FUNDAMENTALS OF THE HOTEL AND CATERING INDUSTRY
Staying Away from Home:
•
The Importance of Hotels
•
Travel & Hotels
•
Two Centuries of Hotel-keeping
•
Hotels in the Total Accommodation Market
•
Hotel Location
•
Types of Hotels
Hotel Products & Markets:
•
The Hotel as a Total Market Concept
•
Hotel Facilities & Services as Products
•
Hotel Accommodation Markets
•
Hotel Catering Markets
•
Hotel Demand Generating Sources
•
Hotel Market Areas
•
Hotel Market Segmentation
•
Buying & Paying for Hotel Services
•
Hotel Marketing Orientation
Hotel Policies, Philosophies & Strategies:
•
Objectives & Policies
•
General & Sectional Policies
•
Policy Formulation, Communication & Review
•
Hotel Philosophies
•
Hotel Plans & Strategies
•
The Framework of Hotel Management
Rooms & Beds:
•
Room Sales
•
Guest Accounts
•
Mail & Other Guest Services
•
Uniformed Services
•
Hotel Housekeeping
•
Organisation & Staffing
•
Accounting & Control
Food & Drink:
•
The Food Cycle
•
The Beverage Cycle
•
Hotel Restaurants
•
Hotel Bars
•
Room Service
•
Functions
•
Food & Beverage Support Services
•
Organisation & Staffing
•
Accounting & Control
Miscellaneous Guest Services:
•
Guest Telephones
•
Guest Laundry
•
Rentals & Concessions – Other Income
•
Accounting & Control
Hotel Organisation:
•
Rooms
•
Food & Beverages
•
Miscellaneous Guest Services
•
Hotel Support Services
•
The Management Structure
•
Organisational Structure of a Large Hotel
•
Accounting & Control
Hotel Staffing:
•
Determinants of Hotel Staffing
•
Numbers & Payroll
•
Hotel Products & Staffing
•
Organisation of the Personnel Function
•
Organisation of Training
•
Functions of the Training Division
Productivity in Hotels:
•
Measures of Labour Productivity
•
Physical Measures
•
Financial Measures – Sales & Payroll
•
Physical/Financial Measures – Sales Per Employee
•
Productivity Measures – Value Added Approach
•
Some Ways to Higher Productivity
•
Productivity Standards
•
Computers in Hotels
Marketing:
•
From Product to Sales to Marketing
•
The Marketing Concept
•
Special Features of Hotel Marketing
•
The Marketing Cycle
•
Marketing Resources
•
Hotels in the Total Tourist Product
Property Ownership & Management:
•
Property Ownership
•
Property Operation & Maintenance Energy
Finance & Accounts:
•
The Hotel Balance Sheet
•
Balance Sheet Ratios & Analysis
•
The Hotel Profit & Loss Statement
•
Profit & Loss Ratios & Analysis
•
Hotel Operating Profit
•
Balance Sheet & Profit & Loss Relationships
•
Liquidity Ratios
The Small Hotel:
•
Products & Markets
•
Ownership & Finance
•
Organisation & Staffing
•
Accounting & Control
•
The Future of the Small Hotel
Hotel Groups:
•
Advantages of Groups
•
Problems of Groups
•
Scope for Centralisation
•
A Concentrated Hotel Group
•
A Dispersed Hotel Group
International Hotel Operations:
•
Products
•
Markets
•
Cost & Profit Ratios
•
Ownership & Finance
•
Organisation & General Approach
Recommended Reading
Reading List
Main Text:
The Business of Hotels (Third Edition) – S Medlik (Butterworth/Heineman
STAYING AWAY FROM HOME
INTRODUCTION
Throughout the year, many people are increasingly stay away from home for different
reasons such as; business, holiday or other reasons. As a consequence many of them
stay in a hotels. The primary function of any hotel is to accommodate those away
from home and to supply them with their basic needs.
Hotel- is an establishment providing for reward accommodation, food and drinks for
travelers and temporary residents, and usually also meals and refreshments and
sometimes other facilities for other users.
Importance of Hotels
•
Provision of facilities – In most countries hotels provide facilities for the
transaction of business, for meetings and conferences, for recreation and
entertainment. Through their facilities hotels contribute to the total output of
goods and services, which makes up the material well-being of nations and
communities.
•
Attractions for visitors – In many areas hotels are an important attractions for
visitors who bring to them spending power and who tend to spend at a higher
rate than they do when they are at home.
•
Foreign currency earners – In areas receiving foreign visitors, hotels are
often important foreign currency earners and in this way may contribute
significantly to their countries’ balance of payments.
•
Employers of labour – Hotels provides thousands of jobs either directly or
indirectly. Directly people are employed in hotels as chefs, receptionists,
housekeepers, food and beverage managers etc. Indirectly hotels provides
opportunities for investments for individuals as proprietors of small hotels,
hospitality, university lectures etc.
•
Outlets for the products of other industries – In the building and
modernization of hotels, business is provided for the construction industry and
related trades. Equipment, furniture and furnishing are supplied to hotels by a
wide range of manufactures.
•
Source of amenities for local residents – Their restaurants, bars and other
facilities often attracts much local custom and many hotel have become social
centers of their communities.
TRAVEL AND HOTELS
Staying away from home is a function of travel. Three main phases may be
distinguished in the development of travel in the northern hemisphere;
•
Until about the middle of the 19th C;
•
Most journeys were undertaken for business and vocational reasons, by road,
by people travelling mainly in their own countries.
•
Volume of travel was relatively small, confined to a small fraction of the
population in any country.
•
Most travel was by coach
•
Inns and similar hostelries along the highways and in the principal towns
provided the means of accommodation.
•
Between about 1850 and about 1950
•
Travel was mainly for other reasons, business, holidays came gradually to
represent an important reason for a journey.
•
The railway and the steamship dominated passenger transportation and the
new means of transport gave an impetus to travel between countries and
between continents.
•
Hotels together with guest houses and boarding houses dominated the
accommodation market.
•
By about the middle of the 20thC
•
Most traffic returned to the road, with the motor car increasingly providing the
main means of passenger transportation.
•
Aircraft took over from both the railways and shipping as the principal means
long-haul passenger transport.
•
a growing volume of travel away from home became international.
•
New forms of accommodation, holiday centers, holiday villages, motels and
various self-catering facilities emerged.
TWO CENTURIES OF HOTELKEEPING
In England
•
The word hotel came into use in England with the introduction of London,
after 1760 of the kind of establishment then common in Paris, called hotel
garni or a large house in which apartments were left by the day, week or
month.
•
Hotels with managers, receptionists and uniformed staff arrived only at the
beginning of the 19thC.
Other parts of Europe
Hotels made much of progress in other parts of Europe in the closing years of the
18thC and early years of the 19thC. At that time originated the idea of a resort hotel.
In North America
Early accommodation originated in converted houses. By the turn of 18thC, several
cities or the Eastern Seaboard had purpose-build hotels. In the first-half of the 19th C,
hotel building spread across America to the pacific Coast.
HOTELS IN THE TOTAL ACCOMODATION MARKET
The ratio of beds in hotels and similar establishments to beds in supplementary
accommodation gives an indication of the relative importance of the hotel sector in
the total accommodation market.
•
According to the World Tourism Organisation, the global capacity of hotels
and similar establishments approached 12.7 million rooms in the mid 1990 s.
•
Well over one-half of the total European capacity is located in five countries Italy, Germany, France, Spain and the United Kingdom.
•
United States, Mexico and Canada combined account for more than three
quarters of the rooms in Americas.
•
China has more than quarter and together with Japan, Thailand and Australia,
more than two thirds of the capacity of East Africa and the Pacific.
•
The remaining global regions –Africa, Middle East and South Asia –combined
have only 6% of the total world capacity.
HOTEL LOCATION
Hotel services are supplied to their buyers direct in person, they are consumed at the
point of sale and are produced there. The main rules of success in the hotel business
are;
•
Location
•
Location
•
Location
Main factors influencing hotel location
•
Transport modes-in this early days all accommodation units followed
transport modes. Inns and other hostelries were situated along the roads and
destinations, serving transit and terminal traffic.
•
Holiday markets-in their areas of highest concentration, holiday visitors are
accommodated in hotels in localities where the resident population may
represent only a small proportion of those present at the time.
•
Economic activity – industrial and commercial activities creates demand for
transit and terminal accommodation in industrial and commercial centers, in
locations not frequented by holiday visitors.
TYPES OF HOTELS
Some Criteria used to Classify Hotels into types
•
Location – hotels may be classified as city hotels, town hotels, inland hotels,
coast hotels, country hotels
•
Actual position – city center hotels, town center hotels, coastal resort hotels
etc
•
Relationship with particular means of transport – hotels may be classified
into motels, railway hotels, airport hotels
•
Purpose of visit – this may give rise to business hotels, holiday hotels,
convention hotels, tourist hotels
•
Duration of guest’s stay – for short stays, transit hotels; for long stays
residential hotels
•
Range of Facilities and Services – hotels may be open to residents and nonresidents, or restrict itself to providing overnight accommodation and at most
offering breakfast to its guests and be an hotel garni (apartment hotel)
•
License for the sale of alcoholic liquor – hotels may either be licensed or
non- licensed
•
Size – Hotels may be small, medium sized, large or major
•
Grading – hotels may be luxury, quality or economy. Also hotels may be one
star, two star, three star, four star or five star
•
Ownership and management – hotels may be individually owned
independent, chain or group hotels. Accompany may operate its hotels under
direct management or under a franchised agreement.
NOTE: In its broadest sense, hotels may be classified as;
•
Terminus Hotel – is a medium sized, economy, town center,
unlicensed hotel, owned and managed by a small company catering
mainly for tourists visiting the historic town and the surrounding
country side.
•
Hotel Excelsior – is a large, independent luxury hotel on the main
promenade of the coastal resort, with holiday visitors as its main
market.
•
The Cross-roads Hotel – is a small licensed quality transit motor
hotel, operated as a franchised, on the outskirts of the city which serve
mainly travelling businessmen and tourists.
HOTEL PRODUCTS AND MARKETS
THE HOTEL AS A TOTAL MARKET CONCEPT
From the point of view of its users, an hotel is an institution of commercial
hospitality, which offers its facilities and services for sale, individually or in various
combinations.
The concept is made up of the following elements;
•
•
Location
•
Facilities
•
Services
•
Image
•
Price
Location
It places an hotel geographically in or near a particular city, within a given area. It
denotes accessibility and the convenience this represents, attractiveness of
surroundings, freedom from noise, etc
•
Facilities
Include bedrooms, restaurants, bars, function rooms, meeting rooms and recreational
facilities. May be differentiated in type, size and in other ways
•
Service
Comprises the availability and extent of particular hotel services provided through its
facilities. The style and quality described in such terms as formality and informality,
degree of personal attention, speed and efficiency
•
Image
This is the way in which the hotel portrays itself to people and the way in which it is
perceived as portraying itself by them. It is enhanced by such factors as its name,
appearance, atmosphere, who eats and stays there.
