FRONT OFFICE OPERATION AND ADMNISTRATION

CHAPTER 1

WHAT IS FRONT OFFICE

Front office is the term used in hotels to cover various sections which deal with reservations, room
allocation, reception, billing and payments. The front desk receptionist is responsible for assisting
and directing guests, monitoring incoming inquiries and ensuring proper check in procedures are
followed. This position also provides customer service support to the guests. Front office members
work in an environment with a high level of guest interaction. Other responsibilities in the
department include checking guest in and out of the hotel, assisting guest with itinerary planning
and ticket sales, tagging and delivering luggage, and providing information to guests.

ADVANCE BOOKINGS

INTRODUCTION

We will begin our study of the work of front office with a look at its clerical functions. The first of
these is dealing with advance bookings. This is the first part of a continuous process that runs
through check-in (arrival and registration) to the guests stay in-house and finally check-out
(departure). The first contact most would-be guests have with a hotel is with its telephone switch
board, which is part of front office. The telephonist puts the guest through to someone in the
reservations department, who takes his booking and deals with any subsequent correspondence
such as confirmations, amendments or cancellations.

ENQUIRIES

The process of making a booking begins with an enquiry. Guests contact hotel in various ways. The
most common are as follows:

1. In person. Such guests are commonly known as “walk-ins”. They are often people who are
travelling unexpectedly, or touring an area out of season. Since few hotels are anything like
100 per cent full, this approach is often successful. Most walk-ins need accommodation
immediately. Another possibility is that a local resident wants to make an advance booking
on behalf of someone else.
2. Letter. In the old days advance bookings generally took this form and were often for several
months ahead. Nowadays, it has gone out of fashion, letters offer the great advantage of
being clear, Unambiguous and permanent. Letters are also useful evidence that a contract
was actually agreed.
3. Telephone. Nowadays bookings are far more likely to come in the form telephone calls.
These generally request accommodation for only a day or two ahead (and sometimes only a
few hours). The telephone is fast and convenient, but suffer from the major disadvantage
that it does not provide a permanent record. This means that the speaker at either end of
the line have to make their own notes of what was agreed.
4. Fax. (Facsimile transmission). Fax uses electronic scanning techniques to send copies of
documents over ordinary telephone lines to a special machine which prints out an identical

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 copy at the end. A fax will print out messages received even if it left unmanned. Using fax, a
would-be guest can send a booking instantaneously to a hotel on the other side of the
world, and receive back written confirmation within a matter of hours or even minutes.
5. The internet and other computerized communications. Write records are becoming
increasingly old-fashioned and what is called “e- mail” (electronic mail) is expanding rapidly.
This means that a provincial travel agency’s computer can talk to a hotel’s computer in
another city, making bookings directly and leaving only an electronic record. Furthermore, it
is possible for an individual guest to make a booking directly through his personal computer,
which will retain the details in its memory.
Note: Note that no single means of communication is ideal in terms of:

 Speed
 Convenience
 Economy

RESERVATION FORMS
Once the bookings have been received, it has to be recorded on the reservation form. The
actual layout will vary from hotel to hotel.
ADVANTAGES OF RESERVATION FORM
1. They provide a permanent record.
2. They summarize information in a standard format.
Even written communication can vary considerably in term of form and content.
Transferring the data from the origin source to standard reservation form makes it
easier to check.
3. The act as a prompt sheet. Would-be guests may leave out important information, and a
junior reservation clerk in a hurry might well forget to ask something vital unless she is
prompted by having to complete a form
4. They enable management to find out who handled the booking. The practice of
requiring reservation staff to sign or initial every reservation form they deal with is
useful in case there are any queries or errors.
5. They can provide a running check on progress. Instead of bulky file containing the
guest’s original letter of enquiry, the hotel’s confirmation and any subsequent
communications, you can simply tick off a series of boxes, such as provisional and
confirmation.
6. They can include information about the sources of bookings (e.g. private, travel agent,
etc.) and how they are made, which is useful for marketing analysis purposes.
THE BLACK LIST
A black list is simply a record of people whom the hotel does not wish to accept as guest.
There are two essential requirements.
1. It should be easy to consult.
2. It should NOT be accessible to guests.
There are a number of ways in which individuals can find themselves on a black list:

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 1. They may have stayed at your hotel before and then skipped (run off without paying
their bill) hotels commonly exchange information about suspect characters, and
many black lists are compiled in conjunction with other establishments.
2. They may have shown themselves to be obnoxious in some way, perhaps by
becoming violent drunk, abusive or quarrelsome and thereby disturbing other guest,
or damaging your fixture and fittings.
3. You may suspect them of having stolen something, either from you or another
guest.
4. Finally they may be employed by a firm whose solvency is in doubt. Some companies
are notoriously slow in paying their bills, and you simply decide that it isn’t worth
the hassle and aggravation of trying to collect.
OFFERING ALTERNATIVES

Never respond to a request for a single room on the 15th with I’m sorry, we’re full’.
Haven’t got anything else you could offer? Your order of priority ought to be:

1. A different type of room.

If the room that the guest is looking for is not available you can persuade the guest
to occupy another type of room. Don’t you have a twin you might offer at an
appropriately reduced rate?
2. A different date.
It is surprising how flexible some guests can be, and if you only win 10 per cent of
the time you will still be well ahead.
3. A companion hotel.
If you are located in a large city, you may well have one or more sister hotels nearby.
The relationship is often one of mutual competition, but it makes sense to see
whether one of them can take your overflow.
4. Another hotel.
If you can’t fit your caller into one of your own hotels, then try someone else’s.

THE BOOKINGS DIARY

The bookings diary’s main purpose is to provide a list of arrivals on any particular
night. It is not so much a specific document as a function; for hotels vary very much
in the way they record this information. The diary importance is shown by the fact
that manual systems normally produce it by means of an additional entry, which is
inevitably expensive in terms of clerical time
THE TRADITIONAL BOOKINGS DIARY
This was just what its name suggests: a dairy diary in which reservations staff listed
all the arrivals due on that particular date.

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THE TRADITONAL BOOKING DIARY

Date of arrival.....................................

Date booked Name Stay Room Terms Other details

27.1.09 Mr/s 2N 24 B&B Arriving late

carter

3.2.09 Mr 1N 16 Room _
Swann only

5.2.09 Miss 3N 12 Inclusive _

Price

6.2.09 Mr 6N 101 Room _

m’pombo only

THE WHITNEY ADVANCE BOOKING RACK

Another approach was pioneered by the American Whitney Corporation. It is known as the Whitney
system. The Whitney System used to most common in large and busy hotels, and has consequently
tend to be suspended by computers nowadays. However it may still be found acting as a back-up
manual system and you to be familiar with it. The system is based on the use of standard sized cards
or Shannon slips. These colours coded to show various kinds of reservation (group, airline, VIP, etc)
the slips are designed to be placed in light metal carriers, which fit into vertical racks in such a way
that only the top part of the slip can be seen. It is possible to consult this whenever necessary
because the slips and their carriers can easily be pushed upwards in the rack.

D/arrival Name Room type Rate

D/departure

How received Who by Date

received

Agency (if any )

Account instructions

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 confirmation date

WHITNEY SLIP

ADVANTAGES OF WHITNEY ADVANCE BOOKIMG RACK

 Bookings can always be kept in date of arrival order, subdivided alphabetically.

 The rack and carriers can be reused, so that running expenses are limited to the cost the
paper slips.
 The rack can be fixed vertically, which saves space (often at a premium in hotel back offices.)

ROOM AVAILABILITY RECORDS

The next stage in the procedure requires us to check whether we actually have a room available.
There are three alternative systems which you may find in use in different kinds of hotels.

 The bedroom book (very small hotels).

 The conventional chart (small to medium hotels).
 The density chart (medium to large hotels).
In addition some hotels use stop /go or space availability chart to supplement the main
records.

1. THE BEDROOM BOOK (RESERVATINAS JOURNAL)

This is similar to the bookings diary except that we enter the guest name for every night
of his stay. It is usual to have a list the room types and numbers down the side of each
page so that we can make sure we don’t put a couple into a single room. Clearly entering
a guest name on every night of his stay increases the amount of writing to be done. If he
staying for seven days, we might have to write out his name seven times

Date... Date...

Room Name Particulars Room Name Particulars

101(s) Collins 101(S) Collins

102(T) Smith 102(T) Smith

103(T) 103(T)

104(S) 104(S)

105(T) Martin 105(T) Martin

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 106(T) 106(T)

THE BEDROOM BOOK

2. THE CONVENTIONAL CHART

This is a development of the bedroom book which is designed to be easier to read
and convenient to operate. The guest’s names are written in block capitals and their
arrival and departure dates rae indicated by < and > respectively.

THE CONVENTIONAL CHART

Month...

Room 1s 2n 3r 4t 5t 6t 7t 8t 9t 10t 11t 12t 13t

t d d h h h h h h h h h h

101(SB
)

102(TB
)

103(TB
)

104(TB
)

ADVANTAGES OF CONVENTIONAL CHART

 Conventional chart is simple to operate.

 It shows most of the reservations staffs need to know in an easy to read form.
 It is easy to enter to a lengthy stay
 The chart can display an entire month of bookings on one sheet of paper.

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THE DISADVANTEGE OF CONVETIONAL CHART

 The so called ‘long name short stay ‘problem.

Imagine that you have someone called ‘foulkes-fotheringham’ staying for just one night. It
can be to fit such a name into a relatively small space.
 The chart quickly becomes untidy because of amendments and corrections. It is usually
printed on stout paper with entries made in pencil to allow for this.
 You can only get 30-60 lines on one sheet if you are going to write the name legibly, which
means that this chart is limited to medium-sized hotels.
 It is not easy to count the number of free rooms on any one night. If you receive a request
for a group booking, you have to run your finger down the appropriate date column,
counting the number of black spaces and checking to see whether they are single or twin.

THE STANDARD DENSITY CHART

This is the development of the conventional chart, designed to overcome the letter’s weaknesses. It
can only be used in hotel with standardized rooms because its fundamental principle is that all
rooms of a particular type are blocked, i.e. grouped together. The reservations clerk does not
reserve a specific room she only books one of the particular types requested. The actual room
allocation is done on arrival. This means that the guest does not know which room he is going to
occupy until he arrives.

