Room Division

Introduction

Founders of the Hotel Industry

A history of the founders of the hotel industry provides an opportunity to reflect on our heritage. Learning about the founding giants such as Statler, Hilton, Marriott, Wilson,and Schultz, to name a few, allows a student of the industry to discover the interesting lineage of hoteliers. Studying the efforts of the innovators who carved out the modern hotel
industry may help future professionals with their own career planning.

Some examples about founders of the hotel industry;

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.”

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.

Ernest Henderson and Robert Moore

Ernest Henderson and Robert Moore started the Sheraton chain in 1937, when they acquired their first hotel, the Stonehaven, in Springfield, Massachusetts. Within two years, they purchased three hotels in Boston and soon expanded their holdings to include properties from Maine to Florida. At the end of its first decade, Sheraton was the first hotel chain to be listed on the New York Stock Exchange.

1. DESCRIPTION of a HOTEL

A hotel is an establishment that provides paid lodging on a short-term basis. The provision of basic accommodation, in times past, a hotel room was consisting:

a room with a bed
a cupboard
a small table
a washstand

However, in these rooms with modern facilities includes:

en-suite bathrooms and air conditioning or climate control
a telephone
an alarm clock
a television
a safe
a mini-bar with snack foods and drinks
facilities for making tea and coffee

Luxury features includes:

bathrobes and slippers
a pillow menu
twin-sink vanities
Jacuzzi bathtubs.

Larger hotels may provide additional guest facilities such as a restaurant, swimming pool, fitness center, business center, childcare, conference facilities and social function services.

1.1.Etymology

The word hotel is derived from the French hotel (coming from hôte meaning host), which referred to a French version of a townhouse or any other building seeing frequent visitors, rather than a place offering accommodation. In contemporary French usage, hôtel now has the same meaning as the English term, and hôtel particular is used for the old meaning.

1.2.Classification

The main categories of hotels are as follows;
Full Service Upscale
Examples include Conrad Hotels, Ritz Carlton, Four Seasons Hotels, and JW Marriott
Full Service
Examples include Hilton, Marriott, Doubletree, and Hyatt
Select Service
Examples include Courtyard by Marriott and Hilton Garden Inn
Limited Service
Examples include Hampton Inn, Fairfield Inn, Days Inn, and La Quinta Inn
Extended Stay
Examples include Homewood Suites by Hilton, Residence Inn by Marriott, and Extended Stay Hotels

Timeshare

A timeshare is a form of ownership or right to the use of a property, or the term used to describe such properties. These properties are typically resort condominium units, in which multiple parties hold rights to use the property, and each sharer is allotted a period of time (typically one week, and almost always the same time every year) in which they may use the property. Units may be on a part-ownership or lease/"right to use" basis, in which the sharer holds no claim to ownership of the property.

Examples include Marriott Vacation Club, Westgate Resorts, and Disney Vacation Club

Destination Club

In a destination club, in exchange for a one-time, upfront, mostly refundable membership fee, and annual membership dues, a member gets access to a roster of luxury vacation homes around the world, which can be booked based on availability and reservation priorities, plus personalized services and resort amenities such as beach clubs, luxury spas, private chefs and more.

Destination clubs were "invented" in 1998, when Rob McGrath, a veteran of the luxury timeshare development business, launched Private Retreats. Since then over 30 companies have launched clubs targeting affluent families that want the benefits of second home ownership, but with more flexibility and choice in where they vacation each year.

Others;

1. Motel: a motel is a hotel designed for motorists, and usually has a parking area for motor vehicles.

2. Hostel: hostels provide budget oriented, sociable accommodation where guests can rent a bed, usually a bunk bed, in a dormitory and share a bathroom, lounge and sometimes a kitchen. Rooms can be mixed or single-sex, although private rooms may also be available. Hostels are generally cheaper for both the operator and the occupants; many hostels have long-term residents whom they employ as desk clerks or housekeeping staff in exchange for free accommodation.

