Managing Front Office Operations

Course Material

Chapter 1 - The Lodging Industry Outline The Hospitality Industry Classifying Hotels

Size Target Markets Levels of Service Ownership and Affiliation

Classifying Guests

Business Travelers Pleasure/Leisure Travelers Group Travelers International Travelers

Buying Influences on Travelers

Blogging and Social Networking

The Green Hotel

LEED Certification and the Energy Star Program Green Meetings

Summary

Competency 1 Objective: Explain how the travel and tourism industry can be categorized, and classify hotels in terms of their size and target markets. Ellsworth M. Statlerthe Henry Ford of the modern hotelonce said, "The guest is always right." [Endnote #1.1] Some might counter this turn-of-the-century hotelier by saying, "Guests are not always rightbut they are always guests. " Either way, these statements reflect the ultimate challenge hospitality professionals face: to provide service that meets the ever-changing needs and demands of guests. For many, the hospitality industry holds a certain glamour and sophistication. This is partly due to the image most hotels choose, refine, and project to the public. Much of this image is created through architecture and design. Yet a building is really only bricks, mortar, steel, glass, and furnishings. The property's architecture and style may be important in setting the theme, but other factors are also important in differentiating one hotel from another. These factors can include the property location, variety and quality of food service, special features and amenities, and, perhaps most important, a staff that puts all of this together with service to create the overall image and competitive position. Front office personnel are literally on the front line in creating that image. Reservations agents are often the first to have contact with the guest, while front desk agents, concierges, bell attendants, and door attendants are among the first employees guests see upon arriving at a hotel. The variety of talents and skills needed to satisfy guest needs makes front office work interesting and rewarding. And since no two guests, two hotels, or two days are ever the same, front office work can't help being exciting and challenging. This chapter outlines some basics about the hospitality industry, and describes how hotels can be classified by size, target markets, level of service, and ownership and affiliation. It also discusses the reasons people travel. Finally, the chapter touches on some of the challenges the industry faces when accommodating the increasing number of guests from different cultures and nations, and discusses influences on travelers to buy. The Hospitality Industry The hospitality industry is part of a larger enterprise known as the travel and tourism industry. The travel and tourism industry is a vast group of businesses with one common goal: providing necessary or desired products and services to travelers.

Exhibit 1 divides the travel and tourism industry into five parts, and shows some of the components of each part. The hospitality industry consists of lodging and food and beverage operations, as well as institutional food and beverage services, which do not cater to the traveling public. Lodging operations stand apart from other travel and tourism businesses, since they offer overnight accommodations to their guests. Many lodging properties provide food and beverage service, recreational activities, and more. An organization that addresses travel and tourism issues in the United Statesparticularly those affecting the hospitality industryis the American Hotel & Lodging Association (AH&LA). As the trade association of the American lodging industry, AH&LA is a federation of hotel and lodging associations located in the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Canada and most other countries with many lodging establishments have similar national organizations. These national trade associations normally work together through the International Hotel and Restaurant Association (IHRA) for common purposes. IHRA is based in Paris, France. A leading service of AH&LA is its Educational Institute. Since its founding in 1952, more than two million individuals have benefited from its programs and servicesmaking it one of the largest hospitality industry educational centers in the world. This non-profit organization provides essential educational and training resources for the expanding hospitality industry, and helps prepare dedicated individuals for careers and career advancement within the industry. Classifying Hotels 4

With so many properties offering so many services in such a huge industry, it is easy to understand how people might get confused about the differences between hotels, motels, inns, and other lodging establishments. The fact is that the distinctions are not always clear. The confusion is compounded because owners can classify their properties as they deem appropriate, making it even more apparent why universally agreed-upon definitions are difficult to implement. Still, despite the numerous exceptions, some general property distinctions exist and are widely accepted. A hotel or inn may be defined as an establishment whose primary business is providing lodging facilities for the general public, and that furnishes one or more of the following services: food and beverage service, room attendant (housekeeping) service, concierge, bell and door attendant service (sometimes called uniformed service), laundry or dry cleaning, and use of furniture and fixtures. Hotels have 50 to 2,000 rooms, and sometimes more; very large hotels may have more than 5,000 guestrooms. Inns usually average 5 to 50 rooms and provide a higher level of personalized service. The term motel is a contraction of motor hotel. It is a lodging facility that caters primarily to guests traveling by automobile. Early motels often provided parking spaces near guestrooms, but that has changed in recent years as motel owners and franchisors have become more aware of guest security. Motels may be located in any setting, but are usually found in suburban or roadside areas. They became especially successful in the 1950s and 1960s with the development of the interstate highway system in the United States. Many motels are two-story or low-rise buildings located near major highways. Pool areas with shrubbery, trees, and children's playgrounds are familiar "trademarks" for many motels. In most cases, motels do not offer the full range of services and facilities available in a hotel. Unless otherwise indicated, this chapter will use the term hotel as a general term for hotels, motels, inns, suite hotels, conference centers, resorts, and other lodging properties. There are many ways to classify hotels. The categories discussed in this chapter are based on hotel size, target markets, levels of service, and ownership and affiliation. It is important to note, however, that some properties defy easy classification, and a particular property may fit into several categories. Size Sizeor the number of guestrooms in a propertyprovides a common way to categorize hotels. Hotels are typically grouped in four size categories:

Under 150 rooms 150 to 299 rooms 300 to 600 rooms More than 600 rooms

These categories enable hotels of similar size to compare operating procedures and statistical results. Unless otherwise specified, hotels in the classifications discussed in the remainder of this chapter may be of any size. Target Markets Two of the most important marketing challenges a hospitality property encounters faces are: "Who stays at our property?" and "Who else can we attract?" Through marketing research, tools, and strategies, 5

lodging properties seek to identify target markets. Target markets are distinctly defined groups of travelers that the hotel seeks to retain or attract as guests. A popular trend in the hospitality industry is to define or identify smaller, distinct groups or "segments" within larger target markets, and to develop products and services aimed specifically at satisfying these segments. This process of market segmentation has contributed to substantial growth, particularly within hotel chains. For example, Marriott Hotels and Resorts now has many different brand names: J. W. Marriott, Marriott Marquis, Marriott Hotels, Marriott Inns, Courtyard by Marriott, and Fairfield Inn by Marriott. Marriott also owns the Ritz-Carlton and Renaissance brands, and people can reserve rooms at any of its locations through the same reservation system. Even Marriott's extended-stay segment has been divided into sub-markets, with Residence Inn by Marriott, TownePlace Suites by Marriott, and SpringHill Suites by Marriott. Each brand is directed toward a type of guest, or market segment, that Marriott identified as distinct. Many other major lodging companies have taken the same segmentation approach. InterContinental Hotels Group, Starwood Hotels & Resorts Worldwide, and Hilton Hotels Corporation employ market segmentation through various products to attract more customers. The advantage to this approach is that a variety of properties can be located in a particular geographical market, thereby attracting a variety of guests. The disadvantage is that guests may become confused when trying to differentiate between the facilities and services of each brand within a chain. Hotels target many markets and can be classified according to the markets they attempt to attract and serve. The most common types of properties based on target markets include commercial, airport, suite, extended-stay, residential, resort, lifestyle, bed-and-breakfast, vacation ownership/condominium, casino, conference center, and convention hotels. There are also several alternative types of lodging properties that directly compete with hotels; these are discussed at the end of this section. Commercial Hotels. The first hotels and inns were usually located in the towns and villages they primarily served. It was not until the age of railroads that the hotel business began to expand in the United States. Traveling by railroad was faster, easier, and safer than traveling by horse-drawn carriage or even by the first automobiles. Railroads connected the country, and railroad stations were generally located near the center of each town. Travelers getting off trains usually needed a place to stay. As more people traveled, the demand for hotels grew. In turn, more hotels were built, many conveniently located near railroad stations. The Waldorf-Astoria Hotel in New York City was constructed above a below-ground railroad platform, which it occasionally used as an entrance for important persons arriving by rail. (The original Waldorf-Astoria was on the site of what is now the Empire State Building.) In time, hotels located in the city center not only catered to travelers but also became the social centers of the community. Like their historic counterparts, commercial hotels continue to be located in downtown or business districts, areas that are convenient and of interest to their target markets. Commercial hotels form the largest group of hotel types. Although they primarily cater to business travelers, many tour groups, individual tourists, and small conference groups also find these hotels attractive. In the past, commercial hotels were referred to as transient hotels because of the relatively short length of time guests stayed in them compared with other hotels. Guest amenities at commercial hotels may include complimentary newspapers, in-room coffee makers, free local telephone calls, cable television, access to DVD players and videos, video games, personal computers, high-speed Internet access, ergonomic desks and chairs, and fax machines. Car rental arrangements, airport pick-up services, 24-hour food service, semi-formal dining rooms, and cocktail lounges are usually available. Most commercial hotels have conference rooms, guestroom suites, room service, and banquet meal service. Commercial hotels may offer laundry-valet service, uniformed services including concierge service, in-room refreshment centers, complimentary local transportation, and retail 6

stores. Swimming pools, health clubs, tennis courts, saunas, and running areas may also be among a commercial hotel's offerings. Airport Hotels. Just as railroads spurred the first expansion of hotels in the United States in the late 1800s and early 1900s, air travel encouraged a distinct type of hotel growth in the 1950s through the 1970s. Air travel did not really exist in its current form until modern commercial jet aircraft were introduced in the late 1950s. These jets traveled much faster and were much larger than earlier aircraft, and prompted dramatic economic growth in the United States. Demand skyrocketed for lodging facilities located near airports, especially international airports. Similar to the way hotels appeared near downtown railroad stations, hotels appeared near airports across the United States. Airport hotels are popular because of their proximity to major travel centers. More than any other type of hotel, airport hotels vary widely in size and level of services. Typical target markets include business clientele, airline passengers with overnight travel layovers or canceled flights, and airline personnel. Hotel-owned limousines or courtesy vans often transport guests between the hotel and the airport. Signs announcing direct telephone service to nearby hotels for reservations and pick-up service are common in most airports. Many airport hotels feature conference rooms to attract a particular market: those guests who travel to a meeting by air and wish to minimize ground travel. Guests who stay at airport hotels and hold their meetings there often enjoy greater convenience and significant overall cost savings with such arrangements. Suite Hotels. Suite hotels tend to be among the fastest-growing segments of the lodging industry. These hotels feature guestrooms with a living room or parlor area and a separate bedroom. Some guest suites include a compact kitchenette with a refrigerator and in-room self-service hot beverage service. In exchange for more complete living quarters, suite hotels generally have fewer and more limited public areas and guest services than other hotels. This helps keep suite hotels' guestroom prices competitive. Suite hotels appeal to several different market segments: people who are relocating transform suites into temporary living quarters; frequent travelers enjoy the comforts of a "home away from home"; and vacationing families discover the privacy and convenience of non-standard hotel accommodations designed with families in mind. Professionals such as accountants, lawyers, and executives find suite hotels particularly attractive, since they can work or entertain in an area besides the bedroom. Some suite hotels offer complimentary evening receptions, breakfasts, or hors d'oeuvre or snack service. Such gatherings give guests opportunities to socialize, which may be important for those staying at the property for extended periods. Extended-Stay Hotels. Extended-stay hotels are similar to suite hotels, but usually offer more complete kitchen amenities in the guestroom. Extended-stay hotels are designed for travelers who intend to stay five nights or longer and require reduced hotel services. These hotels usually do not provide food, beverage, uniformed services, or valet services. In addition, housekeeping services may not be provided on a daily basis. Like suite hotels, extended-stay hotels attempt to establish a homelike feeling through their interior and exterior designs. In addition, unlike for most types of hotels, room rates in extended-stay hotels are often determined by the length of a guest's stay. Popular extended-stay brands include Extended StayAmerica, Homewood Suites, and Staybridge Suites. Residential Hotels. Residential hotels provide long-term or permanent accommodations for people in urban or suburban areas. Located primarily in the United States, these properties house residents who want and can afford daily, limited hotel services. Residential hotels are not nearly as popular or prevalent as they once were. They have been replaced in part by suite and condominium hotel properties.

The layout of a residential guest unit may closely resemble a suite hotel guestroom. Guest quarters generally include a sitting room, bedroom, and small kitchenette. Sometimes people who contract to live in residential hotels may be considered tenants by law. Residents may choose to contract for some or all of the services provided to guests in a commercial hotel. A residential hotel may provide daily housekeeping, telephone, front desk, and uniformed services. A restaurant and lounge may also be located on the premises. Many other types of hotels also house semi-permanent or permanent guests, despite their emphasis on other markets. Likewise, residential hotels may also offer short-term, or transient, guest accommodations. Resort Hotels. Guests often choose resort hotels as their planned destination or vacation spot, setting resorts apart from other types of lodging operations. A resort may be located in the mountains, on an island, or in some other exotic location away from crowded residential areas. The recreational facilities and breathtaking scenery typical of most resorts are not typical of most other hotels. Most resort hotels provide extensive food and beverage, valet, and room services for vacationers. Many also provide special recreational activities for guests, such as dancing, golf, tennis, horseback riding, nature hikes, sailing, skiing, and swimming. Most resort hotels try to be positioned as a "destination within a destination" by providing a wide range of facilities and activities, giving guests many choices and fewer reasons to the leave the property. A more leisurely, relaxed atmosphere distinguishes most resort hotels from their commercial counterparts. Resort hotels strive to provide enjoyable guest experiences that encourage repeat business and word-ofmouth recommendations. Recreational activities are frequently arranged for groups of guests. Resort hotels often employ social directors who plan, organize, and direct a range of guest programs. Resort hotel communities are an expanding area of resort development. These communities may be developed from existing hotel facilities sold as timeshare units or condominiums, or as new destination properties developed specifically as resort communities. Lifestyle Hotels. Lifestyle hotels are an additional lodging industry classification designed to further segment the marketplace. Lifestyle hotels are intended to appeal to specific travelers who enjoy certain architecture, art, culture, special interests, and amenities. Guests appreciate these aspects of a lifestyle property and consider them important to their overall experience. Most major lodging companies have entered this market segment with new lifestyle brands, or are converting existing brands to lifestyle choices. In addition, many independently owned and operated lifestyle hotels are popular destination attractions. Lifestyle brands reflect the interests of their guests. For example, some promote eco-friendly environments, while others promote healthful living or social interactivity. Some brands are directed at the interests of a specific age group, offering amenities specifically designed for those guests. Lifestyle hotels tend to be constructed with 100 to 250 guestrooms and have limited or no meeting space. Food service offerings at lifestyle hotels vary, depending upon the brand design and market tier (for example, worldclass or mid-range). The interior dcor, building and guestroom design, and many other ambient details (such as background music and artwork) contribute to the success of a lifestyle hotel guest experience. Bed-and-Breakfast Hotels. Bed-and-breakfast hotels, sometimes called B&Bs, are an often overlooked group of lodging properties. B&Bs range from houses with a few rooms converted to overnight facilities to small commercial buildings with 20 to 30 guestrooms. The owner of a B&B, the host or hostess, usually lives on the premises and is typically the property manager. Breakfast service may range from a simple continental breakfast to a full-course meal. Thousands of B&Bs exist today, deriving popularity from intimate, personal service for leisure travelers. Some B&Bs provide such fine accommodations and 8

service that they have earned some of the best ratings from highly respected hotel rating services. Most B&Bs offer only lodging and limited food service or, as the name implies, breakfast only. Meeting rooms, laundry and dry-cleaning services, lunch and dinner, and recreational facilities are usually not offered. Due to limited services, the price for a room at a B&B tends to be lower than at a full-service hotel. Vacation Ownership and Condominium Hotels. Another expanding segment of the hospitality industry is the vacation ownership hotel, sometimes referred to as timeshare or vacation-interval hotels. Vacation ownership properties typically attract individuals who purchase the ownership of accommodations for a specific period of timeusually one or two weeks a year. These owners then occupy the unit, usually a condominium, during that time. Owners who cannot or choose not to occupy the unit during their time period may have the unit rented or brokered by the management company that operates the hotel. Since the property functions as a hotel in many respects, travelers renting the unit may not realize it is actually part of a vacation ownership hotel. These hotels have become especially popular in resort areas, but some are also located in commercial areas and may be owned by area companies that need to house visiting executives or consultants. Owners may not be able to afford owning a condominium year-round, but can afford fractional ownership (ownership of a unit for a few weeks a year). One popular feature of vacation ownership hotels is the ability to trade ownership time with another owner in another location. For example, an owner of a beach-front vacation ownership unit may want to trade time in the unit for time in a winter ski unit. Often, the management company can work with the owner to find someone willing to trade. This allows owners the opportunity to vary their vacations each year, without giving up the benefits of ownership. Two major vacation ownership exchange companies are Interval International and Resort Condominiums International. Several major hotel companies are also represented in this market, including Disney, Marriott, and Hilton. The American Resort Development Association provides educational and representational services to this market. Condominium hotels are similar to vacation ownership hotels. The difference between the two lies in the type of ownership involved. Units in condominium hotels have only one owner instead of the multiple owners typical of vacation ownership hotel units. In a condominium hotel, an owner informs the management company of when he or she wants to occupy the unit. That way, the management company is free to rent the unit for the remainder of the year. When the management company rents the unit, a portion of the revenue goes to the owner. Vacation ownership and condominium owners receive the revenue from the rental of their units and pay the management company a fee for advertising, rental, housekeeping, and maintenance services. Vacation ownership and condominium owners are also responsible for furnishing and paying for the general maintenance of their units. In many cases, condominium and vacation ownership hotels were actually built as apartment or condominium buildings and converted to lodging use. Normally, these units consist of a living room, dining area, kitchen, bathroom, and one or more bedrooms. Guest laundry facilities are often provided in the unit, but may be provided in a common area of the building as well. Guests of condominium hotels usually rent a unit for at least one week. Guests often contract for a specific unit at a specific time each year. Casino Hotels. Hotels with gambling facilities may be categorized as a distinct group: casino hotels. Although the guestrooms and food and beverage operations in casino hotels may be quite luxurious, their function is secondary to, and supportive of, casino operations. As with resort hotels, casino hotels tend to cater to leisure and vacation travelers. Casino hotels attract guests by promoting gaming and headliner entertainment. Most casino hotels provide a broad range of entertainment opportunities, including golf courses, tennis courts, spas, and theme recreational activities. Casino hotels may also provide specialty restaurants and extravagant entertainment, and may offer charter flights for guests planning to participate in casino activities. Gambling activities at 9

casino hotels may operate 24 hours a day, 365 days a year; this may significantly affect the operation of the rooms and food and beverage divisions. Some casino hotels are very large, with several thousand guestrooms. A special hotel format involves riverboat gambling. Since most riverboats do not provide lodging accommodations, hotels are often located where the riverboats dock to accommodate gamblers. These hotels are not considered casino hotels because they do not have gaming as part of their facilities. Conference Centers. While many hotels provide meeting space, conference centers are specifically designed to handle group meetings. Most full-service conference centers offer overnight accommodations for meeting attendees. Because meetings are their focal point, conference centers typically place great emphasis on providing all the services and equipment necessary to ensure a meeting's successfor example, technical production assistance, high-quality audiovisual equipment, business service centers, flexible seating arrangements, flipcharts and display screens, and so forth. Conference centers are often located outside metropolitan areas and may provide extensive leisure facilities: golf courses, indoor and outdoor swimming pools, tennis courts, fitness centers, spas, running and hiking trails, and more. Conference centers typically charge meeting planners a single price, which includes attendee guestrooms, meals, meeting rooms, audiovisual equipment, and related services. Guest amenities may not be as plentiful at conference centers, since these centers concentrate more on meeting the needs of conference planners and organizers than on meeting the needs of program attendees. Conference centers may also accept transient business, but this is usually done to fill vacant guestrooms and is not a large portion of the business. Convention Hotels. Convention hotels form another segment of the lodging industry that has grown significantly in recent years; demand for the convention market has nearly doubled in the past 20 years. While most commercial hotels have fewer than 600 rooms, convention hotelsdesigned to accommodate large conventionsoften offer as many as 2,000 rooms or more. Convention hotels have a sufficient number of guestrooms to house a significant majority of attendees at most conventions. Convention hotels often have 50,000 square feet or more of exhibit hall space, plus ballrooms and an assortment of meeting rooms. Most convention properties offer dining facilities ranging from self-serve restaurants or cafeterias to elaborate formal dining rooms. Convention hotels are primarily directed toward business travelers with a common interest. A full line of business services is generally available, including teleconferencing, secretarial assistance, language translation, high-speed Internet access, and facsimile (fax) machines. Examples of convention hotels are the Gaylord Opryland Resort & Convention Center Nashville; the Wyndham Anatole Hotel in Dallas, Texas; and the Hyatt Regency in Chicago. Some casino hotels, like the Mandalay Bay and MGM Grand in Las Vegas, offer similar facilities. Convention hotels usually attract the convention market for state, regional, national, and international meetings. While most hotels book the majority of their group business within two years of the meeting date, convention hotels may book their business up to 10 years in advance. Many groups are so large that they have to book space that far in advance to ensure adequate facilities and housing for their attendees. In some cases, convention hotels do not offer all the facilities necessary, but are affiliated with a local convention center. The local community usually owns the convention center, which often has its own sales force. Convention centers not only have space for meetings and conferences, they also have more than adequate space for exhibits and private booths. Some convention centers have more than one million square feet of floor space in a single building. Convention centers normally coordinate efforts with nearby 10

hotels to ensure that guestrooms are available for convention attendees. Hotels, in turn, sell the convention center to appropriate markets to garner guestroom business. Alternative Lodging Properties. Besides hotels, there are several other types of lodging establishments that compete for business and leisure travelers. Recreational vehicle parks, campgrounds, and mobile home parks are somewhat like hotels, since they involve the rental of space for overnight accommodations. But although similarities exist, these alternatives stand apart from other lodging facilities. In some resort areas, parks and campgrounds strongly compete with traditional lodging operations because they appeal to a broader range of travelers. For example, many state and national parks offer campgrounds and lodges that compete directly with hotels. These facilities may have an advantage over local hotels, since they are located on park land, are usually competitively priced, and may be subsidized. Unlike hotels, however, campgrounds and recreational vehicle parks require that guests bring their accommodations with them. Still another form of alternative lodging is the corporate lodging business. Corporate lodging is designed for guests wishing to stay for very long periods of time, often up to six months or longer. While hotels are usually designed for guests staying one to ten nights, corporate lodging is better suited to guests with very long stay requirements. Guests often include business executives moving from one city to another, consultants on temporary assignments, corporate trainers, professional athletes, and personnel connected to special projects such as movie shoots. Instead of guestrooms, corporate lodging usually provides fully furnished apartments for guests. In many cases, the building owners provide the apartments. In other cases, a service provider supplies the apartment to the guest. The service provider rents the apartment, and provides the furniture and housewares, as well as housekeeping and other services, to guests. Since apartments are used instead of hotel buildings, a single provider in a community can provide corporate lodging in many community locations, allowing guests greater flexibility. Corporate lodging is usually cost-competitive with hotels, since apartments can be rented and furnished by the owner or service provider for a lower daily cost than that incurred by hotels. Corporate lodging has been a major growth industry recently, expanding well beyond North America to Europe and Asia. Some hotel companies have corporate lodging divisions, including ExecuStay by Marriott and BridgeStreet Worldwide by Interstate Hotels & Resorts. Other corporate lodging companies are divisions of residential real estate companies, such as Equity Residential and Charles E. Smith. The cruise ship industry is another example of alternative lodging. Cruise ships have become major competition for resorts, especially in the Caribbean region, and are primary competitors of resort hotels. They offer many amenities similar to those offered at island resorts, while offering the unique advantage of moving from island to island as part of the experience. Modern cruise ships offer all the advantages of resort hotels. Cruise ships come equipped with many modern conveniences, such as fitness centers, movie theaters, multiple dining and cocktail lounge facilities, spas, casinos, shops, and ship-to-shore communications, including satellite television and Internet access. Cruise ships may be small, offering as few as two dozen cabins, or large, with several hundred cabins or more. Some cruise ships even offer small conference facilities for corporate or association meetings.

Section Keywords hotel A general term used to describe hotels, motels, motor hotels, inns, suite hotels, conference centers, resorts, and other operations providing lodging facilities, various services, and conveniences to the traveling public. target markets Distinctly defined groupings of potential buyers (market segments) at which sellers aim or "target" their marketing efforts. 11

market segmentation The practice of defining or identifying smaller, distinct groups or 'segments' within larger markets; corporate business travelers, for instance, is a segment of 'business travelers'.

Section Endnotes
Endnote #1.1 : Floyd

Miller, StatlerAmerica's Extraordinary Hotelman (New York: Statler Foundation,

1968), p. 36.

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Competency 2 Objective: Classify hotels in terms of their levels of service, and ownership and affiliation. Levels of Service Another way to classify lodging properties is by level of guest service, which is a measure of the benefits provided to the guest. The level of guest service offered in a hotel varies without regard to hotel size or type, and some hotels offer more than one level of service. The level of service is usually reflected in a guest's room rate. Before discussing specific levels of service, this section will look at some basic issues pertaining to service, including the intangibility of service, quality assurance, and rating services The Intangibility of Service. Hotels are not simply in the business of selling tangible products such as comfortable beds and wholesome food. In fact, it is the intangible services a hotel provides that contribute most to the guest's hospitality experience. These services are not physical things, but rather actions, deeds, performances, or efforts. For example, a meal served in a hotel dining room is certainly a tangible element of a guest's experience. However, hospitality means more than just a good meal: it means surrounding the meal with a particular ambience, including the dining room's dcor and the attitude of its staff. These intangible elements can be just as important to the guest as the tangible elements. The difficulty is that after a service has been delivered, the purchaser generally has nothing tangible to show for it. Services cannot be touched, tasted, or tried on for size, and are virtually impossible to "return." For the most part, guests leave a hotel with only the memories of their experiences. To counteract this, many hotels try to create an image of their services that is powerful, clear, and precise. The hotel's service becomes an instantly recognizable standard, signature, or trademark of the hotel, almost like a tangible product. The hotel's employees must then sustain that image through their commitment to service. Every service provided by a hotel must be appropriate to the market the property wishes to attract and satisfy. For example, guests at a small lodging property probably would be surprised if someone attempted to escort them to their rooms after registration. However, in a hotel with an appropriately defined market and level of service, escorting guests to rooms is an expected, important part of the hotel's image. Quality Assurance. The intangible services that a hotel delivers tend to be less standardized than the tangible objects produced by a manufacturer. One of the greatest challenges the hospitality industry faces today is controlling service variability. The consistent delivery of services is the result of a program of quality assurance. The traditional quality control techniques of manufacturing industries may not be appropriate for the hospitality industry. In manufacturing industries, consumers are normally isolated from the production processes, and products are tested and inspected before they are sold. In hotels, some quality control techniques used in manufacturing industries may apply: guestrooms are inspected after they are cleaned, and the recipes of menu items are tested before the items appear on a restaurant's menu. However, in many instances, guests are not isolated from the hotel's production processes. For example, registration is a service that is produced and delivered by hotel employees and consumed by guests simultaneously. Consistency is the key to quality service. The ingredients of consistency are the standards that a lodging property develops. But, while standards establish and define quality, only the hotel's staff can make quality a reality. It is the consistency of a particular hotel or chain of hotels that often creates or sustains guest loyalty and preferences, as well as a unique market niche.

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Rating Services. Several groups in the United States provide hotel evaluation and rating services for travelers. The American Automobile Association (AAA) and the Mobil Travel Guide provide the best known of these services. The finest hotels rated by AAA have earned either a five- or four-diamond rating. Mobil Travel Guide awards either five or four stars to the hotels earning its highest ratings. It is extremely difficult for a hotel to earn either five diamonds or five stars. Standards are very strict and include consistency in the quality of facilities and services from year to year. While there are hundreds of four-diamond and four-star hotels in the United States, there are fewer than 50 five-diamond or five-star hotels. In other parts of the world, similar rating services are provided by private organizations and by governments. For example, the Mexican government provides ratings of hotels from one star to five stars, plus an additional category of Gran Turismo for the finest hotels. In Europe, one of the best-known and respected rating services is The Red Guide provided by Michelin. The Red Guide provides up to three stars for the finest hotels and restaurants, and has been published for over 100 years.

For the sake of simplicity, lodging properties can be discussed in terms of four different levels of service: world-class, upscale, mid-range, and economy/limited service. In many cases, a subclass of world-class hotelsfirst classrefers to hotels earning either four diamonds or four stars under the AAA or Mobil Travel Guide rating services. World-Class Service. Hotels offering world-class servicesometimes called luxury servicetarget top business executives, entertainment celebrities, high-ranking political figures, and wealthy clientele as their primary markets. World-class hotels provide upscale restaurants and lounges, exquisite dcor, concierge service, and opulent meeting and private dining facilities. Guests may find oversized guestrooms, heated and plush bath towels, large bars of soap, oversized in-room safes, sophisticated entertainment centers, multiple television sets, and upgraded furnishings, dcor, and artwork. Housekeeping services are typically provided twice daily, including a nightly bedroom turn-down service. Complimentary local and international newspapers may be delivered daily to each guestroom. World-class hotels seldom have more than 400 guestrooms, given the level of service they provide, and in many cases have fewer than 200 guestrooms. In North America, these hotels are often classified as five-star or five-diamond hotels, referring to the rating services discussed previously. Other rating systems may apply around the world. As one might expect, world-class service hotels are usually the most expensive, but also provide the highest value for the price paid. The public spaces of a world-class hotel (for example, the lobby, hallways, and entryways) may be large and elaborately decorated and furnished. Several food and beverage outlets are frequently available to cater to diverse tastes of the hotel's guests and visitors. The hotel may also offer a variety of retail outlets, such as gift shops, clothing and jewelry stores, specialty retail shops, and international newsstands. Above all, world-class hotels stress personalized, sometimes customized guest services, and maintain a relatively high ratio of staff members to guests. This ratio enables the hotel to offer an extensive variety of amenities and unique services and to respond quickly to guest requests. For example, some of the finest hotels in Asia boast a ratio of two or more employees per guest. Many world-class hotels in North America have more than one employee per guest. World-class hotels frequently employ a multilingual concierge in an effort to provide special assistance to international guests. Among their many services, concierges may help guests register, obtain tickets for transportation and entertainment, provide travel directions and sightseeing information, or arrange for secretarial or business services. Additionally, some world-class hotels may provide private butler service on designated floors. Private butlers may be asked to 14

arrange room service meals and cleaning services for clothing, to unpack and pack luggage, and to provide many other customized services. Executive floors. In some hotels, certain floors are designated to provide some of the hotel's guests with world-class attention. Properties offering executive floors (sometimes known as tower, concierge, or club floors) provide non-standard guestroom furnishings and additional guest services in these areas of the hotel. Executive floors usually are designed with larger, deluxe guestrooms that may contain a number of unique amenities. Recent trends for these floors include in-room fax machines, videotape players, large televisions, and even computers. Executive-level guestrooms or suites might also feature an in-room refreshment center and may be stocked with signature bathrobes, fresh fruit, and fresh-cut flowers. Usually, the luxury services offered on executive floors are not confined to the guestroom. A concierge, or personal butler, may be stationed on each executive floor. Access to these floors may be restricted by the use of special elevator keys that allow only authorized guests to enter. In many cases, the executive or tower floors offer a private lounge. Special complimentary food and beverage services may be offered in the evening, and a continental breakfast may be served in the morning. Conveniences such as secretarial services or special check-in and check-out arrangements may also be available. Upscale Service. Upscale service hotels are patronized by travelers seeking exceptional service and accommodations, but not at the level of world-class hotels. The primary clients are business executives, high-level industry meeting attendees, and leisure travelers interested in the extra comforts and amenities these hotels provide. Upscale hotels tend to provide multiple food service and dining experiences and often have several food and beverage outlets, each offering a different cuisine. Guests are provided modern guestroom amenities, including flat-panel televisions, luxurious bedding, choice of pillows, inroom coffee stations, ergonomic work environments, and other features. Housekeeping services are often scheduled twice daily, including evening turndown service upon request. Although upscale service hotels do not provide the unusual staff-to-guest ratio provided in world-class hotels, upscale properties are nevertheless known for providing excellent service. Upscale service hotels appeal to select travelers by providing executive floors, valet parking, door and bell service, concierge services, business centers, shopping outlets, and more. These hotels can range in size from 100 to 2,000 guestrooms, depending on target market and location. In addition, some upscale service hotels offer large meeting facilities that can host 500 or more attendees for a meeting or banquet. In North America, these hotels are often classified as four-star or four-diamond hotels; around the world, other rating systems may apply. In any case, upscale service hotels are generally less expensive than world-class service hotels. Mid-Range Service. Hotels offering mid-range service appeal to the largest segment of the traveling public. Mid-range service is often modest but sufficient. Although the staffing level is adequate, the midrange property does not try to provide elaborate services. A mid-range property may offer uniformed guest services, airport limousine service, and food and beverage room service. Like world-class and upscale hotels, mid-range properties range in size from small to large. The typical hotel offering mid-range service is of medium size, roughly 150 to 299 rooms. A mid-range property may offer a specialty restaurant or all-day dining room and a lounge catering to visitors as well as hotel guests. The lounge may feature entertainment on the evenings the hotel is expected to be most busy. Guests likely to stay at a mid-range hotel include businesspeople, individual travelers, and families. Rates are lower than world-class or upscale hotels, since the properties offer fewer services, smaller rooms, and a smaller range of facilities and recreational activities. Such factors often make mid-range hotel properties appealing to those travelers desiring some hotel services, but not the full range of luxuries offered at world-class or upscale properties. Since meeting rooms are usually available at 15

mid-range hotels, people planning small conferences, group meetings, and conventions also may find midrange hotels attractive. Economy/Limited Service. Economy/limited service hotels also are a growing segment of the hospitality industry. These properties provide clean, comfortable, inexpensive rooms and meet the basic needs of guests. Economy hotels appeal primarily to budget-minded travelers who want rooms with the minimal amenities required for a comfortable stay, without unnecessary, often costly, extra services. Since a large proportion of the population travels on limited funds, economy properties have a potentially large market from which to attract clientele. The clientele may include families with children, bus tour groups, traveling businesspeople, vacationers, retirees, and groups of conventioneers. Initially, the only amenities offered at many economy properties were an in-room telephone, a bar of soap, towels, and a television set with local channels. Most economy properties now offer cable or satellite television, swimming pools, playgrounds, small meeting rooms, and other special features. What most economy properties do not offer is room service, uniformed guest services, large group meeting rooms, laundry or dry-cleaning services, banquet rooms, health clubs, or any of the more elaborate amenities found at mid-range and world-class properties. An economy property generally does not provide full food and beverage service, which means guests may need to eat at a nearby restaurant. However, many economy hotels provide a free continental breakfast in the lobby area. Ownership and Affiliation Ownership and affiliation provide another means of classifying hotel properties. Two basic equity structures exist: independent hotels and chain hotels. An independent hotel has no affiliation with other properties. Chain hotel ownership may take a number of forms, depending on the association that the chain organization has with each property. This chapter points out several distinct forms of chain ownership, including management contracts, franchises, and referral groups. Many chain hotel companies tend to be a mixture of several types of ownership. Independent Hotels. Independent hotels have no identifiable ownership or management affiliation with other properties. In other words, independent hotels have no relationship to other hotels regarding policies, procedures, marketing, or financial obligations. A typical example of an independent property is a familyowned-and-operated hotel that is not required to conform to any corporate policy or procedure. From a business perspective, some independent properties are organized as sole proprietorships or partnerships, while others are incorporated to restrict insurance risk and personal liability. The unique advantage of an independent hotel is its autonomy. Since there is no need to adhere to a particular image, an independent operator can offer a level of service geared toward attracting a specific target market. Moreover, the flexibility inherent in a smaller organization often allows the independent hotel to quickly adapt to changing market conditions. An independent hotel, however, may not enjoy the broad advertising exposure or management insight and consultancy of an affiliated property, and is unable to take advantage of the volume purchasing power of a chain hotel. Examples of well-known independent hotels include The Breakers in Palm Beach, Florida; The New York Palace Hotel in New York; and the Del Coronado in San Diego. Chain Hotels. Chain ownership usually imposes certain minimum standards, rules, policies, and procedures to restrict affiliate activities. In general, the more centralized the organization, the stronger the control over the individual property. Chains with less dominant central organizations typically allow individual hotel managers to exercise more creativity and decision-making autonomy. 16

Several different structures exist for chain hotels. Some chains own affiliated properties, but many do not. Some chains exert strong control over the architecture, management, and standards of affiliate properties. Other chains only concentrate on advertising, marketing, and purchasing. Some chains may have only a small corporate structure and minimum membership standards, and therefore would not be equipped to provide a high level of assistance to local ownership. A chain is usually classified as operating under a management contract or as a franchise or referral group. The following discussion highlights how each type of chain operates, and how each type differs from the other. Management contracts. Management companies are organizations that operate properties owned by other entities. These entities range from individual businesspeople and partnerships to large insurance companies. Here's an example of how a management company might be hired to run a hotel. A group of businesspeople may decide that a hotel would enhance local business conditions. If the group's preliminary business feasibility study is favorable, the group might attempt to obtain financing to build the hotel. Many lending institutions, however, would require professional hotel management, and possibly chain affiliation, before they would approve a loan. At this point, the group could contract with a professional hotel management company to operate the proposed property, probably on a long-term basis. Assuming the hotel management company is acceptable to the lenders, a management contract would be signed by the developers and the management company. Under this type of contract, the owner or developer usually retains the financial and legal responsibility for the property. The management company usually operates the hotel, hires its employees, pays its expenses, and, in turn, receives an agreed-upon fee from the owner or developer. After operating expenses and management fees have been paid, any remaining cash usually goes to the owners, who may use this cash to pay debts, insurance, taxes, and so forth. Management contracts have proven successful for many major hotel chains. Some management contract companies do not have a brand name. These companies usually operate franchises or independents for property owners. The franchising company provides the purchasing power, advertising, and central reservation system, while the management company provides the management expertise. Management contracting is usually a means of rapidly expanding a hotel company's operations with far less investment per property than direct ownership requires. Hotel management companies are sometimes established just to manage hotels for other investors. These companies appear to offer a unique advantage to property owners and managers because of their expertise in operations, financial management, staffing, marketing and sales, and reservation services. Some of these companies have grown quite large. For example, Interstate Hotels & Resorts manages more than 400 hotels around the world for various owners, and works with almost every franchise brand available. Franchise and referral groups. Some of the best-known U.S. hotels belong to franchise and referral groups. These properties are located in most cities and towns, along interstate highways, and in resort areas. Franchise and referral groups have enjoyed the most growth in the worldwide lodging business in recent years because travelers prefer to stay with brands they recognize, and owners trust in brand names to attract business. There is, however, an organizational distinction between franchise and referral group chain hotels. Franchising is simply a method of distribution whereby one entity that has developed a particular pattern or format for doing businessthe franchisorgrants to other entitiesfranchiseesthe right to conduct such a business, provided the franchisee follows the established pattern. In the lodging industry, most organizations offering franchises have first established the quality of their product and expertise in 17

operations by developing parent-company (franchisor-owned) hotels. Franchise organizations typically have established standards for design, dcor, equipment, and operating procedures, to which all franchised properties must adhere. This standardization is what enables franchise chains to expand while maintaining a consistent, established product and level of service. The franchisor usually provides the franchisee with other reasons for purchasing a franchise aside from a strong brand name. These include national or international central reservation networking, national advertising campaigns, management training programs, advanced technology, and central purchasing services. Some franchisors also provide architectural, construction, and interior design consulting services. Some of the better-known franchising companies are InterContinental Hotels Group (Crowne Plaza, Holiday Inn, Staybridge Suites, and Candlewood Suites), Choice International (Quality Hotels and Inns), Wyndham Worldwide (Ramada Inns, Howard Johnson, Wingate, and Days Inn), and Starwood Hotels & Resorts Worldwide (Sheraton and Westin). In some cases, a company may provide management contract services as well as sell franchises. For example, most Four Points Hotels by Sheraton are franchises, while most Sheraton brand hotels are either owned by Sheraton or have Sheraton management contracts. A franchise arrangement is not necessarily right for all lodging properties. Some operations are so distinct that belonging to a franchise system and conforming to a set of standards may be perceived as harmful. For these operations, a referral group might be more appropriate. Referral groups (sometimes called membership groups) consist of independent hotels that have banded together for some common purpose. While each property in a referral system is not an exact replica of the others, there is sufficient consistency in the quality of service to consistently satisfy guest expectations. Hotels within the group refer their guests to other affiliated properties. Through this approach, an independent hotel may gain a much broader level of exposure. Best Western International, one of the largest hotel systems in the world, is an example of a referral group. The owners of Best Western International are the individual property owners. Preferred Hotels & Resorts Worldwide, The Leading Hotels of the World, and ALHI are referral groups serving generally upscale hotels. Belonging to a franchise or referral group provides several benefits, the most obvious being a more extensive reservation system and expanded advertising through pooled resources. These advantages are so important that lending institutions may often be reluctant to lend money to potential investors unless the investors have established an affiliation with a franchise group or referral organization. As with franchise organizations, referral groups provide central purchasing services. These services reduce expenses to the individual hotels, since items are purchased in larger quantities. Owners can purchase interior furnishings, bath amenities, linens and towels, and restaurant items at quantity prices. Referral groups require members to maintain certain operating standards, so that guests can enjoy consistent quality.

Section Keywords quality assurance An approach to ensuring the consistent delivery of services. world-class service A level of guest service that stresses personal attention. Hotels offering worldclass service provide upscale restaurants and lounges, exquisite dcor, concierge services, opulent rooms, and abundant amenities. Upscale service hotels A hotel that appeals to business executives, high-level industry meeting attendees, and leisure travelers interested in extra comforts. Upscale hotels tend to have multiple food 18

service outlets, each with a different cuisine. Guests enjoy such amenities as flat-panel televisions and luxurious bedding. Housekeeping services are often scheduled twice daily, including evening turndown service upon request. mid-range service A modest but sufficient level of service that appeals to the largest segment of the traveling public. A mid-range property may offer uniformed service, airport van service, and food and beverage room service; a specialty restaurant, coffee shop, and lounge; and special rates for certain guests. Economy/limited service A level of service emphasizing clean, comfortable, inexpensive rooms that meet the most basic needs of guests. Economy or limited service hotels appeal primarily to budgetminded travelers. independent hotel A hotel with no ownership or management affiliation with other properties. Chain hotel A hotel owned by or affiliated with other properties. management contract An agreement between the owner/developer of a property and a professional hotel management company. The owner/developer usually retains the financial and legal responsibility for the property, and the management company receives an agreed-upon fee for operating the hotel. Franchising A method of distribution whereby one entity that has developed a particular pattern or format for doing business (the franchisor) grants to other entities (franchisees) the right to conduct such a business provided they follow the established pattern. Referral groups A group of independent hotels that have banded together for their common good. Hotels within the group refer departing guests or those guests they cannot accommodate to other properties in the referral group.

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Competency 3 Objective: Describe characteristics of business, pleasure/leisure, group, and international travelers. Classifying Guests Guests, like hotels, can be categorized. These categories, some quite elaborate, are typically most useful to a property's marketing function. Classifying guests by their reasons for traveling offers some useful general insights into the different wants and needs of guests. The market for the lodging industry can be segmented into three major categories, based on reasons for travel: business, pleasure/leisure, and group. A fourth category is made up of international travelers. Business Travelers The business travel market is important to many lodging properties. Historically, business travelers were the first and primary market for hotels, dating back to the railroad age. In the United States, more than 35 million people take business trips each year. Business travelers average about five trips per year, and, because business travelers are less likely to share rooms or stay with friends or relatives, they account for a significant portion of lodging demand. Regular business travel is that segment of the business travel market not related to meetings and conventions. Regular business travel is an important source of business for many lodging properties. Within the last few years, hotels and airlines have designed specific products and services for the traveling business executive. Increased attention has also been given to traveling businesswomen. A special segment of business travelers is predisposed to stay at luxury hotels. Frequent business travelers generally provide their travel agents with broad parameters outlining the type of hotel in which they wish to stay. The growing number of suite hotels directed specifically toward the business traveler has influenced growth within this market segment. Business hotels usually have amenities and facilities specifically directed at business travelers. Examples include meeting space, offices in the building that travelers can rent, secretarial or computer services, in-room safes, and 24-hour room service. In addition, one of the latest trends is to provide Internet access, either through computers or the guestroom television. Pleasure/Leisure Travelers While business travel generally rates as an important source of business for hotels, pleasure/leisure travel is also very important. Although downturns in economic cycles tend to reduce travel, it is generally true over time that more and more people are experiencing an increase in discretionary income and leisure time; as a result, more and more people are traveling. The segments of the pleasure travel market often overlap. The specific segmentation of this market often depends on the attractions, products, and services offered in the destination area of a lodging property. Typical market segments include specialized resort travel (for example, those seeking health spa facilities or instruction in such sports as tennis and golf), family pleasure travel, travel by the elderly, and travel by singles or couples. Of all the travel industry market segments, pleasure/leisure travelers are among the most difficult to understand. In contrast with business travelers, who consider the cost of travel a necessary expense, pleasure travelers are generally price-sensitive. Income is an important factor in shaping the demand for pleasure travel. Vacation activities and lodging accommodations compete for the traveler's discretionary income as well as leisure time. The amount of discretionary income directly affects pleasure travel because it is the source for supporting leisure-related activities. 20

There are two hybrids of business and pleasure travel. One hybrid results when a business finances an employee's pleasure travel as an incentive. Another hybrid form results when a business traveler adds vacation travel to the end or beginning of a scheduled business trip. Group Travelers Group travel is different from business travel because some groups, such as organized tour groups, travel for pleasure. Business travel related to meetings and conventions is commonly classified into two markets: institutional and corporate/government. Gatherings held by the institutional market are usually open to the public. Examples of institutional gatherings include national conventions held by various trade associations. Gatherings held by the corporate/government market are usually closed to the public because they often deal with private corporate or government business matters. Examples of corporate gatherings include management meetings, sales meetings, new product introductions, training seminars, professional and technical meetings, and stockholder meetings. Conventions and smaller meetings are critically important to much of the lodging industry. They result in the sale of guestrooms as well as banquet and meeting room facilities. Meetings and conventions can attract hundreds or thousands of people, but a single meeting planner typically decides where and when to have a meeting. Therefore, a hotel's sales and marketing department often focuses its efforts on meeting planners. In some cases, a hotel's sales and marketing personnel can persuade meeting planners to hold meetings at its property during the off season, thereby generating revenue during a slow time. International Travelers Hotels face an interesting and enormous challenge as international travel continues to expand. International guests bring a different set of needs and expectations. Hotels lacking translation services may be severely disadvantaged in a city where a Japanese company has just opened a manufacturing plant. Multicultural factors are also important considerations in staffing, interior design, food and beverage services, and recreational facilities. To meet this multicultural challenge, hotel managers must decide what international markets they want to serve, and establish a program to accommodate those markets. Consider how Japanese guests would appreciate a traditional Japanese breakfast of miso soup, fish, and rice, while guests from Great Britain would enjoy a familiar breakfast of fried eggs and breakfast meats. An international guest would also appreciate a hotel staff that could say "hello," "thank you," and other simple words and phrases in his or her native language. A large portion of the labor force in U.S. hotels today is foreign-born. People from Mexico, the Caribbean, India, Pakistan, Japan, China, and Africa are among the employees working in the hospitality industry. While many of these employees hold unskilled or semi-skilled positions, many possess multilingual skills and an understanding of the customs and cultures of international guests. Enlightened hotel managers look to these foreign-born employees for additional proficiency and versatility in serving international guests. Hotels may find themselves establishing training programs for foreign-born employees. These training programs may include English language lessons as well as classes in the customs of various other countries. On the other hand, foreign-born employees may teach classes to improve the skills of nativeborn employees in serving international guests.

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Competency 4 Objective: Identify factors that influence travelers' buying decisions. Buying Influences on Travelers Many things affect a traveler's selection of overnight accommodations. Buying influences may include satisfactory experiences with a hotel, advertisements by a hotel or a chain organization, recommendations by family members or friends, the location of a hotel, and preconceptions of a hotel based on its name or affiliation. To persuade guests to choose one hotel over others, many hotels develop marketing plans that may include the use of billboards, newspaper and radio advertisements, printed publications, the Internet, personal and telephone sales efforts, public relations activities, and direct mail pieces. Until recently, travel agents had a significant impact on consumer hotel selections. Consumers often depended on travel agents to select a hotel appropriate to their needs. However, within the past few years the Internet has played a much larger role in directing, and even attracting, personal travel. There are now dozens of Internet travel sites with varying business models and different ways of attracting customers and pricing travel products. These electronic distribution channels have reduced the role of travel agents and have emerged as mainstream marketing and sales opportunities for hotels. At the same time, more businesses are relying on travel management companies (large travel agencies with significant room rate negotiating power) to control travel expenses. Travel management companies are contracted by client companies and may receive a commission payment for travel booked. In turn, the travel management companies provide cost savings for their clients by consolidating the travel of all their clients and using that bundled buying power to negotiate discounted pricing for hotel rooms, plane tickets, car rentals, and other travel products. American Express, WorldTravel BTI, Navigant, and Carlson Wagonlit are some of the better-known travel management companies, all of which provide travel services through websites as well as traditional offices. A potential guest's buying decision may also be influenced by the ease of making reservations (whether via the front desk, the reservations department, or the hotel's website) or an employee's description of the hotel and its accommodations and facilities. The website's navigational tools or the reservationist's tone of voice, helpfulness, efficiency, and knowledge are all factors that may contribute to a guest's decision to stay at a particular hotel. More and more, potential guests search the Internet or contact several hotels in the destination area to compare room rates, services, and amenities before purchasing. What influences repeat business? Many guests say that the most important factors that bring them back to a hotel are the quality of service and the property's overall cleanliness and appearance. Good service is good business. Front office staff members are among the most visible hotel representatives in this regard. The front office's challenge is to obtain repeat business by providing a level of service that meets and exceeds guest expectations. Business travelers offer a tremendous opportunity for attracting repeat business. Satisfied business travelers may not only return for the same business purposes, but may also bring other business acquaintances, family members, and guests, or even revisit the property for a personal vacation. Guests often become loyal to particular chains or properties. Chain or brand loyalty can be a matter of habit, maximization of value to price, or satisfaction with the hotel's products or services. Since it is difficult to obtain reliable pre-purchase information about services, consumers may be reluctant to change hotels because they are unsure whether the change will actually increase their satisfaction. In order to "comparison shop" for services, consumers must visit various hotel properties in person. Also, consumers 22

often perceive greater risks in purchasing services than they do in purchasing manufactured products. This increases the likelihood of brand loyalty when a lodging property succeeds in satisfying its guests. Frequent traveler and electronic marketing programs are directed toward creating and sustaining brand loyalty for hotels, restaurants, and airlines. Programs such as Marriott Rewards, Starwood Preferred Guest, Hyatt Gold Passport, and Holiday Inn Priority Club are designed to give guests an added incentive to stay at one brand of hotel over another. Many such programs are affiliated with airline and car rental programs and offer rewards for flying a specific airline, staying at a specific hotel chain, and renting a specific company's car. Rewards can be free airline trips, free hotel stays, free car rentals, free amenities, discounted food and beverage services, guestroom upgrades, and even entire vacations for those who accumulate a large number of points or credits. Since many hotel companies offer similar frequent traveler programs, the original intention of these programs to increase brand loyalty has been somewhat diluted. Many frequent travelers have actually come to expect frequent guest programs, thereby devaluing such programs and making them less enticing. Although frequent guest programs are expensive to operate, most hotel companies perceive them as worthwhile in retaining some valued repeat guests whose business might otherwise be lost. Another reason guests may become brand-loyal is their own recognition that repeat patronage may lead to greater satisfaction of their needs. This can be especially important in the luxury sector of the lodging industry. The hotel staff and management may learn the tastes and preferences of regular guests and therefore be better able to provide the services these guests expect. The Ritz-Carlton chain has developed an extensive guest history system to communicate guest preferences to each of its hotels, even if a guest has never stayed at a particular property before. One factor affecting brand loyalty in the lodging industry is the unavailability of some brands in certain locations. If a consumer prefers to stay in hotels belonging to a specific chain but is unable to locate an affiliate at a particular destination, he or she may decide to stay at a property belonging to a different chain. This is one way the consumer learns about competing brands. If the competing brand offers roughly the same quality level or higher, loyalty to the former hotel chain may diminish. Among the most interesting recent influences on travelers are website design, site navigation, and specific websites that serve as reference guides for travelers. Hotel brands spend a lot of time and money designing and redesigning websites to attract and retain clientele. Internet search engines such as Google.com, Yahoo.com, and Ask.com also are becoming significant influences on travelers. Search engines index websites based on key words or references embedded in the websites and match them to words that travelers enter when using the search engine. The closer the match between the searched item and the indexed site, the higher the site is listed in the search engine response. Recently, websites have been specifically designed to let travelers write about their experiences at hotels, restaurants, casinos, clubs, theme parks, and other travel operations. Travelers peruse these sites when deciding whether to stay at a particular property, turning to reviews written by others who have stayed there. These features are part of the online technology applications called blogging and social networking. Blogging and Social Networking A web log or blog is a web page that serves as a publicly accessible chronicle or personal diary. It is similar in functioning to a discussion board. Blog posts are typically listed or logged in chronological order and displayed on the blog in reverse order to the reader, with the newest posts appearing at the top. The posts are a series of topical discussions written by a blogger. The general neutrality of a blog provides 23

an anonymous platform for all interested readers. Blog content, similar in force to word-of-mouth power, can influence purchasing decisions, affect marketing strategies, and affect corporate image. A blog that is dedicated to a specific business or business segment is often termed a b-blog. Several bblogs are dedicated to the hospitality industry. A guest who has had an outstanding experience at a lodging property may be inclined to write about it on a public blog, wherein the guest is the blogger. Accounts of great experiences can enhance a property's image and appeal, while negative accounts tend to have the opposite effect. A quick index to blogs can be found by searching tagged blog site contents. Tags can be created from key words or meaningful acronyms. Online media, such as discussion forums and e-mail exchanges, are examples of alternate forms of blogs. Social networking services, also called social networking sites, are designed to build upon interaction within an online or virtual community. Web-based social networking sites offer a setting for individuals or groups to create a profile to share with fellow members of the site. The website provides a variety of communication formats, including instant messaging, chat rooms, e-mail, blogs, and discussion groups. Many social networking sites offer privacy to members by allowing them to create restricted profiles and to maintain control over how much information is viewable to other members. For example, on some sites, users must agree to be friends before they can see each others' private profiles. Social networking sites can be created for personal reasons (such as communicating with family and friends), for business purposes (discussing news, promotions, discounts, or job hunting), or for finding individuals with similar interests (such as dating or searching for friends). Two widely subscribed social sites for connecting community members are MySpace (launched in 2003) and Facebook (launched in 2004).

Section Keywords travel management companies A large travel agency with significant room rate negotiating power.

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Competency 5 Objective: Describe how hotels can become more ecologically responsible and the incentives they have to do so. The Green Hotel What does being green mean? Although green has become a popular descriptor, it has no standard definition beyond its application to an eco-friendly business. Given the many building industry guidelines and the proprietary systems some hotel companies have developed, being green can range from encouraging guests to reuse towels, to recycling waste, to using wind electricity, to cooking with organic foods, to reducing carbon emissions, to installing rooftop solar panels. Complying with various benchmarks can result in the application of a green label. While a newly constructed property can more easily establish environmentally friendly systems, as opposed to older properties that require retrofit products to achieve success, a significant majority of the hotel industry is seeking compliance. The traveling public appears to be increasingly interested in patronizing hotels that invest in environmentally friendly buildings, equipment, processes, and techniques. In fact, some hotel companies have adopted environmental checklists that must be adhered to by both company-operated properties and franchised locations. Similarly, U.S. government agencies have a policy guideline that requires hotels and convention centers to file environmental performance data with the U.S. Environmental Protection Agency (EPA) if they wish to earn the agencies' business. In addition, the Association of Corporate Travel Executives (ACTE) values environmental performance when choosing hotels to host its meetings; the ACTE, active in more than 50 countries, prefers to conduct its events at venues with strong environmental programs. In fact, the group requires candidate hotels to include an environmental considerations addendum indicating their green practices before it will consider their business. Striving for reductions in greenhouse gas emissions, carbon neutrality, recycling, and organic gardening are goals of a green hotel property. Capturing waste heat from power generators, using renewable energy sources, and educating guests about environmental issues affected through lodging-related processes are also important elements in a comprehensive eco-friendly campaign. Several websites list green and/or certified hotel properties, including Travel + Leisure, LEED, and the Energy Star program. Green hospitality operations can generate both economic (cost savings) and environmental (recycling and reusing) advantages. The appendix to this chapter presents an extended case study describing one hotel's efforts to implement green practices. Green initiatives are in place worldwide, not just in the United States and North America. Perhaps one of the best known initiatives is The Prince's Foundation for the Built Environment, headquartered in London, England, and founded by Prince Charles. Its purpose is to create an educational foundation to improve the quality of life through the teaching and practice of timeless and ecological ways of planning, designing, and building. The foundation promotes ecological principles for improving building designs through environmentally friendly considerations. The foundation is associated with architects, engineers, manufacturers, and other organizations, including hotel companies. LEED Certification and the Energy Star Program Hotels are increasingly earning eco-certification through a variety of industry programs designed to recognize commitment to ecological responsibility. The hotel industry plays a major role in the successful implementation of ecotourism. Perhaps best known among a host of domestic classifications that hotel 25

companies support are the Leadership in Energy and Environmental Design (LEED) rating system and the Energy Star Award program. LEED Certification. The LEED program was created by the U.S. Green Building Council (USGBC) to certify that buildings meet standards of energy efficiency, conservation, and community sensitivity. The LEED certification was developed to encourage and accelerate global adoption of sustainable green building and development practices through the implementation of universally accepted tools and effective performance criteria. LEED is a nationally accepted benchmark for the design, construction, and operation of high-performance green buildings. It promotes a unique approach to construction that recognizes performance in five important areas of environmental health: sustainable site development, water savings, energy efficiency, materials selection, and indoor environmental air quality. The LEED program operates under the auspices of the USGBC, which estimates the advantages of building green to be reflected in decreased operating expenses and increased occupancy value over the life of the building. The four levels of LEED certification are, from highest to lowest, Platinum, Gold, Silver, and Certified. The USGBC estimates that, in the near future, nearly two-thirds of all consumers will elect to do business with companies that are LEED certified. The LEED Rating System was developed through a consensus-based process led by various LEED committees of the building and construction industry. Architects, facility managers, engineers, interior designers, landscape architects, and construction managers use LEED standards. Eco-construction is increasing in popularity, and LEED benchmarks are in place in more than 40 countries, including Canada, Brazil, Mexico, and India. Energy Star Program. The EPA's Energy Star program focuses on energy efficiency in various pieces of equipment and appliances. Hotel properties may be recognized with an Energy Star Award for increased energy efficiency. The Energy Star rating process requires hoteliers to enter energy performance metrics (such as monthly utility bills) into an automated benchmarking system that determines changes in energy conservation. The American Hotel & Lodging Association is a partner and strong supporter of the Energy Star program for the hospitality industry. The Energy Star award is presented yearly by the EPA and the U.S. Department of Energy (DOE) to honor organizations that have made outstanding contributions to protecting the environment through energy efficiency. Nearly 100 hospitality companies have received industry recognition, including Accor North America (for increased energy efficiency), Carlson Companies, Inc. (for constrained consumption), Marriott International, Inc. (for superior energy performance), Hilton Hotels Corporation (for energy-efficient buildings), Hyatt Corporation (for energy-centric design), Ritz-Carlton Hotel Company (energy- sensitive operations), and Starwood Hotels and Resorts Worldwide, Inc. (for energy performance enhancement). The hospitality industry slogan for the Energy Star Award is "Make strong energy performance your competitive advantage!" The goal of a strategic energy management program should focus on reduced costs and increased guest satisfaction. Energy Star estimates that a 10-percent reduction in energy consumption can have a financial impact equal to raising the hotel's average daily rate by $1.35 for fullservice properties, and by 60 cents for limited-service properties. Hotel Compliance. Hotels have engaged in a variety of architectural, electrical, mechanical, and naturalprocess improvements to establish compliance within LEED and/or Energy Star rating systems. Such areas as energy management, water management, biodiversity management, and waste management are receiving attention. The objective of a green program is to minimize waste and maximize efficiency. Energy management. Improved technology can make gains in energy efficiency more easily attainable. Lodging properties can establish credit toward LEED certification in the use of electricity by implementing a renewable energy program through the use of wind power, run-of-river power, solar 26

power, window tinting, and other techniques designed to contain and/or reduce energy consumption and related expenditures. Some hotels have sought benefits in this area by interconnecting their energy management systems with their property management systems to ensure consumption reduction when a room is unoccupied. The linking of energy use and room occupancy presents a natural synergy for conservation. At the time of check-out, all non-critical equipment in a guestroom can be automatically controlled or turned off. Items such as alarm clocks and refrigerators would not be affected, while thermostatic controls, television sets, select room lighting, and related components might all be subject to a power-down condition. Related areas of compliance involve replacing incandescent light bulbs with fluorescent lighting, resulting in a possible 75 percent savings; installing energy-efficient laundry equipment and digital thermostats; and reducing clear air circulating equipment through adoption of a smoke-free policy. Hotels can also reduce energy consumption by replacing air filters in in-room heating/cooling systems more frequently. Clogged filters cause fans to work longer; clean filters also mean cleaner rooms. Energy-efficient guestrooms are also important. Furthermore, some properties are drying laundered items in the sun. Capturing waste heat from power generators, using geothermal energy, transitioning to renewable energy sources, and applying solar energy when appropriate will significantly contribute to overall energy efficiency. Water management. Water conservation and recycling are key components of an effective water management program. Among hospitality industry practices are collecting rain water for use, placing water meters in guestrooms so guests can track usage, and grinding guest soaps to use as laundry detergent for hotel uniforms. Biodiversity management. Hotel companies can participate in biodiversity management by sharing their land with wildlife, embarking on an ecological restoration program to transform scarred and misused land into increased levels of diversity and use, and installing and maintaining hiking trails. Hotels can provide staff training in plant identification and wildlife conservation. They can further demonstrate commitment to the local community by promoting organic produce and gardens, controlling carbon emissions, and installing a hydro-plant. In addition, hotels can use recycled paper products, and support organic produce and gardens. Waste management. Hotels can greatly reduce waste by recycling. For example, hotel restaurants can compost food waste or donate it to charity. Hotels can also purchase items that are not packaged in individual servings, and can purchase supplies from green vendors. Hotel meeting facilities can serve water in pitchers and glasses instead of in individual servings of bottled water, and can use recyclable cutlery and napkins in food service. Reducing the amount of garbage the hotel generates, combined with donating realized savings to community and school projects, can also lead to environmental friendships. Green Meetings Green meetings, green hotels, green convention centers, green suppliers, and international awards for being green affect all aspects of the hospitality industry. Many companies and associations now require that hotels meet certain green requirements before they consider giving them their meeting business. The organizations communicate these requirements to the hotels along with their meeting specifications, and the hotels must address their ability to meet the requirements in their bids for the business. Environmentally conscious meetings are a growing trend. With resources becoming rare and expensive, organizations today increasingly support eco-friendly meetings. The greening of a meeting can be accomplished in many ways, including not pre-filling water glasses at banquet tables, collecting name tags and badge-holders for reuse when meetings end, providing recycling areas inside exhibit areas, and using compostable cups instead of water bottles. Meeting planners often insist that meeting facilities use 27

biodegradable and recyclable materials before the planners will consider booking meetings there. Research indicates that more than 60 percent of meeting planners deliberately avoid a destination or venue with a poor environmental record. Many industry observers do not consider green events a fad, but rather a long-term perspective. By definition, a green meeting incorporates environmental considerations throughout all stages of the meeting to minimize negative impact on the environment. Basically, a green meeting supports a green initiative and is expected to save money while improving the environment. The Convention Industry Council's Green Meetings Report is the reference for the meeting planning industry, while the EPA's "It's Easy Being Green!" publication stipulates mandatory requirements for green meetings. Sustainable Travel International works with such industry leaders as Continental, Marriott, and Leading Hotels of the World to reduce their carbon footprint. Recently, Virginia, California, Michigan, Florida, and Vermont initiated their own certification program for green hotels. The bottom line is that people are more environmentally aware and are basing business decisions on environmental factors as well as on logistics. In 2003, IMEX introduced the Green Meeting Award and recently partnered with the Green Meeting Industry Council to launch the Green Exhibitor Award and Green Supplier Award. Green meeting leaders claim that being green is not only right for the environment, it actually saves businesses money.

Section Keywords green hotel An eco-friendly hotel that strives to reduce greenhouse gas emissions, recycle, save water and energy, and support organic gardening, among other activities.

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Summary The lodging industry is part of the larger travel and tourism industry. One of the world's largest industries, the travel and tourism industry is composed of a vast group of businesses oriented toward providing necessary or desired products and services to travelers. This industry can be segmented into five parts: lodging operations; transportation services; food and beverage operations; retail stores; and travel-related activities. The lodging operations classification consists of hotels, motels, inns, suite hotels, conference centers, lifestyle hotels, upscale service hotels, and other lodging establishments. Although the distinction between these property types is not always clear, properties can be grouped by size, target market, level of service, and ownership and affiliation. As with hotels, guests can be divided into categories. Guests are typically grouped according to their reasons for travel: business, pleasure/leisure, or group. A fourth category consists of international guests. Hotel managers serving a large international guest market may rely on their foreign-born employees for added proficiency in serving international guests. The more information a hotel has about its guests, the better it can anticipate and satisfy their needs. Many things affect a traveler's selection of overnight accommodations. Buying influences may include satisfactory experiences with a hotel, advertisements, recommendations by family members and friends, a hotel's location, and preconceptions of a hotel based on its name or affiliation. Until recently, travel agents had a significant impact on consumer hotel selections, but now the Internet plays a much larger role in directing, and even attracting, personal travel. Hotel brands spend a lot of time and money designing and redesigning websites to attract and retain clientele. Internet search engines such as Google.com, Yahoo.com, and Ask.com also significantly influence travelers. Several b-blogs are dedicated to the hospitality industry. Guests may write about their experiences at a lodging property; what they write can enhance or diminish a property's image and appeal. Businesses are relying on travel management companies to control their travel expenses. Travel management companies consolidate the travel needs of all their clients and use that bundled buying power to negotiate discounted pricing for travel products. What influences repeat business? Many guests say that the most important factors that bring them back to a hotel are the quality of service and the property's overall cleanliness and appearance. Frequent traveler and electronic marketing programs also help create and sustain repeat business. The traveling public is increasingly interested in patronizing hotels that invest in environmentally friendly buildings, equipment, processes, and techniques. Hotels have engaged in a variety of architectural, electrical, mechanical, and natural-process improvements to establish compliance within LEED and/or Energy Star rating systems. The goal of a strategic energy management program should be to reduce costs and increase guest satisfaction. Green meeting leaders claim that being green is not only right for the environment, it actually saves businesses money. While a hotel property's architecture and style may be important in setting its theme, front office personnel play an integral role in defining its image. The variety of talents and skills required to satisfy guest needs makes front office work interesting and rewarding.

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Internet Sites For more information, visit the following Internet sites. Remember that Internet addresses can change without notice. If the site is no longer there, you can use a search engine to look for additional sites. Travel and Lodging Associations American Hotel & Lodging Association (AH&LA) American Hotel & Lodging Educational Institute Hospitality Financial & Technology Professionals Hospitality Sales and Marketing Association International (HSMAI) International Council on Hotel, Restaurant and Institutional Education (CHRIE) International Hotel & Restaurant Association (IHRA) Travel and Tourism Research Association (TTRA) Travel Industry Association of America (TIA) World Tourism Organization (WTO) Hotels and Hotel Companies Associated Luxury Hotels International (ALHI) Best Western Choice Hotels International Days Inn of America, Inc. Extended Stay Hotels Fairmont Hotels & Resorts Gaylord Opryland Resort & Convention Center Nashville Hilton Homewood Suites by Hilton Hotels Hotel Del Coronado Hyatt Hotels Corporation InterContinental Hotels Group 30

Interstate Hotels & Resorts Knights Inn Marriott Oakwood Corporate Housing Preferred Hotels & Resorts Radisson Hotels & Resorts The Ritz-Carlton Company Sheraton Hotels & Resorts Walt Disney World Westin Hotels and Resorts Condominium and Timeshare Organizations American Resort Development Association Community Associations Institute Disney Vacation Club Hilton Grand Vacations Company Interval International Marriott Vacation Club Resort Condominiums International Casino Hotels Caesars Entertainment Harrah's Pechanga Resort & Casino Travel Management Companies American Express BCD Travel Carlson Wagonlit Travel 31

Green Hotels AH&LA's Green Resource Center "Green" Hotels Association Green Lodging News Travel + Leisure magazine U.S. Green Building Council (USGBC) U.S. Environmental Protection Agency Energy Star program World Travel and Tourism Council Green Globe 21 program

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Case Study 1 A Big Fish in a Small Pond Flounders in the Great Lakes Jeff Marlin took down his hospitality management diploma from his office wall and packed it on top of a nearly full box of books and papers. It was Jeff's last day as assistant general manager of the Fairmeadows Inn in suburban Lake Zurich, Illinois. Tomorrow he started a new job as front office manager at the Merrimack, an 800-room convention hotel in downtown Chicago. Not bad for someone just three years out of school, he thought to himself as he finished packing. After this job, there's nothing I can't handle. It was true, the assistant GM's job had taught him to be a jack-of-alltrades. He had hired many of the property's 20 employees and knew them all by name. He had a good relationship with the head of housekeeping; he knew he could count on a quick response to special requests like readying a handicap-accessible room on short notice. He was proud that, during his tenure at the Fairmeadows Inn, his property had consistently had the highest average daily rate and highest occupancy of all the Fairmeadows properties in his region. With no full-time sales department, Jeff had become quite skilled at drumming up business among local groups. The Chamber of Commerce and the Kiwanis held monthly luncheon meetings (catered by the restaurant across the street) at the Fairmeadows and always put up visiting guests at the property. During the summer softball season, the 124-room property was hopping as softball teams of 15 or 20 players from neighboring regions stayed overnight at the Fairmeadows when they played the Lake Zurich team. Even then, Jeff was pleased with the front desk's ability to handle check-in and check-out procedures smoothly. At other times of the year, front desk traffic was easier, with only two or three people checking in or out at any given time. Jeff knew that he could handle anything his new job would throw at him. Hadn't he learned the Fairmeadows's new computer system faster than anyone on staffand trained the front desk staff how to use the programs? Reservations, sales, check-in/check-out, training, daily reportsyeah, I'm ready to move up, Jeff thought. Jeff's confidence got its first jolt as he strolled through the front doors of the Merrimack the next morning at 8 o'clock. Over 200 people jostled one another in the lobby as four front desk agents worked non-stop to get them checked out. What's going on here? Jeff wondered. A bell attendant asked the dazed young man if he could be of assistance, then gave Jeff directions to the general manager's office. "Welcome aboard, Jeff," said Al Grayling, as Jeff entered the G.M.'s office. "Hope you didn't have any trouble finding me." "Who are all those people in the lobby?" Jeff asked. "I've never seen such a crowd before." Al laughed. "Get used to it, Jeff. That's actually one of our smaller groups checking out this morning. There'll be lots of days when you and your staff will be checking out one group of 400 people and checking in another 400." "Of course," Jeff laughed weakly. "It's a convention hotel. I knew that. Well, where do I start?" Al took Jeff out to the front desk, where he was introduced to the morning shiftCarole, Franklin, Ashari, and Dean. They greeted him briefly, then turned their attention back to the guests who were checking out. At the Fairmeadows Inn, Jeff often pulled a shift at the front desk when things got busy. Glancing over Franklin's shoulder, though, Jeff realized that the computer system the Merrimack used was completely 33

different from what he was used to, and that the check-out methods performed so efficiently by his new staff were also unfamiliar. Better let them do what they do best until I pick up the routines, he decided. The phone rang. Jeff knew he could handle that. "Merrimack Hotel, Jeff Marlin. How may I help you?" "Jeff? This is Nancy Troutman, director of sales. You're the new front office manager, right? Al Grayling said you'd be starting today," said the voice on the other end of the line. "Jeff, I need you to let me know when the cosmetics sales convention group checks in. I want to meet with Sheila Watkins as soon as she arrives to go over plans for their awards banquet. I'm at extension 805. Got it? The information should be in the group rsum book at the front desk. Bye." Jeff had to ask Ashari for the group rsum book; they didn't even have one at the Fairmeadows Inn. She also showed him the daily report, which was three pages longer than the reports he was used to. He tried to figure out the different set-up and the unfamiliar itemsF&B, banquets, groups in and out, VIP list, out of order rooms. I need a report to explain this report, Jeff thought. As long as he was looking at reports, he decided to ask Ashari for a copy of the night audit. "Oh, that goes right to accounting," she explained. "Not to me?" he asked. She shook her head, then pointed out the number for accounting on the staff phone list. The list itself overwhelmed Jeff. So many departments, so many managers. PBX, reservations, sales, front officehe'd handled all of that at his last job. Here at the Merrimack, there was a separate department for each function. Would he ever find his way around this organization? Maybe I'd have been better off as a big fish in my small pond, he thought. After lunch, Jeff was back at the front desk. Working with Dean, he was getting oriented to the Merrimack's room management software and feeling his confidence rebound a little. It was still a couple of hours until the cosmetics convention group came in, so traffic at the front desk was fairly slow. A couple, the woman in a wheelchair, came to the front desk. The Armbrusters had reservations for a handicap-accessible room, but when Jeff checked the room status, he discovered that no such rooms were clean and ready for occupancy. He asked Dean to continue taking the Armbrusters' registration information while he attempted to resolve the problem with their room. Jeff searched the phone list until he found the housekeeping manager, Dolores Manta. "Dolores, this is Jeff at the front desk. I need a handicap-accessible room prepared for immediate occupancy. How quickly do you think you could have one ready?" "Just who are you?" asked Dolores. "We do have procedures around here. Don't you know you can't order a room like you order a pizza? No one informed me that an accessible room was a priority. Why did you wait until 1:30 to tell me this? Didn't you know they were coming in? Isn't it in the log?" The head housekeeper at the Fairmeadows Inn had never responded to any of Jeff's requests like this; he was taken aback. What was the big deal, anyway? "I'm the new front office manager; it's my first day," he explained. "No, I didn't know they were coming in. The log? Uh, I don't know about ... oh, wait, here it is. I guess I didn't know...." He tried to recover. "I 34

apologize for not following the right procedure, but I still have two guests here who need a room. Do you have any suggestions for me?" "Well, my staff is pretty tied up getting rooms ready for those 500 cosmetics salespeople coming in at 4 P.M. , but I'll see if I can take someone away from that and prepare Room 167 for you," said Dolores. "But, Jeff, don't let it happen again." The cosmetics convention group was late arriving, but Jeff stayed on to make sure that Nancy Troutman, the sales director, was notified about their arrival. He didn't want to start that relationship off as badly as he had with the housekeeping manager. She was surprised, though, when he called. "Why didn't you just assign the task to one of the front desk agents?" she asked. "I didn't mean that you personally needed to take care of this, just as long as I got the word. Thanks, though." By the end of his first long day, Jeff wasn't at all certain he wanted to come back for a second day. This was supposed to be a career move up, but it sure didn't feel that way. He decided to call Gavin Albacore, a college buddy who was reservations manager at a convention hotel in St. Louis. Maybe he would have some good advice, Jeff thought. Discussion Questions 1. How could the general manager at the Merrimack have made Jeff's transition into his new job easier?

2. What steps could Jeff have taken to make a smoother transition to the new job?

3. What advice might Jeff's friend have to help him make this a successful career move?

Case Number: 3321CA The following industry experts helped generate and develop this case: Richard M. Brooks, CHA, Vice President, TWE Group; and S. Kenneth Hiller, CHA, General Manager, Holiday Inn, Beachwood, Ohio. This case also appears in Case Studies in Lodging Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 1998).

Case Study 2 Choosing the Right Person for the Job Alan Christoff looked up from the report on his desk as his assistant brought in the morning mail. He flipped through the stack until he came to a large envelope bearing the unmistakable logo of the prominent hotel chain for which he was senior vice president of development. Christoff was in the process of finding someone to head up the hotel company's new interval ownership business unit. Construction was already 35

underway on phase one of the company's first venturea 200-unit timeshare resort on the South Carolina coast. The plan called for the resort to be built in phases with an anticipated five-year sellout and a 12month building cycletwo buildings a year for five years. When it was finished, the resort would feature 20 two-bedroom units in each building, along with tennis courts, swimming pools, and a central facilities building. Selling one-week intervals per unit and closing a sale with one out of every ten prospects making site visits, the sales effort might have to attract over 100,000 prospects to reach the sellout goal. Christoff's immediate concern was finding a manager for the hotel chain's interval ownership business unit. The human resources manager had forwarded him the rsums of the three applicants she felt were best qualified for the position. Christoff slid the rsums out of the envelope and sat back to review them. The first rsum was that of Micah Thompson. Christoff recognized the name as one of the hotel chain's rising stars. He held a hospitality degree from Cornell and had earned his CHA designation. His career had begun in operations; his rsum listed experience with reservations and yield management. Currently the general manager of the company's Daytona Beach hotel, Thompson's impressive sales and marketing skills had earned him a reputation for success in opening new properties and turning around troubled properties. In his cover letter, he cited his pre-opening experience, marketing skills, familiarity with resort destinations, and his desire to grow with the company. "I am certain that being general manager of this timeshare operation will not be significantly different from managing a hotel," he wrote. Christoff chuckled at that statement. He wondered if Thompson had ever tried to run a property as it was being built around him, or dealt with the logistics of conducting site inspections for literally tens of thousands of prospective timeshare customers. Still, Thompson did have a strong track record with the hotel company and was well-regarded by the hotel company's executive team. With the company's history of internal promotions, Thompson ought to be a shoo-in for the job, thought Christoff. Christoff turned to the next rsum. Elena Ramirez was currently the assistant general manager at a 400unit resort condominium property in Colorado. She had formerly been an owners' relations manager with another resort condominium. Ramirez had strong knowledge of the real estate product and a proven track record in dealing with a rental program and property resales. From her job descriptions, it appeared that all of her experience had been with whole ownership condominiums, rather than with interval ownership. "In addition to my experience with onsite sales and condominium rental programs, I have developed a strong working relationship with our owners' association and feel confident in dealing with individual owners and understanding their unique needs," Ramirez wrote in her cover letter. She also made a point of noting that her current property had twice the number of units as the hotel chain's planned 200-unit resort, so she felt confident of her abilities to succeed in the new environment. Let's see, mused Christoff. Four hundred units; that's 400 owners. I wonder if she realizes she would be managing 10,000 owners? Still, she probably had a better idea of what she would be facing than someone who had never worked in the condominium business before. The final rsum was from Earl Jackson. He was a timeshare industry veteran with nearly 10 years of experience at interval ownership properties. Before that, he had been in the real estate industry for 12 years. Christoff noted that Jackson had even included his real estate license number on his rsum. Jackson's timeshare experience included operations, marketing, and sales. Christoff looked for evidence of hotel experience, but found none.

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"I look forward to the opportunity to work with a branded chain," Jackson wrote. "I believe my experience in vacation-ownership management will enable me to work effectively with the sales staff to sell inventory and to communicate with both owners and hotel company management." Discussion Questions 1. What criteria should Christoff consider when selecting a manager to head up the interval ownership business unit?

2. Based on criteria developed in Discussion Question #1, what are the strengths and weaknesses of each applicant?

3. Which applicant should Christoff hire? Why?

Case Number: 604CJ The following industry experts helped generate and develop this case: Jerry Hewey, CHA, Condominium Consultant, Aspen, Colorado; Larry B. Gildersleeve, Executive Vice President, MeriStar Hotels and Resorts, Inc.; Pedro Mandoki, CHA, President, Plantation Resort Management, Inc., Gulf Shores, Alabama; and Jack Rush, CHA, General Manager and Managing Agent of the Port Royal OceanResort Condominium Association in Port Aransas, Texas. This case also appears in Case Studies in Condominium and Vacation Ownership Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 1998).