•
Price
It expresses the value given by the hotel through its location, facilities, services and
image and the satisfaction desired by its users from the elements.
NOTE: There are varying degrees of adaptability and flexibility in the total hotel
concept, ranging from the complete fixity of its location to the relative flexibility of
price, with facilities, services and image lending themselves to some adaptation in
particular circumstances with time.
HOTEL FACILITIES AND SERVICES AS PRODUCTS
Rooms and Beds – These relate to sleeping accommodation that is provided to hotel
residents alone
Restaurants – These are used to provide food to residents and non-residents alike
Bars – These are used to provide drinks to both residents and non-residents alike
Functions Facilities – Their products are bought by organized groups who may be
residents in the hotel eg participants in a residential conference, or be non-residents
such as a local club or society, or the group may combine the two
HOTEL ACCOMMODATION MARKETS
The buyers of overnight accommodation maybe classified into the main categories,
namely:
•
•
Holiday users
•
Business users
•
Other users
Holiday users
Characteristics:
•
Mainly travel for leisure reasons
•
Long stay guest at their destinations
•
Their demand for hotel accommodation tends to be resort- oriented.
•
They are seasonal.
•
They are sensitive to price because they often pay out of their own pocket.
•
Tend to book accommodation far much in advance.
•
Business Users
Characteristics
•
Are employees and others travelling in the course of their work
•
Are people visiting exhibitions, trade fairs or coming together as members of
professionals and commercial organizations for meetings and conferences.
•
Their demand for hotel accommodation tends to be town and city oriented.
•
They are non- seasonal
•
They are less price sensitive except for conferences delegates and their
attending exhibitions.
•
Often book accommodation at short notice.
•
Other Hotel Users
Characteristics
•
Comprises visitors to a particular location for a variety of reasons other than
holidays or business.
•
Include those attending such family occasions as weddings, parents visiting
educational institutions, visitors to a special events, relocating families.
•
Have more varied characteristics.
•
Tend to book accommodation in advance.
HOTEL CATERING MARKETS
Hotel catering facilities are restaurants, bars and function rooms. The demand of hotel
catering facilities may be categorized into:
•
•
Hotel residents
•
Non- residents
•
Organized groups
Hotel Residents
Characteristics
•
They are those who have purchased hotel overnight accommodation.
•
Their use of hotel catering facilities is mainly influenced by the reason for
their stay at the hotel and term on which they stay.
•
Breakfast is their common hotel purchased.
•
Are more likely to be hotel restaurants or bar customers in the evenings.
•
Non- Residents
Characteristics
•
They may be staying at other hotels or accommodation establishments or with
friends or relatives or day visitors to the area or local residents using the hotel
restaurants and bars.
•
They tend to represent important hotel users at mid- day as well as in the
evening particularly at weekends.
•
Organized Groups
Characteristics
•
They make advance arrangements for functions at the hotel.
•
They require separate facilities and organizational arrangements.
•
They include local clubs, societies, business and professional groups as well as
participants in meetings and conferences originating from outside the area.
SOURCES OF HOTEL DEMAND
To most people, demand for hotel accommodation is a derived demand- that is, few
stay or eat in an hotel for its own sake: their primary reasons for doing so lie in their
reasons for visiting an area or for spending their time there in particular ways.
For many others the use of hotel is a matter of choice; they do so in their pursuit of
leisure and recreation: for them hotel usage involves discretionary use of their time
and money.
The main types of hotel generating sources are;
•
Institutional sources
•
Recreational sources
•
Transit sources
•
Institutional Sources
These include industrial and commercial enterprises, educational institutions,
government establishments and other organizations. They generate demand for hotels
through their own visitors and their requirements for hotels facilities and services.
•
Recreational sources
Include historical, scenic and other site attractions and event attractions. They
generate demand for hotels from tourists, local events and activities in the social and
cultural life of the community. They generate demand from clubs, societies and other
organizations.
•
Transit sources
This stems from individuals and groups with no intrinsic reason for spending time in
particular locality, other than being on the way somewhere else and the need to break
journey.
It is closely related to particular forms of transport, it expresses itself on highways, at
ports and at airports.
HOTEL MARKET AREAS
Main approaches of defining market areas
•
Reference to the people who buy hotel services
•
A network of dealings between the hotel and its users. From the above
definition, hotel users may come from within the area, from various parts of
the country and from abroad. This gives rise to local, domestic and foreign
markets.
•
Physical area served by the hotel – The area may extend from its immediate
vicinity to a radius of several miles or more for hotel accommodation.
For hotel catering services, the market area depends on market density the availability
of spending power within an area as well as on the accessibility of the hotel to the
different sources of demand and on the availability of other catering services in the
area.
HOTEL MARKET SEGMENTATION
This refers to the subdivision of the market based on different criteria. It enables
individual hotels to identify their actual and potential users.
Some Criteria Used in Segmenting Hotel Markets
•
Products Bought – Buyers of accommodation, food, drink and functions.
Accommodation Market – holiday, business and other users
Hotel Catering Markets – hotel residents, non-residents and functions
•
Origin of Demand – may be classified into institutional, recreational and
transit sources
•
Needs of hotel Users and the means they have to pay for their satisfaction
•
Socio-Economic Characteristics – this groups people according to their
occupation and employment status, for example;
Social Grade
A
Social Status
Upper middle class
Head of Household Occupation
Higher managerial,
administrative or professional
Middle class
Intermediate
managerial,
administrative or professional
Lower middle class
Supervisory or clerical, and
junior managerial, administrative
or professional
Skilled
working Skilled manual workers
class
Working class
Semi-and
unskilled
manual
workers
Those at the lowest State pensioners or widows (no
level of subsistence
other earner), casual or lowest
grade workers
B
C1
C2
D
E
BUYING AND PAYING FOR HOTEL SERVICES
The main buying decisions are:
•
Deliberate
•
Impulsive
Deliberate buying decisions – these are made with some advance planning and with
advance reservations
Impulsive decisions – are instantaneous, for example, a tourist looking for somewhere
to stay when travelling by car, or on arrival at the railway station or airport.
It is important to know who the buying agent is and where the person is located.
According to the source of payment for hotel services, hotel users are of two kinds,
namely;
•
Those who pay for themselves
•
Those whose bills are covered or reimbursed for them
HOTEL MARKETING ORIENTATION
The marketing concept is concerned with the consumer as a starting point in the
conduct of a business
The aim is to meet the needs of hotel users. Some of these needs are basic and
physical, such as sleeping in clean beds or eating wholesome meals, others are met by
the image of the hotel. A successful hotel must seek to meet both sets of needs
HOTEL POLICIES, PHILOSOPHIES
AND STRATEGIES
OBJECTIVES AND POLICIES
Objectives
They indicate what the business is striving to achieve, for example, profitability,
growth, customer and employee satisfaction. These are the stated ends to be pursued.
Different parties in the hotel business have different objectives such as;
•
the community and customers, the purpose of an hotel is to provide certain
facilities and services to its users;
•
the employees, an hotel is a source of employment,
•
the owners, an hotel provides a return on their investment
Policies
These are a set of guidelines for management. The main categories are two namely;
general policies and sectional policies.
General policies – these are formulated and promulgated by the top management, the
owner/manager in a small business, the board of directors in a company.
Sectional policies – these are more detailed guidelines in particular aspects of the
business and in particular activities. They flow from the general policy and extend it
from broad policy indications into operational terms.
Categories of sectional policies
•
Customer Policy – normally says what the hotel is aiming to do in terms of its
markets and quality standards of what it provides; includes its concept of good
value and its approach to price, discounts and credit; its state its attitude to
complaints and refunds
•
Employment or personnel policy – covers such matters as recruitment,
selection and training; remuneration, conditions of employment, welfare;
promotion, retirement, termination; consultation, negotiation and the handling
of disputes.
•
Shareholder Policy – defines what the owners are entitled to expect in terms
of their rewards, information and participation in the business, and what is
expected from them.
•
Supplier policy – it postulates what is expected from them regarding the
quality of supplies, delivery and terms, and how each can expect to be treated
by the hotel
POLICY FORMULATION, COMMUNICATION AND REVIEW
Policies should be committed to paper and be expressed to a greater or lesser extent in
writing and distribute them to those concerned. The need to communicate formally in
writing is a function of size.
Defining objectives is the responsibility of hotel management, which extends from the
directors through managers to heads of departments and supervisors.
At any time objectives and policies should express the best current view of the
business and the rules to be adhered to.
HOTEL PHILOSOPHIES
These are the rules, beliefs and conventions that are not formulated as policies, and
yet influence how people act, and are accepted by them as part of their everyday
conduct of the hotel. They are the ‘common culture, doctrine or philosophy’ of the
business’.
A philosophy may express a more general attitude of management. It is ‘the way we
do things around here’.
Philosophies may be less formal and more specific while policies may be more formal
and more general.
HOTEL PLANS AND STRATEGIES
Plans
Plans are instruments which extend the attainable objectives of the hotel in concrete
actionable terms for a few months or a year ahead (short-term), for several years
(medium-term), for periods longer than a few years (long-term).
Plans are more numerate instruments and they do so as far as possible in measurable
terms for given periods of time. For example, return on invested capital, volume of
sales and rates of growth.
Planning is developing a constructive concern with tomorrow, deciding what can
happen, what should happen and how the desirable is to be accomplished.
Strategies
They define how objectives shall be met. These are the links between objectives and
plans and a means to action-oriented planning in the hotel business.
Management Techniques
Budgetary Control – This is the process used to keep the hotel on its course by
translating into budgets the objectives, plans and strategies.
Management by objectives – these enable members of the management team to adjust
their performance because what is expected of them is based on what they can control
and influence, within the totality of the whole hotel.
FRAMEWORK OF HOTEL MANAGEMENT
There are the objectives – what the hotel is in business to attain. Policies are the rules
on which management bases its decisions in the conduct of the business, and these are
supported by the philosophies of the hotel – the less formal rules and conventions.
Plans and strategies are the instruments which direct management towards the
attainment of the objectives, with the use of such techniques as budgetary control and
management by objectives.
ROOMS AND BEDS
Introduction
Sleeping accommodation is the most distinctive hotel product. Room sales are
invariably the most profitable source of hotel revenue, which yield the highest profit
margins and contribute the main share of the hotel operating profit.