3. Pension (lodging): a pension is a family-owned guest house or boarding house. These small businesses may offer special rates for travelers staying longer than a week

4. Guest house: a guest house (also guesthouse) is a kind of lodging.It is a private home which has been converted for the exclusive use of guest accommodation which is similar to a hostel, bed and breakfast, or inn

5. Boutique hotel: boutique hotel is a term to describe intimate, usually luxurious or quirky hotel environments. Sometimes known as "design hotels" or "lifestyle hotels", boutique hotels began appearing in the 1980s in major cities like London, New York, and San Francisco.

6. Bed and breakfast: a bed and breakfast (or B&B) is a small lodging establishment that offers overnight accommodation and breakfast, but usually does not offer other meals. Typically, bed and breakfasts are private homes with fewer than 10 bedrooms available for commercial use.

7. Resort: a resort is a place used for relaxation or recreation, attracting visitors for holidays or vacations. Resorts are places, towns or sometimes commercial establishment operated by a single company

8. Roadhouse (facility): a roadhouse is a commercial establishment typically built on a major road or highway, to service passing travelers. Its meaning varies slightly by country.

2.HOTEL ORGANIZATION

The staffing and deployment within hotels can differ from property to property. Many factors go into determining the organizational makeup of a hotel. At the most basic level, a hotel will be staffed based on the following criteria:

A hotel's size classification
A hotel's location type
A hotel's product type (service level and target market)

If one was to strictly look at the management organization of a hotel, each of the above would play a role in dictating who and how many did what. How each of these criteria affects the organization also depends on the hotel's lodging management association and the mandates, if any, placed upon it by a management company or hotel chain.

A small owner-operated hotel would obviously need fewer managers than a mega-size hotel operating under a management contract. A resort, simply by the nature of its facilities and services, would need more management personnel than an airport hotel of the same size. A limited-service hotel does not have the need for restaurant or kitchen help because they do not typically offer that amenity.

Given the variety of ways a hotel could deploy its staff using these organizational criteria, a standard example that covers all would be difficult. It would be most useful to select a hotel profile that illustrates the most widely used organizational deployment structure. Therefore, later in this chapter an in-depth analysis of the organizational deployment of an example hotel will be conducted.

2.1.Functional Departments

Most full-service hotels have six main functional departments. Each of these departments will exist, in one form or another, regardless of location type or product type. It is when the other organizational criteria are considered that the problem of defining the size and scope of these departments arises. Before looking at the organizational hotel example, an overview of these functional departments is warranted.

2.1.1.Functional Departments

Rooms Division
Food and Beverage
Accounting
Human Resources
Engineering
Sales/Marketing and Catering

A variety of responsibilities and duties exist within each department. All these departments rely on each other to provide the best product. Understanding each department is vital to understanding the hotel as a whole.

2.1.2.Room Division

This section first provides a general overview of the rooms division. It concludes with an analysis of other hotel departments. Successive chapters deal with other rooms division departments--namely, housekeeping, reservations, and night audit.

Within a hotel, perhaps no area is as vital and in some cases as visible as the rooms division. The rooms division is the "nerve center" for most of a hotel's operations. It is, after all, the area most responsible for the main hotel product, the sleeping room.

This is evident in the hotel industry maxim: "Everything Begins with the Rooms Division."
The rooms division of a hotel is an image easily conjured up in the mind of most people. They know what happens at the front desk (on the surface, at least). Most people understand what a bell person does. People understand the basic premise of housekeeping, and so on. Even if the actual titles differ, such as "greeter" for a bell person, or "room attendant" for a housekeeper, their functions are fairly universal. What goes on behind the scenes in the rooms division is what most people do not know.

The rooms division is a functional area within the hotel that includes;

The front Office
Housekeeping
Reservations
Night audit
Loss prevention/ Security departments.

The size and scope of these areas may differ from one hotel to another depending on the hotel size and product type. The management philosophy of the hotel may also affect the organizational structure of the rooms division.

2.1.2.a.Front Office

Within the rooms division, lies the front office. The front office is comprised of two main areas:

1. Front desk,
2. Uniform services.

Each of these areas performs unique roles. They report directly to the front office manager.
Front Desk. Being one of the first (and often last) points of contact with a hotel guest, the front desk plays a big role in the hotel.

