Hospitality Today
Introduction to the Hotel Industry
What to know……
Competencies:
1. Explain how a hotel is organized, distinguish revenue
centers from cost centers, and describe the rooms
division.
2. Describe a hotel’s food and beverage division, and
describe the following hotel revenue centers:
telecommunications department; concessions,
rentals, and commissions; and fitness and recreation
facilities.
3. List hotel cost centers; describe the marketing,
engineering, accounting, human resources, and
security divisions; and give examples of what a hotel
must do to comply with the Americans with
Disabilities Act.
4. Describe hotel control systems, give examples of
financial controls used in hotels, and summarize the
need for (and give examples of) quality controls in
hotels.
How is a Hotel Organized?
• Organized by what the facility
provides…
– Food/Beverage Division
– Room Division – reservations, check-in/out,
housekeeping tasks, uniformed staff,
telecommunications service.
General Manager
Front Office
Housekeeping
Food &
Building
Beverage
Maintenance
Page 188 - 189
Revenue Centers VS. Cost Centers
Revenue Centers
Cost Centers
Rooms
Marketing
Food and Beverage
Engineering
Telecommunications
Accounting
Concessions
Human Resources
Rentals
Security
Commissions
Fitness/Recreation Facilities
Two Main
Revenue Centers
A. Room Division
1. Single largest source of revenue
2. Room revenue less operating expenses
For every $1.00 spent on guestrooms, 74 cents is available for
general overhead after deducting the direct rooms division
expenses. (See Exhibit 3 on Page 191 – next slide)
Organization of the Rooms Divisions (See Exhibit 4)
•
•
•
•
Front Office
Reservations
Housekeeping
Uniformed Service
Two Main
Revenue Centers
A. Room Division
Front Office
1.
2.
3.
The command post for processing reservations,
registering guests, settling guest accounts (cashiering),
and checking out guests.
Distribution of mail, keys, messages and information for
guests.
Duties include: greeting guests, establishing a method
of payment, assigning rooms that are unoccupied and
have been cleaned, communicating hotel facilities and
surrounding community, calling a bell person.
Two Main
Revenue Centers
A. Room Division
Reservations
1.
2.
3.
Should be staffed by skilled telemarketing personnel
Must be handled with skill and efficiency, provide
immediate and correct information
The largest volume of customers comes from individuals
or direct inquiry. The remainder are received through
the following sources:
•
•
•
•
•
•
•
The hotel’s reservation system
Travel agents
Hotel representatives
The internet
Tour operators
Independent reservation systems
Airlines, cruise lines, and other transportation companies
Two Main
Revenue Centers
A. Room Division
Housekeeping
1.
2.
3.
See Page 202
Responsible for cleaning the hotel’s guestrooms and
public areas.
Includes: Executive Housekeeper, Assistant
Housekeeper, Room Inspectors, Room Attendants,
House person crew, Linen room Supervisor and
Attendants, Laundry Employees, Personnel in charge of
employee uniforms
Duties include: removing soiled linen and towels and
replacing them with fresh ones, checking the bed and
blankets for damage, making beds, emptying trash,
checking for any broken appliances, damage to shades
or blinds, leaky faucets, checking closets and drawers
for items forgotten, cleaning the room and bathroom,
replacing bathroom towels and amenities
Two Main
Revenue Centers
A. Room Division
Measuring the Performance of the Rooms Division
Average Daily Rate
Rooms Revenue
divided by
Rooms Occupied
=
Average Daily Rate
Monday
$23,800
Tuesday
$30,000
Wednesday $29,000
170
185
178
$140.00
$162.16
$162.92
3 Day Figures $82,800
533
$155.03
Two Main
Revenue Centers
A. Room Division
Measuring the Performance of the Rooms Division
Occupancy Percentage
Rooms Occupied
divided by
Rooms Available
=
Occupancy Percentage
Monday
170
Tuesday
185
Wednesday 178
200
200
200
85.0%
92.5%
89.0%
3 Day Figures 533
200
88.8%
Two Main
Revenue Centers
A. Room Division
Measuring the Performance of the Rooms Division
Revenue Per Available Room
•
Occupancy Percentage
divided by
Average Daily Rate
=
Revenue Per
Available Room
Monday
85.0%
Tuesday
92.5%
Wednesday 89.0%
$140.10
$162.16
$162.92
$119.00
$150.00
$145.00
3 Day Figures 88.8%
$155.03
$138.00
Two Main
Revenue Centers
A. Room Division
Uniform Services
1.