The main hotel activities earning the room revenue are:
•
Hotel reception
•
Uniformed services
•
Housekeeping
They are the components of the hotel accommodation function.
•
HOTEL RECEPTION
Room Sales
Hotel guests may reserve their accommodation: in person, by telephone, facsimile or
e-mail, by letter, through travel agents and central reservation systems.
Hotel Reservation – advance reservations are an important responsibility on the part
of the hotel, both in legal and in business sense, and calls for a system that enables
room reservations to be converted into room revenue.
Hotel Register – used by guests to put down certain particulars about themselves.
Importance of guest registration
•
To satisfy the law
•
To provide an internal record of guests from which data are obtained for other
hotel records.
Room Allocations – may be made before the guests’ arrival and only guests
registering without a previous reservation are allocated rooms on arrival, but in some
hotels all room allocations are made only when guests arrive.
Main Records Used to Document Room Sale in the reception
Reservation Form/Card – it standardizes the details of each booking, forms the top
sheet of any documents relating to it, and enables a speedy reference to any individual
case
Reservation Diary or Daily Arrivals List – records all bookings by date of arrival and
shows all arrivals for a particular day at a glance
Reservation chart – provides a visual record of all reservations for a period and
shows at a glance rooms reserved and those remaining to be sold
Hotel register – records all arrivals as they occur and gives details of all current and
past guests
Reception or room status board – shows all rooms by room number and floor and
gives the current and projected status of all rooms on a particular day, with details of
occupation
Guest index – it lists all current guests in alphabetical order with their room numbers
and provides an additional quick point of reference in larger hotels.
Mail and Other Guest services
A combined key and mail rack is a standard feature of most hotel reception offices
and reflects two typical responsibilities of the office – room keys and guest mail.
Room keys are issued from the rack to arriving guests and to residents who call for
them in the course of a day’s business.
Guest Mail
May arrive before, during or after a guest’s stay at the hotel.
•
Before – mails awaiting guest’s arrival should be handed to them when they
are registering
•
During – these should be delivered to guests promptly
•
After – these should be forwarded to them
Basic Aids Related and Complimentary in the Provision of Key, Mail and Other
guest Services
Guest index – shows whether a particular person is resident and that person’s room
number
Reception or Room status board – shows who is occupying a particular room
Key and Mail Rack – indicates whether the guest is in the hotel and whether there is
any mail for that person.
Reception as a source of information to guests about;
•
•
Hotel facilities and services
•
The locality
•
Transport and other matters
UNIFORMED SERVICES
They offer personal services to guests such as:
•
Servicing arrivals and departures – they meet and greet arriving guests, help
them with their luggage and parking their cars. On departure, guests, luggage
and transportation are again their primary responsibilities.
•
Source of information – about the hotel and locality, and the guest’s main
source of such arrangements as theatre tickets, tours, car hire and other
services.
•
Other guest services – may provide such items as newspapers as well as other
small articles. May also act as messengers, lift operators and men’s cloakroom
attendants.
•
HOTEL HOUSEKEEPING
Housekeeping functions
•
Servicing of guest rooms
•
Cleaning bedroom floors, staircases, public cloakrooms and other public areas
of the hotel
•
Other Housekeeping services – these may include;
•
Provision of first aid to guests and staff
•
Dealing with lost property
•
Dealing with floral arrangements
ORGANIZATION AND STAFFING
The dimensions and characteristics of each hotel are the main determinants of the
organization and staffing of the accommodation function.
ACCOUNTING AND CONTROL
The financial performance of the hotel accommodation function is reflected in the
rooms department operating statement, which shows the revenue and expenses of the
department for a given period resulting in the departmental profit. These figures may
be compared by the budget or with the same period of the previous year.
FOOD AND DRINK
Introduction
The provision of food and drink in hotels account for a larger proportion of employees
than the provision of sleeping accommodation and related services. This is because;
In contrast to hotel rooms, meals and refreshments in hotels may be supplied to nonresidents as well as to resident guests and include substantial functions sales
The provision of meals and refreshments is relatively labour intensive.
THE FOOD CYCLE
It represents a sequence through which food passes from the supplier to consumer in a
hotel.
The cycle consist of several stages, namely; - purchasing, receiving, storing and
issuing, preparing and selling.
•
Purchasing – normally one person has a designated responsibility for food
purchases. The purchasing function includes identifying best sources of
supply, making arrangements with suppliers and placing orders, close liaison
with the kitchen and other user departments regarding requirements, yield and
quality, and with the accounts department regarding payment.
•
Receiving – this entails ensuring that the hotel is being supplied with food of
the ordered quantity and quality at the agreed price, and its transfer to stores or
directly to the user departments. It takes place by comparing delivery notes
against orders and by a physical inspection of the deliveries.
•
Storing and Issuing – consists of maintaining an adequate stock of food for
the day-to-day requirements of the hotel, without loss through spoilage and
pilferage and without capital being tied up unnecessarily through
overstocking, and of issues of food to user departments.
Stocktaking takes place to ascertain the value of stocks held in order to determine the
food costs for a given period and stock values for accounts purposes.
•
Preparing/Food production – it represents the conversion of the purchased
foods by chefs and cooks into dishes and meals.
Main Aspects of Food production
•
Volume forecasting – it seeks to predict the number of meals and of
particular items of the menu to be served in each outlet of the hotel each
day
•
Yields – postulate the quantity obtained from items of food after their
preparation and cooking
•
Recipes – give the formulae for producing particular dishes, including the
quantities and qualities of ingredients and the method of preparation used
•
Portions – represent the size or weight of food served to customers
•
Selling – it consists of the service of particular foods, dishes and meals by
various categories of food service staff to the customer in a restaurant or
another hotel facility at particular prices.
Main Aspects of Selling
•
•
Menu
•
Form of service
•
Physical environment and atmosphere
Menu - The main types are two, namely; table d’hôtel and a’ la carte
Table d’hôtel menu – is a limited choice menu with a single price for any combination
of items chosen or with a price determined by the choice of the main dish
A’ la carte menu – provides a choice of items, each of which is priced separately
•
Forms/levels of service –
Self-service – the customer orders and collects the food from a counter and takes it to
a table where he/she consumes it
Counter service – the customer is presented with the food he/she has ordered and
consumes it at the counter
Table service – the customer is served by a waiter or waitress who takes the order and
serves the meal at the table
•
Physical environment and atmosphere
This include; the shape and size of the room, the design and décor, the type and layout
of seating, the lighting, temperature, noise level, cleanliness and comfort, the age,
appearance and dress of the staff and guests.
The food cycle
Selling
Preparing
Storing & Issuing
Receiving
Purchasing
THE BEVERAGE CYCLE
Beverages normally include spirits, wines, beers and minerals but often exclude other
soft drinks which are treated in hotels as food.
N/B: Compared with the food cycle, beverage cycle is a simpler matter. This is
because:
•
Purchasing – many beverages are purchased in standard measures under
brand names from one or a few suppliers, many beverages are not
perishable and can be handled in the same form in which they have been
purchased.
•
Receiving – the form in which beverages are supplied make it easy to
ensure that what is delivered has been ordered.
•
Storage – generally beverages have less specific storage requirements than
food
•
Preparation and sales – each beverage selling outlet in an hotel combines
preparation and sales and there is normally a standard unit of sale for each
For all the above reasons beverage control is a simpler matter than food control and
takes one of two basic forms:
•
Standard gross profit percentages are applied to minerals, beers, wines and
spirits, which are then controlled against these standards
•
Beverages are issued to selling outlets at selling prices, and controlled against
sales
HOTEL RESTAURANTS
The number and type of restaurants is determined by the size and diversity of the
markets served by the hotel.
One ‘multi-purpose’ restaurant has to satisfy the needs of smaller hotel operations
with limited non-resident markets for lunch and dinner service. When the market is
large enough, the need arises to differentiate between those seeking full meals who
have enough time available to consume them, and those requiring light meals and
snacks who have limited time and perhaps also limited means.
HOTEL BARS
These are the main hotel outlets for the service of drinks. The size and diversity of the
hotel markets are reflected in the number and type of hotel bars.
In a small hotel one bar may serve residents and non-residents, in large hotels there
may be a resident’s bar perhaps combined with television lounge, a lounge or cocktail
or a restaurant bar, and one or more separate bars serving functions.
ROOM SERVICE
This refers to the provision meals and drinks to guests in their rooms.
It may take the following forms:
•
Meals and drinks supplied to rooms as part of the restaurant and bar service
•
Organized as a separate department particularly when it operates from separate
floor kitchens
•
Provided by means of bar units in guest rooms, which are stocked with a
selection of alcoholic and non-alcoholic drinks for the use of guests who are
charged for the drinks consumed.
FUNCTIONS
Banquets, conferences and similar hotel services may be conveniently grouped
together as distinct and separate hotel products under the heading of functions.
Main characteristics
•
Customers are organized groups such as clubs
•
The organized groups make arrangements for dates and times, numbers
attending, menus and other requirements for each occasion, in advance
•
Each occasion can be treated as a separate operation planned and organized as
such
•
Normally the same agreed menu is served to all participants
•
The operation usually takes place in separate rooms and is served by staff who
are distinct from those serving others in restaurants and bars, although they
may be interchangeable between these facilities
Main Records Used
•
A function agreement – it summarizes the arrangements for each function
•
A function diary – it lists details of all functions in date order
•
A function chart – it provides a visual record of all functions arranged for a
period ahead
N/B: The volume of identical meals prepared and served together enables higher
profit margins to be achieved from functions than from other food and beverage
activities, and functions often represent the second most profitable hotel product, after
rooms.
FOOD AND BEVERAGE SUPPORT SERVICES
•
•
Kitchen
•
Stores
Kitchen
The numbers and size of kitchens in an hotel depend on the scale and diversity of the
food operations as well as the operating preferences and philosophies of hotel
management.
Kitchen services may be provided in any of the following ways;
•
One centralized kitchen supplying food to all restaurants
•
Individual kitchens serving particular outlets
•
Stores
Basic types of food and beverage stores
•
Food stores – these are sub-divided into;
•
Beverage stores or cellar
•
Linen, china, glass and silver stores
•
Dry stores
•
Perishable stores
•
Cold rooms
MISCELLANEOUS GUEST SERVICES
Introduction
The hotel services other than accommodation food and drinks may be provided to the
guest by the hotel or by the operators on the hotel premises. The revenue earning
activities provided directly by a hotel may be variously described as ancillary or
subsidiary revenue-earning department or minor operated department. These services
may include, telephone, laundry etc.
GUEST TELEPHONES
This facilitates communication between the guest and the outside world. May include
telephone services such as telegrams and facsimile.