Case Study 3 Tub for Two Mary, the front desk agent who had been with the Boden Oceanside Resort and Lodge for nearly six months now, was trying her best to persuade the Wade party to take a look at one of the stylish executive suites in the lodge. Mary had that southern hospitality and didn't like to see guests leave dissatisfied without having done her utmost to show them the opportunities at the resort. Mr. and Mrs. Wade were celebrating their twentieth anniversary and had looked forward to a romantic get-away in a quaint lodge. The brochure for the Boden had described the Romance Package, which included a two-night stay, champagne, carriage ride, dinner for two overlooking the ocean sunset, and a beautifully appointed room. They had phoned reservations to be sure everything they wanted would be available. When they first saw the room that they had been assigned, the bottle of champagne, two fluted glasses and a bouquet of fresh-cut flowers adorned the coffee table. Mrs. Wade wandered over to the bathroom to see what it was like. As she returned to the main room she told the bellman who was delivering the luggage that the bathtub wasn't fit for two. He looked somewhat puzzled and then replied that it did appear to be a single-person tub but that it did have Jacuzzi fittings. Mrs. Wade asked the bellman if there were any rooms with tubs fit for two in the lodge. He didn't think so, but they could go check. 37

Mary was hoping that the executive suite would so impress the Wades that they would accept its singlesize tub and decide that a tub for two was an unnecessary amenity. They consented to let her escort them to the suite. As the Manager on Duty (MOD) watched them ascend the staircase, he commented to no one in particular that they would be back. He decided to anticipate the next step in hopes of satisfying the Wades even if they chose to move to another hotel in the area. He knew that Mrs. Wade was counting on that tub! He picked up the phone book to find the number for two of the upscale, yet small resorts in the area. The second one had just what he was looking for. A nice suite with an ocean view and a large Jacuzzi tub that could fit up to five people comfortably. He also checked on availability in the main dining room to be sure that the Wades would have a table with a view. He knew that they had reserved seating at the Boden for 7:30 P.M. He made the reservation at the new location for this same time. Mary and the Wades arrived back at the front desk and Mary asked the MOD if she should refund the Wades' deposit. Of course they had made the decision to leave and so it was up to the resort to decide whether or not to give the deposit back. Mrs. Wade insisted that she had been led by the reservations agent to expect a Jacuzzi tub for two and that she never would have made the reservation if she had known it would be different. In addition, Mrs. Wade had expected a more quaint style of lodge. This was just another typical hotel. And it wasn't anywhere near downtown as she had expected. The MOD told Mary that the Boden would be happy to return the deposit and that they were very sorry that the Wades had felt misled by reservations. The MOD went on to tell the Wades that he had phoned another resort in the area that they might really like and that a nice suite with a large Jacuzzi tub and an ocean view had been reserved in their name. In addition, the new resort was located closer to town, was smaller in size than the Boden Oceanside Resort and Lodge, and the very elegant main dining room had a table reserved in their name for 7:30 P.M. The Wades left feeling satisfied and yet a little disappointed. The MOD commented to Mary that they may even have seemed a little embarrassed because they said that they might return on another occasion. They just really wanted that tub for two. Discussion Questions 1. What were the main expectations of Mr. and Mrs. Wade?

2. When and how were these expectations formed?

3. If you were the MOD, would you have gone to all that trouble to help the Wades?

4. Was Mary right in trying to find the Wades a substitute room in the Resort?

5. Should the MOD have refunded the deposit in this case?

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Case number: 608C01 This case also appears in Todd Comen, Case Studies in Front Office Management (Lansing, Mich.: of the American Hotel & Lodging Educational Institute, 2003).

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Review Questions 1. What do all travel and tourism businesses have in common? How does the hospitality industry relate to the travel and tourism industry?

2. What are four general ways of classifying hotels? Why can hotels fit into more than one category?

3. What are some distinctions between resort hotels and commercial hotels?

4. For what purpose are conference centers specifically designed? How do they serve their target market?

5. What are some basic issues surrounding the concept of service? How can a hotel help ensure consistency in an intangible product?

6. What is world-class service? What personnel are employed in a world-class hotel? What is an executive floor?

7. What is a unique advantage of an independent hotel? How might independent hotels be at a disadvantage?

8. How might a management contract be involved in the development of a hotel? What are the differences between a franchise and a referral group?

9. What are three chief categories of travelers, in terms of the purpose for traveling? How can a hotel influence a traveler's decision to visit or return to the hotel?

10. Why is international travel becoming so important to the hospitality industry? What major challenges do hotel managers face in this area?

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11. Why are Internet blogging and social networks of interest to the hospitality industry?

12. What is a green hotel? Why are hotels interested in being green?

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Appendix A Comfort Inn & Suites Boston/Airport High Performance Hospitality: Sustainable Hotel Case Studies Opened in September 2000, the Comfort Inn & Suites Boston/Airport is located near Boston Logan International Airport and is managed by the Saunders Hotel Group (SHG). The Saunders Hotel Group was an early pioneer of high performance operations starting from innovations implemented at the Park Plaza in 1989. SHG has been able to take the lessons learned at the Park Plaza, and later at The Lenox, and apply them to the Comfort Inn & Suites franchise in Revere, Massachusetts. SHG built the Revere property from the ground up over an abandoned municipal landfill. The hotel has deftly been able to balance high performance operational practices with Comfort Inn & Suites corporate brand standards. The Comfort Inn & Suites Boston/Airport is an excellent case study in effective team collaboration, high performance operations, performance measurement, education, and outreach.

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Background The Comfort Inn & Suites Boston/Airport is located near Boston Logan International Airport and is managed by the Saunders Hotel Group (SHG). Tedd Saunders leads EcoLogical Solutions, a sustainable consulting practice that he created as an outgrowth of environmental work with SHG. While growing up, Mr. Saunders enjoyed going on family camping trips and had developed a broad appreciation for the natural world. His mother was a holocaust survivor and raised her family with a "no waste" mentality. Mr. Saunders' father has a genuine "sense of wonder" as described by Rachel Carson in her book of the same name. This parental combination strongly influenced Mr. Saunders' commitment to corporate social responsibility. The idea for sustainable operations took shape at the Park Plaza Hotel in Boston, which SHG managed from 1976 to 1996. At one million square feet, the Park Plaza was the largest family owned and operated hotel in the United States. The Park Plaza also had the largest private laundry in the city. Tedd Saunders 43

evaluated their operational practices and found ways to cut their operating expenses by reducing energy and water consumption as well as the waste stream. SHG has been able to take the lessons learned at the Park Plaza property and apply them at other hotels in the company's portfolio, including The Lenox and the Comfort Inn & Suites franchise in Revere, Massachusetts. The Revere property opened in September 2000. The lessons learned at other portfolio hotels heavily influenced SHG's approach to the construction of its eight-story Comfort Inn & Suites. An energy management system with infrared motion sensors, cooling towers, an ozone laundry system, low-flow hardware for plumbing fixtures, and efficient window glazing all were specified in the construction documents. They were cost effective, and they helped to reduce SHG's impact on the environment while lowering operational expenses. In addition, SHG built the Revere property from the ground up, constructing a steel and concrete edifice over an abandoned municipal landfill. According to the United States Green Building Council (USGBC), rehabilitating environmentally damaged sites reduces pressure on undeveloped land. This also has created a rapport between SHG and the local municipality. Comfort Inn & Suites Boston/Airport meets both SHG's mission and Choice Hotels' branding criteria (with some operational waivers granted). It meets and exceeds guest expectations, as demonstrated by having won Choice Hotels' gold medal for excellence in every year the hotel has been in operation. At the same time, the hotel offers guests an opportunity to learn about environmentally sustainable practices, both at the hotel and in their own homes. Not only has the Comfort Inn & Suites Boston/Airport avoided sprawl by undertaking construction on previously underdeveloped land, it has also reduced energy and water consumption and takes pride in a sustainable education program that reaches out to staff, guests, the local community, and many businesses and educational groups. The hotel's Green Team, an interdisciplinary group comprising various staff, meets monthly to measure sustainability progress and identify new areas for improvement. The Comfort Inn & Suites Boston/Airport is an excellent case study in effective team collaboration, high performance operations, performance measurement, and education and outreach. Organization Project Team The project team consists of the property oversight groupthe developer, owner, and management company. In this case, the property oversight group were all from the same parent company, although they represented different subsidiaries.

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Contact Information. Below is contact information for the project team. Developer:

Old Bayside Partners LLC; Jeff Saunders, Gary Saunders, and Steve Bodi High Performance Qualifications: Old Bayside had no specific requirements for high performance development, but did look for properties that other developers usually overlook. For example, brownfields are not typical acquisition candidates because remediation is often costly and time consuming. However, development on brownfields conserves undeveloped land and this is better for the environment.

Owner:

Saunders Hotel Group; the Saunders family High Performance Qualifications: SHG specialized in high performance hotel operations primarily because of its long relationship with EcoLogical Solutions.

Management Company/General Manager:

John Mitchell, Regional Manager for the Saunders Hotel Group High Performance Qualifications: Mr. Mitchell had no prior high performance construction or operations background.

Managerial Structure The Comfort Inn & Suites Boston/Airport has a relatively flat organizational structure and minimal hierarchy. The Saunders family is very much involved and is on site regularly. This access to top management makes it easier to promote new ideas and implement changes. While the focus on environmental sustainability at the Comfort Inn & Suites Boston/Airport seems to be driven from the top down, the hotel's management team actually makes sure staff from all business areas serve on the Green Team. This is part of an overall approach which encourages employee involvement and appears to improve morale, increase the quality of operations, and reduce employee turnover. 45

Figure 1 represents the reporting structure at the Comfort Inn and Suites Boston/Airport for the administrative and managerial positions only. Green Team. The hotel has an active Green Team that meets monthly to discuss 15-20 items that relate to the progress of its sustainability initiatives as well as opportunities for improvement. The team has representatives from each of the hotel's key groups. Tedd Saunders from EcoLogical Solutions helps lead the meeting and brings in external knowledge as needed. Staff Training and Compensation The Comfort Inn & Suites Boston/Airport requires minimal sustainability training but, when it is needed, management focuses on employees in housekeeping, sales, and reservations, as well as on front desk and reception staff, so they can respond to guest questions and concerns. Management personnel at the hotel do not have to transition existing housekeeping staff to work with new products, because Green Sealcertified products have been used since the hotel opened. According to Omar Zenon, the operations manager, "The staff is not reluctant, primarily due to the fact that the hotel has been around for five years. So, it is no longer a new concept and it is not an issue. Also, it is easier, safer, and better for cleaning." The front desk staff, receptionists, and reservationists have been trained to answer guest questions regarding the hotel's high performance program. If the front desk staff does not have the answer to the guest's concern, they take the question to the right person and then get back to the guest. The hotel also has an "eco" bulletin board in the back-of-house office space to help employees learn how to reduce their environmental footprints, both at the office and at home. At the Comfort Inn & Suites Boston/Airport, the general manager's compensation is based in part on gross operating margin and the incumbent has a significant incentive to keep costs low. Environmentally sustainable operations help to achieve this goal and have helped motivate all management staff. Guests also motivate staff through the Choice Hotels' staff recognition program. Choice Hotels offers Platinum, Gold, and Silver employee awards that are based on guest scores for service (with a rating of 60% or above). 46

The Comfort Inn & Suites Boston/Airport is a relatively flat organization and employees stay with the family business over the long-term. For example, there are members of the housekeeping staff who have been there since the opening of the hotel in 2000. According to one staff member, Everyone is willing to go above and beyond. We are all motivated to help with the hotel because this is our second home, or maybe it is our first homebecause we spend so many hours here. The hotel's management recognizes the needs of each staff member and assigns roles appropriately to keep individuals motivated regarding their high performance efforts. The most eco-friendly staff member receives the annual Shining Star award. Another incentive includes the monthly housekeeping award for a staff member who goes above and beyond his or her job responsibilities. The award is a day off with full compensation. The management offers this award in recognition of the fact that the staff is impacted the most by new decisions and changes, and by implementing programs and testing products. The Saunders family also offers the opportunity for a four-year scholarship at Newbury College for the children and grandchildren of Comfort Inn & Suites Boston/Airport employees. Community Outreach and Education The Comfort Inn & Suites Boston/Airport encourages staff members to volunteer with community greening efforts outside of work, as well as during in-house staff volunteer days. A number of managers and staff members volunteered at the Revere Beach and Franklin Park cleanup projects.

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Construction and Operations Table 1 summarizes the most prominent among the high performance features of the Comfort Inn & Suites Boston/Airport construction and operations. 1. Site The Comfort Inn & Suites Boston/Airport is an airport hotel built in the suburban setting of Revere, Massachusetts. The hotel is not accessible by public transportation and can only be reached by private automobile or a hotel shuttle. From an environmental standpoint, this is a limitation, because it does not promote mass transportation. However, three of the hotel shuttle vans run on compressed natural gas (CNG) and only one van runs on petroleum. Additionally, the Saunders Hotel Group is considering the purchase of carbon credits through TerraPass to offset the carbon emitted by the 30-minute shuttle service cycle between the hotel and the airport. This would cost the hotel approximately $2,800 annually to offset 300 tons of CO2. It is important to note that the Saunders Hotel Group preserved greenfields by building on a brownfield site that was originally zoned for industry. This is a significant sustainability feature, because building the hotel did not consume natural spaces and SHG made the land usefulland that would have been 48

otherwise less valuable. The site was previously a municipal landfill. In order to develop the land for constructing a hotel, the site had to be capped. This ensured that previous contaminants would not harm human beings or the atmosphere. 2. Materials and Resources, and Waste Management Comfort Inn & Suites Boston/Airport's interior design and operational practices help minimize use of new resources and materials and also reduce the waste stream from the hotel. Interior Design. Although vinyl wall covering is used throughout the hotel, it has been installed with low volatile organic compound (VOC) adhesives. In addition, the rolled Origins carpets, manufactured by the Shaw Carpet company with recycled content, also have been installed with low VOC adhesives. The majority of the wood throughout the hotel is a laminate. Choice Hotels recently required the Comfort Inn & Suites Boston/Airport to meet the parent company's standards by upgrading the bed sheets to a 200 thread count fabric. The hotel found that the higher thread count actually lasts longer. The hotel typically replaces the bed sheets every six months to a year and uses the retired sheets as cleaning rags before discarding them. Operations. From a materials and resources standpoint, most of the sustainable initiatives affect the dayto-day operations of the Comfort Inn & Suites Boston/Airport. The hotel composts food scraps from the buffet breakfast, uses biodegradable hot cups instead of Choice Hotels' standard Styrofoam, and is in the process of getting a waiver from Choice Hotels to use organic fair trade coffee. The hotel intends to source this coffee from Earth Share, a company that donates the proceeds of its sales to environmental causes. For cleaning the swimming pool, the hotel has implemented an ionization process that uses electric ions instead of chlorine to take pollutants out of the water. The hotel uses Rochester Midland cleaning supplies and Enviro-Care products for daily guest room cleaning. These cleaning products are purchased in bulk (one to five gallons) and are Green Seal certified to extend the life of fabrics and reduce health hazards for employees. Signage in the hallways encourages guests to use the wicker recycling baskets. The hotel also recycles paper, rigid containers, printer toner cartridges, batteries, and cell phones from its back-of-house operations. In addition, to reduce waste, the hotel sought and received special permission from Choice Hotels to purchase refillable dispensers for bulk soap, shampoo, conditioner, and lotion. This has eliminated the cost of 220,000 individual amenity bottles each year. To measure its performance, the Comfort Inn & Suites Boston/Airport solicits comments from guests specifically about environmental initiatives, using comment cards made from 100% post-consumer recycled paper. The hotel staff post their responses to guest comments, showing that they actually pay attention to guest suggestions. Every time the hotel orders a ream of paper, the paper company plants a tree. 3. Energy At the Comfort Inn & Suites Boston/Airport, energy efficiency is primarily the result of operational equipment and technology that was installed when the hotel was built and during subsequent ongoing renovations. As mentioned earlier, in the Background section, SHG's approach to the Comfort Inn & Suites Boston/Airport construction was influenced by lessons learned at other hotels. SHG had years of operating experience with the hotels in its portfolio and was able to apply that experience because the Comfort Inn & Suites Boston/Airport was SHG's first ground-up construction project. 49

Operations. The Comfort Inn & Suites Boston/Airport helps guests conserve energy by using occupancy sensors installed in the guest rooms. These sensors activate or deactivate the thermostat by detecting the presence or absence of the guest. Each room is individually zoned and has its own thermostat for the guest to control within a range of 65-85F. Almost all of the light bulbs throughout the property are compact fluorescent, which also contributes to energy savings. SHG has installed an innovative energy-efficient feature, known as Vendor Miser, for the soda vending machines. The system controls the display lighting with motion sensors while keeping the beverages refrigerated. The decision to install this system was not difficult to make, because the payback timeframe for energy savings was only two years, with an annual 67% reduction of energy consumption over traditional machines. Although the Comfort Inn & Suites Boston/Airport was not built according to specific high performance building standards, such as USGBC LEED (Leadership in Energy and Environmental Design) criteria, SHG incorporated features in both the building's core and shell to make the hotel highly efficient. In the building's core, the HVAC system uses roof cooling towers that inherently consume less energy than compressors do while cooling air. In the shell of the building, SHG installed rigid insulation efficient windows, compact fluorescent light bulbs, LED exit signs, and fans to reduce energy consumption. The roof is a white reflective rubber membrane that also contributes to the building's energy conservation program by reflecting the sun's heat away from the building. However, the roof requires cleaning for maximum efficiency. 4. Water The hotel's design allowed for water-saving innovations. Construction. SHG added low-flow water fixtures to the guest rooms and public restrooms in the initial design phase of the project to reduce water consumption. The equipment rates are: toilets at 1.6 gallons per minute, showers at 2.5 gallons per minute, and faucets at 1.5 gallons per minute. The hotel achieves most of its water conservation through the ozone laundry equipment and the bathroom low-flow water fixtures. SHG has installed an ozone laundry system by Ozotech Inc. to conserve both energy and water. The machine is operated with cold water and the ozone acts as a disinfectant. As a result, SHG saves heat energy (by using cold water) and conserves water (by reusing it). The hotel washes guest room linens and towels with this system. However, the hotel also provides coin-operated machines for washing personal items. Dry cleaning typically is sent off site. 5. Indoor Air Quality At the time of the building's construction, the indoor environmental quality-enhancing features at Comfort Inn & Suites Boston/Airport were operational. Since then, additional steps have been taken to improve the indoor air quality, specifically during a recent hallway renovation project. Operations. In order to improve the air quality in the hallways, the hotel used paints and adhesives with low VOC emissions. The adhesives included those in the carpet and in the wall covering. The renovation improved the indoor air quality and became a good marketing tool for SHG. Business Case Market Positioning and Consumer Response 50

The hotel is a Comfort Inn & Suites franchise, and the brand's parent company, Choice Hotels International, creates the standards for brand positioning and communication. Examples of the standards set by Choice Hotels include website content, guestroom layout, coffee brand, mattress quality, and online guest satisfaction surveys. Choice Hotels sets these standards to create a consistent brand image across all Comfort Inn & Suites hotels. The Comfort Inn & Suites Boston/Airport attracts a variety of guests. A significant amount of the hotel's traffic is the result of its proximity to Boston Logan International Airport. The hotel has contracts with major airlines to house flight crews during layovers, as well as passengers from cancelled flights. The hotel offers a park-and-fly program for guests flying in and out of Logan Airport. Tour groups and leisure travelers visiting Boston on a more modest budget also tend to stay at this hotel. The hospitality business in this area is highly competitive, with a number of full-service hotels nearby (Courtyard, Hampton Inn, and Hilton). The Comfort Inn & Suites Boston/Airport must be able to maintain contracts and ensure repeat business through excellent customer service. Few of the hotel's guests overtly seek out an environmentally sustainable hotel, but the Comfort Inn & Suites Boston/Airport is finding that Northern European and British consumers and travel agencies are more aware of environmental issues and appreciate the hotel's efforts. Upon their arrival, the majority of the guests are unaware of the hotel's commitment to sustainability. In order to keep the format and information consistent with other hotels in the chain, the Choice Hotels' website does not allow the Revere hotel to advertise its environmentally sustainable features. However, the hotel staff promotes a number of programs to educate guests once they are in the hotel. There are several environmental conservation posters and educational signs displayed throughout the hotel. For example, the men's restroom on the first floor has a sign stating that urinals consume 40% less water than is consumed by low-flow toilets. The hotel also places educational cards in guest cars that offer environmental tips on how to reduce gas usage on the road. The "Tread Lightly" box placed at the front of the hotel lobby encourages guests to recycle old athletic shoes and offers a room discount based on the size of the shoe donated. This recycling box was designed by local art school students and helps communicate the hotel's commitment to sustainability. The sneakers are recycled by Nike into safe turf for playgrounds. There is an eco-suggestion box by the elevators that encourages guests to suggest ideas for improving the hotel's environmental performance. The bulk soap and lotion dispensers in the bathrooms are the environmentally sustainable features most noticed by guests, and they are often complimented in the remarks found on the guest comment cards. The hotel's greening efforts do not seem to have resulted in a price premium, nor have they attracted major new business. However, the hotel has received a large amount of publicity; the hotel handles an average of three calls per week from journalists. The hotel's efforts also have resulted in awards from Energy Star, NWF, and British Airways, among others. The hotel is currently helping lead Boston Green Tourism, which is working with the Massachusetts Lodging Association, the mayor's office, the convention bureau, and others to make Boston a green destination known worldwide for its urban ecotourism leadership. Why High Performance Construction? LEED certification was not as popular at the time of Comfort Inn & Suites Boston/Airport's construction and the hotel was not built to any specific green construction standards. SHG did, however, install equipment that would result in energy and water savings. Since the developer, owner, and management company are all the same entity, they had a shared vision of creating a hotel that would run efficiently and be a green model.

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The decision to build on a brownfield site requiring minimal clean-up helped the hotel save money on construction costs. Since it was a brownfield site, SHG was able to purchase the land for less than they would have spent on a non-brownfield site. Additionally, SHG obtained an Alternative Use License (AUL) that allowed them to build a hotel on the site as long as they capped the land. This saved time in the construction schedule, because they did not have to remove the soil and treat it, or perform an in situ remediation. We are unable to quantify the exact benefits due to confidentiality issues. Why High Performance Operations? The Comfort Inn & Suites Boston/Airport operations are considered high performance because they result in cost savings and because they benefit the hotel's employees and guests. Environmentally friendly operations are very important to SHG and are manifested in every aspect of the facility, including the formation of a Green Team and the educational signage throughout the hotel. The hotel's operations incorporate both innovative operational practices as well as common industry practices. Leading innovative examples include the bulk amenity dispensers in the guest rooms (instead of single amenity containers) and the ionization pool-cleaning system instead of a chlorine system. The bulk dispensers save the hotel almost 220,000 individual amenity bottles annually. The ionizing pool-cleaning system had a two-year payback by replacing cleaning chemicals with a one-time purchase of electrodes. Common industry practices at the hotel include the use of washable linens and curtains (washing is cheaper than dry cleaning) and the use of recycled paper for office printing. In addition to the bulk amenity dispensers and the ionization pool cleaning system, the hotel has a few other practices with obvious benefits for hotel guests and staff. For example, environmentally sustainable cleaning products are much nicer for hotel staff because they are less abrasive and do not pollute the air. Recycled-content toilet paper and napkins are items that guests can see. These products are cost neutral. Advantages of High Performance Construction and Operations The Comfort Inn & Suites Boston/Airport has implemented high performance operations and has installed equipment to save money through reduced product costs and operating expenses. The Saunders family also believes it is important to run the hotel this way for the benefit of guests and employees. The hotel's decision to install water conservation technologies in the construction phase of the project saves the hotel money during the operations phase. For example, the ozone laundry system has capital costs of $36,000 with a payback of two years. The utility costs savings include a 25% reduction in water consumption, chemicals, sewage output, and electricity. There is an 86% reduction in hot water usage. More cost savings occur with efficient energy equipment. Vendor Miser, the vending machine lighting sensor, cuts energy costs by $189 annually and only cost $165 to install. Less tangible but nonetheless important advantages are guest comfort and awareness, and employee comfort and productivity. By installing efficient equipment and by employing high performance operational practices, the hotel benefits guests and employees with a comfortable and healthy environment where they can identify with environmental responsibility. This has significant potential for increasing both employee retention and customer satisfaction.

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Table 2 highlights the financial benefits of high performance construction and operations at the Comfort Inn & Suites Boston/Airport.

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Table 3 is a summary of high performance hotel construction and operation advantages realized by the property oversight stakeholdersdeveloper, owner, and management company. Best Practices and Conclusions As mentioned earlier, the Comfort Inn & Suites Boston/Airport is an excellent case study in effective team collaboration, high performance operations, performance measurement, and education and outreach. The following best practices implemented at the Comfort Inn & Suites Boston/Airport have been identified as industry best practices for environmentally high performance construction and operations:

Food Composting Compressed Natural Gas Shuttle Vans Ozone Laundry System Vendor Miser Green Team Sharing Best Practices with Overall Brand

The hotel's management team believes that sustainability cannot be accomplished without the assistance and guidance of others. Successful sustainable design depends on the commitment of all members of the team, including the guests. The hotel's Green Team continues to monitor operational practices to identify environmentally sustainable initiatives that offer a return on investment to the hotel. The Green Team continues to be a leader in the industry as well as in the community, educating guests and working closely with the Boston Chamber of Commerce to improve Boston's record of environmental responsibility. Walking Tour Building Exterior/Entrance

Notice the airport shuttle vanthree out of the four vans use compressed natural gas to run the engines. In addition, the Comfort Inn & Suites Boston/Airport purchases carbon offset credits from TerraPass to offset the emissions from van travel.

Lobby

Notice the "Tread Lightly" box placed at the front of the hotel to collect sneakers that will be recycled into flooring for playgrounds. The hotel offers a discount based on the size of the shoe donated (size 8 = $8 nightly discount). The container was designed in the shape of a running shoe by local Boston art school students. This recycling box demonstrates the depth of the company's commitment to sustainability. Now look up. Wow, that is a big fan! The lobby seating area ceiling reaches up to the second floor, and this area is directly across from the entrance. As a result, this design has led to loss of heat in the central lobby (heat rising and escaping) during the winter months. The large fan circulates the warm air downward and remedies this problem.

Breakfast Buffet Area 55

In this area, tent cards on each table explain how to separate food wastes properly so that the Comfort Inn & Suites Boston/Airport can compost scraps appropriately. In addition, the hotel received special approval from its parent company, Choice Hotels, to purchase biodegradable disposable hot cups (in addition to reusable glasses and ceramic mugs) instead of the standard Styrofoam cups. Also, notice all the awards and recognition plaques the Comfort Inn & Suites Boston/Airport has received since its opening. These awards and plaques are displayed throughout the lobby. Additional educational materials can be found in the elevator as well as in every guest room. Take a look at the vending machines behind the buffet area. Are the lights on or off? Each vending machine has been equipped with a Vendor Miser to control the machine's energy use. If the motion detector senses movement, the machine turns its lights on. When no guest accesses it for several minutes, it "powers down" to conserve energy. Whether the machine's lights are on or off, it continues to keep beverages refrigerated.

Pool

Just before you put on your swim trunks, check out the guest comment station and let the hotel know what you think about their environmental initiatives. It is worth noting that the comment cards are printed on 100% post-consumer recycled paper. Rest assured that when you do go swimming, the Comfort Inn & Suites Boston/Airport uses a nontoxic pool cleaning process. The ionization process employs electric ions instead of chlorine to clean the water.

Guest Rooms

On the way to your room, check out the wicker recycling bins in the hallway. Signs just above the bins tell guests what they can and cannot recycle. The hotel washes linens on site, using an ozone laundry system for disinfecting. Ozone uses only cold water and has no toxic side effects. In addition, the ozone system eliminates some water consumption. Next, turn on your television and find the EcoChannel. The owners of the hotel produced a fiveminute educational video communicating the mission, objectives, and future of green hotels. This and other entertainment videos run 24/7 for free. Finally, step into your bathroom. There you will notice bulk amenities for soap, shampoo, conditioner, and lotion. Using bulk containers eliminates the need to purchase and dispose of 220,000 individually packaged amenities each year. It also allows the hotel to improve the quality of the actual amenity products with the saved purchasing and disposal costs.

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Chapter 2 - Hotel Organization Outline Organizational Missions

Goals Strategies and Tactics

Hotel Organization

Organization Charts Classifying Functional Areas Rooms Division Food and Beverage Division Sales and Marketing Division Accounting Division Engineering and Maintenance Division Security Division Human Resources Division Other Divisions

Front Office Operations

Organization of the Front Office Work Shifts Job Descriptions Job Specifications

Summary

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Competency 1 Objective: Explain what a mission is, and describe how goals, strategies, and tactics are used to accomplish a hotel's mission. A person entering a hotel lobby for the first time might never guess the complexities underlying the dayto-day operation of the property. He or she might not recognize that the courtesy of the door attendant, the competent and friendly manner of the front desk agent, and the tidiness of the guestroom reflect hours of planning, extensive communications, ongoing training, and a coordinated effort to create the workings of an efficient organization. The actual network of a hotel's divisions, departments, and personnel in a smoothly operating hotel should be invisible to the casual observer. But the services that result from a hotel's smooth operations are highly visible. They present the hotel with a unique challenge. For a hotel to run effectively and efficiently, every employee must understand the property's mission and work to achieve it. Every employee must ensure that guests are so impressed by the property's facilities and services that they will want to come back and will enthusiastically recommend the property to others. Teamwork is the key to success. All employees must have a spirit of cooperation both within and between their departmental areas. While every department and division should strive to offer and improve quality guest service, it is especially important that good service be emphasized in high-profile locations like the front office. The ability of front office employees to answer questions, coordinate services, offer choices, and satisfy guest requests is critical to the hotel's mission. This chapter examines the relationship of hotel employees, departments, and divisions, as well as how each contributes to achieving the property's mission. Several sample job descriptions for front office staff positions are shown in the appendix to this chapter. Organizational Missions Every organization has a reason or purpose for existing. Its purpose forms the basis for the organization's mission. An organization's mission can be expressed in a mission statement, which defines the unique purpose that sets one hotel or hotel company apart from others. The mission statement expresses the underlying philosophy that gives meaning and direction to hotel policies. While employees learn the tasks involved in their jobsor the what to do of the jobthe mission statement communicates the why we are doing it of the job. Hotel employees may derive a sense of purpose from a well-conceived mission statement. For example, a hotel's mission may be to provide the finest facilities and services in the market while providing a good place for its employees to work and a reasonable return on investment to its owners. From such a mission statement, employees know what is expected of them (providing the finest facilities and services in the market, thus helping the owners to earn a reasonable return on their investment), as well as what they can expect (a good place to work). A hotel's mission statement often addresses the interests of its three main constituent groups: guests, management, and employees. First, a hotel's mission statement can address the basic needs and expectations of the hotel's guests. Regardless of a hotel's size or service level, it is safe to assume all guests have the following basic expectations:

Safe, secure accommodations A clean, comfortable guestroom Courteous, professional, knowledgeable, and friendly service 58

Well-maintained facilities and equipment

Hotel guests generally anticipate a particular level of service at a given property type. If a hotel clearly defines its markets and consistently delivers the level of service those markets expect, it can satisfy its guests, encourage repeat business, and improve its reputation. Second, a hotel's mission statement can reflect its management philosophy. Since styles of operation differ, mission statements often vary from property to property. In fact, a hotel's mission is one of the principal means it uses to distinguish itself from other hotels. A mission statement guides managers in their jobs by identifying the property's basic values. Third, the mission statement can help the hotel's employees meet or exceed both guest and management expectations. A mission statement can also serve as a basis for job descriptions and performance standards and as an introduction to the property for new employees. The property's mission statement should appear in employee handbooks and training manuals, and should accompany job descriptions. Consider this example of a hotel mission statement: The mission of our hotel is to provide outstanding lodging facilities and services to our guests. Our hotel focuses on individual business and leisure travel, as well as travel associated with group meetings. We emphasize high quality standards in our rooms and food and beverage divisions, as well as the finest service available in our market. We provide a fair return on investment for our owners and recognize that this cannot be done without well-trained, motivated, and enthusiastic employees. Goals Once the hotel has defined and formulated its mission statement, the next step is to set goals. Goals are those activities and standards an organization must successfully perform or achieve to effectively carry out its mission. A goal is more specific than a mission; it requires a certain level of achievement that can be observed and measured. Measurable goals encourage hotel employees to perform effectively while enabling management to monitor employee progress. Many organizations evaluate their goals frequently. Yearly goal planning is common, and sometimes these goals are broken down by month or quarter. Some goals are financial and are linked to the hotel's budget and forecasting cycle. Other goals may deal with the quality of guest service, frequency of guest or employee accidents, property security, or the number of new corporate clients the hotel has obtained. Even more important, goals often become part of the management team's evaluation process. Salary increases, bonuses, awards, and other forms of recognition are often linked to specific goals. Management and staff should be periodically evaluated on their progress toward meeting the goals. Management can determine whether goals are being achieved or whether corrective action is necessary. A properly written goal includes an action verb followed by a specific form of measurement such as a time interval or a level of quality, quantity, or cost. Examples of measurable front office goals might be:

Increase the hotel's average occupancy level by two percent above the previous year's level. Increase the volume of repeat guest business by 10 percent. Reduce average check-in and check-out times by two minutes. Reduce the number of guest complaints by 20 percent. Respond to all guest maintenance requests within one half hour. 59

It is very common for more than one department to be involved in achieving a goal. For example, in order for the front desk to achieve a goal of checking every guest in within a two-minute period, it is necessary for the housekeeping department to keep the inventory of clean and vacant rooms current. For this reason, some hotel goals are stated as property-wide goals, not simply as departmental or divisional goals. Achieving goals is often the result of close coordination between departments. Goals between departments can be tied together, recognizing that the success of one department leads to the success of others. Joint goal setting also fosters cooperation and esprit de corps between departments. Strategies and Tactics By establishing property-wide, measurable goals, a hotel enables its managers and employees to concentrate on specific strategies that will help the property achieve its goals. Goals define the purpose of a department or division; they direct the actions of managers and employees and the functions of the department or division toward fulfilling the hotel's mission. To achieve its goals, a department or division establishes strategies, the methods a department or division uses to achieve its goals. Tactics further define how goals will be achieved. They are the day-to-day operating procedures that implement successful strategies. It is important that goals and strategies set at the departmental and divisional levels complement and support the property's mission and its property-wide goals. Examples of goals, strategies, and tactics involving areas within the front office are:

RegistrationGoal: Operate the front desk efficiently and courteously so that guests may register within two minutes of arrival. Strategy: Preregister all expected guests with reservation guarantees as rooms become available from Housekeeping. Tactic: Preprint registration cards for arriving guests and separate the cards of all guests with a reservation guarantee. Guest CashieringGoal: Post all charges reaching the front desk within 30 minutes. Strategy: Provide sufficient staffing to enable rapid and accurate posting of guest charges when they are received. Tactic: Review occupancy forecasts weekly to develop proper staffing guidelines. Bell StandGoal: Respond to every check-out luggage request within 10 minutes. Strategy: Keep a log of when bell attendants are dispatched and when they return from each guest call. Tactic: Enter guest name, room number, bell attendant assigned, and time out and time in for each luggage request. Telecommunications DepartmentGoal: Answer every telephone call within three rings of the telephone, regardless of whether it is an inside call or an outside call. Strategy: Perform telephone traffic studies periodically, reviewing the number of calls received, to ensure that the proper number of telephone lines are available for both incoming and outgoing telephone calls. Tactic: Print traffic report from the telephone switch daily and record volume by time on a spreadsheet.

Section Keywords mission statement A document that states the unique purpose that sets a hotel apart from other hotels, expresses the underlying philosophy that gives meaning and direction to the hotel's actions, and addresses the interests of guests, management, and employees. Goals Those activities and standards an organization must successfully perform or achieve to effectively carry out its mission. 60

strategies Plans of action a department or division use to achieve its goals. Tactics The day-to-day operating procedures that staff members use to implement strategies.

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Competency 2 Objective: Describe how hotels are organized and explain how functional areas within hotels are classified. Hotel Organization The people authorized by a hotel's owner to represent his or her interests are called hotel management. In small properties, hotel management may consist of just one person. Management guides the operation of the hotel and regularly reports the general state of the hotel's financial health to its owner. The major duties of a hotel management team include planning, organizing, coordinating, staffing, directing, controlling, and evaluating hotel activities and/or personnel. Management performs its duties to reach specific objectives and goals. These duties involve the activities of various hotel divisions and departments. The top executive of a property is usually called the managing director, general manager, or innkeeper. For discussion purposes, this chapter refers to the top executive as the general manager. The general manager of an independent hotel normally reports directly to the owner or the owner's representative. The general manager is ultimately responsible for the success of the hotel and supervises all hotel divisions, either through a resident or assistant manager or through division heads. Chain organizations usually have a district, area, or regional executive who supervises the general managers located at the properties within his or her jurisdiction. While the general manager is responsible for supervising all hotel divisions, he or she may delegate responsibility for specific divisions or departments to an assistant general manager, resident manager, or director of operations. When the general manager is absent, the assistant general manager, resident manager, or director of operations usually serves as the acting general manager. When these four managers are all off the premises, a manager-on-duty (MOD) is often appointed to assume overall managerial responsibility. Front office managers are often called upon to be the MOD when more senior managers are not on the property. Historically, resident managers actually lived in the hotel. Essentially, it was the resident manager's job to be available 24 hours a day, seven days a week. Over time, more authority has been delegated to other managers. While many resident managers are still responsible for the rooms division, it is rare for a property to require its resident manager to live on the premises. To qualify for a department head position, an individual must thoroughly understand the functions, goals, and practices of a particular department. Front office managers are usually considered department heads. Organization Charts An organization requires a formal structure to carry out its mission and goals. A common way to represent that structure is the organization chart. An organization chart is a schematic representation of the relationships between positions within an organization. It shows where each position fits in the overall organization, as well as where divisions of responsibility and lines of authority lie. Solid lines on the chart indicate direct-line accountability. Dotted lines indicate relationships that involve a high degree of cooperation and communication, but not a direct reporting relationship. An organization chart should be flexible. It should be reviewed and revised yearly, or more often if business conditions significantly change. Employee responsibilities may change as individuals assume more duties, depending on their qualifications and strengths. Some organizations list each employee's 62

name on the chart along with his or her title. A copy of the property's organization chart should be included in the employee handbook distributed to all employees. Since no two hotels are exactly alike, organizational structures must be tailored to fit the needs of each individual property. The charts in this chapter illustrate several organizational possibilities: a full-service property, a property with separately owned food and beverage operations, and a rooms-only hotel.

A full-service property that offers both lodging and food and beverage service will probably have an extensive organizational structure. Exhibit 1 shows an organization chart outlining the management-level positions in a large full-service property. All but two of the lines on the chart are solid, indicating reporting relationships. The dotted lines connecting the sales director to the catering director and the reservations manager represent the close working relationships among these positions.

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Some hotels may lease food and beverage outlets to another company. This means that food and beverage operations and guestroom operations are separately owned and managed. When another company operates food and beverage, it is essential that both companies communicate closely, as their goals may not be shared at all times. Exhibit 2 shows a typical organization chart for a hotel with leased food and beverage operations. In this example, informal consulting relationships exist between the managers and owners of the two businesses. The restaurant manager and the hotel's sales department manager must also work closely together. These relationships are indicated by dotted lines.

Exhibit 3 presents a possible organizational structure for a hotel without a restaurant. The charts in Exhibits 1-3 illustrate some of the many organizational variations possible among lodging properties. 64

Classifying Functional Areas A hotel's divisions and departments (its functional areas) can be classified in almost as many ways as the hotel itself. One method involves classifying an operating division or department as either a revenue center or support center. A revenue center sells goods or services to guests, thereby generating revenue for the hotel. Typical revenue centers include the front office, food and beverage outlets (including room service), and catering. Even if the hotel itself does not operate a revenue center (as is often the case with retail stores or full-service spas), the money the revenue center pays to lease the hotel space contributes to the hotel's income. Support centers, also referred to as cost centers, include the housekeeping, accounting, engineering and maintenance, and human resources divisions. These divisions do not generate direct revenue, but provide important support for the hotel's revenue centers. Designers of accounting and information systems often find it useful to segment a hotel by revenue and support centers. The terms front of the house and back of the house may also be used to classify hotel departments, divisions, and personnel. Front-of-the-house areas are areas where guests interact with employees. Such areas include the front office, restaurants, and lounges. In back-of-the-house areas, interaction between guests and employees is less common. Housekeeping staff occasionally interact with guests, but it is not part of their primary duties as it is for front desk and bell staff. Although back-of-the-house employees may not directly serve the guest by taking an order, assisting with registration, or delivering luggage to a guestroom, these employees indirectly serve guests by cleaning guestrooms, repairing leaky faucets, or correcting errors in guest accounts. The following sections examine typical hotel divisions.

Section Keywords organization chart A schematic representation of the relationships among positions within an organization, showing where each position fits into the overall organization and illustrating the divisions of responsibility and lines of authority. revenue center A hotel division or department that sells products or services to guests and thereby directly generates revenue for the hotel; the front office, food and beverage outlets, room service, and retail stores are typical hotel revenue centers. support center A hotel division or department that does not generate revenue directly, but supports the hotel's revenue centers; includes the housekeeping, accounting, engineering and maintenance, and human resources divisions. front of the house The functional areas of a hotel in which staff have extensive guest contact, such as the food and beverage facilities and the front office. back of the house The functional areas of a hotel in which staff have little or no direct guest contact, such as the engineering, accounting, and human resources divisions.

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Competency 3 Objective: Describe the functions performed by departments and positions within the rooms division. Rooms Division The rooms division comprises departments and personnel essential to providing the lodging services guests expect during a hotel stay. In most hotels, the rooms division generates more revenue than all other divisions combined. The front office is one department within the rooms division. Others are housekeeping, uniformed services (bell attendants, door attendants, valet parkers), and the concierge. In some properties, the reservations and switchboard or telecommunications functions are separate departments within the rooms division. Exhibit 4 shows a sample organization chart for the rooms division of a large hotel.

The Front Office. The front office is the most visible department in a hotel. Front office personnel have more contact with guests than do staff in most other departments. The front desk is usually the focal point of activity for the front office and is prominently located in the hotel's lobby. Guests come to the front desk to register; to receive room assignments; to inquire about available services, facilities, and the city or 66

surrounding area; and to check out. The front desk often serves as the hotel control center for guest requests concerning housekeeping or engineering issues. International guests use the front desk to exchange currency, find a translator, or request other special assistance. In addition, it may also be a base of operations during an emergency, such as a fire or a guest injury. Other front office functions include receiving and distributing mail, messages, and facsimiles (faxes), as well as guest cashiering. Cashiers post charges and payments to guest accounts, all of which are later verified during an account auditing procedure (often called the night audit). Front desk personnel also may verify outstanding accounts receivable, and produce daily reports for management. Some hotels have added concierge services to their list of front office functions. In a sense, concierge services are simply an extension of the guest services provided by front office personnel. The functions of the front office are to:

Sell guestrooms, register guests, and assign guestrooms. Process future room reservations, when there is no reservations department or when the reservations department is closed. Coordinate guest services. Provide information about the hotel, the surrounding community, and any attractions or events of interest to guests. Maintain accurate room status information. Maintain guest accounts and monitor credit limits. Produce guest account statements and complete proper financial settlement.

Reservations. More than half of all hotel guests make reservations for hotel accommodations through tollfree telephone numbers, direct telephone lines, the Internet, hotel sales representatives, travel agencies, property-to-property networks, postal delivery, telex and fax, e-mail, and other communications services. Every lodging property has its own way of monitoring and managing its reservations function. The reservations department is responsible for receiving and processing reservation requests for future overnight accommodations. Although procedures may differ from hotel to hotel with regard to reservations handling, maintenance, processing, and confirmation, the purpose remains the same: to accommodate guest requests in a manner that maximizes hotel occupancy and room revenue. In the past, the reservations department merely captured reservations data. Potential guests contacted the hotel, which accepted or denied reservations based on room availability. Reservations systems can be programmed to provide reservations agents with information on the types of rooms available (including room rate, view, furnishings, amenities, and bed size) for a given day. Many automated systems can even provide agents with the exact room number if necessary. Such technology shifts responsibility for room sales from the front desk to the reservations department. More recent technology automatically alerts the reservations agent when the guest requesting the reservation has already stayed at the hotel, or even if he or she has stayed at other hotels in the chain. Reservations systems provide agents with a great deal of information on the hotel, some of which can be provided to the guest on request. 67

Advanced technology has helped transform reservations agents into salespeople. In fact, the reservations department is a great place to start a hotel sales career. Reservations agents should convey the desirability, features, and benefits of staying at the hotel, rather than simply process an accommodation request. It is no longer satisfactory for a reservations agent to defer to the front desk to determine a room's rate at registration. This shift in responsibility away from the front desk to the reservations department is important because it allows management to accurately forecast not only occupancy but revenue as well. Whenever possible, reservations agents should confirm the rate at the time the guest makes the reservation. In fact, most guests requesting a reservation will not book a room without receiving a confirmed rate. The reservations system should reinforce the guest's decision to stay at the property and provide sufficient information to satisfy guest inquiries. It is essential for reservations department personnel to work closely with the hotel's sales and marketing division when group reservations are being solicited or processed. In fact, some hotel companies now place the reservations functions under the direction of the sales department instead of the front office. In any case, sales department representatives must be kept informed of room availability to ensure they know how many rooms are available in the reservations system on any given day. On a day-to-day basis, reservation managers must review reservations system reports and room availabilities to avoid overbooking. Overbooking can create bad feelings and contribute to lost business in the future. The management of reservations is further complicated by the fact that several states have enacted legislation prohibiting overbooking. An additional dimension of reservations is the reservations department's coordination with the chain or referral group's reservation center, sometimes termed a call center. In most cases, reservation centers provide a significant portion of a hotel's occupancy. This is one of the most important reasons hotel owners affiliate with a chain or referral group. Reservation centers do much more than provide a convenient and inexpensive way for potential guests to make reservations. They have become communications hubs for the company, coordinating room availability and rates for airline reservation systems, Internet reservation sites, and other reservation channels. Telecommunications. The telecommunications switchboard area or department maintains a complex communications network similar to that of any large company. The telecommunications department may also be called a private branch exchange (PBX). Hotel switchboard or PBX operators may have responsibilities that extend beyond answering and distributing calls to the appropriate extension. Switchboard operators may also place wake-up calls, answer questions about the hotel, monitor automated systems (such as door alarms and fire alarms), and coordinate emergency communications. Operators also protect guests' privacy, thereby contributing to the hotel's security program by not divulging guestroom numbers. Some hotels now instruct guests to call the hotel operator or a special guest service department for all service requests, including housekeeping, room service, and even bell service. Another recent trend involving guest safety with telephone systems is to have all house phones (telephones in public areas of the hotel used for calling within the hotel) ring the operator for call processing. This reduces the risk of unwanted or mistaken guestroom telephone calls. Many hotels also provide guest paging services over a public address system. Recent technological advances have considerably decreased the responsibilities and workloads of telephone switchboard operators. Hotels have installed technology that allows guests to place their own room-to-room or outgoing phone calls. Most guestroom phones offer touchtone convenience and may feature call waiting or caller ID. Also available is guest voice mail, reducing the reliance on hotel operators to record messages for guests and turn on message waiting lights in guestrooms. Call accounting systems can place direct-dialed calls over the least costly route available. Call accounting systems, which automatically price calls, also enable hotels to add surcharges and access charges to local and longdistance calls. Call accounting systems communicate with a front desk system to automatically post 68

telephone charges to a guest's account. This reduces disputes at the front desk over charges for calls that were not actually completed. Some hotels have installed answering devices for calls coming from outside the hotel. These automated answering devices, or AADs, direct callers to guest reservations, dining reservations, group sales, or other departments without the intervention of an operator. Voice messaging technology also can help improve the efficiency and effectiveness of incoming telephone traffic. In addition, voice messaging can allow callers to leave guest messages in their own voice, a service many guests appreciate. Technology can also automatically place wake-up calls to guestrooms at preprogrammed times. When a front desk agent or switchboard operator receives a request for a wake-up call, he or she enters the room number and the desired time into the auto wake-up system. Some hotels have systems that allow guests to program the telephone to wake them upwithout the assistance of a hotel employee. The system then places the wake-up call as specified, and plays a recorded message when the guest answers the phone. This can be especially helpful in large hotels where hundreds of wake-up calls for the same time may be requested. In world-class hotels, the system may alert the hotel operator to make the wake-up call at the requested time. Uniformed Service. Employees in the hotel's uniformed service department generally provide the most personalized guest service. Given the high degree of attention this department pays to guests, some properties refer to uniformed service simply as guest service. Among the primary positions within the uniformed service department are:

Bell attendants, who provide baggage service between the lobby area and the guestroom. Door attendants, who provide curb-side baggage service and traffic control at the hotel entrance. Valet parking attendants, who provide parking service for guests' vehicles. Transportation personnel, who provide transportation services for guests. Concierges, who are very knowledgeable about the area and assist guests by making restaurant reservations; arranging for transportation; getting tickets for theater, sporting, or other special events; and so on.

While personnel in reservations, front desk, and communications areas affect guest perceptions, it is often employees in uniformed service who make a lasting impression. This is especially true in world-class or luxury hotels that offer a broad range of guest services. Uniformed service employees are usually classified as tipped employees, since a portion of their income is derived from guests' gratuities. To some degree, uniformed service personnel can affect their income through the quality and frequency of service they provide. While uniformed service jobs may not appear complex, they are critical to the smooth operation of a hotel. Quite often it is the ability of uniformed service staff to properly anticipate guest needs and communicate effectively with guests that makes the difference in the hotel's service quality. Among the major challenges the manager of the uniformed service department faces are: setting the proper service standards, recruiting and training employees, and ensuring that employees successfully provide quality service. Since uniformed service employees generally receive among the lowest hotel wages, keeping them trained and motivated can be an enormous job. Without a doubt, well-motivated uniformed service employees can enhance the hotel's image while earning a good income through a combination of wages and tips. Providing excellent service can be personally rewarding as well.

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Bell attendants. Many guests arrive at a hotel with heavy baggage or several pieces of luggage. Guests receive help handling this luggage from probably the best-known employee on the uniformed service staff: the bell attendant. Bell attendants should be carefully selected. Since most hotels have carts for transporting baggage, the physical ability to actually carry the baggage is not a critical job qualification, although heavy lifting is often involved. More important, bell attendants should have strong oral communication skills and should display genuine interest in each guest. Depending on the size and complexity of the hotel, bell attendants may be counted on to:

Transport guest luggage to and from guestrooms. Familiarize guests with the hotel's facilities, services, and safety features, as well as the guestroom and any in-room amenities. Provide a secure area for guests requiring temporary luggage storage. Provide information on hotel services and facilities, as well as group functions. Deliver mail, packages, messages, and special amenities to guestrooms. Pick up and deliver guest laundry and dry cleaning. Perform light housekeeping services in lobby and entry areas. Help guests load and unload their luggage in the absence of a door attendant. Notify other departments of guest needs, such as housekeeping for a crib or extra towels.

While many of these tasks appear simple, they all require a degree of professionalism. For example, to assist a guest with his or her luggage, the bell attendant must know how to properly load a luggage cart. Fragile items must not be placed below heavy items. The cart must also be properly balanced so that it does not tip over or become difficult to steer. Due to their direct contact with guests, bell attendants have an opportunity to communicate vital information to them and help them feel welcome at the hotel. A bell attendant who consistently and clearly conveys a warm welcome and proper information to each guest is a very valuable employee. One of a hotel's best marketing opportunities arises when the bell attendant escorts the guest to his or her room. Familiarity with the area outside the hotel, as well as with the hotel's restaurants, entertainment lounges, recreational activities, meeting rooms, and safety and security measures, is an important part of the job. It is through informal conversation that bell attendants become key players in the hotel's sales and marketing efforts. Bell attendants should make an extra effort to learn guests' names and perhaps the purpose of their stay. This makes guests feel especially welcome and allows bell attendants to provide more personal service. Door attendants. Door attendants play a role similar to bell attendants: they are dedicated to welcoming the guest to the hotel. These employees are generally employed in hotels offering world-class or luxury service. Some of the duties door attendants perform include:

Opening hotel doors and assisting guests upon arrival. Helping guests load and unload luggage from vehicles. 70

Escorting guests to the hotel registration area. Controlling vehicle traffic flow and safety at the hotel entrance. Hailing taxis, upon request. Assisting with valet parking services. Performing light housekeeping services in the lobby and entry areas.

Like bell attendants, door attendants must be well informed about hotel facilities and the local community. Guests frequently ask door attendants for directions to businesses, government offices, transportation centers, restaurants, and local landmarks and attractions. One of the most challenging responsibilities for a door attendant is controlling vehicle traffic at the hotel entrance. Controlling vehicle traffic can be a very demanding job, especially when the hotel is busy. Experienced door attendants are capable of handling all these tasks with aplomb. A skilled, experienced door attendant learns the names of frequent guests. When these guests return to the hotel, the door attendant is able to greet them by name and can introduce them to other front office staff. Such personal service enhances the reputation of the hotel and provides the guest with a unique experience. Valet parking attendants. Valet parking is generally available at hotels offering world-class or luxury service. Specially trained employees park guest and visitor automobiles. The personal attention and security of valet parking service is considered both a luxury and a convenience. Guests do not have to worry about finding a parking space, walking to the hotel in inclement weather, or finding their vehicles in the parking lot. Hotels generally charge a higher fee for valet parking than for self-service parking. In addition to paying the higher fee for valet parking, guests are also likely to tip the valet parking attendant. Valet parking attendants are also responsible for the security of vehicles being moved to and from the hotel entrance. Attendants should not take a car into their care without issuing a receipt to the guest or visitor, usually in the form of a ticket. On the hotel portion of the ticket, the attendant should note any existing damage to the vehicle. Vehicle keys must be kept in a secure area and issued only by qualified personnel. Cars should not be issued to guests or visitors without proper documentation; in most cases, guests or visitors must return the receipt or ticket issued by the attendant before they can receive their keys. If a key is lost or given to the wrong person, the vehicle can be rendered inoperable or considered stolen and the hotel may be held financially responsible. The uniformed service department is responsible for all vehicles under its care, and reports information to the front desk each night so that parking charges can be posted to guest accounts. In addition, when the vehicle entrance to the hotel is busy, valet parking attendants should help keep the area running smoothly by providing traffic control assistance. Transportation personnel. Already common at most airport hotels, transportation services and departments are gaining in popularity at other types of properties. Many airport hotels offer complimentary bus service between the airport and the hotel on a regular schedule. In some cases, a guest can simply step from an airport's baggage claim section to a conveniently located courtesy van area. In other cases, the guest must telephone the hotel before being picked up. Some hotels provide direct-connect phone lines through a courtesy board at the airport for guest convenience. Bus or courtesy van drivers must be well trained and properly licensed to operate hotel vehicles. Since these drivers are sometimes the first contact the guest will have with the hotel, it is important that they be polite, efficient, and knowledgeable about the property. It is generally customary for drivers to provide 71

some information about the hotel while in transit, either through a live spoken presentation or a prerecorded audiotape. Drivers should also help guests entering and exiting the vehicle. An experienced driver efficiently and carefully loads guest luggage into the van. As a result of such assistance, guests won't have to wrestle with heavy bags while entering and exiting the vehicle. Many hotels have equipped vans with two-way radios. While these radios are provided primarily for safety and scheduling reasons, drivers may ask guests for their names and relay the information to the hotel. This allows the hotel to prepare for guests before their actual arrival. Another recent addition at many hotels is providing courtesy transportation service to local business, shopping, entertainment, sporting, and dining establishments. At some properties, limousines may be made available to VIP guests. Transportation personnel may be classified as either tipped or non-tipped employees. In all cases, drivers must present the proper image of the hotel. Guest privacy must be maintained, especially in limousines. Any conversations among guests must be considered confidential and should not be discussed with hotel employees, family, or friends. Also, traffic safety is a critical concern. Drivers must be licensed according to state and federal laws. They must know how to check their vehicles to ensure that all equipment is working correctly. Safety equipment, such as flares and fire extinguishers, must be checked regularly, and drivers must be familiar with their use. Concierges. Even though this guest service position has existed for quite some time, the concierge is perhaps the least understood position in the uniformed service area. In the distant past, the concierge was the castle doorkeeper. The concierge's job was to ensure that all the castle occupants were secure in their rooms at night. The concierge often accompanied traveling royalty to provide security and to travel ahead of the royal party to finalize food and lodging arrangements. As hotels became more common in Europe, the concierge eventually became part of the staff that provided personalized guest services. It is common to find a concierge at a world-class or luxury hotel. Certified concierges may display prominent crossed gold keys on their jacket lapel. To earn these keys, a concierge must be certified by the international association of concierges, known as Les Clefs d'Or (Golden Keys). This concierge association has established high standards for its members. While many hotels employ experienced staff to assist guests with special needs, the title concierge technically applies only to members of Les Clefs d'Or. Concierges may provide custom services to hotel guests. Duties include making reservations for dining, securing tickets for theater and sporting events, arranging for transportation, and providing information on cultural events and local attractions. Concierges are known for their resourcefulness. Getting tickets to sold-out concerts or successfully making last-minute dinner reservations at a crowded restaurant are expected of a good concierge. Most successful concierges have developed an extensive network of local, regional, and national contacts for a variety of services. Especially important, however, are the local contacts the concierge has established at restaurants, box offices, car rental offices, airlines, printers, and other businesses. Some hotels actually encourage concierges to visit appropriate businesses and organizations to establish and strengthen such relationships. Finally, a highly successful concierge should speak several languages. With the implementation of advanced technology throughout the hotel, guests may require assistance in accessing and using such devices, networks, or systems. For this reason, some hotels employ a technology concierge, a staff member who specializes in assisting guests with technology issues. For example, if the hotel offers in-room high-speed Internet access and the guest is unable to access the network, the technology concierge may be dispatched to help resolve the issue. 72

The concierge position is generally a salaried position, but gratuities from guests are common expressions of gratitude for exemplary service. In some hotels, the head concierge is the manager of the uniformed service department. When this is the case, the head concierge assumes additional responsibilities for supervising all uniformed service personnel. In large hotels, the head concierge is often too busy to undertake such tasks and supervises employees in the concierge department only. As mentioned in the introduction to this chapter, service is becoming more important in attracting guests and maintaining their ongoing loyalty. In many hotels offering world-class and mid-range accommodations and services, the role of the full-service concierge or guest-service staff is becoming a key to establishing the reputation of the hotel. Housekeeping. Housekeeping is perhaps the most important support department for the front office. Like the front office, housekeeping usually is part of the rooms division of the hotel. In some hotels, however, the housekeeping function is considered an independent hotel division. This is especially true in very large or convention hotels, where the housekeeping staff may number several hundred employees. Effective communication among housekeeping and front office personnel can contribute to guest satisfaction while helping the front office to effectively monitor guestroom status. Housekeeping employees clean occupied and vacated rooms, inspect rooms before releasing them for sale, and communicate the status of guestrooms to the front office. At most properties, a front desk agent cannot assign a guestroom until the room has been cleaned, inspected, and released by the housekeeping department. The housekeeping department often employs a larger staff than other departments in the rooms division. Normally, an executive housekeeper is in charge of the department, aided by an assistant housekeeper. In large hotels there can be several assistant housekeepers, each responsible for specific floors, sections, or, in very large hotels, entire buildings. The department also includes inspectors, room attendants, housepersons, lobby and general cleaners, and laundry personnel. Room attendants are assigned to specific sections of the hotel. Depending on the hotel's service level, average guestroom size, and cleaning tasks, room attendants may clean 8 to 18 rooms per shift. If the hotel has its own laundry, housekeeping department staff may clean and press the property's linens, towels, and uniforms, and guest clothing. Housekeeping personnel (usually executive housekeepers) are responsible for maintaining two types of inventories: recycled and non-recycled. Recycled inventories are those items that have a relatively limited useful life but are used repeatedly in housekeeping operations. These inventories include such items as linens, uniforms, and guest amenities like irons and hair dryers. Non-recycled inventories are items that are consumed or worn out during the course of routine housekeeping operations. Non-recycled inventories include cleaning supplies, small equipment items, and guest supplies and personal grooming items. Guest amenities and linens are among the items and conveniences most often requested by guests. To ensure the speedy, efficient rooming of guests in vacant and inspected rooms, the housekeeping and front office departments must promptly inform each other of any change in a room's status or availability. Teamwork between housekeeping and the front office is essential to effective hotel operations. The more familiar housekeeping and front office personnel are with each other's departmental procedures, the smoother the relationship. Section Keywords private branch exchange (PBX) A hotel's telephone switchboard equipment. Les Clefs d'Or The international association of concierges; the title "concierge" technically applies only to members of Les Clefs d'Or. 73

Competency 4 Objective: Identify the functions performed by other divisions and departments within a full-service hotel. Food and Beverage Division The hotel's food and beverage division generally ranks second to the rooms division in terms of total revenue. Many hotels support more than one food and beverage outlet. There are almost as many varieties of hotel food and beverage operations as there are hotels. Possible outlets include quick service, table service, and specialty restaurants, coffee shops, bars, lounges, and clubs. The food and beverage division also typically supports other hotel functions such as room service, catering, and banquet planning. Banquets, normally held in the hotel's function rooms, may represent tremendous sales and profit opportunities for the food and beverage division. Hotels that appeal to group and convention business typically generate large amounts of banquet and catering revenues. In group hotels, catering opportunities may extend to the guestrooms, where suites often serve as settings for special hospitality parties given by companies. These are often upscale events, providing good opportunities for creativity on the part of the catering department. Catered functions, such as weddings and anniversaries, may also provide significant revenue opportunities for the food and beverage division. Sales and Marketing Division The size of a hotel's sales and marketing staff can vary from one part-time employee to more than a dozen full-time employees. In small properties, the general manager often fulfills all of the sales and marketing roles. In large hotels, the sales and marketing responsibilities are typically divided into five functions: sales, revenue management, convention services, advertising, and public relations. The primary goal of the division is to promote the sale of hotel products and services. To this end, sales and marketing staff members need to coordinate their efforts with the front office and other hotel divisions to effectively assess and communicate guest needs. Marketing employees strive to attract guests to the hotel. They research the marketplace, competing products, guest needs and expectations, and future demand. Based on their findings, they then develop advertising and public relations programs for the hotel. Sales staff, on the other hand, strive to create revenue through the direct sale of hotel products to guests and groups. Front desk agents also may act as salespersons, especially when negotiating with and registering walk-in guests. In many hotels, the reservations office works very closely with the sales department, and serves in a sales role when guests call the hotel to make reservations. Revenue Management. The revenue manager is responsible for ensuring that the hotel is maximizing its revenue by balancing the room rates guests pay with hotel occupancy. The challenge the manager faces is to secure the highest possible room rate for each potential guest, while not turning away any potential guests simply because room rates are too high. The revenue manager works cooperatively with the sales department, the reservations department, and often other departments to determine which room rate strategies should be applied to ensure that the hotel achieves its room revenue goals. Hotel sales team members often check with the revenue manager before quoting room rates for groups or local business associates. The revenue manager also establishes room rates for the reservation office and works with the hotel's many distribution channels, which include the hotel's website, corporate Internet sites, third-party websites, airline reservation systems, visitors' bureaus, and others. Revenue management often extends beyond room rates, and considers non-room revenues in order to optimize the property's total revenue opportunities. In smaller hotels, the front office manager, the reservations manager, or the general manager may also serve as the revenue manager. Often hotels of the same brand are "clustered" 74

geographically and assigned to a single revenue management department designed to effectively serve multiple hotels. Accounting Division A hotel's accounting division monitors the financial activities of the property. Some hotels use offpremises accounting services to complement the work of their internal accounting division. In this case, the hotel's staff collects and transmits data to a service bureau or chain headquarters. A hotel that performs its accounting work on the premises will employ a larger accounting staff with a higher level of responsibility. Accounting activities include paying outstanding invoices, distributing unpaid statements, collecting amounts owed, processing payroll, accumulating operating data, and compiling financial reports. In addition, the accounting staff may be responsible for making bank deposits, securing cash loans, and performing other control and processing functions as required by hotel management. In many hotels, the night audit and the food and beverage audit are considered accounting division activities. The accounting division's success depends on close coordination with the front office. The front office cashiering and guest accounting functions include monitoring cash, checks, credit cards, and other methods of guest account settlement. The most common financial transactions handled by front office staff members are receiving cash payments, verifying personal checks, processing credit and debit cards, tendering change, and monitoring guest account statements. In small hotels, the front office is also responsible for monitoring the credit status of registered guests. Engineering and Maintenance Division A hotel's engineering and maintenance division is responsible for maintaining the property's structure and grounds, as well as its electrical and mechanical equipment. This division may also be charged with swimming pool sanitation, parking lot cleanliness, and fountain operations. Quite often, the operation of the hotel's safety equipment comes under this division as well. Some hotels, however, may have a separate grounds department or an outdoor and recreation department for these tasks. Not all engineering and maintenance work is handled by the hotel's staff. Often, problems or projects require outside contracting. For example, special skills may be needed to calibrate building controls, charge fire extinguishers, and test and adjust building fire alarms. The special equipment that cleans kitchen duct work, disposes of grease and other refuse, or removes snow from parking lots may require that these tasks be contracted. Since some of the work of the engineering and maintenance division must be done in cooperation with the housekeeping department, some hotels have combined housekeeping and engineering into a single unit called the Operations Department. The front office must efficiently exchange information with a representative of the engineering and maintenance division to ensure guest satisfaction. A guest complaint about a leaky faucet, malfunctioning lamp, or sticking lock shouldn't rest with a front desk agent but should be written up and quickly relayed to engineering and maintenance staff for corrective action. Conversely, front desk staff must be informed quickly about maintenance problems that render a room unsuitable for sale. They also must be informed when the room becomes ready for sale again. Security Division All employees should be concerned about the safety and security of hotel guests, visitors, and employees. Security staff may include in-house personnel, contract security officers, and off-duty or retired police officers. Security responsibilities may include patrolling the property; monitoring surveillance equipment; 75

and, in general, ensuring that guests, visitors, and employees are safe and secure. Critical to the effectiveness of the security division is the cooperation and assistance of local law enforcement officials. A hotel's security program is strongest when employees outside the security division participate in security efforts. For example, front desk agents play a critical part in key control by issuing room keys to registered guests only. Room attendants practice security when they verify a guest's room key before allowing that guest to enter a room they are cleaning. All employees should be wary of suspicious activities anywhere on the premises, and report such activities to the security staff. A key role of the security division is to ascertain that the hotel staff is strongly aware of safety issues through training and enforcement of standards. Hotel management should maintain strong, positive relationships with the local safety agencies as part of its ongoing safety and security program. Human Resources Division Hotels have increased their investment in and dependence on human resources management. The size and budgets of human resources divisions have grown steadily, along with their responsibility and influence. This expanded role is mirrored by the growing preference for the broader term human resources management over personnel management. In properties that are not large enough to justify a separate human resources office or division, the hotel's general manager often supervises the human resources function. When a hotel company has several properties in an area, it may choose to "cluster" the human resources function. With this arrangement, the hotel company has one main office and a skilled human resources manager to serve all the properties in the area. This reduces the cost for each hotel and brings a higher level of knowledge to all of the hotels. Recently, the scope of the human resources division has changed in response to new government legislation, a shrinking labor pool, and growing pressures from competition. Although techniques have changed, the basic functions of the human resources division remain the same: employment (including external recruiting and internal reassignment), training, employee relations (including quality assurance), compensation, benefits, administration (including employee policies), labor relations, and safety. Other Divisions Many hotels staff a variety of other divisions to serve their guests. The range of possibilities reflects the diversity of hotels. Retail Outlets. Lodging properties often establish gift shops, newsstands, or other retail outlets in their lobbies or public areas. These outlets generate revenue for the hotel based on a percentage of sales or a fixed space rental fee. Recreation. Some hotelsprimarily resortsstaff a division dedicated to providing group and individual recreational activities for guests. Some recreation divisions also undertake landscaping the grounds and maintaining the swimming pool. Golf, tennis, bowling, snorkeling, sailing, walking tours, bicycle trips, horseback riding, hikes, and other activities may be arranged by recreation division staff. The division may also plan and direct activities such as arts and crafts shows or children's programs. Typically, recreation employees collect fees for organized activities or arrange for charges to be posted to guest accounts. Casino. Casino hotels have a casino division that operates games of chance for guests and protects the property's gambling interests. The casino division may offer various forms of entertainment and other attractions to draw customers into the property and its gambling facilities. For casino hotels, revenues 76

derived from gambling are usually larger than revenues from hotel operations. Therefore, casino priorities may take precedence over hotel priorities.

Section Keywords revenue management The practice of maximizing revenue by balancing the room rates guests pay with hotel occupancy. The challenge is securing the highest possible room rate for each potential guest, while not turning away any potential guest simply because room rates are too high. walk-in A person who arrives at a hotel without a reservation and requests a room.

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Competency 5 Objective: Describe the organization of the front office, including traditional work shifts, alternative scheduling practices, and the purpose of job descriptions and job specifications. Front Office Operations Traditional front office functions include reservations, registration, room and rate assignment, guest services, room status, maintenance and settlement of guest accounts, and creation of guest history records. The front office develops and maintains a comprehensive database of guest information, coordinates guest services, and ensures guest satisfaction. Employees in diverse areas of the front office perform these functions. While no industry standards exist for front office positions, front office organization charts can help to define departmental reporting and working relationships. The highest level of employee and guest satisfaction can be ensured through a carefully designed front office organization, together with comprehensive and well-planned goals and strategies, work shifts, job descriptions, and job specifications. Organization of the Front Office Large hotels often organize the front office according to functions, with different employees handling separate areas. This division of duties can enhance the control the front office has over its own operations. Front office personnel can provide more specialized attention if each area is responsible for only one segment of the guest's stay. Such a separation of duties may not be practical in a small hotel, where it is common for one or two individuals to handle all front desk operations. The front office in a large hotel supports many positions with a considerable separation of duties. These positions typically include, but are not limited to:

A front desk agent who registers guests and maintains room availability information. A cashier who handles money, posts charges, and oversees guest account settlement. An information clerk who takes messages, provides directions to guests, and handles facsimiles (faxes) and packages. A telephone operator who manages the switchboard and coordinates wake-up calls. A reservations agent who responds to reservation requests and creates reservation records. A uniformed service agent who handles guest luggage and escorts guests to their rooms.

If a hotel is automated, each employee may be restricted to accessing only those electronic records pertinent to his or her function. The front office of a mid-size hotel performs the same functions, but with fewer employees. Staff members are often cross-trained, and job duties are typically combined. For example, a front desk agent may also serve as a cashier and information clerk. He or she may also be trained to assume the duties of a switchboard operator and a reservations agent in their absence. During busy periods, several agents may work at the same time. Although each agent may be assigned identical duties, the agents may informally divide the functions among themselves. For example, one agent may register guests and handle the 78

switchboard, another may function as a cashier, and a third may handle reservations and information requests. Small hotels may have a single front desk agent who performs nearly all the functions with little assistance. If the front desk agent becomes overwhelmed by the workload, the general manager or accountant, if properly trained, can help relieve the burden. In a small property, the general manager and accountant often become more directly involved with front office operations. Work Shifts A 40-hour workweek is the typical workload for front office employees in most hotels. Federal and state wage and hour laws apply to the front office, and, in addition, some properties may be bound by union contracts and rules. A front office employee may work any one of the property's work shifts, depending on the front office's needs and the staff member's availability. Traditional front office work shifts are:

A recent trend in front office operations is to provide a limited level of guest service during late night hours, thereby reducing the number of employees required on the night shift. In mid-size and smaller hotels, the night auditor also serves as the front desk agent. Front office work shifts may vary with guest business patterns. A program of flexible work hours, or flextime, allows employees to vary the time they start and end work. Certain busy hours during a work shift, however, may require the presence of a majority of the staff. For example, one front desk agent may work from 6 A.M. to 2 P.M. so that wake-up calls and check-outs can be handled more efficiently through the 7 A.M. shift change. On the other hand, scheduling a front desk agent to work from 10 A.M. to 6 P.M. may allow for smooth processing of late-morning check-outs and guest arrivals during the time when evening shift personnel are scheduled for a meal break. Other types of alternative scheduling include variations on the traditional workweek of five 8-hour days. A compressed work schedule occurs when an employee works 40 hours in fewer than five days (for instance, four 10-hour days). Job sharing is an arrangement in which two or more part-time employees share the responsibilities of one full-time position. Each worker may perform all aspects of the position on alternate days, or divide the duties while the employees work simultaneously. Part-time employees are an increasingly important source of labor for the hospitality industry. Many potential workers, such as students, parents of young children, and retirees, may not be available to work full time. Part-time workers give the front office the flexibility to respond to fluctuating guest demands while reducing overall labor costs. Alternative scheduling programs, however, require careful planning and evaluation before implementation. Job Descriptions A job description lists all the tasks that are required of a work position. A job description may also outline reporting relationships, additional responsibilities, working conditions, necessary equipment and materials, and other important information specific to the place of employment. To be most effective, job descriptions should be customized to the operational procedures of a specific lodging property. Job descriptions should be task-oriented; they should be written for a position, not for a particular employee. Job descriptions will become dated and inappropriate as work assignments change, so they should be 79

reviewed at least once a year for possible revision. Typically, front office managers write job descriptions. Employees should also be involved in writing and revising their job descriptions. Properly written job descriptions can minimize employee anxiety by specifying the chain of command and the responsibilities of the job. Well-written job descriptions can also be used:

In evaluating job performance. As an aid in training or retraining employees. To prevent unnecessary duplication of duties. To help ensure that each job task is performed. To help determine appropriate staffing levels.

Each front office employee should receive a copy of the job description for his or her position. Final job candidates may also receive a copy of a job description, even before receiving a job offer. This is better than having someone accept a job offer and then decline it because he or she was unaware of the job's requirements. A word of caution about job descriptions is appropriate. In the United States, job qualifications, and, therefore, job descriptions, are subject to certain federal laws. The Americans with Disabilities Act (ADA) states that people with disabilities are considered qualified for a position if they can perform the position's essential functions with or without reasonable accommodation. Job descriptions should be created before an open position is advertised, and they should list essential functions. Management must not discriminate against an applicant with a disability merely because the applicant cannot perform a nonessential function. Improper job descriptions may not only lead to improper hiring decisions, they may also expose the hotel to liability for illegal discrimination. At the same time, proper job descriptions may open opportunities for qualified applicants who have disabilities covered under the ADA. Job descriptions play many roles in an organization. They should be used in the job interview, so that the person applying for a position understands what is expected of him or her. Job descriptions can also be used for promotion, transfer, orin certain casesdisciplinary action. Therefore, having complete and accurate job descriptions is an essential part of managing front office operations, as well as any other hotel department. (The appendix at the end of this chapter presents a sampling of front office job descriptions.)

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Job Specifications Job specifications list the personal qualities, skills, and traits an employee needs to successfully perform the tasks outlined in a job description. Basically, front office job specifications spell out front office management's expectations for current and prospective employees; they are typically prepared by the front office manager with input from front office employees. Job specifications are usually developed after job descriptions, since a particular job may require special skills and traits. Factors considered for a job specification are: formal education, work experience, general knowledge, previous training, physical requirements, communication ability, and equipment skills. Job specifications often form the basis for advertising job opportunities and identifying eligible applicants; they may also help to identify current

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employees for promotion. A sample job specification for a generic front office staff member is shown in Exhibit 5. Although standardized job specifications do not exist throughout the industry, certain traits and skills likely appear in job specifications in most hotels. Because of their high degree of guest and visitor contact, front office employees often must possess extraordinary interpersonal skills. Evaluating an applicant on the basis of these traits may be highly subjective. Nonetheless, traits important to front office work include:

Professional demeanor Congenial, outgoing personality Helpful attitude Good diction, grammar, and speaking voice Flexibility Well-groomed appearance Willingness to learn Orientation to detail

Successful performance of front office procedures usually requires general skills acquired through education and experience. Valuable employees possess practical skills, knowledge, and aptitude. Mathematical abilities (for cashiering and accounting tasks) and keyboarding (for recordkeeping and computer operation) are often necessary in front office work. Some hotels may find it beneficial to have employees in the front office who speak more than one language, to better serve international guests. Front office personnel must be team players. They must be willing to work together for the benefit of the entire operation.

Section Keywords flextime A program of flexible work hours that allows employees to vary their times of starting and ending work. compressed work schedule An adaptation of full-time work hours that enables an employee to work the equivalent of a standard workweek in fewer than the traditional five days. Job sharing An arrangement in which two or more part-time employees share the responsibilities of one full-time position. job description A detailed list identifying all the key duties of a job as well as reporting relationships, additional responsibilities, working conditions, and any necessary equipment and materials. essential functions A term used in the Americans with Disabilities Act; according to government 82

guidelines, the essential functions of a job are those functions or fundamental job duties that the individual who holds the position must be able to perform unaided or with the assistance of a reasonable accommodation. reasonable accommodation A change in the usual way of doing a job so that a qualified person with a disability can participate, but a change that does not impose "undue hardship" on the employer. Job specifications A list of the personal qualities, skills, and traits necessary to successfully perform the tasks outlined in a job description.

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Summary The services that result from a hotel's smooth operation are highly visible to guests. Guests are more likely to return to or recommend a lodging property if they enjoy their stay. For a hotel to run effectively and efficiently, every employee must understand and work to achieve the property's mission. The hotel's mission statement expresses the underlying philosophy that gives meaning and direction to hotel policies. The mission statement should address the interests of three diverse groups: guests, management, and employees. A sound mission statement should address guests' expectations, reflect management's philosophy, and provide hotel employees with a sense of purpose. The front office is typically responsible for developing and maintaining a comprehensive database of guest information, coordinating guest services, and ensuring guest satisfaction. Large hotels tend to organize the front office by functional areas in order to enhance control over operations. In a computerized property, each employee may be restricted to accessing only those electronic records pertinent to his or her function. A hotel operating department can be classified as either a revenue center or a support center. By definition, a revenue center sells goods or services to guests, thereby generating revenues. A support center does not generate direct revenue, but instead provides important backing for the hotel's revenue centers. The terms front of the house and back of the house also refer to hotel operational areas. Areas in the front of the house are those in which guests and employees directly interact. In back-of-the-house areas, there is little direct contact between guests and staff members. Although back-of-the-house employees may not directly serve guests (by, for example, taking an order, assisting with registration, or delivering luggage to guestrooms), they indirectly serve guests by cleaning guestrooms, repairing leaky faucets, or correcting errors in guest accounts. Typical hotel operating divisions and departments include rooms, reservations, food and beverage, sales and marketing, accounting, engineering and maintenance, security, and human resources. A job description lists a majority of the tasks assigned to the position. A job description may also outline reporting relationships, additional responsibilities, working conditions, equipment and materials to be used, expected standards of performance, and other important information specific to the property. To be most effective, job descriptions should be customized to the operational procedures of a specific lodging property. Job specifications list the personal qualities, skills, and traits a person needs to successfully perform the tasks outlined in a job description. They can be used in promotions, transfers, and disciplinary actions. Several sample front office job descriptions are presented in the chapter appendix.