The front desk manages the in/out flow of guests on a daily basis. The front desk is often called the "hub" or "command center" of the rooms division because so much information is funneled through it.

The front desk is the logical point of contact for the dissemination of information for guests and other hotel employees.

Uniform Services. Uniform services encompass the areas within the front office other than the front desk. Sometimes referred to as guest services, the areas within uniform services include:

Bell stand
PBX
Valet parking/Garage
Shuttle driver
Concierge
Door persons

The name derives from the fact that each of these employees used to wear a uniform of some sort. The garage and valet parking groups manage guests' automobiles. The bell staff assists guests to and from their rooms. The concierge tends to special guest needs of any sort. The private branch exchange or PBX manages communications into and out of the hotel.

Confusion may arise in identifying this department because today it is uncommon to find PBX, for example, in uniform, as they never actually greet a guest in person. Also, although housekeepers wear uniforms, they are not considered uniform services in this definition.

2.2.What Is The Importance Of Front Office ?

Front office is a business term that refers to a company's departments that come in contact with clients, including the marketing, sales, and service departments.
In the hotel industry, the front office welcomes guests to the accommodation section:

Meeting and greeting them
Taking and organizing reservations
Allocating check in and out of rooms
Organizing porter service
Issuing keys
Other security arrangements
Passing on messages to customers
Settling the accounts.

2.2.a.The Importance of Front Office

The Front Office is the face of the hotels at the first time. Because, customers first meet with the front office. That’s why front office has a big importance for the hotels.

2.3.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
Revenue per Available Room

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).

3.RESERVATION

Hotel reservations systems, commonly known as a Central Reservation System (CRS) is a computerized system that stores and distributes information of a hotel, resort, or other lodging facilities.

A Central Reservation System is a tool to reach the Global Distribution Systems as well as Internet Distribution Systems from one single system, namely a central reservation system.
A CRS is mainly an assistant for hoteliers to manage all of their online marketing and sales, where they can upload their rates & availabilities to be seen by all sales channels that are using a CRS. Sales Channels may include conventional travel agencies as well as online travel agencies. A hotelier using a central reservation system easens his/her tasks for online distribution, because a CRS does everything to distribute hotel information to the sales channels instead of the hotelier.

• Individual, group, shared, and multi-rate reservations
• Add, change, and cancel bookings including multiple legs
• Standard, package, negotiated, and group rates (via on screen button)
• Multi-Currency rate displays
• Sell messages dynamically linked to CRO office, property, rate or allotment code
• Geographical and regional single or multi-property search
• Property details including pictures, raster maps, rate and room type lists, nearby attractions, and point of interest information
• Links to external context databases to provide in-depth property, rate, and room details
• List of room types and rate codes
• List of rate availability strategies and restrictions
• User definable products by rate code
• Wait list capabilities
• Quote rates system set up initial and secondary rates per property, per day
• Query system for reservation action items
• Intuitive, logical sales process flow
• Links

3.1.Types of Reservation Systems

3.1.a.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 inter hotel property referrals, a system in which one member-property recommends an- other member-property to a guest, and national advertising.

3.1.b.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 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.

3.1.c.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.

3.1.d.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.

3.1.e.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.

3.2.The Important of Forecasting and Overbooking

3.2.1.Forecasting

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

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. 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

3.2.1.a.Important of Forecasting

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
A security department’s requirement to be aware of activity projected for the hotel
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.

A rooms forecast assists in planning for delivery of service.

ROOMS FORECAST FROM: ___ SUN DEC 1 ___ TO: ___ SAT DEC 7 ___

GUAR RES 25 50 55 40 45 10 10
CONF RES 20 25 20 20 25 10 15
WALK-INS 80 80 80
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

3.2.2.Overbooking (Occupancy Management) and Its Importance for Hotel Industry

The concept of overbooking—accepting reservations for more rooms than are available by forecasting the number of no-show reservations, stayovers, under stays, and walk-ins, with the goal of attaining 100 percent occupancy—is viewed with skepticism. 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.”
To explain overbooking, I found an example and I put it in my report.