THE STANDARD DENSITY CHART

STOP/GO OR SPACE AVAILABILITY CHART

Convenient though it is, there can only be one density chart in a hotel. This sometimes proven
inconvenient in very large establishments where five or six reservation clerks might all find
themselves taking bookings at once, If a particular date was clear, the staff could go ahead and let
rooms without worrying. G/S (go slow) might mean that they could sell one or two rooms but had to
check whether they could accept a group.

January 1 2 3 4 5 6 7 8 9 10 1 12 13
1

February

March

April

May

June

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July

August

September

October

November

December

STOP/GO SPACE AVAILABILITY CHART.

GUARANTEED RESERVATIONS

Guaranteed booking is one for which the hotel receives payment whether or not guest turns up.
Apart from cases where the room is actually paid for in advance, there are two ways in which this
can happen:

1. Special agreements. These are usually cases where a company asks the hotel to hold rooms
for if where they are used or not.
2. Credit card bookings. These are guaranteed unless there is a specific agreement to the
contrary, which helps to explain why hotels much prefer this particular form of payment.

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 FRONT OFFICE OPERATION AND ADMINISTRATION
CHAPTER 2
CHECK-IN AND RELATED ISSUES

ARRIVAL AND REGISTRATION

The check-in process actually starts some time before guest’s arrival, for Front Office
commonly make out an arrivals expected on any specific date. Copies are circulated to
the housekeeper, telephonist, head porter and F&B manager. The arrivals list usually
prepared twenty four hours in advance.

CHECK-IN PROCEDURE
Guest action Front Office Task
Arrival Checks booking detail
Registration key Checks registration, allocation room and
issue
Goes to room Directs guest or arranges escort
Notifies other department, open bill
Uses hotel facilities Post charges, passes mail, etc.
Settles accounts Checks and presents bills
Departs Notifies other departments
Updates other departments

Check-In Procedure

ARRIVAL AND REGISTRATION

The arrival list
The check-in process actually starts some time before the guest’s arrival, for front
office commonly makes out an arrivals list beforehand. This is arrivals expected on
any specific date. Copies circulated to the housekeeper, telephonist, and head porter
food and beverage manager and possibly to the general manager. The list will not be
completely accurate because:
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1. Some of the expected guest may turn to be no shows.
2. There may well be some last minute (‘chance’) bookings.

The arrival list is usually prepared from the bookings diary. The entities are
rearranged so that they are in alphabetical order.

Date:....04/08/2014………………………
No. of Guests room Room
Name Adults Children Type No. No. of nights Arrival time Remarks
Adams 2 0 TB 204 2 6:00 pm
Jones 2 1 TB 306 3 6:30pm Cot
required
Lacy 1 0 S 110 1 7:00pm Regular
Ivy 2 0 DB 114 1 6:15pm
Gift 1 0 S 82 4 7:05pm

Figure 1: arrivals list

REGISTRATION
When a guest arrives, he must be greeted politely and then asked to register. This
means requesting him to put down certain particulars in a booking or a form.

Registration services three main functions:

1. It satisfies the legal requirements.
2. It provides records of actual arrivals as opposed to bookings. The traditional
justification for registration was that it provides some form of record in the case of
fire or other disaster.
3. It helps to confirm the guest’s acceptance of the hotels terms and conditions.

LEGAL REQUIREMENTS
These are at present to be found in the immigration order of 1972 which requires the
hotelier to distinguish between non-alien and aliens are currently:
 British passport holders.
 Commonwealth citizens.
 Citizens of Republic of Ireland (Eire).
 Members of NATO armed forces servicing in the UK.
 Foreign nationals serving with the UK’s armed forces.
 Foreign diplomats, envoys and their staff (this is under the Diplomatic privilege
Act 1964)

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 Any non-alien over sixteen years of staying for one night or more required to state his
full name and nationality. The law does not require him to give his address, or to sign
the register the register physically.

An alien is anyone who does not fall into the categories deemed to be non-alien. In
addition to his name and nationality, such guest is required to provide the following
information:

 The number of his passport or registration certificate.

 Its place of issues.
 Details of his next destination and if possible, his address there.

TYPES OF REGISTER
There are two types of register.
 Registration book.
 Registration card.

The advantages of registration book are:

 It is compact, relatively cheap and difficult to lose.
 It is hard to alter without detection.
 It records arrivals in chronological order.

The disadvantages of registration book are:

 It is slow if there are large numbers of guests.
 It lack confidentiality (guest can see who else has arrived).

The advantages and disadvantages of the registration card/form mirror those of the
registration book.

Date Forename Nationality Room Car reg. Passport Place Next

Surname Address No. No. No. of issue dest.

Registration book.

Registration Card

Surname:……………………………Arrival Date:……………………………………

Other name:……………………………………………………………………………
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Nationality:…………………………………………………………………………….

Address:……………………………………………………………………………….

…………………………………………………………………………………………

Room No…………………………Car Registration………………………………….

For foreign visitors only

Passport No:………issued at…………………Next destination……………………..

All visitors: Signature:………………………………………………………………

COMPUTERISED CHECK-IN
If the hotel is using a computerized system, it is usually possible to call up the guest
booking particular on the screen when he arrives, and continue to process from there.

AUTOMATED CHECK-IN
This is relatively new development. It is now possible to install a machine rather like a
bank dispenser which is able to handle arrivals and chance bookings without any staff
having to be present. Such machines are usually activated by a credit card. If the guest
has already made an advance booking, the machine is able to recognize this and
display details of the booking for him to confirm. The machine can then display a
personalized welcome and issue a computer coded rook key. If the machine does not
recognize the card number, is assumes that the owner is a chance guest and display a
menu showing the rooms available and their rates.

ADVANTAGE OF AUTOMATED CHECK-IN MACHINE

 They reduce costs. Maintaining twenty-four coverage of the reception desk is
expensive. The machine reduces the number of errors caused by the operator
fatigue.
 They can increase occupancy and room revenue. It is not known for bored, or
nervous, overtires or nervous night staff to simply shut up shop when there are still
rooms available. The machine does not become bored, over tired or frightened.
 They increase security. The hotel not have to leave front door open or maintain
cash floats in the front office overnight in order to deal with late check-ins.
 They can be moved closer to the customer. They could be placed on the street
outside hotel, for instance, or located at distance (at the local airport, for instant).

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 The disadvantage is a reduction in the hospitality element of the check-in process.
Most present-day guests still prefer to be greeted by a cheerful, pleasant receptionist.

ROOM STATUS RECORDS

It is necessary for a hotel to keep track of current status of each room so that it can
tell:
 If occupied by whom, for how long and for how much.
 If unoccupied, whether it is available for letting, not yet ready or unavailable
because it has been taken out of service for repairs or redecoration.

There are various ways of doing this:

1. BED SHEETS
Some hotels have handled this requirement of keeping a loose-leaf record known
as bed sheet. This had preprinted pages showed the rooms and their current letting
position. The previous day’s stays and arrivals were bought forward into the
appropriate columns on the following day’s sheet, using the date of departure entry
as a guide.

Day:………………………. Date:…………………….
Departures Stays Arrivals
Room Name Sleepers Rate D/D’ture Name Sleepers Rate D/D Nam Sleepers Rate D/D
e
101
SB
102
TB
103
DB

BED SHEET
2. ROOM RACK
The room rack or reception board is found in most medium—sized hotels
operating systems. It is a means of displaying the current position of every room in
the hotel. The chart shows future bookings and will be inaccurate because of no
shows and chance arrivals.

COMPUTERISED ROOM STATUS DISPLAYS

A computerized system does the same job as the manual room rack, but the
information is stored in an electronic memory rather than on a rack physically located
in front office. The computerized keeps track of rooms through the registration
process. It notes the rooms allocated and removes them from the list of those available
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for letting. When the guest checks-out, the computer adds the room to the list of those
to be cleaned.

GUEST INDEXES
MANUAL INDEXES
The manual room rack shows who is in any particular room but is not always easy to
find a particular guests’ name, especially in very large hotels with high occupancies
and high turnover of visitors. This made it necessary numbers. It was particularly
useful to the telephonists, who had to know which room a guest had been allocated in
order to put calls through to him.

GUEST INDEXES
MANUAL INDEXES
The manual room racks shows who is in any particular room but is not always easy to
find a particular guests’ name, especially in very large hotels with high turnover of
visitors. This made it necessary for such hotels to maintain an alphabetical guest index
of current guests with their accompanying room numbers. It was particularly useful to
the telephonists, who had to know which room a guest has been allocated in order to
put calls through to him.

COMPUTERISED GUEST NAME SEARCH FACILITIES

A computer can handle this type of query without any need for additional entries. It
can give you room status information, or tell you which room a particular guest is in.
The program will normally give you full details of all guest who meet the criteria
selected, including their data of arrival departure date, credit status and whether there
are any messages waiting for them.

ROOM ALLOCATION
Guest preferences should be respected whenever possible, and room allocation should
be conducted along the following lines:
 VIPS should be allocated one of the best available. A note may have to be placed
in the room rack to make sure that the room selected is not let to someone else.
 Guest with special requirements (e.g. the disabled) should be tested in the same
way.
 Regulars, early bookings and long stays should be given priority in respect to the
better rooms.

GUEST IN RESIDENCE
ROOM CHANGES
Sometimes a guest will want to change room during his stay. The hotel should agree
whenever possible, because guest wishes must always come first. It is common to
prepare a room or rate change slip in such cases copies would have to any department

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which had been modified of the original room or rate allocation (e.g. switchboard and
the bill office).

KEY CONTROL
Traditionally, one of the receptionists’ main job has been to issue room keys to guest
and take them back for safe keeping when the guests went out. The keys had large and
heavy tags attached to them to stop guests from walking off with them. The odd metal
key has been substituted with the modern electronic keys. The room rack is
programmed to accept only the code on the key, which is changed everytime the room
is let. It even be changed during the guest’s stay should he lose his keys.

MAIL
In the old days, handling mail addressed to guests was one of front office more
important duties. The older form of key was combined with a set of pigeon holes, one
for each room, so that the receptionist could hand over any waiting mail whenever she
issued or took rack were dealt with by a simple mail; advice slip.

INCOMING TELEPHONE CALLS

Ideally, these should be put straight through to the guest switchboard thus needs to
know every guest room number. Guests are not always in their rooms. Traditionally,
they were informed of urgent or urgent a call by a process known as paging. A
uniformed staff was sent round the public areas calling paging Mr. Jones…paging Mr.
Jones until Mr. Jones was finally located. A modern alternative is the loudspeaker
public address system. The trouble with both these system is that they disrupt other
guests’ conversations.