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Internet Sites For more information, visit the following Internet sites. Remember that Internet addresses can change without notice. If the site is no longer there, you can use a search engine to look for additional sites. Americans with Disabilities Act (ADA) Les Clefs d'Or (USA)

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Case Study 1 Dark Days at Sunnyvale: Can Teamwork Part the Clouds? The Sunnyvale Resort is a 300-room luxury property with a lake on one side and a golf course, riding stables, and tennis courts on the other. Once considered the premier resort of the South, the rich (both old and new money) considered it fashionable to winter at Sunnyvale back in the twenties and thirties. However, by the sixties, its glory had begun to fade and so had its revenues. In 1978, the resort added 50 suites and 20,000 square feet of meeting space in an effort to attract group business. This helped for a time, but in the last five years both occupancy and room rates were caught in a seemingly unstoppable decline. Recently, the resort lost a star and was now listed in travel guides as a three-star property. Losing a star spurred Thomas Redgrave to take action. Mr. Redgrave was the resort's owner, and he was not happy that a property that should be making $15 to $16 million a year in revenue had grossed less than $12 million in each of the last two years. He gave the general manager, who had been with the resort since 1977, a nice farewell dinner and a gold watch, then hired Ken Richards, an experienced general manager from a convention hotel in Richmond, to come in and turn things around. At a meeting with Ken, Mr. Redgrave summed up the situation as he saw it. "I'd like to renovate Sunnyvale and really bring it back to where it ought to be. As a businessman, I know sometimes you have to spend money to make money. But I'd have to put several million dollars into the place to do it right. The way things are going at Sunnyvale right now, I'm not sure I'd get the kind of return on investment that I should. "The last general manager was here long before I bought the place and he didn't communicate with me very much. I try to be a 'hands-off' owner and I gave him plenty of room, but for the last few years the numbers have been bad and getting worse, and he didn't seem to know what to do about it. I'll be honest I don't know that much about the hotel business. But that's why I hired you. I want you to find out what's wrong and get the revenues back up to where they should be. If I see signs that you've got Sunnyvale back on track, I'll open the purse strings. It'll take some time, but we'll make everything at Sunnyvale first-class again. That'll make me happy, and down the road it'll make your job a whole lot easier." From his experience at other properties, Ken knew that low occupancy and low rates were not the resort's real problems, only the symptoms. His first inspections of the property revealed quite a few minor blemisheswalls that needed painting, leaky showerheads, thin carpets, and so on. In fact, the entire resort, even the relatively new suites and meeting spaces, had an air of genteel shabbiness. But, more importantly, Ken took time during his first week to meet one on one with all of Sunnyvale's managers. He especially wanted to learn all he could about his department heads before calling his first executive staff meeting next Monday morning. Skip Keener, the resort's director of sales, had been with Sunnyvale for over 40 years and fondly remembered the resort's glory days. "When I first got here, the property sold itself," he told Ken. "Never had a problem filling the place up. We were featured in Southern Living magazine practically every year. But all of a sudden we fell out of fashion, and then in the seventies they put in all that meeting space that I have to sell to groups like vacuum-cleaner salesmen, the Kentucky Aluminum Siding Association, and the North Carolina Association of Used Car Dealers. This is the kind of business that keeps us going now. I tell you, the place sure isn't what it used to be." The resort's executive housekeeper, Ruth Harless, had been with the property for almost 30 years and she missed the glory days, too. "It was a slower pace back then," she said. "Guests stayed longerten days, two weeks, even a month or more. You got to know them and they got to know you. Now, most guests are 86

here for a big meeting and are out in two or three nights. It's 'rush, rush, rush.'" Ken learned that Ruth's reputation for upholding cleaning standards was not what it used to be. The comments he heard were: "She used to be a real stickler for detailevery room was spotless, but there's no denying that the rooms just aren't as clean anymore." Ken also learned that Ruth had stopped attending executive staff meetings years ago. "I don't have time," was her excuse. Bob Ruggles was the resort's chief engineer. Since he had been with the property for "only" 11 years, Skip and Ruth still considered him "the new guy." "I don't know why, but I just never hit it off with them," he lamented to Ken. He also lamented the fact that, because the resort was old, every day he faced a large number of minor maintenance problems. "If it's not the plumbing, it's the electrical. If it's not the electrical, it's the HVAC system acting up. It's always something. I run to put out one 'fire' and two more take its place. I can't catch up." The reservations manager, Teresa Mansfield, had been with the resort for three years but she was also considered a "newcomer," and no one on the executive staff went out of the way to talk to her. One assistant manager from another department told Ken that "she seems angry about something all the time, but she never says much." Her complaint was that she was left out of the decision-making at the resort and was expected to just do as she was told. Skip frequently sold more rooms than were allocated to group sales, for example, without telling her. "I don't know exactly what rooms I can sell from one day to the next." The last, and newest, member of the executive staff was Jon Younger, the resort's food and beverage director. He had arrived at the property just six months ago, after the previous F&B director of 28 years, Abe Williams, had retired. Unfortunately, Abe had chosen to coast into retirement, and the department's performance had declined during the last three years of his tenure. Smart and ambitious, Jon had tried to whip the F&B staff back into shape and restore the resort's reputation for F&B excellence, but his opportunities to shine had been few. Skip, the director of sales, had received so many F&B complaints from clients during Abe's last years that he had begun to book most of the big F&B group functions offsite, and "comp" a lot of the minor ones he allowed the resort's F&B department to handle (a complimentary cocktail party for a group's first night was a favorite giveaway). Jon had asked Skip to book more F&B functions in-house and had lobbied the previous general manager for support, but had made no headway. In his early thirties and feeling the pressure of his first job as a department head, Jon had become defensive and abrasive in his dealings with Skip and the others. By Friday of Ken's first week, Sunnyvale's major difficulties were coming into focus. The sales department was so busy bringing in business that it wasn't communicating with the rest of the staff like it should. The result was confusion, poor service, and dissatisfied guests. To entice dissatisfied guests back to the resort, the sales staff was constantly lowering room rates. It was a downward spiral that Ken had to find a way to stop. Next Monday morning, Ken began his first staff meeting by reassuring his department heads that the owner was committed to the resort's long-term health. "Mr. Redgrave wants to put a lot of money into the place and make it a four-star property again, but first he wants to see that we can turn the rates and occupancy around and beef up the bottom line. I'm committed to taking action quickly and I know all of you want to makes things better, too." Ken picked up a pen and a legal pad and surveyed the managers gathered around the table. "I've looked at the reports," he nodded toward a stack of papers on the table in front of him, "but I'm interested in hearing what all of you think. Does anyone have any ideas about why the revenue's been down the past few years?"

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Silence hung over the room while the department heads looked at the table or shot sidelong glances at each other. Finally, Jon Younger spoke up. "I think a big problem is that we're giving too much F&B business away." Another silence descended on the group. "Yes," Ken agreed after a while, trying to prompt more comments, "I noticed in the financial statements that the F&B lines seem very low for a resort of this size. What's going on there?" "Well, I hate to say it," Skip said, "but I got so many complaints from clients that I finally decided I'd better send them off-site for F&B. I've lined up a few outside caterers that do a good job for me, and just up the road there's the Mountainview Gourmet Steakhouse. I send groups up there and they get steaks bigger than their plates, servers in Wild West costumes, skits and 'gunfights' and other entertainment while they eatthey love it." "The problem with that," Jon said sharply, "is that Skip's not giving me a chance to show what I can do. Those complaints he's talking about happened back when Abe was here. And we're getting killed with all the comps he's giving away. Every group that comes in gets a comp cocktail party the first night, which wipes out the restaurant's dinner sales because everybody goes to the party and scarfs down the heavy hors d'oeuvres and free booze. Why not a banquet the first night? That's high-profit business that we really need." "What about that, Skip?" Ken asked. "Well, all I can say is that it's hard when a client looks you in the eye and says 'Last time we booked here, the banquet was terribleeight of my people stood around embarrassed because you under-set by eight places, you forgot the ice sculpture, the soup was cold, the entres were late and most of them were cold, too, and I had to listen to my people griping about it the entire time I was here. So if you want me back you're gonna have to do something different.' A lot of my clients come back every year or two, and they remember the things that went wrong the last time." Ken made a note on his pad. "But the problems your clients refer to didn't happen on Jon's watch, is that right?" "True," Skip said. "But I still have to fight the perception that we can't deliver quality F&B." Another silence descended on the group. Ken turned to Teresa. "What problems do you see in the reservations area?" Teresa swallowed hard. It wasn't her usual style to speak up, but this might be the best time to get things out in the open with the new general manager. "Well, one thing that could be better," she began, "is that I'm never sure how many rooms Skip has sold, so occasionally I've had to turn guests away because of overbookings. But much more often we've suffered from 'underbookings.' That's when Skip asks for more rooms than he really needs, rooms I could have sold, but they stand empty because he blocked them off and then didn't need them for his groups. That happens a lot more than it should. "It's also hard to have to sell the less-desirable rooms all the time," Teresa continued. "Skip tends to use up the suites and the nicer guestroomseven the ones allocated to mewith his groups. To make it worse, I'm under pressure to sell those less-desirable rooms at a premium. The budget calls for a group rate of $150, but a lot of the time Skip gives groups a $120 rate. This pressures me to sell my allotment of rooms at an even higher rate than my budgeted target of $170 per room. That's hard to do when all the rooms that are left are at the end of the hall, or next to the laundry, or the ones with no view." 88

Skip crossed his arms over his chest. "Groups should get a break, especially with the kind of service they usually get around here. And part of your paycheck isn't riding on how many rooms you sell, like mine is. If you think it's easy selling ten thousand rooms a year, try it sometime!" Ken turned to Skip. "You had to meet a 'rooms sold' target, not a revenue target?" "Correct. No bonus unless I sold ten thousand rooms. It's not easy, especially when there's problems VIPs standing in the lobby because their suites aren't ready, for example. Do you have any idea how hard it is to sell somebody the next time, when the first thing that happens to Mr. Bigshot is that he has to cool his heels in the lobby while his room is cleaned? Instead of getting ushered up to his nice suite and feeling pampered, he gets ticked off." "Wait a minute," Ruth interrupted. "Whenever that happens, I always pull room attendants off their regular rooms so they can blitz through the suites and get them ready." "Ready?" Skip snorted. "They're never as 'ready' as they should be! If I had a nickel for every time the fresh flowers and fruit baskets weren't placed in the suites like they're supposed to be" "I get them in the rooms every time I'm notified," Jon interjected. "You're right, Jon, sometimes I forget to tell you," Ruth said defensively, "but I have my hands full just trying to 'rush rush rush' to get everything clean and get my crew back on their regular duties. It disrupts the entire day." "What about the cleaning problems?" Skip asked Ruth. "It's embarrassing when the president of a state association comes to methis happened just two weeks agoand tells me his wife found a hairball in the bathtub drain and is afraid to take a shower now." "What do you expect when you tell people they can check in at noon, when check-out time is noon, too?" Ruth said. "We're not given time to do a proper job." "Does that happen a lot?" Ken asked. "I mean, people wanting to check into suites that people have just checked out of?" "All the time," Ruth said. "So you have to do these 'cleaning blitzes' pretty often?" Ken laid a hand on the reports in front of him. "I noticed that housekeeping's labor costs are pretty highall those blitzes helps explain it." "They certainly happen more often than they should," Ruth replied. "And you're right, it's costly, because my crew has to stay later to finish their regular assignments. The overtime adds up." "The guest complaints add up, too," Teresa said. "When Ruth pulls her crew from their regular assignments to blitz the suites, the regular guestrooms aren't getting done. So they get cleaned late, and those guests end up inconvenienced and unhappy. So the guest dissatisfaction ripples down through the entire resort." "Also," Ruth added, "when you have ten minutes to try to whip a room into shape, you intentionally skip over some things and miss others, so the constant blitzing doesn't do my housekeepers any good, either. They start to get sloppy even when they aren't rushed. Some of them figure if a quick touch-up is okay for 89

a VIP suite, it's okay for a regular guestroom, too. I really have to fight that attitude with some of my crew." "We've got to plan a little better in the future," Ken said, scribbling in his legal pad. "It's hard to plan when you don't get much advance notice about groups coming in or what their needs are," Teresa said pointedly, looking at Skip. "It's one of the reasons I can never catch up," Bob chimed in. "I never know what's going on, either. I just get calls all the time: 'Leaky toilet in Room 113.' 'The guest in Suite 27 turned on the air conditioning and nothing happened.' Fine. I ask for the rooms for five days, then suddenly they have to be sold because a big group's coming in. The repairs aren't made, guests complain, and I get chewed out." "And I have to lower the rates next time for that group," Skip said. "I call the client and he says a bunch of my people were unhappy last time, why should I come back? So I give him a break on the rates, comp the coffee breaks, breakfasts, what have you, to try to get him to come back for another year. Sometimes it works, and sometimes I lose a group." "And my housekeepers are unhappy because they keep reporting maintenance problems that never get fixed," Ruth said. "They ask me why, and I don't know what to tell them, because I'm never told why either." "If you would talk to me once in a while, I'd be glad to tell you," Bob said. "It's not all my fault. I can't get any cooperation out of anybody." "Do you really need five days every time?" Teresa asked. "Cooperation is a two-way street, you know. Sometimes it's hard to keep a room 'out of order' that long." "I'd like to have five days. I don't see why it's such a big deal." "One room out for five days is not a big deal," Skip said, "but you keep adding rooms to your list, so eventually it gets to be a big deal." Ken held up his hands to halt the discussion, then surveyed the group over steepled fingers. "Obviously there's a lot of frustration in this room. You're frustrated because you want to get your jobs done, but your co-workersinstead of helping youare sometimes getting in the way. This not only frustrates you, but frustrates our guests as well, because they're not receiving the service they should." Ken paused. "You're not getting in each other's way on purpose, or because you want to make someone else's life miserable," Ken smiled. "I just think you're all too focused on your own areas and aren't seeing the big picture. "From what I've heard today, I'd say our biggest problem is that we're not talking to each other. We've got to learn to communicate better so we can serve each other and our guests better. More communication will help bring the bigger picture into focus for everybody. "I want to show Mr. Redgrave some positive changes within 90 days," Ken continued. "With that in mind, I'd like all of you to come to next Monday's staff meeting with ideas on how you can improve communication and work together better as a team. I'll think about it as well, and come to the meeting prepared with recommendations for each of you. I think teamwork will be the key to doing a better job of satisfying our guests and moving revenues in a positive direction." Discussion Questions 90

1. What are the problems that each department experiences because of poor communication among the executive staff?

2. What recommendations can Ken make to each of the resort's department heads to help them work together as a team?

3. What actions should Ken take if his department heads, after a suitable period of time, don't seem to be coming together as a team?

4. What can Ken show Sunnyvale's owner in the next 90 days to demonstrate that the resort is making progress?

Case Number: 3322CA The following industry experts helped generate and develop this case: Richard M. Brooks, CHA, Vice President, TWE Group; and S. Kenneth Hiller, CHA, General Manager, Holiday Inn, Beachwood, Ohio. This case also appears in Case Studies in Lodging Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 1998).

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Review Questions 1. What is the purpose of a hotel's mission statement? What are the three groups of people whose interests should be addressed in a hotel mission statement?

2. How do a hotel's goals relate to its mission statement and to departmental and divisional goals and strategies?

3. How does an organization chart show employee reporting and consulting relationships? Why should an organization chart be flexible?

4. Which hotel departments and divisions are typically classified as revenue centers? Why?

5. Which hotel departments and divisions are typically classified as support centers? Why?

6. What main divisions are typically found in the organization of a full-service hotel?

7. How may a limited-service hotel differ in its organization from a full-service hotel?

8. How does the front office interact with the rest of the rooms division and the other main divisions in a full-service hotel?

9. Why is it impossible for some front offices to divide employee duties according to function?

10. What are the three traditional front office work shifts? What variations on the traditional workweek might a hotel adopt?

11. How are job descriptions typically used? How do they differ from job specifications?

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Appendix A Selected Front Office Model Job Descriptions Cross-training front office employees has helped standardize procedures in many hotels. In a small hotel, for instance, one employee may handle reservations, registration, switchboard, and check-out tasks. Lines of responsibility have also blurred, as more and more properties adopt computerized front office recordkeeping systems. These systems can combine information required for most front office tasks in a common database that can be accessed by many front office employees. Many hotels refer to front office employees as front office agents, guest service representatives, or something similar. Even in hotels with a traditional division of duties, the titles for each position may change over time. These changes may reflect a reevaluation of the tasks involved or an attempt to avoid the negativity associated with certain titles. The position titles used in this chapter represent trends in the lodging industry. This appendix presents generic model job descriptions for typical front office positions found in a mid-size hotel.

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Chapter 3 - Front Office Operations Outline The Guest Cycle

Pre-Arrival Arrival Occupancy Departure

Front Office Systems

Front Office Activities

Front Office Documents

Pre-Arrival Documents Arrival Documents Occupancy Documents Departure Documents

The Front Desk

Functional Organization Design Alternatives

Telecommunications

Telecommunications Equipment

Property Management Systems

Reservations Management Software Rooms Management Software Guest Account Management Software General Management Software Back Office Interfaces System Interfaces Sales Automation Systems 102

Summary Competency 1 Objective: Summarize front office operations during the four stages of the guest cycle. All the functions, activities, and areas of the front office are geared toward supporting guest transactions and services. Critical to the success of the department and the hotel are appropriately designed and used front office work areas, equipment, forms, and reports. Also paramount is the accurate planning and monitoring of front office transactions. To many guests, the front office is the hotel. It is the main contact point for nearly every guest service the hotel provides. This chapter examines front office operations in terms of the various stages of a guest's stay, referred to as the guest cycle. Discussion focuses on the various forms, work space designs, equipment, related tasks, and automated applications appropriate to each stage.

The Guest Cycle The financial transactions a guest makes while staying at a hotel determine the flow of business through the property. Traditionally, the flow of business can be divided into a four-stage guest cycle. Exhibit 1 diagrams these four stages: pre-arrival, arrival, occupancy, and departure. Within each stage, important tasks related to guest services and guest accounting can be identified and analyzed. The guest cycle in Exhibit 1 is not an inflexible standard. Since activities and functions tend to overlap between stages, some properties have revised this traditional guest cycle into a sequence of pre-sale, pointof-sale, and post-sale events. For automated properties, this revised sequence significantly improves coordination among hotel operating departments. Regardless of the number of stages, the guest cycle identifies a logical sequence of hotel-guest interactions.

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Front office employees need to be aware of guest services and guest accounting activities at all stages of the guest stay. Front office employees can efficiently serve guest needs when they clearly understand the flow of business through the hotel. Exhibit 2 indicates which front office personnel are most likely to serve the guest during each stage of the guest cycle. The guest cycle also suggests a systematic approach to managing front office operations. Pre-Arrival The guest chooses a hotel during the pre-arrival stage of the guest cycle. The guest's choice can be affected by many factors. The type of travel is often an important factor. People traveling on business may be more concerned about convenience than price. People traveling for vacation or personal reasons are more likely to be cost-conscious, since they are paying the bill. They also may be more flexible about where they travel and the hotels they stay in; the popularity of Internet sites offering deeply discounted hotel rooms for vacation travelers willing to be flexible about where and when they travel is certainly evidence of that. In addition to the type of travel, guests must consider such factors as previous experiences with the hotel; advertisements and promotions; company travel policy; recommendations from travel agents, friends, or business associates; the hotel's location and reputation; frequent traveler rewards programs; and preconceptions based upon the hotel's name or chain affiliation. The guest's decision may also be influenced by the ease of making reservations and how the hotel's reservations agent or website describes the hotel and its facilities, room rates, and amenities. In reality, the reservations department is the sales office for the hotel's non-group business. Its employees must be sales-oriented and present a positive, strong image of the hotel. The front office staff's attitude, efficiency, and knowledge may influence a caller's decision to stay at a particular hotel. Similarly, the ease with which a guest can navigate the hotel's website can be a contributing factor in property selection. A reservations agent must be able to respond quickly and accurately to requests for future accommodations. The proper handling of reservation information can be critical to the success of a lodging property. Efficient procedures allow more time for the reservations agent to capture needed information and to market hotel services. If a reservation request matches room availability in the reservation system, the request can be accepted, and the reservations agent creates an electronic reservation record. The creation of a reservation record initiates the hotel guest cycle. This record enables the hotel to personalize guest service and appropriately schedule necessary staff and facilities. By confirming a reservation, the hotel verifies a guest's room request and personal information, and assures the guest that his or her lodging needs will be addressed. Using the information collected during the reservations process, a property management system (PMS), the term used for a hotel's main computer system (discussed in more detail later in the chapter), may be 104

able to initiate pre-registration applications. Such pre-registration functions include automatically assigning a specific room and rate to guests who have not yet registered, and creating an electronic guest folio. A guest folio is a record of the charges incurred and credits acquired by the guest during the guest cycle. An automated reservation system helps maximize room sales by accurately monitoring room availabilities and forecasting rooms revenue. (To further maximize room sales, some of these systems are supplemented by revenue management systems.) By analyzing reservation transaction reports, front office management can develop a better understanding of the hotel's reservation patterns. Data collected during the reservations process become especially useful in subsequent front office functions. But, without a doubt, the most important outcome of an effective reservations process is having a room available when the guest arrives. Arrival The arrival stage of the guest cycle includes registration and rooming functions. After the guest arrives, he or she establishes a business and legal relationship with the hotel through the front office. It is the front office staff's responsibility to clarify the nature of the guest-hotel relationship and to monitor the financial transactions between the hotel and its guests. Many guests arrive at the hotel entrance by private automobile, taxicab, or shuttle bus. The entrance is often the first place guests directly interact with hotel staffers. It is for this reason that world-class, upscale, convention, casino, and resort hotels typically station attentive uniformed staff there. Door attendants direct traffic in the hotel entrance, help guests unload luggage, open doors for arriving and departing guests, and provide directions and information about both on-premises and nearby points of interest. Valet parking staff members are often available to provide automotive parking assistance to guests not using self-park. Bell attendants, who are often stationed near the front door, escort guests with luggage to the front desk for registration. While a mid-scale, economy, or limited-services hotel might employ a small number of staff members to provide similar service, most do not. The front desk agent should determine the guest's reservation status before beginning the registration process. Persons with reservations may have already undergone pre-registration activities. Persons without reservations, known as "walk-ins," present an opportunity for front desk agents to sell guestrooms. To sell successfully, the front desk agent must be very familiar with the hotel's room types, rates, and guest services and be able to describe them in a positive manner. A walk-in is not likely to register if he or she is not convinced of the value of renting a particular hotel room. Once a person has registered, whether they have a reservation or are a walk-in, they legally become a guest. Often, the hotel's property management system can be used to quickly identify available rooms and amenities. An electronic reservation record, created during the pre-registration application or at the time of check-in, is essential to efficient front office operation. A registration record includes information about the guest's intended method of payment, the planned length of stay, and any special guest needs such as rollaway bed or a child's crib. It should also include the guest's billing address, e-mail address, and telephone number. When the guest presents a form of identification, it serves as proof of intent to establish an innkeeperguest relationship. Presenting a valid credit card during registration, for example, is deemed evidence of the traveler's intent to become a guest. The innkeeper-guest relationship has many legal benefits for both the hotel and the guest. For example, the hotel obtains legal assurance of payment for the room and services provided, while the guest obtains legal assurance of personal safety while on the premises.

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Gathering all requisite information in detail at the time of reservation and registration enhances the front office's ability to satisfy special guest needs, forecast room occupancies, and settle guest accounts properly. At check-out, the guest's registration record may also become the primary data source for creating a guest history record. This record is a collection of personal and financial information about a guest that can help the hotel in its subsequent marketing and sales efforts. It also provides a basis for facilitating online reservation or registration at the time of a return stay. The hotel's property management system has a predetermined formula (algorithm) that applies registration information to automatically assign a room type and rate for each guest. Room and rate assignment depend on reservation information (long-run availability) and room status (short-run availability) information. The housekeeping status of a room must be communicated to the front desk as soon as possible so that the property management system can maximize room assignments. Some common room status terminology is defined in Exhibit 3. 106

Hotel room types may range from a standard single guestroom to a luxurious suite. Exhibit 4 defines some typical hotel room types. Furnishings, amenities, and location within the property will tend to differentiate room rates within the same room type. Front desk agents must also be sensitive to accessibility issues for guests with physical impairments. The Americans with Disabilities Act requires new and renovated properties to be barrier-free in design. The term barrier-free means that facilities and accommodations must be designed with the disabled guest and visitor in mind. Some of the more prevalent features of barrier-free guestrooms are extra-wide doorways for wheelchairs (both entry doors and bathroom doors), extra-large bathrooms, grab bars beside the toilet and inside the bathtub area, roll-in showers for wheelchairs, lowered vanity countertops and extra height (knee space) under the sink, handles on doors and bathroom fixtures instead of knobs, and strobe lights and pillow shakers as part of the smoke and fire detection systems (for the hearing impaired). Other aspects of barrier-free design are addressed later in this chapter. Once a registration record is created, the front desk agent turns his or her attention to identifying the guest's method of payment. The hotel guest accounting cycle depends on captured information to ensure deferred payment for rendered services. Whether the guest uses cash, personal check, credit card, debit card, travel voucher, smart card, or some alternative method of payment, the front office must take measures to ensure eventual payment. A proper credit check at the outset of a transaction greatly reduces the potential for subsequent settlement problems. If a guest has not secured management approval of credit before arriving at the property, the hotel might deny the guest's request for credit at the time of check-in. 107

Registration is complete once the guest has established his or her method of payment and departure date. The guest is issued a room key and allowed to proceed to the room without assistance, or a uniformed service employee may escort the guest to the room. When the guest arrives at the room, the occupancy stage of the guest cycle begins. Occupancy The manner in which the front office staff represents the hotel is important throughout the guest cycle, particularly during the occupancy stage. As the center of hotel activity, the front desk is responsible for coordinating guest services. Among many services, the front desk provides the guest with information and supplies. The front office should respond to requests in a timely and accurate way to maximize guest satisfaction. A concierge may also be on staff to provide special guest services. A major front office objective throughout the guest cycle is to encourage repeat visits. Sound guest relations are essential to this objective. Guest relations depend on clear, constructive communications between the front office, other hotel departments and divisions, and guests. The hotel must be aware of a guest complaint in order to resolve it. Front desk agents should carefully attend to guest concerns and try to seek satisfactory resolutions as quickly as possible. Security is a primary front office concern throughout all stages of the guest cycle, especially during occupancy. Security issues likely to apply to front office employees include verifying guest identify and other information, and protecting guest funds and valuables. Various transactions during the occupancy stage affect guest and hotel financial accounts. Most of these transactions will be automatically processed through property management system interfaces to revenue centers according to established posting and auditing procedures. The room rate of the guestroom is usually the largest single charge on the guest's folio. Additional expenses can be charged to a guest's account if he or she established acceptable credit at the front desk during registration. Goods or services purchased from the hotel's restaurant, lounge, room service department, telephone department, transportation areas, gift shop, spa, and other revenue outlets may be charged to guest accounts. Many hotels establish a maximum limit on the amount that guests can charge to their accounts without partial settlement. This amount is usually referred to as the house limit and can be automatically monitored by the property management system. Guest accounts must be continually monitored to ensure that the house limit is not exceeded. Front desk accounting records must be periodically reviewed for accuracy and completeness through a system audit, which can be programmed to run automatically at any time during the day. Even though automated properties can perform the audit at any time, they almost invariably follow the hotel tradition of performing the audit at night, since transaction volumes tend to be lower then, and most transactions occur earlier in the day. Regardless of when the system audit takes place, room charges (room rates and room tax) are automatically posted to guest accounts as part of the audit routine. Other system audit tasks usually include: online verification of account postings, monitoring of accounts and credit limits, identification of discrepancies in room status, and the production of operating reports. Departure Guest services and guest accounting aspects of the guest cycle are completed during the cycle's fourth phase: departure. Effective front office monitoring includes processing the guest out of the hotel and 108

creating a guest history file. The final element of guest accounting is settlement of the guest's account (by bringing the account to a zero balance). At check-out, the guest vacates the room, receives an accurate statement of the settled account, returns the room keys, and leaves the hotel. Once the guest has checked out, the front office system automatically updates the room's availability status and closes the account. During check-out, the front office staff should determine whether the guest was satisfied with the stay and encourage the guest to return to the hotel (or another property in the chain). The more information the hotel has about its guests, the better it can anticipate and serve their needs and develop marketing strategies to increase business. In addition, it is important for guests to leave with a positive impression of the hotelit will definitely affect how they talk about the hotel to others and may be the determining point in whether they return to the property in the future. Most property management systems use registration records to automatically construct a guest history file when a guest checks out. A guest history file is a collection of guest history records. Information in a guest history file allows the hotel to better understand its clientele and provides a solid base for strategic marketing. Guest histories, including details of the guests' spending at the hotel, are usually sent electronically to the company's central database management system for processing and storage. The purpose of account settlement is to collect money due the hotel before guest departure. Depending on the guest's credit arrangements, the guest will pay cash; use a credit card, debit card, or smart card; or apply pre-established direct billing instructions. Account balances should be verified and errors corrected before the guest leaves the hotel. Problems may occur in guest account settlement when charges are not posted to the guest's account until after the guest checks out. These charges are called late charges. Even if payment is eventually collected, the hotel usually incurs additional costs through billing the guest. In addition, this can irritate guests, who may have to submit incomplete expense accounts to their employers. The task of settling accounts with outstanding balances for departed guests is generally transferred to a back office system to be handled by the accounting department, not the front office. However, the front office is responsible for providing complete and accurate billing information to assist the accounting department in its collection efforts. Once the guest has checked out, the front office can analyze data related to the guest's stay. Systemgenerated reports can be used to review operations, isolate problem areas, indicate where corrective action may be necessary, and highlight business trends. Daily system reports typically present information about cash and charge transactions and front office operating statistics. Operational analysis can help managers establish a standard of performance that can be used to evaluate the effectiveness of front office operations.

Section Keywords guest cycle A division of the flow of business through a hotel that identifies the contacts and financial exchanges between guests and hotel employees. reservation record An electronic document storing such guest data as date of arrival, type and number of rooms requested, deposit, and number of persons in the party. property management system (PMS) A computer software package that supports a variety of applications related to front office and back office activities. 109

guest folio A paper or electronic form front desk staff uses to chart transactions on an account assigned to an individual person or guestroom. house limit A guest credit limit established by the hotel. guest history file A collection of guest history records containing information about interactions between the hotel and former guests. late charges A transaction requiring posting to a guest account that does not reach the front office system until after the guest has checked out.

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Competency 2 Objective: Describe the front office recordkeeping systems and front office documents. Front Office Systems Before the 1920s, technology in the front office was almost nonexistent. Manual operations were the rule in lodging operations. The semi-automated operations through the early 1970s laid much of the groundwork for the development of automated operations in the late 1970s. Technology today is affordable, allowing lodging properties to manage many of their operations with automated applications. Front Office Activities Front office recordkeeping in a computer-based property management system is mostly the result of programmed routines. Computer systems designed for use in the hospitality industry were first introduced in the early 1970s, but were not considered functionally viable or generally affordable until the late 1970s. These initial systems tended to be expensive, making them attractive to only the largest hotel properties. During the 1980s, computer equipment became less expensive, more compact, and easier to operate. Userfriendly software packages, which did not require the sophisticated technical training demanded by earlier computer systems, evolved for various hotel functions and applications. The development of versatile personal computers encouraged system vendors to approach smaller lodging properties. By the late 1980s, computer systems were cost-effective for hotels of all sizes. Pre-Arrival Activities. The reservations software of an in-house property management system may directly interface with a central reservations system or global distribution network and automatically quote rates and reserve rooms according to a predetermined pattern. The reservations software may also automatically generate letters of confirmation, produce requests for guest deposits, handle pre-registration activities, and establish the credit status of the traveler if a credit card, debit card, or smart card number is provided when the reservation is made. Electronic folios can be established and pre-registration transactions can be processed for guests with confirmed reservations. A reservations software package may also generate an expected arrivals list, occupancy and revenue forecasts, and a variety of informative reports. Arrival Activities. Guest information collected during the reservation process is automatically transferred from the computer's reservation record to the property management system's front office software. A front desk agent enters guest information for walk-in guests into the front office system. The agent may then present a computer-prepared registration card to the guest for verification and signature. The installation of on-line credit card authorization terminals enables front desk personnel to receive timely credit card approval. Registration data, stored electronically in the system, can be retrieved whenever necessary, thereby making a room rack unnecessary. Electronic guest folios are also maintained and accessed through the system's application software. Some properties offer self check-in/check-out terminals. In fact, these terminals have existed for many years, but only recently has the cost of the technology significantly decreased. In addition, the availability of automated teller machines (ATMs) and self check-in terminals at airports has had a direct impact on guests, who are now more willing to accept self-help equipment in lodging establishments. To use one of these terminals, the guest inserts a credit card, debit card, frequent traveler card, or smart card into the machine, which reads the encoded card data and communicates with the property management system. The central system locates the guest's reservation and returns the information to the terminal. The guest is asked to verify name, departure date, rate, and room type on the display. Some 111

systems allow changes to this information, and some require that the guest go to the front desk if any changes are necessary. If the information is correct, the system assigns an available room within the property management system and dispenses a rooming slip and guestroom key. Advanced systems provide electronic room keys that are individually created when the guest checks in. Some world-class-service hotels may not use self check-in/check-out terminals because they want to keep personal contact between the hotel staff and the guest. Self check-in terminals are being accepted in large convention hotels where long check-in and check-out lines can undermine a guest's experience. These terminals are used to reduce these long lines and get guests to their rooms faster. Other hotels, such as economy-priced hotels and some mid-range hotels that do not provide extensive personal service, are also using these systems. One additional advantage of these systems in economy and mid-range hotels is that they may eliminate the need for a night shift at the front desk, because the equipment can independently handle all check-ins and check-outs. Some hotel companies allow guests to register via the Internet. Guests access the company's special Internet registration site and confirm their arrival information. When they arrive at the hotel, they simply stop by a convenient pre-registration desk, show identification, and pick up their room keys. The entire process takes only a few seconds once they arrive at the hotel. With the extension of wireless technologies, guests can also pre-register through their laptop computer, personal digital assistant (PDA), or cell phone. Occupancy Activities. A hotel that uses a property management system locates automated devices throughout the hotel facility. These devices include point-of-sale (POS) terminals, data workstations, smart identification tags, handheld units, and other formats. As guests charge purchases at revenue outlets, the charged amounts are electronically transferred to the property management system, and the appropriate guest account is automatically updated. Most automated devices are capable of supporting two-way (duplex) interfaces, so the status of each guest is verified before the system accepts the charge for posting. For example, if a guest checks out of the hotel and then attempts to purchase a gift shop item and charge it to his or her room account, the point-of-sale terminal notifies the gift shop clerk that the item cannot be charged to the guest's account because the account has already been settled and closed. Instantaneous postings, simultaneous guest account and departmental entries, and continuous trial balances free the front office auditor to spend time auditing, rather than focusing primarily on balancing guest accounts. Departure Activities. A neatly printed electronic folio helps assure the guest that the statement is complete and accurate. Depending on the method of settlement, the computer system may automatically post the transactions to appropriate back office accounts. For a guest account that requires third-party billing, the system is capable of producing a bill to be sent to the guest or credit-granting agency. Once the guest's account is settled and the postings are considered complete, departed-guest information is used to create an electronic record in the hotel's guest history file. Off-premises outsourcing or application service providers (ASPs) enable hotel operations to enjoy some of the benefits of automation without having to support in-house computer technology. Such system solutions require the hotel to provide the servicing bureau with data for processing. A popular outsourced application has been payroll accounting. Employee time records are sent to the service bureau to convert into paychecks and payroll reports for management. However, service bureaus, which focus primarily on back office functions, are not a feasible option for front office activities. ASPs, however, now use the Internet to support front office processing and recordkeeping. Internet-based ASP applications have been developed for all systems in a hotel, including front office, accounting, point-of-sale, and others. Front Office Documents 112

The front office relies on various documents to monitor the guest's stay. This section discusses front office documents employed in the four stages of the traditional guest cycle. Pre-Arrival Documents Since reservations initiate the guest cycle, capturing and maintaining reservation data is critical to effective front office operations. Regardless of the point of entry (in-house, the hotel's website, or the reservations office), reservations are formulated into an electronic reservation file. The guest may be sent a system-generated letter of confirmation to verify that a reservation has been made and that its specifications are accurate. The confirmation process permits errors to be corrected before the guest arrives and verifies the guest's correct mailing address for future correspondence. Confirmation via e-mail has the advantages of lower costs to the hotel and a quicker response to guests. Arrival Documents The front office may use a paper-based or system-generated registration to check in guests. Registration records indicate guests' personal data, including length of stay and method of settlement. Registration records may also provide printed statements relating to the availability of safe storage for guest valuables, and guest responsibility for payment of all charges. Additionally, registration records indicate the room rate, allowing the guest to confirm it. This reduces questions about the price of the room at check-out. Credit must be established, verified, or authorized during check-in as well. Most credit card and debit card companies require an actual swipe of the card in an electronic recording device, or imprint on a credit or debit card voucher, to establish credit. A front desk agent will usually request credit approval against the guest's credit card for a pre-established amount. Should the balance go over that amount during the stay, additional requests are made to the credit card company. Often, the front office system automatically requests the credit approval during check-in and, when the balance approaches or exceeds the approved level, the system may automatically request additional approvals from the credit card company. Occupancy Documents Once the guest is registered, the front office system creates an electronic guest folio to capture guest charges and credits. While folio information is comparable across front office recordkeeping systems, folio formats tend to vary. In nearly all electronic systems, information from the guest registration record is used to create the folio. This is an example of the flow of electronic records. When printed, a minimum of two folio copies is normally generated. The front office uses one copy of the guest folio as a record of the guest's stay, and gives the second copy to the guest during check-out as account documentation. Additional folio copies may be used for such purposes as assistance in direct billing after departure, and to help reconcile departmental sales reports. Electronic folios simplify transaction posting and handling. Once the information is captured, the system assigns an account number or uses the reservation number. An electronic folio is automatically created and available for immediate transaction posting. Electronic folios are stored internally and can be printed on demand. A voucher is a support document detailing the facts of a transaction. A voucher does not replace the source document created at the point of purchase. Common types of vouchers include charge vouchers, allowance vouchers, transfer vouchers, and paid-out vouchers. During a system audit routine, vouchers help ensure that all transactions requiring account posting have been processed correctly. Automated properties tend to require few vouchers, or, in some cases, no vouchers at all. This is because remote 113

revenue centers are electronically connected (interfaced) with the front office system, thus reducing the need for support documentation. Automated front office systems replace traditional filing techniques with computer terminals, thereby eliminating the need for information racks and rack slips. These terminals can quickly access guest records and display comprehensive information. Interfacing technology enables other electronic equipment, such as point-of-sale terminals, electronic locks, call accounting devices, and energy management systems, to be connected to the front office system. Departure Documents Guest folios are kept current throughout occupancy to ensure an accurate account balance for settlement at departure. In addition to the guest folio, other documents may be required for account settlement. A credit card voucher, for example, may be necessary if the guest elects to pay by credit card. In some hotels, a cash voucher is used to document a cash settlement. A transfer voucher may be necessary if the guest's account is direct-billedthat is, transferred from a guest receivable account in the front office to a nonguest receivable account in the back office. Even in a property management system, several records or documents may be generated to prove transactions and provide a basis for comprehensive front office auditing. During the departure stage, the property management system may create a guest history file. As stated earlier, a guest history file stores information helpful to marketing and sales efforts, and can be helpful in registering and serving the guest during a return visit. Most systems automatically create an electronic guest history file as part of the check-out process. A collection of guest history files forms a database of invaluable marketing information.

Section Keywords registration card A printed form for a registration record. reservation file A collection of reservation records. voucher A document detailing a transaction to be posted to an electronic folio; used to communicate information from an unconnected point of sale to the front office system.

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Competency 3 Objective: Describe the front desk and its support devices, and describe the services and equipment of a hotel's telecommunications area. The Front Desk Most front office functions are performed at the front desk. The front desk is where guests register, request information and services, relate complaints, settle accounts, and check out. Most front desks are prominently located in the hotel lobby. A typical front desk surface is a counter approximately three-and-a-half feet high and two-and-a-half feet deep. Its length may vary according to the number of rooms in the hotel, the duties performed at the front desk, and the physical design of the hotel lobby. Signs may be placed on or above the desk to direct guests to the proper activity center for registration, cashier, check-out, information and mail handling, and other guest services. Front desk designs usually screen front office forms and equipment from guests or visitors standing at the desk, since much front office information is considered confidential and proprietary. Functional Organization The functional efficiency of a front desk depends on the organization of the work stations located at the desk. The design and layout of the desk should provide each front desk employee with easy access to the equipment, forms, and supplies necessary for his or her assigned tasks. Ideally, the front desk layout is planned and its furniture and fixtures situated according to the functions performed at designated activity centers along the desk. However, as lines of responsibility overlap among front desk personnel, largely because of cross-training and computerization, more front desks are being designed with position flexibility in mind. Efficiency is an important concern in front office design. Whenever front office employees have to turn their backs to guests, leave guests unattended, or take too long to complete a process, front desk design could be improved. Studies that examine how front office personnel interact with guests and equipment often suggest changes in front desk design. Design Alternatives Various hotel companies have researched industry needs and redesigned front desk areas to make them more aesthetically appealing. For instance, there is general agreement that traditional mail, message, and key racks visible to traffic in the lobby are unnecessary at the front desk, not to mention unwise from a security standpoint. Mail, messages, and keys can be stored in drawers or slots located under or away from the front desk, thereby making the front desk area appear more streamlined. Some hotels have circular or semicircular front desk structures. The circular desk encloses the front desk staff with its counter. In a semicircular arrangement, there is normally a straight wall at the back of the desk with a door leading to front office support services. Circular and semicircular desks allow greater service to more guests at the same time, and also tend to appear more modern and innovative than the traditional straight desk. This design, however, presents potential problems in the sense that guests can approach the desk from all angles, even though front office work stations and equipment are situated in specific spots. Extra care may be necessary to ensure the success of these and other innovative desk designs.

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Some hotels have experimented with a lobby arrangement that includes no front desk at all. In a desk-less environment, registration and room assignment may be handled at a small table or personal desk in a lowtraffic area of the lobby. A concierge, receptionist, or special guest service employee may serve as guest host. Although a guest host may perform many of the same functions as a front desk agent, the service is intended to be more personal and informal. Guests often enjoy a casual, seated registration instead of a long wait standing in line at a front desk counter. Still other hotels use self check-in terminals, with a small reception desk for those guests who are uncomfortable using technology or who may have questions.

Accessibility. The traditional standards for front desk design may not satisfy the physical needs of all hotel guests. Accessibility is an important consideration in the general design of a hotel, especially its front office area. The Americans with Disabilities Act stipulates that companies that serve the general public must make public areas and services readily accessible to the disabled. This means that public areas and accommodations in new and renovated lodging properties must be barrier-free, including front desk areas. According to the law, existing businesses will be required to make architectural and physical changes that are "readily achievable" given the company's size and financial resources. This may require changes in the size and setup of doorways, as well as the removal of architectural barriers such as curbs and steps. The law may also require that a portion of the front desk be of a more accessible height and design to accommodate people using wheelchairs or people with other special needs. When the front desk 116

design cannot be changed, it is customary for front desk agents to go, when necessary, to the guest side of the desk to accommodate disabled travelers. Exhibit 5 presents a sample front desk design. Point-of-Sale System. In small hotels, the front desk also serves as a place where guests can purchase items they may need while traveling. A front desk point-of-sale (POS) terminal is used to record cash transactions and maintain cash balances for front desk sales not associated with the guest cycle, such as the sale of newspapers, sundries, or other items. In certain limited-service hotels, like Hilton Garden Inns, Holiday Inn Express, and others, the hotel offers a pantry of items that guests can purchase, such as frozen meal entres, canned food items, breakfast foods, toiletries, and snacks. Guests are expected to pay for these items at the front desk; the items are rung up by the front office cashier and posted via the POS system. Many specialized functions can be built into a POS system to facilitate close monitoring of front office transactions. The POS system may also be interfaced with a property management system to provide more complete control over financial transactions and folio handling. POS systems also include printers for producing transaction records, sales receipts, imprinted vouchers, and inventory and price control reports. POS systems typically record the:

Amount of the transaction Description of the transaction Affected departments Type of transaction Identity of the cashier Amount tendered Method of payment

A POS cash drawer may be divided into several money compartments, or may have removable drawers for individual cashier cash banks. Support Devices. The front office may have numerous pieces of automated and manual support equipment. These devices can make cumbersome functions straightforward, facilitate information handling, and provide additional storage for data and files. The following paragraphs describe just a few of the support devices found at a front desk. A credit card reader captures the card number, expiration date, and cardholder's name assigned to the card. These devices may be manual, electric, or online and may be connected to an automatic call-out authorization terminal or Internet site. In many cases, they are integrated with the property management system and can be used for several functions involving electronic data capture. Data that is magnetically encoded and stored on the magnetic stripe on the back of a plastic card is transmitted to a clearinghouse or authorization service. On the basis of the transaction data and the cardholder's account status, the clearinghouse or authorization service either approves or disapproves the transaction. The technology integrates the magnetic stripe reader and the front office system and allows more information to be exchanged between the authorization service and the guest's electronic record. Guest loyalty programs often have plastic membership cards with a magnetic stripe. Membership information, including reward points, may be verified when guests check in by swiping the card.

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An alternative form of settlement is the smart card. The American Express Blue Card is an example of a smart card. Smart cards contain an integrated circuit on a silicon chip imbedded in them (instead of, or in addition to, a magnetic stripe) to store cardholder information. A smart card is capable of storing much more information than a magnetic stripe card. As more travelers use smart cards, the companies issuing them will be adding features to make them more useful. For example, hotels equipped with guestroom locking devices that use similar smart card technology for their keys can use the guest's own smart card to allow guest room access. Security monitors, such as closed-circuit television monitors, allow front office or security personnel to monitor certain areas of the hotel from a central location. Front desks are also usually equipped with time stamps that staff uses to record when a guest actually checks in and out. Front desk staff also uses file boxes for storing the registration records of arriving and in-house guests. The file boxes usually have dividers with the letters of the alphabet on one set and room numbers on another set. The pre-printed registration cards of expected guests are filed alphabetically, and the records of in-house guests are filed by room number. Telecommunications Hotels must be able to support a broad range of telephone calls with adequate technology to ensure an efficient, effective telecommunications system. There are many types of calls a guest may place during a hotel stay:

Local calls Direct-dial long-distance calls Calling card calls Credit card calls Collect calls Third-party calls Person-to-person calls Billed-to-room calls International calls Toll-free calls 900 or premium-price calls Voice over Internet Protocol (VoIP) calls

While all of these calls can be completed without operator assistance, guests sometimes ask front office staff for assistance in placing calls. In addition, a single call often fits into more than one category of call. For example, a direct-dial long-distance call could also be a credit card call; a person-to-person call could also be a collect call; a local call could be to an Internet service provider; and an international call could be a person-to-person credit card call. For many of these types of calls, the hotel can charge guests a surcharge for use of its telephone technology. 118

A local call terminates within a local calling area and typically is billed on a per-call basis rather than on a per-minute basis. The local phone company controls local telephone calls. Hotels may charge guests on a per-call basis or offer unlimited local calling for a flat daily charge. Some hotels do not charge guests for local calls. Each chain or individual hotel determines its own local call policy. Direct-dial long-distance calls are the most common calls hotel guests place. A long-distance call terminates outside the local calling area. Once a long-distance number is dialed, it is distributed over the hotel's telephone lines through the local phone company office, which routes the call to whatever longdistance carrier the hotel selected to handle its long-distance traffic. Direct-dial long-distance calls are also referred to as "1+" calls, since guests are typically required to first dial a "1" after accessing an outside line, then dial the area code and the telephone number they are attempting to reach. Together, this string of numbers eliminates the need for telephone operator involvement. Calling card calls are typically billed to a code number on a calling card issued by either a phone company or by a private billing company. Calling card codes may be a combination of the cardholder's area code and telephone number plus a multi-digit personal identification number (PIN), or it may be a scrambled set of numbers unrelated to the cardholder's telephone number. It is important to note that calling cards are not credit cards. Most call placement with a calling card is typically accomplished by either a "0+" procedure or the use of a toll-free telephone access number. With a "0+" call, the guest dials "0" plus the number he or she is trying to reach. Then, the guest hears a "bong" or tone signaling him or her to input the calling card number. When a guest uses a toll-free number, the access number is dialed first, and then the card number and number being called are dialed. Whenever a calling card is used, the hotel does not bill the guest for telephone charges, but may attach a surcharge or usage fee. The telephone company takes responsibility for billing the call to the calling card account. Many telephone companies accept credit cards such as Visa, MasterCard, and American Express as valid phone-charge cards. Call placement is similar to calling card procedures. With collect calls, a guest first dials "0" and the full telephone number, then waits for a telephone company operator. The guest informs the operator that the call is collect, to be billed to the receiving party. The operator stays on the line and verifies that the receiving party accepts the charge. Most telephone companies pay a commission to the hotel for collect calls placed by guests. Third-party calls are similar to collect calls, except that the billed number is not the called number. In most cases, the operator may require that someone at the third-party number accept the charge before putting the call through. The hotel's telephone company bills the third party and the amount does not appear on the guest's folio. The hotel may apply a surcharge or other fee for this service. Person-to-person calls are not connected unless a specific party, named by the caller, verifies that he or she is on the line. This is an expensive call, but has no cost if the requested party is not available. Unlike credit card, collect, or third-party calls, a person-to-person call is charged to the number initiating the call. In addition, the hotel may apply a surcharge or other fee for this service. Most hotel telephone equipment today includes a "call accounting" billing system. The system detects how the call is being placed (direct dial, calling card, etc.) and then calculates a guest charge once the call is finished. The charge can then be sent electronically to the hotel property management system for automatic posting to the guest's account. Operator-assisted and person-to-person calls are charged to the hotel, not the guest, since the call goes through the hotel operator. In these cases, the telephone company notifies the hotel of the cost of the call within a few minutes of the end of the call. The hotel operator must then match the cost with the guest who placed it, and have the front desk post the charge to the guest's account (billed to the room). 119

International calls can be direct-dialed or placed with operator assistance. To direct-dial an international call, the guest typically dials an international access code, a country code, a city code, and the telephone number. Similar to long-distance calls, the hotel bills the guest for direct-dialed international calls, while the phone company bills the guest for calling card or credit card calls. Toll-free calls can be direct-dialed from a guestroom as either local calls or long-distance calls. In either case, the guest receives access to an outside line and dials "1" plus the toll-free access number (such as 800, 888, 877, etc.). The hotel may apply a surcharge or other fee for this service. Calls made to businesses that charge callers a fee for the call (a fee separate from the one the telephone company charges for placing the call) may be 900 or premium-price calls. Problems can arise when these types of calls are made from guestrooms. Guests may be shocked and mistakenly blame the hotel upon receiving premium call charges. The businesses involved in premium-price telephone services charge widely varying rates. One business might charge $1.50 per minute; another might charge $3.50 for the first minute and $2.00 for each additional minute; a third business might charge a flat rate of $9.00 a call. Another problem that arises is that the hotel's telephone system may be able to track only the costs involved in placing the call and not the premium charged by the premium service company. A guest could settle a phone charge of $2.50 at check-out and the hotel could later receive a premium call bill of $40.50 for the same call. It is for these reasons that some hotels choose to block premium-price calls from guestrooms. Calls placed and connected over Internet technology, as opposed to common carrier networks, tend to be less expensive. Use of the Internet for telecommunications is termed Voice over Internet Protocol (VoIP) and represents a viable alternative to traditional phone lines and switching equipment. Note that telephone departments used to be significant revenue and profit producers for hotels. The United States government deregulated telephone charges in the mid-1980s. This was seen as a benefit for the hotel industry, which promptly raised prices to guests. Hotel telephone departments, which for decades had been considered cost centers, were suddenly regarded as revenue centers, as the price increases brought new profits to hotels. Hotel management thought that guests would accept the higher prices for telephone services, since they were a captive market and had to use hotel telephones if they wanted to make calls from the hotel. However, guests did not take the price increases well, to the point that many states and the federal government adopted regulations requiring hotels to inform guests of the costs of placing a call from a hotel phone. This had a dampening effect on hotel telephone revenue. The biggest blow, however, came with the invention and widespread use of cell phones. As cell phones have become more popular, hotel telephone revenues have decreased significantly. As a result, hotel telephone departments are again considered cost centers, and hotel managers are often satisfied if telephone revenues equal costs. Telecommunications Equipment To serve guests efficiently and price calls properly, hotels need the right mix of telephone equipment and lines. There are many types of telephone lines or trunks. Each type of line is designed to carry certain types of calls. There are lines dedicated to incoming calls, others dedicated to outbound calls, and twoway lines as well. Based on its level of guest service, each hotel must determine the types and number of lines it wishes to have. Systems and equipment that hotels use for placing and pricing calls include:

Telephone switches (also known as PBX systems) Call accounting systems Guestroom phones 120

Pay phones Pagers and cell phones Other technology

PBX Systems. Historically, an important piece of equipment controlling phone service at hotels was the switchboard or private branch exchange (PBX). This equipment takes inbound calls to the PBX operator's console. The hotel operator sends these calls on to particular extensions or station lines. These might be at the front desk or in guestrooms, offices, the kitchen, or other areas. This arrangement allows the hotel to have a large number of telephones share a limited number of telephone lines. Outbound calls are usually placed without the hotel operator's help, although they go through the same equipment. Some hotel PBX systems have advanced features enabling them to handle data as well as voice communications. For example, room attendants can update the status of guestrooms by dialing a code from guestroom phones. Call Accounting Systems. These systems enable hotel-based technology to place, price, and post telephone calls without assistance from phone company operators or front desk staff. A call accounting system (CAS) is a set of software programs that initiates the placement, pricing, and posting of calls. The CAS interfaces with a hotel's property management system to electronically post charges to guest folios or to print charge slips for the front desk staff to post appropriately. Some CASs have a least-cost-routing component that routes a dialed call to the type of line that can carry the call at the lowest cost to the hotel. Prior to folio posting, the CAS may add a surcharge or other property-imposed fee (PIF). Guestroom Phones. Along with other telecommunications equipment, guestroom phones are increasing in sophistication and capabilities. For example, guests can plug personal computers or portable fax machines into guestroom phones supporting an input jack for connectivity. Many hotels provide two-line guestroom phones, so one line can accommodate an electronic interchange while the guest talks on the other line. Other features found on some guestroom phones include: conference calling, caller ID, speed dialing, hold buttons, call-waiting, hands-free speakers, voice messaging, and a message-waiting alert. Some phones combine voice data, mail, fax, and other technologies so guests can retrieve messages, order room service, receive written documents, and place wake-up call requests. In addition, some hotels place cordless phones in guestrooms. A cordless phone uses a radio frequency to connect to the telephone system. Although guests like the convenience of cordless, these phones are not as secure or reliable as wired telephones. Pay Phones. Hotels rarely purchase their own pay phones, due to the potentially high maintenance costs. These phones generally take a lot of abuse and are placed in public areas such as in or near the hotel lobby, meeting rooms, conference areas, banquet rooms, and restaurants. Many hotels have their pay phones supplied and maintained by a company other than their local phone company. Pay phones are not connected to the hotel's PBX system or CAS, so the hotel receives no direct revenue from their operation. Instead, most telephone carriers contract to pay the hotel a commission on operator-assisted long-distance calls placed from pay phones. The carrier sets the rates, bills the guest directly, and sends the hotel an agreed-upon commission or other fee. Most hotels have reduced their number of pay phones because so many guests have their own cell phones, but pay phones remain a welcome convenience for some guests. Pagers and Cell Phones. Some hotels offer a pager or cell phone to guests at check-in. In the case of cell phones, the hotel bills the guest for the number of minutes of recorded use, as indicated by the phone's usage meter. Calls placed through cell phones may not go through the hotel's CAS and therefore are priced outside the system and may require manual posting to the appropriate guest folios. Some hotels have begun experimenting with internal cell phones that allow only private-issue cell phones to work on the hotel's premises. Internal cell phones may be issued to guests in lieu of in-room phones. 121

Other Technology. Often, hotels install telephone systems with sophisticated features for reasons other than just cost effectiveness. Examples include automatic call dispensing systems, telephone/room status systems, Internet access, and call detection equipment. In many cases, automatic call dispensing is limited to wake-up services. The operator enters the room number and time for each wake-up call into the computer. Some systems allow guests to place their own wake-up request. At the scheduled time, a telephone call is automatically placed to the guest's room. Once the guest answers the call, the computer may activate a synthesized voice that reports the current time, temperature, and weather conditions. Another variation on automatic call dispensing allows the hotel to call all rooms in case of an emergency or to call all guests associated with a specific group to remind them of a meeting, event, or function. Telephone/room status systems can assist with rooms management and prohibit the unauthorized use of telephones in vacant rooms. Housekeeping or room service employees can use guestroom telephones to enter data concerning room service charges (for example, what was consumed from an in-room bar), maintenance information, or current room status information. Since these features improve communication, they also contribute to lower payroll costs and help ensure a more efficient in-room bar restocking system for guestrooms. An increasingly popular guestroom service is Internet access. While there are alternative methods to Internet access via telephone, dial-up services may be offered. Hotels may charge guests on a pertransaction, fixed-fee, or daily-fee basis. Guests who use guestroom phones for Internet access may tie up phone lines for extended periods of time, however, thereby precluding other guests from using them. While some hotels have chosen to expand their telephone systems, others have elected to install alternate systems that do not rely on telephone switches or trunk lines. These systems involve high-speed Internet access (HSIA) data services via an Internet service provider (ISP). Often there is a revenue-sharing agreement between the hotel and the ISP. These systems may be wired or wireless, and are much faster than dial-up telephone connections. The industry is also using call detection software, which is added to the hotel's call accounting system to sense when a placed call is answered. Call detection equipment can pinpoint the exact moment a telephone call is connected, thereby improving billing accuracy and leading to a reduction in guest account discrepancies, since only answered calls appear on a guest's folio.

Section Keywords call accounting system (CAS) A device linked to the hotel telephone system that accurately accounts for guest telephone calls by identifying each phone number dialed from guestroom telephones and tracking charges.

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Competency 4 Objective: Identify and describe property management systems used by the front office. Property Management Systems Many front office property management systems are available, and they do not operate identically. However, some generalizations about property management systems may illustrate the nature of front office applications. A property management system consists of sets of automated software packages that can support a variety of activities in front and back office areas. Four common front office software packages are designed to help front office employees perform functions related to:

Reservations management Rooms management Guest account management General management

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Exhibit 6 summarizes front office system applications. Reservations Management Software An in-house reservations software module enables a hotel to rapidly process room requests and generate timely and accurate rooms, revenue, and forecasting reports. Most lodging chains participate in remote reservation networks known as global distribution systems (GDSs), Internet distribution systems (IDSs), and central reservation systems (CRSs). GDSs capture, process, and forward reservation information generated mostly by travel agents and airline companies. The largest and best-known worldwide GDSs are Sabre, Galileo International, Amadeus, and Worldspan. IDSs are intermediary websites that represent hotel companies and sell overnight accommodations on a commission or mark-up fee basis. IDSs capture guest reservation data and may be automatically connected to the hotel's reservation management system through a GDS or CRS. Examples of Internet distribution sites include travelocity.com, travelweb.com, priceline.com, and orbitz.com. CRSs are often operated by the hotel company and typically communicate reservations data, track rooms reserved, control reservations by room type and room rate, and monitor the number of reservations received. Most mirror the property management system's reservation information. A property using an in-house reservation module may be able to receive data sent directly from any or all remote reservations networks. Automated in-house reservations records, files, and revenue forecasts are immediately updated as reservation data are received at the hotel. It is through electronic file updating that the system remains current and in control of reservations activities. Many systems allow real time, twoway communication between remote reservations networks and property-level applications, enabling instantaneous updates of inventory and guest information. This way, accurate guestroom inventories and pricing are shared between systems (this is often referred to as seamless integration). In addition, previously received reservation data can be automatically reformatted into pre-registration applications, and a series of appropriate reports can be generated. Various reservation management reports, summarizing reservation data and guest account status information, can also be generated, as well as letters or e-mails of reservation confirmation to guests with processed reservations. Reservations management software also includes upgraded rate control features, guest history modules, and more detailed property information such as bed types, guestroom views, in-room amenities, convention space, public areas, and recreational facilities, and other special features. Reservations management software can also track deposits due, request deposits, and record deposit payments made. This is very important to resorts, which often require deposits to confirm reservation requests. Hotels also may require deposits for special occasions, such as a local special events weekend. Rooms Management Software Rooms management software maintains current information on the status of rooms, provides information on room rates, assists in room assignment during registration, and helps front office personnel coordinate guest services. A rooms management module can also provide rapid access to room availability data during certain aspects of the reservation process. This information can be especially useful in short-term reservation confirmation and rooms revenue forecasting. Since the rooms management module has replaced most traditional front office equipment, it is often a major area of consideration when a hotel is selecting one property management system over another. Rooms management software can provide front desk employees with a summary of each room's status. For example, a front desk employee may enter a room number at a front office terminal, and the current status of the room will be displayed on the terminal's screen. Once the room has been cleaned and readied for occupancy, the housekeeping staff can communicate the room's updated status through a device 124

located in the housekeeping department, or, in some cases, through the guestroom telephone. With a property management system, changes in room status can be instantaneously communicated to the front office system. In addition, front desk agents can enter a guest's specific requests into the system to find a room that meets his or her needs. For example, an agent can request information on all vacant and clean rooms facing the golf course that have king-size beds. Some rooms management systems also feature maintenance and special-request dispatch capabilities. For example, a room with an air conditioning problem or needing extra towels can be recorded through the property management system and a hotel engineer or housekeeper can be dispatched to fulfill the request. Rooms management software also assists the reservations function. When rooms are temporarily taken out of inventory for maintenance or cleaning, the number of available rooms in the reservation office is automatically reduced. This helps control future room inventory and ensure that all guests have rooms ready when they arrive. Guest Account Management Software Guest account management software increases the hotel's control over guest accounts and significantly modifies the front office audit routine. Guest accounts are maintained electronically, thereby eliminating the need for folio cards, folio trays, and account posting machines. The guest accounting module monitors predetermined guest credit limits and provides flexibility through multiple folio formats. At check-out, previously approved outstanding account balances may be automatically transferred to an appropriate back office accounts receivable file for subsequent billing and collection. Account management capabilities represent major benefits of a property management system. For example, a credit manager in a large convention hotel can monitor the credit limits of all guests and report all accounts that are approaching or have exceeded their limits. When the hotel's revenue outlets are connected to the front office system, remote point-of-sale terminals can communicate guest charges to the property management system. These charges will be automatically posted to appropriate electronic guest folios. Automatic posting procedures are intended to improve efficiency while reducing the number of late charges (charges posted to a guest account after the guest has checked out of the hotel). General Management Software General management software cannot operate independently of other front office software packages. General management applications tend to be report-generating packages that depend on data collected through reservations management, rooms management, and guest account management programs. For example, general management software may be able to generate a report showing the day's expected arrivals and the number of rooms available for occupancya combination of reservations and rooms management data. In addition to generating reports, the general management module serves as the natural link between front and back office system interface applications. Back Office Interfaces A comprehensive property management system involves integrating the hotel's front and back office areas. Although separate front and back office software packages can operate independently of one another, integrated systems offer the hotel a full range of control over a variety of operational areas. Such areas include room sales, telephone call accounting, payroll, and account analysis. An integrated system cannot produce complete financial statements unless all the required data are stored in an accessible database. Many reports generated by the back office system depend on the front office system's collection of data. 125

Most property management system vendors offer several back office application modules. Four popular back office applications are:

General ledger accounting software, consisting of accounts receivable and accounts payable application packages. Accounts receivable software monitors guest accounts and account billing and collection when integrated with the front office guest accounting module. Accounts payable software tracks hotel purchases and helps the hotel maintain sufficient cash flow to satisfy its debts. Human resources software may include payroll accounting, personnel recordkeeping, and labor scheduling. Payroll accounting includes time and attendance records, pay distribution, and tax withholdings. Personnel records include withholding and deductions, labor history, and job performance evaluations. Labor scheduling involves tracking employee skills and availability in relation to the hotel's staffing requirements. Financial reporting software enables the hotel to develop a chart of accounts to help in producing balance sheets, income statements, and transaction analysis reports. Inventory control software monitors stocking levels, purchase ordering, and stock rotation. Additional computations include inventory usage, variance, valuation, and extensions.

System Interfaces A variety of property management system interface applications are available in an automated environment. Non-Guest-Operated Interfaces. Common interfaces that are not initiated by guest activity include the following:

A point-of-sale (POS) system allows guest account transactions to be quickly transmitted from remote revenue centers to the property management system for automatic posting to electronic folios. A call accounting system (CAS) directs, prices, and tracks guestroom telephone use for pricing and automatic posting to electronic folios. An electronic locking system (ELS) typically interfaces with the rooms management module to provide enhanced guest security and service. An energy management system (EMS) automatically controls the temperature, humidity, and air movement in public spaces and guestrooms through a rooms management interface.

An EMS is a computer-based control system designed to automatically manage the operation of mechanical equipment in a lodging property. An EMS interfaced to a property management system offers a number of opportunities for energy control. For example, assume that 50-percent occupancy is forecasted for tonight at a 300-room hotel. Minimizing the hotel's energy consumption on this night becomes a factor in determining which rooms to sell. One approach would be to assign guests only to the lower floors and significantly reduce the energy demands of rooms on the upper floors. By interfacing an EMS with a front office rooms management system, it is possible to automatically control room assignments and achieve desired energy cost savings.

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Guest-Operated Interfaces. Hotels can provide automated conveniences and services by installing a variety of guest-operated devices. In some properties, guests may inquire about in-house events and local activities through automated information kiosks in public areas, or through the television or a portable communication device in their guestrooms. Connecting a printer to an information terminal enables guests to print out customized information. Guests can review their folios and complete the check-out process from the comfort and privacy of their guestrooms. In-room televisions or other communication devices interfaced with a guest accounting module enable guests to simultaneously access folio data and to approve and settle their accounts by selecting a pre-approved method of settlement. Guestroom telephones interfaced with the property management system may also be used for this purpose. In-room specialty devices linked to external information services allow guests to access e-mail, Internet websites, transportation schedules, local restaurant and entertainment guides, stock market reports, news and sports updates, shopping catalogs, and video games. An in-room entertainment system can be interfaced with a front office accounting module or can function as an independent system. In-room entertainment systems allow guests to access various forms of entertainment through their guestroom televisions. If there is a charge for the service, such as a pay-perview movie, a video game, or Internet access, the charge can be automatically calculated and posted to the guest's electronic folio. To keep guests from inadvertently tuning to a pay channel, the television is usually preset to a non-pay channel or preview channel. Incorporating a preview channel can significantly reduce the number of guest disputes about the validity of pay TV or movie charges. In-room entertainment systems may even require the guest to dial an in-house department to request that a pay channel be activated. In addition, a preview channel provides the hotel with advertising opportunities. The preview channel can display information about the hotel's facilities. The hotel can also sell advertising for local attractions, thereby creating a new revenue source. There are two types of in-room vending systems. Non-automated honor bars consist of beverage and snack items in both dry and cold storage areas within a guestroom. The bar's beginning inventory level is recorded, and hotel employees on a daily basis note changes in inventory. Appropriate charges for missing or consumed items are noted for later posting to the guest's folio. Since honor bars are available at all times, this system often results in an unusually high volume of late charge postings. Automated honor bars or in-room vending equipment may contain fiber-optic sensors that record the removal of stored products from designated compartments. When a sensor is triggered, these devices assume a sale and transmit point-of-purchase information to a POS microprocessor that, in turn, communicates to the front office accounting module for electronic folio posting. Other technology-based guest amenities include the in-room fax machine and centralized printer/server. Faxes can be sent directly to and from the guestroom without hotel staff intervention. This amenity is popular in hotels serving meeting, convention, and business travelers, and may link with the hotel's telephone system, which automatically calculates the cost of the fax and forwards the charge for folio posting. With a centralized printer, guests upload their documents through an Internet connection, then leave their guestrooms and go to the hotel's business center to download and print their documents. Guest Services and Technology. Outstanding guest services can provide a major competitive advantage in attracting guests. For example, in-room entertainment companies are developing systems to provide local information through guestroom software browsers, satellite television and radios, hand-held mapping devices, and personal digital assistants (PDAs). Guests can locate restaurants, museums, shops, and other points of interest through access to the Internet, including websites, virtual shopping malls, e-mail, and other online resources and services. In a similar way, hotels can promote their own services or other hotels 127

in the chain. If a guest is interested in a particular hotel, the system will automatically connect to the chain's reservation system and provide access to a reservation-booking engine. High-speed Internet access (HSIA) service has evolved from an upgrade amenity to a "must-have" for most hotels. HSIA service, whether wired or wireless, is usually provided in guestrooms as well as in public areas and meeting facilities. At resort locations, wireless HSIA may also be available at pools and recreational facilities, as well as on the beach. Hotels may also offer Internet access through guestroom televisions, the hotel business center, and informational kiosks located throughout the property. In some properties, guests may opt to use the guestroom telephone for alternative Internet access. While guest Internet access often is complimentary, some hotel brands charge for the service ($5.00 to $20.00 per day) based on market conditions. Internet service has also become a major requirement for hotels with meeting facilities. Some hotel brands do not charge guests separately for Internet service; instead, they offer it as a complimentary guest amenity. Hotels usually charge $200 to $500 per day to provide Internet access to groups holding meetings on the premises. Meeting room Internet service usually requires higher speeds and greater bandwidth, so there are higher costs the hotel must recover. Many hotels now provide business centers featuring personal computers, fax machines, photocopiers, conference telephones, and Internet access. There may be charges for use of hardware and software as well as network access arranged through the business center. Sales Automation Systems Property management systems and sales automation systems are usually implemented in tandem. Once viewed as a way to manage group reservation blocks and meeting-room space availability, sales automation software should be viewed as a strategic tool that maximizes revenues while tracking the monetary value of group business relationships. For the front office, this can be vitally important. By entering group guestroom allocations into a sales automation application, a hotel salesperson can evaluate the number of available rooms on a continuous basis. As with a front office reservation module, group allocations are expected to decrease with each group room reservation commitment. The group allocation will increase when groups give room reservations back to the hotel, or management allocates more rooms to a particular group. Maintaining accurate and consistent information about the status of group room reservations (whether the rooms are available or blocked) in both the property management and sales automation systems is critical. The hotel reservations staff may actually have rooms available to sell but be unaware of them, since they may incorrectly appear allocated to a group in the sales automation system even though the group has yet to commit to those rooms. Conversely, group salespersons may oversell group allocations, thereby resulting in no rooms available. To avoid conflicts between these two systems, one salesperson should be responsible for ensuring that the information is properly balanced in each system. Advanced property management systems often provide a direct interface to link the sales automation function. Interfacing gives group sales managers a clear view of rooms inventory in the property management system, since both systems rely on a single data source. In addition, when group room reservations are returned to the hotel, the rooms will be made immediately available for sale. Sales automation systems collect sufficient data to identify booking trends, and have sufficient memory to track group histories. Most group tracking systems store actual group guestroom usage (called group pickup), room rates, and non-room (food and beverage, facilities, amenities, etc.) rates. The next time the group books at the hotel, management will know the group's history and thereby be better able to allocate 128

a group block. Some chains provide affiliate properties access to centralized group history files through a database system. This allows a hotel in Los Angeles, say, to research a group that stayed earlier at an affiliate hotel in Atlanta. Group history files store information on group sales and revenues and the number of rooms blocked (allocated) and booked (reserved). In addition, banquet menus, meeting space usage, VIPs, billing history, and many other pieces of important information may also be available. Such information can be important to the front office. For example, knowing the check-in and check-out pattern of group members may prove helpful for front office staffing. Knowing the group's history regarding its number of no-shows, early departures, suites reserved, and rooms with two beds reserved may also be helpful.

Section Keywords group pickup The number of guestrooms a group actually uses.

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Summary The functions, activities, and areas of the front office are geared toward supporting guest transactions and services. To many guests, the front office represents the hotel. It is the main source for nearly every guest service the hotel provides. The financial transactions a guest makes while staying at a hotel determine the flow of business through the property. This flow of business can be divided into four stages: pre-arrival, arrival, occupancy, and departure. Within each stage, important front office tasks related to guest services and guest accounting can be identified and analyzed. Front office employees need to be aware of guest services and guest accounting activities throughout the guest stay. The guest chooses a hotel during the pre-arrival stage of the guest cycle. The arrival stage of the guest cycle includes registration and rooming functions. During the occupancy stage, the front office provides the guest with services, information, and supplies. Other guest services and guest accounting aspects of the guest cycle are completed during the cycle's departure stage. Since activities and functions tend to overlap between stages, some properties have revised the traditional guest cycle into a sequence of presale, point-of-sale, and post-sale events. This sequence tends to improve coordination among hotel operating departments. Most front office functions are performed at the front desk. The front desk, prominently located in the lobby, is where guests register, request information and services, relate complaints, settle accounts, and check out. The functional efficiency of a front desk depends on its design and layout. The desk should provide each front desk employee with easy access to equipment, forms, and supplies necessary for performing assigned tasks. A property management system comprises software modules capable of supporting a variety of activities in front and back office areas. In addition, guest- and non-guest-operated interfaces can be connected to the hotel's property management system for enhanced efficiency.

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Internet Sites For more information, visit the following Internet sites. Remember that Internet addresses can change without notice. If the site is no longer there, you can use a search engine to look for additional sites. Galaxy Hotel Systems MICROS Orbitz Pegasus Solutions Priceline Sabre Holdings Travelocity Travelport Travelweb

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Case Study 1 Making the Most of Moments of Truth #1Gordon Sumner's Food for Thought Freelance writer Gordon Sumner stepped off the hotel elevator and glanced at his watch. It was 10:00 A.M. on a Thursday and he was grateful to have had the chance to sleep in late after his 11:30 P.M. arrival the night before. Now the only thing he needed to start the day off right was a hearty breakfast. He headed to the front desk for directions to the hotel restaurant. "Good morning," the man behind the desk said. "How can I help you?" "You have a restaurant here, don't you?" "Yes, we do. In fact, it just received a Golden Palate award from our city magazine." "Well, I don't know if I'd recognize award-winning food if I ate it, but I would like a good breakfast," Gordon said. "Then we have just the place for you, sir." Gordon got directions from the agent and within two minutes he was sitting at a table in a bright, welldecorated restaurant. Looking around, he noticed half-a-dozen other people lingering over breakfast and coffee at nearby tables. From what he could see, the food did look appetizing. After several minutes passed without a visit from a server, Gordon finally noticed a server walking across the other side of the room. He caught her attention and asked to see a menu. Ten minutes later, he had to flag her down again. Goodness, he thought, the food must be spectacular if this place can win awards despite such poor service. "Can I help you, sir?" she said as she approached his table. "I'd like to order breakfast. Could I get a" "I'm sorry, sir, but we stopped serving breakfast at 9:45." "Well, then, I guess an early lunch would be all right. I'm starving." The waitress bit her lip. "Actually, we don't begin serving lunch until 11:15. That's about another hour from now." It was frustrating to see people still enjoying their meals and to realize he wouldn't be able to join them. "All right," he said without enthusiasm, "could I get some coffee to go, then? Maybe I'll grab a newspaper from the gift shop and just" She was shaking her head. "I'm sorry, but the register is locked until lunch. We can't handle take-out orders."

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"I see," he said, wondering why the man at the front desk hadn't bothered to explain any of this. "So tell me: where can a guy get something to eat around here?" "You know, if I were you, I'd take the walkway over to the mall across the street. They have a pretty good food court." Twenty minutes later, Gordon passed through the lobby on his way back from the mall and his fast-food meal. The front desk agent called out to him, "And was your breakfast award- winning, sir?" "No, I can't say that it was," Gordon replied as he walked by. The agent looked stricken. "Oh. I'm sorry to hear that. I hope you'll give us the chance to serve you again." "Not likely," Gordon said under his breath as he stepped into the elevator. #2Freddie Bulsara: Dancers, with Wolves Reservations Manager Freddie Bulsara was looking forward to a glorious Sunday, thanks to his booking prowess. This weekend marked a double coup. On Saturday, the hotel had hosted 230 young ballet dancers and their adult chaperones who were in town for a Sunday morning dance competition. Today, they would check out, opening up a large block of rooms that would matchalmost to the roomthe needs of a 200-member contingent of conventioneers from the Royal Fraternal Order of Wolves. Freddie marveled at the perfection of his plan. The dancers would check out by 9:00 A.M. , before leaving for their competition; the Wolves were to begin arriving at exactly 1:00 P.M. Groups like this are really going to put this property on the map, Freddie told himself. But something wasn't right. When Freddie stopped at the front desk to ask how things had gone with the dancers, LeighAnne Crenshaw looked up from her work and said, "I can't really say. I'll let you know once they leave." Freddie felt his heart skip a beat. "It's 11:45, LeighAnne. What are you talking about?" "When I came in this morning, I found a note here that says the dancers asked to be allowed a late checkout, after their competition. I guess a lot of them wanted to be able to come back to their rooms and change their clothes before leaving. Their group leader had it all arranged." "With whom?" LeighAnne shrugged. "There's no name on the note, but it looks like Brian's handwriting. He would have been working the front desk when they all came in last night." Brian. A new hire who hadn't been on the job for more than two months. His misguided need to do anything a guest asks is going to ruin everything I've worked for, Freddie thought. "Do you know when they'll actually be checking out, then?" "Well, the competition started at 9:30, and they said it was about two hours long. With travel time, I'd guess they'll be coming back within the next 30 minutes, if that tells you anything." 133

It tells me we won't have time for housekeeping to finish with the rooms before the Wolves get here, Freddie thought. We'll have to stall the conventioneers until their rooms are ready. "I take that back," LeighAnne said, nodding toward the front entrance. "That looks like their bus now." "Thank goodness!" Freddie said. "The sooner they get back to their rooms, the sooner we can clear them out and get housekeeping started. It might be tight, but" Freddie stopped mid-sentence. His mouth dropped open as the bus doors sprang open and the passengers made their way across the sidewalk to the revolving doors. He expected a stream of little girls in pink tutus. What he saw was a huge pack of middle-aged men wearing wolf ears and shouting, laughing, and punching each other in the arm. "Oh no," Freddie whispered. He glanced at the clock as the first members of the Royal Fraternal Order of Wolves crossed the lobby toward the front desk. The man in fronta tall, barrel-chested individualtugged off his wolf ears and stuck out his hand. "You must be Freddie!" he said with a grin. "Darrell Drucker. We spoke on the phone!" Freddie tried to return the man's energetic handshake, but his heart wasn't in it. The Wolves were quickly filling up every available space in the lobby. "Hello, Mr. Drucker," he managed to say. "We weren't expecting you until one o'clock." Mr. Drucker looked taken aback. "Why, it's one o'clock right smack on the dot!" Then surprise slowly spread across his face. "We musta forgot to turn our watches back when we crossed that time zone!" he said with a grin. "Well, Freddie, just point us to our rooms, and we'll get out of your hair." "Actually, it's going to be" "Look at that!" one of the Wolves shouted across the lobby. He was smiling and pointing at the entrance, where dozens of pre-teen girls in tutus and pink and white tights were pressing their way through the doors and into the packed lobby. "They're ba-a-ack," LeighAnne said dryly, quoting a haunted-house movie from the 1980s. Freddie just hoped there was a ghost of a chance he would be able to keep everyone happy until the situation was straightened out. #3Reg Dwight: A Night to Remember It had been a quiet Monday night until front desk agent Reg Dwight picked up the telephone at 3 A.M. On the other end of the line was a representative from an international airline. "About half an hour ago, we received a bomb threat concerning a flight to London that already was fueled, filled with passengers, and preparing for take-off," the woman began. "For their own safety, we have had to deplane those passengers, and now we have 260 people who need rooms until we can clear the plane, scan the baggage, and arrange for alternate transportation. Can we send them your way for the duration?" Although Reg had worked many nights alone at the front desk, this was the first time he had ever faced a situation like this. He took a deep breath. "How many rooms would be involved?" 134

"With all the families and couples, we would need only about 175 rooms. The airline will of course cover the lodging costs, as well as one meal for everyone at your restaurant." Reg checked availability. The passengers would have to spread out over most of the hotel, but the rooms were there. He was just about to calculate the financial windfall of 175 rooms at a rack rate of $84 when the woman added, "At 'distressed passenger' rates, of course." Oh, Reg thought. That's $35 per room. Reg wasn't aware of any existing hotel policies for handling a situation like this. Although it definitely would not be a money-making propositionit actually cost $40 to deliver a guestroomReg thought the value of providing a needed service would outweigh any financial drawbacks. He hoped his supervisor would think so too. He told the caller to send the passengers his way and he would take care of them. Reg then asked to be kept informed of the guests' new travel arrangements as soon as they were established. He figured the guests would arrive tired, anxious, and angry about having to get off a plane in the middle of the night and stay longer than expected. He hoped that, by being able to answer many of their questions, he could put them at ease. "How soon will they arrive?" he asked. "The buses should be leaving within 15 minutes, so they will reach your hotel around four o'clock. Just one more thing. You may want to let passengers know that their carry-on and checked baggage will be sent over as soon as it is thoroughly scanned, but that may not be until six. We will send all the shoes over then too." Did she say "shoes"? "I'm sorry, I must go," she hurried on. "I will ring back as soon as we have any news to share. Thanks so much for working with us during this emergency." As soon as they hung up, Reg got on the phone. He knew he was going to need much more help than was normally available at 4 A.M. He called his supervisor at home, waking her to find out who he should contact. In addition to saying that she would come to work herself, she recommended that he call in kitchen, dining room, housekeeping, and front desk staff. Since she had also faced a similar situation before, she explained about the shoes. "Before passengers can deplane using the inflatable slides, they have to take their shoes off. They usually collect them later on the runway. But in situations like this, the airline will just dump them all in boxes and send them overunsorted, unpairedalong with a jumble of unidentified carry-on bags and checked luggage. We can put all the baggage in the Heritage Room. The shoes can go in the Carlton Room if Lorenzo hasn't already set up the A-V equipment for the noon meeting that's scheduled there. Hopefully, the shoes will be out in time to allow A-V setup just before the group has to have it." "I'll make sure that happens." "Tell you what. I'll be there as soon as I can to help with checking everyone in and covering whatever else needs to be covered. I'll give this some thought myself, but I'd like you to have a list ready for me of all the things you can think of that might be affected by having 260 possibly upset and worried guests arrivingand what those guests might want or need. We're just lucky we had the rooms to give them." Reg took a deep breath. "Lucky wasn't the first word that came to mind." 135

Discussion Questions 1. What steps could the staff at Gordon Sumner's hotel have taken to improve their service?

