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FRONT OFFICE OPERATIONS MANAGEMENT_1_ Powered By Docstoc
					FRONT OFFICE HOTEL
MANAGEMENT



The Hotel Guest
Typical Lodging Guests


28.8%   are transient business travelers


25.3%   are attending a conference/group meeting


24.6%   are on vacation


        are traveling for other reasons (for example,
21.8%   personal, family, or special event)
Lodging Industry Characteristics
 Emphasis on safety, cleanliness & service
 - Guests also consider “intangible” aspects of the
 purchase
   decision
 Inseparability of manufacture & sales
 - A room exists & is sold at the same site

 Perishability
 - If a room is not rented on a specific date, the revenue
 is
   lost forever
 Repetitiveness
 - Some operating procedures are routines
 Labor Intensive
 - Much of a hotel’s daily work involves employees
   providing services
 Current Issues confronting Hoteliers:
 Marketing Issues
Market segmentation is increasing
   Efforts to focus on a highly defined, smaller group of travelers.


 Brands overlap
   The more the number of brands increase, the harder
   consumers find it to differentiate between them.

Increased sophistication of consumers
   Results in a more competitive selling environment for hoteliers
   (e.g., online room booking)

Increased number of amenities
   Various amenities (e.g., business centers) increase costs for
   hotel owners yet sometimes appeal to only a small segment of
   the hotel’s market.
Contents
 Room Sales Differentiation
   Group Rooms
   Transient Rooms
   Transient Reservation Avenue


 Market Segmentation
   Group Market Segments
   Transient Market Segments
Room Sales Differentiation
 The group catering contribution plays an
  important role in food and beverage revenue
  and also impacts the sleeping room portion of
  the hotel success triangle (see text)
 Occupancy is the measurement of room sales
  verses available rooms
 The rooms that are sold fall into two
  categories: group and transient
 The combination of these two groups makes up
  the hotel’s occupancy
Group Rooms
 Group rooms originate from reservations that
  are made to bring more than one guest to the
  hotel
 Group rooms involve a series of bookings that
  correspond to specific functions
 Most hotels consider bookings of 10 or more
  rooms per night a group booking
 The purpose of the group room sales effort is
  to seek group bookings and bring them to the
  hotel
Group Rooms (Cont…)
 Groups sales is counted upon to fill a certain
  number of hotel rooms per night
 The group base is the measurement of how
  many group rooms are “on the books” on a
  given night
 Because groups can be booked far in advance,
  they are sought after
 It’s important to note that group rooms are
  often offered at lower rates
Transient Rooms
 Transient rooms are rooms that originate from
  individual reservations
 Transient rooms are non-group rooms
 These differ from group rooms as there is no
  way to predict when these guests will arrive
 Predicting the level of individual reservations
  on any given night is difficult
 Looking at historical data helps in determining
  the most likely level
Transient Rooms (Cont…)
 The individual booking cycle is the time
  between when the individual reservation is
  made and when it is due to arrive
 Whereas the group base can be reserved far in
  advance, the individual booking cycle can be
  more short term
 Walk-in reservations are made by guests
  arriving unannounced at a hotel and cannot be
  measured as part of the booking cycle as they
  are hard to predict
Group v Transient Rooms
   The group and transient makeup of a hotel depends on many
    factors including location type, service level, target market,
    size and other factors
   A sample relationship at a fictitious downtown hotel is as
    follows:
              Number of Hotel Sleeping Rooms




                                               500

                                                                               Transient
                                               400                              Rooms


                                               300


                                               200
                                                         Group Rooms
                                               100

                                                     M   T    W        T   F       S       S   Figure 3-1
Transient Reservation Avenues
 Any hotel that wants to minimise the
  opportunity cost associated with transient
  sleeping room sales will incorporate as many
  reservation avenues as possible

 A reservation avenue is defined as the means
  by which a guest is able to make a reservation
  at a hotel

 The greater the access guests have to specific
  hotels, the more likely they are to book
Transient Reservation Avenues
(Cont…)


 The most common reservation
  avenues are:
   GDS system (Global Distribution System)
   CRS (Central Reservation System)
   Direct travel agent or travel
    management company contact
   Direct guest contract
GDS System
 The Global Distribution System (GDS) is a
  network of travel and hospitality entities that
  communicate via an integrated computer
  system

 The computer systems were developed by
  airlines to link their availability to travel agents

 Through fee agreements hotels and car rental
  companies now also link their individual
  products to the GDS systems
CRS
 A central reservation systems provides the
  customer with an avenue to locate a hotel of
  choice in a certain location

 Using an easy to find toll free number such as
  1800-hotels-1 or Web site such as
  www.agoda.com or www.hyatt.com the CRS
  can generate demand for a hotel through
  pricing OR brand loyalty
Travel Agent or Travel Management
Companies
 Within the transient reservation process, travel
  agents and travel management companies act
  as intermediaries, making money in one of two
  ways:

   1. They may charge a flat management fee

   2. They are paid a commission
Direct Guest Contact

 The guests themselves can make a reservation
  via phone, fax or internet

 Most hotels offer a direct booking capability on
  their websites
Transient Reservation Avenues

                     Transient Guest


 Travel Mgmt Co or




                         Via Phone or Fax
    Travel Agent




                                            Via Internet
                                                           CRS

       GDS


                                 Hotel

                                                                 Figure 3-2
Market Segmentation
 A market segment is a portion or segment of
  the actual or potential business mix at any
  given hotel
 Grouping this business pool into segments with
  similar characteristics is called market
  segmentation
 The main group market segments are
  corporate, association and SMERF
 The main transient market segments are
  business and pleasure
Group Market Segments
 The corporate market segment consists of
  for-profit companies and frequently pays
  higher rates than other segments to ensure
  quality programs

 The association market segment consists of
  groups of individuals or companies that share
  common purposes or goals, and is more cost-
  conscious than the corporate segment
Group Market Segments (Cont.)
 The SMERF segment consists of groups that have
  characteristics that set them apart from the
  previous two categories, and has five primary
  components

    Primary Component                    Market

  Social                Weddings, Proms, Fund Raisers, etc
  Military              Reunions, Award Ceremonies
  Educational           Continuing Education, Classes, Training
  Religious             Revivals, Enlightenment Gatherings
  Fraternal             Fraternities, Sororities
Transient Segments
 A business transient guest is one who stays
  at a hotel because of its location in relation to
  another organisation

 The business guest makes his/her hotel choice
  based on many factors, but one of the most
  common is brand loyalty

 Many hotels offer various incentives for guest
  loyalty
Transient Segments (Cont…)

 The pleasure transient guest stays at hotel
  because of its proximity to an attraction and/or
  because of a signature attraction at the hotel
  itself

 A signature attraction is an event, activity or
  facility identified with a specific hotel
Guest Room Demand
 The following figure illustrates how both group
  and transient market segments come together
  to make up guest room demand

  Corporate
                                             Business
                         Hotel
                        Guest

                Group   Room     Transient
  Association
                        Demand

                                             Pleasure


    SMERF


                                                        Figure 3-4

				
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