OUTGOING TELEOPHONE CALLS

In the past, technical limitations meant that outgoing calls to be dialed by the hotel’s
own switchboard operators and then logged by hand. Nowadays, direct dialing and
automatic metering systems are almost universal, except in the very small hotels. This
has helped to reduce the number of disputes, especially since the time of the call and
the number dialled are recorded.

SAFETY CUSTODY
Safe custody routines are simple, but important.
 When a guest brings an article in for safe keeping, he should be asked to place it in
a strong envelope. This prevents different items from becoming mixed up, and also
allows him to keep whatever he is depositing private. He seals it and then signs
over the seal. The receptionist makes sure that the envelope is marked with the
guests’ name and room number and then issues a receipt. The receipt simply

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 specifies one sealed envelope. The approximate value may be added inorder to
avoid possible disagreements later.
 When the guest wishes to reclaim the article, he must produce the receipt. If he has
lost or mislaid this, the hotel must satisfy itself that it is really his property, and
would be well advised to obtain a signed waiver discharging it from any further
liability (it is possible, albeit unlikely, that the guest might later find the missing
receipt and then demand that the hotel produce the property he had already
withdrawn) the receipts should be retained as proof that the item was reclaimed.

INFORMATION
One of the receptionist’s most important duties is the provision of information about
the hotel and the locality. It goes without saying that she ought to know everything the
hotel itself, including details of any special functions which might interest guests.

CONFIRMING DEPARTURES
Guests sometimes change their plans at the minute and expect to be able to stay over
without having given you anything like enough notices. It is good practice, therefore,
to confirm departures the night before if at all possible.

ADDITIONAL SERVICES
The guest may require:
 An alarm call.
 A newspaper.
 Assistance with luggage.
 Help with onward travel.
GUEST HISTORY RECORDS
The information that is found in the guest history records are:
 Date of stays.
 Room used total bills.
 Any special likes or dislikes.

ROOM RECORD CARDS

They provided particulars of actual occupancies, together with details of any periods
during which the room was out of service for repairs or redecoration.

FILING
We need to add a brief word about the filling of the various documents, because these
can amount to a considerable stack. There will probably be a reservation form,
possibly with an initial letter of enquiry, a confirmation and possibly amendment.
There may also be registration card (unless you are using book type register) and
perhaps a copy of the bill. The documents should be arranged in alphabetical order

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within the date sections. Generally, only a very small number of primary documents
ever need to be looking at again, and it is usually enough to know their approximate
whereabouts.

CHAPTER 3
GUEST ACCOUNTING
It is the responsibility of front office to prepare the guest, present it, and ensure that it
is paid. This involves a lot of record keeping, for a guest may incur a large number of
separate charges during his stay, from the cost of the room and various meals through
to telephone, laundry and entertainment charges.

Guests accounting is thus both complex and sensitive. In large hotels it is usually the
responsibility of a cashier. Wherever you work, you are likely to find yourself
undertaking them at some time, and you need to understand the principles involved.

The objectives of the guest accounting procedures are:

 To maintain accurate and up-to date guest accounts.
 To ensure that payment is received promptly and in full.
 To provide management with accurate and up-to date financial report.

BILLING SYSTEMS
There are three main methods of preparing guest bills:
1. The tabular ledger
2. Mechanical or Electronic billing machines
3. Computerized guest accounting system

1. THE TABULAR LEDGER

This is the oldest and most labour-intensive of all methods. It is still typical of
smaller hotels which use manual systems. The tabular ledger provides a record of
all charges incurred by guest during a twenty-four-hour period, analysed according
to their nature. E.g. VPO (Visitors Paid Outs) cover any disbursement, i.e.

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 payments made by the hotel on behalf of the guest. You may have to send
someone out for toilet articles, for instance, or pay for COD (Cash On Delivery).
2. ELECTRONIC-MECHANICAL OR ELECTRONIC BILLING MACHINES
The hard-written tab remain suitable for small hotels. However, the need to handle
large number of posting in larger establishments led to the introduction of various
models of billing machines. Most of these have now been replaced by
computerized guest accounting system, but you may still find them in operation or
standing by ready for use as back-up system (one of the advantages of an electro-
mechanical machine is that it can always be operated by turning a handle even if
the power goes off).
Billing machines offer the following advantages:
 All bill entries are simultaneously recorded in the machines memory and all
additions and subtractions are handled automatically.
 Bills are printed rather than hand-written. In theory, this makes them more
legible though customers try to puzzle out a bill containing a lot of cryptic
abbreviations and produced on a machine with a faded print ribbon might not
agree.
 Charge vouchers are machine-cancelled automatically. This cuts down the risk
of vouchers being posted twice (or not posted at all).
 Count is easier. Since bill and ledger totals are always in agreement, the control
procedures at the end of a shift are considerably simplified.

There are certain corresponding disadvantages, mainly centered on the training time
necessary to produce a competent operator, which is likely to be about a week.

3. COMPUTERISED BILLING SYSTMES

These represent a further major advance in terms of speed and efficiency.
Computers offer all advantages of billing machines, with a number of additional
ones, as follows:
 A further reduction in the number of entries. Whereas the billing machine
stores all the transactions arising in a single shift, the computer can store them
throughout the duration of a guest stay.
 Reduction in the number of vouchers. It is possible to connect the central
computer to any number of point of sale terminals, so that charges can be
‘inputted’ directly by the departments concerned, rather than them preparing
vouchers which must then be physically transferred to the bill office before
being entered on the guest’s folio.
 Easier access to bills. With a computerized system, it is possible for guests to
see their bills anywhere and at any time, as long as they have access to a TV
screen, such as the one in their room.

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  Greater detail. It is possible for computerized bill to show the precise times at
which various charges were incurred. This helps to reduce disputes.
 Even greater accuracy. Arithmetical accuracy can be taken for granted, but
computerized can also be programmed to check whether entries are within
sensible ranges.

Nevertheless, computers are not yet perfect. They are much more complex than the
simple hand-written tab or the relatively primitive billing machine, and this leads to
two disadvantages:
 The operators need more training time.
 The systems are more prone to breakdowns.

This second drawback means that it is still necessary to produce a written ‘audit trail’
so that the accounts can be recreated from scratch in the event of a computer failure.
This implies that there should be a back-up system of some kind.

METHODS OF PAYMENT
Guest can settle their accounts in a variety of ways, namely:
 Cash
 Cheque
 Eurocheque
 Foreign currency
 Travellers’ cheque
 Credit card
 ‘Switch card
 Travel agent voucher
 Transfer to ledger account
Let us consider each of these in turn.

CASH
Cash is the only ‘legal tender’, and a hotelier could insist on payment in notes and
coin if he so wished. Nevertheless, some guests do make payments by cash, and the
cashier must be prepared for these. This means that the hotel must provide a ‘cash
float’ to allow the cashier to give change, and the cash received must be stored safely
until it can be banked. The bill should be receipted ‘paid by cash’.

CHEQUE
Most travellers now have bank accounts, and the use of cheques had grown
enormously over the past few decades. Cheques are very convenient, since they can be

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made out there and then for any amount desired, but they have certain disadvantages
as far as hotels are concerned.
The obvious ones are the fact that there will be a delay before the amount is credited
to the hotel’s account and a small handling charge when it is. The real problem is the
fact that guests are often complete strangers whose cheques may turn out to be ‘dud’.
Nowadays most guests carry cheque guarantee cards, which guarantee anyone who
accepts a cheque payment, provided that:
 Only one cheque is used per transaction.
 The cheque is signed in the presence of the cashier.
 The bank code number and signature on the cheque and guarantee agree.
 The card number is noted on the back of the cheque.
 The guarantee card is not past its expiry date.

If the payment is made during banking hours, the hotel can verify that a cheque will
be paid by telephoning its own bank, which will then ring the drawer’s bank. Even
perfectly honest guests can make silly mistakes which will invalidate their cheques,
and there are certain simple rules which should be followed whenever you accept one.
You should check:
 That the date and year are correct. In particular, watch out for ‘post-dated cheques’
(those with future dates).
 That the cheque has been made out of the correct payee.
 That the amounts shown in words and figures agree.
 That any corrections have been properly signed.
 That the signature is the same as that on the cheque guarantee card. If in doubt, ask
for some other form of identification, such as a passport or driver’s licence.

EUROCHEQUES
Eurocheques allow customers to make payments in the local currency (i.e. pounds,
euros,franchs, deutschmarks, etc.) They are debited to the customer’s account in his
own currency at whatever the rate of exchange was when the cheque was presented
for payment. Euro cheques are accompanied by a special cheque guarantee card know
as Euro card. The rules are exactly the same as for ordinary cheque cards except that
the amount guaranteed is usually higher, and any number or Euro cheques can be
made out for one transaction.

FOREIGN CURRENCY
This is sometimes offered by foreign visitors, especially if they come from a country
with a strong currency. Such currencies present no problem, but others may be very
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difficult to convert into cash except at a substantial discount, and cashiers need to be
careful about which to accept.
There is no obligation to accept any foreign currency since it is not legal tender, but
there is an obvious goodwill aspect. Apart from this, hotels can often make a profit by
doing so, especially if their rate of exchange is less favourable to the guest than that
offered by the local banks. Foreign currency accept in payment of a guest’s bill should
be recorded at the value set on it by the hotel.

TRAVELLERS CHEQUE
Travellers’ cheque are issued by major banks and financial institutions in various
major currencies and in fixed denominations, such as £10, £20, and £50, or $10, $20,
and $50. Those in foreign currencies can be offered as payment or converted into the
local money like foreign exchange.

Customers have to sign their travellers’ cheque when they are issued, but they do not
become valid until they are signed a second time in the presence of the receiving
cashier. Once properly signed, the cheque becomes the equivalent of cash and is
treated as such in the accounts. Cashiers receiving travellers’ cheques in payment
should observe certain simple rules:
 Check the denomination and work out the exchange value, if any.
 Check that the date and payee entries are correct.
 Insist that the travellers’cheque is signed in your presence, and then compare the two
signatures.
 Check the cheque number against the current stop list.

It is also common practice to note the room number on the reverse side, just in case there are
queries later.