2. What factors were out of Freddie Bulsara's control? How could he have prepared for problems?

3. What might Reg Dwight's list of affected areas and guest wants/needs include?

Case Number: 3323CA The following industry experts helped generate and develop this case: Richard M. Brooks, CHA, Vice President, TWE Group; and S. Kenneth Hiller, CHA, General Manager, Holiday Inn, Beachwood, Ohio. This case also appears in Case Studies in Lodging Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 1998).

Case Study 2 Family Reunions: Worth the Hassle? Ten years ago, Mr. and Mrs. Johnson discovered the Boden Oceanside Resort and Lodge. Now they were checking in to the resort for the fourth time. But this time was special. They had planned a family reunion with their three children, their spouses, and five grandchildrenall of the grandchildren were under age 6. Mr. and Mrs. Johnson were the first to arrive after the long drive from the city. Their check-in went smoothly and they made dinner reservations for 13 people at 8 P.M. in the formal dining room. What is the value of a customer? Ten years ago, who at the front desk could have predicted that the Johnsons would become frequent return guests and that this year they would have their small family reunion at the resort? The week turned out to be a beautiful one for the Johnsons and their children's families. The front desk, on the other hand, was kept very busy by all of the requests. The staff wondered if they would survive the numerous families that had selected the resort for their reunions this summer. The many families were running the rooms division and restaurant staffs ragged. After the elder Johnsons checked in, the level of intensity seemed to take a quantum leap. The remaining members arrived in separate vehicles, each having driven the six hours from the city where they had met the night before. The young children were full of energy and the parents were frazzled from being in the car for so long with the kids. Two hours after check-in, the list of observations and special needs was growing. It included the following:

Although it was in the high 70s, the night-time low was predicted to be in the mid-40s. One family from Florida requested a space heater because they were accustomed to sleeping in 80-degree temperatures. The rooms in the lodge either have heat or no heat, with fans for moving the warm 136

air rather than air conditioning. In the summer, the heat is turned off. However, even on cool nights, which most guests appreciate, the lodge stays warmer than the outside air. The space heater was placed in the room upon check-in.

One of the Johnson children requested bumpers for the crib in her guestroom. Because the lodge had no bumpers, which are padded pillows to keep children sleeping in cribs from hitting the side walls, the bell attendant took extra pillows to the room. They were placed in the crib with the child screaming all the while. By 8 P.M. it was obvious that the Johnson party would not be eating in the formal dining room. One of the couples came to the desk and canceled the reservation, stating that they would all eat on their own in the less formal lounge area. At 10 P.M. , one of the families called down for room service. The kids had been too excited to sit in the lounge for their dinner and so didn't eat much. However, much to the family's disappointment, the lodge didn't have room service and didn't serve food after 9 P.M. One of the families walked through the lobby at least six times during their first three hours at the lodge. The mother was constantly saying "shhh" to the children while they ran around enjoying themselves. One of the families requested a room change to a smoking room. However, they would not accept a room on the ground floor. After a lengthy search, it was concluded that a room change would disrupt the expectations of many arriving guests over the next several days because the only available smoking room was on the ground floor of the lodge. The guests weren't moved after all.

At the front desk, Tabitha, the new front office manager, was shaking her head. This was only the first four hours of the Johnson family reunion at the lodge! What would the next four days be like? Was it worth it to attract families for reunions? The Johnsons didn't even seem to want to be together. They had all requested rooms a good distance away from one another. How did the parents feel about this? What kind of psychological toll would this one family have on the staff of the lodge over the next four days? But on the other hand, she considered, what would the revenue for the property be from this one family reunion? And what about future business? Could the staff continue to provide exceptional service to these guests even under the stressful circumstances? Tabitha was out of the office for the next few days on a brief vacation. When she returned, she asked about the Johnson reunion. No one recalled any unusual occurrences. They remembered the name and a few members of the party. She called up the folio to see whether they had any unusual requests or had done many of the activities offered at the resort. What she found was a total bill of $8,900 with guest charges mainly for rooms and meals. She wondered how many other families would generate nearly $10,000 worth of business in just four days at the lodge. She closed the folio, taking note of the importance of frequent guests and their loyalty. When the next guests checked in for the first time, she couldn't help wondering whether they would someday be frequent guests. Just a week later, she noticed that the lodge had sold six rooms for three nights to a family named Camper. When they checked in, it seemed like a small army had descended upon the resort. There were the grandmother and grandfather, their 6 grown children, and 18 grandchildren, for a total guest count of 26 people. The average daily revenue for this small group was projected to be at least $3,000. Tabitha struck up a conversation with the grandfather, asking whether anyone from this party had stayed with at the lodge in the past. He told her that no one had, but that they'd heard about it from friends over the years. 137

As the front office manager, Tabitha thought about what she could be doing to be sure that more first-time guests would become frequent customers. What could they do, for example, to ensure that the 26 members of the Camper party would remember their visit and return again and again on their own or with the larger family group? Discussion Questions 1. In order to make clear to your front office staff the value of an individual customer, how could you calculate the revenue a frequent customer may generate over a long period of time?

2. Family reunions are big business. As front office manager, how would you work with the sales department to ensure quality service for group business?

Case number: 608C17 This case also appears in Todd Comen, Case Studies in Front Office Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 2003).

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Review Questions 1. What activities are involved in the four stages of the traditional guest cycle? Why have some properties replaced the traditional cycle with a three-stage sequence?

2. How does the departure stage of the guest cycle conclude both guest services and guest accounting activities? How can the front office use data about the guest stay?

3. How have front office recordkeeping systems evolved over the years?

4. What are some of the organizational concerns of front desk design? What criteria determine the appropriateness of a design?

5. What are some common telecommunications equipment used in hotels? How do they work?

6. What are the four most common front office software modules? How do they streamline front office recordkeeping? How does a general management module depend on the other three?

7. How are newer technologies helping hotels offer more services?

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Chapter 4 - Reservations Outline Reservations and Sales

The Role of the Sales Department in Reservations The Reservation Sales Planning Process

Types of Reservations

Guaranteed Reservations Non-Guaranteed Reservations

Reservation Inquiries

Distribution Channels Distribution Channel Revenues

Group Reservations

Group Reservation Issues

Reservation Availability

Reservation Systems

Reservation Records Reservation Confirmation/Cancellation

Confirmation/Cancellation Numbers Modifying Non-Guaranteed Reservations Canceling a Reservation

Reservation Reports

Expected Arrival and Departure Lists Processing Deposits Reservations Histories

Other Reservation Considerations

Legal Implications Waiting Lists 140

Promotional Packages Potential Reservation Problems E-commerce

Summary

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Competency 1 Objective: Discuss the sales dimension of the reservations process, outline the different types of reservations, and describe reservation inquiries and their distribution channels. From a guest's point of view, the most important outcome of the reservations process is the hotel having a guestroom ready and waiting when the guest arrives. This guestroom should not be just any room, but the room that best meets the needs the guest expressed during the reservations process. At the same time, the hotel manager and owner have different objectives for the reservations process. They would like the reservations process to provide the highest occupancy and room revenue possible. To achieve these outcomes, hospitality operations must have efficient reservations procedures in place. Finely tuned methods allow reservations agents to perform many functions, including identifying what the guest requires and what the property has available for sale for the dates requested, recording and acting on reservation details, promoting hotel services, and ensuring accuracy. Reservations agents must be able to respond in a quick, accurate, and pleasant manner. The time they spend on researching rates and room package plans, paperwork, filing, and other clerical tasks should be held to a minimum. Processing reservations involves matching room requests with room availabilities and rates; recording, confirming, and maintaining reservations; and producing management reports. Reservation information is especially useful in other front office functions. For example, with the information gathered during the reservations process, front office personnel can use a property management system to finalize room assignments, initiate guest accounts, and fill guests' special requests. At the same time, achieving high occupancy and revenue takes considerable research, planning, and monitoring. In the past, the hotel reservations manager, the front office manager, the rooms division manager, or even the general manager has been responsible for these duties. Since the duties associated with room sales have become more important and complex, many hotels have established the position of revenue manager to oversee them. This manager is responsible for forecasting demand for each market segment the hotel seeks to attractcorporate transient, group, leisure transient, and othersas well as determining the guestroom rates that will provide sufficient room revenues and occupancies. The revenue manager must coordinate efforts with the reservations, front office, and sales departments to ensure a common base of operational information. This chapter describes typical activities associated with the reservations process. These activities include:

Formulating the reservation inquiry Determining room and rate availability Creating the reservation record Confirming the reservation record Maintaining the reservation record Producing reservation reports Researching, planning, and monitoring reservations

The nature of reservations is examined before these activities are addressed. 142

Reservations and Sales Prior to automation, reservations agents focused primarily on basic room availability information; they did not have an effective way to identify available rooms by room type. When a guest requested a room, the reservations agent could confirm that a room was available. The agent, however, could not be sure that a particular type of room or that specific furnishings or features were available. Reservations agents would note special requests on the reservation recordsuch as a no-smoking room or a room with a scenic view or a certain type of beddingbut it was up to the front desk agent to fill such requests at the time of check-in. At the same time, the front desk agent was considered primarily responsible for maximizing hotel occupancy and room revenue. Front desk agents were often provided incentives to sell guests higherpriced rooms during check-in. Automation of the reservations process provides accurate and current room and rate information. Since room features are normally categorized within the rooms management module, reservations agents can review room and rate information for a specific date. Requests for specific room types, locations, and special features can be immediately acknowledged and quickly confirmed as part of the reservations process. Many reservation systems enable reservations agents to assign specific rooms. Given its role in the selling function, much of the responsibility associated with projected room revenues and profitability analyses has shifted; it now resides within the reservations department. For this reason, many lodging companies currently view reservations as part of the sales department, even though the function has traditionally been part of the rooms division. Reservations agents are not order-takers; they are trained in sales techniques. Many hotel companies conduct extensive sales training programs with reservations agents, and use the position to identify staff members who would like to make sales their career. Many reservations offices have sales goals, including number of room nights, average room rate, and room revenue booked. The ability of the reservations department to sell rooms, maximize revenue, enhance inventory control, and improve guest satisfaction is often cited as an important justification for investing in front office automation. With proper emphasis on sales and marketing techniques, properties can more accurately forecast and better react to business volumes. Gathering forecasted sales information and using it to determine pricing or room rate strategies is often referred to as revenue management. The Role of the Sales Department in Reservations Since a great deal of the responsibility for achieving occupancy and revenue goals has shifted from the front desk to the reservations department, the sales department has taken a more important role in reservations. There are several reasons for this. First, the sales department is a primary source of reservations for the hotel. Group sales managers or representatives create group reservations. These reservations are most commonly from corporations or trade associations holding important meetings. In addition, a sales representative may be assigned to attracting social, military, educational, religious, and fraternal groups, which together are usually referred to as the SMERF market. Although the actual guest reservations may go directly to the reservations office by telephone, central reservations office, group rooming list, group reservations mailer, or via the company's website, the sales office originated the group sale. Therefore, management evaluates the sales department on how many group guestroom reservations it creates. Senior property managers frequently compare the number of rooms in a group's sales contract to the actual number of rooms the group reserves. In so doing, managers are able to verify that the sales department or the sales manager working with the group researched the group thoroughly before accepting the sales contract. 143

Second, the sales department is usually responsible for generating sales from other markets as well as the group market. The sales department may have a specialist assigned to corporations (to woo the business traveler market) and perhaps travel agencies as well (to pursue the travel agent market). In large or complex hotels, several managers may be assigned to these markets. Their job is to familiarize local businesses and travel agencies with the features and benefits of the property. If the local company agrees to a specific amount of business, it is often given discounted rates. Senior management must ensure that companies provided with discount plans are meeting their commitments. Depending on the type of hotel, other sales managers may be assigned to work with travel agencies, Internet websites, and other reservation distribution channels. It is the responsibility of a specialized sales manager to familiarize distribution channels with the hotel's characteristics and its surrounding areas, in an effort to create a positive impression of the property and the travel destination. Distribution channels are regularly given current information regarding the property and the destination, and may also be offered special room rates and/or accommodation packages to help promote the property and attract guests. Sales managers are often provided with financial or other incentives for meeting or exceeding their sales goals. In the past, goals were commonly established for room nights soldthat is, the total number of room nights the department and individual sales manager sold and the reservations office recorded. Unfortunately, this often led sales managers to significantly reduce room rates in order to close the sale. It is better for sales objectives and incentives (including promotions) to be related to the total revenue a sales manager generates, so that sales managers are not tempted to sell guestrooms at rock-bottom prices just so they can meet room-nights-sold quotas. The Reservation Sales Planning Process The sales department can book business many months or years in advance. It is not uncommon to make group reservations five years in advance at large, group-oriented hotels. Some hotels have group contracts even further into the future, as the size of the group may limit the number of hotels that can host them. Other hotels may have the majority of their group business booked no more than six months in advance. Either way, it is usually the sales department that initiates the reservation and revenue management processes, simply by focusing on committing rooms well into the future. The reservations manager should be involved in every decision affecting the hotel's occupancy and revenue opportunities. In some cases, it is the reservations manager who monitors group and non-group business and informs the sales department of room availability. In other cases, the reservations manager may also be responsible for the hotel's revenue objectives. Every proposed group or corporate rate is evaluated, and the hotel's management team is notified when offering discounted rates jeopardizes revenue goals. Through this involvement, hotel managers can plan and control future business, rather than merely react to market conditions. One example of planning and controlling group business is the mix of group and transient reservations a hotel accepts. This is generally decided in the annual budgeting process. The mix of business is very important, as it affects total room revenue. Since a hotel's sales department is generally focused on group sales, it is usually allocated a specific number of group rooms to sell. This is called a group allocation. The sales department is allowed to sell the rooms within the group allocation without additional approval. However, should sales managers desire to sell more rooms than have been set aside in the group allocation, they generally need the approval of the hotel's sales director or general manager. The reservations manager is usually the person who evaluates these requests and reports on their potential impact on the bottom line. Types of Reservations 144

The majority of hotel guests make reservations. Reservations may take many forms, but they can all be placed in one of two broad categories: guaranteed or non-guaranteed. It is important for hotel managers to know their state's law concerning guaranteed and non-guaranteed reservations. In some states, confirming a guaranteed reservation is considered a binding contract. If the hotel then fails to provide the room, legal penalties can be applied if the guest files a complaint with the proper state authority. Guaranteed Reservations A guaranteed reservation assures the guest that the hotel will hold a room until a specific time of the day following the guest's scheduled arrival date. This time may be check-out time, the start of the hotel day (that is, when the front office audit has been completed), or any time the hotel chooses. The guest, in turn, guarantees to pay for the room, even if it is not used, unless the reservation is canceled according to the hotel's cancellation procedures. Guaranteed reservations provide some protection for the hotel's revenues even in the case of a no-show, a situation in which a guest makes a reservation but does not register or cancel the reservation. Variations of guaranteed reservations are discussed in the following paragraphs. Prepayment. A prepayment guaranteed reservation requires that a payment in full be received prior to the guest's day of arrival. From the perspective of the front office, this is generally the most desirable form of guaranteed reservation. This type of guaranteed reservation is commonly used at U.S. resorts and at hotels outside the United States. Payment Card. Major credit and debit card companies have developed systems to ensure that participating lodging properties receive payment for no-shows through payment card guaranteed reservations. Unless a credit or debit card guaranteed reservation is properly canceled before a stated cancellation hour, the lodging property will charge the guest's payment card account for one night's room rate plus tax; the card company will then bill the cardholder. Payment card guaranteed reservations are the most common form of guaranteed reservation. Resorts may charge a no-show guest for more room nights, since the average length of stay at a resort is usually longer and it is more difficult for a resort to fill rooms at the last minute. Advance Deposit. An advance deposit guaranteed reservation requires that the guest pay the hotel a specified amount of money prior to arrival. The amount of an advance deposit is typically large enough to cover one night's room rate and tax. (At resorts that traditionally have longer guest stays, advance deposits of several nights' room rate and tax are often required.) The pre-arrival amount will typically be larger if the reservation is for more than a one-night stay. If a guest holding an advance deposit guaranteed reservation fails to register or cancel, the hotel may retain the deposit and cancel the reservation for the guest's entire stay. This type of guaranteed reservation is most common at destination resorts and convention center hotels. A variation on this type of deposit applies the deposit received to the last night of the stay. This is intended to ensure room revenue should the guest depart earlier than scheduled. Voucher or MCO. A type of travel agent guarantee is the travel agency voucher or miscellaneous charge order (MCO). The MCO is a voucher issued by the Airline Reporting Corporation (ARC) and is controlled by many of the same travel agency regulations that control airline tickets. Many resorts prefer MCOs if they must accept vouchers, because ARC guarantees payment if the travel agency defaults on the payment. With travel agency vouchers and MCOs, the guest has prepaid the amount of the deposit to the travel agent. The agent forwards a voucher or MCO to the hotel as proof of payment and a guarantee that the prepaid amount will be sent to the hotel when the voucher is returned to the travel agency for payment. Usually, with vouchers and MCOs, the travel agency deducts its commission before sending payment to the hotel.

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Corporate. A corporate guaranteed reservation involves a corporation entering into an agreement with a hotel. A corporation may sign a contractual agreement with the hotel that states that the corporation will accept financial responsibility for any no-show business travelers the corporation sponsors. Such contracts are often popular in downtown or business center hotels catering to a large number of transient guests. The corporation, in turn, receives one invoice from a hotel for several stays, thereby simplifying the billing process. Non-Guaranteed Reservations In the case of a non-guaranteed reservation, the hotel agrees to hold a room for the guest until a stated reservation cancellation hour (usually 4 P.M. or 6 P.M. ) on the day of arrival. This type of reservation does not guarantee that the property will receive payment for no-shows. If the guest does not arrive by the cancellation hour, the hotel is free to release the room, meaning that it can add the room to the list of other rooms available for sale. If the guest arrives after the cancellation hour, the hotel will accommodate the guest if a room is available. It is common for hotels planning on full occupancy or nearing full occupancy to accept only guaranteed reservations. The goal behind this strategy is to maximize hotel revenue by reducing the number of potential no-shows. The efficiency and accuracy of a hotel's reservations process is especially critical in full or nearly full occupancy conditions. Reservation Inquiries A property receives reservation inquiries in a variety of ways. Regardless of the source, the reservations agent or website will collect information about the guest's stay through a process known as a reservation inquiry. The reservations agent or online process should collect such information as the guest's name, address, and telephone number; company or travel agency name (if applicable); date of arrival and date of departure; and the type and number of rooms requested. The reservations agent or online sequence should also try to establish the room rate, number of people in the party, method of payment or guarantee, and any special requests.

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Distribution Channels Hotel chains have come to realize that having multiple distribution channels for their goods and services is critical to success. The more channels of distribution, the more opportunities guests will have to inquire about and book rooms. Reservation inquiries may come in through the property's reservations department (property direct), through a central reservations system, through a cluster reservations office, via a global distribution system (airline and travel agent network), via an intersell agency, or through Internet distribution systems (see Exhibit 1). We'll take a look at each of these distribution channels in the following sections. Property Reservations Department. Hotels handle many of their reservation transactions directly. Depending on the volume of direct customer contact, a hotel may have a reservations department handle reservation inquiries rather than the front desk. This arrangement is common in hotels of 200 rooms or more. A reservations department handles all direct requests for accommodations, monitors any communication links with central reservations systems and intersell agencies, and maintains updated room availability status information. Property-direct reservation requests can reach a hotel in several ways:

Telephone: Prospective guests may telephone the hotel. For most hotels, this is the most common method guests use to request a reservation directly from the hotel. Mail: Written requests for reservations are common for group, tour, and convention business. Generally, mail requests are sent directly to the reservations department. Property website: A hotel can also handle reservation transactions through its property-direct (property-specific) website. Property-to-property: Hotel chains typically encourage guests to plan their next hotel stay while in an affiliated property by offering direct communication between properties. This approach can significantly increase the overall number of reservations handled among affiliated properties. Faxes and other sources: Faxes and other methods of communication account for a small proportion of total reservation transactions. Another option involves communicating reservations through TDD equipment. This equipment is a specially designed teletype machine that allows people with hearing disabilities to communicate by telephone.

Reservations agent sales process. Most hotels have specific sales procedures they want their reservations agents to use when taking a reservation. Common components of the reservations agents' sales process include the following: 1. Greet the caller. A warm greeting always sets the proper tone for the conversation. A greeting such as, "Thank you for calling the Casa Vana Inn. This is Mary speaking. How can I help you today?" is always more favorably accepted than a curt greeting such as, "Reservations."

2. Identify the caller's needs. It is appropriate to ask the caller about arrival and departure dates, the number of guests, bed preference (double, king, etc.), group or corporate affiliation, and other information that helps define the caller's needs. For example, if a caller states that he or she is traveling with children, the reservations agent should attempt to identify the number of children and their ages.

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3. Provide an overview of the hotel's features and benefits, based on the caller's needs. Reservations agents should listen closely to what the caller has said in Step 2. Based on that discussion, the agent should highlight the hotel features and benefits that meet the caller's needs. For example, mentioning a year-round swimming pool might be a feature welcomed by families, but they probably would not be interested in the hotel's business center. On the other hand, the business center may be an attractive feature to a business traveler.

4. Make a room recommendation, and adjust it according to the caller's response. This step comes after the image of the property has been established (Step 3) and lets the caller know that the reservations agent has truly been listening. If the caller says the recommended room is too expensive or doesn't meet his or her needs, the agent should revise the recommendation as necessary.

5. Close the sale. Ask for the reservation; don't wait for the caller to make a decision. Such questions as, "Mr. Jones, would you like me to reserve that room for you now?" may be appropriate after Mr. Jones's needs have been addressed.

6. Gather the reservation information. Record all the reservation information necessary, following hotel procedures. This process typically involves repeating the guest's name, arrival date, departure date, room type and rate, and special requests to the caller to confirm the information. This is also the time to secure the reservation guarantee and provide a reservation confirmation number.

7. Thank the caller. Closing a call as warmly as opening it leaves callers with a sense of confidence that they have selected the right hotel.

First and foremost, the reservations function is a sales process. One important quality of a successful reservations office is that the agents are trained to sell the hotel instead of being merely order-takers. They create a positive image of the property and instill a desire on the part of the caller to make a reservation. If the agents are excited about their work, their enthusiasm will carry over to callers. Conversely, if the reservations agent sounds unenthusiastic, the caller will not have a positive impression of the property and may decide to make a reservation elsewhere.

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Most of the information gathered during the reservation inquiry will be used to create the reservation record, a process discussed later in the chapter. Exhibit 2 shows a sample reservation display screen used in an automated reservation system. Reservations can be made for individuals, groups, tours, or conventions. A guest coming to the hotel as an individual and not part of a group is typically referred to as a free independent traveler (FIT). Reservations of persons coming to the hotel as part of a group may be handled differently from those of FIT guests. For example, reservations for group members may be found under both the group's name and the guests' individual names. In addition, group reservations may receive special attention during preregistration activities. Central Reservations Systems. A majority of lodging properties belong to one or more central reservations systems. A central reservations system is responsible for maintaining a room availability inventory for each property participating in the system. There are two basic types of central reservations systems: affiliate networks and non-affiliate networks.

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An affiliate reservation network is a hotel chain reservation system in which all participating properties are contractually related. Nearly every chain operates its own reservation network or outsources the central reservations function to a reservation technology supplier. Chain hotels link their reservations operations to streamline the processing of reservations and reduce overall system costs. Another intended outcome is that one chain property will attract business for (or refer business to) another chain property. In the case of group reservations, information may be shared among affiliate properties through a sales office automation program. Reservations are often passed from one chain property to another through an automated reservation network. If one property is fully booked, the reservations system handling the transaction may provide an online referral to accommodations at a chain property in the same local area. Referrals may also be made to properties whose locations appear more convenient or suitable to the guest's needs. Affiliate reservation networks that allow non-chain properties to participate in the reservation system are able to represent themselves to a broader market. Non-chain properties in an affiliate reservation system are referred to as overflow facilities. Reservation requests may be routed to overflow facilities only after all the available rooms in chain properties (within the nearby geographic area) have been booked. Overflow facilities typically pay a fee to the hotel or reservation network for these referrals. A non-affiliate reservation network is a subscription system designed to connect independent or nonchain properties. Non-affiliate reservation networks enable independent hotel operators to enjoy many of the same benefits as chain-affiliated operators. Like an affiliate reservation network, a non-affiliate network usually assumes responsibility for advertising its service. Examples of non-affiliate reservation networks are The Leading Hotels of the World, Preferred Hotels & Resorts Worldwide, and Distinguished Hotels. In many cases, these non-affiliate networks accept only hotels of a certain quality or a limited number of hotels in any geographic area, to keep the value of their service high to participating members. A central reservations office (CRO) typically deals directly with the public by means of a toll-free telephone number or online web address. Most large lodging chains support two or more reservation centers, with calls and contacts being directed to one of the centers. Reservation centers and websites operate 24 hours per day, most days of the year. At peak times, reservation centers have a large number of agents on duty simultaneously. Central reservations offices typically exchange room availability information with member properties and communicate reservation transactions as they occur. This may be accomplished through an online communications connection at the member hotel. In this way, reservations information is immediately transmitted between the central reservations office and the hotel. Rapid-access reservation systems ensure that both the hotel and the central reservations office have accurate, up-to-date information on room availability and rates. Where is this information kept and maintained? Some hotel companies maintain this information at the central reservations office; the master system, therefore, is the central reservations system. Another approach is to have each hotel's property management system hold the master information for its room availability, rates, amenities, and so on; the central reservations office must access it when processing reservations. In either case, when a reservation is handled at a central reservations office, property-specific rate and availability data must be uploaded to the central reservation system, and completed reservation transactions processed by the central reservations office downloaded to the hotels' property management systems. Central reservations systems normally provide participating properties with the communications equipment necessary for handling reservation transactions. Communication equipment may take the form of a desktop or notebook computer, an Internet website, an integrated network, a fax machine, a hand-held communication device, or a TDD (telecommunications device for the deaf). The central reservations 150

system typically charges a fee to participating hotels for the services and support equipment it supplies. Hotels may pay a flat fee for the communication equipment and an additional fee for each reservation transaction processed through the system. Alternatively, some central reservations systems charge a flat percentage of room revenue to cover all CRO operational expenses. In turn, each property provides accurate and current room availability data to the central reservations office. Without such data, the central reservations office cannot effectively process reservation requests. Affiliate and non-affiliate central reservations systems often provide a variety of services in addition to managing reservations processing and communications. A central reservations system may also serve as an inter-property communications network, an accounting transfer system, or a destination information center. For instance, a central reservations system is used as an accounting transfer system when a chain hotel communicates operating data to company headquarters for processing. When a central reservations system communicates reports on local weather, special events, and seasonal room rates, it serves as a destination information center. Cluster Reservations Office. Chains that have several properties in a geographic area may opt to establish a single reservation or "cluster" office. This satellite office operates similarly to a hotel chain central reservations system, but serves one specific destination area instead of the entire company. Instead of a reservations agent at the hotel answering the telephone and processing reservation requests, all reservation transactions are channeled through the cluster reservation office. When a guest calls the hotel directly for a reservation request, the hotel transfers the call to the cluster office. Similarly, the company's central reservations network is connected to the cluster office as well as the property itself. There are several advantages to a cluster reservations office. First, there is usually a reduction in labor; it takes fewer reservations agents to staff a central office than to staff separate reservations offices in every property. Since labor is the single highest expense at a hotel, any reduction in labor cost is generally welcome. Second, since reservations agents are serving several hotels at the same time, they are able to cross-sell other properties. For example, if Hotel A is full because of a convention, the agent in the cluster office can offer another company hotel nearby. This is a convenience for the guest and improves the occupancy of the other hotel. Finally, room rates and availability can be coordinated among properties, the brand's central reservations network, and the global distribution systems. This makes reservation processing even more efficient. Cluster reservations offices may operate in one centrally located hotel, or sometimes in an office building away from hotel activities. This physical separation makes good communication between the hotels being served and the cluster office vitally important. Before clustering, general managers could easily see what their reservations agents were doing by simply visiting the office within the hotel and observing them. With clustering, coordinating with remote offices has its challenges. Perhaps the most important of these is training the reservations agents. Since they are not working in the hotel, they have less opportunity to become familiar with the hotel's rooms, facilities, and amenities. It is essential, therefore, that hotel managers visit the cluster office frequently and keep the agents there informed about events, facilities, and services at the hotel. Global Distribution Systems. Most central reservations systems, whether they are an affiliate or a nonaffiliate network, connect with one of the global distribution systems (GDSs). Most airlines around the world are connected to one of four GDSs: SABRE, Galileo International, Amadeus, or WorldSpan. Historically, GDSs have been owned by an airline or consortium of airlines, but that has changed, since airlines are no longer very involved in the lodging industry. GDSs provide worldwide distribution of hotel reservation information and allow selling of hotel reservations around the world. GDSs also support the distribution of airline tickets, automobile rentals, and other services required by travelers. By directly linking the reservation systems of hotels, airlines, car rental agencies, and travel agency companies on a 151

worldwide basis through the Internet or a private network, global distribution systems provide access to travel and tourism inventories around the world. Selling hotel rooms is usually accomplished by connecting the hotel company reservation system with the GDSs. Most travel agents around the world have terminals connected to one or more of the many airline reservation systems to book airline travel. By having hotel accommodations and automobile rentals available in the automated system at the same time, most GDSs provide single-source access to most of a travel agent's selling requirements. In one transaction, a travel agent can sell an airline ticket, hotel room, and automobile rental. Travel agents may be reluctant to book hotel rooms through GDSs, fearing that room availability and room rates are not accurate, and the confirmation process can be frustrating. Hotel companies have improved their service to guests and travel agents by linking their central reservations systems to GDSs, which allows travel agents to book reservations directly into hotel systems and verify room availability and rates. This linkage is called seamless integration or seamless connectivity. Intersell Agencies. An intersell agency is a reservation system that contracts to handle reservations for more than one product line. Intersell agencies typically handle reservation services for airline companies, car rental companies, and lodging propertiesa "one call does it all" type of approach. Although intersell agencies typically channel room reservation requests to a hotel central reservations system, they may also communicate directly with a destination hotel. The fact that a hotel participates in an intersell arrangement does not preclude its participation in other types of central reservations systems. Internet Distribution Systems. Many airlines, hotel companies, and car rental firms offer online reservation services through an Internet distribution system (IDS). Examples of IDSs include Expedia, Hotwire, Priceline, and Travelocity. IDSs enable travelers from many different market segments to use their personal computers to book flights, reserve hotel rooms, and select rental cars. Vacation travelers, business travelers, corporate travel offices, international visitorsall are able to use the World Wide Web to make their own travel and accommodation reservations. The variety of potential guests accessing Internet sites to place reservations has prompted travel and hospitality companies to develop user-friendly reservation procedures. Large and small hotels alike have a presence on the Internet. Chains often have a website focusing first on the brand and its features, then on the individual properties within the chain. Most chain Internet sites allow visitors to book reservations. Independent hotels also support websites that, while they may not be as technically sophisticated as chain sites, provide similar information and allow visitors to make reservations. Some prospective hotel guests are concerned about the privacy and security of financial transactions over the Internet. However, hotel websites have adopted security procedures based on reliable encryption methods that protect against fraud. When users access online reservation systems, web browsers automatically engage a high-level security feature. In addition to providing a user-friendly reservations process and securing transactions, online systems perform important marketing functions for the hospitality company. Reservation features of many Internet sites enable users to participate in special events and rate promotions. Some enable users to download multimedia presentations of the features and benefits of the hotel chain and of individual hotels complete with a walk-through of the property and a virtual tour of the various rooms and services offered. Others allow users to reserve golf tee-times, spa treatments, spots in tours and other activities, and to make dining room reservations. 152

Distribution Channel Revenues Revenues derived by hotels (suppliers) and agents (sellers) forming distribution channels vary widely, depending on the channel or supplier/agent relationship. Central reservations offices typically charge affiliate properties either a fixed rate per night per room, regardless of reservation activity, or a transaction fee, or both. The amount of revenues earned by the CRO depends on the financial arrangements contracted between the chain and its member properties. Global distribution systems and Internet distribution systems receive revenues from hotels through commissions, by levying transaction fees or transmission fees, and/or by selling hotel rooms that have been discounted. To illustrate how revenues might be distributed through various distribution channels, let's look at a sample transaction. Suppose that a chain hotel is selling a guestroom for $100. If the sale came to the hotel directly, via its property reservations department, the hotel would receive $100. However, if a GDS agent sells the $100 room, the hotel receives less money. Why? Because there are multiple fees that reduce the net revenue to the hotel. The seller (a travel agency, for example) earns a 10 percent commission ($10 in this case) and the GDS is paid a $3 transaction fee. In addition, the reservation transaction may be processed through the chain's CRS, which might charge as much as $5. In this example, the hotel receives $82 for the sale, and pays $18 for commissions and fees. When hotels sell their hotel rooms via the various distribution channels discussed in this section, they are hoping that the discounts offered or the commissions or other fees paid will be more than offset by the increase in occupancy and revenue that they otherwise might not have realized.

Section Keywords revenue manager The manager responsible for forecasting demand for each market segment the hotel seeks to attractcorporate transient, group, leisure transient, and othersas well as determining the guestroom rates that will provide sufficient room revenues and occupancies. Also typically manages e-commerce functions. guaranteed reservation A reservation that assures the guest that a room will be held until a specific time of the day following the guest's scheduled arrival date. This time may be check-out time, the start of the hotel day, or any time the hotel chooses. The guest, in turn, guarantees to pay for the room, even if it is not used, unless the reservation is canceled according to the hotel's cancellation procedures. no-show A guest who made a room reservation but did not register or cancel. prepayment guaranteed reservation A type of reservation guarantee that requires a payment in full before the day of arrival. payment card guaranteed reservations A type of guarantee supported by credit card companies; these companies guarantee participating properties payment for reserved rooms that remain unoccupied. cancellation hour The hour after which a property may release for sale all unclaimed non-guaranteed reservations, according to property policy. advance deposit guaranteed reservation A type of reservation guarantee that requires the guest to 153

pay a specified amount of money to the hotel in advance of arrival. corporate guaranteed reservation A type of reservation guarantee in which a corporation signs a contractual agreement with the hotel to accept financial responsibility for any no-show business travelers it sponsors. non-guaranteed reservation A reservation agreement in which the hotel holds a room for the guest until a stated reservation cancellation hour on the day of arrival; the property is not guaranteed payment in the case of a no-show. reservation record A collection of data that identifies a guest and his or her anticipated occupancy needs before arrival at the property; enables the hotel to personalize guest service and accurately schedule staff. free independent traveler (FIT) A traveler who is not part of a group. central reservations systems A network for communicating reservations in which each participating property is represented in an automated database and is required to provide room availability data to the central reservations center on a timely basis. affiliate reservation network A hotel chain's reservation system in which all participating properties are contractually related. overflow facilities A property selected to receive central system reservation requests after room availabilities in the system's participating properties within a geographic region have been exhausted. non-affiliate reservation network A central reservations system that connects independent (nonchain) lodging properties. global distribution systems (GDSs) A distribution channel for reservations that provides worldwide distribution of hotel reservation information and allows the selling of hotel reservations around the world; usually accomplished by connecting the hotel company reservation system with an airline reservation system. seamless connectivity The ability of travel agencies to book reservations directly into hotel reservation systems, as well as verify room availability and rates. Internet distribution system (IDS) A direct-marketing distribution channel that provides property exposure and reservations management for independent hotels, chain hotels, and third-party intermediaries representing hotel companies.

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Competency 2 Objective: Describe the process of taking group reservations and discuss group reservation issues. Group Reservations Group reservations can involve a variety of contacts: guests, meeting planners, convention and visitors bureaus, tour operators, and travel agents. Group reservations typically involve intermediary agents and require special care. Usually, when a group selects a hotel, its representative deals with the hotel's sales or reservations department. If sufficient accommodations are available, an agreed-upon number of guestrooms, called a block, is set aside for the group's members. Group members may be given a special reservation identification code or reservation card to use to reserve rooms within the group's assigned block. Reservations received from group members are applied against the rooms held in the group's block, thereby reducing the number of rooms available within the block. Rooms reserved for specific guests are referred to as booked. As group members reserve rooms, the room statuses change from blocked to booked. Normally, the hotel will establish progress dates to evaluate the progress of conversions from blocked to booked rooms. Unreserved rooms in the block may be released to the hotel's available room inventory at a predetermined date. This time frame is usually referred to as the group reservation cut-off date. Typically, the cut-off date is clearly stated in the contract the group's representative signs with the hotel. The hotel may honor reservation requests received after the cut-off date so long as rooms are available. Group Reservation Issues Although group reservation procedures appear simple, a number of potential problems may develop. The following sections consider common group reservations players and issues. Creating a Group Block. Group business is often highly desired by hotels. Yet creating and controlling a group block has its pitfalls. When handling group blocks, the reservations manager should be aware of the following procedures:

Group business demands that a contract be created specifying the exact number of rooms required and the quoted rates. The contract must also specify the main group arrival and departure dates, any special considerations such as suites or complimentary rooms, method of reservation, and the group and individual billing arrangements. Early arrival and late departure dates may also be included in the contract. The contract should also note the group cut-off date for room availability. This information should be applied to the front office system so that reservations can be automatically tracked. The reservations manager should verify the total number of rooms required for the group against what is available in the hotel. The sales department often has access to a front office terminal to verify general availability before booking the group. However, the group block should always be verified by the reservations manager to be sure the system inventory is accurate before confirming the room block to the group. If the group will take away rooms from transient (non-group) business, the reservations manager should notify the sales or general manager of the possible effect. This is called non-group displacement (or displacement). Determining displacement is important, because the hotel may block rooms for group guests that it would normally sell to nongroup guests, often at a higher rate. In addition, frequent guests of the hotel may have to be turned away and disappointed when a group takes these rooms. Transient guests may feel uncomfortable 155

in a hotel dominated by group business, or may choose to go elsewhere if they are not able to reserve rooms due to group blocks.

Before blocking the rooms, the reservations manager should check the group's history with the hotel, if available. For example, if the group requests a 50-room block and the record shows the group booked only 40 rooms the year before, the reservations manager may wish to confer with the sales manager before finalizing the block. Reducing a block based on the group's history is called a wash down (or wash). If the group does not have a history at the hotel, it is sometimes possible to check with the hotel that last accommodated the group. By following these steps, the reservations manager helps control room inventories and ensures that as many rooms as possible are available for sale. It is important to note that the wash-down process must be handled very carefully. Contracts are legally binding and the hotel must provide the number of rooms specified in the contract. If a group leader finds out that a hotel does not have the number of available rooms specified in the contract, there can be significant legal consequences. As group reservations arrive, the reservations manager must monitor the room availability in the block. It is important for the reservations manager to notify the sales department when a block does not look like it will fill or if more rooms are needed in the block due to strong demand. The sales department can then contact the group and make adjustments to the room block. If more rooms are needed, there may be an impact on the group allocation and the hotel may have to choose between taking the additional reservations or referring them to other hotels. If fewer rooms are needed than blocked, this can be an opportunity for the sales department to sell additional rooms. Group room sales programs are an important issue for the reservations manager to monitor. By definition, a definite group is a group that has signed a sales contract. All definite groups should be entered into the reservation system as soon as they have signed the contract, in order to maintain an accurate room inventory. A tentative group is a group that has had a contract sent to them, but has not signed or returned the contract to the hotel. Some hotels choose to enter tentative groups into their reservation system. In this way the hotels can keep track of what they believe they have sold of their group allocation. However, it is necessary to track tentative groups to be sure they are updated to definite status or removed from the reservation system. Holding tentative groups on the books for too long may prohibit the booking of a definite group and can cause confusion between the sales and reservation offices. The method of sending group reservations to the hotel is also important and often included in the sales contract. Attendees may be allowed to make reservations directly with the hotel and through the central reservations network or online. Direct registration activity may not always be desired. In other cases, the group sponsor may want to receive the reservation requests before they go to the hotel. Many corporate group reservations are provided to the hotel on a rooming list from the company; this may also apply to tour groups from travel agencies. Group leaders often prefer to closely control rooming and billing arrangements. Agents in the reservations office must be careful that they honor these arrangements and not accept reservations outside of the agreed-upon procedures.

Conventions and Conferences. Problems can occur during a convention or conference if a close working relationship is not established between the hotel's sales staff and the group's meeting planner. If good communication and a spirit of cooperation are established early on, many problems can be avoided. Suggestions for hotels dealing with convention groups include the following:

Know the convention group's profile, including its cancellation, no-show, and last-minute reservation history. 156

Review all relevant hotel reservation policies with the convention planner. Inform reservations agents that the convention has been scheduled, and go over the reservation process set up for the convention. Produce regularly scheduled reports to update the status of the convention block. Generate an up-to-date list of registrants at regular intervals. Correct errors found by the convention planner immediately. Confirm reservations from attendees as soon as they are received. Return rooms to the group's block when cancellations are received and inform the convention planner. Distribute a final rooming list to the convention planner and all hotel staff involved with the convention.

Convention and Visitors Bureaus. Large conventions sometimes require the use of rooms at more than one hotel to accommodate all the convention attendees. When conventions take rooms at many hotels in a city, they are often called city-wide conventions. Frequently, room requirements at several hotels are coordinated by a separate housing or convention bureau within the city. Special application software may be used to help monitor and coordinate this effort. Each hotel must determine the number and type of available rooms it is willing to set aside for convention use. The objective of the bureau is to accommodate all attendees by coordinating hotel availabilities with reservation requests. The convention and visitors bureau normally uses a communications network to notify participating hotels on a daily (or more frequent) basis. In return, each hotel informs the bureau of any requests or cancellations communicated directly to the hotel's reservation system. Through such an exchange of information, the bureau assists each hotel in effectively managing its convention block. Tour Groups. Tour groups are groups of people who have had their accommodations, transportation, and related travel activities arranged for them. Hotels should be especially careful to research the reliability and past performance of tour operators and travel agents. Once acquainted with a tour operator's history, reservations managers may feel more secure when blocking and booking reservations for a tour group. Suggestions for dealing with tour group reservations include the following:

Specify the number and types of rooms to be held in a group block, including rooms for drivers and guides. Clearly state a cut-off date, after which unused rooms in the block will be released for other hotel use. On or before the cut-off date, the tour operator should supply the hotel with a guarantee on the number of rooms the group will need (if the operator can't supply a final rooming list by this date). Specify a date by which the organizer will provide a final rooming list (if this date is different from the cut-off date). Monitor the amount of advance deposits required and their due date. Note on the reservation record any services and amenities the property will provide as part of the group package. Include the name and telephone number of the tour group's representative or agent. 157

Note any special arrangements, such as early arrival, baggage handling, registration, or check-out procedures.

Attendee Management and Housing Systems Software. Attendee management and housing systems software is a supplemental reservation planning tool. Historically, group meeting planners and hotel reservation staffs had to coordinate group attendee reservation activities without the help of automated systems. Group reservations were once handled by telephone or via a printed reservation mailer. Group leaders would distribute mailers to potential attendees, who would complete the mailer and return it to the hotel. This was a time-consuming process that was often inaccurate, due to illegible guest handwriting or confusion over dates and rate plans or other issues. Hotels then had to report the reservations they received to group leaders, so they could keep track of group reservations on their end. These problems were relieved when hotel companies allowed group reservations via their websites and call centers. Although a website can be helpful, the hotel staff must ensure that the site's group information is accurate. Group attendees using the website will receive the appropriate group rate for a guestroom allocated to the group only if the information is accessible at the time of the reservation. Attendee management and housing systems software automates the group reservations and registration process. The software relies on the Internet to communicate with potential attendees. Attendee management applications focus only on meeting registration activities, while housing system applications are designed to handle guestroom reservations and meeting registration activities. With an attendee management and housing registration system, the group leader creates a special website that provides information about the group event and reservation availability. The information is then linked to the group's main website, so people visiting the site can see the information. Some systems allow group leaders to load e-mail and postal addresses; the group leader can then send e-mail and printed messages via regular mail to prospective attendees. Attendees receiving the e-mail message can click on the Internet link contained in the message, then register for the meeting and reserve a room. Prospective attendees receiving the printed message are given the website address, so they can log on and make their reservations. These systems capture guest information, including the guest's name, mailing address, e-mail address, credit card information, guestroom request, and much more. Guests can usually identify special needs; they may indicate that they plan to arrive early, for example, or request a no-smoking room. Group attendees can sign up for specific presentations, events, or recreational activities (they can reserve golf tee times or make spa reservations, for example). Once the guest provides the information requested on the website, the information is sent to the group for processing. Simpler systems provide meeting planners with reports that are forwarded to the hosting hotel for manual processing. More sophisticated systems, like Passkey, actually interface with hotel reservation systems. When a reservation is made through a Passkey website to a "Passkey-enabled" hotel, the reservation is made, and confirmed to the guest, automatically. This eliminates the manual processing associated with transcribing printed reports into the hotel's reservation system. It also keeps the room inventories accurate between the group and the hotel. For large meetings, some systems combine the inventories of many hotels, thereby giving guests a choice of where to stay. This is especially important for meetings that use much of a city's guestroom inventory. Attendee management and housing system software can be very cost-effective because it simplifies the meeting registration and reservation processes. This is important to meeting planners and hotels alike, since it improves communications between them and reduces the amount of manual labor.

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Section Keywords block An agreed-upon number of rooms set aside for members of a group planning to stay at a hotel. booked Having sold or reserved rooms ahead of time. cut-off date The date agreed upon between a group and a hotel after which all unreserved rooms in the group's block will be given back to the general rooms inventory for sale. non-group displacement (or displacement) The turning away of transient guests for lack of rooms due to the acceptance of group business. wash down (or wash) Blocking fewer rooms than the number requested by a group, based on the group's history.

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Competency 3 Objective: Identify the tools managers use to track and control reservations availability, and discuss the reservation record. Reservation Availability When a property receives a reservation inquiry, it is important to compare the inquiry data with previously processed reservations. Processing a reservation request results in one of several responses. A property can:

Accept the reservation as requested. Suggest alternative room types, dates, and/or rates. Suggest an alternative hotel.

In any reservation system, it is necessary to closely monitor the number of reservations in order to control overbooking. A hotel should use care when accepting reservations beyond its room capacity. Some states have laws concerning guests with guaranteed reservations who do not receive rooms when they arrive at a hotel. Reservation systems can be programmed to closely monitor overbooking. Comparing historical reservation volumes against actual arrivals can produce an overbooking factor to serve as a booking guideline. Depending on the property's no-show reservation history, management may allow the reservations system to overbook. Overbooking is a strategy aimed at helping the hotel to achieve 100-percent occupancy by hedging against no-shows, cancellations, and unexpected early departures. Based on historical data and the experience of knowledgeable managers, reservation systems are able to forecast cancellations and no-shows with accuracy. This forecast must be shared with the sales department and general manager, who may have additional information not entered in the reservation system, such as information about competitive pressures and other issues. When booking a hotel slightly beyond its available room capacity, the system attempts to ensure that as many rooms as possible are occupied. Overbooking should be approached cautiously. If a reservation system is allowed to book too many rooms, guests with confirmed reservations may have to be turned away. This creates poor guest relations and discourages repeat business. To properly control overbooking, managers must monitor reservation system activity by controlling booking, blocking, and cancellation information.

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Reservation Systems An in-house automated reservation system can keep close track of reservations. Such systems can tightly control room availability data and automatically generate many reservation-related reports. Exhibit 3, for example, shows a daily expected arrival, stayover, and departure report. It shows that for January 19, 19 arrivals, 83 stayovers, and 4 departures are expected. In addition, this report projects estimated room revenue based on reported reservation information. Automated systems can also generate reports summarizing reservations by room type, guest profile, and many other characteristics. The biggest advantage of an automated reservation system is the improved accuracy of room availability and rate information. As reservations agents input reservations and reservation modifications or cancellations into the system, the inventory of available rooms is immediately updated. In addition, front desk transactions involving no-shows, early departures, or walk-ins will immediately update the room availability. This is important, as it provides sales managers with the occupancy and room-rate information they need to help them achieve revenue objectives.

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Exhibit 4 shows a guestroom control log from a hotel sales software package. For each day of the week, the screen shows the total number of rooms still available for sale, as well as the number of rooms allocated to definite and tentative group bookings and the number of rooms protected for front office sales to transient business. Room sales are coordinated in real time as salespeople, reservations agents, and the front office manager have instant access to the most current information. Once all rooms in a specific category are sold, the reservation system can be programmed to refuse any further reservations in that category. When checking availability in a closed category, a reservations agent may receive a message such as the following displayed on the screen: The category of rooms requested is not available. Some reservation systems are programmed to automatically suggest alternative room types or rates, or even other nearby hotel properties. Systems can be programmed to itemize room availability for future periods and may display open, closed, and special event dates for an extended period of time. Open dates refer to available room days, while closed dates depict full-house forecasts. Special event dates can be programmed to alert reservations agents that a convention or large group is expected to occupy the hotel either before, during, or immediately following a caller's requested day of arrival. In addition, many reservation systems have a management override feature that enables overbooking. This override provision should be exercised with extreme care. Reservation systems store reservation records electronically, thereby allowing the creation of waiting lists for high-demand periods. This feature contributes to the processing of group reservations and the 162

implementation of revenue management strategies. The future time frame for tracking reservations is called the "reservation horizon"; most automated systems have horizons of two to five years. Reservation Records Reservation records identify guests and their occupancy needs before the guests' arrival. These records enable the hotel to personalize and/or customize guest service and schedule staff more accurately. Reservation records also contain a variety of data that the hotel can use to generate several important management reports. Reservations agents or online forms can create reservation records based on interactions with guests only after determining that a request for a reservation can be met. These electronic records initiate the guest cycle. To create a reservation record, the reservations system typically captures such guest data as:

Guest's name (and group name, if applicable) Guest's home or billing address Guest's telephone number, including area code Name, address, and telephone number of the guest's company, if appropriate Name of and pertinent information about the person making the reservation, if not the guest Number of people in the party, and perhaps the ages of any children Arrival date and time Number of nights required or expected departure date, depending on how the system is designed Reservation type (guaranteed, non-guaranteed) Special requirements (infant, disabled guest, or no-smoking accommodations, for example) Additional information as needed (method of transportation, late arrival, flight number, room preference, e-mail address, and so forth)

If a guest plans to arrive after the hotel's normal reservation cancellation hour, the guest should be informed of the property's policy for non-guaranteed reservations. Once the necessary information has been captured, the system may immediately assign a reservation confirmation number. Confirmation number assignment provides both the guest and the reservations department with a unique reference for the reservation record. In the case of a guaranteed reservation, additional information is generally needed for the reservation record. Depending on the guest's method of guarantee, the following information may be required:

Credit card information: This information consists of the credit card type, number, expiration date, and the cardholder's name. Online reservation systems may be connected to a transaction processing service that allows for automatic verification of credit card information. Prepayment or deposit information: This information comes in the form of an agreement from the guest to submit a required deposit to the hotel before a specified date. A proposed advance deposit or prepayment guarantee should be closely monitored to ensure the correct amount is paid by the 163

designated date; if it is not, the reservation may need to be canceled or reclassified as nonguaranteed. If the hotel's policy is to collect the deposit at the time of reservation, the guest should be notified. If a credit card is provided at the time the reservation is made, the transaction processing services will post the deposit to the hotel immediately.

Corporate or travel agency account information: This information includes the name and address of the booking company, the name of the person making the reservation, and the client's corporate or travel agency direct billing account number (if previously assigned by the hotel). For efficiency, the hotel may preload an approved list of corporate and travel agency account numbers to expedite the verification process. Even if the corporation or travel agency does not require billing, a tracking account is usually set up in the reservation system to monitor the business the corporation or travel agency provides to the hotel. In this way the sales office will have the information necessary to negotiate or renegotiate contracts with these companies.

Reservations systems should disclose important aspects of guaranteeing a reservation. Guests must be aware that their accommodations will be held until a specific time past their scheduled arrival. Guests must also know that if they fail to cancel the reservation before a specified time, they may forfeit the deposit or the hotel may levy a charge against the guarantee. Individual properties and chains may differ with respect to quoting and confirming room rates during the creation of a reservation record. Although published rates may be subject to change without notice, a rate quoted and confirmed during the reservations process must be honored. Reservation systems must be capable of modifying rates based on such factors as:

Supplementary charges for extra services or amenities. Arrival or minimum stay requirements in effect for the dates requested, if any. Special promotions in effect for the dates requested, if any. Applicable currency exchange rates, if quoting rates to an international guest. Applicable room tax percentages. Applicable service charges or gratuities.

Section Keywords reservation system Software specifically designed to handle the creation, modification, confirmation, and/or cancellation of reservation records. overbooking Accepting more reservations than there are available rooms.

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Competency 4 Objective: Describe policies and procedures surrounding the confirmation, modification, and cancellation of different types of reservations. Reservation Confirmation/Cancellation A reservation confirmation means that the hotel acknowledged and verified a guest's room request and personal information. A written confirmation states the intent of both parties and confirms important points of agreement: names, dates, rate, type of accommodation, number of rooms, deposit required or received, and number of guests. Confirmed reservations may be either guaranteed or non-guaranteed. Reservation systems normally generate a confirmation notice on the day the reservation request is received. Information can be retrieved from the reservation record and automatically reformatted into a specially designed letter or e-mail format. While there are probably as many formats for confirmation letters and e-mails as there are hotels, all confirmation notices generally include:

Name and address of guest Date and time of arrival Room type and rate Length of stay Number of persons in party Reservation classification (guaranteed or non-guaranteed) Reservation confirmation number Special requests, if any

Depending on the nature of the reservation, the confirmation notice may also include a request for a deposit or prepayment, or an update of the original reservation detailing reconfirmation, modification, or cancellation. For guests requesting accommodations and services covered by the Americans with Disabilities Act, the confirmation notice is an important channel of communication. It lets them know that their special needs are understood and the accommodations they need will be ready. Hotels will often hold the guestrooms that are specially equipped for disabled guests in a separate inventory category for improved control. Confirmation/Cancellation Numbers As part of the reservation confirmation process, systems may assign a reservation confirmation number. A confirmation number helps assure a guest that a reservation record exists. It can be especially useful to a hotel in referencing a specific reservation record requiring modification or cancellation. Similarly, reservation systems may issue a reservation cancellation number to guests properly canceling a reservation. Issuing a reservation cancellation number protects both the guest and the hotel. In the event of any future misunderstanding, the assignment of a reservation cancellation number can prove that the hotel received 165

the cancellation. In the case of a canceled guaranteed reservation, a reservation cancellation number may relieve the guest of an obligation to pay any charges posted against the guarantee. Without a reservation cancellation number, a guest may have trouble disputing a no-show billing. Cancellation numbers are not normally assigned to guests who cancel their reservation after the hotel's stated cancellation hour. These reservations are considered canceled outside the available time frame. If the canceled reservation is nonguaranteed, the guest is not obligated to pay the hotel. Procedures for issuing cancellation numbers may be part of an established agreement between the hotel and a credit card company relative to no-show billing. Each reservation system typically uses unique methods of generating confirmation and cancellation numbers. These numbers can include portions of the guest's scheduled arrival date, the reservations agent's initials, a property code, and other relevant information. For example, under one system, the cancellation number 36014MR563 represents these facts:

Calendar dates can be expressed in three digits when the days of the year are numbered consecutively from 001 through 365 (366 in a leap year). These are often referred to as Julian dates. For example, the number 360 in the example corresponds to December 26 in a non-leap year. Confirmation and cancellation numbers should be stored in separate files for quick referencing. Crossreferencing reservation cancellation numbers by scheduled date of arrival can help facilitate other related functions. For example, the cancellation of a reservation will result in updated reservation reports that assist management in staffing and facility planning. No matter how thorough the reservations process, there is no way to avoid an occasional reservation change or cancellation. This fact does not make the proper creation of a reservation record any less important. A system's capabilities for storing and retrieving reservation records and related files are vital to the reservations process. If a person contacts the hotel to change a reservation, for example, the reservations agent must be able to quickly access the correct record, verify its contents, and process the modification. The system must also be able to promptly re-file the reservation record and update pertinent reservation reports. Modifying Non-Guaranteed Reservations Guests sometimes make non-guaranteed rather than guaranteed reservations when they expect to arrive at the property before the hotel's reservation cancellation hour. However, situations can arise that make it impossible for a guest to arrive on time. For example, delayed airline flights, road-construction bottlenecks, or weather conditions may hinder travel. When delays are apparent, experienced travelers often contact the hotel and notify the staff of the delay, or change their reservations from non-guaranteed to guaranteed in order to avoid being canceled at the hotel's reservation cancellation hour. Reservations systems capable of processing reservation changes must closely adhere to hotel policies. Typically, a system would: 1. Access the correct non-guaranteed reservation record.

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2. Capture the guest's credit card type, number, and expiration date.

3. Assign the guest a new reservation confirmation number, if it is hotel policy.

4. Complete the change from non-guaranteed to guaranteed reservation status according to additional system procedures, if any.

Canceling a Reservation A prospective guest does the hotel a service when he or she takes the time to cancel a reservation. A reservation cancellation informs the hotel that a previously reserved room is once again available, and helps the front office more effectively manage its rooms inventory. Hotels should make processing reservation cancellations easy and efficient. Reservation cancellations, like any guest service, require the reservations or front office staff to be as polite, courteous, and effective as possible. Non-Guaranteed Reservations. To cancel a non-guaranteed reservation, the reservations system requires the guest's name and address, number of reserved rooms, scheduled arrival and departure dates, and reservation confirmation number, if available. This information will ensure that the correct reservation is accessed and canceled. After recording the cancellation, the system will assign a cancellation number. Credit Card Guaranteed Reservations. Most credit card companies will support no-show billings only if the reservation system issues cancellation numbers for properly canceled reservations. Reservations systems may follow a cancellation procedure for credit card guaranteed reservations that involves the following steps: 1. Access the correct reservation record.

2. Assign a reservation cancellation number.

3. Add the cancellation number to the reservation cancellation file.

4. Verify updated room availability information (room returned to available inventory).

Advance Deposit Reservations. Policies related to the cancellation of advance deposit reservations vary greatly among hotel companies and reservation systems. The reservation system should follow procedures similar to those it uses for processing reservation cancellations. Deposits are normally returned to guests who properly cancel reservations. While reservation systems must always be precise when assigning and 167

recording reservation cancellation numbers, it is especially important when an advance deposit is involved.

Section Keywords confirmation number A code that provides a unique reference to a reservation record and assures the guest that the reservation record exists. cancellation number A number issued to a guest who has properly canceled a reservation, proving that a cancellation request was received.

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Competency 5 Objective: Explain the function of typical reservation reports, and summarize other reservation considerations. Reservation Reports An effective reservation system helps maximize room sales by accurately monitoring room availabilities and forecasting rooms revenue. The number and type of management reports available through a reservation system are functions of the hotel's needs and the system's capability and contents. Popular reservations management reports include:

Reservation transactions report: This report summarizes daily reservations activity in terms of reservation record creation, modification, and cancellation. Other possible reports include specialized summaries such as cancellation reports, blocked room reports, and no-show reports. Commission agent report: Agents with contractual agreements may be owed commissions for business booked at the property. This report tracks the amounts the hotel owes to each agent. Regrets and denials report: Regrets and denials are ways of classifying lost business. Regrets are recorded when guests choose not to make a reservation. There may be several reasons for this, including room rate, room type availability, location, and other factors. Denials are recorded when the hotel is unable to accept a reservation request. This is most often due to room availability or restrictions put on new reservations. In many hotels, each of these situations is recorded, and then reviewed by management. If the hotel is getting too many regrets due to rate, management may need to adjust the rate to be more competitive. Denials help management decide such things as group allocations, or whether more rooms of a certain type need to be added to the property. Some companies call this report the "turnaway report" or "lost business report." Revenue forecast report: This report projects future revenue by multiplying predicted occupancies by applicable room rates. This information can be especially important for long-range planning and cash management strategies.

Expected Arrival and Departure Lists Expected arrival and departure lists may be generated according to a pre-determined schedule or on demand to indicate the number and names of guests expected to arrive, depart, or stay over. A list of expected arrivals may be displayed or printed in the reservations department or at the front desk. Front desk agents depend on having expected arrival information to facilitate the guest registration process. Similarly, expected departure information can be used to anticipate and expedite guest account settlement and check-out. Expected departure lists also help the front desk staff identify guests who may be staying beyond their expected departure date but have not told the hotel (overstays). This can be very important, especially when the hotel expects high occupancies and has already reserved the room for an incoming guest. Reservation systems can also perform preregistration functions and provide other services for special guests, such as VIPs or those staying in specially prepared rooms. Depending on the amount of information collected during the reservations process, a guest may need only to sign a pre-arrival form or submit his or her credit card for processing to complete the registration process. By securing comprehensive information during the reservations process, a more efficient guest registration process may be possible. 169

Processing Deposits Advance deposits for reservations should be processed by employees who do not have direct access to reservation records. Reservations personnel should not directly handle checks or cash; a separation of duties provides better security. The general manager's secretary or the hotel's general cashier are two possible candidates for independent reviewer. These employees should endorse deposit checks with the hotel stamp immediately after receiving them and record the following information in a deposits-received log or system file: check number, check amount, date received, guest name, arrival date, and confirmation number (if known). The log or file should then be sent to the reservations department. Each reservation record should be updated with the status of its deposit information. A transaction report should verify that the recorded deposits balance with the total reservation deposits entered for the day. Generally speaking, advance deposits received from guests should be processed with special care. Hotels should discourage guests from sending cash through the mail. Checks are better, but credit card deposits are preferred, even though the hotel pays a service charge to the credit card processing company. Reservations Histories Front office managers can develop an understanding of the hotel's reservations pattern by analyzing reservation information. The hotel's sales and marketing division can use reservations data and assorted system reports to identify trends, review available products and services, and assess the impact of its marketing strategies. Reservations histories include statistics on all aspects of the reservations process, including the number of guests, occupied rooms, reservations (by distribution channel), no-shows, walkins, overstays, and understays (people who checked out before a stated departure date). Overstays differ from stayovers in that a stayover is simply a guest who continues to occupy a room between his or her day of arrival and expected departure date. Knowing overstay and understay percentages can help management devise a plan for accommodating walk-ins or guests who request reservations at the last minute. Histories are also very helpful to track individual groups. Knowing the group booking pattern (arrivals before the start of the group block and departures after the end of the group block, for example) is important for future bookings. Tracking group guests who depart before their expected departure date is important because it may indicate to the hotel reservations manager that additional reservations can be taken on certain dates, since certain convention guests traditionally leave early. Other Reservation Considerations The topics covered in this section are not part of the typical reservations process. Nonetheless, it is important for front desk and reservations personnel to understand the legal implications of a reservation and be familiar with waiting lists, promotional packages, potential problems in the reservations process, and the impact of e-commerce on reservations. Legal Implications The reservation agreement between the hotel and the guest begins at the time of guest contact. This agreement may be oral or written. Confirming a reservation to a prospective guest in language that states that the guest will be accommodated on a particular date may constitute a contract binding the hotel to provide accommodations on that date. If the confirmation is in response to a reservation request from the prospective guest, it may bind both the hotel and the prospective guest to fulfill the reservation. Waiting Lists

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Occasionally, a reservation request must be denied because the hotel is fully booked. However, with enough lead time, interested guests may be put on a waiting list for the proposed date. Hotels experiencing high-volume reservations may satisfy excess demand through this technique. A waiting list might be developed and used according to these guidelines:

Advise the guest that no rooms are currently available for the requested dates. Offer to take the guest's name, telephone number, and/or e-mail address. Agree to notify the prospective guest immediately if a room becomes available due to a cancellation or change. Help the guest find alternative dates or accommodations if no rooms become available.

Having a waiting list, when properly implemented and managed, is a good business practice that provides a service to guests and helps foster an atmosphere of good will. Promotional Packages Many hotels and resorts offer special promotional packages to guests. These packages always include the guestroom, plus features such as meals, golf, tennis, sports lessons, limousine service, and sight-seeing or other activities in or near the property. Generally, hotels and resorts provide guests with some sort of discount for purchasing the package. Guests often consider promotional packages a bargain and a convenience, since they don't have to arrange to separately purchase the items and activities offered in the package. Reservations personnel and website content must be very informative about all the packages a property offers. Before buying a package, guests will usually talk with a reservations agent or visit the property's website to learn more about the package in detail, including features and all related prices. If a guest wishes to stay at a resort for four nights, and the resort offers only a three-night package, the reservations agent or the website must be capable of pricing an extra night's stay. Packages can be very effective for hotels and resorts, especially when they are well designed and properly sold. Potential Reservation Problems Some steps of the reservations process are more susceptible to error than others. If reservations agents are aware of these trouble spots and can successfully deal with them, mistakes will be less likely. The following sections discuss some common reservation problems. Errors in the Reservation Record. Unfortunately, there are many opportunities for a reservations agent or a guest at a website to make an error when creating a reservation record. For example:

The record may be created with an incorrect arrival or departure date, a misspelled guest name, or first and last names mistakenly reversed (for example, Troy Thomas might be recorded as Thomas Troy). The name of the person making a reservation for the guest may be accidentally entered as the guest's name on the reservation record.

To avoid such problems, the reservations system or agent should verify the information entered on the reservation record by displaying or reciting the information back to the person creating the reservation record. In addition, displaying or quoting the hotel's cancellation policy is appropriate at this time, to help 171

avoid any problems over no-show billing or non-return of deposits. Such communication can be especially important to hotels catering to international travelers. An error that prevents access to a reservation record can be disastrous to a hotel-guest relationship. Misunderstandings Due to Industry Jargon. Sometimes reservations agents or systems use industry jargon that is not widely understood. This can lead to problems. For example:

A family with a confirmed reservation may arrive two hours after the cancellation hour only to find that the hotel has no rooms available; the family thought a confirmed reservation was the same as a guaranteed reservation. Two business travelers book a double room, anticipating two beds; they are displeased to learn their room has only one double bed. Parents wishing to have their children stay in a connecting room mistakenly request an adjacent room. At check-in, the parents find that the children's room is across the hall or next door with no direct connection.

To avoid such problems, reservations agents or systems should make every effort to minimize industry jargon and explain what various terms mean at their particular property. After accepting a reservation, the terms and conditions of reserved accommodations should be provided in addition to the hotel's general reservations policies and procedures. Miscommunication with Central Reservations Systems. There are some unique possibilities for miscommunication between guests and reservations agents at central reservations systems. For example:

A central reservations system serving several hotels in the same city may book the guest into the wrong hotel, such as a chain's airport property rather than its mid-city property. A system that handles hotels in similarly named cities may book the guest into a hotel in the wrong city or state (for example, Charleston, West Virginia, instead of Charleston, South Carolina; Pasadena, California, instead of Pasadena, Texas).

To avoid such problems, the hotel's reservations agents or website should furnish the guest with the full name and address of the property at which a reservation has been made. When a reservation system serves more than one hotel in the same city, a thorough description of the hotel's location can be extremely helpful to guests. One feature of automated systems is a zip code check. With this program, the reservations agent or guest enters the zip code of the hotel and the system identifies the city associated with the zip code, helping to minimize address errors. Online Reservation System Failures. Unless communication between the hotel and an online reservation system is maintained effectively, problems can occur. For example:

The hotel may fail to update the online reservation system database with current room availabilities and rate changes. The online reservation system may be delinquent in communicating reservations it has booked to the property. Communications equipment, affecting either the online reservation system or the hotel, may become inoperable. 172

The hotel may close reservations on a particular date with the online reservations system, but too late to be effective. The reverse is also possible. The hotel may find rooms available at the last minute due to cancellations or early departures and fail to update the online reservation system in time to gain last-minute reservations. Global distribution systems and Internet distribution systems may present similar problems. Reservation systems without effective interfaces to GDSs and IDSs may have to constantly update through an off-line process. This can be time-consuming and error-prone.

To avoid such problems, hotel management must ensure accurate and timely communication between the hotel and the online reservation systems. This is typically a duty of the reservations manager. When closing reservations for a certain date, the hotel must check for any reservations an online reservation system may have confirmed but not yet communicated. Many companies have automated links between the hotel reservations system and central reservations network that eliminate the timing issues of opening and closing availability and changing rates (seamless integration). Faulty equipment at either end of the communication channel may impair the effectiveness of the reservations process. Attention must be paid to ensuring a sound working relationship with the reservations system. In addition, it is appropriate to frequently double-check the global distribution systems and Internet distribution systems to be sure hotel availability and rates are correctly displayed. This can be done by reviewing copies of GDS and IDS listings on a regular basis through GDS and IDS Internet sites. E-commerce E-commerce is an important force in hotel reservations management. (The chapter introduced e-commerce earlier, but discusses it here in more detail because of its importance.) E-commerce extends the reach of hotels far beyond the traditional distribution channels of a hotel reservations office, call center, and global distribution system. Hotels have a presence in multiple distribution channels and direct access to the consumer through the Internet. Regardless of whether a hotel is part of a chain or is independent, it can participate in online commerce via the Internet. Linking with guests through the Internet is actually the easiest part of e-commerce. The more difficult part is knowing which sites provide the best distribution opportunities, which hotel features to present, and which room rates to display. In the mid-1990s, the Internet was recognized as an emerging force in hotel reservation distribution, and most hotel companies sought a web presence. At first, most hotels simply placed the content of their printed property brochures online. With first-generation websites, hotel guests desiring to make a reservation contacted the hotel's reservations office by phoning the number displayed on the website. The second generation of hotel website development offered guests the ability to book reservations online. Offering fully interactive reservation capabilities with multiple room types and rates and real-time confirmation quickly became the standard. At first, many prospective guests checked the Internet to make a hotel selection, and then called the hotel to make their reservations. But, over time, "lookers" have become "bookers," as consumer confidence in online hotel reservation processing increased. Hotel companies then expanded their website capabilities by adding search engine capabilities, group sales, and advanced navigational features. Visitors to many hotel websites can experience 360-degree panoramic pictures, peruse dining room menus, and receive hotel-generated web-cam streaming video. Searches can be conducted according to such parameters as city, size and brand of hotel, room type, function room type, convention settings, nearby businesses, and nearby points of interest. For example, 173

potential guests can search for hotels with swimming pools, located near an airport, with high-speed Internet access and 24-hour room service. With some additional mouse clicks and key strokes, individual and group reservations can be completed and confirmed. In the same transaction, guests can reserve golf tee-times, reserve a massage treatment in the spa, make a table reservation in the dining room, and request a shuttle for transportation from the airport. E-commerce has become so important that a hotel may assign a dedicated manager to be responsible for managing electronic business transactions. This is typically a duty given to the revenue manager. Some hotel companies assign corporate managers and implement elaborate technology to oversee the revenue management and e-commerce requirements for the firm company-wide. Buyers who search the Internet for overnight accommodations do so for convenience as well as price. Many websites now combine air transportation and car rentals with hotel reservations into one booking engine for the ease of bundled purchasing and the price discounts that often accompany such purchasing. The Internet provides many specialized travel-related sites for specific traveler profiles. For example, there are sites dedicated to:

Brand-loyal travelers (for example, hilton.com, marriott.com, choicehotels.com, and so on) Meeting professionals (for example, mpoint.com, starcite.com, etc.) Bargain shoppers (priceline.com, lastminute.com, etc.) Cruise travelers (celebrity.com, cruise.com, cruisesonly.com, and so on) All-inclusive hotels (resortvacationstogo.com, for example) Interval-ownership vacations (rci.com, intervalworld.com, etc.)

There are many more travel-related websites, some general-purpose, others appealing to specific travel markets. E-commerce is an effective and expanding distribution channel for potential guest reservations. However, e-commerce must be effectively managed on a daily basis, so hotel managers can be sure that their hotel's information and pricing are properly presented. Single Image Inventory. In order for e-commerce to be effective, accurate and timely rate and inventory data must be available to all electronic distribution channels simultaneously. The best means to accomplish this is through single image inventory technology. Simply stated, single image inventory means that all reservation distribution channels draw from the same room availability, pricing, rate rules, services, and amenities information. Failure to have all online distributors working from the same data source can be chaotic and lead to overselling, shortages, and erratic levels of occupancy. When using single image inventory, all sellers base transactions against identical information. E-commerce Site Categories. E-commerce sites can be categorized as merchant-model or wholesaler sites, and as opaque or transparent sites. We will look at each of these categories in the following sections. Merchant model. The merchant model, also called the markup model, is an e-commerce strategy for an online intermediary, such as an IDS, negotiating room pricing with a hotel. The participating hotel is asked by the online seller (merchant) to provide rooms at 20 to 30 percent below the lowest published rate normally charged for the room type, or an alternate discounted rate (at the discretion of the hotel). This 174

discounted rate is called the net rate. In turn, the online seller takes on the responsibility for marketing the inventory allocated to it. The merchant will multiply the net rate by a similar percent to achieve the gross rate. For example, consider a standard room with a lowest published rate of $100. To determine the net rate, assume the merchant has negotiated a 25 percent discount, thereby producing a net rate of $75. The merchant then determines the new selling price of the room (that is, the room's gross rate) by multiplying the net rate by a percent similar or equal to the discount percentage. In the present example, using a 25 percent markup, this will generate a gross rate of $93.75 ($75 plus the 25 percent markup of $18.75). Therefore, the merchant earns a gross margin (gross rate minus net rate) of $18.75, and the guest pays $6.25 less than the $100 rack rate, which means the guest receives a discount of 6.25 percent. Merchant-model sites tend to rank hotels based on their discounts; the more a hotel discounts its rooms, the more prominently the hotel is listed. Therefore, many hotel managers feel pressured to provide significant discounts to merchant-model websites, fearing that otherwise their hotel will not be promoted as well as their competition. Examples of merchant-model sites include Hotels.com, Lowestfare.com, Orbitz, and Travelocity. Wholesaler model. With the wholesaler model, the hotel tends to maintain greater control over its room price, as a commission is paid to the wholesaler based on a percentage of the hotel's net rate. Simply stated, the hotel sets the selling price and the wholesaler receives an agreed-upon sales commission (that is, percentage of the price). For example, consider a hotel company that offers a room with a rate of $100 to a wholesaler at a net rate of $80, and agrees to let the seller add a 10 percent ($8) commission. In this example, the room will have a gross rate of $88 and the guest will pay $12 less than the hotel's $100 published rate. Some wholesalers, like Priceline and Hotwire, may negotiate a minimum margin (for example, $5 per room) to be added to the net rate rather than work on a percent commission. Sellers using the wholesaler model tend to earn less than sellers using the merchant model. It is for this reason that online sellers tend to favor the merchant model; hotels, on the other hand, tend to favor the wholesaler model, because they maintain greater control over their rooms' final price to guests. Examples of wholesaler model sites include Expedia, Hotwire, Priceline, and Travelweb. Orbitz, like some other travel sites, offers both a merchant model and a wholesaler model platform. Opaque sites. At an opaque website, a hotel room is marketed by a price and/or rating category (it might be offered by a "three-star property," for example), not by brand or property specifics. Rooms tend to be treated as a commodity being sold to the highest bidder. The services, amenities, and ambience of the property may not be considered in the selection process. With opaque websites, the brand of the hotel and its features are hidden from the buyer until the transaction is completed. Only a quality rating and the room's general location are known to the buyer at the time of purchase, hence the use of the term opaque. Since neither the hotel's identity nor its brand is disclosed until after the sale is completed, defining whether the guest is a customer of the e-commerce site or the hotel can be challenging and confusing. Since both hotels and travel sites may offer loyalty club points or frequent shopper rewards, this can be important to determine. Opaque sites often work on an auction basis. Potential guests may specify a rate they are willing to pay, and the site then works with available inventory in that price range. If it has no inventory to sell in the price range specified, it may contact participating hotels to see if they will accept the guest's bid price. Since these rates may be significantly below the hotel's published or even usual discounted rates, profit margins are reduced. For this reason, many hotel companies now do not offer loyalty club points or upgrades for reservations made through opaque sites. Examples of opaque sites include (Priceline and Hotwire. It is important to note that several opaque sites offer transparency as a special feature. 175

Transparent sites. As with opaque sites, rooms at transparent sites are classified or categorized based on room rate or star ranking, but several hotels in the qualifying range are identified before buyers make a purchase. Examples of transparent sites include Expedia, Hotels.com, lastminute.com, and Travelocity.com. E-commerce Trends. While most hotels rely on multiple e-commerce distribution channels simultaneously, the channels have become much more sophisticated in the roles they play in a hotel's overall selling strategy. For years, many hotels offered the same rooms on different channels at different rates, often underselling their own brand websites by offering special pricing to unbranded websites. This resulted in a significant erosion of the hotels' average room rates and therefore overall revenue. Hotels have learned to use caution when selecting which e-commerce sites to interact with, and have learned to develop distinct strategies for each online partner. The majority of hotel branded sites offer a best rate guarantee, which assures the traveler that the lowest online rate appears on the hotel website; should a traveler find a lower rate for the same room on the same date, the hotel company will compensate the traveler (that is, refund the difference plus a premium). A guaranteed rate program normally applies to all distribution channels except opaque websites, since travelers do not learn the identity of the hotel property they are buying (until the transaction is completed), and therefore it is difficult to equate two quoted rates. Individual hotels that allow e-commerce sites to offer rates lower than the brand site may be penalized or removed from the brand or chain. Although online booking engines are capable of reserving space for corporate and group meeting sales, most hotel websites so far have focused on individual guests. As e-commerce evolves, however, this focus is likely to shift toward the processing of group meetings, embracing issues such as large room blocks, food and beverage catering menus, tradeshow space allocation, meeting room reservations, and audiovisual equipment scheduling. On some hotel websites, group leaders can use an online request for proposal (RFP) script to enter meeting dates, room and space requirements, and other meeting needs, to which the hotel can respond based on a database query. Catering considerations, the need to control meeting space, and the desire to maximize group revenues make an automated response beyond the capabilities of most hotel companies. However, a few are moving toward automating the group RFP response process, based upon sophisticated formulas that involve guestroom-to-meeting-space ratios and projected revenue ratios. Examples of online group search and RFP engines are PlanSoft's mpoint and StarCite. Another online booking trend involves the awarding of affinity or loyalty club points (generated by the online booking site) for hotel, auto, air, cruise, rail, and other travel services. In awarding points to guests, the online booking site becomes the featured product, not the destination hotel. Some hotel companies now allow loyalty club members to redeem rewards in real time on their websites as well. However, as hotels struggle to promote their unique identity online, such online booking agency practices may be considered confusing and harmful. One online application is dynamic package pricing. Historically, online booking sites have offered only predetermined, rigidly defined (static) hotel packagesfor example, "stay five nights and receive a sixth night at no charge, along with a discount on a rental car and airfare." As online booking engines evolve, websites are able to offer on-the-fly (dynamic) pricing of custom packages selected and assembled by the guest (for example, inclusive of accommodations, food service, recreational activities, holiday events, special occasions, etc.). E-commerce technology will allow guests to build and bundle components to create a unique package, generate a unique package price, and simultaneously make multiple reservations for the services they request in their custom package.