2.
3.
Also called guest service department. Includes bell
persons, concierge, transportation/valet-parking
employees, and door attendants.
Bell person moves luggage and guest to their rooms
Concierge is the main source of information about the
hotel.
Measuring the Performance of the Rooms Division
See Page 200
Two Main
Revenue Centers
1.
2.
3.
B. Food and Beverage Division
May produce as much or more than room division
Is paramount to the success of the operation
Not just a convenience for guests anymore.
Capture rate – the percentage of guests who eat meals at
the hotel – is measured regularly by many hotels.
Two Main
Revenue Centers
B. Food and Beverage Division
Catering plans food for…
–
–
Conventions and smaller hotel groups
Local banquets
Room Service
–
–
Delivery time plays a role in quality
Food items must be charged more for
Two Main
Revenue Centers
B. Food and Beverage Division
Support and control services
–
–
–
–
–
–
Receiving clerks verify quality
Storing supplies
Cashiers who control the payment
Costing and pricing menus
Conducting monthly inventory
Creating monthly and daily reports on food and
beverage costs
Two Main
Revenue Centers
B. Food and Beverage Division
Problems in Food and Beverage Operations
–
–
–
–
–
–
Long Hours of Operation
Low check Averages
Too many facilities
High turnover
Costly Entertainment
Insufficient Marketing
Other
Revenue Centers
Telecommunications Department
See Page 214 – Voice Mail, Beeper Service, Internet Service
Concessions, Rentals, and Commissions
See Page 214-215 – Gift Shops, Newsstands, Flower Shops, Laundry,
Dry Cleaning Services, Beauty salons, Jewelry stores, Secretarial
Services, and even Office space.
Fitness and Recreational Facilities
See Page 215 - 216 – health clubs, spas, exercise facilities, rental
bicycles, luxury spas.
Cost Centers
Marketing and Sales Division
The mission of a hotel’s marketing and sales division is to…..
1. identify prospective guests for the hotel
2. shape the products and services of the hotel as
much as possible to meet the needs of those
prospects
3. persuade prospects to become guests
Cost Centers
The marketing and sales division is charged with the
responsibility of keeping the rooms in the hotel occupied
at the right price and with the right mix of guests. It
accomplishes this through many activities, including:
1.
2.
3.
4.
5.
6.
7.
Contacting groups and individuals
Advertising in print and on radio, television, and the Internet
Creating direct mail and public relation campaigns
Participating in trade shows
Visiting travel agents
Participating in community activities
Arrange familiarization tours
Cost Centers
Marketing Division
See Page 218
Cost Centers
Engineering Division
Takes care of the hotel’s physical plant and controlling energy
costs are the responsibilities of the engineering division.
–
–
–
–
–
–
Slow a hotel’s physical deterioration
Preserve the original hotel image established by management
Keep revenue-producing areas operational
Keep the property comfortable for guests and employees
Preserve the safety of the property for guests and employees
Create savings by keeping repairs and equipment replacements
to a minimum
Cost Centers
Accounting Division
A hotel’s accounting division is responsible for keeping track of
the many business transactions that occur in the hotel.
–
–
–
–
–
–
Forecasting and budgeting
Managing what the hotel owns and what money is due form
guests
Controlling Cash
Controlling costs in all areas of the hotel – revenue centers as
well as cost centers and payroll
Purchasing, receiving, storing, and issuing operating and capital
inventory such as food and beverages, housekeeping supplies,
and furniture
Keeping records, preparing financial statements and daily
operating reports, and interpreting these statements and reports
for mangement
Cost Centers
Human Resources Division
Security Division
•
•
•
•
•
Security Officers – rooms, parking areas, pool, bars,
restaurants, shopping areas, etc.
Equipment – two-way radios, closed-circuit tv; motion sensors,
elevators, smoke detectors, fire-alarms, interior/exterior lighting.
Master keys – to guestrooms, storerooms, and offices at all
times.
Safety procedures – fire, bomb threats, terrorism, etc.
Identification procedures – photo identification for all
employees, name tags, etc.