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 Arrivals: Conﬁrmed Guaranteed Total Walk-ins Stayovers * No-shows TOTAL**
0 40 30 70 20 10 5 95 10 20
* Yesterday’s total departures
** Yesterday’s total departures arrivals walk-ins no-shows
Notes: 10/1 Dental Committee (125 rooms), checkout 9:00a.m.–10:30a.m.
Lion’s Convention (72 rooms), check-in 1:00p.m.–4:00p.m.
10/3 Lion’s Convention, checkout after 10:00a.m. group brunch; checkout extended until 1:00p.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 4:00p.m.–6:00p.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.

They have held hotel overbooking to be customary and justiﬁable practice for offsetting the losses from no-shows.

Hoteliers and front ofﬁce managers who practice overbooking do so to meet an organization’s ﬁnancial objectives. They do not intentionally overbook to cause problems for the traveler.

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. 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, stay overs, under stays, 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 no- show rate.
Group travelers may have a 0.5 percent no-show rate, with no-shows all coming from one or two particular bus companies.
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. 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 stay over rates.

For example;

1. Employees of a corporation who travel with spouses may extend a Thursday and Friday business trip to include a Saturday.
2. A group conference scheduled from Monday through Thurs- day may encourage the attendees to stay longer to sightsee.
3. Under stays are guests who arrive on time but decide to leave before their predicted date of departure.
4. Pleasure travelers may ﬁnd their tourist attraction less interesting than anticipated.
5. Urgent business may require the corporate client to return to the ofﬁce sooner than expected.
6. Maintaining accurate records will help the front ofﬁce manager to predict under stays.

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 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 under stays,
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 reservations who did not show up.

Here is an example of how to use this formula:

1. If a 200-room lodging property has 75 conﬁrmed reservations with a 5 percent no- show factor in that category, 71 rooms can be predicted to be occupied by guests with conﬁrmed reservations.
The no-show factor is based on historical records of this category for this property maintained and reviewed by the front ofﬁce manager.

2. There are 100 guaranteed reservations, with a historical no-show rate of 2 percent. This means that 2 rooms have probably been reserved by no-show guests and may be available for sale.
The policy of the hotel may or may not allow the sale of these 2 rooms. If the hotel knows of other hotels in the immediate area that have 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 unpleasant scene can occur if an exhausted guest arrives at 3:00a.m. with a guaranteed reservation and ﬁnds no vacancies.

3. The predicted number of stay overs 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 under stays 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 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.

3.3.Guest Segmentation

“Its not a demographic, it’s a psychographic”
Jim Abrahamson, Hyatt ,

** Guest segmentation is no longer about age..!
** Guest segmentation is about connectivity..!
** Guest segmentation is about engagement..!
** Guest segmentation is about communication..!

3.4.Distribution Channels

A distribution channel is the vehicle utilized to make a product or service available to the consumer.

In hospitality, a successful channel management strategy consists of selling inventory at the highest possible rates, while pushing reservations through the lowest cost channels. Those are challenging tasks, which require an understanding of the wide array of distribution options available, their sales models, and how they interact.

One of the clear difficulties is the lack of standardized definitions to describe distribution channels

3.4.1.Hospitality Distribution Channels

In hospitality, particularly in the lodging industry, the traditional main distribution channels were the call center and the travel agencies.

Over time, other channels were created. For the most part, these new channels acted as intermediaries between the property and the global distribution system (GDS)/travel agent.
The advent of the Internet led to profound changes in hospitality distribution. New business models were created, as well as online-based reservations networks, which allowed worldwide exposure to products while avoiding intermediaries such as the GDSs.

3.4.1.a.Call Center

This is a central location phone bank, also called central reservation office (CRO). It consists of a telephone and a reservation agent.

Generally, call centers have the ability to place multiple reservations at the same time through central computer reservation systems (CRSs), usually through an 800 number. Hotel companies may have call centers that serve many different properties within the corporation.
Centralized call centers have the advantage of providing consistent service and decreasing the company’s costs, such as management and training. Multi-branded companies, however, may have different call centers and, in some cases, different CRSs within their system, mostly due to mergers and acquisitions.