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In addition, e-commerce capabilities enable online booking sites to create virtual hotel brands by grouping a proprietary set of preferred hotel properties at their travel sites (for example, Expedia's Bargain Hotels). This creates a new level of competition within the marketplace.

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Summary Effective hotel operations require an efficient reservations procedure. Reservation systems must be able to respond quickly, accurately, and pleasantly to requests for overnight accommodations. Reservations processing involves matching room requests with room availabilities; recording, confirming, and maintaining reservations; and producing management reports. Reservation information is especially useful in other front office functions. The reservations office and hotel sales office must coordinate their activities and information regularly. The reservations manager participates in regular sales meetings and ensures that current reservation information is provided to the sales department. Successful reservations agents sell their hotel, creating positive images of the facilities and services. Hotels use specific sales processes to ensure that guests have the right information about the property, and the reservations agent collects all the guest information necessary to process a reservation. The reservation system should contain detailed and timely information covering room types and available rates. Given the capabilities of automation, much of the responsibility for room sales has shifted from the front office to the reservations department and associated websites. Requests for specific room types, locations, and special features can be acknowledged and confirmed as part of the reservations process. The two major types of hotel reservations are guaranteed and non-guaranteed. Hotels can draw reservations from various market sources within the hospitality industry, including central reservations systems, intersell agencies, and property-direct reservations. There are two basic types of central reservations systems: affiliate networks and non-affiliate networks. Global distribution systems connect central reservations systems with airline computer systems and terminals around the world. The term intersell agency describes a central reservations system that contracts to handle more than just hotel rooms. A property-direct system handles all requests for accommodations, monitors any communication links with central reservations systems and intersell agencies, and maintains updated room availability status reports for a single hotel. Processing a reservation request can result in one of several responses: reservation acceptance; suggestion of alternative room types, dates, and/or rates; and suggestion of an alternative hotel property. In any reservation system, it is necessary to closely monitor the number of reservations accepted in order to avoid overbooking. A reliable reservation system can assist management in maintaining tight control over room availability data and can generate many reservation-related reports. Reservation records identify guests and their occupancy needs prior to actual arrival. These records enable the hotel to personalize guest service and more accurately schedule staff. Reservation records are created based on interactions with potential guests. A reservation record initiates the hotel guest cycle. A reservation confirmation indicates the hotel's acknowledgment and verification of a guest's room request and personal information. A written confirmation states the intent of both parties and confirms important points of agreement, including the room type and rate for a specific date. Confirmed reservations may be guaranteed or non-guaranteed. As part of the reservation confirmation process, a reservation confirmation number may be assigned to each accepted reservation record. A confirmation number assures the guest that a reservation record exists. It can be especially useful to the hotel in retrieving a reservation record for updating, prior to guest registration. Similarly, hotels may issue a reservation cancellation number to guests properly canceling a reservation. Issuing a cancellation number to guests protects both the guest and hotel in the event of a no-show or a misunderstanding. An effective reservation system helps maximize room sales by accurately monitoring room availabilities and forecasting rooms revenue. The number and type of management reports available through a reservation system are a function of the hotel's needs and the system's capability and contents. Typical 178

reservations management reports include: reservation transactions report, commission agent report, regrets and denials report (or turnaway report), and a revenue forecast report. Other reservation considerations include the legal ramifications of reservations, waiting lists, promotional packages, potential problems in the reservations process, and the impact of e-commerce on reservations.

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Internet Sites For more information, visit the following Internet sites. Remember that Internet addresses can change without notice. If the site is no longer there, you can use a search engine to look for additional sites. Internet Reservation Sites BizTravelBrokers.com Business Travel Net Hotels and Travel on the Net HotelsOnline Resorts Online Travelocity TravelWeb Technology Sites Agilysis Hospitality Solutions Hospitality Industry Technology Exposition & Conference Hotel Electronic Distribution Network Association Hotellinx Systems Ltd. MICROS Systems, Inc. Newmarket International, Inc. Passkey StarCite, Inc. Softbrands, Inc.

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Case Study 1 Sarah's Serious ReservationsWorking with the CRO Sarah Shepherd was visiting her hotel chain's Midwest central reservations office in Des Moines, Iowa, wondering why her general manager had wanted her to spend a day touring the facilities with other reservations managers. She had a lot of work to do back in Bloomington, and she didn't understand what good it could do her to see how a roomful of reservations agents took orders over the telephone. "Frankly, I don't know either," her GM had told her. "I just have the suspicion that we could make a lot better use of our central reservations system. We're currently booking 30 percent of our rooms with them. Maybe we could do better. I'd like you to find out if that's true and bring back some recommendations." Right now, I'd recommend catching an early flight home, she thought as the tour leaders began dividing the large group into smaller teams. Recognizing Gabe Culberson, the reservations manager from her sister property in Bloomington, she went to join his team. "At least I'll have a friend to commiserate with," she said under her breath. Sarah and Gabe were joined by Gwen Hsu, a reservations manager from one of the chain's St Louis properties. The tour began "on the floor," where Sarah, Gabe, and Gwen watched as 200 reservations agents answered an unending stream of telephone calls. "This is really the nerve center for the operation," their guide was telling them, trying hard to be heard without interrupting any of the ongoing phone conversations. "Every potential guest who picks up the phone and dials our toll-free number ends up talking to someone in this room. Using the information you've provided that appears on these monitors, agents answer guest questions about rates, availability, amenities, local attractionsthe whole works. To the best of their ability, that is." "What do you mean by that?" Gwen asked. "Well, we can only pass along the information that managers like you provide. If it isn't in our reservations system, we don't know about it." Gabe leaned toward Sarah. "That's for sure. You wouldn't believe the difference it made when we posted information about the new children's museum downtown." Then he chuckled. "What am I sayingyou've probably noticed the healthy bump in family business, too, right?" "What do you mean?" Sarah started to ask, but their tour guide was moving on. The guide stopped behind a reservations agent who was telling a caller about one of the chain's downtown Chicago properties. "This is Michelle," the guide said, "and she's one of our most enthusiastic sales agents. I just wanted you to hear how she works her magic over the phone." "that's right, Mr. Davis," Michelle was telling the caller. "Now, I have you booked for a room with two double beds and a rollaway bed for five days. Since you mentioned that you and your wife will be traveling with three small children, though, I would personally encourage you to consider the benefits you would gain by staying in a suite instead. You're right. It is a more expensive room, but it will give your family substantially more room to spread out in during a long stay in the city. Plus, with the suite reservation I can also offer you a special family package price that includes reduced admission to the Field Museum of Natural History, the Museum of Science and Industry, and Shedd Aquarium. That will give your family something fun to do while you're at your conference." Michelle paused, scanning her terminal. "Yes, a hotel shuttle offers transportation to those attractions. Great, I'll reserve a suite in your name and 181

make sure you get the family package price. You'll be able to pick up your museum and aquarium tickets at the concierge desk in the hotel lobby. Oh, and you might tell your wife that the hotel is just one block off of the Magnificent Mile, one of the best shopping districts in the nation. Thank you for calling, Mr. Davis. I hope you and your family will have a great stay." Wow! Sarah thought with surprise. She sounds just like one of my own sales agents. In fact, she might even be better than they are! The group started moving on when Michelle answered another call. Suddenly Sarah heard Michelle say the name of her own property in Bloomington. "Wait a second," she called to their guide. "I'd love to hear this." Michelle was studying her screen. "I'm sorry, sir. I do know that there's a new children's museum in Bloomington, but I don't have any information here about it. Other attractions? There is an annual Frontier Fest, but that's the only attraction I have a record of." "What?" Sarah said, a bit too loudly. The Frontier Fest died out two years ago. Why wasn't Michelle-theWonder-Agent telling this caller about the Worlds of Water Fun Park that opened less than a mile away last year or the new mall and movie theaters? And why didn't she know anything about the children's museum? "It's five minutes from the airport and shuttle service is provided. One moment while I check. I'm sorry, I don't have any information about fees or whether that's a hotel shuttle or an airport shuttle. There may be a charge." But there isn't, Sarah thought, her heart sinking. It's our own courtesy van. Why don't you know that? "I'm showing a rate of $105 for that room. Would you like me to reserve that for you, then, Ms. McQueen?" This time, Michelle paused for what felt like minutes to Sarah. "I understand. Well, thank you very much for your call. I hope we'll be able to serve you in the future." Dejected, Sarah turned to her friend Gabe. "She just lost that sale for me." Gabe peered at Michelle's monitor for a minute. "Actually, Sarah, I think you just lost that sale for your hotel." He explained what he meant over coffee during a break in their tour. "Tell me how you work with central reservations," he said. "I'm not sure I know what you mean. We tell them how many rooms they can sell, and usually they sell them. It's simple: people call in and the agents take orders." "But it's not that simpleat least, it shouldn't be. You heard Michelle's conversation with that guy staying in Chicago. She definitely was not 'taking an order.' She was selling. She could do that because the Chicago property provided her with every piece of information she'd need in the selling process. That's what I try to do at our property. Anything that I'd normally tell our in-house sales staff I post to the central res system. If the pool is out for repair, if we've changed our menu, if we've added amenities or know of area attractions, if we offer special corporate discountsall of that information gets added to the database here so it comes up on their screens when a guest calls in."

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Sarah was suddenly thoughtful. "So you're saying Michelle didn't know about the children's museum or the defunct Frontier Fest or the courtesy van or our new rate structure because I didn't post the information." Gabe nodded. "I also noticed that there wasn't any information about that renovation you guys did about a year and a half ago." "Just rub it in, Gabe," Sarah said, starting to smile. "I admit I had no idea they could be such effective salespeople." Just then Gwen Hsu walked up. "Oh, they're effective, all right. Too effective, if you ask me. My problem is that central res keeps overbooking my property, so I get a seemingly constant stream of guestswith confirmationsthat I don't have any room for." "So you walk them," Gabe said. "Well, I sure don't walk the folks who've reserved with us directly. They're our regulars. The central res guests are usually one-timers who have to be in town for a meeting; odds are, I'll never see them again." "Gwen, how often do you update your allocation of rooms with central reservations?" Sarah wondered. "What do you mean?" "Gabe's been telling me that central reservations can only work with the information we give them. I just wondered how often you changed their allocation or posted new occupancy information." "I guess it's usually first-thing-in-the-morning, last-thing-at-night. In the morning, I post the allocation for the day; at night, I check in to see where they stand in relation to the reservations we've developed inhouse. That's usually when I get the bad news." "That may be the problem," Gabe interjected. "I'm on our system probably 12 times a day, updating information and adjusting the allocation. And we don't have a pattern of overbooking." Gwen frowned, saying that sounded like a lot of work. She would have to evaluate it to decide whether the benefits warranted the extra effort. She then left to ask their guide a specific question before the second half of their tour began. "That was a good question, Sarah," Gabe said. "You know, by the time the next trip to central res rolls around, I bet your property will be just as involved in and enthusiastic about the system as mine is." "Actually, Gabe, I was thinking that, next time around, it'll be your property's turn to play catch-up," Sarah said, flashing a smile. Discussion Questions 1. What kinds of information does Sarah need from other departments at her hotel that will enable her to work better with the central reservations office?

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2. As the reservations manager, what might Sarah do to improve the effectiveness of her property's work with central reservations?

Case Number: 3324CA The following industry experts helped generate and develop this case: Richard M. Brooks, CHA, Vice President, TWE Group; and S. Kenneth Hiller, CHA, General Manager, Holiday Inn, Beechwood, Ohio. This case also appears in Case Studies in Lodging Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 1998).

Case Study 2 Booking Online Most of the arrivals had checked in to the Boden by 5:00 P.M. on this beautiful late spring day. They seemed to want to get in their first swim of the season and maybe even a stroll on the beach before going to dinner. The computer showed that three more arrivals were expected, a party of three and two couples. Since it was going to be such a nice weekend, many of the guests had arrived without prior reservations, but, given the fact that the season was just getting underway; the resort was able to accommodate all of them. However, the last three parties would nearly fill the resort and lodge for the weekend. Rooms still available included a honeymoon suite, two mini-suites, and three double-double standard rooms. The front office supervisor, Sasha, was pleased with the results. While Sasha reviewed the departure print-out for Saturday, a handsome tall couple and their daughter stepped from their vehicle under the porte cochere. The valet attended well to their needs, and before long the bell attendant had unloaded their luggage. Sasha assumed that this was the party who had reserved room 314, a room with two double beds and an ocean view, for the weekend. Indeed it was. She welcomed the party to the Boden Oceanside Resort and Lodge. The guest, Mr. Pardonme, said hello and handed Sasha a reservation confirmation. It was immediately obvious that the reservation had been made online by Mr. Pardonme. Sasha brought up the reservation file on the computer screen and scanned the guest file to determine if the Pardonme party had been assigned a room comparable to the one specified on the reservation confirmation. She knew that sometimes guests who booked online were sold rooms that were not always available when they arrived at the resort. Her concerns were confirmed when she saw that they had been assigned room 314 when they had actually purchased a mini-suite. The price they were paying, however, was for a standard room like the one they had been assigned. Sasha wondered if the Pardonme party would even notice. She checked them in to room 314 without mentioning the difference, hoping that the two double beds, the nice view, and a reasonably spacious bathroom would satisfy the guests. As it was, there weren't many choices left for them anyway! Sasha decided that if they were dissatisfied she would show them the last mini-suite available, but also let them know that it was usually sold for $145 rather than the $85 bargain online price they were paying per night. Moments later the Pardonmes returned to ask about the suite they were promised. Sasha asked the bell attendant to show them a suite that was usually saved for handicapped guests. 184

The bell attendant and the Pardonme party went to the suite and, upon entering, Mr. Pardonme thought that the hotel must have gone mad. "Where is the second bed?" he asked, looking a little perplexed. "It's here on the wall," said the bell attendant. "It's a Murphy bed." Mr. Pardonme looked around the room, looked at his confirmation letter that described the room he had reserved, and shook his head. Back at the front desk, Mr. Pardonme was a little upset. He told Sasha that the room he had reserved over the Internet was the one that he expected to sleep in for the next three nights. He purposely had phoned the Boden prior to reserving online to be sure that he could get the room of his choice. Whoever had been on reservations that day had told him not to worry because there were plenty of the mini-suites available for the nights he was booking for. She told him the rate that would guarantee him the room was $145 per night if he booked directly with the Boden through the reservations department. She wasn't sure why the online rate was so much lower, but she couldn't lower her rate. So Mr. Pardonme decided to try booking online, and now the room he had selected was not the one he had been assigned. He told Sasha that he wasn't interested in the alternative she had given him because the Murphy bed didn't give him and his wife any more privacy than the double-double that they had first been assigned. Sasha didn't have any other rooms available that met his specific needs. She told Mr. Pardonme that the best she could do was either of the two rooms that they had been shown. The Pardonme party finally settled for the mini-suite with the Murphy bed. The room would be more comfortable than the first one they had been shown. Sasha did a room move on the computer and gave them the proper keys. She hoped they would enjoy that room. How much time would they spend in it anyway, she thought to herself. And they are getting a great price on the room anyway, so why are they so picky? Discussion Questions 1. What were the expectations of the guests?

2. What other options might Sasha have considered in this case?

Case number: 608C02 This case also appears in Todd Comen, Case Studies in Front Office Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 2003).

Case Study 3 Overbooked at the Boden Oceanside Resort and Lodge It was 9:30 P.M. and a couple was at the front desk insisting that they placed a reservation for three nights at the lodge over two months ago. The front desk agent, Rob, was unable to find their reservation anywhere. Rob had been with the hotel for two years and he knew his way around the front office. He had seen this trick before and didn't have much patience for it. As was the routine, however, he checked the reservation system, called the toll-free reservation service and thumbed through the manager's files trying to uncover anything that would suggest that the guests had a reservation for this evening. The guests' names were neither in the history file nor anywhere in the central reservation system. 185

The hotel was oversold and Rob was in no mood to work with the guests. He had already walked three other parties, two families with reservations and one couple from off the road who didn't have reservations for the evening. He had been taught to walk first-time guests or walk-ins with no reservations. Rob was always advised to hold rooms at whatever cost for those frequent guests who stayed at the resort for at least a week each year. These guests were sacred and never to be sacrificed, even if they didn't show up on the night they were expected. He told the couple politely that there were no rooms available and suggested they try another resort of similar quality down the road. The couple was getting quite belligerent by then and insisted on speaking with a manager. Matt, the manager on duty, had been running since coming on duty late that afternoon due to a fully booked house. As he approached the desk, he wondered why Rob couldn't deal with the situation. Matt listened to all of the details and noted that the guests claimed to have had a reservation for a couple of months. He checked the time, noting that it was relatively late, and also checked to see how many arrivals were expected. There were reservations that hadn't been claimed yet and they were all held with a credit card. He wondered if any of the late arrivals had phoned the hotel earlier to cancel their reservation and the message hadn't been entered into the system for some reason. After pondering for a moment he made up his mind to check the couple in to a double-double that wasn't in the new section of the resort. He figured that they might complain that it wasn't their first choice, but at least it was a room. The couple was pleased when he told them that they could have a room for the night, but that the hotel was overbooked for the next three nights due to a number of small family reunions and that he couldn't guarantee them a room for the following evening. Rob was puzzled by Matt's quick decision, but graciously and smoothly checked the guests into the room that Matt had assigned them. The remainder of the evening was quiet, with a couple of late arrivals. Rob had time to think over the events of the evening and wondered if he should stay with the resort or if he should apply at the new Four Winds resort that was advertising for an opening team just down the road. The next day Rob called his manager and gave his two weeks' notice. Discussion Questions 1. Which guests would you walk to another hotel?

2. What would be a guest-friendly way to walk guests?

3. What are the costs of walking a guest?

Case number: 608C05 This case also appears in Todd Comen, Case Studies in Front Office Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 2003).

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Review Questions 1. What role does a reservations manager or supervisor play in the sales department? What role does the reservations manager or supervisor play in forecasting occupancy and revenue?

2. What are the major types of reservations? What are the responsibilities of the guest and the hotel in each case?

3. What information does a reservations agent need to create a reservation record?

4. How do non-affiliate reservation networks differ from affiliate reservation networks? How do central reservations systems differ from intersell agencies?

5. What methods can be used to guarantee a reservation? What is the difference between them?

6. What are common reservation control devices used by hotels? How is each used to monitor room availabilities?

7. What guest information is necessary for a reservations agent to guarantee a reservation?

8. What is the main purpose of a confirmation letter or telephone call?

9. How does proper cancellation of a reservation benefit the hotel? How can hotels make cancellations as easy as possible for guests?

10. What is the purpose of a cancellation number? How might a cancellation number be generated?

11. What management reports can be generated from reservations data? What are the uses of expected arrival lists and reservations histories?

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12. How can reservation procedures for conferences, conventions, and tour groups be made more efficient? What precautions should a reservations manager take before creating a group block?

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Chapter 5 - Registration Outline The Registration Process

Preregistration Activities Creating the Registration Record Assigning the Room and Rate Establishing the Method of Payment Verifying the Guest's Identity Issuing the Room Key Filling Special Requests

Creative Registration Options

Self-Registration

Selling the Guestroom Denying Accommodations

Walk-In Guests Guests with Non-Guaranteed Reservations Guests with Guaranteed Reservations

Summary

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Competency 1 Objective: List the seven steps of the registration process, explain the function of preregistration, and identify preregistration activities. Registration begins when the front desk agent extends a sincere welcome to the guest. A warm greeting sets the tone for everything that follows. The front desk agent moves into the registration process after determining the guest's reservation status. To a great degree, registration relies on the information kept in a reservation record. Front office personnel will find registration simpler and smoother when accurate and complete information has been captured during the reservations process. This chapter takes a close look at the seven steps of the registration process. The chapter then examines creative registration options, the front office sales role, and strategies to use when guests cannot be accommodated. The Registration Process From a front desk agent's perspective, the registration process consists of seven steps:

Preregistration activities Creating the registration record Assigning the room and rate Establishing the method of payment Verifying the guest's identity Issuing the room key Filling special requests

We will discuss each of these steps in the following sections. Preregistration Activities Preregistration activities (registration activities that occur before the guest arrives at the property) help accelerate the registration process. Guests can be preregistered using the information collected during the reservations process. Typically, preregistered guests need only verify information already entered onto a registration record and provide a valid signature in the appropriate place on a registration form or card. Preregistration normally involves more than merely producing a registration document in advance of guest arrival. Room and rate assignment, creation of a guest folio, and other functions may also be part of the preregistration process. However, some front office managers may be reluctant to assign a specific room to a guest in advance of check-in, since reservations are sometimes canceled or modified. Specific room assignments often become jumbled when last-minute changes in reservation status are made. In addition, assigning a large percentage of vacant rooms in advance of arrival may limit the number of rooms available to guests who are not preregistered. This imbalance can slow down the registration process and create a negative impression of the hotel. Hotels will tend to develop pre- registration policies based on operational experience. 190

In some front office operations, preregistration services may be limited to specially designated or VIP guests or groups. However, most experienced front office managers prefer to preregister guests with reservation records because it shortens the check-in process and also helps them identify what rooms are available for those guests who do not have reservations when they arrive. Since data recorded during the reservations process serve as the basis for preregistration, front office systems can reformat a reservation record into a registration record. A sample system-generated preregistration card is shown in Exhibit 1. Although a hotel may have to void some pre-arrival room assignments due to last-minute changes, the 191

registration time saved by guests who register without complications usually compensates for the inconvenience caused by the small percentage of cancellations. Preregistration helps managers plan for the special requirements of guests as well as of the hotel. For example, frequent guests may have a special room they enjoy at the hotel, and guests with disabilities may need rooms outfitted to their special needs. By preregistering these guests, the front desk agent can be sure to satisfy them or can notify the department responsible for the request. For example, once a room has been assigned to a family, the front desk can notify the housekeeping department of the room assignment so that a crib can be delivered in advance. In addition, preregistration helps managers when they know that the hotel will be at full occupancy over the next several days. In order to fill the house properly, it may be necessary to apply reservations management software that enables guest reservations of one or two nights to be preregistered into rooms that have been specially blocked for one or two nights in the future. In this way, rooms that are blocked will be available when the guests check in. In some hotels, this process may be closely tracked several days in advance to be sure that the required rooms are available. Preregistration lends itself to innovative registration options. For instance, a hotel courtesy van might pick up a guest arriving at the airport who has a hotel reservation. The driver of the van, equipped with appropriate information and forms, could request the guest's signature on a pre-printed registration card, imprint the guest's credit card, and give the guest a pre-assigned room keyall before the guest arrives at the hotel. Another variation on preregistration for air travelers involves actual services at the airport. Some luxury hotels have arrangements with nearby airports to provide guests with convenient check-in services. The guest may leave an impression of a major credit card with an agent at an appropriate desk, frequently the airport transportation desk. Credit information is then transmitted through a specially interfaced communication device to the hotel's front desk. This arrangement allows the front office to approve the guest's credit, prepare and print guest registration records, prepare room keys, and print any waiting messages. When the guest arrives at the front desk, the check-in process is abbreviated. A more sophisticated approach to preregistration involves registering guests designated for VIP service at some place other than the front deskfor example, at the concierge desk. Some hotels arrange for VIP guests to be taken directly to their rooms, thereby avoiding possible delays encountered at a busy front desk. A hotel may take care to preregister guests who are members of the hotel's frequent traveler program, are part of an arriving group, or are travelers from a preferred corporate account. Preregistration ensures that these guests receive a quality allotment of rooms because of their level of loyalty or affiliation. Some hotels do not make special provisions for reservations from e-commerce websites. These reservations are often sold as run of the house, meaning that the guest will be assigned whatever room is available at check-in time. Generally, a run-of-the-house guest does not benefit from preregistration activities. Some hotel companies have centralized guest history systems. Guest reservations can be compared to the guest history system, either manually or through advanced automation techniques. Guest preferences are captured and can be acted on as part of the guest preregistration activity. For example, Wyndham Hotels & Resorts has a guest-loyalty program called "Wyndham ByRequest." Members of Wyndham ByRequest can enter certain items into their history file, like the type of pillow they prefer, or whether they would like to have complimentary bottled water in their guestroom when they arrive. Through the preregistration process, the front office can notify housekeeping or room service about these requests and have the necessary items in place prior to the guests' arrival. This adds value to the loyalty program for guests, and shows them that the entire hotel company is aware of their preferences. 192

Section Keywords reservation status An indicator of a room's long-term availability for assignment. registration form A document used to help formulate a registration record; in many states, the guest's signature on a registration form is required by law. run of the house Room assignment based on room availability at the time of check-in.

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Competency 2 Objective: Describe the function of registration records and registration cards, and identify factors that affect room and rate assignments during the registration process. Creating the Registration Record After a guest arrives at the hotel, the front desk agent creates a registration record, a collection of important guest information.

Registration records facilitate the registration process. The registration record requires a guest to write down (or simply verify, if the registration record has been pre-printed by the property management system) his or her name, address, telephone number, company affiliation (if appropriate), and other personal data. Exhibit 2 shows a sample registration record. As this sample shows, some registration records may include a statement about the hotel's responsibility for storing guest valuables. State law may require such a statement. The registration record usually contains a space for the guest's signature to indicate acceptance of the room rate and date of departure. In some states, a guest's signature is a legal prerequisite to establishing an innkeeper/guest relationship. In many states, however, this requirement has been replaced by other provisions, such as the intentional establishment of credit by the guest at the time of registration. Although a state or local municipality may require a signed registration form, an electronic record establishes the basis for registration processing. Guests arriving without reservations (that is, walk-ins) will experience a different registration routine. Front desk agents will need to collect guest data and 194

subsequently input that data into a front office system to create a registration record. Required registration information should be collected from guest responses during check-in. Registration records require guests to indicate their intended method of settlement for rooms and other hotel goods and services. In addition, front desk agents should confirm the guest's planned departure date and pre-assigned room rate. These elements are critical to rooms and revenue management. Clarifying the room rate at registration minimizes confusion and adjustments to the guest's folio at check-out. Many registration records also contain some form of acknowledgment on the part of the guest that he or she is responsible for payment in case the credit card, debit card, or direct billing is not accepted for settlement.

Exhibit 3 diagrams the flow of guest registration information to electronic files and to other areas and functions of the hotel. The guest's intended method of payment may determine his or her point-of-sale charge status. For example, a guest paying cash in advance at registration is likely to have a no-post status in the hotel's revenue centers. In other words, the guest will not be allowed to charge purchases to a room account. A guest presenting a valid credit card during registration may be allowed point-of-sale charge privileges. The decision to allocate charge privileges to a guest usually depends on the establishment of an acceptable method of credit at check-in. At check-out, the information in a guest's registration record may be used as the primary source for creating a guest history file. This file may then become part of the hotel company's database to be used in the future by the hotel's sales and marketing staff. The information in a guest history database can be analyzed to assist management in developing contact strategies, marketing lists, and detailed reports. Assigning the Room and Rate

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Room assignment is an important part of the registration process. Room assignment involves identifying and allocating an available room in a specific room category to a guest. When the guest request is ambiguous, or when a room is unavailable in the guest's preferred category, a front desk agent may query the front office system to locate an acceptable available room. On the basis of reservation information, specific rooms and rates may be pre-assigned (before the guest's arrival). Pre-assigning a specific room depends on the room's forecasted availability status and how appropriately the room meets the guest's needs. This requires the reservations system to interact with the rooms management module in the front office system. Room assignments are finalized during the registration process. Determining the guest's needs by room type alone is often insufficient. Hotels typically offer a variety of room rates for similar types of rooms. Room rates for rooms with identical bed configurations may vary based on room size, quality of furnishings, location, amenities, and other factors. Front desk agents must know the differences between the room types and be capable of querying the system to determine each room's rate category, current occupancy status, furnishings, location, and amenities to best satisfy guest requests. Future reservation commitments must also be considered during room assignment so that rooms are not assigned in conflict with near-future reservation needs. The front desk agent's knowledge of the hotel and ability to use the system to determine room status and an appropriate room rate is critical to an effective registration process. The important topics of room status, room rates, room locations, and reservation blocks are addressed in the following sections. Room Status. Effective room and rate assignment depends on accurate and timely room status information. Room status information is usually discussed in terms of two timelines. In the long term (beyond the present night), a room's readiness is described by its reservation status. In the short term (tonight), a room's readiness is described by its housekeeping status, which refers to its availability for immediate assignment. Typical housekeeping status descriptions include:

Occupiedthe room has a registered guest or guests in it. Vacantthe room is currently unoccupied. On-Changethe room is currently being cleaned for the next guest. Out-of-Orderthe room has a condition that does not allow it to be rented.

An important aid to the registration of guests arriving early is the prompt relay of housekeeping information to the front desk. This is especially true during high-occupancy or full-occupancy (sold-out) periods. The more efficient the registration process, the more impressed an arriving guest is likely to be with the hotel's efficiency of operation. At most properties, the front desk agent is not authorized to assign a guestroom until the room has been cleaned, inspected, and released by the housekeeping department. Even though a guest arriving early may have to wait for a room, he or she will perceive the wait for a readied room as a better option than simply receiving a room key to a room that has not been properly prepared. Room status discrepancies can occur in front office systems for several reasons. First, there may be an actual variance, caused by incomplete or inaccurate recordkeeping. For example, a guest may settle his or her account for the nights he or she originally reserved the guestroom, but request to stay in the room for another night or two; while the front desk agent settles the account, he or she might accidentally indicate to the property management system that the guest has checked out, creating a room status discrepancy, since the front office will show the guest checked out, but the housekeeping department will indicate that 196

someone is still in the guestroom. Another room status discrepancy occurs when a guest leaves the hotel without settling his or her account; the front office still shows the room as occupied, but housekeeping lists the guestroom as vacant. (In this case, the guest is termed a skipper.) Room status discrepancies may also arise from delays in communicating housekeeping status information from the housekeeping department to the front desk. In many properties, the property management system produces a daily front office report called the occupancy report, which lists rooms occupied for the current night and indicates those guests expected to check out the following day. The executive housekeeper receives a copy of this report on a daily basis and uses it to schedule housekeeping staff for the following day. A scheduling report is created each morning, and the executive housekeeper can use it to assign staff members to specific floor sections. The rooms occupied by guests expected to check out are usually scheduled to be cleaned last, since many guests tend to use their room until just before the hotel's departure time. Thus, if these rooms were cleaned early, they might have to be cleaned again. Rooms of departed guests require more cleaning time than do rooms of guests who are staying over (making the room a stayover room). If a guest checks out before the stated departure date, the front desk must notify housekeeping that the room should no longer be classified as a stayover. A special housekeeping routine coordinated with the front desk is often needed for cleaning and inspecting early check-out rooms.

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At the end of a work shift, the housekeeping department prepares a housekeeping status report (see Exhibit 4) based on a physical check of all guestrooms. This report indicates the current housekeeping status of each room. It should be compared with the front desk occupancy report, and any room status discrepancies should be brought to the attention of the front office manager. This process helps ensure that front desk agents work with accurate and timely rooms-availability information, which is especially important when processing late check-ins. Many front office systems define room status in more detail than just occupied or on-change. Typical status designations in these systems include:

V/Ovacant and on-change V/Cvacant and cleaned, but not yet inspected V/Ivacant and inspected 198

O/Coccupied and cleaned

Room Rates. A room rate is the price a hotel charges for overnight accommodations. The cost structure of the hotel dictates the minimum rate for a room, and competition helps the hotel establish its maximum rate. The room rate range is the range of values between the minimum and maximum rates. A hotel will usually designate a standard rate for each room. This rate is typically called the rack rate because historically the standard rate was the one posted at the front desk in a device called a room rack. The rack rate is considered the retail rate for the room. In most cases, room rate discounts provided by the hotel are discounts to a room's rack rate. Room rates are typically confirmed as part of the reservations process. Assigning rates for walk-in guests is usually the responsibility of the front desk agent, guided by the hotel's policies and sales guidelines. Front desk agents may sometimes be allowed to offer a room at a lower price than its rack rate. Normally, this occurs only with managerial approval. For example, hotel management may be expecting low occupancy. To attract as much business as possible to the hotel, walk-in guests may be offered a rate below the rack rate to entice them to stay. Some hotels establish seasonal rate schedules in order to anticipate business fluctuations. The objective is to provide greater value during low-demand periods and to maximize room revenue during high-demand periods (a form of revenue management). Other room rate schedules may reflect variations in the number of guests assigned to the room, service level, and room location. For example, room rates may cover billing arrangements for meals. Under the American Plan (AP), room charges include the cost of the guestroom and three meals per day. Under the Modified American Plan (MAP), the daily rate includes charges for the guestroom and two meals per day (typically breakfast and dinner). Sometimes, the phrase full pension is used in place of American Plan, and semi-pension in place of Modified American Plan. Some resorts use an All Inclusive rate that includes all meals, beverages, and activities. Under the European Plan (EP), meals are priced separately from guestrooms. American resorts frequently use either the American Plan or the Modified American Plan. Most non-resort hotels in the United States set their rates according to the European Plan. Room rates may also vary based on type of guest. If authorized, front desk agents should know how and when to apply a special room rate during the registration process. Special room rates may include:

Commercial or corporate rates for frequent guests. Complimentary rates (no charge) for business promotion. Group rates for a pre-determined number of affiliated guests. Family rates for parents and children sharing the same room. Day rates for less than an overnight stay (usually check-in and check-out on the same day). Package-plan rates for guestrooms sold in a package that includes special events or activities. Frequent traveler rates for guests earning discounts through a frequent traveler program.

Eligibility for special rates is generally contingent on management policy and the guest's profile.

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Room Locations. When assigning guestrooms, a front desk agent must be aware of the characteristics of each room type. In most hotels built within the last 50 years, guestrooms within each room category tend to be approximately the same size. Older hotels, due to different construction techniques and materials, often have rooms varying significantly in size and configuration. Differences between guestrooms in modern hotels generally lie in their furnishings, amenities, and location. Front desk agents should be familiar with various guestroom configurations, as well as the hotel's floor plan, in order to satisfy guest rooming requests. Exhibit 5 provides an example of a simplified hotel floor plan. Note the connecting rooms and handicapper-accessible rooms depicted in the floor plan. The front office system contains specific data about each room, such as its type, rate, floor, view, bedding, and other pertinent information. Front office systems can be programmed to provide other guestroom information, such as special room features and amenities, in an easy-to-reference format. 200

Individual guests or groups of guests may specify certain room locations in the hotel as part of their reservation requests. Groups may be promised preferred rooms by the department that booked the business, usually the sales and marketing department or catering department. However, the department booking the rooms should be careful to check room availabilities with reservations before committing specific rooms or facilities to an incoming group. Although the reservations department may block the desired rooms in advance, it is the responsibility of the front desk agents to assign guestrooms at registration to those group members not previously assigned a room from the preferred block of rooms. Reservation Blocks. A primary concern in the room assignment phase of registration concerns which rooms will be available in the near future, based on reservation blocks. Usually, a reservations agent or the front office supervisor blocks reserved rooms on an electronic reservations file. If for any reason reserved rooms are incorrectly blocked or inadvertently overlooked, room assignment conflicts may result. For instance, suppose a walk-in guest is assigned a room for a two-night stay. But if that room is booked for a guest arriving the next dayand the front desk agent is unaware of this commitmentrooming problems will arise when the second guest registers. Front office systems help reduce such booking errors because they can be designed to prohibit the front desk agent from selecting a pre-assigned room reserved for a guest expected to check in at a later date. Many guests believe that once they occupy a room, there is little that the hotel can do to change their status. Any attempt to move a registered guest to another room is often resisted; bad feelings may arise even if the guest agrees to move. Conversely, the incoming guest, who was promised a particular room, will probably be inconvenienced and may be wary of the front desk's control over its room assignment process. These and related reasons make it imperative for the front office to be aware of all future guestroom commitments.

Section Keywords registration record A collection of important guest information created by the front desk agent following the guest's arrival; includes the guest's name, address, telephone number, and company affiliation; method of payment; and date of departure. Room status discrepancies A situation in which the housekeeping department's description of a room's status differs from the room status information that guides front desk employees in assigning rooms to guests. skipper A guest who leaves without paying for the room. occupancy report A report prepared each night by a front desk agent that lists the rooms occupied that night and indicates those guests expected to check out the following day. housekeeping status report A report prepared by the housekeeping department indicating the current housekeeping status of each room, based on a physical check. room rate The price a hotel charges for overnight accommodations. rack rate The standard rate established by a hotel for a particular category of rooms. 201

American Plan (AP) A billing arrangement under which room charges include the guestroom and three meals; also called "full pension." Modified American Plan (MAP) A billing arrangement under which the daily rate includes charges for the guestroom and two meals, typically breakfast and dinner. All Inclusive A billing arrangement under which room charges include the guestroom, meals, beverages, and activities. European Plan (EP) A billing arrangement under which meals are priced separately from rooms.

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Competency 3 Objective: Outline procedures for establishing the guest's method of payment at registration. Establishing the Method of Payment Regardless of whether the guest intends to pay by cash, check, credit card, or other acceptable method, the hotel should take precautionary measures to ensure payment. Effective account settlement depends on the steps taken during registration to determine the guest's method of payment. The establishment of proper settlement or credit authorization at the time of registration will greatly reduce the potential for unauthorized settlement and subsequent collection problems. Just as hotels vary in size, structure, and organization, so do the guidelines for establishing a guest's method of payment. The registration process plays an important role in front office guest accounting, since front desk agents are responsible for gathering information at check-in on the intended method of payment. Methods of payment typically include cash, personal checks, credit cards, debit cards, direct billings, and special promotions payment methods. Cash. Some guests prefer to pay guestroom charges during registration, in advance of occupancy. As stated earlier, guests who pay cash for their accommodations at the time of registration are typically not extended in-house credit. Revenue outlets are usually given PIA (paid-in-advance) lists of cash-paying guests who are thereby not authorized to have charge purchases posted to their guestroom accounts (nopost status). In most properties, PIA lists are replaced by a front office system that interfaces the front desk to devices in the hotel's revenue outlets. Such systems do not allow outlet employees to post charges at the point of purchase to guest accounts that are not authorized for in-house charges. Guests without in-house charge privileges must settle their purchases at the point of sale. Alternatively, during check-in, front desk agents may require a cash-paying guest to leave an imprint of a credit card (or the front desk agents may capture the credit card information electronically) before extending in-house charge privileges to the cash-paying guest. Just as banks do, hotels consider cashier's checks, traveler's checks, and money orders equivalent to cash. A hotel that accepts such forms of legal tender should require proper guest identification. Front desk agents should compare the picture and signature on the guest's identification with the appearance and signature of the person presenting the tender. When there is doubt, the form of tender should be verified with the issuing bank or agency. Personal Checks. Some lodging properties allow transactions to be paid by personal check, while others have a strict policy against accepting personal checks. Although a hotel has no obligation to accept personal checks, it cannot refuse to accept a personal check on the basis of sex, race, or other grounds that would warrant illegal discrimination. Individual properties must establish policies for accepting personal checks. Hotels should also consider adopting policies relative to payroll checks, personal checks written on out-of-state and foreign bank accounts, government checks, and second- and third-party checks. Some hotels allow guests to cash personal checks as long as they have a credit card that provides a checkcashing guarantee, and as long as the amount of the check is within the credit card company's established credit limit. When this is the case, front desk agents should imprint the credit card onto the back side of the guest's personal check or the guest's registration card. Some hotels accept personal checks only during standard banking hours; this provision often allows the daytime shift of the front office to obtain bank verification of the check, if necessary. Some hotels allow guests to write personal checks for the amount 203

of the guestroom rate and taxes only. When this is the case, cash or credit card payment will be required for all other purchases. Hotels that accept personal checks should require proper identification. The guest's driver's license or passport number, address, and telephone number should be recorded on the back of a personal check as part of the hotel endorsement. Bank stamps and clearing house imprints will also be recorded on the back of the check. In some hotels, the amounts and dates of cashed personal checks are recorded on the guest's registration card. This procedure helps ensure that guests do not exceed the property's pre-established check-cashing limits (if any). If front office cashiers are not authorized to accept personal checks, they must be aware of what procedures to follow when a guest attempts to write a personal check. Properties can also protect themselves against potential losses incurred through acceptance of fraudulent or bogus personal checks by following some of these basic guidelines:

Do not refund cash if the original transaction was settled by personal check. If possible, return the guest's original personal check and, when appropriate, require an alternate form of payment. Some properties do not write a refund check, even if a refund is warranted, until the guest's bank verifies that the personal check in question has cleared. Accept personal checks written only on the current day. Do not accept undated or post-dated personal checksthat is, checks carrying no date or a future date instead of the current date. Require that personal checks written to settle an account be made payable to the hotel, not to "Cash." Or, to put it another way, if guests want to write a check to "Cash," the guests should be given money in exchange for the check, and not be allowed to use such a check to pay their hotel bills. Such a policy would undermine a non-paying guest's (skipper's) claim that a personal check made out to "Cash" was used to pay his or her hotel account. Do not accept checks written on foreign banks unless the hotel's credit department has preapproved them.

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Exhibit 6 shows some additional hints for avoiding credit card fraud. Second- and third-party checks. In general, hotels should not accept second- or third-party checks. A second-party check is one made out to the guest presenting the check. A third-party check is one made out to someone who has in turn signed the check over to the guest presenting it. When accepting such checks, hotels may experience collection problems, especially if the maker of the check has registered a "stop payment" order on the check. If the hotel accepts a second-party check, the front desk agent should require the guest to endorse the check at the front desk, even if it has been previously endorsed. The agent can then compare the guest's two signatures (previous and current endorsements) prior to accepting the check. Check guarantee service. Some hotels use a check guarantee service to ensure that the checks guests present are valid. A check guarantee service requires critical information from the check, which hotel staff can provide either by entering the information on a terminal keypad or by passing the check through a specialty magnetic reader. The check guarantee service, in turn, determines the check writer's credit history and either guarantees or denies payment support. If a supported check later is found to be invalid, the guarantee service is liable for the amount of the check. Alternatively, some hotels use a system capable of providing immediate payment through electronic transfer, much like a debit card transaction. The equipment looks and works like a credit card reader with 205

an interconnected verification system. Valid checks have specially encoded bank identification and account numbers printed at the bottom front of the check. Check readers can capture and decipher the special numbering like a credit card reader interprets the coded information from the magnetic stripe on the back of a credit card. The check reader uses data transfer technology to contact the bank identified on the check and to verify that the account has sufficient funds. Basically, the check is passed through the reader, which records the bank and account information and sends it forward through the system. If the information is valid, the funds are set aside and paid to the hotel through the same system. If the check is not valid, or the balance in the account is not sufficient to cover the amount of the check, the hotel is immediately notified. Since both check services charge a transaction fee, hotels use the services only for personal checks written to settle guest accounts. It is important to note that neither service guarantees or provides payment for checks drawn on foreign banks. Credit and Debit Cards. There are two types of magnetic-stripe cards used for payment of guest charges. Credit cards are plastic cards with a magnetic stripe that are assigned a line of credit with the issuer of the card. When a charge is made against the card, it is applied to the cardholder's credit line. Statements are sent to cardholders every month. Some credit cards, called travel-and-entertainment (T&E) cards, are expected to be paid in full each month. American Express and Diners Club are examples of T&E cards. Cardholders of bank cards (Visa, MasterCard, and others) are typically provided an installment payment plan that applies a rate of interest on balances carried forward to the next payment cycle. Credit card purchases may be rejected by the issuing company if the account is over the pre-approved limit or if the purchase in question will take the account over the limit. Debit cards differ from credit cards in that a debit card is attached to a savings or checking account. When a charge is incurred, it immediately reduces the balance in the debit cardholder's account; there is no credit extended. Debit card charges can be rejected if there are insufficient funds to cover the charge, or if a charge will result in the account balance dipping below a predetermined minimum balance.

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Careful authorization and verification of card payments are as important to front office cash flow as the precautions taken with any other method of payment. The front office usually compiles a set of steps for processing credit and debit card transactions. In addition, card payment companies often require exact 207

procedures in order to ensure transaction settlement. As shown in Exhibit 7, credit card companies also provide helpful tips for avoiding fraud and implementing sound processing procedures. Hotels should have an attorney review their card payment procedures to be sure the hotel adheres to state and federal laws and to the specifications contained in card company contracts. Local banks may also provide procedural guidelines. Properties might also consider the following points when establishing a front desk policy for handling credit and debit cards. Expiration date and location validation. When a guest presents a credit or debit card, the front desk agent handling the transaction should immediately check the card's expiration date. If the date shows that the card has expired, the front desk agent should point this out to the guest and request an alternative method of payment. Since card payment companies are not required to honor transactions made with an expired card, the acceptance of an expired card places the hotel in an untenable position. If the hotel inadvertently accepts an expired or invalid card, it may not be able to collect payment for the guest's charged purchases. In addition, some banks issue cards that are good only in a specific country. International travelers may present credit cards that are clearly marked as being valid only in their home country. Online authorization. After checking a card's expiration date, the front desk agent should make sure the card isn't listed as stolen or otherwise invalid. Many hotels validate credit cards through an online clearinghouse service. Once a communication connection is established, the required card and transaction data are entered through a card payment reader. The magnetic stripe on the card is swiped and an electronic-data-capture (EDC) process is initiated. On the basis of the captured data, the card verification service consults an account database and generates either an authorization code or a denial code for the transaction. Online authorization services offer the advantage of allowing the front desk agent to perform other tasks while the service verifies the transaction. The front desk agent checks the authorization terminal to obtain and record the authorization or denial code number. It is important to note that online authorization services often charge a transaction processing fee. Invalid card. Front desk staff members should follow established front office and card-payment-company procedures when a card appears to be invalid, such as when it has been tampered with, or the signature on the card does not match the signature on the hotel registration form. Normally, it is appropriate for staff members to politely request an alternate form of payment, without attracting attention or embarrassing the guest. If the guest has no other acceptable means of payment, front desk agents typically will refer the situation to the front office credit manager or hotel general manager for resolution. If a guest presents a card that appears invalid, the front desk agent might be advised to contact hotel security. Although the federal government has made credit or debit card fraud a criminal offense, lodging properties should exercise care in detaining guests they suspect of theft or fraud. Such detention, especially if unjustified or improperly instituted, might expose the hotel to a lawsuit based on false imprisonment and slander. The hotel's attorney should provide advice on handling invalid cards and on the hotel's vulnerability to related lawsuits. Imprinting the voucher. Although electronic verification and approval of credit and debit cards is becoming the industry standard, some hotels may not have online access to verification systems. In this case, front desk agents imprint approved, valid cards onto approved card vouchers. Some hotels require front desk agents to circle the card's expiration date and initial the validation number on the imprinted voucher as proof that procedures have been followed. The imprinted card voucher is normally attached to the guest's folio, or placed in a voucher file for safekeeping. Usually, the guest is not asked to sign the voucher until final account settlement at check-out. Card-payment companies requiring electronic data 208

capture swipes may provide an incentive to the hotel by reducing the fee they charge for processing card transactions. Floor limits. Card companies may assign hotels a floor limit. A floor limit is the maximum amount in credit or debit card charges the hotel can accept without requesting special authorization on behalf of a cardholder. If the amount a guest wants to charge to his or her card account exceeds the hotel's floor limit, the front office should contact the card company to request approval for the transaction. In some cases, the penalty to the hotel for not obtaining authorization for charges exceeding the floor limit is forfeiture of the entire amount charged, not just the amount above the floor limit. An automated front office system that monitors guest account balances can help identify guest accounts approaching the floor limit. Some lodging properties ask credit card companies to assign unusually high floor limits, given the hotel's room rates and other pricing structures. By receiving a higher floor limit, front desk agents will not have to inconvenience guests by frequently authorizing transactions or by having to secure alternate methods of payment. Reserving credit. The front office may reserve a specified amount of pre-authorized credit in a guest's credit card account to ensure payment for goods and services. For instance, a guest who arrives and plans to stay for several nights likely will incur room charges in excess of the hotel's floor limit. To avoid a potential credit authorization problem, the front office may want to reserve a credit line of at least an amount equal to the anticipated charges in the guest's credit card account. Management must be aware of the laws that pertain to reserving credit, as well as related card policies. Consider the case of a guest who decides to leave earlier than planned, and tries to make a subsequent purchase elsewhere, only to discover that his or her credit is tied up in a reserve created by the hotel. Laws related to reserving credit vary by state. In some states, the hotel would be obligated to notify the credit card company to release the unused portion of the reserved line of credit when the guest checks out. Also, some states stipulate that a hotel can reserve an anticipated amount of credit only if it informs the guest beforehand, and obtains the guest's consent. Hotels should consult legal counsel before establishing a front office policy for reserving credit against credit card accounts. When a guest arrives to check in, the front desk agent asks for a method of payment before retrieving the registration information. The agent may then swipe a credit or debit card through the card reader attached to the front office system. The card reader processes the captured data and attempts to identify the arriving guest by displaying the registration record to the agent or by providing a list of possible matches. Once the agent has identified the proper guest, the system automatically calculates the amount of credit to be reserved and contacts the card company without intervention by the front desk agent. By the time registration is completed, the hotel should have an approval or denial code displayed in the guest's record. It is important to note that debit cards do not establish credit, and some hotel companies may not accept debit cards at check-in if guests are planning to use them for settlement. If guests use a debit card, the hotel will usually treat them as paid-in-advance (PIA) guests, as if they paid in cash.

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Denying a credit request. When a front desk agent discovers that a guest's credit has been denied by the issuing card company, he or she must exercise extreme care in notifying the guest of the problem. A person's credit involves more than money; it often involves self-esteem. In discussing problematic credit issues, the agent must be as diplomatic as possible. The agent's tone of voice should remain friendly and subdued, no matter how belligerent the guest may become. While hotel staff members have certain rights to review and evaluate credit information, the guest also has the right to know why the front office will not accept his or her personal check, credit card, debit card, or direct-billing arrangement. Exhibit 8 suggests some procedures for resolving credit problems. These suggestions should be modified to fit the problem, the guest, and the hotel's policies. Direct Billing. Some hotels extend credit to guests by agreeing to bill the guest or the guest's company for charges. Direct billing (also called "bill to") arrangements are normally established through communication between the front office and the guest or the guest's sponsoring company, and in advance of the guest's arrival. A potential guest or a sponsoring company representative may be asked to complete the hotel's application for credit. The front office manager normally reviews and is responsible for approving a guest's credit application. A list of approved direct billing accounts is usually maintained at the front desk for reference during registration. At check-out, a guest with approved credit simply signs his or her folio after approving its contents, and a statement is direct-billed for collection. In a direct billing arrangement, the hotel, not a credit card company or third party, assumes full responsibility for account collection. Special Promotions Payment Methods. During registration, guests may present vouchers, coupons, gift certificates, or special incentive awards received from businesses, airlines, or other authorized agencies. Front desk agents must be aware of hotel agreements to honor such items and must know how to properly credit the bearer. Front desk agents, too, must use care when handling special program vouchers because such documents may differ in value, conditions, or terms. Since vouchers represent a form of payment and may be the actual documents the front office uses to reconcile the guest's bill, careful handling is warranted. Since vouchers and coupons represent revenue to the hotel, the front desk should keep a 210

collection of samples of all currently acceptable vouchers, coupons, and certificates. This collection should be discussed in front desk agent training and should be readily available in case questions arise. Payment Issues for Groups. Front desk agents must be careful when registering group guests and establishing the method of payment for them, because group guests arriving at the hotel to attend a meeting or convention often have their billing arrangements pre-established. In some cases, the guest's room and tax charges are direct-billed to a group master account, while other charges, called incidental charges (such as telephone, food, beverage, and laundry charges), may be the guest's responsibility. In such a case, credit for incidental charges will need to be established for each member of the group. However, when the group agrees to pay for all of the charges made by its members, it may not be necessary to establish individual guest lines of credit. Groups often pay all of the hotel charges for VIPs or invited speakers, so these individuals should simply sign a registration form to verify departure dates before being issued a room key.

Section Keywords PIA (paid-in-advance) A guest who pays his or her room charges in cash during registration; PIA guests are often denied in-house credit. authorization code A code generated by an online credit card verification service, indicating that the requested transaction has been approved. denial code A code generated by an online credit card verification service, indicating that the requested transaction has not been approved. floor limit A limit assigned to hotels by credit card companies indicating the maximum amount in credit card charges the hotel is permitted to accept from a card member without special authorization. Direct billing A credit arrangement, normally established through correspondence between a guest or a company and the hotel, in which the hotel agrees to bill the guest or the company for charges incurred. incidental charges Charges made to a guest account other than the charges and tax for the guestroom.

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Competency 4 Objective: Explain the importance of verifying the guest's identity, outline proper procedures for issuing guestroom keys to guests, and describe the front desk agent's role in addressing special requests from guests during registration. Verifying the Guest's Identity Many hotels require positive identification before completing the registration process. This is a common practice in Europe, especially for international guests. It is very common for front desk agents to ask for photo identification in the form of a passport to ensure positive identification of the guest's name, address, signature, and photograph. Since the terrorist attacks of September 11, 2001, verifying the identity of guests has become common practice at U.S. hotels as well. Hotel managers want to be sure they know who is staying at their property. For domestic guests, a driver's license or other form of photo identification is usually sufficient. International guests should be asked for their passports. In both cases, the type of identification and identification number on the card or passport should be recorded in the guest record. As an additional security measure, if the guest does not speak the local language, this fact should also be noted in the guest's record. This information is intended to assist hotel personnel in identifying guests requiring foreign language translation, and is also helpful in emergency situations. Issuing the Room Key The front desk agent completes the registration process by issuing a room key. In some hotels, a newly registered guest is simply handed a guestroom key and directed to the guestroom by the front desk agent. In large hotels, the guest may be given a map showing guestroom location as well as the location of other hotel facilities such as the dining rooms, cocktail lounges, swimming pool, fitness center, meeting rooms, and parking facilities. For the security of both the guest and the property, room keys must be very carefully controlled. The theft, loss, or unauthorized duplication and use of guestroom keys threaten hotel security. Hotels should have written procedures governing guestroom key control. These procedures should state who is authorized to issue guestroom keys, who receives such keys, and where and how guestroom keys are created and/or stored at the front desk. For security reasons, the front desk agent should never announce the room number when handing a guestroom key to a guest. The front desk agent can, however, draw the guest's attention to the room number by writing it down or pointing to the room on the hotel map. Front offices that use a special code on guestroom keys instead of room numbers should have their front desk agents write the room number for the guest or discreetly explain to the guest how to interpret the code. Many hotels provide guestroom keys in envelopes, which gives front desk agents a convenient place to write the room number for guests. If the hotel provides bell service, the front desk agent should ask whether the guest would like assistance from a bell attendant. If so, the front desk agent should introduce the bell attendant to the guest, hand the bell attendant the guest's room key, and ask him or her to show the guest to the room. On the way to the room, the bell attendant should familiarize the guest with hotel information by explaining the special features of the hotel and such things as the locations of emergency exits, emergency procedures, restaurant locations, retail outlets' hours of operation, locations of ice and vending machines, and other appropriate information. Once inside the guestroom, the bell attendant can explain the features of the room, show the guest how the thermostat and television work, answer any questions, and hand the room key to the guest. If the guest is displeased with the room or if the room is not prepared as the guest expected, the bell attendant should listen attentively and bring the matter to the attention of the front desk agent for 212

immediate action. For example, if a family arrives at a hotel expecting a rollaway bed for a child to already be in the guestroom and it isn't there, the agent or bell attendant should make arrangements to have the bed immediately brought to the room. Filling Special Requests Part of the registration process involves acknowledging and acting on special requests that guests make. For example, a guest may have requested connecting rooms during the reservations process. These rooms should be blocked in advance to ensure that they are available when the guest arrives. If it appears that the guest's reservation requests were not properly handled, the front desk agent should strive to satisfy the guest's requests at registration, if possible. Other special requests may involve guestroom:

Location View Bed type Smoking/no-smoking status Amenities Special furnishings for disabled guests High-speed Internet access Entertainment systems, such as on-demand video systems and video game systems

A guest may request a room close to or far from an elevator; one that overlooks the ocean, pool, or city; one that has a king-size bed; or one that has a refreshment center or entertainment area. In addition, guests may ask for special furnishings in the guestroom. A couple arriving with a young child may request a crib. If the room was not pre-set with a crib, the front desk agent should contact housekeeping to arrange for prompt delivery of a crib. Special requests are best handled during preregistration. Some guests may ask for other special items, such as bed boards or ironing boards. Disabled guests may require rooms with certain design featuresgrab bars in the bathroom, for example, or special lights attached to smoke and fire detection systems. The Americans with Disabilities Act requires most lodging establishments to have special accommodations for disabled guests. These rooms should be specially reserved whenever possible and not sold to anyone who is not disabled unless there are no other rooms available in the hotel. Sometimes special requests are made by another person on behalf of the guest. For example, the general manager may want to welcome a frequent guest by placing a fruit basket in the guest's room. Travel agents may order champagne to be delivered to their clients' guestrooms. Relatives of a honeymooning couple may request that champagne and flowers be placed in the room before the couple arrives. While many of the details surrounding special requests can be handled during preregistration, it is important for the front office to follow up on each request. Guests are quickly disappointed if, upon arrival at their room, they find that the hotel did not honor their requests. Front desk agents should mention the guest's special requests at check-in to ensure that the hotel has provided what the guest requested. In this way, guests are satisfied that their requests are being met. 213

Competency 5 Objective: Discuss creative registration options, describe techniques used to upsell guests during registration, and explain how to handle situations in which guests cannot be accommodated by the hotel. Creative Registration Options The registration process described in this chapter is typical of most hotels. Some hotels, however, have experimented with different techniques to make registration more efficient and effective. Techniques tried, with varying degrees of success, include the following:

Eliminating the front desk. Instead of a front desk agent behind a front desk, a host waits in a reception area with a list of expected guests and their pre-assigned rooms. The host identifies guests, completes an abbreviated registration process, and sometimes escorts guests to their rooms. Several hotel companies have had success with this procedure at select hotels. Credit is established when the reservation is made through a special interface between the central reservation software and the card-payment company. With everything else in place, all the hotel has to do is preregister the guest and assign a room key. When the guest arrives, a simple verification of the information on the registration form completes the process. Sometimes this service is tied to the hotel's frequent traveler program or handled by the concierge staff. Registering group guests at a special location. The regular front desk is screened off and used only for managing guest services and/or providing check-in or check-out services at peak times. Creating a unique, separate registration area for VIP guests. This approach is similar to the hotel greeter concept just mentioned, but is available only to VIPs. Combining the hotel registration with the meeting registration in a separate area of the building. Separating group guests from other guests enables the hotel to offer specialized services to the group. Registering guests off-site, such as in airports, convention centers, and shuttle vans, allows guests to check in without being present at the front desk.

The challenge is to make the hotel registration process innovative while treating guests with expediency and care. Some front office registration services include temporary luggage storage for guests who arrive during busy periods. In addition, front desk agents may offer complimentary food or beverages to guests who may be inconvenienced. These guests may be directed to the hotel's lounge or restaurant to enjoy a more relaxed and leisurely wait while their guestrooms are being readied. Self-Registration A concept that is being used more and more in front office registration is self-registration. Selfregistration terminals may be located on or off hotel grounds. Self-registration may be available through a mobile handheld terminal, kiosk resembling an ATM device, or specially designed PDA. Limited-service lodging brands as well as full-service brands are providing self-registration terminals for guests who are comfortable with self-service technologies. Technological advances allow hotels to place self-registration terminals at off-premises locations such as airports and car rental agencies, and on hotel shuttle vehicles. 214

Regardless of which guest-operated device is used, self-registration significantly reduces guest registration time. To use an advanced self-registration terminal, a guest generally must have made a reservation that led to the creation of a reservation record. At the time of self-registration, the guest may need to enter a reservation confirmation number or swipe a valid credit, debit, or guest-loyalty-program card. The terminal reads the magnetic stripe on the back of the card and passes the name and card number to the hotel's property management system to link with the reservation record. A self check-in terminal may prompt the guest to enter additional registration data. Most terminals connect to an automated rooms management system, thereby enabling automatic room and rate assignment. Some terminals print registration materials (identifying the assigned room number) and a map (showing the location of the room). Customized greetings or messages about special hotel events or promotions can be printed onto system-generated forms or displayed on the terminal screen. The terminal then automatically dispenses a guestroom key as a result of being interfaced with an electronic guestroom lock system. Selling the Guestroom Front desk agents will not have the chance to use efficient or innovative registration techniques if the guest is not convinced of the value of renting a hotel room. Part of the front desk agent's job is to create consumer acceptance of the hotel's products: guestrooms, facilities, and services. Front desk agents can take several approaches to selling guests on the value of staying at the hotel. Front desk agents should practice sales techniques specific to their work. The registration process, for example, must move through certain stages to ensure quick and careful registration. Within such stages, front office staff members have the opportunity to make individual sales presentations. Properly trained front office staff members can improve room revenue by applying front office sales techniques, especially the technique of upselling.

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Upselling refers to the efforts of reservations and front desk agents to offer guests the opportunity to rent rooms in categories above standard rate accommodations. Hotels normally have several rate categories based on such factors as room decor, size, location, view, and furnishings. Sometimes the rack rate differences among guestrooms are substantial. Exhibit 9 lists some general suggestions for upselling guestrooms. To upsell, front office and reservations staff must be trained to be more than simply order-takers; they must be trained to be salespeople. Staff members should upsell rooms in much the same way that a food server sells an extra item such as an appetizer, beverage, or dessert. Reservations and front office staff should learn effective techniques for suggesting room options to guests. This involves knowing how and when to ask for a sale in a non-pressuring way and how to direct the sales effort. Offering guestroom options is the key to the reservations and registration sales process, and it requires thoughtful planning and practice. Although the majority of upselling is conducted during the reservations process, front desk agents will have similar sales opportunities with walk-in guests. Some hotels, as a matter of policy, offer registering guests more than one room option (when more than one option is available) and let the guests decide. To create guest acceptance, the front desk agent must know how to describe the hotel's facilities and services in an attractive and positive manner. It is very common for hotels to offer incentive programs for reservations and front desk staff who successfully upsell rooms.

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A guest will probably provide several clues about what is acceptable for his or her stay; some information may be available on a reservation record. Front desk agents should mention the physical features as well as the benefits and conveniences of the various types of available rooms. A guest may select a room immediately after it is described, or may wait until the front desk agent describes all the room options. In some cases, the only rooms available may be those in the higher-priced categories. Successful reservations and front desk agents can briefly and efficiently explain to the guest the value in a higher-priced room. However, if a guest has reserved a lower-priced room and does not want to pay the higher rate, a room should be provided at the reserved (quoted) rate. The front desk agent normally asks the guest to complete a registration form after selecting a room. As the guest is completing the form, the front desk agent may reinforce the guest's choice by recapping the room's location and special features. As registration draws to a close, the front desk agent should continue to sell by informing the guest about the hotel's revenue outlets, services, and facilities. Most guests appreciate this information. Before the guest leaves the front desk, the front desk agent should thank him or her for choosing the hotel and express a personal interest in making the stay pleasant. Some hotels require front desk agents to place a phone call to the guest's room shortly after registration, to ensure that the guest's accommodations are satisfactory. Denying Accommodations In general, a hotel is obligated to accommodate guests if rooms are available. Discrimination is prohibited in places of public accommodation on the basis of race, sex, sexual orientation, religion, or national origin. Legitimate reasons for refusing to accommodate a guest may include a lack of available rooms, the potential guest's disorderly conduct, or the guest's inability or unwillingness to pay for accommodations or services. In addition, state law may stipulate other reasons for denying accommodations. A front desk agent should not be the person who determines whether someone will be roomed or not; this is the responsibility of front office management. Management is also responsible for informing the person that he or she has to be turned away. Management, with the advice of legal counsel and the state hotel association, should instruct front office staff on policies and procedures concerning the acceptance or rejection of potential guests. Sometimes a hotel may be short of available rooms and may not be able to accommodate guests. It is imperative that the hotel set policies and procedures for handling these situations. Seldom, if ever, should a hotel be unable to accommodate a guest who has a reservation, especially a guaranteed reservation. When this happens, most hotels will make other arrangements for the guest. In the case of a guaranteed reservation, most full-service hotels will arrange for and pay for the guest's room at another property. It is important to remember that the hotel may have no obligation to guests without guaranteed reservations. Generally speaking, guests with reservations who arrive before the cancellation hour should be accommodated. Walk-In Guests A walk-in guest who has been traveling for an extended time may be disappointed to find that a hotel is fully occupied. Hotels have no obligation to accommodate guests who arrive without a reservation when no rooms are available. If a walk-in guest cannot be accommodated, front desk agents can assist the guest by providing directions to nearby hotels. The front desk agent might also offer to contact another hotel for the guest.

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Most of the time, guests who cannot be accommodated at the hotel would prefer to stay at a similar property. Hotels should keep a list, with phone numbers, of comparable properties in the area. Hotels can benefit through mutual guest referrals in this way. Guest referrals allow one hotel to compare how well it is doing on a given night with other area hotels. Competing properties may reciprocate by sending overflow business to neighboring properties. Most importantly, however, referrals should be viewed as part of the hotel's guest relations program. The extra care paid to turned-away guests helps create an industry-wide atmosphere of caring and concern for guests. The situation may be more difficult when a walk-in guest incorrectly believes he or she has a reservation. The hotel might take the following steps to clarify the situation:

If the guest presents a letter of confirmation, verify the date and the name of the hotel; the guest may have arrived on a different date or at the wrong property. Most confirmation letters have a confirmation number that can help the front desk agent locate the reservation record. Ask whether another person might have made the reservation for the guest; the reservation may be at another property, or it may be misfiled under the caller's name, not the guest's name. Double-check the reservations file for another spelling of the guest's last name. For instance, "B," "P," and "T" may have been confused when the reservation was made during a telephone conversation. Also, check to see if the guest's first and last names were inadvertently reversed in the reservation file. If the reservation was made through a travel agency or representative, allow the guest to call the originating source for clarification. Verify no-show registration information from the previous day, just in case the guest is a "noshow" who has arrived a day late.

If there seems to be no alternative to walking (turning away) the guest, a manager, not a front desk agent, should explain the matter in a private area. Registering one guest in view of another who cannot be accommodated can be extremely awkward and embarrassing. Guests with Non-Guaranteed Reservations A number of circumstances can delay a guest's scheduled arrival. Guests frequently do not have the chance to change a non-guaranteed reservation to a guaranteed reservation by the time they realize they will arrive past the hotel's reservation cancellation hour. As a result, the hotel may not hold the reserved room for the guest and may not have a room available by the time the guest arrives. If the hotel cannot provide a guestroom, front office management must be extremely tactful when informing the guest. Blame should not be placed on either party, since the lack of accommodations may not be the fault of the guest or the hotel. Guests with Guaranteed Reservations If reservations are carefully handled and sound forecasting procedures are followed, the property should not have to deny accommodations to a guest who has a guaranteed reservation. It is a serious matter to turn away a guest with a guaranteed reservation: some states have laws prohibiting hotels from doing so, and, should a hotel not be able to accommodate such a guest, penalties may be imposed upon the hotel by the state, at the guest's request. Even though hotels should do all they can to never turn away guests who have guaranteed reservations, they should have a policy for front desk staff members to follow if the situation occurs. 218

The front office manager should take charge and make the necessary decisions when it appears that the property does not have accommodations for a guest who has a guaranteed reservation. The manager may do the following:

Review all front desk transactions to ensure full occupancy. Re-take an accurate count of rooms occupied, using all relevant data. Compare information in the rooms availability file, the housekeeper's report, and guest folios for discrepancies in occupancy status. Contact in-house due-outs (guests expected to check out today) who have not yet checked out to confirm their departure time. If they do not answer the telephone, the rooms department should visit the guestroom to verify continued occupancy. The guest may have left the hotel without properly completing check-out. The guest may have expected to be billed, or may have paid in advance, or simply may have forgotten to check out. An early discovery of a skipper will reveal a room that can be made available. Verify guestrooms with a status of "out-of-order" to ensure accuracy. Perhaps an out-of-order room might be readied for sale, if the room problems are minorno bedspread, for example, or missing sheer drapes. If a guest is willing to occupy an out-of-order room, its rate could be appropriately adjusted. These decisions must be made by front office management. An out-oforder room should never be offered if the room has serious deficiencies, like no running water or no telephone service. In addition, an out-of-order room should never be offered unless it is inspected first, and the department placing the room on out-of-order status is notified that it will be sold. The front office manager should check the out-of-order report daily to ensure that all rooms are available as quickly as possible. Identify rooms pre-blocked for one or two days in the future. The guest can be given one of these rooms, if he or she will depart in time to honor the blocks.

Front desk staff should be consistent when discussing the lack of accommodations with arriving guests. Helpful suggestions include the following:

Guests should be encouraged to return to the hotel at the earliest date of availability. Upon their return, they may be placed on a VIP list, provided a complimentary room upgrade, or presented with a small gift as compensation for the inconvenience of having been turned away on their last visit. Management should prepare a follow-up letter to be sent to guests who arrived with a reservation but could not be accommodated, apologizing again for the inconvenience and encouraging the guests to consider returning to the hotel (with appropriate incentives). If a member of a convention block cannot be accommodated, the group's meeting planner should be notified. The planner may be able to solve the problem by arranging for some attendees to alter their current rooming status. In such cases, it is important for the front office staff to have a positive working relationship with the meeting planner. This notification may better enable the planner to properly deal with the problem and subsequent membership complaints. The hotel may pay the transportation expenses associated with having the guest travel to an alternative property. Financial considerations are especially important when walking a guest with a guaranteed reservation. The hotel may also notify its telephone department of the change to 219

another hotel so that incoming calls and faxes can be redirected without confusion or concern on the part of the caller or the relocated guest.

Section Keywords self-registration A computerized system that automatically registers a guest and dispenses a guestroom key, based on the guest's reservation and credit card information. Upselling A sales technique whereby a guest is offered a more expensive room than what he or she reserved or originally requested, and is then persuaded to rent the room based on the room's features and benefits, and his or her needs. walk-in A guest who arrives at a hotel without a reservation. walking Turning away a guest who has a reservation because of a lack of rooms. due-outs Guests expected to check out on a given day who have not yet done so.

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Summary Through the reservations process, a guest provides nearly all the information needed to complete registration. The focus of front office operations shifts to the registration process once the arriving guest's reservation status is known. Front office personnel will find registration smoother and simpler when the information in a reservation record is accurate and complete. The registration process can be divided into seven steps: preregistration activities, creating the registration record, assigning the room and rate, establishing the method of payment, verifying the guest's identity, issuing the room key, and filling special requests. Preregistration activities occur before guest arrival and are intended to accelerate the registration process. Guests can be preregistered when reservations agents gather the proper information. Typically, preregistered guests need only verify registration information and provide a valid signature to complete the registration process. In addition, room and rate assignment, creation of a guest folio, and other functions may be part of a hotel's preregistration activities. The registration record is a collection of important guest information, and is created at the time of checkin. Registration cards, or their computer-generated equivalent, should prompt front desk agents to inquire about the guest's intentions regarding method of payment and planned date of departure. Front desk agents should always confirm the guest's departure date and pre-assigned room rate. Room assignment involves identifying and allocating an available room in a specific room category. Based on reservation information, specific rooms and rates may be assigned before the guest arrives. Preassigning a specific room depends on the room's forecasted availability status and how appropriately the room meets the guest's needs. Room assignments are finalized during the registration process. Effective room and rate assignment depends on accurate and timely room status information (long-term reservation status and short-term housekeeping status). Effective account settlement depends on the steps taken during registration to determine the guest's method of payment. Proper settlement or credit authorization at the time of registration will greatly reduce the potential for subsequent collection problems. Just as hotels vary in size, structure, and organization, so do their guidelines for establishing the guest's method of payment. The registration process may also play an important role in guest accounting, since it deals directly with method of payment. Many hotels require positive guest identification to complete the registration process. This has long been common practice in Europe, and has become common in the United States since 9/11. Hotel managers want to be sure they know who is staying at their property. For domestic guests, a driver's license or other form of photo identification is usually sufficient. International guests should be asked for their passports. By issuing a room key, the front desk agent completes the registration process. Hotels should have written policies governing guestroom key control. If the hotel provides bell service, the front desk agent should ask whether the guest would like assistance from a bell attendant and then communicate specific room information to the bell attendant. Part of registration is making sure that any special requests made by guests are acknowledged and dealt with. While many of the details surrounding special requests can be addressed during preregistration, it is important to follow up on each request. Guests will be disappointed if they arrive at their room and find that the hotel did not honor a request. Front desk agents should mention special guest requests during registration to assure the guest that the hotel will meet the guest's wants and needs.

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Some hotels are trying creative registration options in an effort to better accommodate guests. A relatively new concept in front office registration is self- registration. Self-registration terminals can be located offsite (in airports, for example) or in the hotel lobby. These terminals vary in design and may resemble automated bank teller machines. Upselling at the front desk is a common practice used to enhance the value of the guest's lodging experience while increasing hotel revenues. Front desk agents should identify opportunities for offering better accommodations to guests and selling their value. For example, guests who travel regularly as part of their work may appreciate rooms with special business amenities at a small increase in the room rate they confirmed. Many hotels provide incentive programs for agents making the most of such selling opportunities. Relocating (or walking) guests must be done with great care and concern. Most guests who believe the hotel has not acted in their best interest will become upset; some may cause a disturbance or vow never to return. Further, they may criticize the hotel to friends and co-workers, creating an even larger negative image of the hotel. Walking a guest should be done by a manager, not a front desk agent. Hotels should attempt to bring the guest back as soon as possible. Front office managers must take care to minimize the number of guests who must be relocated, and be aware of any laws pertaining to guests who have guaranteed reservations. Upscale hotels usually pay for the guest's transportation to and from the hotel to which the guest is relocated (in addition to paying for the guestroom), and advise their telecommunications department to redirect incoming telephone calls and faxes to the other location.

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Internet Sites For more information, visit the following Internet sites. Remember that Internet addresses can change without notice. If the site is no longer there, you can use a search engine to look for additional sites. American Express Company Diners Club International Discover Card MasterCard Worldwide Visa Inc. Wyndham ByRequest

Case Study 1 Checking in to the Boden Oceanside Resort and Lodge Checking in to the Boden Oceanside Resort and Lodge should have taken John five minutes, even though the check-in line was three deep. However, there was only one front desk agent in sight and the people checking in seemed to have all kinds of questions. To complicate matters, their room key couldn't be encoded for some reason, and the agent was trying to take a phone call from a guest at the same time. When John finally reached the desk, the agent didn't make eye contact. John's name was on the reservation list and all of the details of his stay were in order. John was given a handful of brochures but the clerk didn't really explain any of them specifically. There was a map of the town, a brochure of events, and a brochure of various restaurants in the area. The map of the property was so small that it was difficult to make out where exactly one was on the property. The best part of check-in was the 20 percent discount coupon for the Saturday brunch. As John picked up his luggage, he looked around for the bell attendant. He wasn't quite sure where his room was, but knew its general direction. The desk clerk had not looked up at him while explaining where the room was on the map. He hoped that there would be signage to direct him once he got outside the main lobby. After settling into his room, John noticed a constant humming sound coming from behind the wall. It sounded somewhat like a fan. John hated any extra noise and called the front desk to find out what the noise was. The desk agent who had checked John in was on break and the new one informed him that the noise was indeed a fan from the kitchen that ran from 8 A.M. until 11 P.M. and that the room wasn't usually sold unless the hotel was sold out. John asked to be moved since he would be in the hotel for five days. The agent told him it would be no problem and that he should come back to the front desk to get another room key. She asked whether he needed assistance with his luggage and then asked if he could hold the line for a second.

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John waited on the phone for what seemed three or four minutes when the agent finally got back to him. She apologized and he said he would like help with his luggage. After waiting for about ten minutes, John finally left his luggage in the room and went back to the front desk. The agent who had helped him was taking a phone reservation, but her assistant asked if he could help. John mentioned his desire to change rooms. The assistant leaned down to talk to the agent on the phone but was ignored momentarily. He told John he didn't know which room she had arranged for him and that she would be off the phone in a moment. Twenty minutes later John was checked into a new room with an ocean view. He decided to go out for a walk and stopped first at the front desk to see if his luggage could be delivered to his new room. "Oh no!" said the agent. "I forgot to let the bell attendant know about the move and now he has gone home." John found his way to his old room, picked up his luggage and took it to his new room. As he lay on his bed substituting a rest for a walk, John couldn't help seeing a few cobwebs in the upper corners of the room, cracking wallpaper, and some dust on the ceiling trim. After his nap, John had to call down to the front desk because there was no toilet paper in the bathroom. He was transferred to housekeeping where the executive housekeeper answered cordially. She apologized and told him that she was severely understaffed due to budget freezes but would send someone up right away. As John went for a walk later that afternoon, he was nearly knocked over in the hallway by a load of laundry being carried by a very small woman. She said something he couldn't understand in broken Spanish and English and hurried along on her errand. As it turns out, John had been hired to inspect the property by the owners of the Boden Oceanside Resort and Lodge. He began to jot down some notes that he would use in his report to the owners. Discussion Questions 1. What suggestions do you have for the front desk manager?

2. How many departments did John interact with during the arrival stage?

3. Why would the owners hire John to check out the property?

Case number: 608C04 This case also appears in Todd Comen, Case Studies in Front Office Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 2003).

Case Study 2 224

Everybody Sells: Turning Front Desk Agents into Salespeople "Come in, come in!" Ben, a slim, gray-haired figure in a dark three-piece suit, rose from his leather desk chair and waved Keith into one of the two chairs on the other side of the massive oak desk. Keith said "Thank you" and glanced around the general manager's office as Ben settled into the chair next to his. Keith had been in the office a few times before, but he was still impressed by the floor-to-ceiling bookshelves behind the desk, the lithographs of old hotels that lined the walls, the awards and testimonial plaques that were sprinkled throughout the room. "The reason I wanted to talk with you today," Ben began, "is to discuss what we can do to bring up our average daily rate. You've been at the hotel a couple of weeks now and I assume you've learned your way around a bit." "Yes sir." Ben's eyes twinkled. "I've told you before, just because my hair is gray and I've been in the hotel business a hundred years, there's no need to call me 'sir.' 'Ben' will do." Keith smiled and just stopped himself from saying "Yes sir" again. "I've received word that corporate wants us to raise our ADR ten percent by the end of the quarter, and the front desk has got to do its part." Ben leaned back in his chair and clasped his hands over his vest. He reminded Keith of a kindly, long-time family lawyer getting set to dispense some grandfatherly advice. "I don't want to be insulting, but, since this is your first job as a front office managerin fact, you're not that long out of college, is that correct?" "That's right, just a few years," Keith said. "Still 'wet behind the ears,' you might say." "Well, if you'll indulge me, I'd like to relate a little history of the relationship between the reservations department and the front desk; I think it will help you appreciate how we got to where we are today, and put into perspective what I'll be asking you to do to help us get that extra ten percent." "Okay." Keith settled back for a long story. "My first hotel job was in the reservations office. Back then there were no computers. We did have phones, however, in case you were wondering." Keith smiled as Ben chuckled. "People would call in requesting a room, and we would roll an index card into a typewriter and type out a reservation. The caller didn't make special requests, such as 'a room with a desk, please,' or 'a king-size bed, please,' and we didn't ask for any of that information, because we weren't sure what type of room would be availableback then inventory control was all done at the front desk. The card was simply a request that a room be held for the caller on a certain day. The cards would all be gathered up at the end of the shift and taken to the front desk, where they would be filed by the day the reservation was for. "When the guest arrived at the hotel, the front desk agent would pull the card ('Yes, Mr. Whosis, we have a room for you') and then the selling would begin, based on what types of rooms the agent knew were still available: 'Would you like a king-size bed?' 'We have several rooms with a nice view of the parkwould you care for one of those?' and so on. In other words, the front desk agents were the hotel's salespeople, because they had control of the guestroom inventory. They knew which rooms were available and which were not. 225

"Well, along came computers, and suddenly sales moved from the front desk to the reservations department. Why? Because computers allowed the reservations department to keep track of guestroom inventory. Now when a caller phoned the hotel, the reservationist could look at a computer screen and tell exactly what rooms were still available on the day the caller wanted to stay at the hotel. So the reservationist, instead of merely reserving 'a' roomthe old card system could do that muchcould now reserve a particular room. The reservationist could ask the caller all of the questions the front desk agent used to ask: 'What size bed would you like?' 'Would you like a room with a view?' 'For five dollars more I can reserve a room near the pool; would you like that?' and so on. Therefore, once computerized reservations systems arrived and guestroom inventory control shifted from the front desk to the reservations department, the sales function and all of the sales training shifted from the front desk to the reservations department, too." Ben spread his hands in a gesture of regret. "Consequently, salesmanship was not emphasized at the front desk anymore. In fact, many agents saw no need to sell, because most guests had already told the reservationist exactly what types of rooms they wanted. Many front desk agents thought they would be 'bothering' a guest if they suggested a room other than the one called for by the reservation already entered into the computer. "Butand this is something I could never get your predecessor to understand, or at least to act on," Ben frowned, "front desk agents can still have a tremendous impact on a hotel's bottom line, through upselling. For example, if a guest walks in with his wife, and the front desk agent sees that he has reserved a standard room, the agent should say something like the following: 'Sir, we have a room available that you might enjoy more than the one you've reserved. The room I'm thinking of is a corner room with a great view. It also has a whirlpool tub that's great for relaxing, a sitting area, and a king-size bedwhich would be an upgrade from the two double beds in your present roomall for only $15 more. Would you like me to reserve this room for you?' "Or, if an agent sees a guest come in lugging three sample cases, he can assume that this is a businessperson who probably would like enough space in his room to spread out business papers or samples or what have you. The agent should say something like this: 'Gee, it looks like you're really loaded down, sir. I see that you've reserved a standard guestroom, but I have a bigger room with plenty of desk space for only $10 more.' What's wrong with that?" Ben stopped talking and looked at Keith expectantly. "Nothing?" Keith ventured. "That's right, there's nothing wrong with that!" Ben said enthusiastically. "The agent made a suggestion that might make the guest's stay more pleasant and also increase revenues for the hotel. That's all there is to upselling. But so few agents are trained to do that anymore. Like I said, computers changed everything. In the old days, reservationists were 'order-takers' and the front desk agents were the salespeople; now the roles are completely reversed. And it shouldn't be that way. Front desk agents still have a sales role to play." Ben chuckled again. "Thank you for letting me climb up on my soapbox. You're probably wondering, 'What does all this have to do with me?' Well, what I want you to do is turn your front desk agents into salespeople again. We've got to teach them how to sell and give them the tools to sell so they'll have the confidence to sell."