CREDIT CARDS
Credit cards now represent one note the main methods by which bills are settled.
Credit cards are issued by the major banks, who are affiliated to either the MasterCard
or Visa networks, or else b major travel and entertainment organizations such as
American Express (Amex) and Diners Club International (Diners). The terms and
conditions upon which they are issued vary somewhat, but this need not concern the
cashier. What is important is that the issuing organization issues a franchise to the
hotel, entitling it to accept card payments in exchange for services offered. This
franchise includes a ‘floor limit’, which restricts the amount the hotel can accept any
one card for without special authorization. The floor limit will be bigger for large
hotels than smaller ones. The issuing organizations guarantee payments of all bills run
by the holder up to his credit limit. Nowadays, much of this process is being replaced
by simple card ‘swipe’ through an electronic point of sale terminal which carries out
the checking process electronically and authorizes payment.

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SWITCH CARDS
This type of ‘smart’ card is increasing importance. They resemble cash cards in that
they allow holders to make payments directly from their current accounts to
establishments equipped with appropriate terminals. Hotels thus equipped can have
the money paid directly into their own account without delay. The advantages are
obvious, though cardholders have to sign a sales voucher and this still has to be
forwarded to their bank to provide a written record.

TRAVEL AGENTS’ VOUCHERS

Many guest presents vouchers in whole or part of their bills vary much more than
other form of payments we have been considering and need to be examined carefully.
Travel agent vouchers arise when the guest pay the agency for his food and
accommodation in advance the agency then prepares two copies of the voucher. One
copy goes to the hotel to confirm the booking, and the other is given to the guest for
him to present to the hotel when he registers.
TRANSFER TO LEDGER ACCOUNT
Large companies responsible for a lot of bookings find it tiresome to make separate
payments. In such cases it is more sensible for the hotel to transfer the amounts to
accounts in general debtors’ ledger and then invoice the companies at regular interval.
This allows them to settle a number of fairly small debts with one cheque or bank
transfer. It also reduces the cash-handling task for the hotel at the expense of a little
extra book-keeping.

DISPUTED BILL, DISCOUNTS AND REFUNDS

Sometimes a guest objects to a bill, either because the amount is not what he agreed to
pay, or because he has not received one or more of the items charged, or simply
because he feels he has not had adequate service. In such cases, the first thing to do is
to take the guest aside and ask him to wait his complaint is investigated. Ideally, this
task should be handled by a senior member of staff.

CHAPTER 4
LEGAL ASPECT AND SECURITY
Hotels have been subject to legal control ever since Middle Ages. Travelers were
vulnerable, villainous innkeepers were sometimes tempted to charge them extortionate
prices, or even to rob them while they slept. Even today, hotels are not allowed to pick
and choose their guests, and those classed as inns have a legal obligation to look after
their property while they are staying. You need to understand these rules.

Not all guests are honest, either, and the hotel must protect its guests and itself against
the occasional dubious customer. This may involve taking some form of legally
sanctional action to exclude him. You need to know what your powers are in these
matters, too. There are kinds of threat that you need to be concerned about:

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 Anything that might affect a guest’s health, comfort or well-being. This has to be
taken into account.
 Anything that affect the hotel’s fixture and fittings together with revenue and
reputation.

LEGAL ASPECTS
1. CONTRACTS FOR ACCOMODATION
When a hotel accepts a booking from a guest, it enters into a binding contract. The
guest is expected to turn up and the hotel has to provide the agreed accommodation
if either parties fails to honor the other; it must compensate the other for the loss
suffered.
Meanwhile the guest have to behave reasonably, if they tend to be quarrelsome,
noisy, violent or any other unsuitable behaviours then the hotel can ask the guest to
leave because that’s the breach of contract.

2. THE PROPRIETORS ACT 1956

Section 1(1) of the Hotel Proprietors Act defines a hotel as an inn have an
obligation to receive bona fide customers who appear able to willing to pay
reasonable sum for the hotel services and facilities and who are in a fit state to be
received.

3. SEX DISCRIMINATION ACT 1975

This prohibits hotels from discrimination against women as far as the provision of
good facilities and services are concerned.

4. RACE RELATIONS ACT 1976

This prohibits hotels from discrimination against any person on the grounds of
colour, nationality or ethnic origin against the provision of food, services and
facilities.

5. PAYMENT IN ADVANCE
Nothing in the above provisions prevents the hotel from demanding payment in
advance. This is one of the main lines to defend against dubious customers, so long
as you do not use it as a concealed form of discrimination.

6. TRESPASS
Normally the property owner can stop anyone else from coming into his property
without permission. The intruder is a trespasser and can be required to leave. The
obligation to accept bona fide customers imposed by the hotel proprietors act 1956
limits the rights as far as operations are concerned, but it certainly does not give
travellers the right to wonder all over the hotel. No guests are required to enter
places marked staff only.
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7. THE RIGHT TO LIEN
This is found the Innkeepers Act 1978, allows hotels to seize guest’s belongings
and sell them to defray its costs if guests’ bills are not paid.

PROTECTING THE GUEST

There are number of possible threat to a guest comfort and well-being put has most
serious which is any threat to physical safety. The fact is that more guest are injured as
a result of a hotel carelessness than a result of the action of an external agencies.

INTERNAL THREAT TO GUEST PERSON

The major risk is fire. This put everyone in the hotel at risk not just the careless
individual who has started the blaze (burning) in the first place. The real hazard is the
fire itself but the smoke before the flames actually reach them.

KEY AREAS TO FOLLOW WHEN PROTECTING A GUEST FROM FIRE

 Fire Detection System
A high proportion of hotel fires begin at night when most guests and staff are
asleep, it is essential that the hotel should be protected by appropriate detectors and
that these be properly maintained and tested regularly.
 Fire Containment Provision
A good deal of time and money has been spent on installation of fire doors and
adequate fire escape facilities but too often these are not maintained as they should
be.
 Escape Procedure
Clear and un ambiguous instructions must be displayed in every room so that
guests know which way to go in the event of an emergency.
 Fire Fighting Equipment
Hotels should be properly equipped with fire extinguishers. These must be
serviced regularly and staff trained in their use.

EXTERNAL THREAT/TERRORIST
Hotels which cater for VIPs need to take bomb threats and other forms of terrorism
very seriously, such hotels often liaise closely with their local police force which
would advise them regarding security precautions.
The chief threat is a telephone bomb warning front office staffs are liable to take such
calls and need to be trained to handle them correctly, below are the essential
requirements of a bomb warning.
 The caller should not be interrupted and his/her words should be written down
exactly.
 As soon as he finished, you should write down as many details as you remember
about the caller’s voice and mannerism etc.
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THREAT TO PRIVACY
This is also a problem as far as VIPs are concerned, the activities of the famous make
a good copy, so there always reporters to give them information by using flattery or
even bribery. Famous guest might also be pestered by fans and autograph hunters and
it is part of your duty to prevent this from happening.

THREAT TO GUEST PROPERTY

Hotel guest carry considerable amounts of money and other valuables with them and
this makes targets to a variety of unscrupulous characters. The threats come from a
variety of source.
a) MUGGERS
Hotel rooms offer a quiet and secure environment for criminals. If the criminal can
get the unsuspecting guest to open the room. Hotels do not offer easy gate away
routes but this only problem if the assailant leaves the victim to raise the alarm
afterwards.

b) SNEAK THEIVES
Large and busy hotels offer happy hunting groups for certain kind of professional
thieves. Pickpocket and bag snatchers might work in the bar or swimming pools.
These people are well dressed confident looking room thieves who wander around
the corridors undisturbed, testing bedroom doors to see whether they have
securely locked.
c) CONFIDENT TRICKSTERS
Expensive hotels offer the perfect environment for such persons. Their guest are
generally well off and often surprisingly gullible. Confident tricksters’ book in as
legitimate guest and then move in a likely looking targets. Their scans vary but are
almost based on character weakness on the part of the marks or victim.
d) PROSTITUTES
These present hotels with the same problem as confident tricksters in that guest
seldom campaign if they end up on the losing side. Prevention is made even harder
by the fact that the guest will deliberate conspire to smuggle the prostitute into his
room, evading whatever security routines you may have introduced to prevent this
from happening. Although prostitution itself is not illegal, prostitutes tend to live
in a shadow borderland between the legal and illegal, and may well take advantage
of the opportunity offered when they are alone in a room with a guest who has just
dropped off to sleep, careless leaving his wallet in full view. Some years ago the
metropolitan police felt justified in launching a campaign based on the slogan
‘prostitutes are thieves.

PROTECTING THE HOTEL

TREAT TO HOTEL BILLS
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SKIPERS, RUNNERS, WALKOUTS
Walkouts, skippers and runners are a threat to guest bill and these people who leave
without paying. They can be divided into three groups.

 THE ACCIDENTALS
These are people who had an intention of paying their bills but might forget them
to pay because they are confused over who was due to settle the account or may
genuinely forget an extra bill.
 THE OPPORTUNIST
These are people who had every intention of paying their bill when they first
checked in but who subsequent realize that they could get away without doing so.
Opportunists take advantage of weaknesses in the hotel’s billing procedures.
Hotels who design allows to reach the car park without passing reception have
found a number of their guest yielding to this kind of temptation.

 THE PREMEDITATORS
These are people who never have any intention of paying in the first place, and
who sometimes go to considerable lengths in order to avoid doing so.
Premeditators repeat the same offence at hotel after hotel around the country.

SECURITY MEASURES TO REDUCE THE INCIDENT OF WALK-OUTS

Meanwhile the hotel use a number of security measures to reduce the incidence of
walk-outs:
1) CREDIT STATUS CHECKS
It may be possible to confirm a guest’s credit status from his registration
particulars by checking with a commercial credit agency. This is the job of the
security officer, but he needs the cooperation of the receptionist, who should refer
any chance or otherwise doubtful customers to him/her for clearance.
2) PAYMENT IN ADVANCE
As we have seen, a hotel is entitled to demand this, and receptionists should
always do so if they have any doubts about the guest’s reliability. It should be
normal practice in case of a chance guest, for example.
3) INTERIM PAYMENTS
Interim payment is an amount of money that is paid before the total amount of
money owed is decided. An alternative approach is to establish a credit limit, and
ask for an interim payment or additional credit card authorization as soon as the
guest’s account reaches it. Computerized billing programs allow you to enter this
limit, and will ‘flag’ the account as soon as it is reached.
4) GUARANTEED BOOKING
Means your booking is 100% confirmed. In guaranteed booking, payments must
be made if the guest fails to arrive, except where cancellation procedures of the
hotel allow an escape. As we have seen, if a would-be guest has given a credit card
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 number at the time of booking and does not then cancel the booking within a
reasonable time, the hotel can make out a credit card voucher in the usual way and
the company will pay it and debit the guest’s account.