The Main Operative Methods
•
All calls to be made through the hotel operator who can ascertain the cost of
all outgoing calls with the aid of a meter connected to the main switchboard
•
The guests may dial calls directly from their rooms
GUEST LAUNDRY
Some guests particularly those staying in hotels more than a few days often require
laundry and valet services in hotels.
Main Ways of Organising Guest Laundry
•
As an in-house facility
•
By arrangement with an outside laundry and dry cleaning firm
•
Centralized
Guest laundry and valeting are regarded by some hotels as a service to their guests,
which is required no more than to cover its direct costs.
RENTALS AND CONCESSIONS
Hotels may raise income from activities operated on the hotel premises by others as;
•
•
Rentals
•
Concessions
Rentals
This type of income arises most commonly from;
•
flats and apartments let to tenants for residential purposes
•
The offices may be let to businesses and other organisations for their purposes;
shops let to retailers;
•
club rooms let for purposes of a member’s or a proprietary club
•
display rooms and show cases let to others for the display of their wares
•
Concessions
The concessionaires are given the right to operate on hotel premises with a view to
undertaking services to guests, which would be otherwise operated by the hotel. These
include;
•
News agents
•
Hair dressers
•
Souvenir shops
NOTE: Rentals denote greater independence for the tenants than concessionaires
OTHER SOURCES OF INCOME
•
Commissions – may accrue to the hotel from the providers of car hire and taxi
services, theatre and travel agencies, and other suppliers of services to guests,
in return for the business generated for them by the hotel
•
Foreign currency and travelers’ cheques exchange – hotels usually exchange
these for guests at rates more favourable to the hotel by those offered by banks
•
Salvage – it represents revenue derived from the sale by the hotel to dealers of
such items as used cooking oil, waste paper and other waste or obsolete
materials
•
Interest – this is earned by hotels on bank deposits and other investment of
spare funds
•
Cash Discounts – these are earned by the payment of creditors’ accounts
within the discount period, as deduction from the cost of goods and services
bought.
HOTEL ORGANISATION
Introduction
Hotel organization is the framework in which various activities operate. It is
concerned with such matters as:
•
The division of tasks
•
Positions of responsibility and authority
•
Relationship between the positions
Some Concepts in the Organisation Framework
•
Span of control – refers to the number of subordinates supervised directly by
an individual
•
Levels of management – the number of tiers through which management
operates
•
Delegation – this is the allocation of responsibility and authority to designated
individuals in the line of ‘command’
Organization is a function of purpose and the complexity of hotel business arises
because it is concerned with several distinct products, services and facilities which are
offered in various combinations.
Classification of Activities of the Hotel Business
•
Operated Departments (Revenue Earning)
•
Major (Primary) Departments
These are;
•
•
Rooms
•
Food
•
Beverages
Minor (Ancillary) Operated Departments
These include;
•
Guest telephone
•
Guest laundry and valeting
•
•
Other guest services
Support Service Departments (Undistributed Overheads)
These include;
•
•
Administration and general
•
Marketing
•
Property operation, maintenance and energy
ROOMS
The accommodation function of the hotel is described in terms of reception,
uniformed services and housekeeping
Typical Organisational Approaches
•
All the three activities operate as separate departments with their own heads of
departments
•
Reception and uniformed services are grouped together as the front hall or
front house of the hotel under an assistant manager for whom this is the sole or
main responsibility
•
Reception or uniformed services are grouped together as front hall or front
house department with its own head of department
•
All the three activities are grouped together as the rooms department under an
assistant manager for whom this is the soul or main responsibility
•
All three activities are grouped together as rooms department with its own
head of department
Some Activities Connected with Rooms
•
In most hotels advance reservations form an integral part of hotel reception
and the same employees deal with them and with other reception tasks.
•
In smaller hotels guest accounts are normally handled by
bookkeeper/receptionists however, this is an extension of the accounting
function.
•
In some hotels room service is provided by housekeeping staff, though this
function is clearly part of the food and beverage function of the hotel.
•
FOOD AND BEVERAGES
Food and beverage function of the hotel is described in terms of the food and
beverage cycle, the main sales outlets, and the related support services.
Typical Organisational Approaches
•
Each sales outlet and supporting service operates as a separate department
with its own head of department
•
Several departments are grouped together under an assistant manager for
whom they represent the sole or main responsibility eg purchasing and storage
bar etc
•
Several of these departments are grouped together as one department under its
own head of department
•
All food and beverage activities are grouped together under an assistant
manager from whom they represent the sole or main responsibility
•
All food and beverage activities are grouped together as a food and beverage
department with its own head of department
Aspects of Food and Beverage Function
•
Most hotels have facilities serving both food and beverages although in some
of them food or beverages may predominate.
•
Food and beverage control based on the food and beverage cycles may be
appropriately seen as part of the total accounting function of the hotel
•
Where there is a separate sales department, food and beverage sales are
usually closely monitored by that department.
•
MISCELLANEOUS GUEST SERVICES
These may be presented in such terms as telephone and laundry
Typical Organisational Approaches
•
The services are operated under direct management of the hotel as minor
operated department
•
The services are operated under rental and concession arrangements with hotel
by another firm.
The Following Services may be provided under this arrangement;
•
Beauty shop and hair dressing
•
Florist
•
Garage
•
Laundry and dry cleaning
•
Newspapers and magazines
•
Secretarial services
•
Squash courts and tennis courts
•
Gifts and souvenirs
•
Swimming pool tobacconist
Factors Influencing the Type of Approach Adopted
•
Size of the operation
•
Availability of suitable operators of particular services
•
Operational philosophy of the hotel or hotel groups
•
Quality of the services
•
Financial return to the hotel
HOTEL SUPPORT SERVICES
In practice the non-revenue service activities are organized in one of the three main
ways.
•
Retained among the hotel managers own responsibilities
•
Assigned to an assistant manager as one of his or her responsibility
•
Assigned to separate department with its own head of department
Specialist activities which may be organized in the hotel
Specialist Activity
Source
Accounting
and Hotel accountants and consultants, public accountants and
Finance
auditors, professional stock-takers
Personnel Services
Personnel recruitment and selection specialist; work study,
human resource and industrial relations advisers; training
boards and other agencies
Purchasing
Hotel accountants and consultants; furniture and equipment
specialists; various suppliers
Sales and marketing Market research agencies; advertising agencies; public
relations consultants
Property operation, Architects, builders, designers; consulting engineers; utility
maintenance, energy undertakings
THE MANAGEMENT STRUCTURE
According to the size of the hotel and the particular arrangement in operation, the
hotel chief executive may be variously designated as managing director, general
manager or simply hotel manager.
The complexity and continuity of the hotel activities normally give rise to the need for
one or more deputy or assistant managers.
Those in positions of heads of departments fall into two distinct categories;
Line managers – Heads of operated departments with direct lines of responsibility and
authority to their superiors and to their subordinates. Eg, head receptionists, head
housekeepers, head chefs and restaurant managers.
Heads of service departments – these are specialists who provide advice and service
to line management. They have no direct authority over employees other than those of
their own departments. Eg, accountants, buyers, personnel and purchasing officers.
NOTE: ORGANISATION STRUCTURE OF A LARGE HOTEL (Copy
organization chart, page 159)
INFORMATION TECHNOLOGY IN HOTELS
Main Areas of Application of Information Technology in Hotels
•
Administration
manipulation
–
•
Communications – fax, e-mail, telephone, messaging, pagers
•
Control – reservations, billing, telephone charging, in-room entertainment
•
Finance – budgeting, accounting and taxation
•
Internal Systems – property and energy management, security and fire control
•
Management – management information and decision making, project
management systems
•
Marketing – internet selling, customer profiling
word processing, spreadsheets,
data storage
and
Advantages of Technology
•
Speed – the new technology is fast and speed is important in hotels, for
example, in responding to a guest, travel agent etc
•
Accuracy – the new technology is accurate and accuracy is important in
hotels.
•
Cheap – the new technology is becoming cheap to use, cheaper than ordinary
office machinery, and with rising costs of clerical labour in hotels, the scope
for saving may be considerable.
HOTEL STAFFING
Main Aspects of Human Resource Function
•
Job analysis, manpower planning and scheduling of work
•
Recruitment, selection and training of employees
•
Job evaluation, conditions of employment and welfare of employees
•
Promotion, retirement and termination of employment
•
Employees consultation, negotiation and the handling of disputes
DETERMINANTS OF HOTEL STAFFING
•
Size of hotel – large hotels tend to have a lower staff/guest ratio than medium
sized hotels and the ratio is also low in smaller owner/managed hotels where
the owner and his family generally work longer hours and employ fewer staff.
•
Ownership – group owned hotels tends to be larger and more standardized
than the independent hotels, which tend to be more individualized
•
Age and layout of the building – modern purpose built hotels with a view to
ease economy of operation can operate with fewer staff than older hotels,
which are more difficult and expensive to operate
•
Range/type of facilities and services – the greater the variety of food and
beverage facilities of other guest services in the hotel, the greater the staffing
requirements
•
Methods by which hotel services are provided – hotel services may be
provided personally by staff or through self-service and other non-personal
methods with wide variations in required staffing
•
Quality of staff – this has a bearing on the output and, therefore on the number
of staff required to provide a particular volume and standard of hotel facilities
and services
•
Organization – this influences the staffing of hotels through the division of
tasks and responsibilities, the extent of use of labour saving equipment,
techniques, procedures and the extent to which specialists, contractors and
suppliers are used for particular hotel requirements.
•
Incidence of demand – may give rise to annual, daily, and weekly fluctuations
in staffing requirements, which can be met to a varying extent by the
employment of temporary, casual and part-time staff
HOTEL PRODUCTS AND STAFFING
The number of employees in different departments depend on;
•
Relative importance of each activity in the total hotel operation
•
The criteria used in allocating employees between departments
•
Distinctive Features of Employment in Hotels
•
The operating conditions of various hotels
•
The range of skills and occupations
•
The groupings in departments and the conditions of work
ORGANIZATION OF THE HUMAN RESOURCE FUNCTION
In small the human resource function may be the direct responsibility of the hotel
manager, in a large hotel or in a hotel group, the human resource function is normally
the responsibility of separate departments which form one of the main service
departments of the hotel.