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"I hope this doesn't sound naive," Keith said, "but, can upselling really make that much difference? I mean, $5 here, $10 there, and not every guest is going to agree to an upgrade." Keith paused. "I guess I'm not sure how much that's really going to add to the bottom line." "That's the beauty of upselling," Ben replied. "Every extra dollar you bring in through upselling falls to the bottom line. We've already spent the money to get the guest to the hotelthrough advertising, the reservationist taking the call, and so on. Now that he's here, anything extra we can entice him into spending is pure gravy." Ben smiled. "Now, don't get the wrong idea. I don't want to sound manipulative, because upsellingdone properlyis not the art of tricking a guest into buying something he doesn't want. A front desk agent should never pressure a guest. However, there's nothing wrong with pointing out to a guest that, for a few dollars more, his or her experience at the hotel might be enhanced. Usually, guests are unaware that there are rooms available that might better fit their needs. Maybe the reservationist didn't do a great job of selling, who knows? So agents aren't trying to 'gouge' guests when they upsellthey are merely offering a guest some options that the guest might not have thought about, options that might make the guest's experience at the hotel more enjoyable. That's the way you should present upselling to your agents." "I'll be glad to try," Keith said, "but I'm not sure how to go about it." "Well, the first thing I'd do is assess the current sales skills of the staff," Ben said. "Is anyone selling right now? You've only been here a couple of weeks and I know you're not fully acquainted with your personnel, so I'd spend some time observing the agents. This might also give you ideas on what types of upselling opportunities the agents are missing. If you discover a pattern, that will give you a plan of attack on good ways to raise the ADR. "What I suspect you're going to find," Ben continued, "is that few, if any, agents are upselling right now. But don't be discouraged. There are lots of techniques we can use in-house to train them; we may even send them to some outside seminars, or bring a trainer here if we have to. Also, you'll probably want to set up an incentive program to encourage the agents to sell." Ben stood up to signal an end to the meeting and placed a hand on Keith's shoulder. "Don't worry, I'm confident you can do it. And you're not alone. All we need from the front desk area is an additional five percent; reservations and the sales department have targets to meet, too, andworking togetherwe'll make our numbers and corporate will be happy. If you run into trouble, don't hesitate to come see me." "Thank you, Ben." During the next week, Keith observed the front desk agents as they checked in guests. As Ben predicted, they didn't make any effort to upsell. They were polite and professional, but invariably they sent the guests to whatever room they had previously reserved. Even with walk-in guests there was no salesmanship. The agents always offered the walk-ins one of the hotel's standard guestroomsthe lowest-priced rooms in the houseand almost every walk-in simply accepted it. Keith observed only one walk-in guest who asked if there were better rooms available. The agent said yes, the hotel had some deluxe rooms available, and there was even one club room still available. (The hotel had three basic types of rooms: "standard" guestrooms with either two double beds, two queen-size beds, or one king-size bed; "deluxe" guestrooms with the same bed combinations but with slightly more floor space and better appointments; and "club" rooms that were really mini-suites with king-size beds, sitting areas, and special amenities such as thicker towels, upgraded toiletries, turn-down service, and so on.) When the guest asked the agent to describe the differences in the rooms, Keith was surprised to hear the agent do a terrible job of outlining the different 227

features and amenities that accompanied each type of room. Later, Keith checked with some of the other agents and was shocked to learn that many of them had never seen any of the hotel's guestrooms. As the week wore on, Keith noticed a pattern that concerned him: most of the hotel's club rooms were given away as upgrades to the hotel's business guests. Those rooms were supposed to be real moneymakers for the hotel, because the hotel sold them at a higher rate than the standard and deluxe guestrooms, but that was precisely the problemthe rooms were rarely sold. As part of its special corporate rates, the hotel promised business travelers free upgrades to club rooms "subject to availability." And club rooms were always available, because front desk agents weren't selling them! If Keith did nothing more than get his agents to sell more club rooms, that would have a dramatic impact on ADR, because the rooms would be sold rather than given to guests who were already enjoying a discounted corporate rate. At the end of the week, Keith met with his front desk agents at the beginning of their shifts and explained the situation. "The overall goal of the hotel is to raise ADR by ten percent; our contribution is to increase our numbers by five percent. We can do that by upsellingto all of our guests, but especially to our walkins. According to my research, about 12 percent of our guests are walk-ins, and since these guests have no prior reservations, they're not committed to a particular room and should be easier to upsell. If we start out by offering walk-ins our club rooms, rather than our standard rooms, then offer a deluxe room as a compromise if they don't want a club room, I think we can almost make our numbers right there, not even counting upselling to guests who already have reservations. "Let me give you an example of how a little bit of upselling can make a big difference," Keith continued. "We sold about 1,000 rooms to walk-ins last month. All but 14 of those guests were booked in standard rooms at around $55 per night. If we sell club rooms, which sell for $40 more, to 200 of those walk-ins that's just one upgraded guest out of fivethat brings in an additional $8,800 for the month. Project that over 12 months, and we're bringing in over $100,000 more revenue per year for the hotel. Just moving 200 walk-ins from a standard to a deluxe room at $75 a night would bring in $4,400 more a month. And those dollars fall right to the bottom line. "If we sell out the club roomsand that should be our goal every nightthey are no longer available as free giveaways to businesspeople, which saves us money and gives us upselling opportunities: 'I'm sorry, Ms. Businessperson, but our club rooms are full tonight. I can go ahead and book you into your standard room, or I can upgrade you to a deluxe guestroom with lots of space and a king-size bed for just $20 more.' Don't save the club rooms so you are sure to have some available to give away as upgrades. What you want to do is sell them out, so we don't have to give them away." "Isn't that unfair to the business travelers?" asked one agent. "Not really," Keith replied. "Our deals with business travelers state that we will upgrade them to club rooms if any are availablebut we certainly aren't obligated to deliberately not sell club rooms to make sure they're available. That's not good business, and businesspeople don't expect us to do that. The hotel put a lot of money into those club rooms, and it's entitled to try to recoup that investment if it can. "I know the idea of upselling is a new one for many of you," Keith said in conclusion, "but it isn't that difficult, and I'm not going to just shove you out there unprepared. You're going to get some training, and I'm also going to come up with an incentive plan so you can share in the rewards of bringing more revenue to the hotel. "Upselling can be enjoyable if you approach it the right way, so get ready to have some fun! And here's a slogan I want you to remember from now on: 'Everybody Sells!'" 228

Discussion Questions 1. What are some ways Keith can train his front desk agents to be salespeople?

2. What types of incentive plans might Keith put in place to encourage his front desk agents to sell?

Case Number: 3325CA The following industry experts helped generate and develop this case: Richard M. Brooks, CHA, Vice President, TWE Group; and S. Kenneth Hiller, CHA, General Manager, Holiday Inn, Beachwood, Ohio. This case also appears in Case Studies in Lodging Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 1998).

Case Study 3 Risking the Upgrade! Things were hopping in the front office this Friday afternoon. Guests had been checking in for the Glamder wedding, which would last two days and was taking up a block of 20 rooms. It was a major wedding for the resort, and the sales department was very pleased. It was still the shoulder season, so an event such as this was welcome at this time of year. With the wedding room block, the resort was nearly fully occupied. At 7:30, two men arrived at the front desk to check in a little late for the rehearsal dinner. The front desk agent, Clarice, greeted them cordially and requested their names. One introduced himself as John Jones. Clarice identified the correct guest record for John Jones, scanned it briefly to determine if indeed he was with the wedding party, how many days he would be staying, and the number of people in the room. She noticed that there was only one booked for the room and asked whether he was traveling alone. He explained that his buddy had decided to attend the wedding at the last minute so they drove down together from Oregon. Clarice reviewed the guest record again, taking notice of the room assignment and the price quoted for the room. Mr. Jones had been assigned to a small, less expensive room in the south wing of the resort for the low rate of $120. This room had only one queen size bed and a pull-out sofa. She took a look at the men and wondered who would get the pull-out sofa since both were well over six feet tall. While pondering what to do next, she asked whether they had ever stayed at the resort before. Mr. Jones said that he and his wife and two children had stayed at the resort just eight months ago and loved it. They had planned to go to Europe, but world circumstances influenced them to stay closer to home. They had stayed in a lovely suite and really enjoyed their time at the resort. The friend, however, had never stayed there. Clarice then asked whether they would be comfortable in a room with a queen bed and a pull-out sofa. Mr. Jones quipped that since he was paying for the room, he would take dibs on the queen bed. The other gentleman didn't complain, but was a little disappointed. Clarice thought for a moment and asked whether 229

they would like an upgrade to a more comfortable room. She couldn't guarantee one, but would see what she could do if they gave her a few moments. She asked them if they would like to have a refreshing drink in the lounge while she checked on room availability. Since the men were late already, they decided a few more minutes wouldn't matter and that they would have a drink. After ten minutes and another check-in, the men were back wondering if anything had been found. Clarice said that the only thing she could find was a junior suite with two queen beds. It was a very comfortable room and would be the envy of the other wedding guests. She said it was $100 more per night. As the wedding party would last two nights, the total additional cost would be $200. Mr. Jones was quick to respond to the suggestion by saying he would be pleased to split the difference with the resort, meaning that the additional charge would be $50 per night. Clarice pondered the offer. She cringed, wondering what her supervisor would have to say about upgrading guests from the lowest-cost room to one of the nicest the resort had to offer for only $50 per night. Her superiors had always pushed for getting top dollar for the suites. On the other hand, Clarice had noticed that the suites hadn't been selling to walk-in customers. At this time of night, the room might not sell anyway, she thought to herself. And what were the chances of the room selling the following night when it wasn't reserved in advance? Clarice wondered whether to take the additional $50 per night and risk upsetting the supervisor whom she knew didn't like selling below rack rate, or just leave the two guys in the less expensive room. She thought for a moment and then decided to go with the upgrade. The two gentlemen were thrilled when they passed the front desk later that evening on their way to the rehearsal dinner. They had called their wives and told them of the warm reception and that they would have to plan a visit in the near future. The following day the assistant front office manager asked to have a word with Clarice about the upgrade decision she'd made the previous afternoon. They had a brief discussion while Clarice answered phones for the PBX operator who was taking a dinner break. As expected, the assistant front office manager wasn't very pleased with the upgrade decision. Even though Clarice tried to explain her reasoning for the upgrade, the manager couldn't see her point and asked her never to do it again. Discussion Questions 1. Did Clarice use good business sense or was she just being nice?

2. Should the manager have been called to help with this decision?

Case number: 608C07 This case also appears in Todd Comen, Case Studies in Front Office Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 2003).

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Review Questions 1. What are the seven steps of the registration process?

2. What are the advantages of preregistering guests? What might limit the front office's ability to preregister guests?

3. What information is usually requested on a guest registration card? How is this information useful to the front office?

4. Why is current room status information essential to an effective guest registration process?

5. What are the advantages of a computerized room status system?

6. What are some examples of special room rates?

7. What major methods of payment do guests use? What forms of tender are generally considered equivalent to cash?

8. What procedures do front desk agents use for accepting a credit card as a method of payment during registration?

9. What are some creative registration options?

10. What is upselling? When is it appropriate? What are some things a hotel can do to upsell a guest?

11. What actions should the front office consider when a guest cannot be accommodated?

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Chapter 6 - Communications and Guest Services Outline Front Office Communications

Guest Communications Transaction File Information Directory Reader Board Group Rsum Book/File Mail and Package Handling Telecommunications Services

Interdepartmental Communications

Housekeeping Engineering and Maintenance Revenue Centers Marketing and Public Relations

Guest Services

Equipment and Supplies Special Procedures

Guest Relations

Complaints

Summary

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Competency 1 Objective: Describe front office procedures for communicating with guests, and describe communications between the front office and other hotel areas. Communication is vital to front office operations, because nearly everything that happens in a hotel affects the front office, and vice versa. All functions of the front office rely in part on clear communication. Front office staff must communicate effectively with one another, with personnel in other departments and divisions, and with guests. Effective communication is a prerequisite to an efficient front office. This chapter examines the importance of communication and several ongoing responsibilities of the front office. Front Office Communications Communication involves more than memorandums, face-to-face conversations, and electronic messages sent over computer workstations. Effective front office communication also involves the use of transaction files, information directories, internal and external networks, search engines, and mail and telephone procedures. The complexity of front office communication tends to be directly related to the number of guestrooms and the size and extent of the hotel's public areas and facilities. The larger the hotel and the more people involved, the more complex the communication network. Even in small hotels, establishing and maintaining communication links can be complex. Guest Communications Communication takes many forms in a hotel, but none is more important than how hotel employees communicate with guests. Guest communications must present a professional, positive image for the hotel, whether they are in person, over the telephone, or online. The proper greeting, attitude, and followup all set expectations and influence how guests perceive the hotel. For example, when staff members answer the telephone, it is appropriate for them to provide an informative and warm greeting. Using an introduction such as: "Thank you for calling the Casa Vana Hotel. This is Emily speaking. How can I help you?" provides a warm welcome to the caller. By contrast, answering with: "Casa Vana Hotel" may seem cold or abrupt and fail to create an impression of hospitality. The same applies to departmental calls within the hotel. A warm greeting, such as "Thank you for calling the Casa Vana Hotel Reservations Office. This is Brad. How may I help you?" is much more professional than simply answering "Reservations" would be. It greets the caller, identifies who is speaking, and offers service, all in a concise expression. When calling a guest, it is also important to introduce yourself and give the reason for the call. For example: "Good afternoon, Mr. Wilson. This is Greg at the front desk. I'm calling to follow up on the service request you made this morning to repair the room's air conditioning system. Is it working to your satisfaction now?" With this approach, Mr. Wilson knows who is calling and why the call is being made. Also, it's less likely that he will consider the call an intrusion, since Greg made it clear that the call is in response to Mr. Wilson's prior request. Face-to-face communication is just as important. Unlike telephone communication, where words and tone of voice alone determine how the message is received, face-to-face communication also includes body language and eye contact. Guests do not respond well when hotel employees don't look at them when they are trying to communicate. Guests checking in at the front desk may become irritated when the front desk agents look only at their computer screens and not at them, for example. Guests respond well when hotel 233

employees convey a sense of interest, confidence, and honesty. This is done through proper language, a professional demeanor, and an attitude of hospitality. Transaction File Front desk agents may keep a transaction file (if they are using an automated front office system) or manually keep a log book (if they are using a non-automated system) so that all front office staff members can have access to a record of important events and decisions that occurred during previous work shifts. A typical front office transaction file (sometimes referred to as a concierge file) is a chronological journal that lists unusual events, guest complaints or requests, and other relevant information. Front desk agents make entries to the transaction file throughout a work shift. These notes should be clearly entered in a prescribed format or template, so they serve as effective reference material for the next front office shift. Before beginning their shift, front desk supervisors and agents should review the transaction file, noting any current activities, situations that require follow-up, or potential problems. For example, a front desk agent on the morning shift might note that a guest phoned requesting maintenance or housekeeping services. The agent should also note what action was taken to resolve the situation, if any. Notations become an important link in the communication network that informs employees on subsequent shifts of previous happenings. The front office transaction file should detail what happened, why, and when. After reviewing these notes, the front desk agent on duty can respond intelligently if the guest contacts the front desk for follow-up. When entries are made in the transaction file concerning guest requests, it is appropriate for the person who noted the request to personally follow through, if possible. For example, if a guest calls the front desk to request extra towels in his or her room, the agent who took the call should check with the guest later in the day to ensure that the towels were delivered. If the agent who took the initial call cannot make a follow-up call, an agent working the very next shift should do so. Sometimes it's not possible to respond to a guest's request until the following day. In that case, the guest should be told at the time the request is made when action will be taken. If no information is provided, the guest may feel uneasy and irritated. Once the guest's request has been filled, an entry should be made in the transaction file showing that the follow-up call was made and how the guest responded to it. It is important to always leave enough space in the transaction file to (1) record the final action taken concerning the guest request, or (2) communicate with other hotel departments, if follow-up action on their part is required. This is the most efficient way for the next shift of front office agents to know if additional action must be taken. The front office transaction file is also important to management. It helps management understand the activity of the front desk, and it records ongoing issues. For example, if there are recurring problems with housekeeping or engineering issues, one of the best ways to identify these problems is through notes in the front office transaction file. Also, should there be guest complaints, compliments, or unusual activity, the transaction file explains what happened and how it was handled or resolved.

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Hotel automation applications may include rapid response software for the recording, tracking, and completion of guest service requests. (See Exhibit 1.) Several software systems allow hotel employees to record guest service requests via workstations, personal digital assistants (PDAs), or telephone devices. The requests are automatically distributed to the appropriate hotel department, which sends staff to provide corrective services. For example, a guest may notice that a guestroom light bulb is burned out and must be replaced, and phones the front desk agent to report the problem. The front desk agent enters the guest request into the guest services system. The department responsible for changing light bulbs, either housekeeping or engineering, receives the notification from the system and sends a staff member to replace the bulb. Once the task is complete, the staff member records that fact through the system, perhaps using a guestroom telephone interface. Management can use the system to track and report a variety of maintenance-related information to ensure that guest concerns are resolved quickly and completely, leading to high levels of guest satisfaction. Using the transaction file or guest services application is a much better approach than receiving a negative rating on a guest survey and having the hotel's guest satisfaction score decline because of something that could have been successfully handled during the guest's stay. Information Directory Front office staff must be able to respond in a knowledgeable way when guests contact the front desk for information. Common guest questions involve:

Local restaurant recommendations Contacting transportation companies, including taxi, limousine, and airport shuttle companies Directions to a business or office building 235

Directions to a shopping center, drugstore, or gas station Directions to a place of worship Directions to a bank or automated teller machine Directions to a theater, stadium, or ticket agency Directions to a university, library, museum, or other point of interest Directions to a federal building, capitol, district court, or city hall Information about hotel policies (for example, check-out time, or rules concerning pets) Information about the hotel's recreational facilities or those near the hotel

Often front desk agents need to access somewhat obscure information to answer guest questions. Some front offices accumulate such data in a bound guide or an electronic file called an information directory. The front office information directory may include simplified maps of the area; taxi and airline company telephone numbers; bank, theater, church, and store locations; information about local restaurants (including their menus); and special event schedules. Front desk agents should be familiar with the information directory's format and content. Some hotels have installed automated information terminals or kiosks in their lobbies and other public areas. Information kiosks are the electronic equivalent of the front office information directory. Information kiosks are easily accessed by guests without front office staff assistance. This ease of access frees front desk agents to attend to other guest needs. Reader Board Many hotels provide a schedule of daily events through the television system or information display panels. A common industry term for the device used to display daily events is the reader board. Information on a reader board usually includes the names of groups staying at the hotel and their meeting room(s), agenda items, and meeting times. Reader boards may be placed near the front desk, in elevators, in the lobby, and in the meeting room section of the hotel; reader board information may be displayed on a guestroom television channel as well (this helps reduce the volume of information requests at the front desk). Display monitors may be placed in convenient locations so that guests can review the list of daily events scrolling on the screen. Interfacing the electronic reader board system with the hotel's sales and catering system allows the information to be updated automatically by the sales and catering system instead of manually. Group Rsum Book/File In convention hotels, it is also common to have a group rsum book or electronic file at the front desk. Each group staying in the hotel has a summary in the book or file of its activities, billing instructions, key attendees, recreational arrangements, arrival and departure patterns, and other important information. Some hotels prefer to store the rsums by group name. Many hotels make the group rsum book or file required reading for front desk and uniformed staff at the beginning of each work shift. Front desk staff members should familiarize themselves with the rsums of all incoming groups to be sure they know what arrangements have been made. In addition, front desk staff should know where the group rsum book or file is located so that any questions concerning the group can be answered quickly and correctly. Prior to a group checking in, it is common to have a pre-convention meeting, or Pre-Con. The hotel 236

catering or convention services manager responsible for the group usually leads the meeting. Group rsums are usually distributed and reviewed at these meetings. Group leaders attend these meetings along with key hotel managers. Last-minute changes are discussed and any outstanding issues are resolved prior to the group's arrival. The managers are then expected to return to their departments and familiarize their staffs with the information on the rsum. A frequent guest concern involves understanding group billing arrangements. Most property management systems have the ability to monitor group room and non-room charges and to allocate charges to predetermined accounts (if desired). For example, it is common for corporate meeting planners to require that the room and tax portion of every guest bill be forwarded to the group master account, while directing that incidental charges (for telephone service, laundry service, alcoholic beverages, in-room refreshments, and entertainment fees) be paid by the guests. Property management systems can be programmed to automatically split folio charges according to the specifications of the group's coordinator or representative. However, guests may not understand these arrangements. By having a group rsum book or file, the front office agent can quickly verify billing arrangements and direct the guest to the group leader for further clarification, if necessary. The group rsum book or file should be kept current and should include not only the rsums of groups currently at the hotel, but also the rsums for groups due to arrive within a few days and groups that have departed within the past week. By having the rsums of groups arriving in the near future, the front office manager can verify the detailed arrangements for the group. For example, if a group expects an early arrival pattern, or many requests for late departures following a meeting, these facts should be in the rsum, so the front office manager can plan for these events. Maintaining rsums in the book or file for departed groups helps the front office manager refer to group arrangements should departed guests telephone with questions concerning billing or other arrangements. Mail and Package Handling Registered guests rely on the front office to relay delivered mail and packages quickly and efficiently. Front office managers normally develop policies for mail and package handling based on the policies and regulations supplied by the United States Postal Service. In general, the front office is expected to time-stamp all guest mail when it arrives at the property. Doing so documents the date and time that the mail was received in case a question arises about when the mail arrived or how quickly the guest was notified of its arrival. When mail and packages arrive, front office records should be checked to verify that the guest is currently registered, is due to check in, or has checked out. Different mail handling procedures should be prescribed for each of these three circumstances. Usually, mail for a registered guest is held at the front office in the appropriate room slot in a mail and message rack or in an alphabetical rack according to the guest's last name. At one time, keys and mail were kept behind the front desk in view of guests and other hotel visitors. Due to security issues, these items are now maintained out of sight behind the front desk. This approach prevents other people from learning that a particular room is occupied because there is mail in the room slot. The front desk should promptly attempt to notify a guest when mail is received. Some properties notify guests by turning on an in-room message light on the guestroom telephone; others deliver a printed form to the guestroom. If mail arrives for a guest who has not yet registered, a notation should be made on the guest's reservation record and the mail held until the guest arrives. Guest mail that is not picked up or has arrived for a guest who has already checked out should be time-stamped a second time and returned to its sender or sent to a forwarding address if the guest has provided one.

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Guests may also receive registered letters, express mail packages, or other mail requiring a signature on delivery. Some hotels permit the front desk agent to sign for such mail. After doing so, the agent records the item's delivery in the front office mail signature book, and has the guest sign for the mail in the book at the time of pickup or delivery (a sample page from a mail signature book is shown in Exhibit 2). If the sender restricts who can receive the mail, the front office must follow other procedures. For example, if the sender stipulates guest signature only, the front office cannot sign for the mail. Instead, the front desk agent may page the guest or provide a notice to the guest's room that a delivery attempt was made. Packages are usually handled as mail. If the package is too large to store at the front desk, it should be taken to a secure room. The package and its location should be recorded in the front office mail signature book. When mail or packages are received, it is customary to notify the guest immediately. Most hotels will call the guest's room. If no one answers, the message light is turned on and a message is left with the department that customarily answers message requests.

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Telecommunications Services Most hotels provide in-room local and long-distance telephone service 24 hours a day. Regardless of whether front desk agents or telephone system operators answer incoming calls, all employees answering calls should be courteous and helpful. The telephone is often the first point of contact with the hotel, and the way that callers are treated does a lot to affect the hotel's image. Front office management may restrict the type of information the front office staff may furnish to callers, because of guest privacy and security issues. Telephone messages taken by front office staff should be time-stamped and placed in the guest's mail and message rack slot. If guestroom telephones are equipped with a message indicator light, the front desk agent may switch on the in-room message light so that the guest is alerted that a message is waiting at the front desk. In some properties, messages can be typed directly into the computer terminal as they are relayed to a switchboard operator or front desk agent. The telephone system may be programmed to automatically turn on the guestroom message light when it receives the message from the front office computer. When the guest returns to the room, the flashing light on the phone informs the guest that mail or a message is waiting at the front desk. The guest can then call the switchboard operator or the front office message center and ask for the mail or message to be delivered. In some hotels, the guest may be able to display typed messages on the guestroom television screen. Many hotels have added guest voice mail systems. Voice mailboxes are devices that can record messages for guests. A caller wishing to leave a message for a guest simply speaks into the phone; his or her message is then recorded by the voice mailbox system. To retrieve the message, the guest typically dials a special telephone number that connects him or her with the voice mailbox, and listens to the previously recorded message. A major advantage of voice mail is that the message is captured in the caller's voice. This is especially helpful with foreign callers who may not speak the local language clearly. Voice mail also offers improved confidentiality of messages and eliminates interpretation of unclear messages by the hotel staff. Another popular feature of voice mail systems is the group broadcast. This feature allows guestrooms associated with a specific group to automatically receive special messages. For example, a group leader may send a voice mail to everyone in the group, informing all members that the time for their dinner has been changed. All the guests in the group are identified through the group code in the front office system. The room numbers are then entered into the voice mail system and all the individuals in the group are notified through the group leader's message. Facsimiles. Facsimiles or faxes are usually treated like mail, but with special care. Guests are often waiting for these documents. If the incoming fax has special delivery instructions, such as deliver immediately to a specific meeting room, the front desk should dispatch a bell attendant with the fax right away. If no special instructions are provided, the hotel may store the fax in the mail rack and turn on the message light in the guestroom. Faxes are different from mail in that they do not need to be time-stamped and usually do not come in envelopes. (Some hotels opt to deliver the fax in an envelope to the guestroom.) The fax document usually contains the date and time of transmission. Faxes should always be treated as confidential; front desk staff members should never read a fax. It is their job simply to deliver the document. Some front offices maintain a fax log or combined fax and mail log for tracking all received documents. Information recorded in the fax log book may list the recipient, the sender, the time the fax was received, and the total number of fax pages. Front desk agents may also record when the guest was notified and when the guest picked up the fax. A similar record is kept of outgoing faxes if the property offers public fax service. If a fax is undeliverable, the hotel should immediately notify the party sending the fax. Most 240

hotels charge guests to send faxes, since there are telephone costs involved. Some hotels charge guests for received faxes (to cover costs). Whether or not there is a charge, front desk agents should process and deliver faxes quickly. The guest should be notified as soon as possible that he or she has received a fax. One of the more recent innovations in technology is the in-room fax. Connected to a second telephone line in the room, it offers guests improved convenience and security. Faxes can be received directly in the guestroom instead of at a central hotel fax machine. In addition, in-room fax machines now allow guests to receive newspaper headlines and even copies of their room bills. Wake-Up Services. Since a guest may miss an important appointment, a flight, or simply a head start on a vacation by oversleeping, front desk agents must pay special attention to wake-up call requests. Front office mechanical devices or a front office automated system can remind front desk agents to place wakeup calls, or the systems can be programmed to place the calls and play a recorded wake-up message. Despite advances in technology, many hotels still prefer that front desk agents or telephone operators place wake-up calls. For the most part, guests appreciate this personal touch. Quite often, the clock in the telephone department used for wake-up purposes is called the hotel clock. It is the official time of the hotel. Therefore, the clock should be checked daily to be sure it is correct. Other clocks in the hotel, such as front desk time stamps, should be synchronized with the hotel clock to be sure time accuracy among departments and services is maintained. The hotel clock is usually kept next to the switchboard. Again, technology is providing new services in this area. Instead of calling the hotel operator or service department to place a wake-up call request, guests can simply dial a special hotel extension on their telephone and follow the instructions provided by the system to request a wake-up time. The hotel then has the option of providing an automated wake-up call or prompting the hotel operator to place a personalized wake-up call. Hotels can also combine a wake-up call with room service, allowing the guest to order breakfast upon receiving a wake-up call. E-mail and Data Services. Most hotel guests have business and personal e-mail accounts or company data files that they may need to access while traveling. A guest who has a laptop, notebook, or handheld device can use the guestroom's high-speed Internet access to connect to the Internet. Once connected, the guest can access web-based e-mail or can download e-mail files via specialty software. Alternatively, guests may use a guestroom telephone line as a data port, but such access typically operates at a much lower transfer speed. Connecting to the Internet enables communication with corporate networks, virtual private networks, home office networks, public access networks, or automated devices (such as handheld PDAs, cell phones, and pagers). If the hotel provides wireless high-speed Internet access, travelers can also access the Internet from public areas (inside and outside venues) as well as from meeting rooms and exhibit floors. Hotels may provide such services on a complimentary basis or for a nominal fee. TDDs. A special hotel guest service involves telecommunications devices for the deaf (TDDs) for hearing- and/or speech-impaired travelers. A TDD is a specially designed piece of equipment for placing and conducting telephone calls. A TDD looks like a small typewriter with a coupler above the keyboard for a telephone receiver. The Americans with Disabilities Act requires that hotels make available, upon request, a TDD for use by a guest who has impaired hearing or a related communication disorder. Similarly, the front desk should have a TDD device to handle in-house calls from hearing- or speechimpaired guests. To use a TDD, the caller turns on the unit, places the telephone receiver into the coupler, dials the telephone number, and begins typing when the other party picks up. There is a small display screen above the typewriter keys that shows what the caller is typing. Call Broadcast. Many hotels have a call broadcast feature on their telephone equipment that allows them to make calls to all guestrooms listed as occupied. Some equipment can be selective, calling only certain 241

guests. For example, a group leader may want to leave a message for all group guests staying at the hotel, reminding them that the evening reception time has been changed from 6 P.M. to 6:30 P.M. More importantly, in case of an emergency, the call broadcast feature also acts like a reverse 911 system. For example, calls can be placed simultaneously to all rooms identified as occupied in the property management system. The emergency message can be sent to all rooms, and the system can record if the telephone was answered. This feature is very important, especially if the hotel has to be evacuated, or if guests need to be instructed to stay in their guestrooms. Interdepartmental Communications Many services in a hotel require coordination between the front office and other departments or divisions. The front office generally exchanges most of its information with personnel in the housekeeping and engineering and maintenance departments. Front desk agents should also recognize how influential their advice to guests can be regarding the hotel's revenue centers. Housekeeping The housekeeping department staff and the front office staff must keep each other informed of changes in room status to ensure that guests are roomed efficiently and without complication. The more familiar front office staff is with housekeeping procedures, and vice versa, the smoother the relationship will be between the two departments. Housekeeping must know the status of every room and all guest requests. In most cases, property management systems have workstations in housekeeping offices that provide the staff with up-to-the-minute information on arrivals and departures. However, it is still very common for front desk agents to call housekeeping with requests, whether for extra towels for a guestroom or to tidy up the lobby. The front office manager and housekeeping manager should meet frequently to review upcoming hotel activities. For example, if the hotel is expecting a large check-out and check-in on the same day, the front office manager and housekeeping manager should discuss what priorities should be set for arriving guests and stayovers. Special requests, like VIP rooms, are very important, since the hotel does not want to inconvenience or give a bad impression to VIPs. Engineering and Maintenance In many hotels, engineering and maintenance personnel begin each shift by examining the front office log book or specialty software for repair work orders. Front desk agents use the log book or application software to track maintenance problems reported by guests or staff, such as poor heating or cooling, faulty plumbing, noisy equipment, or broken furniture. The front office log book serves as an excellent reference for the hotel's engineering and maintenance staff. Many hotels use a multiple-part work order form, or real-time data entry, to report maintenance problems. When the work is completed, the engineering and maintenance staff informs the department that filed the work request order. If a maintenance problem renders a room unsalable, housekeeping must be informed immediately when the problem is resolved so the room can be placed back in the available room inventory. Immediate notification of changes in room status helps minimize lost revenue. To enhance hotel operations, some hotels employ engineering and maintenance staff around the clock. Revenue Centers

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Although hotels enjoy their greatest revenues through guestroom sales, additional services and activities may support or boost overall profitability. In addition to the rooms division, hotel revenue centers may include:

All-day dining rooms, snack bars, and specialty restaurants Bars, lounges, and nightclubs Room service Business centers Laundry/valet service Vending machines Gift shops, barbershops, and newsstands Banquet, meeting, and catering facilities Local and long-distance telephone service Health clubs, golf courses, and exercise rooms Car rentals, limousine services, and tours Casinos and gaming activities Pay-per-view television movies In-room entertainment (video games, for example) Valet parking and parking garages

Guests frequently learn about these services and facilities through the hotel's website, printed directory, or advertising over the guestroom television. Front desk agents and uniformed staff members must also be familiar with these facilities and services so they can answer guest questions in a positive and knowledgeable way. The transactions charged to room accounts by guests at hotel restaurants, gift shops, and other remote points of sale must be communicated to the front desk in a timely manner to ensure prompt payment and to avoid late charges. Marketing and Public Relations The front office staff should be among the first to know about events the hotel schedules for publicity. In many ways, the effectiveness of a hotel's marketing and public relations efforts depends on the participation and enthusiasm of front office staff. Guest receptions, special hotel promotions, health and fitness programs, family events, and even complimentary coffee in a hotel's lobby may provide settings for guests to socialize and can help promote repeat business. Front office staff may contribute to hotel newsletters, guest history files, and customized registration and check-out processes that can greatly help personalize hotel services for frequent guests.

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Section Keywords transaction file A chronological recording of important front office events and decisions for reference during subsequent front office work shifts. log book A journal in which important front office events and decisions are recorded for reference during subsequent shifts. In many hotels, the log book has been replaced by a transaction file maintained by the property management system. rapid response software An electronic form of a maintenance log book system. information directory A collection of information kept at the front desk for front desk agents to use in responding to guest requests and questions, including simplified maps of the area; taxi and airline company telephone numbers; bank, theater, church, and store locations; and special event schedules. reader board A posting or closed-circuit broadcast of daily events at a hotel. group rsum A summary of all of a group's activities, billing instructions, key attendees, recreational arrangements, arrival and departure patterns, and other important information; usually stored in a binder at the front desk. Voice mailboxes Devices capable of storing, recording, and playing back messages for guests through the telephone system. hotel clock The clock by the hotel switchboard that keeps the official hotel time.

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Competency 2 Objective: Identify typical service requests that guests make at the front desk, and describe general approaches to handling guest complaints. Guest Services As the center of front office activity, the front desk is responsible for coordinating guest services. Typical guest services involve providing information and special equipment and supplies. Guest services may also include accommodating guests through special procedures. A guest's satisfaction with the hotel hinges in part on the front desk's ability to respond to special requests. A request that falls outside the front office's responsibility should be directly referred to the appropriate person or department. A growing number of hotels employ a concierge or other designated staff member to handle guest requests. A concierge should embody the warmth and hospitality of the entire property. As more hotel functions become automated, the concierge may play an even more important role in reinforcing the hotel's personal touch in guest services. Several hotel companies have introduced centralized guest service centers. Guests have only to dial one telephone number (or press one button on their guestroom telephone) for any and all requests. This includes valet parking, room service orders, luggage assistance, laundry and valet services, meeting times, directions to a local business, and other requests from guests. The staff of these service centers is specially trained to handle guest requests and dispatch whatever service is necessary. Equipment and Supplies Guests may request special equipment and supplies while making a reservation, at the time of registration, or during occupancy. Reservations agents should have a reliable method for recording special requests to ensure that they are properly met. After registration, a guest who needs special equipment or supplies will almost always contact the front desk. The front desk agent, in turn, follows through by contacting the appropriate service center or hotel department. Equipment and supplies commonly requested by guests include:

Rollaway beds and cribs Additional linens/pillows Irons and ironing boards Additional clothes hangers Audiovisual and office equipment High-speed Internet connectors (for example, cables or wireless adapters) Special equipment for visually impaired, hearing impaired, or physically challenged guests

Front desk agents should have alternative ways to meet guest requests when the department that normally provides the equipment or service is closed or inaccessible. Housekeeping, for example, attends to many guest requests, but may not be staffed around the clock. In some hotels, front office staff may have access to linen rooms during late night hours. In others, the housekeeping department may stock a centrally located linen closet and issue a key to appropriate front office staff. Such arrangements enable the front 245

office staff to satisfy requests for additional linens and pillows even when the housekeeping department is closed. Special Procedures Guests may ask for special treatment when making a reservation, registering, checking out, or, for that matter, at any point during their stay. Reservations agents should have a reliable method of recording special requests made during the reservations process and communicating such requests to appropriate front office staff. Front desk agents should also have a way to record any requests they receive or process. Filling some special requests might call for exceptions to standard front office procedures. For this reason, front desk agents should be empowered to use their judgment when attempting to satisfy guest requests. Procedural requests may require more time and effort to fill than equipment and supply requests do. Typical procedural requests include:

Split account folios Master account folios Wake-up calls Transportation arrangements Entertainment reservations Newspaper delivery Secretarial services, including language translation and photocopying services Bonded child-care services

A knowledgeable front desk agent usually can fill a special request involving guest folios. Split folios are most often requested by business travelers. Essentially, these folios separate guest charges onto two or more separate folio accounts. One folio account may be set up to record room and tax charges; this part of the folio may be billed to the guest's company or to a group master account. Another folio account may be set up to track incidental charges such as telephone calls, food, and beverages; this part of the folio will most likely be paid directly by the guest. A convention group meeting in the hotel may request a master folio. Typically, only authorized charges incurred by the group are posted to the master folio and subsequently billed to the convention's sponsor. Each group member may be held responsible for other charges posted to his or her individual folio account. The purpose of a master folio is to collect authorized charges that are not appropriately posted elsewhere. The master account is one of the most important items on a group rsum and is usually discussed in detail during the hotel staff's pre-convention meeting for the group. A concierge may handle other procedural requests. Hotels not employing a concierge may have front desk agents update and use the front office information directory as a resource for referrals and outside services requested by guests. Some hotels operate a guest service center. Hotels can be confusing places for guests, and, when guests have a question or special request, they may not know whom to call to resolve the issue. Often the call goes to front desk agents, who must then act upon the requests or refer them to the appropriate 246

department. A guest service center makes it easier for guests. For example, some hotels instruct guests to call a single extension number, usually printed in bold numbers on the guestroom telephone. Staff members at the guest service center are specially trained to handle everythingfrom a room service breakfast request to ordering a guest's car from valet parking. While the process is thus simplified for the guest, it places a great deal of knowledge responsibility on the guest service staff. For example, when a guest calls to request a bell attendant to pick up luggage, the guest service agent must know to ask how many pieces of luggage need to be retrieved, because this determines the kind of cart the bell attendant brings to the guestroom. Also, room service orders can be complicated. Guest service staff must know the production capabilities of the kitchen and know how to properly communicate special requests. Guest Relations Despite front office staff efficiency and attentiveness, guests will occasionally be disappointed or find fault with something or someone at the hotel. The front office should anticipate guest complaints and devise strategies that help staff members effectively resolve the problem. The high visibility of the front office means that front desk agents are frequently the first to learn of guest complaints. Front desk agents should be especially attentive to guests with complaints and seek a timely and satisfactory resolution to the problem. Nothing annoys guests more than having their complaints ignored, discounted, or overlooked. While most front office staff members do not enjoy receiving complaints, they should understand that very few guests actually enjoy complaining. Employees should also realize that guests who do not have the opportunity to complain to front office staff often tell their friends, relatives, and business associates instead. When guests find it easy to express their opinions, both the hotel and the guests benefit. The hotel learns of potential or actual problems and has the opportunity to resolve them. For a guest, this can mean a more satisfying stay. When problems are quickly resolved, a guest often feels that the hotel cares about his or her needs. From this perspective, every complaint should be welcomed as an opportunity to enhance guest relations. On the other hand, guests who leave a hotel dissatisfied may never return. A popular axiom in the lodging business is that it takes $10 to attract a guest for the first time, but only $1 to keep the guest coming back. By handling guest relations positively, the investment pays off many times. Complaints Guest complaints can be separated into four categories of problems: mechanical, attitudinal, servicerelated, and unusual. Most guest complaints relate to hotel equipment malfunctions. Mechanical complaints usually concern problems with climate control, lighting, electricity, room furnishings, ice machines, vending machines, door keys, plumbing, television sets, elevators, and so on. Even an excellent preventive maintenance program cannot completely eliminate all potential equipment problems. Effective use of a front office log book and maintenance work orders may help reduce the frequency of mechanical complaints. Sometimes the complaint is not about the mechanical problem, but the speed of response. It is essential, therefore, that the appropriate staff member be dispatched as quickly as possible with the proper tools to fix the problem promptly. Good tracking methods will ensure timely service. Guests may make attitudinal complaints when they feel they have been poorly treated by hotel staff members. Guests who overhear staff conversations or who receive complaints from hotel staff members may also express attitudinal complaints. Guests should not have to listen to employees arguing or become sounding boards for employee problems. Managers and supervisors (not guests) should listen and attend to 247

the complaints and problems of staff members. This can be especially critical to maintaining solid guest relations. Guests may make service-related complaints when they experience a problem with hotel service. Servicerelated complaints can be wide-ranging and about such things as long waiting time for service, lack of assistance with luggage, untidy rooms, phone difficulties, missed wake-up calls, cold or ill-prepared food, or ignored requests for additional supplies. The front office generally receives more service-related complaints when the hotel is operating at or near full occupancy. Guests may also complain about the absence of a swimming pool, lack of public transportation, bad weather, and so on. Hotels generally have little or no control over the circumstances surrounding unusual complaints. Nonetheless, guests sometimes expect the front office to resolve or at least listen to such complaints. Front office managers should alert front desk agents that there will be times when guests will complain about things that the staff can do nothing about. Through such orientation, staff members will be better prepared to handle unusual complaints with appropriate guest-relations techniques and avoid potentially difficult encounters. Identifying Complaints. All guest complaints deserve attention. An excited guest complaining loudly at the front desk requires immediate attention. A guest making a more discreet comment deserves no less attention, although the need for action may be less immediate.

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Guest relations stand to improve when the front office systematically identifies its most frequent guest complaints. By reviewing a properly kept front office transaction file or log book, management can often identify and address recurring complaints and problems.

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Another way to identify complaints involves the evaluation of guest comment cards or questionnaires. Exhibits 3, 4, and 5 demonstrate the level of detail and sophistication that can be expected of a thorough analysis of guest responses to well-designed comment cards. Exhibit 3, "Guest Perception Detail," groups comment card questions by specific hotel departments (in this exhibit, the bellman/valet department and the front desk department are shown). Within each department, the specific questions asked of guests are listed, with their individual responses tabulated. Current month, last month, and year-to-date favorability rating percentages are shown for purposes of comparison. Exhibit 4, "Guest Perception Graph," shows the overall favorability ratings of all hotel departments, in descending order for ease of comparison. The overall hotel average ("Overall Perceptions") is also shown on the graph. Departments falling below the overall average generally signal areas that need to be improved. Exhibit 5, "Favorability Trending Graphs," depicts the overall rating trend for all questions asked about specific departments. This exhibit shows the trend graphs for the bellman/valet, front desk, and housekeeping departments. Trend graphs not only help identify areas that need improvement, but help measure the success of current and future improvement efforts.

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Identifying problems is one of the first steps in taking corrective action. By examining the number and type of complaints received, front office management may gain insight into common and less-common problems. Front office staff members may be better equipped to handle frequent complaints courteously and effectively, especially if they are aware the problem may not be immediately corrected. Handling Complaints. It is usually counterproductive to ignore a guest complaint. In many hotels, front desk agents are instructed to refer complaints to supervisors or managers. Sometimes, though, front desk agents may not be able to pass the complaint on, especially when the complaint demands immediate attention. The front office should have contingency plans in place, and front desk agents should be empowered to deal with such complaints. 251

The front office may receive complaints about the hotel's food and beverage operations, regardless of whether those operations are managed by the hotel. Unless the front office and the food and beverage operators establish procedures for passing on and dealing with complaints, guests may continue to be upset and the front office will continue to hear about the problem. The hotel and its revenue outlets should maintain close communications and develop procedures designed to satisfactorily resolve guest complaints. Front office management and staff should keep the following resolution guidelines in mind when handling guest complaints:

Front office staff members should not go alone to a guestroom to investigate a problem or otherwise risk potential danger. When expressing a complaint, the guest may be quite angry. Front office staff members should not make promises that exceed their authority or the ability of the hotel to deliver. If a problem cannot be solved, front office staff should admit this to the guest early on. Honesty is the best policy when dealing with guest complaints. Front desk agents should be advised that some guests complain as part of their nature. The front office should develop an approach for dealing with such guests.

Exhibit 6 lists guidelines for handling guest complaints in a professional manner. Learning to deal effectively with guest complaints requires experience. Front office staff members should anticipate how they might resolve some of the hotel's most common complaints. Role playing can be an effective method 252

for learning how to deal with guest complaints. By anticipating complaints, planning and practicing responses, and receiving constructive feedback, front office staff members will be better prepared to deal with actual guest complaints. Follow-Up Procedures. Front office management may use the front office transaction file or log book to initiate corrective action, verify that guest complaints have been resolved, and identify recurring problems. This comprehensive written record helps management contact guests who express dissatisfaction with some aspect of their stay during check-out. After the guest has departed, a letter from the front office manager expressing regret about the guest's unsatisfactory experience is usually sufficient to promote goodwill and demonstrate concern for the guest. It may be good policy for the front office manager to telephone a departed guest to get a more complete description of the problem or incident that caused the dissatisfaction. Chain hotels may also receive guest complaints channeled through chain headquarters. Cumulative records of guest complaints about hotels in the chain may be compiled and sent to each manager. This method of feedback allows the chain's corporate headquarters to evaluate and compare each hotel's guest relations performance. Hotels that have a consistent record of guest complaints may receive visits from chain managers to resolve the issues.

Section Keywords Split folios A folio in which a guest's charges are separated into two or more folios. master folio A folio used to chart transactions on an account assigned to more than one person or guestroom, usually reserved for group accounts; a master folio collects charges not appropriately posted elsewhere.

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Summary Effective communication is essential to an efficient front office. Front office employees must communicate effectively with one another, with personnel in other departments and divisions, and with guests. Professional communications with guests starts when the reservation is made and carries through the entire guest stay. Whether communicating by telephone or in person, all employees in guest contact positions should be properly trained in what to say and how to say it. The complexity of front office communication tends to be directly related to the number of guestrooms and the size and extent of the hotel's public areas and facilities. The larger the hotel, the larger and more complex the communication network is likely to be. The front desk may maintain a front office transaction file or log book (typically, a journal that chronicles unusual events, guest complaints or requests, and other relevant information) so that front office staff can be aware of important events and decisions that occurred during previous work shifts. Rapid response software is an electronic version of a log book. A group rsum book is also helpful in handling group arrangements at the front desk. In addition, front desk agents may need to access non-hotel information (for example, maps; bank, theater, church, and store locations; and special event schedules) to answer guest inquiries. Some front offices accumulate such data in a bound guide called a front office information directory. Daily hotel activity is communicated to guests and visitors through reader boards placed conveniently in various locations. The hotel maintains a hotel clock to synchronize the various departments and services it offers. Registered guests rely on the front office to quickly deliver mail and messages. Front office staff should time-stamp all guest mail when it arrives. Doing so provides evidence of when the mail was received and helps ensure timely delivery. Guest mail that is not picked up or has arrived for a guest who has already checked out should be time-stamped a second time and returned to its sender. Due to privacy and security issues, front office managers may restrict the information that front office staff members answering telephones may furnish to callers. Voice mail allows callers to record messages for guests. Many services in a hotel require coordination between the front office and other hotel departments or divisions. The front office generally exchanges the most information with personnel in the housekeeping and engineering and maintenance departments. For example, housekeeping and the front office must keep each other informed of changes in room status to ensure that guests are roomed efficiently and without complications. In many hotels, the engineering and maintenance staff begins each shift by examining the front office log book for repair work orders. Front desk agents can influence the performance of the hotel's revenue centers through the use of marketing and public relations skills. Front desk agents should be familiar with all revenue centers so they can answer guest questions about them. The transactions charged by guests at hotel restaurants, gift shops, and other remote points of sale must be communicated to the front desk to ensure eventual payment. As the center of front office activity, the front desk is responsible for coordinating guest services. Typical guest services involve providing information and special equipment and supplies. Guest services may also include accommodating guests through special procedures. A request that falls beyond the responsibility of the front office should be referred to the appropriate person or department. Despite staff efficiency and attentiveness, guests will occasionally be disappointed or find fault with something or someone at the hotel. The front office should anticipate guest complaints and devise 254

strategies that help staff effectively resolve the problem. Guest complaints can be divided into four categories of problems: mechanical, attitudinal, service-related, and unusual.

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Internet Sites For more information, visit the following Internet sites. Remember that Internet addresses can change without notice. If the site is no longer there, you can use a search engine to look for additional sites. Lodging PublicationsOnline and Printed Hospitality Net Hotel & Motel Management Lodging Hospitality Technology Sites CSS Hotel Systems First Resort Software Hospitality Financial and Technology Professionals HOST Group Hotellinx Systems Ltd. MICROS Systems, Inc. Newmarket International Guest and Employee Satisfaction Market Metrix UniFocus

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Case Study 1 Service Recovery at the Simpson Hotel "Carrie, what are you doing? It's almost time to go." "I'm looking for my new book, Mommy. Have you seen it?" Abraham Nichols's voice echoed up the stairway. "Almost set up there?" "We'll be a few more minutes, Abe," answered his wife, Angela. "All right, but remember, we'll be getting in late as it is. I'll put the baby in the car." Two weeks ago, Abe had been asked to attend a two-day conference in a town five hours from his home. He and Angela had decided to make it a weekend getaway for the family. When making reservations at the Simpson Hotel for the family, Abe informed the reservations agent of all their special requirements: their 11:00 P.M. Thursday-night arrival; a clean, no-smoking double-double with a crib in place for sixmonth-old Jason and food service available for their eight-year-old daughter; a pool and fitness center; and the group rate for Thursday and Friday nights. Thursday night before they left, the Nicholses took a quick supper. Carrie didn't eat much, as her parents had expected; she always got excited about vacations. Then they were on their way. When the Nicholses arrived, everyone was more than ready for bedeveryone except Carrie, who had found the snacks that her parents had packed inadequate. "I'm still hungry, Daddy. Do they have vending machines at this hotel?" "Well, don't worry, honey. I talked to the people at the hotel ahead of time, and they said we could get food delivered to our room even at 11 at night. You're going to love it here; there's a big pool where you can swim all you want. And here we are," said Abe as they pulled in under the marquee. Angela pulled the baby out of the car seat while Abe wrestled with the two large suitcases and the baby's bag and Carrie unloaded her day pack. "You'd think a place like this would have a bellperson," Abe grumbled to Angela. "I knowand valet parking," she answered. "Go ahead and park, we'll bring the luggage inside." Angela grabbed Jason's bag with the hand with which she was holding him, took one suitcase in the other hand, and pushed the last suitcase with her foot. Carrie yawned. "Can you get the other suitcase for me, honey?" her mother asked. Once they were inside, the front office agent looked up from what he was doing and said, "Oh, I'm sorry, let me help you with those. There's usually a bellperson to help with luggage, but he was sick and there was no replacement for this shift. Welcome to the Simpson Hotel. Once we get your things over by the front desk, I'll get you checked in right away." Abe returned a few minutes later and the family checked in. They noticed a vending machine on their way upstairs, but it had nothing that interested Carrie. When they got to their room, they found it clean and smelling fresh. It had two double beds, but no crib. Abe called the front desk right away. "The agent I 257

talked to on the phone when I made the reservation said you'd have a crib for us," he told the front desk agent. "Oh, I'm very sorry, sir. I'll chase one down for you right away," the agent responded. "And could you bring us your room service menu?" Abe asked. "You'll find that in the guest information directory in your room, sir. It's in the blue binder on the desk," the agent answered. "Oh, OK, thank you," Abe replied. Carrie went through the menu with her mother, but Carrie wasn't interested in anything on it. "It looks like all they have available right now is two kinds of salad and some cold deli sandwiches," she told her parents. Angela tried to console Carrie. Between the excitement and the hunger, it looked as if Carrie was going to have trouble getting to sleep. Eventually Angela ordered her a small bag of chips, but the room service order-taker told her that they were making an exception for her; usually chips were only available with the sandwiches. The chips arrived at the same time as the crib. The crib was delivered by a breathless gentleman who had a five-minute explanation of why it had taken him so long. Abe politely thanked him and turned to put Jason down. "The first session of the conference isn't until 10 tomorrow morning, so let's try to sleep in," Abe told Angela. "We can try, but we'll see what Jason does. He doesn't know we're on vacation," she answered. The next morning the family was awakened at 8:30 A.M. by noise. Abe and Angela were both surprised that it was not Jason's crying, but a knock on the door. "Housekeeping," said a voice on the other side. Abe opened the door and blinked at the housekeeper. Jason started crying. "Very sorry, sir, I didn't mean to wake you," said the housekeeper. "Didn't you see thenever mind, I'll come back later. Very sorry." It's not my fault they don't use the Do Not Disturb signs, thought the housekeeper to herself. The Nicholses had breakfast, then Abe was off to the conference. Carrie was eager to get into the pool, but first Angela had to ask front desk agents where it was. "I'm very sorry, ma'am," the agent said, "Didn't anyone tell you? The pool is closed for repairs." Carrie groaned. Angela tried to salvage the situation. "Will it be reopened soon? by Sunday?" "I'm afraid not, ma'am," answered the agent. "All right, then, there's a museum I read about in a magazine that's supposed to be close bythe Pinkerton Museum of Natural History?" The front desk agent recognized the name but had no brochures handy. She drew Angela a map on the back of an envelope and gave her directions for how to walk to the museum. The agent couldn't remember all the street names, nor did she know the museum's hours or admission charges. In spite of this, Angela 258

and the children headed out and had a good time that day at the museum. Carrie was so excited that she told the front desk agent all about it when they got back. Angela thanked the agent for her directions. Abe finished up with the conference meetings late Friday afternoon. He realized that he could have put up a Do Not Disturb sign the night before, but he looked around the room and found none. After Abe had unwound a bit, Angela left the children with him so she could go work out at the fitness center. She used the treadmill for a while, but when she went to use the rowing machine, she noticed that one of its handles was much looser than the other. She reported it to the front desk on her way back to the room. She also asked the front desk agent about family restaurants in the area. The agent pulled out a phone book and started scanning the yellow pages. "All I see for family restaurants is places across town," the agent told her, "but there's an upscale place just down the road...." Angela thanked him, and the family had their favorite pizza delivered for supper. That night the Nicholses realized that their room was right over the lounge. They could hear the live music until about midnight, but that wasn't too bad, because the singer was singing songs they knew and liked. Saturday night was different; the driving beat seemed to make the whole room vibrate. Somehow the kids managed to fall asleep in spite of the noise; Abe and Angela were still trying to get to sleep at 2:00 A.M. They talked about when they wanted to leave the next day and decided to leave earlier than they had originally planned. After a night like this, they reasoned, they were not going to be in the mood for recreation. Abe began filling out a guest comment card. The Nicholses learned at check-out the next morning that the hotel had incorrectly billed them the full rack rate for all three nights. "We'll generate a new bill in just a few moments, Mr. Nichols," the front desk agent told him. Abe was dropping the comment card into the designated slot while he was waiting when Tom Girard, the hotel's general manager, introduced himself. "I'm just taking an informal guest survey today. How was your stay here?" Abe gave him the whole storygood points and bad points. Tom listened carefully, taking notes on a pad. He thanked Abe for his feedback and apologized for the difficulties the family had. He offered the Nicholses a free lunch at the hotel's restaurant and told Abe that if the family was ever in the area again, they should call Tom's office and he would arrange for a free night's stay. Three weeks later, the Nicholses received a very thoughtful follow-up letter from Tom Girard. It explained what he and his staff had done to correct the problems the Nicholses had experienced. But Abe reported to Angela that the credit card bill for the hotel stay was $14 higher than their folio had been when they checked out. A call to the Simpson Hotel revealed that the minibar charges were not posted until after the family had left. Discussion Questions 1. What went right with the Nichols's stay? What went wrong? Was the overall impression they received of the hotel good or bad?

2. How did the general manager do at responding to Mr. Nichols's feedback?

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3. How should the GM relay the Nichols's feedback to his department heads and staff? Should a property offer a 100-percent guest-satisfaction guarantee? If so, how should it be implemented?

4. How can the Simpson Hotel's staff develop a process for improving communication, quality control, and accountabilityultimately, for improving guest service?

Case Number: 3326CA The following industry experts helped generate and develop this case: Richard M. Brooks, CHA, Vice President, TWE Group; and S. Kenneth Hiller, CHA, General Manager, Holiday Inn, Beachwood, Ohio. This case also appears in Case Studies in Lodging Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 1998).

Case Study 2 To Serve or Not to Serve It was a typically warm summer afternoon and check-ins were brisk. This was one of the first big weekends of the summer and the front office staff was still adjusting to the large number of arrivals. As another car pulled under the porte cochere, Drew, a bell attendant, gave an audible sigh. "I hope this one tips better than the other two I just had," he muttered loudly enough that Chris, the front desk agent, and Philip, the manager on duty (MOD), could hear. Drew was still leaning against the front desk taking a short breather as the couple got out of their car, looked around, and then proceeded to the front desk. After the front desk agent completed the check-in process, she asked whether they would like assistance with their luggage. After a brief pause, they said yes andlike many other guestslooked around for the bell attendant. Drew had moved from the front desk he had been leaning on to a part of the lobby where he wasn't easily seen, hoping that the guests would turn down the offer for assistance. He wasn't in the mood for another poor tipper even though a gratuity of 15 percent was placed on every room charge. This meant that the guest was paying for bell service whether they used it or not. Also, if they did request assistance, they were not even obliged to pay an additional sum because the tip was covered in the cost of the room. Once the front desk agent knew that the guests required assistance, she radioed Drew. As he heard the radio call, Drew proceeded to the back area where the luggage carts are kept. Philip caught Drew's eye and suggested with a point of the finger that the people who had just checked in were in need of assistance. Drew, however, ignored this cue from the MOD. A few minutes later, Philip noticed the guests taking their belongings from their car and placing them on the walkway. He wondered what happened to Drew. Philip found Drew in the service corridor talking with the other bell attendant, Jim. "I thought you were going straight out to assist those guests," said Philip in a rather disturbed and impatient tone of voice. "What are you two doing? Don't you know guests are waiting to be helped?" 260

Drew backed up and told Philip in an angry voice that his shoulder was really hurting and he went to get Jim so he could assist the guests. Jim had been eating his dinner and wasn't very pleased to be asked to assist the guests when Drew was the one on duty. Jim was even off the clock at the moment. Philip said that he would do the job if the other two couldn't take the time for it or were too tired. "Maybe you should go home if your shoulder is hurting too much to assist guests," suggested the MOD. "Hey," said Drew, "I've been working hard all day, it's hotter than blazes, and I'm going in to the doctor next week. I haven't been sitting on my you-know-what, you know!" Finally, Jim took the luggage cart and proceeded to the entrance to assist the guests. By this time they were looking around inside the lobby for a bell attendant. As Philip returned to assist the front desk agents during this busy check-in afternoon, he counted the number of times he practically had to drag Drew and some of the other bell attendants away from their place at the front desk counter to assist guests with their luggage. "Isn't this their job?" he asked himself. "What messages are they sending by just standing around watching our guests help themselves? Why include the 15 percent gratuity if we aren't helping every guest with his or her luggage?" Philip pondered these questions for a long time. Now, with Drew being so difficult to direct, he thought about how to communicate his concerns with the front office manager. Discussion Questions 1. What nonverbal message is Drew sending to the arriving guests?

2. When Jim interacts with the guests waiting for luggage assistance, what will be his greatest communications challenges?

3. How would you suggest Drew and the other bell attendants behave during this vital arrival stage of the guest cycle?

4. Was the MOD acting appropriately toward the bell attendants? How else could he have communicated with them that could have been more effective?

Case number: 608C06 This case also appears in Todd Comen, Case Studies in Front Office Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 2003).

Case Study 3 261

Something Old, Something New: Meeting Tour Group Needs The bus coach tour group from San Francisco arrived three hours late. Coach sales staff had long since gone home, having made last-minute rooming changes. The dining room had finally blocked 6:30 P.M. for an entire busload of 40 customers. And the thermometer hovered just shy of 85 degrees. Stacy looked tired as she disembarked from the coach. She was the tour escort, a job she had performed very well for many years. Three hours behind schedule on what should have been an eight-hour drive revealed the wear on her. The hotel staff greeted the arriving passengers while they remained seated on the coach, advising them of their dinner reservations, suggesting that washing up but not changing would be the most expedient for the resort as the dining room was booked through the evening. Room keys were distributed while the guests left the bus. Guests were informed that their luggage would be delivered to the guestrooms while they were at dinner. The majority of the passengers were in their mid-60s to late 70s, with a wide range of health, from good to really poor. Numerous passengers, the hotel staff was to discover, had respiratory problems. And one was on oxygen 24 hours a day. As the guests entered the lobby, they were directed to their rooms by one of the front desk agents, who was stationed between the entrance and the elevators. It was a slow process, as many of the guests were stiff from the long bus ride. Some decided to go directly to the dining room, while others either took the stairs or waited for the elevator to the second, third, and fourth floors. As the lobby cleared, it quieted down at the front desk while the guests refreshed themselves and got acquainted with their rooms. The front desk staff was feeling pretty good thus far, as no one had complained about his or her room assignment. The hotel was unusually full for this time of year because of some small functions, including a wedding party and an executive retreat. As there were only a few expected arrivals left, the desk staff knew that they had three additional rooms that could be sold to walkin customers. At 6:50, a distinguished looking elderly couple stopped abruptly at the front desk, obviously upset. The woman wore two large diamonds on her wedding ring and they were both well dressed, as if going to an upscale restaurant in the city. They introduced themselves as the Kavaliers and asked Trisha, the front desk agent, how to turn on the air conditioning, as the room was very warm. She politely informed them that there wasn't any air conditioning in their room and that the fan would circulate the air when the windows in the room were opened. With a distraught look on his face, Mr. Kavalier said, "My wife has to have air conditioning or she can't breathe. If we had known this, we never would have come on this trip. The owner of the tour company assured us that there was air conditioning at this resort." This guest was now visibly angry and very upset. He informed Trisha that if he couldn't have an air-conditioned room, he and his wife would have to rent a car and drive home. Trisha apologized and said that she understood their concern. She assured the guests that there had never been air conditioning in the guestrooms and that the only rooms with air conditioning were in the new addition that had only 25 rooms. She also explained that the resort was very full, but, if they would proceed to their dinner, she would see what could be done. The guests were reluctant to leave, but Philip, the manager on duty (MOD), assured the guests that Trisha would do what she could to meet their requirements. If a room could not be found for the next two nights, the guests would have the option to move to another resort that could meet their requirements. 262

The situation wasn't so bad yet, as there were a number of guests still to arrive and a few rooms still available. Trisha and Philip went to work to identify a solution for the Kavaliers. The front desk agent first checked to see if there were any air-conditioned rooms available for two consecutive nights. These rooms, however, were more than twice the cost per night of the rooms that the coach guests were assigned. They discussed whether it was a good idea to upgrade a coach guest to these fine rooms. What would the other coach guests demand if they knew that one of their party was assigned an executive room? Soon after this first complaint about the lack of air conditioning, Stacy approached the front desk. She was in good spirits, but she said many in her party were uncomfortable with their room assignments. Several guests were placed in smoking rooms when they had specifically requested non-smoking. Her guests were having trouble breathing as they had minor respiratory problems. One of her party had actually requested a smoking room but had been placed in a non-smoking room. And others were saying they couldn't take the humidity and heat. The rooms were hot and they couldn't find the air conditioning. On top of this deluge of new information, one of the coach guests in room 340 had just called the desk to say that her husband, who is on oxygen 24 hours a day, could not attach his portable oxygen unit to the bulk tank that was delivered to their room earlier in the day by an outside vendor. She wondered if the company was close by so that the proper equipment could be delivered. Her husband, she said, had about two hours' worth of oxygen left in his portable tank. As Trisha relayed this information to Philip, he began to wonder just how this night was going to end up. Where should he and his staff focus now? Things were heating up as the weather turned more humid. He knew that not only were the guests uncomfortable, but that this heat and humidity caused the resort employees to become cranky and less patient. His main problem was to find a solution to the oxygen tank problem. This he assumed was a life-and-death situation. The guests with complaints about air conditioning may or may not be in a life-threatening situation. He would leave the rooming challenges to the front desk agents and focus on getting oxygen to the resort before two hours elapsed. As he was considering his options, an elderly man emerged from the elevator pushing a wheelchair. He was breathing with the assistance of an oxygen tank. This was the man who had two hours of oxygen left, and he was heading for the dining room without his wife. She came down the stairs minutes later, berating him for walking down himself. He seemed fairly relaxed, and Philip wondered if he really needed the oxygen continuously or if he could live without it for a time. Room-move requests from the coach tour group only were as follows:

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Finally, at 10 P.M. , Trisha decided to move room 212 to 367, the last air conditioned room available. She first went to discuss this room change with the guests to be sure this would work. While she was away from the desk, Philip met two of the last arriving guests for the evening, Mr. and Mrs. Vogel, who had driven more than 400 miles that day. The Vogels were very tired but happy to have arrived at the resort. Philip checked them into room 367. When the front desk agent returned after confirming the room move to 367, she was shocked to learn that the Vogels had just been checked in to that same room. Now what would she tell the guests she had just shown the room? As the night wore on, small groups from the coach tour could be overheard in the lounge and public areas complaining about the resort accommodations. Even the bus driver was upset because his room was different from the room he had the last time he had driven a group to the resort. Finally, at 11 P.M. , most of the guests had gone off to their rooms. Oxygen had finally been delivered to the gentleman in room 340. He was hooked up for the night, but the oxygen firm had to return the next morning with a nozzle that would fit his canister. The MOD had spent a couple of hours on this project, finally calling the local rescue squad for an emergency oxygen tank while they awaited delivery of oxygen from the regular supplier. It turned out that the regular supplier was more than an hour away and couldn't guarantee delivery before the guest ran out. The last of the coach tour guests passed the front desk on her way up to her room. She looked at Trisha and Philip and just shook her head. "Some people just can't be satisfied with being alive," she said. "I'm doing great and very happy to be here." Trisha and Philip looked at each other and sighed, wondering why all of the coach guests couldn't be that easy. Discussion Questions: 1. How should the work associated with the problems outlined in the case be delegated among the staff on duty? Who should do what?

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2. Who is the most important guest in this group? What steps would you take in order to meet that person's needs?

3. If you were on the morning shift, what do you think your morning would be like following a night such as this described in the case?

4. Are room moves really necessary, or do they just result in more work for everyone?

Case number: 608C08 This case also appears in Todd Comen, Case Studies in Front Office Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 2003).

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Review Questions 1. What front desk procedures help ensure the proper delivery of mail, packages, messages, and faxes to guests?

2. How are communications between the front office and the maintenance division handled? What are the functions of the front office log book and maintenance work orders?

3. What are three main types of requests guests make at the front desk?

4. What is the purpose of the group rsum book? What kind of information is contained on group rsums, and how does the front desk use such information?

5. What is the purpose of a front desk information directory? What sort of information might such a directory contain?

6. Why should the front office staff welcome guest complaints? How may a property benefit from analyzing the complaints it receives?

7. What are the four major types of guest complaints? Which is most common? What are some general approaches to handling guest complaints?

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Chapter 7 - Security and the Lodging Industry Outline Developing the Security Program

Doors, Locks, Key Control, and Access Control Guestroom Security Control of Persons on Premises Perimeter and Grounds Control Protection of Assets Emergency Procedures Communications Security Records Staff Security Procedures

Management's Role in Security

Areas of Vulnerability Security Requirements

Setting Up the Security Program

Relations with Local Governmental Agencies Security Staffing Security Training

Security and the Law

Legal Definitions

Summary

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Competency 1 Objective: Explain important issues in developing and managing a security program. Lodging property managers have many responsibilities, one of which is security. From the earliest days of the hospitality industry, one of the most important duties of an innkeeper has been to protect guests from harm while on the property. Although interpretations of protection may vary from state to state, every legal jurisdiction imposes some form of security obligation on hotels. Security regulations go beyond the innkeeper-guest relationship to include hotel employees and others on the property who are not guests. Therefore, providing security in a hotel is the broad task of protecting peopleguests, employees, and othersand assets. Crimes involving the theft of assets usually result in greater immediate monetary losses to lodging properties than crimes against persons, but crimes against persons have a greater effect on public relations (and therefore occupancy) and may lead to high legal expenses and large punitive damage awards. Lodging property security efforts may involve such areas of concern as guestroom security, key control, locks, access control, perimeter control, alarm systems, communication systems, lighting, closed-circuit television, safe deposit boxes, inventory control, credit and billing procedures, computer security, staffing, pre-employment screening, employee training, responsible service of alcoholic beverages, emergency procedures, safety procedures, recordkeeping, and more. The industry's concern with security has increased greatly since the terrorist attacks of September 11, 2001. Hotels, because they are so open to the public, are potential targets for terrorist activities. For example, immediately after the tragic events of 9/11, hotels in New York and Washington, D.C., received dozens of bomb threats, including threats to use poisonous gas and other types of destructive devices. More recently, two prominent hotels were among the targets of the terrorist attacks in Mumbai, India, in late 2008. Of course, terrorism is not the only security concern hotels face. The crime rate against both people and assets continues to increase. In addition, the rapidly growing number of lawsuits filed against innkeepersand even individual employeesfor failure to provide adequate security has raised the industry's security awareness. Newspaper and television exposs make the public aware of many hotel security issues. In most states, innkeepers have a legal duty to provide "reasonable care" to protect guests and guests' invitees. Innkeepers may be held responsible if employees injure guests. Innkeepers accused of negligence for not providing reasonable care for someone who was injured or victimized on their premises are losing millions of dollars every year in court judgments and out-of-court settlements. Even if financial considerations were the only security concern (which they certainly are not), the urgent need for hotels to implement a security program if one is not already in place is obvious. It must be stated, however, that each lodging property is different and has different security needs. Therefore, the material included in this chapter should not be construed as recommending any industry standard. We can only explore general security concerns in the following pages. Developing the Security Program A lodging property's security program should stress the prevention of security problems. It is far more desirable to keep security incidents from occurring than to catch a criminal after a crime has been committed. Certain security actions and procedures may help to prevent or discourage incidents. Nonetheless, it must be recognized that not all crime is preventable. 268

Each property should continually review its security procedures and update them to meet changing security needs. The following list indicates general areas that might be part of a property's security program:

Doors, locks, key control, and access control Guestroom security Control of persons on premises Perimeter and grounds control Protection of assets (money on hand, guests' assets, equipment, inventories) Emergency procedures Communications Security records Staff security procedures

We will discuss each of these security areas in the following sections. Doors, Locks, Key Control, and Access Control During a grand opening, a hotel traditionally throws out the keys to the front door. This symbolizes that everyone is welcome. Yet the symbolism doesn't preclude the need to provide access control to all parts of the building and grounds. When most people think of access control, they first think of guestroom access, but there are many other hotel areas that require security control, including offices, pool and fitness centers, meeting rooms, storerooms and lockers, and other areas. For example, locking hotel storerooms helps prevent hotel employees from unauthorized entry and from stealing hotel property, whether it is food, linen, or other supplies. Locking fitness centers and pools helps prevent guests, visitors, and employees from using the facilities when they cannot be properly supervised. Guestroom-access security is the most common security need, however. Electronic guestroom locks have replaced mechanical systems in most lodging properties. Electronic systems have great flexibility. Different key types can be issued to guests and hotel employees. Electronic systems can record every authorized entry and every unauthorized entry attempt. If a guest reports a robbery, the person responsible for hotel security can query the guestroom lock and identify the keys that were used in the last 10, 20, or 50 entries. For guests, security is enhanced because new key codes are issued each time a guest checks in. Keys are issued during the check-in process, and usually will only work for a limited time periodfor example, the issued key is good until noon on the scheduled date of departure. If the guest decides to extend the stay, the key must be recoded. Similarly, if the guest departs a day early, the key can be rendered invalid by checking in another guest to the room. For employees, guestroom keys are coded by department, and may also have time limits on them. For example, a hotel maintenance employee may be given a temporary guestroom key to fix a problem in a guestroom. The key may be good for a specific time period, such as between 10 A.M. and 11 A.M. If more time is needed, the key must be recoded.

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Guestroom door locks also may include chains or other backup locks on the inside of the door, so that guests can control access once they are in the room. Most guestroom locks have a deadbolt mechanism. This allows the guest to provide extra security by turning a lever that extends a thick piece of metal into the guestroom doorframe. Guestroom locks are also found on connecting-room doors and balcony or patio doors. These locks are usually not electronic, so extra care must be taken to ensure that they provide guests with good security. Balcony and patio locks may include not only the lock on the door, but also an extra lock that is controlled from the inside of the room. When connecting rooms are not needed, it is important that the connecting door be closed and locked. Only hotel employees should have the keys to open those doors. Most hotels have multiple key-security levels. The lowest level is the individual guestroom, office, storeroom, or meeting room. The next level is often called a "section master" key. Section master keys are generally used in housekeeping when a room attendant is assigned a specific group of rooms to clean or inspect; he or she can carry one section master key instead of carrying many separate guestroom keys. A floor master key is generally the next level up; it provides access to an entire floor. There can be several building master keys. One building master can cover the guestroom section of the building, including all storage closets in that part of the building. Another building master can cover all public areas, such as dining and meeting rooms. A grand master key gives access to all door locks in the building. An emergency key or "E-Key" is an emergency override key that allows access to all rooms, even if they have been locked from the inside. All of a lodging property's keys, no matter what level they are, should have controls on them. Guestroom keys are recoded every time new guests check in or change their departure date. Other keys do not need to be changed as often, but still need to be controlled. For example, an E-Key should be issued only upon the permission of the hotel general manager or security manager. When an E-Key is issued, an entry should be made in the security log, stating who was issued the key, the time and date it was issued, who approved the issue, what lock it was issued for, and the reason for the key's issuance. E-Keys must have a time limit on them as well. Section master keys and floor master keys should be issued a day at a time, with the original keys being returned to a security checkpoint at the end of every shift. If a key is lost or stolen, it must be reported immediately and appropriate actions taken to invalidate that key. Guestroom Security We have been discussing guestroom key control, but guestroom security extends beyond the guestroom's door locks. Another security device found on guestroom doors is the peephole. Peepholes usually contain a fish-eye lens that allows guests to see to the left and right when looking out. Peepholes are usually placed conveniently in the door for guests of average height. In rooms that are specially equipped to comply with the Americans with Disabilities Act, a second peephole is provided for guests in wheelchairs. Hotel hallways should be brightly lit, to allow guests to see all areas of the hall. Telephones are also an important part of guestroom security, as they allow guests to call for help when necessary. Clear instructions, such as "Dial 0 for Emergencies," should be on or near every guestroom telephone. Control of Persons on Premises Controlling people on the premises is one of the most difficult issues for hotel managers and security personnel. By their nature and history, hotels hold themselves open for public accommodation. Unfortunately, however, there are times and circumstances when not everyone is welcome. Hotels are private property, so people can be excluded if they have no specific reason for being on the premises. It is 270

in these situations where training the hotel staff in security issues is so important. Training should include how to identify people who may not belong at the hotel, and what to do if such people are identified. For many hotels, surveillance systems assist in this effort, since employees cannot directly view every area of a hotel at all times. Surveillance systems use video cameras, motion detectors, and other security devices to monitor hotel areas. Cameras are usually connected to monitors in the security office, front desk, telephone department, or other areas where there is generally someone to watch them. Motion detectors and other forms of passive security can set off alarms. Some hotels have signs posted stating that they are private property. This public warning may be required to take advantage of local trespass laws. Perimeter and Grounds Control Perimeter and grounds control can take many forms. Surveillance systems are very useful in providing security monitoring of such outdoor areas as parking lots, pools, tennis courts, and other areas. Parking lots should be well-lit; guests and employees feel safer in well-lighted parking lots or structures. Parking facilities may also have gates to control traffic; sometimes these gates are staffed for extra protection. Fences are often needed, especially in high-risk areas. For example, most states require swimming pools to be fenced and gated if they are outside and not physically surrounded by the hotel structure. Fences may also be used to separate the hotel from its neighbors. The hotel's management should train valet parking attendants, landscape staff members, maintenance staff members, and others to watch for unauthorized people on the grounds. Protection of Assets The physical and intellectual assets of the hotel must be protected as well. Important devices for securing the assets of guests are hotel safe deposit boxes and, for those hotels that offer them, in-room safes. All states require hotels to provide some sort of safe deposit box facility for guests at no charge. Guests must be notified of the availability of these boxes, usually through notices in guestrooms. Some states also require that notices be posted in public areas, such as the front desk. The safe deposit boxes are usually at or near the front desk. Upscale and world-class hotels usually have a separate room for safe deposit boxes, where guests can have privacy while using the boxes. These rooms cannot be entered from the lobby without someone from the hotel opening the door. In other properties, the safe deposit boxes are at the front desk, and guests may have to open and close them in the lobby. Guests must sign a signature card every time they use the safe deposit box, and the hotel employee must verify the signature before allowing access to the safe. In addition, the safe deposit box keys must also be secured to prevent them from being lost or stolen. Hotels usually have only one key per safe deposit box. If the key is lost or stolen, the box lock must be removed and a new lock installed. If a hotel has more than one key per safe deposit box, a guest claiming a loss from the contents of the box may have legal grounds for claiming that hotel employees could open the box with the other key. Guestroom safes are becoming more popular, as they offer convenience to guests. However, some states do not have clear rulings at this time as to whether in-room safes can take the place of guest safe deposit boxes. Some in-room safes have unique keys, some are digital and use codes entered by the guest, and some work with guest credit cards. Another important security device is a robbery alarm at the front desk. Usually this is a silent alarm that sends a signal to the local police department. The activation device is generally placed out of sight, such as near an employee's foot where it can't be easily seen from the guest side of a counter. This device may work with the hotel's surveillance system, so that when it is activated, a camera records what is going on at the alarm location.