The term ‘CRS reservations’ is sometimes used to refer to the reservations originating from the call center, even though the CRS serves as an intermediary between most other channels and the property management system (PMS). There are companies that provide third party call centers (e.g. Utell), which may handle all incoming calls or overflowing calls in periods of high demand. They may also provide central reservation services for companies that do not have their own CRS.

3.4.1.b.Global Distribution Systems

These are technologies that allow worldwide realtime distribution. A global distribution system (GDS) contains a database with information on travel products (air, hotel, rental car, etc.), such as schedules, prices, availability, and descriptions.

Users are able to access information as well as book and/or purchase the hospitality products. In the years since their inception, they have grown to serve a worldwide clientele who use nearly 500,000 access points with a full array of travel services.’

The four major GDS systems are Sabre, Galileo/Apollo, Amadeus, and Worldspan. Those systems, however, were built on older technological platforms and do not interface directly with most property management systems (PMSs). Intermediaries, the switching companies, provide interfaces between the suppliers and the GDSs.

The supplier pays fees per reservation to a GDS and to the switching companies. Because accessing information from a GDS requires a physical GDS terminal and specific training in codes and search techniques, the GDSs are usually used by travel agents and not by the end consumer. Some operators used the term GDS to refer to the travel agents, mostly because they used to be the main users of the GDSs.

3.4.1.c.Travel Agents

Travel agents act as intermediaries between the customer and the supplier. The role of the travel agent is to provide information to the customer as well as to effectuate the booking and purchase of the hospitality product.

Examples of travel agents are Carlson Travel, Thomas Cook, and International Leisure Corporation. They access rates and place reservations in a variety of ways. The most common is through a global distribution system (GDS).

Travel agents may also contact a property directly, through wholesalers, or by accessing the Internet. The traditional travel agents are also referred to as ‘brickand- mortar’ travel agents. Travel agents typically work on commission, they sell rooms at a negotiated rate or at the prevailing rate, and receive a percentage of the sale from the suppliers.

3.4.1.d.Meeting Planners, Group TA,Corporate TA ( Tourist Agencies )

Meeting planners and group travel agents, also simply called ‘third parties’ or ‘third party meeting planners,’ are companies that specialize in providing business travel services, such as meeting planning, incentive travel, and convention services.

Their roles may overlap, but generally these third parties prescreen hotels, negotiate rates, and organize events, working with travel agents or acting as specialized travel agents in order to cater to corporate group travel needs.
Examples of third parties are Carlson Marketing Group, PGI HRT, and Krisam. Corporate travel agents perform similar roles, but they are part of a corporation (e.g. American Express, Sony, etc.) and attend exclusively to the corporation needs. National, state, and local tourism agencies

These agencies promote tourism in certain geographic areas. They may be sponsored by the state or constitute business associations with the common goal of providing information and promoting travel in certain regions.

Tourist agencies advertise resources, tourist attractions, and help customers to plan their trips providing maps, guides, and effectuating bookings, generally though destination management systems (DMSs). They are usually located either in strategic target markets or in entrance or strategic points.

3.4.1.e.Tour Operators and Wholesalers

According to Lewis and Chambers (1999), tour operators and wholesalers differ from the previous channels in that they take nominal possession, or secure an allotment, of the suppliers inventory to sell to the public. Wholesalers, also called consolidators, can often negotiate for deeply discounted rates because they buy large volumes or have access to a surplus inventory of deeply discounted tickets and hotel rooms that they are free to sell at slightly marked-up prices. Their advance purchase agreements for hotel rooms also mean that consolidators are often able to provide inventory when other resources list products as sold out. The wholesalers obtain rates and availability directly from the supplier and create packages with different accommodation and transportation options, such as airlines, cruise lines, railroads, car rentals, and bus companies, which are sold directly to the consumer or through travel agents. Examples of wholesalers are America West, GoGo Tours, and Mark Travel. Tour operators offer discounted packages, which may include meals and tours, and may specialize in certain markets or destinations. Motorcoach tours are typical tour operator products. The Japanese Tourist Bureau ( JTB) is an example of a tour operator.