Organization of the human function of a group of hotels
General Manager
HR Manager (a)
HR Development assistant (b)
Welfare assistant (e)
Training manager (d)
Recruitment assistant (c)
Each hotel
Head office
Assistant manager (HR) (g)
HR Manager (head office) (f)
Schedule of the human resource responsibilities
•
•
•
•
•
•
•
Position
Human
resource
manager
Human
resource
development
assistant
Recruitment
assistant
Training manager
Responsible to
General
manager
The
human
resource
manager
Human resource
manager
Human resource
manager
Welfare assistant
Human resource
manager
Human
resource Human resource
manager
(head manager
office
Hotel
manager
assistant Hotel manager
(human
Responsible for
All aspects of the human resource
function
Job analysis and evaluation,
research, records and statistics
Recruitment
and
preliminary
selection
All aspects of training
Health, welfare, safety including
staff accommodation
All aspects of the human resource
functions in respect of the head
office
personnel
and
hotel
management
All aspects of the human resource
function in respect of staff in the
resource)
hotel
ORGANIZATION OF TRAINING
The main aims of training are to;
•
To Improve employees’ knowledge, skills and attitude to work
•
Improve output and sales
•
Improve recruitment
•
Increase employees loyalty
•
Improve the image of the company in the outside world
•
Reduce breakages, waste of materials and misuse of equipment
•
Reduce accidents
•
Reduce absenteeism
•
Reduce labour turnover
•
Reduce stress on management
FUNCTIONS OF THE TRAINING DIVISION
Main Functions of the Training Division
•
Formulate a training policy for the approval of the general manager and the
board to keep them regularly informed of its implementation
•
To prepare an annual budget for the approval of the general manager and the
board to report regularly to them on income and expenditure
•
To identify quantitatively and qualitatively the training requirements for all
grades and categories of employees and keep them under review
•
To maintain close liaison with educational institutions and training centres,
asses the appropriateness of their facilities and services for the training
requirements of the company and to arrange for new courses
•
To establish and operate induction, orientation, refresher and other appropriate
courses for different grades and categories of company employees as
necessary and to make arrangements for their attendance
•
To co-operate with appropriate staff of the human resource management and
supervisory staff and those suitable for developing into such positions for
systematic development of existing new managers and supervisors
•
To establish and administer training schemes for all grades and categories of
employment
•
To maintain adequate premises for purposes of training administration and
instruction
•
To maintain all necessary procedures for training within the company
•
To represent the company in all natters concerned with training both within
and outside the company and advice the general manager and the board on all
such matters
Organization of the training function in a group of hotels
HR Manager
Training Manager (d)
Trainer, aids & Equipment (l)
Training instructor (k)
Management trainer (j)
Supervisory trainer (i)
Operative Trainer (h)
Schedule of training responsibilities in a group of hotels
Position
• Training manager
•
Operative trainer
Role
Directs and coordinates all training and
maintains close liaison with recruitment and
welfare assistants, human resource manager
(head office) and hotel assistant manager
Is responsible for supervision and co-ordination
of all training below the level of assistant head
of department
•
Supervisory trainer
•
Management trainer
•
Training instructors
•
Trainer
equipment
aids
Is responsible for supervision and co-ordination
of all management training above operative and
below assistant manager level, ie head and
assistant head of department training
Responsible for supervision and co-ordination
of all management training above head of
management level
Are specialists trainers in food production, food
and drink service, housekeeping, training and
administration , providing instructions at all
levels under the supervision and co-operation of
training officers
and Is responsible for production, maintenance and
storage of all training aids and equipment
including operational and training manuals
PERFORMANCE IN HOTELS
Introduction
Performance of hotels reflects their success in a range of areas. Success in
performance is necessary for any hotel to survive and prosper, often in an increasingly
competitive environment.
Success enable the hotel to earn the revenue required to pay its debts, reward its staff
and make a profit to give a suitable rate of return for its owners or investors.
Some Criteria of Measuring Performance
The hotel can be regarded as a systems model which takes in inputs that lead to
desirable outputs.
Revenue
Job satisfaction
Fed & rested customers
Return on investment
Wages & salaries
Costs
Employees
Tired & Hungry Customers
Capital
Time & effort
INPUTS
OUTPUTS
The effort, time and capital that is put into a business can lead to outputs of job
satisfaction, wages and salaries for staff and return on investment for owners.
The hotel system can input tired and hungry customers and output those whose needs
are satisfied by the services provided by the hotel.
Performance is the relationship between the inputs and output of an hotel, Including
tangible goods and intangible services. Tangible goods include food and drink to be
consumed by the customer, while the services produced by a hotel are less tangible
and are often judged subjectively by the customer.
Integrating the Tangible and Intangible Measures
Since the running of an hotel nowadays is such a complex activity, managers need to
be able to monitor the business from a number of perspectives such as;
•
Financial perspective
•
Internal business perspective
•
Innovation and learning perspective
•
Customer perspective
Financial perspective
Internal Business perspective
Customer perspective
Innovation & learning Perspective
•
FINANCIAL PERSPECTIVE
It deals with how the hotel looks to shareholders.
In order to succeed hotels must generate outputs that can be measured in terms of
profitability, growth and shareholder value.
Because the fixed costs of hotels are usually high, it is important that sales and
revenue (outputs) are maximizes and costs (inputs) are minimized.
Measures of labour productivity
These relate output to labour input. The main types are;
•
Physical measures – these relate physical units of output to numbers
employed or hours worked.
•
Financial measures – relate output measured in financial terms to pay roll
•
Physical/financial measures – relate output measured in financial terms to
numbers employed or hours worked.
Also productivity may be measured by considering the number of employees per
bedroom
•
INTERNAL BUSINESS PERSPECTIVE
These include activities and processes in which the hotel must excel in order to be
successful, such as:
•
Management – of the property, people and planning for the future. Hotel
management is an important activity and a determinant of the success of the
hotel.
•
Operations – the day-to-day running of the business that is central to the way
that hotels run. The operational day often runs from check-in time to checkout time on the following morning.
•
Systems – these the internal processes that ensure that, for example,
information is sent to the right department.
•
Information – all hotels need to keep records about, for example, customers
and finance.
•
Communication – managers and staff need to work together to satisfy
customers, so there is a constant need to communicate effectively.
•
INNOVATION AND LEARNING PERSPECTIVE
Relates to ways in which the hotel can improve and create value. Because of the
dynamisms in the market environment, there is an increasing need for hotels to
consider how they operate in the future. This takes into account product development,
marketing and technology. It is the role of management to constantly re-evaluate the
facilities and services of the hotel to ensure that they will meet the needs of the market
in the future.
The hotels must manage their workforce effectively because their employees are their
greatest assets.
•
CUSTOMER PERSPECTIVE
It involves looking at the hotel from the viewpoint of customers.
As the hotel world-wide has become so competitive, there is a greater need more on
the customer and continuously adapt to their needs. Hotels must review their service
and facilities against what is offered by competitors, so that the product is periodically
developed.
Hotels need to gauge customer feedback regularly so that regular complaints of
service or facilities can be addressed. This may be done by asking hotel users to
complete questionnaires or comment cards about their perceptions.
SOME WAYS TO HIGHER PRODUCTIVITY
Productivity measures provide a means of monitoring productivity levels and trends,
and of comparing them between hotels and departments, with a view to identifying
reasons for differences, and taking steps to improvement.
These ways may include;
•
Substituting capital for labour by machines replacing men
•
Examination of the extent to which highly labour intensive guest services
continue to meet an economic demand, and in the elimination of those which
do not, or their provision by non-personal methods.
•
Improving the utilization employees’ time through the definition of jobs, work
scheduling and multifunction staffing, when the same employee performs
more than one role or task in a working day.
•
Improving the quality of staff through improved recruitment, selection and
training and through financial and other incentives to better performance.
MARKETING
FROM PRODUCTION TO SALES TO MARKETING
Consumer markets have evolved through several phases, namely;
First Phase (Production Phase)
Main Characteristics
•
Shortage of available goods and services when demand exceeds supply
•
There is no sales problem
•
What is produced can be sold
•
The major problem is to increase output
•
It leads to a sellers’ market and a production orientation on the part of the
seller
Second Phase (Sales Phase)
Main Characteristics
•
There are higher real incomes
•
Increase in purchasing power
•
Greater supply that exceeds demand leading to a buyers’ market and a sales
orientation on the part of the seller
Third Phase (Marketing Phase)
Main Characteristics
•
There is growth in capacity and output accompanied by a further growth in
incomes leading to the affluent society.
•
It leads to a realization of the need for goods and services to be produced to
match consumers’ needs
•
It gives rise to a buyer’s market and a marketing orientation
THE MARKETING CONCEPT
MARKETING - According to the British Chartered Institute of Marketing, it refers;
The management function which organizes and directs all those business activities
involved in assessing and converting customer purchasing power into effective
demand for a specific product or service and in moving the product or service to the
final customer or user so as to achieve the profit target or other objectives set by the
company.
Marketing is based on the belief that sustainable profitability can only be achieved by
identifying, anticipating and satisfying customer needs and desires.
Differences between Marketing and Selling
•
Selling focuses on the needs of the sellers while marketing on the needs of the
buyers
•
Selling is pre-occupied with the sellers need to convert his products into cash
while marketing with the idea of satisfying the needs of the customers by
means of the product
SPECIAL FEATURES OF HOTEL MARKETING
•
The demand of hotel products is a derived demand – the reason for a guest
stay at the hotel may be a business visit or holiday but rarely the room
itself
•
The hotel room is fixed in time and place – in the short run the number of
rooms or beds on offer cannot be significantly changed and location is part
of the highly perishable product
•
Hotel investment is primarily an investment in land and buildings and
interior assets. The critical factors to a successful hotel operation are:
•
The right location
•
Correct capacity
•
High level of utilization
•
In the reception of an hotel, marketing can contribute first through a
market feasibility study to assess the demand – a study may identify the
best market opportunity for an hotel , a gap in the market, a location or
choice between alternative location for a particular hotel concept; or given
a particular location a study can determine the most appropriate hotel
concept
•
In planning a new hotel, there is full scope for adherence to the marketing
concept from the outset
•
In the short run, the existing facilities and services are given within narrow
limits
•
Hotel services are less tangible and therefore they cannot be tried out
before purchase. They are often bought individually or as part of a
package, and they may be bought directly by the user or through an
intermediary such as a travel
The Marketing Cycle
Market Research
Monitoring & Review
Development
Selling
•
Product
Formulation
&
Promotion
Market Research
This is concerned with providing the management with information about market and
product in such a way as to contribute to systematic decision making.
•
Product formulation and development
With adequate information about the market it is possible to identify accurately the
particular segments of the market serve or to be served by the hotel. The formulation
and development of the products to match the identified market segments includes
both the range and type of hotel facilities and service and pricing.
•
Promotion
This may be done through;
Advertising – this covers the use of the press, radio and television, films, posters and
other paid space or paid media
Public relations – Includes all those efforts other advertising, such as editorial
publicity, intended to create and maintain a favorable image of the hotel and its
products.
Merchandising – This is the point-of-sale promotion of particular significance
importance in hotel restaurants and bars through packaging, display and presentation.