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There may be more than one safe for hotel use. For example, a hotel can have a main safe, where cash and important records are secured. As computer software becomes more important, it is not uncommon to find the software stored in the hotel safe, or in another secure area, such as the computer room. There may also be a cashier drop safe. A cashier drop safe is a special safe that allows items to be dropped into it; the only way to remove the items is to open the safe with a combination. Drop safes are used to temporarily store the cash received in the day's transactions from the front desk and the various hotel revenue outlets. When a deposit is made into the safe, the amount, date, time, revenue outlet, and name of the person dropping the amount is entered in a log near the safe. Many hotels require someone other than the person responsible for the drop to witness the deposit and co-sign that a drop was actually made. The person opening the safe then compares the log to the actual envelopes found in the safe as the first step in ensuring that the contents are accurate. Both general hotel safes and drop safes are fire-rated to protect the contents from fire. An important procedure used to protect the contents of a cashier bank is the bank audit. Bank audits may be done on a scheduled basis or without notice. Most hotels conduct audits without notice so that employees do not have time to make corrections to their banks. The purpose of the bank audit is to make sure that the contents of the bank are correct and money is not missing. This prevents hotel employees from making "loans" to themselves. Hotels must also protect the assets of employees. Employee changing and locker rooms should be secure and safe. Many hotels provide locks for employees. When uniformed employees arrive for work, they each receive a uniform and a lock for the locker they store their personal valuables in. When they leave the hotel after their shift, the lock must accompany the uniform. Other hotels use a more flexible system, involving a lockable storage bag that holds employee clothing and other items. The bag is turned in to a secure storage area after it is filled, and it is claimed at the end of the employee's shift. Most departments have secure storage areas for women's purses and other employee personal items that may be needed during the day. Good front desk designs allow for lockable drawers at the front desk or in a nearby area. Each employee gets a drawer to use during his or her shift. Emergency Procedures Sooner or later, every hotel will have some sort of emergency to deal with. Injuries, robberies, destruction of assets, fires, or other emergency situations will require extraordinary action on the part of the hotel staff. The hotel should have well-documented procedures for all emergencies that can be anticipated. These procedures should be included in the initial and ongoing employee training program. For example, many hotels invite the local fire department to the hotel to train employees on the proper use of fire extinguishers. Lifeguards must be properly trained on water safety and cardiopulmonary resuscitation (CPR). Front desk employees must know what to do during a robbery or when a guest calls asking for medical assistance. Hotel staff members working at hotels located in hurricane or flood-prone areas need to know what to do when these emergencies occur. If a fire is reported, all employees should know how to respond. Some employees may be assigned to directing guests out of the building, while others may be assigned to directing the fire department to the fire's location. One of the most important emergency procedures is to assist guests with disabilities during an emergency. Most hotel computer systems have special codes in them for identifying where guests with disabilities have been roomed. If a hotel is being evacuated, employees must go to these guestrooms to assist the disabled guests. For example, if the hotel has a fire, elevators will not work, and guests who use wheelchairs or are otherwise unable to move easily will need assistance to fire exits. 272

All states require guests to be notified in their guestrooms of emergency exits and procedures. Most fullservice hotels have bell attendants provide a brief emergency orientation while escorting guests to their rooms. Evacuation routes are generally posted in guestrooms, often on the back of the main guestroom door. Communications Good communication forms the backbone of any successful security program. Providing mobile communications devices, such as radios and pagers, to key employees is one way to ensure good communication during emergency situations. Another good communication strategy is to post security information in high-traffic employee areas to help keep security awareness at the hotel high. Security should be a frequent topic of discussion for departmental and staff meetings. In addition, the hotel should regularly publish security information. For example, if a hotel is notified of a counterfeit ring in the area, employees should be given a description of how to identify the fake bills, and, if known, a description of the persons distributing them. This applies to drug or theft gangs as well. Employees should be given very specific instructions on what to do when they identify a possible security problem. Guests in need of medical assistance often communicate their need to the front desk, so the hotel should have procedures in place for front desk agents to follow when helping these guests. Guests may be referred to doctors or hospitals; in real emergencies, the local emergency medical service (EMS) should be contacted. However, employees should be given clear instructions on when to call for EMS assistance. Just as important, all hotel staff members should receive training on how to communicate to guests and other people during an emergency. For example, in the case of a building evacuation, staff members must show composure and confidence. If the staff seems panicked, the panic may spread to guests. Dealing with the public at large is just as important. When the news media becomes aware of a hotel emergency, they will attempt to contact the hotel for comment. Every employee should be aware of the hotel's policy concerning media contact and why compliance with the policy is so important. Security Records Any activity that has a security-related dimension to it should be recorded for future reference. For example, the issuing of an E-Key should be recorded in writing. The audit of a cashier bank requires more than one person counting the bank, and all employees involved should sign a security record as to the results of the audit. Reports about robberies, assaults, personal injuries to guests or employees, and property damage or theft; vehicle maintenance records; and preventive maintenance records all should be part of an ongoing security record program. Security records are important for several reasons. First, they allow hotel management to track issues. For example, the hotel may identify an ongoing problem with a guestroom lock by recording every time a security officer is called to a room because the issued key doesn't work properly. Vehicle maintenance records allow the hotel to track maintenance issues, such as tire wear. Most municipalities mandate periodic testing of the fire alarm system and recording of the results.

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Another important reason for security records is to protect the hotel from legal action. Hotels should use a standard form for all reported security violations (see Exhibit 1 for a sample incident/loss report). The form should record a clear description of the situation and what actions the hotel took when it was notified. These records are confidential and must remain in the hotel's custody unless the general manager directs otherwise. Finally, security records may assist the hotel with insurance claims made by either the hotel's insurance carrier or a guest's. In either case, security records can present the hotel's view of what happened. This is especially helpful when hotel staff members are called upon to describe a security incident that occurred many months ago. Staff Security Procedures Investing in security technology and equipment is a good idea, but a properly trained hotel staff is still the best way to provide security in a hotel. Although every hotel differs, certain common security procedures should be standard practice. Some examples include:

Never say a guest's room number out loud at the front desk. If someone asks what room a guest is in, he or she should be directed to a house telephone; the hotel operator can then connect the person to the appropriate room without mentioning the number. This also means not saying the room number when issuing a key to a newly arrived guest at the front desk. Room numbers and directions to guestrooms should be written down for guests or given to guests via pre-printed materials. Front desk agents should require identification from anyone who comes to the front desk and asks for a key. If photo identification is not available, the person asking for the key should provide some personal information that can be verified in the hotel computer system, such as their home address, telephone number, or company affiliation. Room attendants should not allow anyone in a guestroom without a key. People asking to have a guestroom door opened should be directed to the front desk; if the situation warrants it, hotel security should be called. Valet parking should use a numbered three-part form to control cars. The first part goes to the guest as a receipt. The second and third parts stay with the vehicle keys. When the guest claims the car, the second part stays with the valet office as an official record; the third part goes with the keys and should be matched to the guest's receipt before the car is released. Some hotels use a four-part form.

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Hotels should provide standard guest safety information in their guestrooms. The American Hotel & Lodging Association has published a "Traveler Safety Tips" brochure that can be placed in guestrooms for guests (see Exhibit 2). Hotel guests should be asked for a room key or other proof of occupancy when they ask to charge purchases to their room. Employees should immediately report possible security issues. For example, burned-out light bulbs in guest corridors should be reported and replaced right away. Open emergency doors, unlocked gates, and other security issues should be addressed with the highest priority.

Security procedures are also important with regard to the acceptance of credit and debit cards for payment and the protection of sensitive information that, in the wrong hands, could facilitate identify theft. [Endnote #7.1] Throughout the guest cycle, hotels frequently receive payment for various transactions via credit or debit card. Due to the sensitive information that is found in payment cards, hotels must be extremely careful in keeping card data secure. Some countries and states have laws regarding these issues that must be obeyed, but there is no single, consistent set of laws applicable to everyone. In an effort to address the security of card data, the payment card industry has imposed its own comprehensive set of requirements. All businesses that accept payment (credit and debit) cards, including hotels, are required to comply with the Payment Card Industry Data Security Standard (PCI DSS or simply PCI or DSS), which the major payment card companies created to reduce risk and prevent problems related to the misuse of cardholder data. As set forth in the PCI DSS, all merchants accepting payment in the form of payment cards must adopt a series of security measures to protect sensitive customer credit and debit account information. Most merchants were given notice and a period of time to prepare their organizations and secure their systems. That grace period ended in the fall of 2007, at which point compliance enforcement began. Any merchant, regardless of size or type, that accepts credit and/or debit cards that is not currently compliant with this standard faces potentially strict financial penalties and runs the risk of losing the privilege to accept credit and debit cards.

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The PCI DSS affects all merchants globallyregardless of size, industry, location, or type of business that accept credit and/or debit cards and covers the collection, storage, transmission, and use of customer and account information embedded in these cards. The PCI DSS is defined by six major categories and 12 key compliance requirements (see Exhibit 3). The extensive procedural details of the PCI DSS are beyond our scope here, and they involve not only the procedures used when accepting payment, but also the computer security protocols that must be in place when saving and transmitting information electronically. For a full explanation of the PCI DSS, see The Payment Card Industry Compliance Process for Lodging Establishments, an excellent resource published by the American Hotel & Lodging Educational Institute. [Endnote #7.2] There are also a number of privacy issues that need to be addressed where payment cards are concerned, such as payment card fraud, identity theft, and misuse of data. The Federal Trade Commission (FTC) estimates that as many as nine million Americans have their identity stolen annually. Identities are stolen when a thief claims to be someone else, and uses the victim's Social Security number or credit card 278

account, or conducts transactions without the victim's permission, thereby committing fraud and/or other criminal activity. Identity theft can take many forms, including renting an apartment, obtaining a credit card, signing a contract, or establishing a telephone account in someone else's name. Unfortunately, victims of identity theft often do not discover the theft until they learn about an unexplainable transaction, receive a doubtful credit report or invalid credit card account statement, or are contacted by a debt collection agency. Popular techniques for capturing unauthorized guest information include, but are not limited to, the following:

Dumpster DivingThis term refers to the practice in which a thief rummages through hotel trash cans and/or dumpster contents in search of receipts, folios, bills, records, or other documents that may contain personal information about guests. SkimmingThis term describes the activity by which a thief steals a credit card or debit card account number by using an illegal data-capture device while supposedly processing a legitimate transaction (such as a magnetic stripe swipe data capture). Change of AddressFront office staff should be wary of anyone contacting the front desk or the accounting department in an attempt to change or divert guest billing statements or transaction records to an alternate address without confirming the authorization of such a change.

The hotel's privacy obligation relative to payment card fraud is to secure credit card numbers from theft. The most effective ways to secure card numbers include:

To "mask" or not display complete card numbers on folios, POS receipts, confirmations, screen displays, and reports. Rather, show only a portion of the card number. Destroy obsolete transaction records that may contain card numbers as required by the PCI DSS. Secure all databases containing card numbers (PMS, POS, CRS, booking engine) from unauthorized access either locally or online. Secure all back-up tapes from unauthorized removal. Use systems that encrypt credit card numbers if at all possible.

Identity theft frauds can take various forms, but usually involve a thief getting credit in some manner (credit card, bank loan, even a mortgage) using the victim's name and SSN and/or other credit card numbers. The hotel can help prevent identity theft by securing guest credit cards using the methods listed above. Many of the perceived threats to payment card privacy revolve around the fear that someone could abuse private data to discriminate or otherwise act against a victim. While hotels should have clear policies in place regarding the protection of sensitive guest (or employee) information, hotels should be prepared to release data to legitimate investigations or warrant supported by a subpoena. A difficult gray area occurs when, for example, a police officer or detective requests information in a situation where there is no time to get a subpoena and delay could put someone at risk or a crime could be committed on hotel premises. There are other very real threats to payment card privacy in this category that the hotel is obligated to protect guests from. For example, folio detail should include only enough information to identify the transaction. Hotels must ensure that requests for copies of folios are legitimate and are in fact from the 279

guest himself or herself, rather than, say, his or her spouse's divorce attorney. The process for confirming folio copy requests should be clear, documented, and adhered to. The general rule of thumb must be "It is no one else's business what the guest did in the hotel, so the hotel must protect that information from accidental or by-deception exposure." It is important that staff members understand their roles and responsibilities in safeguarding sensitive information.

Section Keywords security Protecting people and assets. Security efforts may involve such areas of concern as guestroom security, key control, locks, access and perimeter control, alarm and communication systems, lighting, closed-circuit television, safe deposit boxes, inventory control, credit and billing procedures, computer security, staffing, pre-employment screening, employee training, responsible service of alcoholic beverages, emergency and safety procedures, and recordkeeping.

Section Endnotes
Endnote #7.1 : Much

of the remainder of this section is drawn from Mark G. Haley and Daniel J. Connolly, The Payment Card Industry Compliance Process for Lodging Establishments (Lansing, Mich.: American Hotel & Lodging Educational Institute, 2008) and Principles of Privacy: Defining and Implementing Sound Privacy Practices in Hospitality (Lansing, Mich.: American Hotel & Lodging Educational Institute, 2005).
Endnote #7.2 : For more information,

contact the American Hotel & Lodging Educational Institute, 2113 N. High Street, Lansing, MI 48906, 800-349-0299 or 407-999-8100.

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Competency 2 Objective: Describe the role that managers play in a property's security program. Management's Role in Security All managers at a property should be involved in developing security guidelines that address the hotel's unique security needs. Legal counsel should review these guidelines. Once approved, these guidelines should be communicated to all employees. If guidelines were prepared for each individual department, they can be provided on a department-by-department basis. There is a greater likelihood that employees will review the material if it addresses their specific areas without detailing the total security operations of the property. Employee turnover and changes in job assignments necessitate a regular review program to make sure all employees are aware of their security responsibilities. Lodging properties should clearly define the security role of their managers, whether the size of the property requires a large security staff or the security function is assigned to one or several on-premises supervisory staff. The protection of guests, employees, and assets requires all managers (and, indeed, all employees) to be constantly alert to possible security breaches. Areas of Vulnerability A more mobile worldwide society, the criminal by-products of the drug culture, and a climbing crime rate have all created new security problems for hotels. Many decades ago, hotel security problems related primarily to room theftsassaults or rapes were almost unheard of. In a famous lawsuit, a jury awarded 1960s entertainer Connie Francis $2.5 million after she was assaulted in a hotel. The case considerably raised the public's awareness of hotel safety issues. Hotels have gained an unfortunate visibility with regard to criminal incidents that can include assault, arson, and armed robbery. Crimes against guests, even if few in number, can generate adverse publicity, can seriously damage the reputation of the property, and may be extremely costly during subsequent litigation. One problem in designing a security program to deal with serious crime is that the security effort must take into consideration the property's image. The lodging industry is, after all, a service industry. A hotel markets an image of hospitality as its main product. Security procedures that evoke impressions of martial law may be good for security, but they will probably be bad for the hotel's image of hospitality and therefore will be bad for business. Poorly thought-out security procedures may offend or inconvenience guests and drive them away altogether. Another area of asset vulnerability results from the use of inadequate procedures for checking and giving credit. Such procedures may lead to losses by permitting the unauthorized or fraudulent use of credit cards, personal checks, and traveler's checks. This type of incident is less visible to the general public than personal crime and is therefore less likely to greatly affect public relations efforts. Nonetheless, when establishing credit procedures to protect a property from incurring losses through bad debts, care must again be taken to avoid offending one's guests. A high degree of vulnerability exists in the protection of the physical assets of a lodging establishment. Tableware, ashtrays, linens, and towels are taken from hotels so often that, in many hotels, these expenses are virtually ignored and are merely written off as a cost of doing business. However, because the theft of these items results in a monetary loss to the organization, management has a responsibility to take preventive action.

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Unfortunately, another area of vulnerability for hotels is theft by employees. Studies by the U.S. Small Business Administration have indicated that business failures can often be directly related to employee theft, which may appear in numerous forms within lodging properties and, taken together, may combine to constitute a major security concern. Security Requirements The number of lodging properties and the variety of lodging concepts have proliferated in recent decades. Each new lodging concept or expansion of a successful format for serving the traveling public has added to both the variety of lodging properties and the variety of communities in which lodging properties are located. Such diversity is clearly one of the strengths of the lodging industry, but it also provides some of the industry's profoundest challenges. This is perhaps nowhere truer or more evident than in the area of hotel security. For example, some extended-stay lodging brands operate with minimal or no staff on duty at night, making security a greater issue for these types of properties. No two hotels have identical security requirements; therefore, national security standards are not feasible for such a varied industry. The ever-growing diversity of lodging operations, locations, layout, staff, functions, and clientele makes it impossible for lodging managers to develop security requirements that could reasonably apply to all properties. Because each property is different, something that is a required security procedure for one property may not be of any value to another. Managers do not have an easy task when it comes to creating and implementing security programs that are uniquely suited to their properties.

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Competency 3 Objective: Explain the importance of setting up a security program, including security staffing and having a liaison with local law enforcement. Setting Up the Security Program A lodging property's management must evaluate whether a special security presence is warranted by its property's security requirements. If it is, management must decide how that presence may best be integrated with the operation of the hotel. A management team's commitment to security is necessary to integrate security concerns into the day-to-day operation and administration of the property. Setting up such an integrated security system is a process that involves many elements. These may include establishing working relationships with local and regional law enforcement and other agencies, choosing whether to use in-house or contract security personnel, and creating an appropriate and effective security training program for all personnel. Relations with Local Governmental Agencies A hotel is part of a larger community. Many hotel managers actively participate in civic organizations such as the Rotary Club, Kiwanis Club, and other organizations. Involvement can be beneficial for business, as many important relationships can develop through such affiliations. Establishing good relationships with people from government agencies like police, fire, health, and emergency management agencies is also very important for hotel managers. This became very apparent in New York City after September 11, 2001. Manhattan Island, where the tragedy occurred, was intentionally cut off from the rest of the city. To get home, many people in Manhattan had to walk, sometimes for miles, because the subways, trains, and some bridges and automobile tunnels were closed. Foot traffic across bridges was allowed, but nothing more. People turned to hotels for shelter and, in some cases, protection. Yet hotels were not part of New York City's master plan for emergencies. Hotel managers responded well to the emergency and accommodated many guests, whether they could pay or not, during the crisis. This example proves that civic emergency plans that consider hotels isolated from the rest of the community and region may be inadequate, and underscores the wisdom of hotel managers getting to know leaders of the various emergency-response agencies in their communities. Hotel managers can gain insight into potential security and emergency planning issues by coordinating their security plans with local and regional law enforcement and other agencies. This goes well beyond just looking at crime rates and past experiences at the hotel and its surrounding community. Liaisons with police, fire, health, and emergency management agencies are essential to an effective hotel security and emergency plan. Each emergency agency requires special attention, because each is unique. For example, police specialize in solving and preventing crimes. Fire departments specialize in fire prevention, protection, and extinguishing. Some health agencies focus on sanitation, while others respond to urgent emergency situations. Emergency management agencies, created to coordinate the activities of local and regional resource agencies, are important hotel contacts as well. On a national level, similar responsibilities are under the control of the Federal Emergency Management Agency, better known as FEMA. Hotel managers should coordinate hotel involvement with these agencies and actively participate in their planning processes. For example, in 1993, Hurricane Iniki struck the island of Kauai in Hawaii. The resorts along the coast ended up in the direct path of the hurricane and were severely damaged. Resort 283

managers involved in regional emergency planning efforts were able to ensure that their guests found safe shelter in designated locations outside the storm's path. Resort managers who did not participate in the emergency planning process found themselves unable to assure their guests of a similar level of safety and protection. Hotels that have a security or loss prevention department should make that department the hotel's official contact with local agencies. For hotels without such a department, this role is delegated to the general manager or front office manager. Therefore, understanding the role each emergency agency plays can be critical to the front office manager. As part of a property's security program, hotel managers should cultivate cooperative relationships with local law enforcement and other agencies. Managers should invite the appropriate law enforcement personnel to visit the hotel, so they can become familiar with it. Some hotels hire off-duty police officers as additional security for special occasions. If possible, review hotel security procedures with the local law enforcement authorities. Be sure to request police guidance in crime prevention. A good relationship with local law enforcement agencies often encourages a more prompt response to security incidents at the hotel and will likely result in more frequent police patrols. A police presence at the hotel can also be a deterrent to certain crimes. Most hotel managers think of the fire department when they think of emergencies. In many hotels, the fire department is the most visible government agency, because of frequent hotel inspections performed by the fire marshal. Working cooperatively with the fire department goes beyond identifying fire hazards, however. The fire department can train hotel managers and staff members in how to use fire extinguishers, help the hotel develop fire escape routes, and prescribe evacuation procedures. Improper handling of emergency fire equipment can be just as dangerous to hotel staff members, guests, and property as a raging fire. In many communities, fire departments are also responsible for the emergency medical teams (EMTs) that respond to emergency calls for medical assistance. An EMT may be willing to train hotel staff members in first aid and other emergency procedures. Coordinating with health agencies helps ensure hotel access to medical services when needed. Establishing a relationship with a local hospital should be considered part of the hotel's emergency planning. Guests may request or require medical assistance, and being familiar with a local hospital helps make things easier when it's time to call the hospital for medical assistance or to notify it that someone is in transit who requires emergency treatment. The need to coordinate with local and regional emergency management agencies is especially important for hotels in geographic areas that are subject to severe weather and other natural disasters. Since 9/11, however, coordinating with emergency management agencies has taken on added importance for hotels everywhere, since terrorists can strike anywhere. Hotel managers should be involved in the community's emergency notification planning, so that hotel guests and staff members can be notified of the need to evacuate. In certain cases, hospitals may not be sufficiently large enough to handle emergency situations, so they may request that hotels serve as emergency medical treatment centers. Another reason to participate in local and regional emergency planning is to be sure hotels are included in emergency service plans. Such participation can help ensure that hotels will be listed as high-priority buildings for the maintenance or restoration of electric, telephone, transportation, medical, and other vital services during emergencies. A Potential Communications Problem. Unfortunately, law enforcement, fire, medical, and emergency management agencies and private security personnel have not always cooperated well with each other. Police have sometimes viewed private security efforts as staffed with poorly trained older (or retired) personnel who are largely ineffective. In today's changing security scene, this stereotype often does an 284

injustice to a lodging property's security personnel, as private security has become more professional and sophisticated. Better communication is the key to educating local agencies about the broad scope of a lodging property's security and emergency programs and about the growing professionalism of the industry's security personnel. The most effective cooperation results when government agencies and hotels understand each other's needs. For example, the police should know enough about a property and its security program to be able to offer appropriate assistance in a given situation. They should be informed of any special events or visitors (for example, political or entertainment figures) that may create an unusual security risk at the property. On the other hand, the property's staff should have a basic understanding of police procedures so that they can be of greatest assistance to the police once they arrive. Representatives of the various government agencies will be able to explain the type of assistance they would find most helpful. This information should be included in a property's ongoing security training program. Security Staffing A hotel must choose whether to hire its own full-time security personnel, outsource the security function by contracting with a local security company, arrange for part-time protection with local off-duty police personnel, or use any combination of these or other options. Because of a facility's size and organizational structure, it may be appropriate to assign security responsibility to a member of the management staff, such as a resident or assistant manager, a chief engineer, or the human resources director. Most large hotels have full-time security staffs, with one or more employees on each shift. Smaller properties may not be able to afford a full-time staff, so a combination of part-time security employees and properly trained full-time hotel employees may be an appropriate approach. If management decides the property needs a security department, it must determine whether the department should be a proprietary unit with in-house staff functions or a security program run through a reputable licensed contract security company. In some situations, it may be feasible to employ off-duty police to cover certain hours of operation, while certain members of the property's staff provide daytime coverage as one of their responsibilities. If the security department or function is staffed by hotel employees, additional considerations include determining whether the staff will wear uniforms, whether certain or all members of the security staff will be armed, and whether there are work shifts on which security personnel need not be assigned. Unless mandated by a local or state jurisdiction, the senior security executives of the lodging industry are unanimously opposed to the use of firearms by security staff. The rare instance where an armed security officer could have been of value in a specific security incident is far outweighed by the insurance costs and the potential for accidental injury or death of innocent bystanders in a shoot-out. All decisions concerning security staffing deserve careful thought and should be discussed with legal counsel. Each option has its adherents. Contract Security. The proponents of contract security organizations argue that such organizations can provide sophisticated security services at considerable savings. In addition, they assert that a reputable contract security company will provide thoroughly screened, tested, and trained personnel. It may also provide consulting services, including in-depth surveys of hotel security requirements, electronic audio countermeasure sweeps (a debugging tactic), data processing security, and assistance in contingency planning for bomb threats and natural disasters. Finally, they contend that an in-house security staff may become too familiar and friendly with the other employees. If a guard catches a friend stealing, he or she might hesitate to report that friend. Some people believe that this situation may be less likely to occur if the hotel's security personnel are supplied by an outside agency. 285

In selecting a security company, make sure that extensive guard training, geared specifically to each facility, is provided. Review contract and insurance requirements (that is, named insured clauses and requirements for proof of insurance) with legal counsel. Check the previous lodging experience of the company's managers and line security employees, as well as specific training in dealing with guests, employees, and others. If your state or community requires that such agencies be certified, verify that the agency you choose meets this legal requirement. Be clear and specific regarding the services to be provided by the contract organization. Require the security firm's supervisory personnel to conduct frequent unannounced inspections, day and night, to ensure that its guards are in compliance with company regulations. Determine whether the security service can provide a sufficient number of personnel on short notice in the case of a large-scale emergency. Insist that security officers be required to file daily and unusual-incident reports. Determine the percentage of the security firm's hotel customers that it retains on an annual basis; rates of retention are an excellent indication of a company's service level. If hotel managers give orders or instructions to contract security employees, a different relationship is established. The responsibility for the actions of the contract security employee becomes blurred, and there are instances in which the contract employee has been considered a workers' compensation case for the property rather than for the contract security company. Contract companies have held (and their viewpoint has prevailed in court) that the instructions from the hotel executive may have placed the contract employee in jeopardy and may have been contributory to the workers' compensation incident. In other instances, the contract employee has turned to his or her company for the workers' compensation relief, but has sued the lodging establishment under general comprehensive liability, which affords the opportunity for a much greater settlement than would be available through workers' compensation only. A contract security organization will almost always be willing to perform an in-depth security survey for a property if the property has not already performed one for itself or had one performed by another agency. Remember, however, that a contract security organization is selling services. This fact may sometimes lead such an organization to overstate a property's security needs, which can pose an unfortunate problem for an innkeeper. Suppose a property implements some (perhaps even most) of a contract security organization's recommendations, yet despite such efforts, a security incident occurs on the premises. It is possible that a plaintiff might subpoena and use the security organization's written recommendations in court as evidence of the innkeeper's knowledge of alleged "inadequate security." Even if the recommendations overstated the needs, if the innkeeper failed to implement every suggestion, a jury may be more likely to judge the innkeeper negligent. In-House Security. Proponents of proprietary or in-house security departments point out a number of advantages to this system. They emphasize the fact that the hotel has greater control over its own security officers or staff members. They also argue that training for in-house security staff members can be much more directly related to the lodging industry. They believe that the peculiarities and special needs of the industry are more effectively addressed by those within the industry than by those in a contractual relationship with the industry. In addition, they emphasize that the quality of personnel is under the direct control of the hotel in a proprietary system, rather than under the control of the contract security company, and that the director and staff of an in-house department are more effectively integrated with the other hotel departments and personnel. If the security staff is in-house, the security director can be a member of the property's executive committee, an action that would not be possible with a contract security agency. They point out that a greater sense of loyalty may be developed among in-house staff members, since career paths can be established that move security personnel into other roles in the organization. Finally, another important concern is the typically high turnover of contract security employees. Off-Duty Police. Some properties use off-duty police officers for their security staff. There are certain benefits associated with this practice. Such officers have superior training in reacting to and dealing with crimes and other emergencies, they understand the law, they are used to dealing with people, they may be 286

better able to identify known criminals, they are immediately recognized as authorities, and they often do in fact have more authority than ordinary citizens (as a deputized individual, they are not limited to a "citizen's arrest"). In addition, the hotel's relationship with the local police department may be enhanced. However, there may be potential drawbacks as well. First, police officers may be oriented more toward apprehension functions than toward prevention. Second, some jurisdictions require off-duty officers to be armed, and this may not be desirable (if they are armed and injure someone, the property may be liable). In addition, off-duty officers may not be permitted to wear uniforms in some jurisdictions. Finally, an officer may be working at the hotel following a full-duty police shift and may be fatigued. Other Security Staffing Considerations. Security concerns should be addressed during the selection and hiring of all employees. It is especially important, though, when hiring a member of the security department, given that this individual is responsible for the protection of the property. If legal counsel approves, the hotel could use an authorization statement and affidavit. Such a statement, signed by the job applicant, allows the property to more easily investigate the applicant's background. Bonding (insuring for protection from employee theft) through an insurance company permits more effective screening of applicants and is certainly warranted in the case of security staff members who, by virtue of their function, have access to most areas of the hotel. It is appropriate to have everyone employed as a driver to have a police background check to make sure they have a valid driver's license for the type of vehicle they are driving, and to see if they have any traffic violations on their driving records. This background check should be done before hiring and at least annually from that time on. This procedure applies not only to specialized employees, such as airport bus drivers, but also to other employees who may drive a hotel vehicle as part of their other assigned duties, such as a maintenance staff member. Properties must also decide how they will schedule security staff on the property. During daytime operations, involving all employees as the "eyes and ears" of the property may make it possible to reduce the security staff to a few key persons able to respond to a security-related call from an employee. In setting schedules, special programs and activities that may affect the number of security staff needed during a particular work shift should be taken into consideration. In many properties, additional security staff members are assigned during the nighttime hours.

Section Keywords plaintiff The side that initiates and files the suit.

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Competency 4 Objective: Identify the elements of security training that are critical to an effective security program. Security Training Whether or not a hotel has a full-time security staff, no security staff can be everywhere at once. Therefore, every hotel employee must be trained to identify security issues and take appropriate action when they are discovered. Training can include company-provided security training programs, as well as visits by local police departments. Everyone must understand the limits of an on-premises security officer's authority under the local codes and regulations of the jurisdiction. Factors to review in such training are: procedures to follow in a citizen's arrest, the arrest authority of a deputized security guard, and the legal limits placed upon an offduty police officer. In addition, since every employee of a lodging facility may act as an integral part of its security program, all employees should be given a thorough security orientation at the time they are hired and should be regularly exposed to an ongoing security education program throughout their term of employment. Such continuing security education programs can occur at departmental or staff meetings. Management then can maintain and preserve records of attendance and minutes of such meetings for future reference. Comprehensive training should include all aspects of the protection of guests, the general public, employees, and the assets of guests, employees, and the property. Depending on a particular facility's needs, training may be expanded to include the special concerns of emergency management and interconnections with the other departments in the hotel. The key point is that the unique needs of each lodging property call for the development of individually designed security systems and individualized security training programs. Of course, this is not to say that no two lodging properties will ever have security systems with common elements. Though never identical, the security needs of various properties are sometimes similar. Common elements are likely to arise from the common potential problems that lodging properties face. However, each property also has security needs that are unique to it.

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Insights that have an impact on security training may also be gained when security personnel keep abreast of the latest thinking and developments in the security field by reading the various security publications available. Because new security equipment is regularly being introduced, and approaches to security are constantly being refined, such periodicals can provide important supplemental information that may help management keep its particular security program up-to-date. Exhibit 4 lists several of these publications. It is unfortunate when a hotel manager does not realize the importance of implementing a well-planned security training program. Having a well-documented and implemented security program, including a trained staff, can play a part in protecting a hotel against certain lawsuits; being able to prove that staff members were given security training can make a positive impression on a jury attempting to determine negligence or reasonable care. In numerous lodging cases, the presentation of an effective and wellorganized security program has been persuasive to both the jury and the court. Admittedly, it takes time and money to develop an effective security training program. Management must carefully examine its operation and premises to discover potential security problems. It then must decide how to best use its resources (systems, procedures, and personnel) to deal with the potential problems. Every aspect of management's plan that relies on the performance of personnel then must be explained through training to the affected personnel.

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An important part of preparing a security training program is determining not only what should be taught, but also who should learn it. Trainers should focus their efforts on providing employees with the information the employees need to know to operate more effectively in their jobs. Each property should write down its security standards and procedures in a security manual that can be used to help train employees. A carefully written manual helps ensure consistency in employee training and performance. Just as important, actually having to write the manual forces managers to think carefully and to organize their thoughts about security in a way that often does not happen if managers and trainers are allowed to rely merely on their memories and on oral instruction. The formats of security manuals can vary; regardless of the format used, the contents of a security manual should cover the broad range of its property's security concerns in specific terms. In addition, with the input of many of the lodging industry's corporate security executives, the American Hotel & Lodging Educational Institute developed a very effective training program for security officers. Successful completion of Lodging Security Officer Training provides the individual with a "certificate of completion." [Endnote #7.3] Who Is Responsible? When a property uses an in-house security staff, it is obvious to all concerned that the property is responsible for the actions of its staff. The property cannot evade this responsibility merely by using off-duty officers or a contract security service, because these security officers are usually considered agents of the property. If the security officers are negligent, the property may be held liable. Such services do not relieve a property of its legal responsibility to provide reasonable care. The use of off-duty police officers poses certain potential legal problems as well. If an off-duty officer uses his or her legal authority to arrest someone who then proves that the arrest was inappropriate, whose agent is the officer: the community's or the property's? In some cases, the officer is considered the property's agent. This means the property could be held liable for false arrest and false imprisonment. Similar liability could result if an armed officer unlawfully injures someone.

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The Authority of a Security Officer. The presence of a uniformed security officer may connote to some people the image of a public law enforcement officer. In fact, some security officersonce outfitted with a uniform, badge, and, at times, weaponrysometimes wrongly believe themselves to possess the authority of public law enforcement officers. This attitude must be changed if the police, the public, and the individual security officer are to understand and accept the role and authority of the private security officer in crime prevention. The right of a property owner to protect his or her property and the role of the security officer as his or her agent is a key principle behind the security officer's authority. A hotel security officer, in the absence of any special commission, deputization, ordinance, or state statute, possesses no greater authority than any other private citizen. However, because the security officer can be involved in protective functions on a daily basis, he or she may be in a position to use certain powers more than most other private citizens. The exercise of these powers may involve nothing more than simply stopping undesired conduct, or it may involve making a citizen's arrest. In all actions that interfere with the rights of others, the security officer should endeavor to obtain consent and voluntary cooperation from the person being interfered with. Most security officers will, at some point in their careers, be faced with situations in which they must determine the appropriate legal action to be taken, such as calling the police, questioning a suspect, or making a citizen's arrest. To prevent improper acts that could result in a liability suit against the security officer and/or the employer, an officer must understand what constitutes a crime according to the appropriate criminal law so that he or she may be more specific in relaying information to and working with public law enforcement agencies. Criminal statutes set limits on the behavior of lodging security officers. Activity beyond these limits may result in the filing of criminal charges for assault, battery, manslaughter, or other crimes. Tort law, which provides legal grounds for one person to remedy a wrong committed against him or her by another, also restricts the actions of the security officer. Tort law permits an injured party to bring a lawsuit for damages against the security officer, as well as the employing property, for such unreasonable conduct as false arrest, false imprisonment, malicious prosecution, defamation, slander, and other tortious acts. Individuals charged with responsibility for security should be familiar with applicable state and local laws regulating private security, particularly those relating to citizen's arrest. Citizen's arrests. Most states, through state statutes, judicial pronouncements, or common law, permit arrests by private citizens under certain circumstances. There is considerable variation among states concerning the privileges conferred and restraints imposed in a citizen's arrest. A citizen's arrest occurs when an individual is lawfully deprived of his or her freedom. Normally, the task of arresting criminal offenders is one for a sworn police officer. Even where the law permits a security officer to make a citizen's arrest, he or she should do so only if a sworn police officer cannot respond in time and good judgment requires prompt action on the part of the hotel. Non-security personnel should not attempt to make a citizen's arrest. Each security officer must be familiar with the statutory arrest authority of private citizens in the state in which he or she is employed. In New York, for example, a private citizen may make an arrest for a felony only when the suspect has in fact committed it; merely having reasonable grounds for believing the suspect committed a felony is insufficient to make a citizen's arrest. In other states, the felony must be committed in the presence of the citizen making the arrest. Some states do not permit a citizen's arrest for the commission of a misdemeanor of any type, while in other states, such as New York, a citizen's arrest for a misdemeanor is permitted, provided the offense is in fact committed in the presence of the citizen making the arrest. In any event, hotels in all states should check with local counsel before instituting any 291

procedures for detaining persons on their premises. Moreover, security officers cannot exercise lawful arrest power for any purpose other than to turn the individual arrested over to the proper authorities. An arrest made without proper legal authority may constitute false arrest and false imprisonment, and could result in civil and criminal liability on the part of the security officer and civil liability on the part of the lodging property. Except for a felony or misdemeanor arrest when and where permitted under state law, or except as provided for in some areas by state statutes relating very specifically to shoplifting, no other involuntary detention or confinement should be attempted. Any person who voluntarily consents to being detained must clearly understand that he or she is free to leave at any time. Even situations in which sworn police officers make an arrest in response to a hotel complaint may present the lodging property with a potential problem. If a guest or patron is arrested without justification at the instigation of the hotel, the property might be faced with a suit for malicious prosecution. Search. When a security officer makes a legal citizen's arrest for a felony or misdemeanor, the right of self-defense may in some states justify a search for an offensive weapon under certain circumstances. Individual properties, however, should check with local counsel to determine what circumstances, if any, would justify a search by a private citizen incidental to a lawful arrest. If a person consents voluntarily to a search, the consent should be obtained by the security officer in writing if at all possible, and should be witnessed by at least one other individual. Use of force. Generally speaking, a private citizen may use only such force as is reasonably necessary to effect a lawful arrest or to prevent the escape of a person from custody who has been lawfully arrested. If excessive or unreasonable force is used, the security officer may be subject to criminal action by the state, and both he or she and the lodging property may be subject to a civil action for damages by the person against whom force was used. No employee should use any force calculated to cause death or serious bodily harm unless there is a threat to his or her personal safety or the personal safety of another person. Deadly force should never be used to protect property. The Team Concept. An important goal of a security training program is to turn a property's entire staff into a security-conscious team. The team concept may benefit a hotel in protecting guests, employees, and the property itself. In the team approach, all department heads and supervisors regard security as an aspect of their jobs. While they usually are not directly involved in routine security assignments, they can be invaluable in maintaining the security of the property. Similarly, each employee has a responsibility to assist in a security capacity. It is essential, for example, that room attendants call the security office or the property's management when they notice a suspicious person in the guestroom area or back in the service areas of the property. Such alertness on the part of employees has been instrumental in many cases in the prevention of incidents and in the arrest of criminals. Whether the security role is incorporated in the activities of an assistant manager, a resident manager, or an owner-manager at the small property level, or in the role of a full-time director of security at a large property, the team concept is still valid. Employees in properties of any size can, for example, be instructed to:

Be alert to and report any suspicious activities or persons anywhere on the property. Avoid confronting a suspicious individual. Instead, the employee should step into a secured area (guestroom, locked linen room, or other space containing a phone), lock the door, and call the office designated to receive such emergency calls. Report any drug paraphernalia or other suspicious items that may be exposed to public view when working within a guestroom. (Never search through a guest's luggage or property, however.) In 292

one case, a jewel thief was arrested when a room attendant noticed an open case filled with jewelry. The thief stayed at one hotel while breaking into the other hotels in the community. In another case, a thief left a case of burglar tools open.

Alert security when rooming guests with large but empty pieces of luggage. Check on the proper posting of innkeeper laws, as the posting of such laws may be required in the jurisdiction in which the hotel is located. Check to make sure that any information cards or tent cards provided for the guest's information on security are in their proper locations.

This list contains only a brief selection from the wide range of activities a security training program can prepare a staff to perform. Every property will be able to construct its own list to deal with its unique security concerns. In 1993, the "Traveler Safety Campaign" was introduced by the American Hotel & Lodging Association to inform the traveling public of safety/security concerns and enlist them as members of the lodging security team. The initiative included the following participating members:

American Automobile Association (AAA) American Association of Retired Persons (AARP) American Society of Travel Agents (ASTA) National Crime Prevention Council and its mascot, McGruff the Crime Dog

Millions of "Traveler Safety Tips" cards (see Exhibit 2) were distributed and displayed in guestrooms. Some hotel chains incorporated the ten suggestions on their room key folders. A videotape was also made available for review by guests on the information channel in each guestroom. There have been instances where crimes have been prevented when guests have followed the campaign's recommendation of calling the front desk to report a suspicious person or incident. Section Keywords Tort law Provides the basis for actions permitting one person to remedy a wrong committed against him or her by another. For example, it permits an injured party to bring a lawsuit for damages against the security officer and the employing property for such unreasonable conduct as false arrest, false imprisonment, malicious prosecution, defamation, and slander. citizen's arrest Common law in most states, a citizen's arrest permits arrest by private citizens when an individual is lawfully deprived of his or her freedom. It should be done only if a sworn police officer cannot respond in time and good judgment requires prompt action.

Section Endnotes
Endnote #7.3 : For more information

on this program, contact the American Hotel & Lodging Educational Institute, 2113 N. High Street, Lansing, MI 48906, 800-349-0299 or 407-999-8100, or see Lodging Security Officer Training Program (Lansing, Mich.: American Hotel & Lodging Educational Institute, 1995). 293

Competency 5 Objective: List and describe the legal concepts and societal concerns related to security issues. Security and the Law Every state has its own statutes and court rulings on innkeeper laws. These laws deal with the rights and responsibilities of innkeepers and can be fairly extensive. Although such laws almost invariably deal with the same general topics, they can differ from state to state. Lodging management and security personnel should read the innkeeper statutory laws of their state. The understanding gained from this information can contribute to the development of a more effective security program. Also, in determining what elements might be included in a particular security program, it may be wise to review recent court and jury decisions that deal with hotel security matters. Many recent cases have addressed one or more of the following issues: locking systems, key control, security personnel on the premises, lighting, door viewports or peepholes, police liaison, foreseeability or prior notice, crime in the community, security efforts tailored to the needs of a specific property, and the involvement of employees as the hotel's "eyes and ears" with regard to the security function. Expert witnesses for the plaintiff frequently stress these areas of concern in depositions. The frequency of all types of lawsuits is increasing annually, and hotels, motels, inns, clubs, restaurants, and resorts are not immune from this trend. Management cannot afford to ignore the financial ramifications associated with costly settlements. The hospitality industry, with its special emphasis on people and personal services, represents an area where the possibility for litigation is very great. Legal Definitions Generally, in a suit alleging negligence, the plaintiff must show that the defendant innkeeper had a duty to use reasonable care to protect the plaintiff or victim from foreseeable acts; that the defendant failed to perform this duty; that this failure was the proximate cause of the incident; and that the plaintiff actually suffered loss or injury. The central legal issue is that innkeepers owe a duty of care to all persons on their properties. Failure to meet this duty may result in security-related liability. In most states, the innkeepers' duty or standard of care is legally defined as taking reasonable care to protect against foreseeable acts. There is probably no concept that has affected the lodging industry more than the court interpretation of reasonable care. Unfortunately for the innkeeper, there is no concise and clear-cut determination of what a court or jury may consider reasonable care in any given case. Whether reasonable care is exercised depends on the facts and circumstances in each case. Like reasonable care, foreseeability is an imprecise term. Courts and juries may consider certain consequences foreseeable at some properties and not at others. Factors that may help determine foreseeability at a given property include the prior incidence of that type or similar types of crime on the premises, the prior incidence of all types of crime on the premises, and (in an increasing number of cases) the crime rate of the surrounding community. The practical result of many court and jury decisions as they relate to foreseeability has been to expand the innkeeper's duty to include being aware of criminal activities both on- and off-premises. For example, if certain crimes are taking place in a community, a court or jury might decide that a reasonable innkeeper should foresee the possibility of a similar crime happening on-premises; if such a crime does indeed occur on-premises and the victim alleges negligence on the innkeeper's part in not taking reasonable steps to prevent such a crime, it may be difficult for the 294

innkeeper to plead successfully that he or she did not know about the crimes in the community if they were generally known. Simply failing in a duty does not in itself establish liability for negligence. The breach of a duty to exercise reasonable care must be shown to be the underlying proximate cause of an incident. Proximate cause, sometimes called legal cause, is usually defined as that primary moving predominating cause from which an injury follows as a natural, direct, and immediate consequence, and without which the injury would not have occurred. It is not sufficient that the defendant's conduct has been one of the causes of the plaintiff's injury. It must be the proximate cause, which is sometimes said to depend on whether the conduct has been so significant and important a cause that the defendant should be legally responsible. A proximate cause of an incident need not be its only cause.

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Foreseeability is again a factor. Negligence involves a foreseeable risk, a threatened danger of injury, and an injury that is caused by conduct unreasonable in proportion to the foreseeable danger. For example, if someone carelessly leaves a can of gasoline near an open flame and the gas then explodes, causing injury, a jury might find that such an act created a foreseeable risk of harm and that the injury was caused by conduct unreasonable in proportion to the foreseeable risk.

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Suits alleging negligence request that the defendant be required to pay damages. There are two types of damages: compensatory and punitive. Compensatory damages are awarded to compensate the plaintiff for pain and suffering, loss of income during a period of absence from work, medical and hospital expenses, and recuperative facility or home-service expenses. Compensatory damages may sometimes be covered, perhaps after the payment of a deductible, by an individual's or corporation's liability insurance policy. In recent years, there has been a trend within the courts for juries to assess punitive damages in addition to compensatory damages. Punitive damages are damages awarded against a person to punish him or her for outrageous conduct. The chief purpose of punitive damages is to inflict punishment as an example and a deterrent to similar conduct. Some courts have allowed insurance coverage for punitive damages under certain circumstances, while other courts have disallowed insurance coverage of punitive damages as a matter of public policy. The size of punitive damage awards can be substantial, sometimes totaling several million dollars. The court in which a suit or case is first tried is often called the trial court. The suit is filed by the plaintiff against the defendant. At the commencement of a lawsuit, the defendant can ask for dismissal of the complaint. If the allegations in the plaintiff's complaint fail to establish a valid legal claim or the defendant has an absolute affirmative defense, the complaint should be dismissed. After each party has had an opportunity to discover the facts of the case, but before the case is tried, either the plaintiff or the defendant can ask for a summary judgment. A defendant can be granted summary judgment if, upon undisputed facts, the plaintiff fails to meet the factual and legal requirements to establish the case. A plaintiff can be granted summary judgment if, upon undisputed facts, the defendant's liability is absolutethat is, the plaintiff has a valid legal claim supported by the facts and no defense is possible. The jury will then deliberate only the amount of damages to be awarded. After the close of proofs offered in evidence, either the plaintiff or defendant can ask for a directed verdict. The defendant can contend that it should be granted a directed verdict because the plaintiff failed to prove its cause of action. The plaintiff can request a directed verdict claiming that the defendant has been unable to establish a defense. Directed verdicts are rendered by judges, not juries. If the case goes to the jury and the jury returns a decision, the losing party can ask for judgment n.o.v. (notwithstanding the verdict) and/or a new trial. In granting judgment n.o.v., the trial judge overrules all or part of the jury verdict. The judge can also grant a new trial. Whichever party loses the suit can appeal the decision. The party appealing is the appellant; the party appealed against is the appellee or respondent.

Section Keywords defendant The side the suit is brought against. reasonable care Actions that are ordinary or usual to protect against a foreseeable eventthe central legal issue being that innkeepers owe a duty of care to all persons on their property. Failure to meet this duty may result in security-related liability. foreseeability The reasonable likelihood that a specific future incident could have been foreseen and, therefore, preventedbased on knowledge of past similar incidents on the premises or in the surrounding community. proximate cause The primary or predominating cause from which an injury follows as a natural, 297

direct, and immediate consequence, and without which the injury would not have occurred. Also known as legal cause. legal cause The primary or predominating cause from which an injury follows as a natural, direct, and immediate consequence, and without which the injury would not have occurred. Also known as proximate cause. Negligence Failure to exercise the care that a reasonably prudent person would exercise under like or similar circumstances. damages Monetary awards paid by the defendant to compensate the plaintiff, to punish the defendant, or both. Compensatory damages Damages awarded to compensate the plaintiff for pain and suffering, loss of income during a period of absence from work, medical and hospital expenses, and recuperative facility or home-service expenses. Punitive damages Damages awarded against a person as punishment for outrageous conduct; also acts as a deterrent to similar conduct. trial court The court in which a suit or case is first tried. summary judgment A judgment granted (1) to the defendant when the plaintiff fails to meet the factual and legal requirements to establish its case, or (2) to the plaintiff when a valid legal claim exists supported by the facts with no possible defense. directed verdict An immediate decision rendered by a judge after the close of evidence, because either side failed to prove its cause. judgment n.o.v. (notwithstanding the verdict) A judgment by a trial judge that overrules all or part of the jury verdict. appellant The party appealing a previous court decision. appellee The party appealed against. Also known as the respondent. respondent The party appealed against. Also known as the appellee.

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Summary From the earliest days of the hospitality industry, one of the most important duties of an innkeeper has been to protect guests from harm while on the property. Although interpretations of protection may vary from state to state, every legal jurisdiction imposes some form of security obligation on hotels. Of course, the industry's concern with security has increased greatly since the terrorist attacks of September 11, 2001. A hotel's security program should stress the prevention of security problems. It is far more desirable to keep security incidents from occurring than to catch a criminal after a crime has been committed. Certain actions and procedures may help to prevent or discourage incidents. Nonetheless, it must be recognized that not all crime is preventable. There are many areas that require security control in a hotel, including offices, pool and fitness centers, meeting rooms, storerooms and lockers, and other areas. Guestroom access security is the most common security need, however. Electronic guestroom locks have replaced mechanical systems in most lodging properties. Electronic systems have great flexibility; different key types can be issued to guests and hotel employees. Typically, these systems can record every authorized entry and every unauthorized entry attempt. Guestroom door locks may include chains or other backup locks on the inside of the door, so that guests can control access once they are in the room. Most guestroom locks have a deadbolt mechanism of some type. By their nature and history, hotels hold themselves open for public accommodation. However, hotels are private property, and therefore people can be excluded if they have no specific reason for being on the premises. Staff training should include how to identify people who may not belong at the hotel. For many hotels, surveillance systems involving video cameras, motion detectors, and other security devices assist in this effort. Some hotels have signs posted stating that they are private property. This public warning may be required to take advantage of local trespass laws. Perimeter and grounds control can take many forms. Surveillance systems are very useful in providing security monitoring of such outdoor areas as parking lots, pools, tennis courts, and other areas. Parking lots should be well-lit, and may also have gates to control traffic; sometimes these gates are staffed for extra protection. Fences are often needed to separate the hotel from its neighbors. The hotel management should train valet parking attendants, landscape staff, maintenance staff, and others to watch for unauthorized people on the grounds. Important devices for securing guest assets are the hotel safe deposit boxes and, for those hotels that offer them, in-room safes. All states require hotels to provide some sort of safe deposit box facility for guests at no charge. Hotels must also protect the assets of employees. Employee changing and locker rooms should be secure and safe. Many hotels provide locks for employees. Most departments have secure storage areas for women's purses and other items that may be needed during the day. Good front desk designs allow for lockable drawers at the front desk or in a nearby area for use by employees. When hotel guests use payment cards to settle purchases, a whole series of security issues arise because these cards contain sensitive information. Staff must be trained in proper procedures for safeguarding transaction information. In addition, the payment card industry imposes mandatory software and hardware protocols dealing with the storage and transmission of payment card data. Hotel staff must be especially sensitive to the fact that guest information, in the wrong hands, can help a criminal facilitate identity theft. For this reason, the hotel must safeguard files and business records. Every hotel will have emergencies. They may be injuries, robberies, destruction of assets, fires, or other situations that require extraordinary action on the part of the hotel staff. The hotel should have well299

documented procedures for all anticipated emergencies. One of the most important emergency procedures is to assist guests with disabilities during an emergency. The hotel must have a plan in place for giving guests medical assistance when necessary. Guests can be referred to doctors or hospitals, or in real emergencies, the local emergency medical service (EMS) should be contacted. However, there should be clear instructions to employees on when to call for EMS assistance. All lodging properties should keep good security records. Security records are important for several reasons. First, they allow hotel management to track security issues. Second, they help protect the hotel from legal action. Third, they may assist the hotel with insurance claims, either by the hotel's insurance carrier or a guest's. Security records can present the hotel's view of what happened. This is especially helpful when hotel staff members are called upon to describe a security incident that occurred many months ago. Whether or not a hotel has a full-time security staff, no security staff can be everywhere at once. Therefore, every hotel employee needs to be trained to identify security issues and to know what to do when they are discovered. Training can include company-provided security training programs, as well as visits by local police departments. All employees should be given a thorough security orientation at the time they are hired and should be regularly exposed to an ongoing security education program throughout their term of employment. Comprehensive training should include all aspects of the protection of guests, the general public, employees, and the assets of guests, employees, and the property. When a property uses an in-house security staff, it is obvious to all concerned that the property is responsible for the actions of its staff. The property cannot evade this responsibility merely by using offduty officers or a contract security service, because these security officers are usually considered the hotel's agents. If the security officers are negligent, the property may be held liable. Hiring a security service does not relieve a property of its legal responsibility to provide reasonable care. The use of off-duty police officers poses certain potential legal problems as well. If an off-duty officer uses his or her legal authority to arrest someone who then proves that the arrest was inappropriate, whose agent is the officer: the community's or the property's? In some cases, the officer is considered the property's agent. This means the property could be held liable for false arrest and false imprisonment. Similar liability could result if an armed officer unlawfully injures someone. The presence of a uniformed security officer may connote to some people the image of a public law enforcement officer. However, a hotel security officer, in the absence of any special commission, deputization, ordinance, or state statute, possesses no greater authority than any other private citizen. However, because the security officer can be involved in protective functions on a daily basis, he or she may be in a position to use certain powers more than most other private citizens. The exercise of these powers may involve nothing more than simply stopping undesired conduct, or it may involve making a citizen's arrest. In all actions that interfere with the rights of others, the security officer should endeavor to obtain consent and voluntary cooperation from the person being interfered with. Criminal statutes set limits on the behavior of lodging security officers. Activity beyond these limits may result in criminal charges being filed against the officers for assault, battery, manslaughter, or other crimes. Every state has its own statutes and court rulings on innkeeper laws. These laws deal with the rights and responsibilities of innkeepers and can be fairly extensive. Although such laws almost invariably deal with the same general topics, they can differ from state to state. Lodging management and security personnel should read the innkeeper statutory laws of their state. The understanding gained from this information can contribute to the development of a more effective security program. 300

Internet Sites For more information, visit the following Internet sites. Remember that Internet addresses can change without notice. If the site is no longer there, you can use a search engine to look for additional sites. American Hotel & Lodging Association (AH&LA) American Hotel & Lodging Educational Institute American Society of Travel Agents (ASTA) CISA Security Products, Inc. FindLaw: Internet legal resources International Association of Chiefs of Police International Association of Professional Security Consultants International Foundation for Protection Officers National Crime Prevention Council National Fire Protection Association (NFPA) National Institute of Justice

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Case Study 1 Steve's Royal Problem Steve Tritsch was enjoying his first month as a full-fledged GM. He'd enjoyed his previous position at a large downtown property in Philadelphia. In fact, his GM there had been a valuable reference for his new job. But it was exciting to now be out on his own. Although the Royal Court was a smaller property, with 198 rooms, it was still a full-service hotel with numerous strengths: it was in a prime location just off the expressway, it was a well-known brand with a national reputation, and it seemed to have an excellent, well-trained staff. The only real problem was financial. Apparently, the previous GM had not been able to turn those strengths into a sufficient number of bookings. Steve's job was to keep expenses down, increase revenue as much as possible, and turn the Royal Court around. After 30 days on the job, he was well on his way to turning those goals into realities. Then the letter from Lawhead, Alexander, and Fisk arrived. Apparently, a female guest had her purse snatched in the hotel's parking lot three months ago, on June 4. Now her attorneys were threatening to file suit unless the Royal Court made restitution. They requested payment of $25,000 as compensation for their client's loss of property, multiple injuries, and pain and suffering. Steve took a deep breath. He knew what writing a check for $25,000 would do to his property's struggling bottom line: $25,000 represented an awful lot of room nightsespecially when his insurance deductible was twice that amount. But he also wondered if the letter might be nothing more than an empty threat. He had to get the facts. First, he checked the previous GM's files for any record of the incident. Although he did find one folder labeled "On-Premises Security," it contained only a form letter of dismissal that had apparently been sent to all of the hotel's security staff this past March, six months ago. He also paged through the previous GM's planner and found no notations regarding a June 4 incident. Increasingly frustrated, he dialed his executive housekeeper, a 15-year veteran who seemed to have an almost infallible memory. "Ginnie, do you remember anything about a purse snatching earlier this year?" Steve asked. "You'll have to be more specific than that, Steve," she said. "There was one in late winter that happened in the corridor upstairs, and there was another one in June. That was out in the parking lot." "So, it's true," Steve said. "A guest got injured during a purse snatching on our property." "Well, there were injuries," Ginnie began, "but I seem to remember that she wasn't exactly a guest. I'd want to check on that." "Thanks. I'll take care of it," ended Steve. Steve picked up the letter and walked down to the front desk. Malia Etoise, another long-time staff member, was working this afternoon. "Hi, Malia. I need to find out if," he glanced down at the letter, "a Lauren Heidegger was a guest here on June third or fourth." Malia entered the necessary information into her computer terminal. "Hmm," she began, "I'm not showing a Lauren Heidegger or any Heideggers for those dates. But for some reason that name's ringing a bell." "She's claiming to have been the victim of a purse snatching on June 4," Steve prompted.

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"Oh, I remember that," Malia said, nodding her head. "It was awful. She came running in here and her knees were bleeding and her dress was torn. Once all the other women heard about it, there was total chaos for a while." "All the other women?" Steve asked. "Mrs. Heidegger was here for a women's luncheon of some kind. I don't remember all the details. But once the word spread, women just streamed out of the Briar Room and filled the lobby wanting to know everything that happened, wanting us to call the police." "Which you did, of course," Steve stated in a matter-of-fact tone. Malia paused for a moment. "Yes, that time I'm sure we did call the police." "That time? So, there were other incidents when you didn't call the police?" Steve asked. Malia rolled her eyes and nodded. "Not my choice. But the way it was explained to me was that all police calls show up in the newspaper, and your predecessor didn't want that kind of publicity." Steve returned to his office and fell into his chair, not certain what his next step should be. It certainly sounded as if the incident had occurred on Royal Court property and that there were witnesses to that fact. But Mrs. Heidegger wasn't a guest after all; maybe the property wasn't liable. Besides, the previous GM hadn't even felt the incident warranted a written record. At Steve's former job, the hotel was large enough to afford a full-time security staff and he hadn't paid much attention to their work. Now, it seemed the responsibility for security rested firmly on his shoulders, but he was stymied. "Maybe Carson has some advice for me," Steve thought, recalling how his former boss had gone out of his way to be a mentor for him. He picked up the phone. "That's a tough spot," Carson agreed. "But I'm sure you'll handle it fine." "Great," Steve said, sounding less than confident. "Where do I go from here?" "I'll lay it out for you," Carson replied. "First, call the legal department at the corporate office. Let them know about the letter and that you're researching the matter. They may ask a lot of questions you can't answer yet, but you'll get the answers as you continue the investigation." "To me the only real question is: do we settle or go to court?" Steve remarked curtly. Carson calmly replied, "But you can't answer that until you know how strong your position is. You need to find out whether your operation has taken 'reasonable care.' There aren't any hard-and-fast rules about what that isit can vary from community to community. You need to find out what reasonable care means for your location. "First, contact the police department and get a computer print-out of all the calls made to your address. They can probably do it while you wait. Now, some incidents on that list may not really involve your hotel at allmaybe there was a car accident on the street and the driver came in to use the phone, that kind of thing. You'll need to go through the list and find out which incidents do apply. "Next, I'd call up the local newspaper and ask them to search their morgue for all of the stories with the name of your hotel in it. Chances are, any problems that would generate a police call would also show up 303

in the newspaper. There might even be some mentions in the paper that didn't involve the police. Give the newspaper's librarian a couple of days to get the information you need. "While you're waiting, though, I'd recommend talking to some of the other GMs in your area. Ask them what types of crime problems they've had or are having. Some might not want to talk specifically about their own operationyou know, nobody wants to give the impression that their place isn't as safe as can bebut you should be able to get a good feel about what kind of neighborhood you're in. "You've already started talking to your staff, and that's good. I'd suggest that you do more of that. Just walk around and ask your people what incidents they might remember, what their overall impression is of hotel security and crime in the area." "Carson," Steve interrupted, "you and I both know that perceptions aren't always accurate. They're subjective." "That's true," Carson replied. "But, accurate or not, do you want a dozen members of your staff on the witness stand telling a jury that they didn't feel safe at the Royal Court Hotel? I don't think so. Better to find out sooner than later." "I understand," Steve sighed. "One last thing," Carson added. "Drive around your neighborhood and try to see it through the eyes of a plaintiff's attorney who wants to prove negligence. Is yours the only property without a fence? Without security lighting? In other words, does it look as if you care about security?" The next few days proved both valuable and anxiety-filled. The police call sheet noted only the June purse snatching, not the late-winter incident that Ginnie remembered. But it also listed three car burglaries in the parking lot, one break-in during a wedding reception (in which the bride and groom's wedding gifts and honeymoon luggage were stolen), some vending machine vandalism, and two calls in response to guestroom parties that resulted in property damage. All during the last 12 months. The first local GM Steve called began the conversation by thanking Steve's predecessor. "If he hadn't let those three security officers go," she said, "I'd still be reviewing rsums." She went on to explain that a rise in criminal activity throughout the area had led most of the other hotels to actually increase their security. As far as she knew, Royal Court was the only property to eliminate staffand she had immediately added two of them to her payroll. Another property down the road had hired the third security officer. "I think a lot of us felt he was just shooting himself in the foot," she admitted. "Sure, he saved some money up frontand I know things have been tight for everybodybut...." She didn't have to finish the sentence. Steve was beginning to understand. Other incidents surfaced once Steve began chatting with his staff. Some tires were slashed by vandals. Some fights erupted in the bar. Malia recalled that there had even been rumors that the Royal Court recently had a reputation as a favored place to buy drugs for dealers who wanted fast interstate access. That activity had diminished, though, when the Carriage Bridge Hotel across the street started offering doughnuts and coffee to the police working the night shift; the close proximity of a squad car was enough to scare the dealers awayat least at night. Unfortunately, that didn't completely convince the staff at the Royal Court. Some employees continue to ask not to work the night shift and others only enter and leave the hotel in pairs. 304

The newspaper search only confirmed what Steve had already learned: the Royal Court had seen more than its share of security problems. Apparently, he'd just been lucky in not seeing any new incidents during his first 30 days on the job. He realized that luck was not good enough. Not only did he have to present the facts of his investigation to the corporate legal department along with his recommendation, he also had to implement an effective security program immediately. With his notes in front of him, Steve picked up the telephone and placed a call to the corporate office. Discussion Questions 1. What evidence can Steve share with the corporate legal department that would support a recommendation either to settle for $25,000 or to take the case to court?

2. What steps can Steve and his staff take to effectively reduce the number of security incidents at the Royal Court, while still working to keep expenses to a minimum?

Case Number: 3871CA The following industry experts helped generate and develop this case: Wendell Couch, ARM, CHA, Director of Technical Services for the Risk Management Department of Bass Hotels & Resorts; and Raymond C. Ellis, Jr., CHE, CHTP, CLSD, Professor, Conrad N. Hilton College, University of Houston, Director, Loss Prevention Management Institute.

Case Study 2 Doughnuts and Dilemmas Phil Watson, the general manager of the Bluestone Hotel, was just settling down to some early morning paperwork when the buzzer on his intercom sounded. He pushed the speaker button: "Yes, Jean?" "There's a Douglas Koneval on line two. He wants to know if you've still got 'Calamity Jane' in your 'bag.' He said you'd know what he's talking about." Phil chuckled. "Put him through, put him through." Phil waited for the muffled click, and then said: "Doug!" "Phil! You still trying to make putts with that beat-up old putter of yours!?" "Hey, that putter was good enough to send you back to the clubhouse a broken and defeated man! How've you been? I haven't heard from you in a while." "Actually, I've been pretty busy," Doug said. "You heard I'm at the Wellington now, right?" The Wellington was an independent hotel upstate. "No, I didn't know that." "Yes, I took the GM job a couple of months ago." 305

"Your first job as a general manager! That's great! How's it working out for you?" "Well, that's why I'm calling. Things have been going pretty smoothly so farthere's a good staff here, and I've got ideas for improving some things, but something happened yesterday that got me thinking about security issues here at the hotel. It was nothing majorwe had a loud guest get a little belligerent when we asked him to quiet downbut it hit me that I don't have a contact at the local police department yet and I really don't know how to go about making one. You've been at the Bluestone for a lot of years, and I know you have an excellent relationship with the police. I was hoping I could pick your brain a bit this morning and get some ideas on how I can establish a good relationship with the police here in my little community." Phil laughed. "Well, I don't know that I've got anything spectacular to offer, but I can share some basics with you that just about any general manager would probably try." "That's just what I need." "Well," Phil began, "the first thing I'd do is arrange to have lunch with the police chief. I can't rememberdoes the Wellington have F&B?" "Yes, we have a nice little restaurant on-site." "Well, I'd invite him to the restaurant. Is the police chief a 'him' or a 'her,' by the way?" "It's a 'him,'" Doug replied. "Malcolm Ramsey is his name. I've never met him, but I've heard he's an okay guy to deal with." "Invite Malcolm to the restaurant, have a nice lunch, and just introduce yourself and get to know him a little. If he has the time, ask him to walk around the property with you after lunch and point out any security concerns you should be aware of." "Great idea! I could even have him write something up for me, a report that I could" "Whoa, stop right there!" Phil interjected. "You do not want anything in writing from Malcolm." "I don't? Why not? He might come up with some great suggestions that would really make the property safe." "Yes, he might, but he might also come up with suggestions that you could never afford to implement. If you have a written report lying around with some security advice in it that you didn't act on and something happens at the hotel" Phil shrugged. "You could be in serious trouble if that report winds up in court." "Good point. Okay, nothing in writing. What else should I do?" "Well, let Malcolm know that you're interested in a good relationship with his department and that you're willing to do what you can to accommodate his officers. Let him know that officers out on patrol are welcome to stop by and use the hotel's restrooms, for example. If the officers are tired of writing out police reports with their clipboards balanced on their knees or on steering wheels, they can come by and use a table in the employee breakroom. And they're welcome to just stop by for coffee and pastries." "Doughnuts still work," Doug laughed. 306

"Yes, they do," Phil agreed. "And little courtesies can pay big dividends when something happens at your property. Three weeks ago we had a 'domestic situation' occur in one of our rooms. Our front desk got a call around midnight'Hey, there's a racket going on next door, I can't sleep'and Sylvia at the front desk says, 'Okay, I'll take care of it.' She calls the room410, I think it wasand asks them to pipe down. She gets a response like: 'Oh, no problem. Sorry,' et cetera, et cetera. A few minutes later, the phone rings again'Hey, they're still going at it in Room 410; now some woman's crying in there'so Sylvia contacts the security guard and the manager on duty, Bret Russell. The two of them go up to the room and knock on the door. 'What's going on? Is everyone okay?' 'Yeah, yeah,' the man inside says, 'we're just arguing a little bit.' 'Open the door, please.' So the door opens and this guy is standing there in his underwear, the desk lamp's turned over, and a woman's standing on the other side of the bed in a nightshirt, a hand cupped over one eye. 'Ma'am, are you okay?' 'Yeah, I'm okay, we're just having a little disagreement, that's all. Everything's cool.' 'Are you sure?' 'Yeah, we're done.' 'We'll pay for the damages,' the guy says, so Bret says, 'All right, we'll leave, but take it easy in here, okay?' 'Sure thing, we're sorry,' the guy says. So Bret and the security guard leave the room and they don't even get all the way down the hall to the elevator before they hear the guy start yelling again and another lamp go over. 'That's it,' Bret says, 'we're calling the police.' "And the officers were great. Two squad cars were at the hotel within five minutes, and ten minutes later the husband was in one of them, on his way to jail. The other officer stayed with the wife while she packed and went to the front desk to pay the bill, then he took her to a shelter for battered women. The whole thing was over in 20 minutes and they handled it beautifully. Real quiet. None of the other guests even knew the officers had been there." "That's the kind of cooperation I'm looking for," Doug said. "What about hiring off-duty police officers for hotel security work? Is that a good idea?" "Two words," Phil replied. "'No guns.'" "'No guns'?" "That's right. Off-duty officers can be good additions to your staffif you tell them that you don't want guns on your property. It's a liability issue. Even though these officers are on the city's police force, when you hire them, they're working for you. If they accidentally shoot an innocent bystander, the hotel is on the hook, not the city." "That's good to know," Doug said. "Should I just approach the officers individually with offers?" "I'd ask the chief about it during your lunch with him. Just tell him what you are considering, and ask him what his policy is. Some police departments don't allow their officers to do freelance security work. At the other extreme, some departments have a sergeant in charge of evenly distributing that kind of work among the officers. Other departments let individual officers cut their own deals." "You've given me a lot to think about," Doug said, in that tone of voice people get when they are winding down their phone call. "I really want to get started on the right foot with Malcolm. A good relationship with the police is really important." Phil took his cue to sum up. "Well, the thing to do first is to set up a lunch with Malcolm and let him know that you want to do what it takes to have a positive working relationship with his department." "Hey, thanks for the time, Phil. I gotta run, but I really appreciate your ideas. I'll let you know how things work out." 307

"Do that, Doug, and best of luck to you. I know you'll do well." Phil no sooner hung up the telephone when the intercom buzzer sounded again. "Yes, Jean?" "Lieutenant Foster is here to see you." What a coincidence, Phil thought. "Send him in, please." The office door opened and Jean showed in one of the lieutenants on the local police force. Phil came around from behind his desk and shook his hand warmly. "Hi, Glenn, nice to see you again. What brings you out our way?" "Good morning, Phil." Glenn took a seat in one of the two chairs in front of Phil's desk. Phil, rather than sit behind his desk, sat in the other. "I got a problem that maybe you can help me with," Glenn continued. "The FBI called me a few minutes ago, looking for," Glenn paused to pull a notebook out of the inside pocket of his sport coat"looking for a 'Ruben Drosha.' I guess this guy's really bad news. We need to know if he's at the hotel, what phone calls he's made, and his credit card number. They're trying to track where he's been. You know the drill." Phil shifted in his seat uncomfortably. "Do you have subpoenas for any of that stuff, Glenn? Because if you don't, you know the only thing I can legally tell you is whether he's registered at the hotel." Glenn snorted. "Get real, Phil, this is a Saturday. All the judges are up north getting their fishing boats out about now. Like I said, the FBI just called me. I was hoping we could keep this on an informal, friendly basis." Phil shook his head. "Sorry, Glenn, but I just can't do it. I can tell you if he's here or not, and I can put a call through to his room if you want to talk to him, but that's as far as I can go without a court order." "I'm sorry you feel that way." Glenn stood up, signaling an end to the discussion. Phil stood up, too. "The chief will be disappointed. He thought you'd be more cooperative," Glenn said quietly. "But I guess you gotta do what you gotta do. Let's go check reservations and see if Drosha's here. It's not much, but at least I won't go back to the FBI entirely empty-handed." Discussion Questions 1. In addition to the things Phil mentioned to Doug, what other things can Doug do to promote a good relationship with his local police department?

2. The "domestic situation" that occurred at Phil's hotel could have turned out much worse. What are some of the things that could have gone wrong, had it been handled less effectively by hotel staff members?

3. Despite Phil's advice to Doug about establishing a good working relationship with the police, and despite Phil's wish to preserve his relationship with his own local police force, Phil turned down 308

Lieutenant Foster's request for information about a man wanted by the FBI. Why did Phil refuse to give Foster all of the information he wanted?

Case Number: 3871CB The following industry experts helped generate and develop this case: Wendell Couch, ARM, CHA, Director of Technical Services for the Risk Management Department of Bass Hotels & Resorts; and Raymond C. Ellis, Jr., CHE, CHTP, CLSD, Professor, Conrad N. Hilton College, University of Houston, Director, Loss Prevention Management Institute.

Case Study 3 The Case of the Missing Jewels It was 3:40 in the afternoon and I had been on property for less than an hour when I overheard a guest speaking rather loudly about something to do with the manager. It was a thick accent and coming from a woman who seemed to be rather upset. I couldn't tell if she was speaking English or not, but knew that the voice was one of an upset woman. Within a minute, the front desk agent had come to my side to tell me that there was an Italian guest who spoke little English demanding to speak to the manager. She wasn't clear on what the problem was, but told me that the woman was very upset. Turning around I saw an elegantly dressed, elderly woman looking directly at me. I knew right away that she was with the wedding party that was up from Los Angeles. The bride had selected the resort many months ago, and today was the big day. Thus far, however, many of the wedding guests were not satisfied with their experience at the resort. It seemed that they would rather have been at a five-star hotel than an oceanside resort. As I walked over to the guest, I made eye contact with her and smiled just a little. I greeted her with my usual, "How can I be of service to you?" After a long while of trying to decipher her limited English combined with Italian, it became clear that her jewelry was missing. She claimed that jewelry valued at more than $2,000 had been stolen by our room attendants. The guest was staying in the old south wing where the locks on the sliding glass are broken so it is not possible to lock the room completely. In addition, there are no safes in the rooms. However, the lodge does offer safe deposit boxes in the front office. We had never had a robbery before, but I never assume anything until I hear the whole story. I patiently listened to the guest as she raised her voice accusing the room attendants and demanding that we pay her for her loss. I informed her that we would need to treat this as a theft and call the police so she could file a report. First, though, I asked her whether there could be any other reason the jewelry might be missing, because our room attendants are quite responsible and honest. She insisted that the jewelry had been stolen from the room, and she was ready to file the police report. She also continued to demand that we compensate her immediately. I phoned the police. The guest went back to her room still visibly upset. 309

I wondered if the Lodge was responsible for the jewelry, since the registration card that the guest receives states that the property is not responsible for lost or stolen items. The police arrived within the half hour. It took a while to complete the report, given the limited English of the guest. It was now time for the wedding to begin, so the guest departed, although still very disgruntled. She let all of us know that we didn't meet her high standards for service and luxury accommodations. I knew that she would be back as soon as the wedding was over to demand compensation for her jewels. Later that afternoon, I retired to my office to consider my options. I wondered if this was really a security issue. I knew that the sliding glass door could be secured if the bar was placed behind the door once it was closed. Security guards were always scheduled from 9 P.M. to 8 A.M. , when the front office manager arrived. We had theft insurance, but it carried a high deductible. I wondered if the front desk agent who had checked in this guest had offered the use of the resort's safe deposit boxes. Later that evening, as I was making my rounds, the father of the bride called me aside. He told me that the jewels had actually been worn by his daughter for the wedding but that her aunt hadn't remembered giving permission the night before at the rehearsal dinner. I returned to my office and wondered whether I should let the police know that this was just another mistake. Discussion Questions 1. How should the Manager on Duty (MOD) have approached the irate guest?

2. What steps would you have taken to gather the relevant information from the guest?

3. Would you have called the police?

4. Is the property following a good procedure for storing and protecting guest valuables?

Case number: 608C11 This case also appears in Todd Comen, Case Studies in Front Office Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 2003).

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Review Questions 1. What are the general areas that should be considered for inclusion in a property's security program?

2. What are the main areas of vulnerability that create security problems for hotels?

3. Why is it important to cultivate a law enforcement liaison?

4. What are the various types of security staffing? What are the advantages and disadvantages of each?

5. Why is security training for the hotel staff so important? Why is good security recordkeeping so important?

6. Why is training critical to an effective security program? What specific elements should be incorporated into a training program? What are some of the myths about training?

7. Should security guards be armed? Why or why not?

8. What is the extent of a security officer's authority? What types of behavior can the officer legally engage in? What activities could result in civil and criminal liability?

9. What does the term team concept refer to in a security training program? What are some things that all employees can be instructed to do?

10. How can courts in different states come to different conclusions regarding similar issues?

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Chapter 8 - Front Office Accounting Outline Accounting Fundamentals

Accounts Folios Vouchers Points of Sale Ledgers

Creation and Maintenance of Accounts

Automated Recordkeeping Systems Charge Privileges Credit Monitoring Account Maintenance

Tracking Transactions

Cash Payment Charge Purchase Account Correction Account Allowance Account Transfer Cash Advance

Internal Control

Cash Banks Audit Controls

Settlement of Accounts Summary

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Competency 1 Objective: Summarize front office accounting fundamentals, including issues surrounding accounts, folios, vouchers, points of sale, and ledgers. While front office accounting may seem intimidating at first, it is actually grounded in straightforward logic and requires only basic math skills. A front office accounting system monitors and charts the transactions of guests and businesses, agencies, and other non-guests using the hotel's services and facilities. The front office's ability to perform accounting tasks in an accurate and complete manner will directly affect the hotel's ability to collect outstanding balances. This chapter examines the fundamentals of front office accounting, including creating and maintaining accounts, tracking transactions, following internal control procedures, and settling accounts. Accounting Fundamentals An effective front office accounting system captures and records guest data during each stage of the guest cycle. During the pre-arrival stage, a front office accounting system captures data related to the type of reservation guarantee and tracks prepayments and advance deposits. When a guest arrives at the front desk, the front office accounting system documents the application of room rate and tax at registration. During occupancy, the system tracks authorized guest purchases. Finally, the system helps ensure payment for outstanding goods and services at the time of check-out. The financial transactions of non-guests may also be processed within the parameters of front office accounting. By allowing authorized non-guest transactions, a hotel can promote its services and facilities to local businesses, or track transactions related to conference business. The area of non-guest accounts also includes the accounts of former guests that were not settled at check-out. The responsibility for collecting on non-guest accounts shifts from the front office to the back office accounting division. In brief, a front office accounting system:

Creates and maintains an accurate accounting record for each guest or non-guest account. Tracks financial transactions throughout the guest cycle. Ensures internal control over cash and non-cash transactions. Records settlement for all goods and services provided.