3.4.1.f.Consortia, Affiliations, Companies

These are associations with common marketing efforts.
In the United States, the term ‘consortia’ normally refers to a conglomerate of travel agencies.

In some other countries, particularly in Europe, ‘consortia’ refer to entities that provide chains or individually owned and operated hotels with access to global distribution systems and representation services, acting as intermediaries between the supplier and the travel agents.

Affiliations and reservation companies have similar roles.Membership in a consortium is a quality statement. The properties become associated to a third party brand and there are entry requirements, even though the hotels still keep an individualized image.

An example of a consortium is the ‘Leading Hotels of the World.’ There are also entry requirements and certain consistency among the members in affiliations. The hotel name, however, is secondary, and the affiliation brand becomes the flagship for the members. Best Western Hotels is an example of an affiliation.

There are virtually no entry requirements for reservation companies. Hotel companies use reservation services when they wish to delegate GDS distribution and reservation processing, as well as broad Internet distribution, to a third party.

Unirez, Utell, and TRUST International are examples of reservation companies. Most reservation companies are also known as representation companies, because they usually provide representation services.

3.4.1.g.Representation Companies

These companies act as sales organizations, representing hotels through their sales force, the representatives, in regional offices located in different geographical areas.
Representation companies eliminate the supplier’s need for establishing sales offices in certain markets. European Hotels Representation and David Green Organization are examples of representation companies.

A special case of representatives are the ‘junket reps,’ individuals who have a casino clientele and work with casinos that are promoting gambling trips. Junket reps are particularly active in international markets.

3.4.1.h.Internet Channels

These channels involve the online dispersal and purchase of travel products, and include Internet counterparts of the traditional channels. These companies interact with the customer in different ways, forming complex and dynamic distribution arrangements.

The online reservation environment has two major players: hotel companies and third party travel companies. Most dot-commers currently use the so-called ‘merchant model,’ which consists of a certain mark-up over rates to sell rooms in lieu of commissions and fixed fees used in traditional GDS-based channels.

Internet channels also use innovative sales strategies, such as ‘name your own price auctions’ and opaque models.

4.Hospitality and Quality

Delivering quality service will be one of the major challenges facing hospitality managers in the opening years of the next millennium. It will be an essential condition for success in the emerging, keenly competitive, global hospitality markets. While the future importance of delivering quality hospitality service is easy to discern and to agree on, doing so presents some difficult and intriguing management issues.

Since the delivery of hospitality service always involves people, these issues center on the management of people, and in particular on the interactions between guests and staff, interactions that are called service encounters.

Service encounters are the building blocks of quality hospitality service. How can hospitality businesses manage them more effectively?There are two step process in the evaluation of a service chain.

1. Hospitality managers should identify each encounter in the chain that they wish to take a part, and then single out those that are operational or strategic significat – in effect, focusing in on the few encounters that really make a difference to guest experience and thus to the botto line.
2. Apply what professionals called the 6 S’s to improving these critical encounters through effective redesign.

It is important to identify a service chain and then to break it down into the component encounters.Just how much detail is needed? Too much detail takes time and resources, and may confuse rather than clarify. Too little and we may miss important problems. The process is iterative,with more detail needed in some areas and less in others,and with an overriding consideration that the chain is assessed not just from the point of view of a manager but also from that of a guest.

Hospitality service encounters run the gamut from those that are very trivial to those that are highly critical. They vary greatly in their nature and may be simple or complex, standard or custom, low tech or high tech, remote or friendly, low or high skill, frequent or occasional, and so on. They can be instrumental dealing with the performance of necessary utilitarian activities or can involve emotion-laden hospitality events.

An initial management task is to understand a service encounter by discerning and dealing with those attributes that are most important to guests. In doing so, pertinent questions must be raised about the specific service encounter(s) under consideration.

With respect to a particular service encounter, hospitality managers might raise many questions like the following:

• Exactly what happened?
• What were the guest reactions?
• Should it be done differently?
• What resources would assure optimal performance?
• What changes should be made?
• How can such changes best be put into effect?