•
Selling
This may be performed by sales staff whose sole concern is selling. In most
successful hotels the receptionists, waiters and other staff in direct contact with the
customer are also sales men.
•
Monitoring of performance and review
It is concerned with comparisons of actual results with plans and budgets and with
evaluating the effectiveness of the marketing effort, with view to providing an
informed basis for changes and adjustments in market and product policies and
strategies of the hotel.
MARKETING RESOURCES
Marketing costs include payroll, and other expenses of the relevant activities.
YIELD AND QUALITY MANAGEMENT
•
Yield Management
Refers to the concepts and techniques concerned with the maximization of profit and
revenue. It can help in two main ways:
Rooms inventory management – this is concerned with matching different room
types to the available demand
Differential pricing structure – it is concerned with obtaining the best price at any
particular time
•
Quality Management
This is a systematic process that consists of several stages, namely;
•
Determining the guests’ requirements
•
Designing hotel facilities and services to meet the guests’ requirements
•
Operating the hotel in conformity with the established standards
•
Monitoring the guest satisfaction
HOTELS IN THE TOTAL TOURIST PRODUCT
More often than not hotel accommodation and other hotel products are parts of the
total tourist products, which covers, from the point of view of the tourist, the whole
experience from the time s/he leaves home to the time they return.
In inclusive tours the tour operator or another organizer brings together all the
elements of a holiday which the operator promotes and offers for sale as a single
product at one inclusive price.
This has important implications for hotel marketing, increasingly, hotel beds and
other facilities and services cannot be successful if marked in isolation.
Main Types of Co-ordination required for effective marketing in travelling and
tourism
•
At the destination – It is the role of the official tourist organization to
formulate and develop tourist products based on the destination and to
promote them in appropriate markets
•
At the generating end – It is the role of tour operators to assemble component
services into packages and to promote them and sell them as a single product
•
It is the role of individual operators to formulate, develop and supply their
products as parts of a total tourist products
PROPERTY OWNERSHIP AND
MANAGEMENT
An investment in hotels is an investment in land and buildings, which represent the
dominant asset in hotels.
Other fixed assets in hotels
•
Plant and equipment – eg, major items such as air conditioning, boilers, lifts
and heavy kitchen equipment
•
Furniture, furnishings and small equipment
•
China, glass, linen and cutlery
Some ways of owning and managing hotels
•
The building shell may be owned by a developer sometimes as part of some
large project and leased to an hotel operator on a rental basis
•
Hotel companies make use of sale-and-lease-back arrangements as a means of
financing the investment, which reduces the capital requirements for the hotel
operator
•
Interior assets may be leased by the hotel rather than bought
PROPERTY OPERATION AND MAINTENANCE
The property support services are usually under the technical services, building and
services, works director, etc
Technical consideration involved in property operation and maintenance are specialist
activities normally entrusted to specialist staff and sometimes contracted out
Property Operation and Maintenance Costs
These include Operating costs of;
•
repair and maintenance of buildings
•
plant and equipment
•
furniture and furnishings
•
maintenance of grounds
•
related wages and salaries
Main Factors Influencing Property Operation and Maintenance Costs
•
Age of the hotel – older hotels tend to spend more of the revenue on property
operation and maintenance than new ones
•
Size of the hotel – In comparison with others smaller hotels tend to spend
more of their revenue on property operation and maintenance
FACILITIES MANAGEMENT
Most hotels concentrate on what they do best and outsource other non-core activities
to it. This is done to achieve cost effectiveness in operations
Some non-core activities include; cleaning, laundry, waste collection, ground
maintenance, re-decoration, minor repairs, heating and electrical matters, swimming
pool maintenance etc
ENERGY
Energy costs include;
•
Cost of electricity
•
Cost of gas
•
Cost of oil
•
Cost of steam
•
Cost of water
•
Cost of other fuels
NOTE: Energy costs may be affected by climate in the following ways;
•
In warmer climates energy costs account for the higher proportion of
the hotel revenue to air condition the rooms in first class hotels
•
In cold climates heating represents the major parts of energy
consumption
HOTELS AND THE ENVIRONMENT
The major environmental problems in this century are;
•
Global warming
•
Ozone layer depletion
•
Acid rain
•
Land pollution
•
Pollution of water and other natural resources
Hotels should therefore use energy and other resources responsibly and control
consumption as a social responsibility as well as good business
In hospitality and tourism this can be best achieved by acknowledging the importance
of sustainable development and eco-tourism.
FINANCE AND ACCOUNTS
Introduction
The major accounting statements include;
The balance sheet – it shows the financial position of a business at a particular time
eg, at the end of the year
The profit and loss accounts (Income Statements) – It shows the revenue and the
costs and expenses incurred in earning that revenue for a given period such as a week,
a month or a year
Main Users of Accounting Information
•
Owners and long-term lenders
•
Short-term lenders and trade creditors
•
Management
•
Owners and Long-term lenders – they are interested in the sustained
profitability of the hotel. Their focus is on the return on investment, which
indicates the use the business makes of its assets, and at the relationship
between owners’ capital and loans.
•
Short-term and Long-term lenders – They take a more limited view and
wish to be particularly satisfied that the hotel can meet its current
obligation
•
Management – has responsibilities to investors and to both long-term and
short-term creditors. Are also concerned with planning and day-to-day
control of the business.
THE HOTEL BALANCE SHEET (STATEMENT OF FINANCIAL POSITION)
This may either be presented horizontally or vertically.
Major sections of the balance sheet
•
•
Assets
•
Liabilities
•
Capital (equity)
Assets – these may either be fixed or current
The grouping of assets into fixed and current reflects the investment intensity, which
is normally very high in hotels, because the bulk of hotel investment is in land and
buildings and other fixed assets. Current assets comprise cash and other items
convertible into cash in the normal course of business such as stocks.
•
Liabilities – these may either be short or long term.
Long-term liabilities are a form of total financing of the hotel wile short-term
liabilities are the amounts owed to suppliers and they include such short-term
borrowing as bank overdrafts.
•
Capital (Equity, Net worth of the business)
This represents the owners’ capital. According to the form of ownership it may be
represented by shareholders capital in a company, capital accounts in partnerships and
individual proprietorships.
Some Balance Sheet Ratios and Analysis
•
Capital gearing – it shows the relationship between equity and liabilities.
It is calculated by dividing the net worth by total liabilities or, where
current liabilities fluctuate, the net worth is divided by the long-term debt
only.
It indicates the strength of capitalization
•
Current ratio – It is calculated by dividing current liabilities into current
assets and represents the measure of liquidity of a business.
THE HOTEL PROFIT AND LOSS ACCOUNT (INCOME STATEMENT)
The main profit and loss concepts are;
•
Revenues – these are classified by products/department showing the
income mix
•
Costs and expenses – these are classified by type of cost and expense into
cost of sales, payroll, other direct expenses, undistributed operating
expenses, and fixed charges.
Costs and expenses
These are classified into;
•
Cost of departmental Sales – they relate to each category of sales eg, food,
beverage and minor operated departments.
Cost of Sales = opening stock + purchases – closing stock
•
Departmental Payroll – this is related to each category of sales eg, (food
and beverages, rooms, minor operated departments)
Other direct departmental expenses incurred in the operation of a department are
allocated to that department
Operating expenses relating to the whole hotel, which are not distributed to
departments, are distinguished from fixed charges related to assets and capital
PROFIT LEVELS
•
Departmental gross profit – may be calculated for food, beverages and minor
operated departments (revenue less cost of sales)
•
Departmental net margin – may be for rooms, food and beverages and minor
operated departments (revenue less prime costs)
•
Departmental operating profit – may be calculated for rooms, food and
beverages and minor operated departments (revenue less direct expenses)
•
Hotel operating income – this is the sum of departmental profits plus rentals
and other income
•
Hotel operating profit – it is given by operating income less undistributed
operating expenses
•
Hotel net profit – it is given by operating profit less fixed charges
PROFIT AND LOSS RATIOS AND ANALYSIS
A number of ratios may be calculated from the income statement, these include;
•
For each operated department each element of cost may be expressed as a
percentage of departmental sales
•
For each operated department each profit margin may be expressed as a
percentage of departmental sales
•
For the whole hotel rentals and other income, undistributed operating
expenses, and fixed charges may be expressed as a percentage of total hotel
revenue
•
For the whole hotel operating income, operating profit, and net profit may be
expressed as a percentage of total hotel revenue
Some Particular ratios of importance
These enable each element of cost and expense to be controlled for each operated
department in relation to the sales of that department.
When the departmentalization of the operating statement follows the responsibilities
of the hotel organization structure, it is possible to equate the various profit levels
with individual responsibilities, for example;
•
Departmental gross profit – this is the responsibility of the chef, head bar
person, telephone supervisor etc
•
Departmental operating profit – this is the responsibility of the front hall
manager and the food and beverage manager
•
Hotel operating profits – this is the responsibility of the hotel manager
NOTE: Control is facilitated by;
•
The structure of financial statements
•
The amount of detail and analysis contained in the statements
•
The frequency with which they are produced
The following are produced together with related ratio and with supporting schedule
•
Daily statement of revenue
•
Weekly statement of costs of sales and payroll
•
Monthly operating statement of revenue, costs and expenses
•
Quarterly balance sheet
HOTEL OPERATING PROFIT
The most significant profit level for management purposes is the hotel operating
profit, ie, the level of profit after all operating costs and expenses have been deducted
from the hotel revenue and before fixed charges
BALANCE SHEET AND PROFIT AND LOSS RELATIONSHIP
•
When assets are used up they become expenses eg, fixed assets are
depreciated and the depreciation becomes an expense
•
Revenue creates assets eg, sales generate cash or debtors
•
Earnings and assets – this is a measure of the effectiveness of management in
employing assets to generate profits.
•
Rate of stock turn-over – This is calculated by dividing the costs of food,
beverages and other sales by the average stock. It represents the number of
times a particular stock turns over in a year and is useful indicator for avoiding
overstocking
•
Rate of debt turn-over – This is measured by dividing credit sales by average
debtors.
THE SMALL HOTEL
Introduction
The criteria used to measure the size of an hotel are;
•
Scale of investment
•
Turn over
•
The number of bed and guest rooms
•
Numbers employed
•
Other criteria
Importance of small hotels
•
Hotel ownership offers considerable attraction to people willing to invest
money, time and effort in building up a business
•
It is concerned with providing personal service.
•
The size of a small hotel is limited by the size of the market and the extent of
competition.
•
Most hotels provide more than one product line – rooms, meals and
refreshments and sometimes also other services and they do so in various
combinations
•
A small hotel often has more than minimal capital invested in it, employs nonfamily labour and is perceived as a business by its owners.
