Hospitality Today Introduction to the Hotel Industry

1. Hospitality TodayIntroduction to the Hotel Industry

2. What to know…… Competencies: • Explain how a hotel is organized, distinguish revenue centers from cost centers, and describe the rooms division. • 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. • 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. • 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.

3. 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 & Beverage Building Maintenance Page 188 - 189

4. Cost Centers Marketing Engineering Accounting Human Resources Security Revenue Centers Rooms Food and Beverage Telecommunications Concessions Rentals Commissions Fitness/Recreation Facilities Revenue Centers VS. Cost Centers

5. A. Room Division Single largest source of revenue 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

8. A. Room Division Front Office 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

9. A. Room Division Reservations 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

10. A. Room Division Housekeeping 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 See Page 202

11. Room Division Measuring the Performance of the Rooms Division Average Daily Rate Rooms Revenue divided by Rooms Occupied = Average Daily Rate Monday $23,800 170 $140.00 Tuesday $30,000 185 $162.16 Wednesday $29,000 178 $162.92 3 Day Figures $82,800 533 $155.03 Two Main Revenue Centers

12. Room Division Measuring the Performance of the Rooms Division Occupancy Percentage Rooms Occupied divided by Rooms Available = Occupancy Percentage Monday 170 200 85.0% Tuesday 185 200 92.5% Wednesday 178 200 89.0% 3 Day Figures 533 200 88.8% Two Main Revenue Centers

13. 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% $140.10 $119.00 Tuesday 92.5% $162.16 $150.00 Wednesday 89.0% $162.92 $145.00 3 Day Figures 88.8% $155.03 $138.00 Two Main Revenue Centers

14. A. Room Division Uniform Services 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

15. Two Main Revenue Centers • 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.

18. 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

19. 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

20. 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

21. 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.

22. 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

23. 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: • 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

24. Cost Centers Marketing Division See Page 218

25. 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

26. 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

27. 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.