The specific encounter(s) under consideration will, of course, indicate the kinds of questions that should be pursued. It is important to obtain adequate information to understand the situation thoroughly. Determining the context of a situation relating to a hospitality encounter that has gone wrong establishes parameters for improvement.

All this is part of the second step. With the information at hand hospitality managers can organize, and analyze the data and it is here that the 6S approach can help. These are:

1. Specification
2. Staff
3. Space
4. System
5. Support
6. Style

Specification means clearly detailing information about the What, When, Where, and How, of service encounters.It requires giving careful thought to the linkages between particular service encounters and others in the service chain.

The starting point for hospitality service encounter analysis is specifying clearly the overall service strategy and what it is designed to achieve. Some questions about topic are given below:

Is the purpose cost or service quality leadership?
Is it to provide unique service values, customized or standardized, complex or simple, frequent or occasional?
Is it to provide service at any reasonable cost?
Is service limited to a luxury package, or does it include budget travellers?
Which staff members are involved in providing the service?
What skills do they need?
What training has been provided?
How committed are they to service goals?
Is team cooperation or individual empowerment required?
What attitudes are appropriate-- friendly, open, helpful, warm service, or efficient, unobtrusive, uninvolving, unthreatening service?
What staff members deal with guests?
How close are the 'backroom' staff to guests? Are staff presentations and appearances appropriate?
To what extent are guests involved in the provision of service?
What skill, knowledge, information, or experience do guests need to fulfill their roles? What are likely guest expectations?
What communication occurred between guest and service provider?
Did the dynamics of the exchange proceed smoothly?
Do any language and cultural barriers exist?
Where will the service encounter occur?
Is the space appropriately designed to facilitate the service encounter? Is there adequate space to handle each of the activities such as waiting, completing forms, storing or handling luggage, assembling tours?
Is signage appropriate?
Is the decor attractive to guests and supportive of activities that have to be carried out?
Are the necessary systems to support the encounter in place?
Is the information necessary to respond effectively to guests' needs readily available?
Is the appropriate technology being fully used?
Are the interfaces between different functions such as housekeeping and front office, sales and front office, fully operational?
What measurements of quality, or performance, are in use?
Are they the most helpful for both service providers and managers?
Are the criteria for success clearly defined?
Is everyone involved aware of guest needs and concerns?
Are the service providers given the facilities and financial and human support needed to do the job?
Is the technology appropriate?
Have employees been given the training needed?
Are incentive and reward systems geared to the tasks to be performed? Is supervision supportive?
Does organization structure help or hinder performance?
Are the suggested procedures appropriate?
How should the service encounter be conducted, given the enterprise culture?
Is the management style, and marketing orientation, appropriate for the tasks?
Do service providers have the appropriate attitudes?
Is the right emphasis being placed on service quality?

When hospitality managers have carried out this two step process they will be in an excellent position to make decisions that will both improve the quality of hospitality services provided and guest perceptions of them. Zeroing in on hospitality service quality in this manner will help hospitality businesses meet the service challenges of the millennium, enhance their market positions, and reap the associated profit rewards.

5.Property Management Systems

In the hospitality industry, a property management system is a computerized system used to manage guest bookings, online reservations, point of sale, telephone and other amenities. Hotel property management systems may interface with central reservation systems and revenue or yield management systems, front office, back office and point of sale systems.
There are many different types of property management systems available, but a user/business will want to work with the different companies to determine which property management system best fits their needs.

Bibliography

http://www.highbeam.com/doc/1G1-184324925.html
http://www.pmrconsulting.com/case_studies/Guest-segmentation - and -occupation-rate-analysis-within-the-hotel-industry-in-Poland.shtml
http://www.hotelmule.com/
Presentation by Eric B. Hansen, AIA, ISHC,Lodging Innovation The Guest
Quality of Hospitality Service: A Challenge for the Millenium By William Lazer, Ph.D., and Roger Layton, A.M. / April 1999
http://en.wikipedia.org/wiki/Property_management_system

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