PRODUCTS AND MARKETS
Products
Independent owner-managed hotels have commonly up to twenty or thirty rooms and
less than twice that number of beds, a restaurant or a dining room, and a bar and
sometimes also offer a few other guest facilities and services.
Rooms may, but need not necessarily represent the large single source of hotel
revenue. Telephones, newspapers and guest laundry are the main and often the only
services provided by small hotels, in addition to sleeping accommodation, food and
drink.
Products in small hotels relate to its markets, which are likely to be more specialized
in a large city with a variety of hotels than in a small town where the hotel may be one
of only a few small hotels or the only hotel serving the town.
Markets
The small hotel users include;
•
Individuals
•
Family rather than groups
•
Coach tours etc
Small hotels tend to approach their markets less formally and more intuitively from
their detailed knowledge of their guests and rely on selling their products more on
personal recommendation than on repeat visits than on systematic promotion
OWNERSHIP AND FINANCE
Ownership
Traditionally, the small hotel has been owned by an individual or a family; the
common legal form of ownership has been an unincorporated firm, a sole trader or
sometimes partnership
Finance
Hotels require short-term, medium term and long term finance for particular purposes.
It is common for small hotels to provide most of the finance of all three types from
retained profits and from personal savings, sometimes drawn from the realization of
other assets, and the main external source are bank overdrafts.
The Main Ways that Income Accrues to the Owner of small hotels are;
•
The appreciation of land and buildings
•
Income in-kind
•
Salaries
ORGANISATION AND STAFFING
In a small hotel the owner/manager is an entrepreneur who normally combines
ownership and management as well as the function of top and operational
management in one person.
The owner/manager may turn outside for advice and help for such services as
accounts, and finance architecture and design, business promotion, law, maintenance
of equipment and services, etc
Main Implications of the Scale of Operations
•
Limited departmentalization and the likelihood that it can be supervised
without or with no more than one intervening level.
•
In a small hotel, a few people may assist the owner in the office and others
have specific but quite wide departmental responsibilities
•
From a management point of view, a small hotel operation calls for a breadth
of knowledge and skills, which are rarely combined to a high degree in the
same person.
ACCOUNTING AND CONTROL
Most hotels, however small, keep some accounts, in order to have a record of their
transactions with their guests and suppliers, and in order to satisfy certain legal
requirements.
Main basic accounting records appropriate for small hotels
•
A receipt and payments book – it records all cash transactions
•
A visitors’ tabular ledger – with individual accounts for all resident guests
may be extended to include separate accounts for functions, as well as for total
cash and credit sales in the restaurant and bar to customers using these
facilities without taking up sleeping accommodation.
•
A wages book – it includes all employee and related payments, provides a
comprehensive record of all payroll transactions.
Some Reasons for Analysing the Performance of Small Hotels
•
Indicate the relative profitability of different parts
•
Establish a basis for monitoring and comparison
•
Enable an assessment to be made of the effect of any changes introduced in
operation
Realities of small hotels
•
It is normally adequate to analyse and certain expenses under no more than
four headings; room, food, liquor and miscellaneous
•
An extended visitors’ ledger can provide analysed details of all revenue
•
Cost of sales data for food and beverages can be derived from an analysed
receipts and payments book and adjusted for changes in stock levels, to give
the gross profit
•
Each employee is allocated to the department in which s/he is primarily
employed, or an employees’ pay roll cost may be divided between the
departments to which they contribute.
THE FUTURE OF THE SMALL HOTEL
•
The future of the small hotel lies in concentrating on what it can do best and
what it alone can do, on the high quality, individual and personal approach to
hotel keeping.
Some other approaches
•
The formation of hotel consortia or cooperatives of independent hotels
•
Creation of advisory services by national hotel associations and by tourist
boards
•
Inter-hotel comparison surveys which enable them to compare or benchmark
their own performance with other hotels with similar characteristics, and to
identify particular operating weaknesses.
CONSORTIA
These provide the small hotel with greater visibility and the ability to market its
products offering to the wider consumer base.
HOTEL GROUPS
Introduction
The independent owned hotel may be the dominant firm in the industry, but the
growth of the industry has been increasingly associated with hotel groups. The
increase in the size of hotel firms has come about by firms building or acquiring
hotels in different locations and placing them under central management.
HOTEL GROUP OPERATIONS
The Main ways of Operating Hotels as groups are:
•
A group operating hotels owned by them or leased by them from their owners
to whom they pay a rental
•
Groups may manage hotels as agents for the owners under management
contracts
•
Group may operate under franchise agreements
ADVANTAGES OF GROUPS
The advantages that may accrue to hotel groups are resulting advantages of size, ie,
economies of scale. These include;
Financial Economies – this is the ability of the group to marshal capital resources
from its own cash flow and from external sources. A group may be able to borrow
from lending institutions and to do so on favourable terms because it is big and
because its hotels provide a good security to its lenders.
Marketing Economies – because of its size a group can enjoy marketing economies.
It can create a group image in the market, which may extend to a common name,
facilities and standards throughout the group, and it can engage in promoting its hotels
together.
Economies of Buying – an hotel group has open to it economies of buying because it
can buy in bulk and negotiate advantageous prices and terms with its suppliers of a
wide of goods and services on behalf of the whole group.
Managerial Economies - a group can attract high-quality staff through the prospects
it can offer within the group and the availability of training schemes, and benefit from
an interchange of staff between its hotels. It can also provide centralized services to
its hotels and in these it can employ specialists with the time and skill to exploit the
advantages of group operation in such areas as finance, personnel, purchasing and
marketing.
Technical Economies - when the hotels are concentrated geographically within a
limited area, the volume of business may then make it possible to concentrate such
operating facilities as central food production, maintenance and laundry, when
reduction in unit costs may be achieved as compared with providing the facilities in
individual hotels.
Economies of risk spreading – these enable groups to reduce risk by product and
geographical diversification. A decline in demand for a particular hotel may be offset
by a high volume of business in another hotel, and thus even out the fluctuations for
the group as a whole.
Some Sources of economies of Scale
•
The weight the group has in the markets
•
From providing certain services to its hotels
•
From operating them as a group
PROBLEMS OF GROUPS
The major problems are those of;
•
Communication
•
Control
•
Costs
Communication – in order for a group to operate well, the centre has to communicate
policies, procedures and other matters to individual hotels which in turn have to
communicate information, requests and other matters to the centre.
Control – whatever the degree of central direction and monitoring of individual units,
there is a need for some control to be exercised over the conduct of the hotels, to
ensure group decisions being carried out and the accountability of individual hotels
for their performance.
Costs – a group operation gives rise to its own costs, through the need for
communication and control, and through the provision of central services to hotels.
Factors affecting the extent of the above problems
•
The number of hotels in the group
•
Geographical dispersal of the hotel
•
The extent to which the various aspects of the group operation are centralized
SCOPE OF CENTRALIZATION
A group management may adopt a mainly passive ownership role. In order to obtain
the advantages of group operation, a more positive group management approach is
necessary. The group management has to formulate the objectives, policy and
operational guidelines, evolve strategies and plan on behalf of the group.
The major issue for an hotel group is how much to centralize
The Principal Functions that offer scope for Centralization
•
Accounting and finance
•
Human resource services
•
Purchasing
•
Sales and marketing
•
Technical services
Accounting and Finance – such aspects such as preparation of final accounts for the
group, capital accounts, cash management and detailed analysis of the financial
performance of each hotel.
Human resource service – this is concerned with staffing levels, salary and wage
structure, employee records. It normally deals with recruitment, selection and
placement, sometimes for all employees, sometimes only with particular grades and
categories, and others are recruited and engaged locally.
Purchasing – substantial economies may be achieved by centralized purchasing. This
may be done in the following ways:
When the hotels are located in a limited area, supplies are bought for central stores
from which they are distributed to a hotel
Orders may be placed centrally against requisitions by hotels and delivered directly to
hotels.
Orders may be placed by individual hotels against centrally negotiated contracts, with
nominated suppliers to deliver directly to the hotels.
Sales and Marketing – all or some publicity, advertising and direct sales promotion
may be centralized, to project the desired image of the group and to generate sales,
particularly from large hotel users.
Other Operations – these may be services carried out individual hotels, or obtained
from specialist suppliers, or provided to hotels in a group as a central facility, if their
volume is large enough and if the hotels are close enough to be served centrally.
NOTE: DRAW THE ORGANISATIONAL CHARTS ON PAGES 60 & 61
INTERNATIONAL HOTEL
OPERATIONS
These are hotel groups that operate in more than one country.
The major types of international companies are:
•
National companies with a head office in a particular country
•
Multinational companies, established by airline and other interests, which
operate hotels in different countries.
•
National companies operating internationally
International operation offers a scope for expansion outside their initial sphere of
operation often in more favourable terms than their own countries.
Also it offers them a chance to exploit further the economy of scales for example in
finance, marketing and risk spreading through geographical diversification.
•
Multinational Companies
When airlines participate in international hotel operations, they bring together the
main components of the travel products ie, transportation and accommodation –
thereby diversifying the products as well as often seeking to safeguard their main
business, to which they take their passengers.
Main Reasons for International Hotel Operations
•
To less developed countries international hotel operations bring management
skills and expertise not available locally and helping opening up international
markets.
•
For developed countries international hotel operations offer opportunities for
the export of skills and expertise, as well as various goods and services.
Main Problems/Challenges of International Hotel Operations
•
Communication
•
Control
•
Costs
PRODUCTS
Rooms represent the single most important hotel products in all regions and countries
except in Ireland. In most of them rooms, food and beverages account for around 90%
or more of the total revenue.
MARKETS
There are major variations in the extent to which hotels in different regions rely on
business, holiday and other markets.
The great majority of hotel users reserve their accommodation in advance. The
operation of international groups account for a high proportion of reservations made
through own reservation systems and through travel agents and tour operators, both of
particular importance in the marketing of international hotels.
OWNERSHIP AND FINANCE
Ownership
The major forms of ownership available are;
Joint Venture – this occurs when the operator is a full partner in the joint ownership
of the hotel with a joint participation in the financial outcome
Lease – occurs when the operator take temporary possession of the hotel for a
specified period of time for rent payments
Management Contract – it occurs when the operator who may or may not be also an
investor manages the hotel for an agreed remuneration.
Franchise – this occurs when the operator takes a franchise from a franchisor
Finance
The Main Forms of ‘National’ Financing of International Hotel Operations
•
Operating companies with a head office in a particular country enter into
arrangements in other countries which may include capital investment
•
Private institutions such as commercial banks in Europe, North America and
the Far East investing in hotels abroad
•
Suppliers of goods and services, particularly construction companies, may
participate in, or arrange, equity or loan finance for projects abroad in order to
secure a substantial contract
•
Public and semi-public institutions are entrusted by governments to make
grants and extend credit, usually to developing countries, where the
beneficiaries are normally governments but may also be private firms.
