of the first night’s room charges at the
alternative hotel
The cost related to the loss of good will on the
part of the walked guest
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Establishing Room Rates
Transient Rates
Corporate rate: The special rate a hotel
charges to its typical business traveler.
For example, a rate that is 5–20% below the
hotel’s rack rate might be designated as the
hotel’s corporate rate.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Establishing Room Rates
Transient Rates
Transient: Individual guests who are not part
of a group or tour booking.
Transient guests can be further subdivided by
traveler demographics to obtain more detailed
information about the type of guest staying in
the hotel (for example, corporate, leisure, and
government).
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Establishing Room Rates
Transient Rates
Negotiated Rate: An agreed upon rate that is
offered by a hotel but is subject to room
availability.
Also referred to as a volume rate or volume
discount rate.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Establishing Room Rates
Group Rates
Group rate: Special discounted room rates
given to customers who agree to buy a large
number of room nights for their group.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Establishing Room Rates
Group Rates
Opryland Hotel in Nashville, Tennessee is an
example of a property that relies very heavily
on group and group meeting business.
To review this impressive property, go to
http://www.gaylordhotels.com/gaylord-opryland
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Lodging Goes Green!
For those involved in the meeting industry, a
commitment to sustainability increasingly takes
the form of membership in the non-profit
organization, Green Meeting Industry Council
(GMIC).
To learn more please visit
www.greenmeetings.info
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Establishing Room Rates
Contract Rates
Contract rate: A fixed term room rate that is
agreed to in advance and for the length of the
contract agreement.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reservations
◼
Reservations may occur either from:
◼
◼
◼
Hotel Direct Inquiry
Central Reservation System
Internet Booking Site
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reservations
Hotel Direct Inquiries
◼ Critical areas that should be examined for
training needs include:
◼
Telephone etiquette
◼
Qualifying the guest
◼
Describing the property
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reservations
Hotel Direct Inquiries
◼
Presenting the rate
◼
Overcoming price resistance
◼
Upselling
◼
Closing the sale
◼
Recapping the sale
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reservations
Hotel Direct Inquiries
Walk-in: A guest seeking a room who arrives
at the hotel without an advance reservation.
Curb appeal: The initial visual impression the
hotel’s parking areas, grounds, and external
buildings create for an arriving guest.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reservations
Central Reservation Systems
When guest call the toll free number to make a
reservation they will receive a:
◼
◼
Confirmation number
◼
Cancellation number
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reservations
Central Reservation Systems
Room night: The number of rooms used times
the number of nights they are sold.
For example, a guest who reserves 2 rooms for
5 nights each has made a reservation for 10
room nights
2 rooms 5 nights = 10 room nights
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reservations
Central Reservation Systems
◼
Room availability
◼
Black-out dates
◼
◼
Specific day(s) when the hotel is sold out and/or is not
accepting normal reservations.
Room rates
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reservations
Central Reservation Systems
◼
Seasonality of rates
◼
Room types
◼
Distances to local attractions
◼
Hotel amenities and services offered
◼
Directions to the property
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reservations
Internet Booking Sites
To see how easy it is to navigate a hotel brand’s
internet site please visit either of the following
hotel sites:
www.choicehotels.com or www.marriott.com
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reservations
Internet Booking Sites
To view a non-brand-specific Internet booking
site (sometimes called third-party booking
sites), please visit either of the following sites:
www.travelocity.com or www.hotels.com
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reception and Guest Service
Pre-arrival
Registration (Reg) card: A document that
provides details such as guest’s name, arrival
date, rate to be paid, departure date, and other
information related to the guest’s stay.
In conversation, most often shortened to “Reg”
card, as in: “Where is the signed Reg card for
room 417?”
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reception and Guest Service
Pre-arrival
Registration (Reg) card: A document that
provides details such as guest’s name, arrival
date, rate to be paid, departure date, and other
information related to the guest’s stay.
In conversation, most often shortened to “Reg”
card, as in: “Where is the signed Reg card for
room 417?”
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reception and Guest Service
Arrival and Stay
◼
Correctly registering guests is a five-step
process that consists of:
1.
2.
3.
4.
5.
Greeting the guest
Confirming the information on the registration
record
Securing a form of payment
Room assignment
Issuance of room keys
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Reception and Guest Service
Departure
◼ The actual settlement of the guest’s bill
includes:
◼
◼
◼
◼
Confirmation of the guest’s identity
Presentation of a copy of the bill for the guest’s
inspection
Processing the guest’s payment
Revising the room’s status in the PMS to designate
the room as vacant and ready to be cleaned
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Guest Accounting
◼
Possible charges that hotel staff must
accurately identify and then post to the
guest’s folio:
◼
◼
◼
◼
◼
◼
Guest room charges, including appropriate taxes
In-room safe charges
In-room mini-bar charges
Pay-per-view movies/games
Internet access charges
Restaurant or bar charges
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Guest Accounting
◼
◼
◼
◼
◼
◼
◼
◼
Telephone tolls
Gift shop purchases
Laundry charges
Parking charges
Meeting room charges
Audio-visual equipment rental
Banquet food or beverage charges
Business center charges
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Guest Accounting
Data Management
Interface: The process in which one datagenerating system automatically shares all or
part of its information with another system.
Call accounting: The system used by a hotel
to document and charge guests for the use of
their in-room telephones.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Guest Accounting
Data Management
PBX: Short for “Private Branch Exchange.” The
system within the hotel used to process
incoming, internal, and outgoing telephone
calls.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Guest Accounting
Night Audit
◼ Completing the night audit consists of the
following eight key items:
1.
2.
3.
Posting the appropriate room and tax rates to the
folios of the guests currently in the hotel.
Verifying the accurate status of all rooms
recorded in the PMS.
Posting any necessary adjustments to guest
folios.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Guest Accounting
Night Audit
4.
5.
6.
Verifying that all legitimate non-room charges
have been posted throughout the day to the
proper guest folio.
Monitoring guest account balances to determine
whether any are over the guest’s established
credit limit.
Balancing and reconciling the front office’s cash
bank.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
Guest Accounting
Night Audit
7.
8.
Updating and backing-up the electronic data
maintained by the front office.
Producing, duplicating, and distributing all
management-mandated reports, such as those
related to room and non-room related revenue,
ADR, occupancy percentage, source of business,
and in-house guest lists.
Foundations of Lodging Management, 2e
David Hayes
© 2012, 2008 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.
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