5) LUGGAGE PASSES
These used to be common in the days when the guests travelled with large amount
of baggage. This was taken down to a luggage room on the day of departure and
not released until the cashier issued a luggage pass confirming that the bill had
been paid. Air travel has made these obsolete.
6) LIEN
As we have seen, this is the right to retain possession of a guest’s luggage until he
has paid his or her bill.

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CHAPTER 5
HOSPALITY
Hospitality and service are vitally important concepts. They are also elusive one
which are very difficult to turn into a straightforward checklist of do’s and don’ts for a
new staff. However, they must be considered. It may be helpful if we try to summarize
the argument in this chapter.

1. Hospitality means the whole process of anticipating and satisfying a guest needs.
This goes right back to the design stage and covers facilities and staffing levels in
relation to what the would-be guest is willing to pay. We should therefore start by
establishing what these needs are. We will find that although they include tangible
(i.e. material) requirements such as comfortable bed, they also include important
psychological satisfactions as well.
2. Service closely linked with hospitality, but we have chosen to define it more
narrowly in terms of what staff can do to satisfy the guest’s needs. We will find
that it is not just what is done but how it is done that is important. This links up
with our recognition that hospitality involves catering for guest’s psychological
needs.

GUEST NEEDS
TANGIBLE AND INTANGIBLE NEEDS
Analysis the hotel package shows that the needs it caters for are a mixture of tangible
(i.e. physical) and intangible (i.e. psychological) ones. The first involve anything
aimed at saving the guest effort or stress. One way of looking at them is to think
though what he will require from starts to finish of his way. He will probably have
travelled some distance before arriving, and may well be on business. On arrival, he
will require:
 Easy access to reception and somewhere to leave his car, if he has one.
 Easy access for himself and his luggage to his room.
 A lock and a room key so that can be sure of privacy.
 Toilet facilities so that he can refresh up.
 Somewhere to keep his clothing fit to wear, and, for longer stays, laundry
facilities.
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 Something to eat and drink.
 A chair so that he can relax in comfort.
 Alternatively, somewhere to exercise, such as sauna, gymnasium or swimming
pool.

INTANGIBLE NEEDS
The approach discussed above tends to lead to a facilities oriented approach, whereby
hotels are assessed largely on the basis of their physical features (such as the provision
of toilet facilities en suite) and the availability of staff to cater for the guest’s needs in
terms of saving them effort or inconvenience (like portering and room service).
1. The ambience (i.e. style and décor) of the building. Imagine spacious bedrooms
equipped with every possible facility which is nevertheless painted in dull,
monotorious colours and whose outlook is restricted to the local gasworks or an
interior wall. A guest could be physical very important in such a room, but that
might not prevent him from feeling depressed, even suicidal. Surveys show that
guests place high value on accommodation which is comfortable, pleasant and
relaxing. While comfort has sensory dimensions, the other two requirements
clearly fall within the psychological sphere.
2. The amount of hospitality or customer care displayed by the staff. It is (sadly) not
too hard to envisage a receptionist checklist in a guest efficiently but unsmilingly,
and it is just as easy to imagine a porter carrying the guest’s luggage up to the
room in such an ungracious manner as to totally destroy any favourable impression
that the physical act itself might have created.

SERVICE
THE NATURE OF SERVICE
As we have seen, hospitality is a big topic which involves the hotel package as a
whole. It starts with market research and goes on through planning and design to
cover issues such as staffing levels and maintenance. Service is that part of the process
which involves day-to-day contact between the staff and the customer. This links up
with the generally accepted view that services i.e. the products of service industries)
differ from material goods in that they are.
1. Much less tangible. As we have seen, the service package is made up of sensory
and psychological experience rather than objects that the guest can take home and
add to his permanent possessions.
2. Much more perishable. Goods can be stockpiled, but service can’t. As every
commentator on the hotel industry points out, an unsold room night is lost forever.

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3. Simultaneous. The customer has to be there when the service is delivered. This is
obviously true in the case of the hotel guest, without whose physical presence the
whole concept of a hotel experience becomes meaningless. The situation is quite
different for a manufacturing industry, where the factory makes the product long
before the customer buys it.
4. Heterogeneous. The product is hard to standardize. Different customers have
different needs. It is thus difficult to establish output standards for a service firm,
and even harder to ensure that they are always met.
All this means that the service product depends very much on the way the staff
behave. This is not true of manufacturing industries.

SERVICE QUALITY
We need to focus a little on the nature of this important service element. How can we
measure its quality? Well, the customer would expect the staff to be:
1. Reliable. As far as Front Office is concerned, this means the avoidance of error in
every one of the procedures we discussed in Part One, from taking the booking
correctly, through allocating a clean and tidy room, to having an accurate bill
ready for when the guest wants check out.
2. Responsive. This means that each service should be available as and when the
guest wants it, and not when it happens to suit the staff. It thus covers the
important time dimension. In Front Office terms, it means promptness in
answering the telephone and not keeping the guest waiting while you finish your
conversation with a colleague or whatever. Management should ensure that the
desk is conveniently situated and that customer waiting is cut to a minimum
through sensible staff scheduling.
3. Courteous. This is very much an individual staff responsibility. It means being
polite even when the guest is overbearing, inconsiderate or even downright
offensive. It can conflict with other requirements such as responsiveness, for it can
mean being willing to explain things clearly and patiently even though there is a
quae waiting. It can also mean being friendly and reassuring, though it is
sometimes difficult to draw the line between being coldly polite on the one hand
and too familiar on the other.
4. Customer-oriented. This means putting the customer before the establishment. Any
suspicion on the part of the guest that the priorities are the other way round (for
example, as a result of his becoming the target for hard selling techniques) is likely
to be counter-productive.
5. Confidential. It may be very tempting to gossip about what went on in VIP’s suit
the night before, but a hotel which permits this is not providing good service.
6. Caring. This means the staff must make every effort approach the individual
guests’ needs. As we have seen, these may differ from other guests’ and even
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 change from hour to hour, but recognizing them is a key feature of the service
concepts. Guests don’t like to be treated as if they were all identical, and you need
to be able to ring the changes. It is this need to combine individually of treatment
with the maintenance of consistent overall standard which provides much of the
challenge in hospitality work.

A service is an economic activity where an immaterial exchange of value occurs.

When a service such as labor is performed the buyer does not take exclusive
ownership of that which is purchased, unless agreed upon by buyer and seller. Service
is the action of helping or doing work for someone.

CHAPTER 6
SOCIAL SKILLS
INTRODUCTION
Social skill is any skill facilitating interaction and communication with others. Social
rules and relations are created, communicated, and changed in verbal and nonverbal
ways. The process of learning these skills is called socialization. Social skills
Social skill is any skill facilitating interaction and communication with others. Social
rules and relations are created, communicated, and changed in verbal and nonverbal
ways. The process of learning these skills is called socialization.
Interpersonal skills are how people relate to one another. Interpersonal skills are the
skills a person uses to communicate and interact with others. They include persuasion,
active listening, delegation, and leadership. The term "interpersonal skills" is used
often in business contexts to refer to the measure of a person's ability to operate within
business organizations through social communication and interactions.
Good social skills are a crucial component of leading a healthy, happy and enjoyable
life. Studies have proven a positive correlation between social skills and mental
health. Improving your social skills is key to becoming more charming, confident and
having healthier relationships. Everyone has the potential to improve their social skills
with self-reflection and practice. This guide provides steps for successfully
communicating and interacting with other people.
Social skills are the skills we use to communicate and interact with each other, both
verbally and non-verbally, through gestures, body language and our personal
appearance.
Human beings are sociable creatures and we have developed many ways to
communicate our messages, thoughts and feelings with others.
There are distinct advantages to having well developed social skills.
Here are five:
1. More and Better Relationships
Identifying well with individuals leads to more relationships and, at times,
friendships.
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By developing your social skills you become more charismatic, a desirable trait .
People are more interested in charismatic people as charismatic people are (or at least
appear to be) more interested in [Link] people know you cannot advance far in
life without strong interpersonal relationships. Focusing on relationships will help you
get a job, get promoted and make new friends. Well-honed social skills can increase
your happiness and satisfaction and give you a better outlook on life. More
relationships can also help to reduce the negative effects of stress and boost your self-
esteem.
2. Better Communication
Relating with people and being able to work in large groups naturally develops
one's communication skills.
After all, you can not have great social skills without good communication skills and
being able to convey one's thoughts and ideas may be the single most important skill
that you can develop in life..

3. Greater Efficiency
If you are good with people, you can more easily avoid being with the people you
do not like as much as others.
Some people dread social interactions because they do not wish to spend time with
individuals who do not have similar interests and viewpoints. It is a lot easier to attend
a meeting at work or a party in your personal life if you know at least some of the
people who will be there.
If you are in a social situation and do not want to spend time with 'John' because you
don't like him or he cannot help you with a particular issue, a good set of social skills
will allow you to politely convey that you need to spend time with other people at the
get together.
4. Advancing Career Prospects
Most worthwhile jobs have a 'people component' and the most lucrative positions
often involve a large amount of time spent interacting with employees, media and
colleagues.
It is rare that an individual can remain isolated in their office and still excel in their
job. Most organisations are looking for individuals with a particular, tactical, skill set:
the ability to work well in a team and to influence and motivate people to get things
done.
See our pages: Employability Skills and Transferable Skills for more information
about the kind of skills that employers are looking for.

5. Increased Overall Happiness

Getting along and understanding people will help to open many personal and
career-related doors.

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Having the confidence to start a conversation at a work-related conference may lead to
a new job offer with a higher salary. A smile and 'hello' in a social situation may lead
to a friendship being formed.
Characteristics of Social Skills

CHAPTER 7
SALES

INTRODUCTION
Most of the expenses involved in letting accommodation are fixed, so once sales have
passed the break-even point additional receipts are virtually pure profit from the
department’s point of view. This means that effort to put into generating additional
room revenue is worth more than equivalent effort put into selling liquor or food,
where there are important variable costs. Of course, better value for money in terms of
food and drink can generate extra accommodation and drink can generate extra
accommodation revenue, but the fact remains that in many hotels the bars and
restaurants often do little more than break even and it is the rooms which generate the
profits.

Raising room revenue is usually seen as a marketing problem. However, there are
measures which front office staff can take, and they form the subject of this chapter.

INCREASING OCCUPANCIES
Although front office little to do with the main means by which are attracted to a hotel
(advertising and direct sales, for instance), this does not mean that its staff have no
scope at all for increasing occupancies.