Main Forms of ‘International’ Financing of Hotel Operations
•
Multinational companies, which tend to set up separate companies in different
countries and acquire a part interest in them
•
Inter-governmental organizations, such as the World Bank group and regional
development banks, which lend to developing countries.
ORGANISATION AND GENERAL APPROACH
The problems of international hotel groups operations are potentially and in practice
generated by the following sets of factors;
•
Group operations
•
Differences between countries
•
The need to cope with the differences in the interests of the group as a
whole
NOTE:
Each hotel in a particular country operates in its own environment with its own
markets and market conditions, operating conditions, customs and practices.
Also there are differences in the various in the countries economic, political, and
social systems.
SAMPLE REVISION QUESTIONS FOR FUNDAMENTALS OF
THE HOTEL AND CATERING INDUSTRY
•
The market is a dominant influence on the location of an hotel.
a) Discuss to what extent EACH of the following may influence an hotel’s
location:
i
Transport
ii
Holiday markets
iii
Economic activity
[
b) Describe the criteria that will place an hotel into EACH of the following
categories:
•
i
Luxury hotel
ii
Resort hotel
iii
Commercial hotel
iv
Residential hotel
v
Transit hotel
An hotel will often have characteristics that are specialist to meet demands of
their particular clientele.
[
a) Explain how a transit hotel differs from other types of hotel.
b) Describe how an hotel may provide amenities for local residents.
c) Discuss influences that contribute to determining the location of an hotel.
[
•
During a worldwide credit crunch, the hotel and catering industry will
continue to make a significant contribution to the economic and financial
stability of a country.
a) Explain how hotels are influential in EACH of the following aspects:
i employers of labour
ii outlets of products of industries not related to food and beverage
production
b) Describe how the characteristics of a resort hotel may differ from a city hotel
in EACH of the following
i
location
•
•
ii
purpose of visit
iii
length of stay
iv
range of facilities and services
[8]
features:
[12]
A number of countries has suffered from a lack of tourism during recent
economic restraint. Examine the role to the economy that the hotel and
catering industry plays in EACH of the following areas:
a)
provision of outlets for the products of other industries
b)
attracting visitors to the area
c)
provision of facilities
d)
employers of labour
e)
provision of amenities for local residents
[
Whenever visitors stay in an hotel, they will use the services of the restaurants
and bars depending upon their perceived needs.
a) Describe the needs that EACH of the following categories of customers may have on the serv
i
organised groups
ii
non-residents
iii
residents
b) Compare and contrast characteristics that will distinguish between the
following types of hotel guest:
i
holiday user
ii
business user
iii
other user
•
The main purpose of the visit to a particular hotel will determine the extent to
which a guest will use hotel accommodation and services.
a) Examine the distinguishing characteristics of the main types of client that will
make up an hotel’s accommodation market.
[
b) The use of hotels frequently represents derived demand, as guests rarely stay or eat in an hotel for
•
Persons who are influential in the functioning of an hotel will have a different
priority towards the operation of the establishment, depending upon their
individual involvement.
a) Discuss the interests of EACH of the following categories of person:
i owner
ii employee
iii customer
b) Sectional policies will provide guidance for management decisions and
actions. Explain aspects that a shareholder policy should be expected to define.
•
•
[15]
[5]
The operational success of an hotel will be influenced by a policy that is based
on management objectives specified within sectional policies. Discuss
objectives you would expect to find in the following sectional policies:
a)
Customer
b)
Supplier
c)
Shareholder
d)
Employer
Commencing from the time that an enquiry is received through to departure,
the progress of an hotel guest will be recorded whenever an activity takes
place.
a) Examine FIVE records that an hotel front office will maintain during a
guest’s stay, identifying information that is held on each record
[
[10]
b) Throughout a guest’s stay, the hotel front office will usually be the prime
source of information. Discuss what information the guest can expect staff to
provide. [5]
c) Hotel guests may spend up to one-third of their stay in their room. Describe
characteristics of an hotel bedroom that will influence customer satisfaction.
•
In addition to providing a wide range of services, hotels operate to provide
overnight accommodation for travellers.
a) Discuss FIVE ways in which a traveller may reserve accommodation in an
hotel, and identify ONE advantage for EACH method.
b) Describe how a room reservation chart may differ from a room status
board.
[5]
[5]
[10]
c) Identify duties that may be carried out by front hall uniformed staff.
[5]
•
Although the sale of rooms is usually the biggest income provider in an hotel,
a range of services and facilities is usually offered to maximise sales.
a) Differentiate between TWO activities that will increase earnings through the
sales of rooms in an hotel.
b) Explain how the atmosphere in an hotel dining room may be changed.
•
[10]
[10]
Front office staff will be aware that a room reservation is a legal contract
between a hotel guest and the hotel, and it is important that details of the
transaction are recorded.
a) Explain what information is recorded on EACH of the following front
office documents:
i
guest list
ii
room status board
iii
hotel
iv
daily arrival list
v
reservation chart
vi
reservation form
[
b) Determine which of the records listed above is complementary to the
distribution of guests’ incoming mail.
• The food and drink service is the second major activity of most hotels.
a) Explain how an à la carte menu will differ from a table d’hôte menu.
b) Identify THREE different levels of food service, and describe the unique
characteristics of EACH type of service.
c) Discuss why the control of food costs is more complex than the control of
beverage costs.
•
•
The food and beverage operation in an hotel follows a sequence of progressive
stages. Examine activities that take place in relation to food and beverage
operations at EACH of the following stages:
a) purchasing
b) receiving
c) storing and issuing
d) preparing
Budget hotels may offer accommodation only, but the supply of food and
drink is a significant activity in most hotels and will frequently attract visitors,
some of whom will reserve accommodation as well.
a) Discuss how banqueting will differ from other aspects of a food and
beverage operation.
b) Outline the advantages and disadvantages of having one central kitchen in
an hotel.
[20]
[10]
[
•
Hotels that encourage group bookings will obtain a significant source of their
revenue from organised activities.
a) Indicate how banqueting and conferences are frequently a separate and distinct sector of the fo
b) Describe how the use of a function diary will differ from that of a
functions chart.
c) Specify reasons why the profit gained from a function is usually higher
than that gained from other food and beverage activities.
•
In addition to accommodation, food and drink, overnight guests will make
demands on hotel services according to their needs.
a) Discuss extra services that may be provided for a guest that will generate
additional income for an hotel.
b) Identify support service departments in an hotel, and explain the specialist
activities that may be provided by EACH of them.
[
[
•
The efficient operation of an hotel is influenced by the successful manner in
which management is able to organise the various departments.
a) Compile an organisation chart for a large hotel, identifying departments and
levels of management, and indicating the span of control in EACH
department.
b) State ONE advantage and ONE disadvantage in the use of an organisation
chart.
[5]
[15]
•
Managers who analyse weekly sales will identify the sources of hotel income
and take suitable action to maximise expenditure across all departments.
a) Examine activities that may be classified within EACH of the following
operations:
i primary revenue-earning departments
ii ancillary revenue-earning departments
iii support service departments
b) Specify the type of services that may be operated under rental and concession
arrangements within an hotel
[
•
Hotel companies with a successful human resource department are
organisations that have a tendency to accomplish more than their rivals.
a) Describe activities that may be carried out by the human resources, or
personnel, department in an hotel
b) Explain how the size, age and layout of an hotel will be influential on the
numbers of staff employed there.
•
[10]
[10]
Training of staff is usually a dedicated section of the human resource
department of an hotel.
a) Identify principal activities of a training manager in an hotel.
[
b) Discuss the benefits to an hotel of implementing training.
[
•
•
•
During economic constraint, an hotel will depend on effective marketing to fill
rooms. Examine activities that will be carried out at EACH of the following
stages of the marketing cycle:
a)
Market research
b)
Product formulation and development
c)
Promotion
d)
Selling
e)
Monitoring and review
The ability to reduce costs without a compromise of standards will enable
hotel and catering managers to improve profit margins. Examine how variable
costs may be decreased.
[
[20]
High-performance hotels have regular training sessions to improve the
efficiency and raise the standards of their staff.
a) Examine the ways in which training will be of benefit to an hotel’s
operation. [15]
b) Discuss how an hotel manager may develop the quality of existing staff, and
thereby increase sales revenue.
[5]
•
The type of holiday package chosen by a traveller will have been selected
from a range of information received.
a) Explain how the role of the official tourist organisation will differ from that of
the tour operator.
b) Hotel products are brought to the attention of the tourist through marketing
promotions. Discuss various methods that may be used to develop the
promotional mix.
[10]
[
•
The role of a facilities manager embraces the care and maintenance of an
hotel.
a) Specify the categories of costs that may be included under ‘Property Operation
and Maintenance’ costs
b) Discuss, with reasons, main factors that will affect these costs.
c) Explain how energy costs will be influenced by climate.
[
•
The role of a manager in the hotel and catering industry will benefit from a
greater understanding of the financial situation of the establishment.
a) Define the following financial terms:
i current assets
ii current liabilities
iii equity
iv fixed assets
v gross profit
[15]
b) Describe how an hotel manager may calculate whether a particular food item
is
being
overstocked.
•
[5]
Financial performance may be used to measure the success of an hotel
manager.
a) Specify information that may be found in an operating statement.
b) Discuss the main operating ratios that are monitored during the day-to-day
control of a business.
[
c) Differentiate between departmental net profit and departmental gross
profit.
[5]
•
The financial performance of an hotel is reflected in just two key statements –
the balance sheet and the profit and loss statement.
a) Examine information that a profit and loss statement may contain.
[
b) Discuss who will benefit from receiving a copy of the latest profit and loss
statement.
c) Compare the frequencies with which a profit and loss statement may be
prepared to the frequency with which a balance sheet may be prepared.
•
Companies owning hotels regularly review their portfolios and ownership of
hotels changes whenever a smaller company is incorporated into a larger
group. Examine issues that an hotel group will need to consider in order to
remain successful in a competitive market.
[
•
The number of hotels owned by national companies is steadily increasing
whilst the number of privately owned hotels is diminishing.
a) Explain how the administration of an hotel managed under a management
contract differs from an hotel operated under a franchise agreement.
b) Examine advantages that an hotel group can expect as a result of its larger
size.
[15]
•
In times of economic constraint, the challenge for any hotel group is to remain
competitive. Examine issues that an hotel group will need to consider in order
to remain successful in a competitive market.
[5]
[20]