‘JUGGLING’ BOOKINGS
If the hotel uses a conventional chart, skilled reservation clerks can display ingenuity
in plotting the bookings so as to fit the maximum number.

Now suppose you receive a request from Mr. and Mrs. Morrison, who want a twin
room for the nights of the 3rd and 4th. An inexperienced clerk may well say. ‘Sorry: we
don’t have a twin for both nights’.

HANDLING ENQUIRIES
Most shop assistants ask ‘Do you want anything else? as a matter of course. Few
reservation clerks do. This is a mistake, because a lot of calls come from agents of
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various types who have to make multiple bookings. It saves them time and money if
they can reserve several with one call, and although their other clients may have
expressed preferences for other hotels, your question might just tip the scales and lead
to them all being placed with you.

In the same way, never respond to a request for a single room on the 15 th with ‘I’m
sorry, we’re full’. Haven’t you got anything else you could offer? Your order or
priority ought to be:
1. A different type of room. Don’t you have a twin you might offer ad an
appropriately reduced rate?
2. A different date. It is surprising how flexible some guests can be, and if you only
win 10 percent of the time you will still be well ahead.
3. A company hotel. If you are located in a large city, you may well have one or more
‘sister’ hotels nearby. The relationship is often one or mutual competition, but it
makes sense to see whether one of them can take your overflow.
4. Another hotel. If you can’t fit your caller into one or your own hotels, then try
someone else’s. Kemmens Wilson, the founder of Holiday Inns, would not allow
his managers to put up ‘hotel full’ signs.

REPEAT BUSINESS
Another very important way in which front office staff can help to increase
occupancies is to try to boost repeat business. Obviously, the guest must have been
satisfied with the hotel during his current stay, otherwise you stand little chance of his
coming back.

If all has gone well, the moment of departure is a good to try some forward selling.
Many hotels ignore this opportunity, but there are good reasons for trying to capitalize
on it. One of the main problems hotels face in terms of marketing is that they are
seldom able to engage in face-to-face selling, since bookings are usually arranged in
advance, over the telephone and often through agents of one type or another. Never
forget that A GUEST IN THE HOTEL IS A POTENTIAL FUTURE CUSTOMER.
Somebody who has come to your area once may very well do so twice, and if your
hotel suited him then, it ought to do so again.

NO SHOWS
The most difficult and controversial issue in connection with increasing occupancies
is the way you respond to the problem created by ‘no shows’. These are people who
make bookings and then fail to honour them. Early departures have the same effect,
though they are not quite so serious from the hotel’s point of view because you tend to
find out mid-morning rather than the late evening, allowing you more chance to relet.

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OVERBOOKING
Overbooking means deliberately accepting more bookings than you have for. If you
get it right, you should end up with just about the right number of guests, and your
room revenue for that night will be close to the optimum. However, this raises the
question of whether the practice is legal. The civil law position is quite clear: a hotel
which fails to supply accommodation when it has undertaken to do so is guilty of
breach of contract. We have already discussed your obligations in that respect.
However, it is worth repeating that you must try to minimize your losses. A prudent
hotelier who expected to certain number of no shows might well argue that
overbookings was simply a way of doing this.

INCREASING AVERAGE ROOM RATES

The second possible way of raising revenue is to get the guest to spend more. Since
we are only concerned with room revenue here, we will not consider the way it in
which front office can help to promote the hotel’s other services and facilities, though
this is also an important part of the jobs.

Selling accommodation is much like selling any other product. There are a number of
simple techniques which are taught on sales courses and which you should keep in
mind. They are (in no particular order):

 Sell hospitality. This involves using the appropriate body language, including
smiles. You have to make your customers like you, and the simplest way to do this
is to show that you like them. It also includes lots of eye contact. This shows that
you are interested in the other person and concerned for their welfare. Remember,
too, that your body language can convey whether you are telling the truth or not.
Whenever you don, don’t refer to them by their room number (e.g. ‘Oi, you in
447’!)

Outside hotels, a lot of selling are done in this way: you go into a store to buy
something with a low price tag, then find yourself walking out with something
much more expensive because the salesperson has taken the opportunity to show
you better quality product. So try to learn all about the facilities, and endeavour to
find something extra to say about the more expensive types of room. Don’t just say
‘We have some singles at £45…’Try ‘We have some very comfortable singles at
£45: all they have baths and toilets en suite and excellent views of the lake…’ You
can always something good to say about the facilities on offer.

 ‘Show’ the room. This is difficult but not impossible. In a small hotel you can
literally take guests up to the rooms and show them the different facilities: you will
often find that they agree to take a more expensive room once they have seen that

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 it really is better. In a larger hotel that is more difficult, but you can still do a lot.
This approach starts with two or three positive touches (the ‘Sir’, the smile, the
welcome news that you do have some singles). It then goes on to the (presumably)
unwelcome news that the rooms cost £45…’ That way, you are really telling the
guest that he can enjoy all the public facilities of your hotel for £30. It is very
difficult to persuade a customer to move upwards once you have indicated your
lowest price, whereas it is fairly easy for you to come down.
 Assume that the prospective guest wants to stay at your hotel. It is possible to
convert an enquiry into a booking by subtly ‘nudging’ a caller so that he moves
from an uncommitted standpoint to one where he finds himself confirming a
booking, almost without realizing that the decision has been taken.

CHAPTER 8
MARKETING ASPECTS
According to the British Institute of Marketing, it is the management process
responsible for identifying, anticipating and satisfying customer requirements
profitably’. This covers many activities which do not form part of the day-to-day work
of front office, such as consumer orientation, market research, product analysis and
promotion.

REACHING THE CUSTOMER:

ADVERTISING
Most commercial organisations fall into one of two classes:
1. Their market is local, and thus easily reached through media such as local
newspaper, TV, cinema advertisements and the like. Most restaurant fall into this
category.
2. Their market is dispersed, but linked together by a common enthusiasm so that it
can be reached via ‘special interest’ journals. There are any number of these
magazines available, catering for interests as diverse as boat-owning, computing
dog breeding and walking.

REACHING THE CUSTOMER:

RELATIONSHIP MARKETING
The difficulties hotels have in reaching new customers make it all the more important
for them to retain the loyalty of their existing ones. Hotels have already tried to do
this, but the development of the ‘branding’ concept industry as a whole, coupled with
the creation of computerized marketing databases, has led to modern groups tackling
the issue in a much more systematic manner. This new approach is called ‘relationship
marketing’.

Relationship marketing aims to build business by:

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 Maintaining existing customer loyalty.
 Creating brand awareness among new customers.

It does this by advertising various concessions to frequent-stay customers. These can

include:
 Privileged check-in facilities.
 Free or concessionary rates for partners.
 Room upgrades.
 Late check-in privileges.
 Free nights after a certain number of stays.

REACHING THE CUSTOMER:

INTERMEDIATE AGENCIES.
The problems hotels experience in reaching new customers lead them to use third
parties as intermediaries. This costs money in the form of commissions, of course, but
then so does advertising.

This is the simplest method. The whole-be guest choses a hotel and then contacts it by
letter, telephone or some other medium. The only parties involved are the hotel and
the customer.

Of course, the customer has to find out about the hotel first this involves some kind of
advertising or promotion. Typical methods include mentions in guidebooks, local
accommodation brochures or directories such as the motoring organization
handbooks. Since one of the themes we shall be emphasizing in this section is that
hotels have to pay to reach their customers, we should point out that such ‘mentions’
are seldom free. There is almost always a charge of some kind, even if it comes in the
form of a subscription to whatever local agency might be promoting and distributing
the brochure.

One of the main problems with direct contact is that the customer is usually located a
considerable distance from the hotel. This means that he has to place a long distance
telephone call inorder to make a booking, and might have to repeat this several times
inorder to obtain a room at a particular busy period. This costs money and (what is
often worse) often takes a good deal of time.

DIRECT GROUP SALES.

Many ‘direct’ bookings are actually made on behalf of groups of one sort or another.
Some of these are relatively small, such as sports clubs outings, overnight functions
and the like, but others can be very large, such as major conferences. These are
sometimes arranged by specialist agencies, but quite often the organizer prefers to
deal with the hotel directly.

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Groups are so important as a source of business that they are an exception to the usual
rule that it is not worth the hotel’s while to try to contact the customer directly for
some fact-to-face selling.

As members of the group doing the booking, conference organisers are not usually
entitled to any kind of commission.

TRAVEL AGENTS.
There are two main types:
1. Rental agents. These are the common and familiar high street agents who sell
direct to the public. Their main business is to arrange holidays to their customers,
including hotel accommodations.
2. Company agents. Some city centre agencies specialize in business house travel,
while organisations such as major multinational companies are so big that it is
worth their while to have their own travel agency to handle all their business.

Travel agents make their money from commissions received on the sale of tickets and
bookings. Since tickets are fixed in price, the mechanism is simple. The agency carries
a stock of blank tickets and simply remits the money less the commission the carrier
after it sells one.

GROUP TOUR OPERATORS

These include the familiar names whose brochures you will find in any retail travel,
agent. Many of the larger ones have their own retail outlets. In all, they sell an
enormous number of holiday ‘packages’ and book a comparable amount of space at
hotels.

This category also includes a vast number of smaller operators of various sorts. Some
undertake ‘speciality’ work, arranging battlefield or birdwatching tours, safaris, ski
trips and the like. Others specialize in arranging conferences. One of the fastest
growing sectors is that of incentive travel, usually arranged by a company for its
clients or its successful sales staff. This is a specialized field, and it has attracted its
own full-time companies which provide a range of consultancy and administrative
services.

Group tour operators do not receive commission because they are not introducing
clients but rather booking the space themselves. They make their money from the
difference between the cost of the separate elements of the ‘package’ (transport, food,
accommodation, entertainment, etc.) and the price they are able to charge for it as a
whole.

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HOTEL REPRESENTATIVES
Hotel representatives were originally an American idea, developed because the USA
is a large country with widely dispersed centres of population, yet a lot of business
travel. Hotel representatives base themselves in one such area (some now have
worldwide representation) and act as sales and reservation agents on behalf of a
number of non-competing hotels from other regions. Local travel agents are able to
make bookings for their clients quickly and cheaply, rather than incurring the expense
involved in long distance telephone calls. Representatives will also distribute your
brochures and other promotional material locally. They are usually paid an annual fee
plus commission on the reservations they generate.

HOTEL BOOKING AGENCIES

Some areas are short of hotel space and it is particularly difficult to find
accommodation in them at busy times of the year. This is fine for the local hotels, but
not much fun for those trying to make bookings there. This has led to the development
of specialized hotel booking agencies.

Some of these offer this service to individuals. You can often find their outlets in
important travel centres such as major railway stations. They are a particularly useful
source for ‘last minute’ booking. As with most intermediaries, they make their money
by charging commission on the bookings they arrange.

SELLING TO INTERMEDIARIES.
We have seen that intermediary booking agencies such as airlines, groups tour
operators and conference booking agencies are able to deliver large numbers of
guests. It is thus well worth investing time and effort in trying to ‘sell’ the hotel to
them.

DIRECT SALES
The difference between direct sales and the kind of selling you do in front office is
that instead of waiting for the customer to come to you, here you go to them.

The forest step, therefore, is to decide who are to be your sales targets. You have to
analyse your sources of business, both actual and potential, so that you can increase
the former and penetrate the latter.

The one point we would stress is that such research doesn’t stop with the construction
of the hotel or the preparation of the annual marketing plan.

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The targets for direct sales include travel agents, tour operators, exhibitors, short
course nesses, who often make a whole series of bookings for their visitors throughout
the year.

DIRECT MAIL
‘Direct mail’ is the term used for the kind of circular letter outlining some opportunity
or other which we often find in our morning post. It is superior to advertising in that it
can be addressed to a specific group of people and can outline a particular selling
point in considerable detail. Take as an example a hotel introducing a complicated
new weekend break tariff.

The problem with direct mail is that people often throw the contents away unread.
This is partly because circulars are often perceived as being impersonal. You can get
around this some extent by using the mail merge facilities on your computer to
produce personalized letter, but this still doesn’t solve other basic problem, which is
that your letter may be seen as irrelevant.

LETTERS
Unlike the circular, a letter is addressed specifically to one particular reader. It is a
good deal more flattering to the recipient because he usually has a pretty good idea of
how much it actually costs to draft and type. You can emphasize this by adding some
kind of personal touch like ‘It was nice to meet you at the conference last month…’
This has become even more important lately, since technical developments are making
the better quality ‘personalized’ circular letter increasing difficult to distinguish from
the real thing.

Letters should be simple, direct and, above all, oriented towards the recipient. He’s
not interested in your facilities: he’s interested in satisfying his requirements, and the
only reason he is reading your letter is that he thinks you might be able to help him.
He knows, too, that he is going to have pay something for this services, so don’t try to
hide the price.

CHAPTER 9
YIELD MANAGEMENT
The question that this development poses is, what type of business should the hotel
accept? More and more such hotels are negotiating preferential rates with favoured
customers. At the same time, differences between market segments with respect to the
length of time between bookings and arrival have also become more marked.
Relatively low price group bookings are often arranged months or even years in
advance, whereas many high price single bookings are only a few days before arrival.
There is thus a risk that a hotel may find itself turning away lucrative business because
it has already committed itself to taking a less profitable type.

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The result has been a great expansion of interest in what is called ‘yield management’.

DIFFERENTIAL RATES.
We have already seen that travel agents can earn a discount on any booking made
through them, and we have described the mechanism by which this is paid. The larger
credit card companies can negotiate similar discounts. The customer still pays the full
rack rate, of course, but this is immaterial as far as the hotel is considered.

Many large associations are offered the same kind of concession. It is quite common
for their members to be eligible for discounts in this way. As private individuals their
purchasing power may not be very significant, but collectively they represent an
important source of business. This applies to trade associates, professional bodies,
trade unions and the like. In these cases the individual guests do benefit from the
discount.

Companies can also negotiate special rates. Many hotels offer a special ‘corporate
rate’ almost a matter of course, but important companies responsible for providing a
significant amount of business can hold out for much better terms than these.

The actual level of rates available is likely to vary considerably, and is usually
confidential.

BOOKING HORIZONS
Holiday guests generally make their bookings much further ahead than business
travelers. This is mainly because holidays are planned in advance, whereas business
trips have to be arranged at short notice.

This lengthy ‘time horizon’ is particularly true of the group tour business. In this case
the organisers often book large blocks of rooms long before they actually sell them to
their customers (in other words, the rooms are booked even before the holidaymakers
get around to planning their vacations).

On the other hand, leisure bookings are generally much more price-sensitive than
business bookings. There are several reasons for this:
 In most cases leisure bookings are paid for by the individuals making the bookings
rather than by their employers.
 Holiday travel less dependent upon location than the business kind. If one turns out
to be too expensive, the holidaymaker can usually choose to go to another,

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 whereas business travelers generally have no alternative but to go to one specific
destination.
 The longer leisure booking time horizon allows the holidaymaker to go ‘bargain
hunting’.
 Very competitive bargaining over rate is characteristic of group tour operators and
largescale conference organisers. They are able to do this because they can offer
substantial numbers of guaranteed future bookings, and hotels are reluctant to turn
these down.

Since leisure bookings generally earn the hotel less revenue than business ones, a
hotel which ‘fills up’ with leisure bookings well in advance runs the risk of having to
turn down requests for accommodation from higher value business customers close to
the date of arrival.

FORECASTING BOOKINGS
Clearly, if a hotel wants to take effective avoiding action in such circumstances, it
must be able to forecast the final level of bookings. One way of doing this would be to
take each market segment in turn. However, experience suggests that the best
approach is to try to predict the total number of guests expected, and then break this
down into different segments in the light of previous experience. Since this ‘top down’
approach is working with larger number than those for any individual segment, it
tends to be more successful.

The simplest of the forecasting techniques is ‘time series analysis’. This tries to
smooth out the inevitable random fluctuations by assuming demand to be equal to the
average to the average of the equivalent nights in the past.

CONCLUSIONS
Yield management has proved itself to be a valuable approach to the problems of
maximizing room revenue. It will continue to increase in both importance and
sophistication (the development of computerized ‘Expert System’ applications using
artificial intelligence is already well advanced). However, it is as well as well to keep
certain limitations in mind:

1. Yield management proper is a specific technique which involves the switching of

blocks of rooms from one market segment to another. This means that it will only
work when demand is high and it is possible to find late, high yield bookings.
2. Many enthusiastic advocates of yield management tend to widen the scope of the
technique to include measure which competent hoteliers have been taking for
generations. It is true that yield management will help to ‘trigger’ rate reductions
and generate intensive marketing activities when demand falls significant below
the expected levels.

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3. Yield management is a technique which has been developed largely by airlines and
other large transport firms. There are significant differences between such
undertakings and hotels.
4. Yield management generate is essential a quantitative approach. This means that it
works best in large and busy hotels, which can generate the volume of numbers
which make statistical analysis.
5. Since yield management is a quantitative approach, it ignores significant
intangibles like the need to retain goodwill, especially that of important ‘corporate’
customer.

CHAPTER 10
GROUPS
There is no agreed definition as to what constitutes a ‘group’, but it is clearly not quite
the same as a family booking, even a large one. The essential elements are that it
should be booked as a unit, pay the same rate, have some common interest or purpose
(even if it is only the accidental one of travelling by the same plane or coach), arrive
together and depart together. Arrivals and departures need to be ‘en bloc’: in fact
conference delegates often arrive separately, and some may stay on afterwards.
However, the great bulk of the bed nights involved will be over the same period.

Groups can range from half a dozen persons up to a couple of hundred or even more.
This difference of scale is bound to affect the way the hotel deals with them. Since the
group is likely to amount to a significant proportion of guests staying on any one
night, the hotel will pay particular attention to the booking process.

The main forms of group business are group inclusive tours (i.e. packages holidays)
and conferences. However, we have also taken the opportunity to consider the
implications of another and rather specialized form of business, namely, that of
timeshare.

NEGOTIATING
Tour operators, conference organisers and the like differ from ordinary guests in a
number of respects. Because they book large numbers of rooms, and do so much
further in advance than most other guests, they are able to negotiate terms in a way
that is seldom possible for an individual.

Although the group organizer wants accommodation and the hotel wants to let it, there
is a clear conflict of interest between the two sides. The former wants to have as many
rooms as possible during the peak period, and to get them at the lowest possible rates,
whereas the hotel wants to use group bookings to fill up during slack periods, and to
charge the highest possible rates for them.

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One of the advantages of group business is that it provides the hotel with a degree of
security. As long as the group organizer is reliable, the hotel knows that a significant
number of bookings are ‘in the bag’ well in advance. Another important consideration
is that the administrative costs of handling this type of booking are lower (though this
is offset to some extent by the need to spend time on negotiations). These factors help
to increase the attractiveness of group bookings.

ASSESSING THE VALUE OF GROUP BUSINESS

The hotel needs to take more than just room revenue into account. Group rates tend to
be package into account. A group tour will generally have its evening meal in the
hotel, while a conference (whose members are supposed to be attending the
proceedings all day) will usually have lunch.

There can be other kinds of revenue take into consideration. Conferences make use of
the hotel’s conference suite, and it is normal to make a charge for this. Conferences
usually have tea or coffee served halfway through each session: the hotel adds to a
charge for this, too. Conference delegates often spend significant amounts in the bar
after the formal sessions are over (their food and accommodation is almost always
paid for so they have a good deal of ‘pocket money’: besides, they have a common
interest and the opportunity to meet colleagues from other institutions). They may also
be extras such as laundry and telephone charges.

Conferences pose a particular problem in this respect because while group tours
normally include enough couples to produce a reasonable split between twins and
singles, delegates usually attend as individuals and would prefer to have single rooms.

ADVANCED BOOKINGS CONSIDERATIONS

A group represent a much larger proportion of a night’s bookings than any single
reservation, and a failure on the part of the group organizer to honour its contract is
much more serious than an individuals, and check them more carefully. Individual
guest histories are very much an optional feature of hotel procedures, but it is normal
to maintain some such of ‘agent record card’ as far as group organisers are concerned.

ADVANCED BOOKING PROCEDURES

Group bookings are inherently more complicated than individual ones because there
are a number of additional factors to consider. These include:
1. The arrangement for payment. The package price is simply transferred to the
group organizer’s ledger account in the usual way, but it may be necessary to open
separate ‘extras’ accounts for individual group members so that they can obtain
drinks, laundry and possibly room service on credit.

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2. Any additional administrative arrangement. Groups are often directed to a separate
area for check-in purposes, partly to foster a feeling of group cohesion and partly
to avoid long queues at reception.
3. Arrangements in respect of couriers, etc. Groups are normally accompanied by a
courier or tour organizer, and often by a driver as well. It is common for such
functionaries to be accompanied free or at reduced rates, especially if they handle
administrative tasks which would otherwise have to be undertaken by the hotel’s
own staff.

CONFERENCES
Conferences are very similar to groups. They are often arranged just as far in advance,
and represent just as significant a part of the night’s business. Consequently, the
process for handling conference business are very similar.

The main difference is that the hotel has to provide more in the way of facilities.
Conferences require general meeting rooms and additional syndicate discussion
rooms, as well as areas set aside for conference registration, press briefing (if
appropriate) and any associated social events. They key points to be considered in
respect of a conference booking are as follows:
1. Accommodation requirements. These cover not only the number of delegates
expected and the types of bedrooms required, but also the conference rooms
themselves.
2. Equipment. Modern conference presentations often employ sophisticated audio-
visual aids, and the hotel ought to be able to provide microphones, slide, films and
overhead projectors, speaker’s lecterns and the like, as well as humbler items such
as pencils, notepads and ashtrays.
3. Food and beverage requirements. It is usual to break up the conference
proceedings with a series of tea and coffee breaks, and these must be agreed with
the client and arranged with the food and beverage department.
4. VIP arrangements. Many conferences invite distinguished guest speakers to
address them. These may need to be met at the airport or station, and should be
afforded every possible courtesy by the hotel as well as the conference organisers.
5. Signs, etc. It will be necessary to put these up so that the delegates can find their
way around. However, they should not be too large or widespread as this may
annoy the other guests.
6. Partners’ programmes. Delegates often bring their wives, husbands or children
along with the, and a programme of visits, excursions and other activities may be
arranged for them. This too, requires planning, and the extent of the hotel’s
responsibility (and the appropriate charges) needs to be settled beforehand.

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 CHAPTER 11
TARRIFS
Introduction
So far, we have said little about the way in which a hotel decides how much to charge
for its accommodation. This is clearly something which affects its marketing policy
and is likely to play an important role in the negotiating process we outlined at the end
of the last chapter.
Tariff construction is not likely to concern the majority of front office staff very
closely. However, it is a matter for front office staff manager, and you ought to have
some understanding of the principles.
There are two fundamental methods of approaching the problem:
1. Cost-based pricing. In these systems, the tariff is designed to cover the basic costs
of operation at a given level of service, plus a given rate of return.
2. Market-based pricing. These systems start from an idea of what the customer is
prepared to pay and use this as a starting point. The hotel then tries to tailor its
costs so that it achieves a reasonable rate of return on that basis.

There are evidence that the hotel industry is divided into ‘price makers’ and ‘price
takers’. The former (usually the larger market leaders) use a sophisticated cost-based
approach combined with market research techniques to determine the optimum price
level for their hotels.

DIFFERENTIAL ROOM RATES

The 1:1,000 rule and the Hubbart formula only produce average room rates. These do
not allow for the fact that the price often has vary according to the type of room (e.g.
single, twin, etc.), its facility (size, furnishings, accessories, location, noise, etc.) and
the number of people occupying it.

These considerations affect most hotels, so that the calculation of an average room
rates is usually only the step in the process of tariff creation. It needs to be broken up
in order to offer differentials between different rooms types.

SEASONAL RATES
Another of the problems that an average rate doesn’t deal with is that of seasonality.
Almost all hotels experience some fluctuations in occupancy levels at different times
of the year, and these are particularly marked in the case of resort hotels. Setting a low

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one during the off season helps to attract business, while setting a higher one during
the busy season maximizes profit.

Some specialized kinds of operation (hire boats, for instance, or holiday camps) have
a wide range of different rates, with the main holiday periods attracting the highest
ones, but hotels generally have fewer.

MARKET PRICING
Price-taking or ‘price followership
Many smaller hotels simply ‘follow’ the prices established by their larger competitors
by keeping their own rates 10-20 per cent below theirs.

Strictly speaking, this is competitor-based pricing, but since the ‘pricemaker’ will
have taken what market will bear into consideration.

Price taking does not take any account of the follower’s operating costs. If the price-
maker is much more efficient (through better room design reducing heating costs, for
instance.

INCLUSIVE/NON-INCLUSIVE RATES
Before we finish, we need to consider whether to include meals in our rates. There are
four main kinds of tariff available:
1. Fully inclusive (room plus all main meals). This is the European ‘En Pension’ or
Full Board’ rate, also known as ‘American Plan’ because nineteenth century US
hotels often catered for long-stay full board residents.
2. Semi-inclusive (i.e. room plus breakfast and one main meal, usually the evening
one). This is the European ‘Demi-Pension’ or ‘Half Board’, also called ‘Modified
American Plan’ or ‘MAP’
3. Bed and Breakfast (‘B&B’). This is self-explanatory.
4. Non-inclusive rate (i.e. a separate change for each item such as a room, meals,
drinks, extras, etc.). This is often known as ‘European Plan’ because it was
characteristic of the large European hotels American stayed at in their travels.

No rate can ever be fully inclusive, because guests vary so much in their requirements.
Some drink a lot, others don’t. Some will make a lot of use of the telephone or laundry
while others won’t.

GUEST CHARACTERISTICS
The tariff type has to be related to the guests own requirements. The main factors
affecting these are as follows:
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1. Length of stay. An airport hotel can’t even be sure that its guests will stop for
breakfast. Most hotels find that overnighters want an evening meal, although
longer stays may not wish to be tied down to a single restaurant (this is why large
modern hotels often offer a range of ‘meal experiences’). Really long-term stays
(like those at spa hotels) tend to regard the hotel as ‘home’ and only eat out
occasionally.
2. Spending power. An inclusive tariff implies a table d’hotel menu with a restricted
range of dishes all costing more or less the same to produce. Since such menus
offer the advantages of economies of scale, they are usually cheaper and thus
appeal to customers with relatively low purchasing power. By contrast, more
upmarket customers are accustomed to a wider range of choice and are prepared to
pay for this.
3. Homogeneity. The standardization implicit in inclusive rates is more acceptable if
all the guests have similar backgrounds. This is characteristic of holiday camps,
group tour business and conventions.
4. Predictability. This means the extent to which the guests’ requirements are likely
to vary from night to night. A business traveller may eat a plain, solitary meal one
evening, then entertain a group of clients lavishly the next, which makes an
inclusive tariff awkward to operate.

HOTEL CHARACTERISTICS
Some hotels are more likely to operate inclusive tariffs than others. The main
considerations are:
1. Grade. A five star hotel has a higher staff: guest ratio than a cheaper one. The
extra staff make it easier for such hotels to produce itemized bills.
2. Size. This means that the cost of equipment such as expensive computers and point
of sale terminals can be spread over a larger number of customers. Moreover, the
larger the hotel, the more sophisticated its costing system needs to be, and this also
tends to lead to itemized bills.
3. Type of business. The longer stays characterized of resort hotels increase the
relative burden of itemizing every separate charge. If a guest incurs for charges a
day (room, breakfast, lunch and dinner) and stays for seven days, his bills will be
at least twenty-eight items long. This could be reduced to only one by using an
inclusive weekly rate.
4. Location. Guests at isolated hotels are more or less forced to eat there. On the
other hand, a hotel situated in the centre of a city’s restaurant district has little
chance of ‘holding’ its guests for more than one night (one imaginative solution is
to provide vouchers which the guests can use as a variety of local restaurant).
5. Marketing considerations. An inclusive rate helps to ‘fix’ guests as far as the
restaurant is concerned. This can be important in smaller hotels (where the
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 unexpected absence of a few guests can seriously upset restaurant calculations)
and those working on very narrow margins. Hotels offering inclusive rates
sometimes offer ‘meal allowances’, which permit guests to choose either the
standard table d’hote menu or to set off the cost against an ὰ la carte meal. This
encourages them to take advantage of the latter’s wide choice because they feel
they are getting a substantial allowance towards the cost, and thus helps to increase
restaurant sales figures.

CHAPTER 12
CONTROL
A housekeeper’s report is produced independently of front office. It is compiled on a room-
by-room basis and summarized by the housekeeper.

Occupied’ means that the room has been used and there is still luggage in it. ‘Checked out’
shows that it was used but the guest has left. ‘Slept out’ means that the room is recorded as
having been let but has not been slept in (it may mean that the guest has left the hotel for a
day but has asked that his room his room he kept available.

This report has to be checked against the room rack or computerized room status display. In
small hotels there are only likely to be one or two discrepancies, and these can be cleared up
quickly. In large hotels it may be necessary to prepare a ‘discrepancies report’, which is sent
back to the housekeeper for double-checking.

There will be three main types of discrepancy:

1. The rack shows ‘occupied’ but the housekeeper’s report shows ‘vacant’. The possible
explanations are:
 The rack is wrong, usually because the receptionist has forgotten to update it when the
guest left. This is serious, for the room might have been let to a ‘chance’ customer. It
is quite common error with manual systems, but much less likely with a computerized
one, which will automatically update its room status records whenever a guest is
checked out.
 There has been a ‘walk-out’ (i.e. a guest has left without definite loss to the hotel,
almost certainly including food, drink and services as well.
2. The rack shows ‘vacant’ but the housekeeper’s report says ‘occupied’. In this case the
possible explanations are:
 Reception has forgotten to update the rack when it registered a guest. Again, this is
almost impossible with a well-designed computerized system, especially one that
issues a coded room key on registration.
 The room might have been used by staff without notifying front office.
 Someone has deliberately failed to check in a sleeper using the normal procedures.
This is most serious situation of all, for it suggests that use of a key, but a criminally

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 inclined employee will probably be able to produce an explanation (‘I wasn’t sure if it
had been cleaned, so just nipped up to check…’) and in any case such records are not
always checked through in detail.
3. There are differences regarding the number of people who have slept in the room. This is
another serious matter, especially if the rack says ‘1’ and the housekeeper says ‘2’. Once
possibility here is that the guest has booked as a single and then smuggled a friend (or a
prostitute) in to share his accommodation.

NIGHT AUDIT
Although each shift is expected to ‘balance up’ before going off duty, hotels normally draw
the line under each day’s trading between midnight and 6a.m. the following morning. This is
the most convenient time because:
1. There will be few arrivals or transactions during that period.
2. It is essential to check that the accounts are correct before the guests start to leave the
following morning.

This process is known as ‘night audit’. In a large hotel it is often the responsibility of a
separate employee (or even a small team) known as the ‘night auditor (s). The role of the
night auditor is as follows:
1. To ensure that any outstanding transactions have been entered. There may very well be
some restaurant vouchers to be

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