While there are generally accepted accounting principles for the lodging industry, front office accounting procedures are often uniquely tailored to each hotel operation. Accounting terminology and report formats often differ from hotel to hotel or chain to chain. The following sections provide a brief review of some general concepts of front office accounting. Accounts An account is a form on which financial data are accumulated and summarized. An account may be imagined as a bin or container that stores the results of various business transactions. The increases and decreases in an account are calculated and the resulting monetary amount is the account balance. Any financial transaction that occurs in a hotel may affect several accounts. Front office accounts are recordkeeping devices to store information about guest and non-guest financial transactions. 313

In its simplest written form, an account resembles the letter T:

This form of recording is called a T-account. The growing use of front office automated systems has diminished the popularity of T-accounts. However, T-accounts remain a useful tool for teaching bookkeeping principles. For a front office account, charges are increases in the account balance and are entered on the left side of the T. Payments are decreases in the account balance and are entered on the right side of the T. The account balance is calculated by subtracting the T-account right-side total from the left-side total. Front office accounting documents typically use a journal form. In a non-automated or semi-automated recordkeeping system, a journal form might contain the following information:

Similar to a T-account, increases in the account balance are entered under charges, while decreases in the account balance are entered under payments. In a fully automated system, charges and payments may be listed in a single column with the amounts of payments placed within parentheses or noted with minus signs to indicate their effect (a decrease) on the account balance. In accounting terminology, the left side of an account is called the debit (dr) side and the right side is called the credit (cr) side. Despite their prominence in other branches of hospitality accounting, debits and credits play a relatively small role in front office accounting. Debits and credits do not imply anything good or bad about an account. The value of debits and credits results from the use of double-entry bookkeeping, which is the basis for accounting in all modern businesses. In double-entry bookkeeping, every transaction creates entries that affect at least two accounts. The sum of the debit entries created by a transaction must equal the sum of the credit entries created by that transaction. This fact forms the basis for an accounting process called the night audit. Guest Accounts. A guest account is a record of financial transactions that occur between a guest and the hotel. Guest accounts are created when guests guarantee their reservations or when they register at the front desk. During occupancy, the front office is responsible for and records all transactions affecting the balance of a guest account. The front office usually seeks payment for any outstanding guest account balance during the settlement stage of the guest cycle. Certain circumstances may require the guest to make a partial or full payment at other times during the guest cycle. For example, if the front office is to enforce the hotel's house limit, guests who exceed that limit may be asked to settle part or all of the outstanding balance. When there is a house limit, account settlement action is initiated when the account balance exceeds a predetermined limit, not at the time of check-out. Non-Guest Accounts. A hotel may extend in-house charge privileges to local businesses or agencies as a way to promote business. Management may also offer in-house charge privileges to groups sponsoring meetings at the hotel. In each of these cases, the front office will create a non-guest account to track deferred transactions. Non-guest accounts set up for local businesses and agencies are usually called house accounts or city accounts. Such accounts set up for groups are termed master accounts. 314

A non-guest account can also be created when a guest fails to settle his or her account at the time of departure. Whenever a guest's status changes from in-house to non-guest, the responsibility for account settlement shifts correspondingly from the front office to the back office accounting division. The hotel's accounting department normally bills non-guest accounts on a weekly or monthly basis, unlike guest accounts, which the hotel compiles daily. Folios Front office transactions are typically charted on account statements called folios. A folio is a statement of all transactions (debits and credits) affecting the balance of a single account. When an account is created, it is assigned a folio with a starting balance of zero. All transactions that increase (debits) or decrease (credits) the balance of the account are recorded on the folio. At settlement, a guest folio should be returned to a zero balance by cash payment or by transfer to an approved credit or debit card or direct billing account. The process of recording transactions on a folio is called posting. A transaction is posted when it has been recorded on the proper folio in the proper location, and a new balance has been determined. When posting transactions, the front office may rely on handwritten folios (if it uses a non-automated system), machineposted folios (with a semi-automated system), or computer-based electronic folios (with the accounting module of the hotel's fully automated property management system). Regardless of the posting technique or system used, the basic accounting information recorded on a folio remains the same. There are basically four types of folios used in front office accounting:

Guest folios: accounts assigned to individual persons or guestrooms Master folios: accounts assigned to more than one person or guestroom; usually reserved for group accounts Non-guest folios (also called semi-permanent folios): accounts assigned to non-guest businesses or agencies with charge privileges at the hotel Employee folios: accounts assigned to employees with charge privileges

Additional types of folios are frequently created by front office management to accommodate special circumstances or requests. For example, a business guest may request that his or her charges and payments be split between two personal folios: one to record expenses to be paid by the sponsoring business, and one to record personal expenses to be paid by the guest. In this situation, two folios are created for one guest. If the room and tax portion are to be separated from other charges, the room and tax is posted to the room folio. This is sometimes called the A folio. Food, beverage, telephone, and other charges are posted to the incidental folio or B folio. Every folio should have a unique identifier (e.g., serial number or code number). Folio identifiers are necessary for the following reasons. First, they serve as labels that help ensure that all folios are accounted for during an audit of front office transactions. Second, folio identifiers may be used to index information in automated systems. Automated systems frequently create folio identifiers when a reservation record is created. The reservation record is assigned an identifier that is carried forward to the front office system as the folio identifier. Finally, folio identifiers help provide a chain of documentation. Most hotels restrict the use of employee folios to those individuals who have been granted charge privileges for business reasons. For example, a sales manager may have charge privileges in the hotel's dining room to entertain clients. 315

Vouchers A voucher details a transaction to be posted to a front office account. This document lists detailed transaction information gathered at the source of the transaction, such as the hotel dining room or gift shop. The voucher is then sent to the front office for posting. For example, hotel revenue outlets use vouchers to notify the front office of guest charge purchases that require posting. Several types of vouchers are used in front office accounting, including cash vouchers, charge vouchers, transfer vouchers, allowance vouchers, and paid-out vouchers. Most automated front office systems require few vouchers, since revenue-outlet terminals interfaced with a front office computer are capable of electronically transmitting transaction information directly to electronic folios. In most hotels, the use of vouchers has been significantly reduced by the use of point-of-sale workstations that record the purchase transactions and transmit electronic information directly to folios. Points of Sale The term point of sale describes the physical location at which goods or services are purchased. Any hotel department that collects revenues for its goods or services is considered a revenue center and, thus, a point of sale. Large hotels typically support many points of sale, including restaurants, lounges, room service, laundry and valet service, parking garages, telephone service, fitness centers, athletic facilities, and shops. The front office accounting system must ensure that all charge purchases at these points of sale are posted to the proper guest or non-guest account whenever the point-of-sale systems are not interfaced with the hotel's property management system. Some hotels offer guest-operated devices that also function as points of sale. Similar to an actual revenue outlet, these devices result in charges that must be posted to guest folios. Three such devices are in-room movies, high-speed Internet systems, and in-room vending systems.

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The volume of goods and services purchased at scattered points of sale within the hotel requires a complex internal accounting system to ensure proper posting and documentation of sales transactions. Exhibit 1 charts the flow of information that results when a guest charges a restaurant purchase to his or her guest account. An automated point-of-sale (POS) system may allow remote terminals at the points of purchase to communicate directly with a front office system. Automated POS systems significantly reduce the amount of time required to post charge purchases to guest folios, the number of times each piece of data must be handled, and the number of posting errors and after-departure (late) charges. Overall, automation helps front office staff create a well-documented, legible folio statement with a minimum number of errors. No matter the location, points of sale must provide some basic information when posting a charge through a remote terminal or submitting a voucher to the front desk. The information includes the voucher or transaction number, the amount of the charge, name of the point-of-sale outlet, room number and name of the guest, and brief description of the charge. If the charge is being submitted by voucher, the signature of the guest and the identity of the employee submitting the charge are also required. If the charge is posted through a remote terminal, the employee identification is captured by the automated system and forwarded to the folio, along with the time of the posting. Posting through an automated terminal may require a guest signature on a sales slip or voucher for audit purposes or in case there is a dispute regarding the transaction or amount. Some POS systems allow the swipe of a guestroom key as sufficient verification for posting a charge. Ledgers A ledger is a summary grouping of accounts. The front office ledger is a collection of front office account folios. The folios represented in the front office are a part of the front office accounts receivable ledger. An account receivable represents money owed to the hotel. Front office accounting commonly separates accounts receivable into two subsidiary groups: the guest ledger (for guest receivables) and the city ledger (for non-guest receivables). Guest Ledger. The guest ledger refers to the set of guest accounts that corresponds to registered hotel guests or guests who have sent advance deposits. Guests who make appropriate credit arrangements at registration may be extended privileges to charge purchases to their individual account folios during their stay. Guests may also make payments against their outstanding balance at any time during occupancy. Guests' financial transactions are recorded onto guest ledger accounts to assist in tracking guest account balances. In some front office operations, the guest ledger may be called the transient ledger, front office ledger, or rooms ledger. When an advance deposit is received, it is posted to the guest ledger as a credit balance. When the guest arrives, the amount of the credit balance is diminished throughout the stay by the charges posted to the account. In hotels that have a lot of advance deposit activity (resorts, for example), the guest ledger is further divided into advance deposit and in-house guest ledgers. This makes recordkeeping for large amounts easier. In hotels that have few deposits, posting the deposits to the guest ledger usually provides sufficient financial control. For non-automated and semi-automated hotels, the credit may be posted to the guest's folio immediately or on an advance deposit ledger card. When the guest arrives, the deposit on the ledger card is transferred to the guest's folio. City Ledger. The city ledger, also called the non-guest ledger, is the collection of non-guest accounts. If a guest account is not settled in full by cash payment at check-out, the guest's folio balance is transferred from the guest ledger in the front office to the city ledger in the accounting division for collection. At the time of account transfer, the responsibility for account collection shifts from the front office to the accounting division (back office). The city ledger can contain credit card payment accounts, direct billing accounts, and accounts of past guests due for collection by the hotel. 317

Section Keywords outstanding balances The amount the guest owes the hotelor the amount the hotel owes the guest, in the event of a credit balance at settlement. account A form on which financial data are accumulated and summarized. account balance A summary of an account in terms of its resulting monetary amount; specifically, the difference between the total debits and total credits to an account. debit (dr) An entry on the left side of an account. credit (cr) An entry on the right side of an account. guest account A record of the financial transactions that occur between a guest and the hotel. non-guest account An account created to track the financial transactions of (1) a local business or agency with charge privileges at the hotel, (2) a group sponsoring a meeting at the hotel, or (3) a former guest with an outstanding account balance. folios A statement of all transactions affecting the balance of a single account. posting The process of recording transactions on a guest folio. Guest folios A form (paper or electronic) used to chart transactions on an account assigned to an individual person or guestroom. Master folios A folio used to chart transactions on an account assigned to more than one person or guestroom. Master folios are usually reserved for group accounts; they collect charges not appropriately posted elsewhere. Non-guest folios A folio used to chart transactions on an account assigned to (1) a local business or agency with charge privileges at the hotel, (2) a group sponsoring a meeting at the hotel, or (3) a former guest with an outstanding account balance. Also known as semi-permanent folios. Employee folios A folio used to chart transactions on an account assigned to an employee with charge purchase privileges at the hotel. voucher A document detailing a transaction to be posted to a front office account; used to communicate information from a point of sale to the front office. point-of-sale (POS) system An automated network that allows electronic cash registers at the hotel's points of sale to communicate directly with a front office system. 318

ledger A grouping of accounts. accounts receivable ledger A grouping of accounts receivable, including the guest ledger and the city ledger. account receivable An amount owed to the hotel. guest ledger the set of accounts for all guests currently registered at the hotel; also called the 'front office ledger', 'transient ledger', or 'rooms ledger'. city ledger The collection of all non-guest accounts, including house accounts and unsettled departed guest accounts.

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Competency 2 Objective: Describe the process of creating and maintaining front office accounts. Creation and Maintenance of Accounts The task of accurately and completely recording all transactions that affect guest ledger accounts is the responsibility of the front office. The front office also records all transactions that affect non-guest accounts. The back office accounting division is ultimately responsible for collection of non-guest ledger accounts. Guest folios are created during the reservations process or at the time of registration. To prepare a folio for use, information from the guest's reservation or registration record must be transferred to the folio. In a fully automated system, guest information is automatically transferred from an electronic reservation record or captured at registration and entered onto an electronic folio. Electronic folios are automatically cross-referenced with other computer-based records within the front office system. Unlike manual or semi-automated systems, automated systems can track an unlimited number of postings in each account created. In some systems, a preliminary electronic folio is created automatically and simultaneously with the reservation record. This enables postings to guest accounts prior to registration. Such items as prepayments and advance deposits can then be accurately monitored through electronic recordkeeping. A registration form can also be created within a fully automated system. In addition, automated systems can be programmed to create the proper number of folios for each guest at the time of registration, and can direct charges to the proper folio throughout occupancy. At check-in, reservations data are verified and combined with room rate information and the guest's assigned room number to create an in-house electronic folio. For a walk-in guest, equivalent information is captured during registration and entered into a front office terminal. Creating an electronic folio within a front office system can significantly reduce the possibility of transactional account entry errors. One of the major advantages of electronic data processing is that captured data need be handled only once. By having to handle data only once, an automated system can significantly reduce errors caused by repetitive data handling.

Automated Recordkeeping Systems Point-of-sale transactions may be automatically posted to an electronic folio. In a printed copy of a folio, debits (charges) and credits (payments) may appear in a single column with payments distinguished by parentheses or a minus sign. Printed folio copies may also be produced in the traditional multiple-column account format. It is unnecessary to manually maintain an account's previous balance in a fully automated 320

system, since computer-based systems maintain current balances for all folios. Exhibit 2 is an example of a guest folio used in a fully automated recordkeeping system. Charge Privileges To establish an in-house line of credit, a guest may be required to present an acceptable credit card or a direct billing authorization at the time of registration. Fully automated hotels allow credit to be established at the time the reservation is made. This is usually done by obtaining the number and expiration date of the guest's credit card and electronically transmitting this information to the credit card company with a request for an amount guarantee. Once a line of credit has been approved, guests are authorized to make charge purchases. These transactions are communicated manually by vouchers or electronically from remote points of sale locations to the front desk for proper account posting. Guests who use cash or debit cards to pay for accommodations at registration are typically not extended charge purchase privileges. These guests are typically called paid-in-advance (PIA) guests. In a fully automated front office accounting system, PIA accounts are typically set to a no-post status. Since pointof-sale terminals throughout the hotel have immediate access to stored account information, a no-post status account is one that cannot accept charge purchase transactions. This means that revenue center cashiers will not be able to post charges for a guest whose account has a no-post status. Many hotels ask guests who intend to pay by debit card to establish credit with a credit card at registration to establish account-posting privileges. Hotels must charge a debit card account with the exact amount due, since the transaction withdraws cash directly from the guest's savings or checking account. In non-automated and semi-automated properties, a PIA list is manually distributed to all revenue centers. While this list has the same effect as the computer no-post status, it may not be as easy to use or as current. Local businesses or residents may apply to the hotel and qualify for house or non-guest accounts. Charge purchases for house accounts, like those for guest accounts, move from the hotel's revenue centers to the front office for posting. Since all point-of-sale transaction vouchers are collected by the front office every day, it is logical for the front office to audit both guest and non-guest accounts. Credit Monitoring The front office must monitor guest and non-guest accounts to ensure they remain within acceptable credit limits. Typically, a line of credit is set for guests who establish charge privileges during the reservations or registration process. Guests who present an acceptable credit card at registration may be extended a line of credit equal to the floor limit authorized by the issuing credit card company. This means the front office may not have to seek approval on the credit card as long as the charges do not exceed an amount specified by the credit card company. However, the front office may still need to verify the card's validity. Guest and non-guest accounts with other approved credit arrangements are subject to limitations established by the front office. These internal credit restrictions are called house limits. Front office management may need to be notified when a front office account approaches its credit limit. Such accounts are called high-risk or high-balance accounts. The front office manager, or night auditor, is primarily responsible for identifying accounts that have reached or exceeded predetermined credit limits. The front office may deny additional charge purchase privileges to guests with high-balance accounts until the situation is resolved. Most front offices periodically review the guest ledger during the day to ensure that guests have not exceeded their approved credit limits. Automated front offices may have a computerized guest list printed on demand that highlights the names of guests whose accounts are near or over their approved credit limits. Front office management may ask the credit card company to authorize additional credit, or request the guest to make a partial payment to reduce the outstanding account balance. 321

In large hotels, there may be a full-time credit manager to review high-balance accounts. A credit manager may also request additional authorization from credit card companies for guests near or over their floor limits. In addition, it is the credit manager's responsibility to obtain settlement from present and past guests who have not settled their accounts. In small hotels, this responsibility is given either to the front desk manager or to someone in the accounting division. Account Maintenance A folio is used to record transactions that affect a front office account balance. Guest folios must be accurate, complete, and properly filed, since guests may inquire about their account balance or check out of the hotel with little or no advance notice. Transaction postings conform to a basic front office accounting formula. The accounting formula is:

Recall that debits increase the balance of an account, while credits decrease the account balance. This formula can be applied to the folio data shown in Exhibit 2. The guest registered on July 27. The first debita charge purchase of $14.25occurred that evening in the hotel's restaurant. Since the front office received no cash payment or credit, the first net outstanding balance on the account is $14.25:

Or, stated another way:

Later that evening, the night auditor posted the guest's room and room tax charges ($60) to the account. This transaction, which appears on the second line of the folio, results in a new net outstanding balance:

Next, the guest's long-distance telephone call was posted, resulting in a $6.38 debit posting. The front office later applied a miscellaneous credit (account allowance) of $18.38, and received a cash payment of $62.25 from the guest at check-out. When each of these transactions is applied, the front office posting formula yields a zero net outstanding balance for the account:

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At this point, the guest checks out of the hotel and the account is brought to a zero balance and is properly closed.

Section Keywords paid-in-advance (PIA) guests A guest who pays his or her room charges in cash during registration; PIA guests are often denied in-house credit. floor limit A limit assigned to hotels by credit card companies indicating the maximum amount in credit card charges the hotel is permitted to accept from a card member without special authorization. house limits A credit limit established by the hotel. high-balance accounts An account that has reached or exceeded a predetermined credit limit; typically identified by the night auditor; also called a 'high risk account'. front office accounting formula The formula used in posting transactions to front office accounts: Previous Balance + Debits - Credits = Net Outstanding Balance.

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Competency 3 Objective: Describe typical procedures for processing and tracking common front office accounting transactions. Tracking Transactions Charge purchase transactions must be correctly documented in order for the front office to properly maintain accounts. Front office staff relies on accounting vouchers to provide a reliable set of documentation. Even in automated hotels with POS systems communicating directly to the front office system, guests may still question charges when the folio is reviewed. A major concern of the front office accounting process involves the communication of transactional information from remote points of sale to the front office. The night audit is intended to verify transactional data to ensure that the front office collects accounts receivable balances for all goods and services the hotel provides. A transaction initiates activity within the front office accounting system. From an accounting perspective, nothing happens until a transaction occurs. For this reason, the front office accounting system can be described as a transactional accounting system. Proper posting procedures depend on the nature of the transaction and its monetary value. A transaction can be classified as:

Cash payment Charge purchase Account correction Account allowance Account transfer Cash advance

Each type of transaction will have a different effect on the front office accounting system. Each may be communicated to the front office through the use of a different type of voucher, which will help simplify eventual auditing procedures. Most semi-automated front offices require that each voucher be imprinted with transaction information by the front office posting machine. Imprinting provides visual proof that the nature and amount of the voucher were correctly posted to the guest's folio. This procedure also simplifies the night audit routine. Cash Payment Cash payments made at the front desk to reduce a guest's net outstanding balance are posted as credits to the guest or non-guest account, thereby decreasing the balance of the account. Since most guests establish credit by using a credit card at the time of check-in, the front office may use a cash voucher to support such transactions. Only cash payment transactions that take place at the front desk will create entries that appear on a front office account folio. Front office account balances are also affected by cash payments made to settle an account or to prepay accommodations. Guests who register and pay cash in advance for their stay may be given a copy of their folio during registration. The folio will have a zero ending balance as proof of cash payment. When cash is paid for goods or services at a location other than the front desk, no entry will appear on the account folio. The "account" for this transaction is created, increased, settled, and closed at the point of 324

sale, thereby eliminating the need for front office documentation or posting. For example, a cash payment for a guest's lunch in the hotel's restaurant would not appear on the guest's folio. In addition, some hotels sell items such as newspapers at the front desk. When guests pay for these items with cash, there is no charge to post to any account. Personal and traveler's checks are negotiable instruments and treated as cash by the front desk staff. However, they require a high level of scrutiny before the staff can accept them as payment of an account or exchange them for cash. Most hotels have a very specific procedure for accepting checks. It is customary for the name, address, and telephone number of the guest to be preprinted on the check. The bank name and branch identification, along with the check number, should also be preprinted. In addition, the bank account number and bank routing number must be clearly printed at the bottom of the check. Cashiers should verify the signature on the check with another form of identification, preferably one with a picture. The check should then be endorsed with a special stamp, requiring payment to the hotel only. Finally, the proof of identification, such as the driver's license number, should also be recorded on the check. Traveler's checks require the guest to countersign the instrument in front of the hotel cashier. Travelers sign the checks when they are issued as a security precaution. The hotel casher verifies the original signature against the guest's signature when the guest signs the traveler's check over to the hotel, to ensure that the signature is valid. An additional precaution should be taken with both personal and traveler's checks relating to the actual currency used. Cashiers should be sure the payment is in local currency, not foreign currency. If the instrument is issued in foreign currency, the cashier should calculate the currency conversion to local currency before payment is accepted. Most local newspapers show the daily current conversion factors of foreign currencies. This information can also be obtained from local banks. Hotels usually charge the guest a small fee for currency conversion. Many hotels use a check guarantee service to ensure that the checks they receive are good. When using a guarantee service, the account number, bank routing number, check number, and amount of the check are provided to the service. If the check is accepted, the service guarantees payment to the hotel. Guarantee services charge a fee to hotels, but in most cases hotels absorb the fee as a cost of doing business. Traveler's checks do not require guarantee services as long as the instrument is properly completed, signed, and countersigned. Charge Purchase Charge purchases represent deferred payment transactions. In a deferred payment transaction, the guest (buyer) receives goods and services from the hotel (seller), but does not pay for them at the time they are provided. A charge purchase transaction (debit) increases the outstanding balance of a folio account. If the transaction occurs somewhere other than at the front desk, it must be communicated to the front desk for proper folio posting. In non-automated and semi-automated properties, this communication is normally accomplished by means of a charge voucher, also referred to as an account receivable voucher. When the revenue center in which the charge originated uses a form to record the sale (for example, a guest check in the dining room), the form itself is usually considered a source document. To communicate the existence of this transaction, the support document (a voucher) is filled out and sent to the front desk for posting. Many non-automated and semi-automated hotels use a multi-part food and beverage check. When the guest signs the charge to his or her room, a copy of the check goes to the front desk for posting in place of a voucher. Many hotels contain retail stores the hotels do not own or operate. Instead, the hotels lease the stores to independent shopkeepers. The hotel and the shopkeepers usually form a business arrangement that allows 325

hotel guests to charge store purchases to their hotel guest account. Whenever this is the case, the hotel and shopkeepers must agree on a document-supported procedure for accurately tracking and posting purchase transactions. Once guest charges are posted, the hotel tends to become liable for settlement with shopkeepers for all shop charges posted (either manually or automatically) to guest accounts. It therefore becomes incumbent on the hotel to meticulously monitor and record all deferred guest account transactions. Hotel staff must clearly identify a proof-of-sale procedure and must establish a resolution process, in the event the guest disputes a transaction. When guests charge such shop purchases to their hotel guest account, shopkeepers must ask the guests to present a room key and/or an additional form of identification. If the shopkeeper's point-of-sale system is not linked to the hotel's front office system, the shopkeeper will likely contact the front desk and ask for account verification before completing the sale. The front desk agent will verify the guest's status, and the shopkeeper may also ask the guest to sign the receipt or sales voucher, even when the system has already accepted the charge. This is done to avoid guest disputes at a later time. When the shop's point-of-sale system is electronically linked to the hotel front office system, the shopkeeper can use the system to verify that a guest's name is associated with an authorized account (that is, that he or she is checked in with credit established). If the guest's account is not authorized to accept charge purchases (that is, the guest's account has a no-post status), the system will not accept the charge. The shopkeeper may fill out a charge voucher, which usually has two parts. The shopkeeper retains the original, and delivers the copy to the front desk as proof of sale. Once the guest account has been settled, the front desk transfers its copy to the accounting office as documentation supporting payment to the shopkeeper. Hotels are often not liable for shopkeeper charges presented for posting after the guest has settled his or her account and departed. Account Correction An account correction transaction resolves a posting error on a folio. By definition, an account correction is made on the same day the error is made, before the close of business (that is, before the night audit). An account correction can either increase or decrease an account balance, depending on the error. For instance, an account would need to be adjusted if a front desk agent inadvertently posted an incorrect charge for a particular guestroom. A correction voucher is used to document an account correction transaction. Usually the front desk agent posting the correction is asked to sign the correction voucher, and it may be presented to the front office manager or supervisor on duty for review and approval. Account Allowance Account allowances involve two types of transactions. One type of account allowance is a decrease in a folio balance for such purposes as compensation for poor service or rebates for coupon discounts. Another type of account allowance corrects a posting error detected after the close of business (that is, after the night audit). Such an error will be separately entered into the accounting records of the appropriate revenue centers, thereby also correcting their accounting records.

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An account allowance is documented by the use of an allowance voucher. Allowance vouchers normally require management approval. Exhibit 3 contains sample account correction and account allowance vouchers that may be used in a semi-automated property. Just as with correction vouchers, the front office agent posting the allowance may have to secure the front office manager's or supervisor's approval for the allowance voucher. Account Transfer

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Account transfers involve two different accounts and tend to have offsetting impacts on subsequent account balances. For example, when one guest offers to pay a charge posted to another guest's folio, the charge will need to be transferred from the first account to a second account. A transfer voucher supports the reduction in balance on the originating folio and the increase in balance on the destination folio. Cash Advance The difference between a cash advance and other types of transactions is that cash advances reflect cash flow out of the hotel, either directly to, or on behalf of, a guest. Cash advance transactions are considered debit transactions, since they increase a folio's outstanding balance. Cash advances are supported by cash advance vouchers. Cash disbursed by the front office on behalf of a guest (and charged to the guest's account as a cash advance) is typically called a paid-out. In some front office operations, a paid-out voucher is used instead of a cash advance voucher. In the past, front office staff often allowed guests to sign a paid-out slip and receive cash on account; this is no longer common practice. Many hotels refer guests requiring cash to bank automated teller machines (ATMs) located on, or nearby, the property. This reduces the amount of cash the hotel is required to hold in its banks and reduces the risk to the hotel if the guest leaves without settling his or her account. However, a guest who orders a floral delivery, for example, may request that the front desk agent accept the order and pay for the flowers at time of delivery. Since the guest most likely will not leave money at the front desk for this purpose, payment by the front office constitutes a cash advance on the guest's behalf. The front office may pay for the delivery on the presumption that the guest will reimburse the front office. Front office policy should dictate how cash advances are to be handled. Paid-outs always require a manager's approval before the cash is actually dispensed.

Section Keywords cash voucher A voucher used to support a cash payment transaction at the front desk. charge voucher A voucher used to support a charge purchase transaction that takes place somewhere other than the front desk; also referred to as an account receivable voucher. correction voucher A voucher used to support the correction of a posting error that is rectified before the close of business on the day the error was made. allowance voucher A voucher used to support an account allowance. transfer voucher A voucher used to support a reduction in balance on one folio and an equal increase in balance on another; used for transfers between guest accounts and for transfers from guest accounts to non-guest accounts when they are settled by the use of credit cards. cash advance vouchers A voucher used to support cash flow out of the hotel, either directly to, or on behalf of, a guest. paid-out Cash disbursed by the hotel on behalf of a guest and charged to the guest's account as a cash advance. 328

Competency 4 Objective: Describe internal control procedures for front office operations and explain typical settlement procedures. Internal Control Internal control in the front office involves:

Tracking transaction documentation Verifying account entries and balances Identifying vulnerabilities in the accounting system

Auditing is the process of verifying front office accounting records for accuracy and completeness. Each financial interaction produces paperwork that documents the nature and dollar amount of the transaction. For example, consider the transaction that occurs when a guest charges a meal to his or her individual folio. This transaction will likely be supported by the restaurant's guest check, cash register recording, and charge voucher. The charge voucher is prepared in the revenue center and sent to the front office as notification of the transaction. In a semi-automated front office, a front desk agent then retrieves the guest's folio, posts the charge purchase transaction, refiles the guest folio, and files the charge voucher. Later that day, the front office auditor ensures that all vouchers sent to the front office have been properly posted to the correct accounts. In the case of this example, the auditor will match the front office total of charges transferred from the dining room to the total reported by the dining room. Discrepancies in accounting procedures are easy to resolve when complete documentation is readily available to substantiate account entries. Cash Banks An important set of front office accounting control procedures involves the use of front office cashier banks. A cash bank is an amount of cash assigned to a cashier so that he or she can handle the various transactions that occur during a particular work shift. The hotel usually issues banks with a specific amount in them to cashiers. That amount is to be used for making change when guests settle their accounts, for processing paid-outs, and for providing other cash-related services during the shift. The bank limit is the amount the bank should have in it when it is issued at the beginning of the shift. Good control procedures typically require that cashiers sign for their bank at the beginning of their work shift and that only the person who signed for the bank have access to it during the shift. At the end of a work shift, each front office cashier is solely responsible for depositing all cash, checks, and other negotiable instruments received during the work shift and ensuring that the bank is restored to the bank limit amount. In hotels that do not assign individual banks, cashiers usually pass the banks to the next shift. In these cases, the cashier that has used the bank is required to verify the balance of the bank at the end of the shift, depositing any amounts over the bank limit in the hotel's safe. The cashier receiving the bank must also verify that the bank has the proper amount in it, since he or she is accepting responsibility for it. At the end of the shift, the cashier typically separates out the amount of the initial bank, and then places the remaining cash, checks, and other negotiable items (such as paid-out vouchers) in a specially designed cash voucher or front office cash envelope. The cashier normally itemizes and records the contents of the front office cash envelope on the outside of the envelope before dropping it into the front office vault. From an internal control perspective, at least one other employee should witness this cash banking procedure, and both employees should sign a log attesting that the drop was actually done and stating the time of the drop. 329

Monetary differences between the money placed in the front office cash envelope and the cashier's net cash receipts should be noted on the envelope as overages, shortages, or due backs. Net cash receipts are the amount of cash, checks, and other negotiable items in the cashier's drawer, minus the amount of the initial cash bank, plus the paid-outs. For example, assume the front office cashier began the work shift with a $175 cash bank. During the shift, the cashier made paid-outs totaling $49. At the end of the work shift, the amount of cash, checks, and other negotiable items in the cash drawer totals $952. To determine the amount of net cash receipts, the front office cashier would first add together the value of the cash, checks, and other negotiable items in the cash drawer ($952). The cashier would next subtract the value of the initial cash bank ($175). By adding the amount of paid-outs ($49), the front office cashier will arrive at a net cash receipt position ($826):

An overage occurs when, after the initial bank is removed, the total of the cash, checks, negotiables, and paid-outs in the cash drawer is greater than the net cash receipts. An overage can occur when a front desk agent receives a cash payment from a guest for more than the amount of the folio balance and returns less cash to the guest than required. A negotiable usually takes the form of a document or certificate that actually has a cash value to the hotel. For example, the guest may have a gift certificate that represents a prepayment to the hotel. The hotel cashier treats this coupon as cash. A shortage occurs when the total of the contents of the drawer is less than the net cash receipts. A shortage can occur when a front desk agent receives a cash payment from a guest for more than the amount of the folio balance and returns more cash than required. Neither an overage nor a shortage is typically considered "good" by front office management when evaluating the job performance of front office cashiers. Overages and shortages are determined by comparing the cash totals of the cashier's postings against the actual cash, checks, and negotiables in the cashier's bank. Good recordkeeping systems, whether they be non-automated, semiautomated, or fully automated, will provide proper cash posting documentation. Since cashiers deal with cash, it is essential to have proper procedures to ensure financial integrity at the front desk. A due back occurs when a cashier pays out more than he or she receives; in other words, there is not enough cash in the drawer to restore the initial bank. Due backs are not unusual in the front office. A special kind of due back may occur when a cashier accepts many checks and large bills during a shift. This can make it difficult to restore the initial bank without including the checks or large bills. Since checks and large bills are not very useful for processing transactions, they are usually deposited with other receipts. Consequently, the front office deposit may be greater than the cashier's net cash receipts, with the excess due back to the front office cashier's bank. Front office due backs are normally replaced with small bills and coins before the cashier's next work shift, thereby restoring the cash bank to its full and correct amount. Due backs do not reflect positively or negatively on the cashier's job performance, and may occur when net cash receipts are in or out of balance.

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Audit Controls A number of front office audit controls help ensure that front office staff members properly handle cash, guest accounts, and non-guest accounts. Publicly held lodging companies are required to have both their front and back office accounting records audited yearly by independent certified public accountants. In addition, companies with several lodging properties often employ internal auditors to make unannounced visits to individual properties for the purpose of auditing accounting records. In both instances, a report is completed for management and ownership review. Exhibit 4 presents one firm's internal control inspection checklist. The checklist includes items related to standard front office procedures designed to protect the integrity of front office operations. Settlement of Accounts The collection of payment for outstanding account balances is called account settlement. Settlement involves bringing an account balance to zero. An account can be brought to a zero balance as a result of a cash payment in full or a transfer to an approved direct billing or credit/debit card account. All guest accounts must be settled at the time of check-out. Transfers to approved deferred payment plans move outstanding guest folio balances from the guest ledger to the city ledger. Although guest account settlement normally occurs at check-out, guests may make payments against outstanding folio balances at any time. Non-guest folio balances may be initially billed on the day the transaction occurred. Settlement may be due in 15 to 30 days, depending on accounting department policy. For example, consider the case of a guest who makes a guaranteed reservation but does not show up, often called a no-show guest. The account cannot be settled at check-out, since the guest never registered. Instead, the front office sends a statement to the guest for the amount of the guarantee, hoping to collect the account balance in 15 to 30 days. Once the billing is sent, the account is often transferred to the accounts receivable department for collection. If the guarantee was made by credit card, the hotel may have an agreement with the credit card company to bill it for the no-show guest. The amount of the guarantee is then transferred to the credit card part of the accounts receivable ledger for collection. When an account is paid in full, most hotels show the final payment on the guest folio. This is handy for the guest, because it shows proof of payment. It also assists the hotel in the regular audit of accounts. Sometimes a guest settles the account but a charge is posted after the guest departs. This is called a late charge. Hotels work hard to prevent late charges, because guests do not receive them well. Guests may dispute or refuse to pay the late charges, often resulting in an adjustment by the hotel. An example of a typical late charge is a charge from the guest's in-room refreshment center that arrives at the front desk after the guest has departed.

Section Keywords cash bank An amount of money given to a cashier at the start of a work shift so that he or she can handle the various transactions that occur. The cashier is responsible for this cash bank and for all cash, checks, and other negotiable items received during the work shift. bank limit The amount of cash contained in a cashier bank when it is issued at the beginning of a work shift. Net cash receipts The amount of cash and checks in the cashier's drawer, minus the amount of the initial cash bank. 332

overage An imbalance that occurs when the total of cash and checks in a cash register drawer is greater than the initial bank plus net cash receipts. shortage An imbalance that occurs when the total of cash and checks in a cash register drawer is less than the initial bank plus net cash receipts. due back A situation that occurs when a cashier pays out more than he or she receives; the difference is due back to the cashier's cash bank. In the front office, due backs usually occur when a cashier accepts so many checks and large bills during a shift that he or she cannot restore the initial bank at the end of the shift without using the checks or large bills. late charge A charge posted to a guest account after the guest has settled the account and departed the hotel.

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Summary A front office accounting system monitors and charts the transactions of guests and businesses, agencies, and other non-guests using the hotel's services and facilities. The front office's ability to perform accounting tasks in an accurate and complete manner will directly affect the hotel's ability to collect outstanding balances. A front office accounting system is uniquely tailored to each hotel operation. Accounting system terminology and report formats often differ from hotel to hotel. In general, an account is a form on which financial data are accumulated and summarized. The increases and decreases in an account are calculated and the resulting monetary amount is the account balance. All of the financial transactions that occur in a hotel affect accounts. Front office accounts are recordkeeping devices used to store information about guest and non-guest financial transactions. For a front office account, charges are increases in the account balance and are entered on the left side of the "T" (when using a simple written T-account). Payments are decreases in the account balance and are entered on the right side of the "T." Front office accounting documents typically use a journal form. A guest account is a record of financial transactions between a guest and the hotel. Guest accounts are created when guests guarantee their reservations or when they register at the front desk. A hotel may also extend in-house charge privileges to local businesses or agencies as a means of promotion, or to groups sponsoring meetings at the hotel. The front office creates non-guest accounts (also called house accounts or city accounts) to track these transactions. Front office transactions are typically charted on account statements called folios. A folio is a statement of all transactions (debits and credits) affecting the balance of a single account. All transactions that increase (debit) or decrease (credit) the balance of the account are recorded on the folio. At settlement, a guest folio should be returned to a zero balance by cash payment or by transfer to an approved credit/debit card or direct billing account. The process of recording transactions on a folio is called posting. A transaction is posted when it has been recorded on the proper folio in the proper location, and a new balance has been determined. There are basically four types of folios used in the front office: guest folios, master folios, non-guest or semi-permanent folios, and employee folios. Additional types of folios are frequently created by front office management to accommodate special circumstances or requests. A voucher details a transaction to be posted to a front office account. This document lists detailed transaction information gathered at the source of the transaction. The voucher is then sent to the front office. Auditing is the process of verifying front office accounting records for accuracy and completeness. The term point of sale describes the location at which goods or services are purchased. Any hotel department that collects revenues for its goods or services is considered a revenue center and, thus, a point of sale. An automated point-of-sale (POS) system may allow remote terminals at the points of sale to communicate directly with a front office system. Automated POS systems may significantly reduce the amount of time required to post charge purchases to guest folios, the number of times each piece of data must be handled, and the number of posting errors and after-departure (late) charges. A ledger is a grouping of accounts. The front office ledger is a collection of front office account folios. The folios used in the front office form part of the front office accounts receivable ledger. An account receivable represents money owed to the hotel. Front office accounting commonly separates accounts receivable into two subsidiary groups: the guest ledger (for guest receivables) and the city ledger (for nonguest receivables). The guest ledger is the set of guest accounts that correspond to registered hotel guests. 334

Guests who make appropriate credit arrangements at registration may be extended privileges to charge purchases to their individual account folios. The city ledger, also called the non-guest ledger, is the collection of non-guest accounts. If a guest account is not settled in full at check-out, the guest's folio balance is transferred from the guest ledger in the front office to the city ledger in the accounting division for collection. Shops in the hotel may have arrangements to allow guests to charge purchases to their rooms. In these cases, the hotel posts the charges to the guests' accounts, collects the amount due from the guests, and pays the shopkeepers the money due them. Front office policy may require the completion of a cash voucher as support documentation for cash transactions affecting front office accounts. In large hotels, establishing and monitoring the credit of guests is often the responsibility of the credit manager. In small hotels, these tasks may be part of the front desk manager's duties. The credit manager assists guests in establishing credit and reviews the guest and non-guest ledgers to ensure that accounts do not exceed established credit limits.

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Summary A front office accounting system monitors and charts the transactions of guests and businesses, agencies, and other non-guests using the hotel's services and facilities. The front office's ability to perform accounting tasks in an accurate and complete manner will directly affect the hotel's ability to collect outstanding balances. A front office accounting system is uniquely tailored to each hotel operation. Accounting system terminology and report formats often differ from hotel to hotel. In general, an account is a form on which financial data are accumulated and summarized. The increases and decreases in an account are calculated and the resulting monetary amount is the account balance. All of the financial transactions that occur in a hotel affect accounts. Front office accounts are recordkeeping devices used to store information about guest and non-guest financial transactions. For a front office account, charges are increases in the account balance and are entered on the left side of the "T" (when using a simple written T-account). Payments are decreases in the account balance and are entered on the right side of the "T." Front office accounting documents typically use a journal form. A guest account is a record of financial transactions between a guest and the hotel. Guest accounts are created when guests guarantee their reservations or when they register at the front desk. A hotel may also extend in-house charge privileges to local businesses or agencies as a means of promotion, or to groups sponsoring meetings at the hotel. The front office creates non-guest accounts (also called house accounts or city accounts) to track these transactions. Front office transactions are typically charted on account statements called folios. A folio is a statement of all transactions (debits and credits) affecting the balance of a single account. All transactions that increase (debit) or decrease (credit) the balance of the account are recorded on the folio. At settlement, a guest folio should be returned to a zero balance by cash payment or by transfer to an approved credit/debit card or direct billing account. The process of recording transactions on a folio is called posting. A transaction is posted when it has been recorded on the proper folio in the proper location, and a new balance has been determined. There are basically four types of folios used in the front office: guest folios, master folios, non-guest or semi-permanent folios, and employee folios. Additional types of folios are frequently created by front office management to accommodate special circumstances or requests. A voucher details a transaction to be posted to a front office account. This document lists detailed transaction information gathered at the source of the transaction. The voucher is then sent to the front office. Auditing is the process of verifying front office accounting records for accuracy and completeness. The term point of sale describes the location at which goods or services are purchased. Any hotel department that collects revenues for its goods or services is considered a revenue center and, thus, a point of sale. An automated point-of-sale (POS) system may allow remote terminals at the points of sale to communicate directly with a front office system. Automated POS systems may significantly reduce the amount of time required to post charge purchases to guest folios, the number of times each piece of data must be handled, and the number of posting errors and after-departure (late) charges. A ledger is a grouping of accounts. The front office ledger is a collection of front office account folios. The folios used in the front office form part of the front office accounts receivable ledger. An account receivable represents money owed to the hotel. Front office accounting commonly separates accounts receivable into two subsidiary groups: the guest ledger (for guest receivables) and the city ledger (for nonguest receivables). The guest ledger is the set of guest accounts that correspond to registered hotel guests. 336

Guests who make appropriate credit arrangements at registration may be extended privileges to charge purchases to their individual account folios. The city ledger, also called the non-guest ledger, is the collection of non-guest accounts. If a guest account is not settled in full at check-out, the guest's folio balance is transferred from the guest ledger in the front office to the city ledger in the accounting division for collection. Shops in the hotel may have arrangements to allow guests to charge purchases to their rooms. In these cases, the hotel posts the charges to the guests' accounts, collects the amount due from the guests, and pays the shopkeepers the money due them. Front office policy may require the completion of a cash voucher as support documentation for cash transactions affecting front office accounts. In large hotels, establishing and monitoring the credit of guests is often the responsibility of the credit manager. In small hotels, these tasks may be part of the front desk manager's duties. The credit manager assists guests in establishing credit and reviews the guest and non-guest ledgers to ensure that accounts do not exceed established credit limits.

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Internet Sites For more information, visit the following Internet sites. Remember that Internet addresses can change without notice. If the site is no longer there, you can use a search engine to look for additional sites. CSS Hotel Systems Execu/Tech Hospitality Solutions Hotellinx Systems Ltd. Innfinity Software Systems Prologic First

Case Study 1 Front Office Accounting at the Magic Crest Hotel One of the major problems with front office accounting at the Magic Crest Hotel is monitoring guest and non-guest accounts. Management has always extended local businesses and government officials charge privileges, the idea being that, with the convenience of deferred payments, local patrons would be more likely to dine and/or host clients at the hotel. This program has proved to be highly successful. The volume of purchases charged to such non-guest accounts now approximates the level of sales incurred by registered guests. Unsure if this is a good or bad situation, Mr. Aerial, the front office manager, requests the front office accounting staff to study the problem and to report its findings at next week's meeting. At the weekly front office meeting, the hotel's accountant, Ms. Letsche, reports that there are at least three problems related to the hotel's non-guest charge purchasing policies: its impact on the daily hotel audit, the billing procedures to collect payment, and the number of applications for additional non-guest accounts. When asked to be more specific, she begins with a review of the daily hotel audit. She states that since the front office receives charge vouchers from the hotel's revenue centers, it is the front desk agent's responsibility to separate guest from non-guest accounts. Since registered guest charges are posted by room number, one would think it easy to sort those charges from the others. Unfortunately, both the hotel's room numbers and the non-guest account numbers are three digits, thereby making the sorting more timeconsuming. Mr. Aerial asks if it is really necessary to separate the charges. Ms. Letsche explains that it is, since the hotel must maintain accurate guest folio balances. She further states that the non-guest vouchers are accumulated and posted on Saturday afternoons, when the hotel's business is less hectic. The billing procedures to collect non-guest account balances are tricky. Since the hotel bills non-guest accounts on the last day of each month, some charges occurring in a particular month may not be posted in time to appear on that month's bill. In addition, non-guest accounts usually are not paid in a timely fashion. In fact, 47 percent of last month's non-guest account balances remain unpaid and tomorrow is the date of the next billing cycle. Mr. Aerial explains that the local customers are important to the hotel and suggests that maybe Ms. Letsche is over-sensitive to the billing problems.

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Lastly, Ms. Letsche relates the fact that there are at least ten new applications for non-guest accounts. She has instructed her staff not to authorize any new accounts without her written approval. She further states that she is reluctant to authorize any additional non-guest accounts, and looks to Mr. Aerial for advice. Convinced of the positive aspects of such business, Mr. Aerial directs her to approve the requests and to assign account numbers effective the first day of next month. Ms. Letsche so instructs her staff. Discussion Questions 1. What ideas would you suggest to facilitate a more effective processing of guest and non-guest charge vouchers? How might the daily audit be aided by such changes? Is the accumulatedpostings routine for non-guest accounts an effective plan?

2. What could be done to improve the hotel's billing of non-guest accounts? What could be done to improve collection of outstanding balances?

3. What are the advantages and disadvantages to having a high volume of non-guest accounts? What about the cost of carrying and collecting outstanding balances? How might the hotel's cash flow be affected by such transactions?

Case Number: 3327CA The following industry experts helped generate and develop this case: Richard M. Brooks, CHA, Vice President, TWE Group; and S. Kenneth Hiller, CHA, General Manager, Holiday Inn, Beachwood, Ohio. This case also appears in Case Studies in Lodging Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 1998).

Review Questions 1. What are the specific functions of a front office accounting system? What tasks are performed during each stage of the guest cycle?

2. What is the purpose of an account? How are transactions recorded in an account? How are guest accounts and non-guest accounts different?

3. What are the four types of folios in common use in front office accounting? How is a folio related to an account?

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4. What is a point of sale? How can fully automated point-of-sale systems and guest-operated devices streamline the flow of accounting information to the front office?

5. What information is necessary to create a folio? How does the process differ in non-automated, semi-automated, and fully automated front office recordkeeping systems?

6. What is the basic front office accounting formula? How is it used in posting transactions?

7. How does accounting for a cash payment differ from accounting for a cash advance at the front desk?

8. What is a cash bank? What are good cash bank control procedures?

9. What are overages, shortages, and due backs? How might these conditions reflect on a front office cashier's job performance?

10. What is the difference between an account correction and an account allowance? Why is it important to differentiate between the two?

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Chapter 9 - Check-Out and Account Settlement Outline The Check-Out and Settlement Process Departure Procedures

Methods of Settlement Late Check-Out

Check-Out Options

Express Check-Out Self Check-Out

Unpaid Account Balances Account Collection

Account Aging

Front Office Records

Guest History File Marketing Follow-Through Data Privacy

Summary

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Competency 1 Objective: Identify functions and procedures related to the check-out and settlement process, including departure procedures and methods of settlement. Check-out and settlement are part of the final stage of the guest cycle. The services and activities of the departure stage are performed primarily by a member of the front office staff. Before the age of automation in hotels, the workload of the front desk staff in medium and large hotels was great enough that registration and cashier positions were separate. A guest would be checked in by the front desk registration staff and checked out by the front desk cashiering staff. Cross-training of staffs was very rare. Only in smaller hotels did the same person do both jobs. With front desk automation, most hotels train front desk personnel on both check-in and check-out procedures. This adds variety to the job, permits more flexible staffing schedules, and provides better service to guests. Personnel from the accounting division may be involved as well. Before departing the hotel, guests will generally stop at the front desk to review their folio, settle any outstanding account balance, receive a receipt of the account statement, and return their room key. However, self check-out has become quite common, allowing guests to check out from their room or from a remote terminal in various locations and bypass the front desk entirely. Receipts can be picked up at the front desk, mailed, or e-mailed to the guest. Two of the most stressful times for hotel guests are during check-in and check-out. Many guests will forget all the previous courtesy and hard work of the hotel staff if check-out and account settlement are not professional, accurate, friendly, and fast. This chapter covers the final phase of the guest cycle by examining the various activities involved in check-out and settlement. The Check-Out and Settlement Process The front office performs at least three important functions during the check-out and settlement process:

Resolution of outstanding guest account balances Updating of room status information Creation of guest history records

Guest account settlement depends on an effective front office accounting system that maintains accurate guest folios, verifies and authorizes a method of settlement, and resolves discrepancies in account balances. Generally, the front office finds it most effective to settle a guest's account while the guest is still in the hotel. A guest can settle an account by paying cash, charging the balance to a credit or debit card, deferring payment to an approved direct billing entity, applying a gift card, or using a combination of payment methods. Front office policy usually requires guests to specify an eventual method of settlement during registration. This procedure enables the front office to verify or confirm the status of the guest's credit or debit card or direct billing information before he or she arrives at the desk for check-out and account settlement. Presettlement verification activities help minimize the guest's check-out time and may significantly improve the front office's ability to collect outstanding account balances. Despite the fact that a guest may later change his or her mind and settle by another form of payment, pre-settlement verification activities ensure that the hotel will be paid for the accommodations and services it provides during the guest's stay. Effective front office operations depend on accurate room status information. When a guest checks out and settles his or her account, the front desk agent performs several important tasks. First, the agent changes the guestroom's status from occupied to on-change in the room status file. On-change is a 342

housekeeping term that means that the guest has checked out of the hotel and the guestroom he or she occupied needs to be cleaned and readied for the next guest. When the room status is changed, the front office system may automatically notify the housekeeping department system that the guest has departed. Some front office systems will also remind housekeeping of any extra equipment to be removed from a guestroom, such as a crib, iron and board, or rollaway bed. In the past, the front desk communicated information to the housekeeping department by telephone or through an electronic room status board or a telewriter. Today, information is more commonly relayed automatically by the front office system to the housekeeping department when the front desk agent completes the check-out process. Once housekeeping receives the information, a housekeeper is dispatched to clean and ready the room for inspection and resale. To maximize room sales, the front office system must maintain a current occupancy and housekeeping status for all rooms and must exchange room status information with the housekeeping department quickly and accurately. Check-out and settlement also involves the creation of a guest history record that will become part of the guest history file. Since a hotel can gain a valuable competitive advantage in the hospitality marketplace through the proper analysis of guest history data, guest history files can provide a powerful database for strategic marketing. Departure Procedures Check-out and account settlement can be an efficient process when the front office staff is well-prepared and organized. The departure stage of the guest cycle involves several procedures designed to simplify check-out and account settlement. These procedures include:

Inquiring about additional recent charges. Posting outstanding charges. Verifying account information. Presenting the guest folio. Verifying the method of payment. Processing the account payment. Checking for mail, messages, and faxes. Checking for safe deposit box or in-room safe keys. Securing the room key. Updating the room's status. Inquiring about the guest's stay and experience. Requesting the guest to complete a guest satisfaction survey. Updating the guest history file.

The procedures used vary among front office operations, depending upon the hotel's level of service and degree of automation. The amount of personal contact between the guest and front desk staff may also 343

vary, since most front offices offer automated or express check-out services and many guests elect self check-out. Check-out affords the front office staff yet another chance to make a positive impression on guests. A guest approaching the front desk should be greeted promptly and courteously. The front desk agent should check for any messages, faxes, or mail awaiting guest pickup. The front desk agent should also verify that the guest has cleared his or her safe deposit box or in-room safe and returned the guestroom key. In many systems, the guest's electronic folio can be flagged so that the front desk agent can be notified if the guest has an outstanding message, mail, fax, or items in a safe deposit box. This simplifies recordkeeping and also minimizes the chances of overlooking these matters during check-out. To ensure that the guest's folio is accurate and complete, the front desk agent should process any outstanding charges that need posting. In addition, the front desk agent should ask the guest if he or she incurred any recent charges and update the necessary postings to the guest's folio. Before front office automation, guests used to phone the front office before coming to the front desk to check out. This notice allowed the cashier to find any unposted charges and prepare the folio so the guests would not have to stand and wait while the charges were identified and posted. Since most hotels are now automated, guests expect a final folio to be accurate and ready for them when they approach the front desk to check out. No matter what degree of automation at a hotel, the guest may leave with a poor impression of the property if the bill is not complete and accurate at check-out. Traditionally, at check-out the guest is presented a final copy of his or her account folio for review and settlement. During this time, the front desk agent should confirm how the guest intends to settle the account, regardless of which method of settlement the guest specified during the registration process. This request is necessary, because front office policy may require the guest to establish credit at check-in, regardless of how the guest eventually plans to settle the account. A guest may establish credit by presenting a credit card at check-in, and then decide to settle his or her account balance by cash, debit card, gift card, or check. VIP guests or special guests of a group or corporate account should not be asked for settlement if their account is marked as a direct billing account. After determining how the guest will pay, the front desk agent should then bring the guest's account balance to zero. This is typically called zeroing out the account. A guest's account balance must be settled in full for an account to be considered zeroed out. As long as the hotel has received full payment or is assured full payment, the account will be settled with a zero balance. For example, if the guest pays cash, the account is brought to a zero balance immediately. If the guest settles using a credit card, the hotel will get an approval from the credit card company for the amount due. Approval of a transaction by the credit card company guarantees payment to the hotel for the amount approved, so the account can also be brought to zero. Hotels are usually paid amounts due from payment card companies within a day or two of the settlement transaction. Upon receiving a payment guarantee, the hotel assumes that payment in full will follow, and closes the folio. If the account is to be paid through direct billing by the hotel, however, the account is not brought to a zero balance but instead is transferred to the non-guest ledger and billed through the back office accounts receivable system. Methods of Settlement A guest account can be brought to a zero balance in several ways. Methods of settlement include cash or debit card payment, credit or direct billing transfer, or a combined settlement method. Cash Payment in Full. A cash payment in full at check-out will bring a guest account balance to zero. The front desk agent should mark the folio paid. As mentioned previously, front office policy may sometimes require the guest to present a credit card at check-in to gain charge privileges. A guest may 344

have had a credit card imprinted at registration, even though he or she intended to settle the account using cash. The front desk agent should destroy the guest's credit card voucher created at registration when the guest pays the account in full with cash. When the guest registers and the front desk agent establishes credit by obtaining a credit card authorization, in effect the credit card processing company commits to reserving projected funds for potential payment to the hotel. This practice reduces the amount of funds available to the credit card holder for other purchases. If the guest settles his or her account with another form of payment, it is essential that the funds being held for the hotel be released at check-out. Otherwise, the credit card processing company may reserve the funds for up to 30 days. This can be a burden to guests, and will result in complaints and dissatisfaction after the guest has departed the hotel. Debit card settlements are considered cash payments because the funds are drawn directly from the guest's checking or savings account. Banks issuing debit cards will not process a withdrawal transaction against the card unless there are sufficient funds in the account at the time of the transaction. Therefore, the hotel is assured of payment by the bank. Even though the guest's folio is brought to a zero balance, the amount due the hotel is normally transferred from the guest ledger to the city ledger until final payment is received. Guests desiring to pay in foreign currency should first convert their money to local currency. Settlements are customarily handled in local currency only. Hotels often charge a fee to convert currencies, since banks charge hotels fees for currency conversion. Most front desk areas of major hotels display currency conversion rates for major countries, or have the rates readily available, based on information found in the financial section of a newspaper or through an online resource. Cash payments are the most likely to be involved in fraud by front desk agents. It is important that the hotel have procedures in place to record every cash transaction. Some hotels require that supervisors approve all cash settlements. This is to verify that the cash paid by the guest is actually put into the agent's cash bank. However, in most cases the folio indicates the cash payment, and guests verify the entry before they leave the front desk area. In addition, front desk agents should be trained on how to identify counterfeit currency, especially $20 and $50 bills, which are among the most common counterfeited. Credit Card Transfer. Even though credit card settlement brings a guest account to zero, the amount of the charge must be tracked until payment is actually received from the credit card company. Therefore, credit card settlement creates a transfer credit on the guest's folio and moves the account balance from the guest ledger to a credit card account in the city (or non-guest) ledger. After the front desk agent swipes the card through a credit card reader, a payment slip is printed showing the transaction amount. The completed credit card slip is then presented to the guest for signature. In many hotels, the guest may be asked to sign a copy of the folio, acknowledging and agreeing to the credit card balance instead of receiving a payment slip to sign. In either case, the guest's signature completes this transaction. In many locations, imprinting vouchers is no longer necessary because the front office system sends the settlement transaction directly to the credit card company. When international guests present credit cards for payment, the credit card company always provides payment in local currency. Hotels do not have to worry about currency exchange rates or fees, since these rates are computed and processed by the credit card company. Direct Billing Transfer. Like credit card settlement, direct billing transfers a guest's account balance from the guest ledger to the city ledger. Unlike credit card settlement, responsibility for billing and collecting a direct billing lies with the hotel rather than an outside agency. Direct billings are not normally an acceptable method of settlement unless the billing has been prearranged and approved by the hotel's credit department before or during guest registration. To complete a direct billing settlement, the front desk agent should have the guest sign the folio to verify that its contents are correct and that the guest will 345

accept responsibility for all charges contained on the folio, should the direct billing account refuse payment. Then the hotel sends a bill to the direct billing account. Combined Settlement Methods. A guest may elect to use more than one settlement method to bring the folio balance to zero. For example, the guest may make a partial cash payment and charge the remainder of the account balance to a credit card. Front desk agents must accurately record the combined settlement methods and take care that all required paperwork is properly completed. Properly completed paperwork helps facilitate a front office audit. Once the guest has settled the account, the front desk agent should provide the guest with a copy of the folio and continue to be a goodwill ambassador for the hotel. Check-out and account settlement are among the last opportunities the front office staff has to convey hospitality. The front desk agent should take full advantage of this opportunity. For example, the agent should ask if everything at the property met the guest's expectations, especially the guestroom, facilities, and service areas. Check-out and account settlement is an excellent time for the agent to let the guest know that the hotel cares about the quality of the guest's hotel experience. Many front offices provide guests with comment cards at check-out, hoping that guests will provide an evaluation of the hotel's effectiveness. The front desk agent should always thank guests for staying at the hotel and wish guests a safe trip. The front desk agent should also ask guests to consider returning to the property during a return trip to the area. Sometimes guests may settle their account before check-out time and not leave the hotel. For example, a guest may go through the check-out process at 8 A.M. but will be in a meeting at the hotel until noon. Such a guest will not be able to post additional charges to his or her account, since the account was closed at check-out. This can be an inconvenience or embarrassment for some guests. For this reason, front desk agents should verify that guests are actually leaving the hotel upon completion of check-out, and, if they are not, let them know that they will not be able to post additional charges to their account. Late Check-Out Guests do not always check out by the hotel's posted check-out time. To minimize late check-outs, the front office should post check-out time notices in conspicuous places, such as on the back of all guestroom doors and in a prominent location at the front desk. A reminder of the check-out time can also be included in any pre-departure materials distributed to guests expected to depart on the current day. Late check-outs can be a problem for some hotels and resorts. Guests may wish to stay the full day on their last day and use the meeting and recreational facilities of the property, including their room. It is important to properly communicate and tactfully enforce the check-out time in order to give the housekeeping staff enough time to prepare the room for arriving guests. Some hotels authorize the front desk to charge late check-out fees. A guest will probably be surprised to find such a fee on the folio, especially if he or she is not familiar with the hotel's check-out policy. Whenever a guest inquires about a late check-out, the front desk agent should inform the guest of the hotel's policy regarding late check-out charges. Some guests may resent being charged an additional expense and refuse to pay. Front desk agents should approach such situations calmly, offering a well-reasoned explanation for the late check-out fee policy. A front office manager may need to be summoned to discuss and resolve the matter with the guest. Front office staff should not be apologetic about the late check-out fee. The hotel's check-out time is carefully selected, not arbitrarily set. It is not intended to inconvenience guests. As just mentioned, management establishes a check-out time so that the housekeeping department will have sufficient time to 346

prepare rooms for newly arriving guests. Guestrooms should be cleaned and readied for arriving guests before the housekeeping staff completes its work shift. Late check-outs granted by the front desk can lead to additional costs for the hotel, especially in the housekeeping department, where room attendants may have to stay beyond their regular shift to finish cleaning all of their assigned rooms. In addition, the inconvenience and potential dissatisfaction of arriving guests should also be taken into consideration. For these reasons, it is justifiable for hotels to apply a late check-out fee.

Section Keywords zeroing out Settling a folio account balance in full as the guest checks out. late check-outs A room status term indicating that the guest is being allowed to check out later than the hotel's standard check-out time. late check-out fees A charge imposed by some hotels on guests who do not check out by the established check-out time.

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Competency 2 Objective: Describe express check-out and self check-out procedures. Check-Out Options Changes in technology and guest needs have prompted front offices to develop alternatives to standard check-out and account settlement procedures. These options combine advances in technology with special guest services to expedite departure activities. Express Check-Out Guests may encounter long lines at the front desk when trying to check out between 7:00 A.M. and 9:30 A.M. , a prime check-out period for many hotels. To ease front desk volume, some front office staffs initiate check-out activities before the guest is actually ready to leave. A common pre-departure activity involves producing and distributing guest folios to those guests expected to check out. Front office staff, housekeeping staff, or even hotel security staff may quietly slip printed folios under the guestroom doors of expected check-outs before 6 A.M. (These folios must be placed so that they can't be seen or reached from outside the room.) Normally, the front office will distribute an express check-out form with each pre-departure folio. Express check-out forms may include a note requesting guests to notify the front desk if departure plans change. Otherwise, the front office will assume the guest is leaving by the hotel's posted check-out time. This procedure usually reminds and encourages guests to notify the front desk of any changes in departure before the hotel's check-out time.

A sample express check-out form is shown in Exhibit 1. By completing such a form, the guest authorizes the front office to transfer his or her outstanding folio balance to the credit card voucher that was created 348

during registration. If no credit card information was captured or if no credit was established at registration, the front office will not provide express check-out service. After completing the form, the guest deposits the express check-out form at the front desk when departing. After the guest has left the hotel (it may be hours afterward), the front office staff completes the guest's check-out by transferring the outstanding guest folio balance to a previously authorized method of settlement. Any additional charges the guest makes before leaving the hotel (telephone calls, for example) will be added to his or her folio before the front desk agent brings the account to a zero balance via account transfer. Due to the possible occurrence of late charges, the amount due on the guest's copy of the express check-out folio may not equal the amount applied to the guest's credit card account. This possibility should be clearly stated on the express check-out form to minimize confusion. When late charges are added to the account, a copy of the updated folio should be mailed or e-mailed to the guest so that he or she has an accurate record of the stay. In this way, the guest is not surprised when his or her credit card billing arrives with a different amount. Express check-out must not be offered to guests who paid in advance using cash, because it is unlikely the amount due the hotel will equal the amount pre-paid by the guests, and the hotel has no credit information on cash-paying guests, so it can't bill them for any additional money owed. As soon as an express checkout form is received, the front desk agent should enter the change in room status information in the front office system so the housekeeping department has the information in a timely manner and the room can be scheduled for cleaning. Self Check-Out In some hotels, guests can check themselves out of the hotel by accessing self check-out terminals in the hotel's lobby or meeting areas, or by using an in-room system. Self check-out terminals or in-room systems are interfaced with the front office system and are intended to reduce check-out time and front desk traffic. Self check-out terminals vary in design. Some resemble automatic bank teller machines, while others possess video and audio capability. They can be located in areas of the hotel away from the front desk, such as in a convention registration area or even in a parking garage. To use a self check-out terminal, the guest accesses the proper folio and reviews its contents. Guests may be required to enter a credit or debit card number by using a keypad or by passing a credit or debit card through a magnetic strip reader attached to the terminal. Settlement can be automatically assigned to an acceptable credit or debit card as long as the guest presented a valid card at registration. Check-out is complete when the guest's balance is transferred to a credit or debit card account and an itemized account statement is printed and dispensed to the guest. A self check-out system should then automatically communicate updated room status information to the front office system. The front office system, in turn, relays room status information to the housekeeping department and initiates action to create a guest history record. In-room folio review and check-out usually relies on an in-room television set with a remote control device. The guest can simply confirm a previously approved method of settlement for the account, because the in-room television is connected to the front office system. The front office system directs the self check-out process. Guests can pick up a copy of their printed folio at the front desk after completing self check-out. In-room self check-out technology usually automatically updates room status and creates a guest history record. Another advantage of in-room folio review is that guests can look at their folios at any time during their stays without having to stop by the front desk to review them. Many guests carry laptop PCs, mobile handheld devices, or personal digital assistants (PDAs). Some hotel companies and front office system suppliers feature self check-out capabilities through these devices. 349

Guests are able to access their account on their PDA through a secure Internet link. They can view their folio and approve payment, all online. The final billing is sent to the guest via e-mail or instant messenger.

Section Keywords express check-out A pre-departure activity that involves the production and early morning distribution of guest folios for guests expected to check out that morning. self check-out terminals An automated system, usually located in the hotel lobby, that allows the guest to review his or her folio and settle the account using the credit or debit card authorized at checkin.

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Competency 3 Objective: Explain how hotels handle unpaid account balances, summarize account collection procedures, describe how managers use guest history files, and outline how the front office staff can support the hotel's marketing program through the check-out process. Unpaid Account Balances No matter how carefully the front office monitors a guest's stay, there is always the possibility that the guest will leave without settling his or her account. Some guests honestly forget to check out; others depart the hotel with no intention of settling their account (these guests are commonly referred to as skippers). Sometimes the front office discovers late charges for guests who have checked out and left the hotel. Regardless of the reason, after-departure charges or outstanding balances represent unpaid account balances. Late charges are a major concern in guest account settlement. A late charge is a transaction requiring posting to a guest account that does not reach the front desk for posting until after the guest has checked out and closed his or her account. Restaurant, telephone, and room service charges are examples of potential late charges. Since the guest should have paid for these purchases before leaving, the hotel may have problems collecting after-departure charges. Even if late charges are eventually paid, the hotel incurs the additional costs involved in after-departure billing. Sometimes the extra expenses for labor, postage, stationery, and special statements may cost more than the amount of the late charge. Many hotels decide that they will not send a bill to a departed guest who owes for late charges unless the charges are above a certain set amount (typically these hotel minimums range anywhere from $8 to $15). If the late charge is less than this limit, the hotel is likely to write off the amount and zero the balance through accounting. Few hotels can easily afford to finance a large volume of late charges, however. That's why reducing the number of late charges is important to maximizing profitability. A front office automated system that interfaces with revenue center outlets is often the most effective means of reducing or eliminating late charges. For example, a restaurant point-of-sale system with a twoway communication interface can instantly verify room account status, check credit authorization, and post charges to the guest's folio, all before the guest leaves the restaurant. Similarly, a call accounting system interface to the front office system can help eliminate telephone late charges. Guests who make telephone calls from their guestroom and then go directly to the front desk to check out are likely to find all of their telephone charges, even the last-minute ones, listed on their folio. At hotels with front office systems that are not interfaced to point-of-sale or other systems, front desk agents can follow several guidelines to help reduce the occurrence of late charges. Front desk staff can:

Post transactional vouchers as soon as they arrive at the front desk. This procedure will help minimize the volume of unposted charges prior to and during the check-out period. Survey front office equipment and voucher and folio racks for unposted charges before checking a guest out. For example, local telephone traffic and in-room movie charge meters may possess transactional information not recorded on a voucher. Ask departing guests whether they have incurred any charge purchases or placed long-distance telephone calls that do not appear on their final folio.

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While most guests will respond honestly to a direct question, many guests may not feel obligated to volunteer information about charges not posted to the folio. These guests will simply pay the outstanding balance on the folio and disregard unposted charges. Some guests may be unaware that they remain responsible for paying unposted charges. Front office management at hotels that do not have interfaced systems may establish a system to ensure that revenue outlet charges are delivered quickly to the front desk for posting. This is especially important during peak morning check-out periods. In an effort to minimize late charges, the front desk may employ runners to pick up revenue outlet vouchers, or may telephone other hotel departments to gather charge purchase information. Guests who present a credit card at check-in may assume that all charges will automatically be transferred to their credit card account for subsequent billing. Depending on the hotel's contractual agreement with a credit card company, the hotel may simply write "signature on file" on the signature line of the credit card voucher and receive payment for the guest's outstanding balance. Signature on file means the guest has signed the hotel's registration form or its equivalent at check-in and, by doing so, has agreed to pay the bill in full when he or she departs. Some credit card companies allow after-departure charges to be added to the guest's signed credit card voucher. Front desk agents must be sure that the credit card company will accept additional charges before posting charges to a voucher a guest has already signed. When afterdeparture charges are posted to a folio and added to a credit card voucher, the hotel should send a copy of the updated folio to the guest so that the guest will understand why additional charges appeared on the account. Account Collection Late charges that are billed to departed guests should not be classified as uncollectible until the front office or the accounting department has exhausted all billing and collection procedures. A properly completed registration form should contain the guest's signature and his or her home and business addresses and telephone numbers. Procedures for billing late charges to a guest who settled an account using cash or a debit card may differ from procedures used to bill late charges to a guest who settled an account with a credit card. Guests who paid with a credit card will be billed according to the policies and procedures of the credit card company governing late charge collection. Non-credit-card guest accounts not settled at check-out by cash payment in full or paid in full with a debit cardregardless of the credit established or prepayments processed during registrationare transferred from the guest ledger to the city (non-guest) ledger for collection. At that time, the guest account is transferred from the control of the front office to the hotel's accounting division in the back office. Typical city ledger accounts include:

Credit card billings to authorized credit card companies Debit card billings to bank accounts Direct billings to approved company, travel agent packages, and individual accounts Travel agency accounts for authorized tours and groups Bad check accounts resulting from departed guests whose personal checks were returned unpaid Skipper accounts for guests who left the hotel without settling their accounts

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Disputed bills for guests who refused to settle their accounts (in part or in full) because of a discrepancy Guaranteed reservations accounts for billing and tracking no-show guests Late charges accounts for guests who checked out before some charges were posted to their accounts House accounts for non-guest business and promotional activities

To be effective, the front office and the accounting department must jointly establish a procedure for billing departed guests with overdue accounts. Accounts receivable billing includes determining:

When outstanding account balances are payable The number of days between billings How to contact departed guests whose accounts are overdue

The sooner the collection process is started, the more likely the hotel will receive payment on unpaid account balances. Timing is often the key to success in preparing departed-guest accounts for collection. Each hotel needs to develop its own collection schedule. Collection schedules can range from aggressive (short-cycle) to lenient (long-cycle), depending on the hotel's financial needs, clientele profile, history of collection patterns, and so on. In large hotels, it is usually the front office credit manager who is 353

responsible for collections. In small hotels, the front desk manager or an accounts receivable clerk is assigned the responsibility. Exhibit 2 shows a billing scheduling chart that may be used to develop or outline the methods and timing cycles for collections. Sometimes guests dispute charges because they do not remember making them. This is especially true of late charges. It is for this reason that the hotel might maintain copies of charge vouchers at the front desk past check-out and settlement. These copies are helpful in resolving disputed after-departure charges. In all collection cases, it is important for hotel staff to be polite but firm in any encounter involving a deferred payment account. However, collection activities that violate a consumer's rights may prove to be more costly than the original debt. The Federal Fair Debt Collection Practices Act and the Fair Credit Billing Act clearly state the responsibilities and rights of those involved in collection activities. Regardless of the collection procedures followed, problems in accounts receivable billing may develop. The hotel should have a documented procedure for collecting overdue accounts. Hotel management may appoint a credit committee to examine overdue accounts and decide among collection options. Just as individual guest accounts must be watched closely, so must the master accounts for meetings. Credit for groups and conventions should be established well before their arrival. Sometimes the hotel will require an advance deposit or pre-payment to ensure at least a partial payment. Many hotels prepare a preliminary master account folio before the group's departure and review it with the group leader to answer any questions and expedite the final payment process. It is common for hotels to require individual guests to establish credit during registration, as the group master folio may handle only certain expenses, such as room, tax, and arranged meals. Master accounts can be very complex for some meetings and conventions. For this reason, billing arrangements are usually clearly specified in the group function contract and reviewed and confirmed with the group leader just before the group's arrival. Should there be changes, the front office and all other affected hotel departments must be notified. It is customary to meet daily with the group leader or designated representative to review group transactions. The objective of the daily meeting is to review all charges with the group leader and obtain his or her signed approval of the charges applied to the group account that day (or the previous day). This procedure allows time to resolve any billing disputes before the meeting ends. In addition to informing the group leader of billing totals, the daily tally authorization meeting helps expedite the hotel's collection process. Depending on hotel policy, the responsibility for obtaining charge authorization may be assigned to the front office manager, the credit manager, the catering manager, or the conference service manager. Of particular interest are banquet charges, since food-service charges are usually assessed on a per-guest basis. Guest and meeting room charges to be posted to the master account should also be regularly reviewed to ensure that the group is being charged properly. At some resort properties, unique or unusual charges are commonly posted to the master folio account. For example, there may be a golf or tennis tournament for which all associated charges are posted to the group's master folio account. Special events such as these can add complexity to the billing process since they go beyond typical lodging transactions. When the totaled master account balance is sent to the accounting department for final billing, all previously authorized invoices, vouchers, and related documentation should be attached to verify that the group leader reviewed and approved all charges. From an accounting perspective, some properties attribute uncollectible accounts back to the department that originally accepted the uncollectible charge. For instance, the front office may be assessed the amount of an uncollectible transaction if the post office returns a wrongly addressed billing. Postal returns can happen when a front desk agent fails to request that a guest clarify illegible writing on a registration form. Tracking receivables back to the originating department helps identify departments whose transaction processing procedures regularly result in uncollectible account balances. The hotel's credit committee, credit manager, or general manager should then analyze the departments' procedures, or lack thereof, and 354

recommend corrective action. Collection problems may indicate the need for employee retraining or closer supervision. Account Aging Credit card billings are normally paid according to the hotel's contractual agreements with the credit card companies. The hotel might receive payment immediately after billing or might wait several days or more. Factors that affect this include the volume of transactions, frequency of voucher submission, and transaction fees levied by the credit card company. Most other city ledger accounts are usually settled within 30 days of billing, which is considered satisfactory. Some city ledger accounts, however, may experience a collection period longer than 30 days. The hotel should establish methods for tracking past due accounts based on the date the charges were incurred. This practice of scheduled billings is normally referred to as account aging.

Account aging analysis tends to differ among hotels, depending on the variety of credit terms in effect. At large properties, the hotel accounting division typically monitors account aging. At smaller properties, the night auditor may assume this responsibility. An account age analysis sheet identifies which accounts receivable are 30, 60, 90, or more days old. Exhibit 3 shows a simplified aged accounts receivable report. In most hotels, accounts that are less than 30 days old are considered current accounts. Accounts that are 355

older than 30 days are considered overdue accounts. In some cases, accounts that are older than 90 days are considered delinquent accounts. The front office and accounting department staffs should maintain a list of outstanding accounts over 90 days. Guests asking for a reservation who have an overdue account may be asked to pay by cash, debit card, or credit card until the account is considered current. Overdue accounts represent an expense to the hotel. The hotel cannot use the revenue attributed to these accounts because it has not yet been collected. In addition, the older an account is, the more difficult it becomes to collect. For this reason, many accounting departments issue a report that shows the average age of the accounts receivables. Hotel owners and senior managers look at this report closely and track the aging of accounts to ensure that collections are being handled properly. Front Office Records At the time of check-out, guest folios are stored electronically and can be accessed by guest name, folio number, guest history record number, or arrival/departure date. Front office staff can use electronic records to document original billings and set up guest history records following check-out. Guest History File Front office management can better understand hotel clientele and determine guest trends when it develops and maintains a guest history file. This automated file is a collection of personal and financial data about guests who have stayed at the hotel (or at another property in the chain, in the case of chain hotels). An individual guest history record within the file normally contains personal and transactional information relevant to the guest's previous stays. (Guest history records are confidential and proprietary; front office managers are obligated to protect guests from invasions of privacy.)

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Creating the guest history record is one of the last steps in the check-out and account settlement process. Many front office operations construct a simple guest history file from a collection of expired registration forms and guest folios. Some front offices use a computer-based system that automatically re-formats guest information into a guest history database. Automated front office systems can apply a pre-formatted template to automatically generate an electronic guest history record. See Exhibit 4 for a sample guest history record. Some hotels may ask guests to complete a special form requesting such information as name of spouse and children, birthday, guestroom preference, bedding and pillow preference, and favorite foods. Having such personal information on file helps the property provide better, more comprehensive guest service. Several hotel chains allow members of their frequent guest programs to provide this information online through a dedicated preferred-guest website. The hotel's sales and marketing division can use guest history records as a source for mailing lists or to identify guest characteristics important for strategic marketing. This information may help the hotel develop and place advertisements or link websites in a way that appeals to the types of clientele the hotel is attempting to attract. Guest history records may also point out the need for new, supplementary, or enhanced guest services. An automated guest history system is based on specialty software that allows the hotel to excerpt guest history data for marketing and related efforts and to measure the effectiveness of past operational efforts. 357

For instance, a guest history database may enable the hotel to determine the geographic distribution of its guests' home and business addresses. Hotel advertising may be placed more effectively based on this type of data. Some hotel chains centralize their guest history database, so that all affiliated hotels in the brand can access guests' preferences. Guests are often excited to discover that a stay at one chain hotel has alerted another property in the chain to provide some extra, personalized courtesy. This approach tends to build strong loyalty to the brand, as well as across multiple brands of the same company.

Exhibit 5 diagrams the automated guest history system at The Ritz-Carlton Hotel Company. This system enables Ritz-Carlton staff members to use online guest preference information to provide uniquely personal levels of service to returning guests. Many hotels also keep detailed group and corporate account history files, which can help the hotel maintain positive relations with the group leader at each organization. For example, a group may request 100 guestrooms for three nights for a corporate meeting scheduled for June, but fill only 70 rooms for those three nights. The number of group rooms actually booked compared to the number originally blocked is called the pick-up rate. Someone on the hotel's sales staff may track the group's pick-up rate so that the next time the group holds a meeting at the property, the sales staff can work with the meeting planner to block a more accurate number of guestrooms. Hotels commonly require that the group fill a minimum number of blocked guestrooms by a certain date, or the hotel may apply an attrition charge to the group's master account. The attrition charge is intended to help compensate the hotel for blocking rooms for the group that might otherwise have been saleable had they not been held out of availability and gone unused. The attrition charge represents an extra expense to the group, so, if the hotel can help the group to more accurately determine its rooming needs, it may avoid the charge. Group leaders and meeting coordinators often negotiate with hotels for special discounted group or corporate rates. These discounted rates are usually based on the number of guestrooms the group or company is willing to guarantee to occupy over a specific time period (usually one year). By maintaining a detailed history of the group or company's guestroom usage, as well as its non-room spending, the hotel can be more flexible in its negotiation efforts.

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Marketing Follow-Through Just as a hotel's marketing department may rely in part on guest history files to develop new marketing strategies for individual guests, so too may the department depend on a front office agent's performance and follow-through at check-out. Many hotel companies have implemented frequent guest or frequent traveler affinity clubs to encourage brand loyalty. Frequent guest programs are often important components of enhanced guest relations management programs. Such clubs generally award credits to guests for room nights occupied or dollars spent at the property or across a brand of properties. These business measures amount to credits in the affinity program and are applied to the guest's club account at check-out. Before checking the guest out, it is appropriate for the front desk agent to verify the guest's club membership status or to offer membership opportunities to a guest who is not already a member. For example, if the hotel's marketing department creates a program to reward frequent guests with a free overnight stay following a specified number of room night visits, the front office staff will likely be responsible for ensuring that a guest's number of room nights is properly posted at check-out time. Hence, the frequent guest's record becomes associated with the folio and subsequent guest history file. Front desk agents may have to validate and record coupons or adapt to some other form of recordkeeping system if the guest history file is not automated or interfaced to the system controlling the frequent guest or frequent traveler affinity program. Hotel companies usually centralize their frequent guest programs to facilitate recordkeeping and to better serve guests wishing to redeem accrued rewards. In addition, frequent guest clubs tend to be an excellent channel for direct communications with brand-loyal guests. Since club members are asked to provide both a mailing address and an e-mail address, the club can notify its members about special offers, including vacation, dinner, theater, golf, and other recreational packages, and other special promotions. Some hotel frequent guest programs are co-marketed with airline, car rental, cruise line, and marketing firms. Many hotels place guest comment cards in their guestrooms and other locations throughout the property. Some hotels offer an electronic version of these cards through their guestroom televisions, hotel lobby kiosks, or website. However, nothing is as effective as a front office employee asking a guest about his or her stay. If the experience was not good, this is an opportunity to correct the situation and have the guest leave with a positive impression. Once the guest has left the building, it is very difficult to deal effectively with a negative experience. Sometimes a simple apology is all that is necessary, while at other times an adjustment to the guest's folio balance may be appropriate. If the situation is serious, it should be noted in the front desk transaction file or log book and a manager should meet with the guest, time permitting. If the guest doesn't have time to discuss the issue in detail, the manager should contact the guest later to identify the issue and take appropriate action. If a guest needs a reservation for the next stop on his or her trip, the front office staff may be helpful in making a reservation at a hotel specified by the guest. A front desk agent can also make a reservation for a guest's return trip to the hotel. Front desk agents should keep in mind that check-out is the last opportunity to offer the hotel's services. Offering to make reservations for guests in transit or to make reservations for a future trip to the hotel often leads to repeat business regardless of whether the guest makes a reservation at that time or not. Guests tend to remember the friendliness, convenience, and special services that help distinguish one property from another. Data Privacy

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Hospitality managers and staff members become the guardians of proprietary data by virtue of the fact that the hotel's property management system contains information regarding preferences, transactions, and behaviors of guests and employees. There is an implied expectation of privacy as a basic component of the guest-hotel or employee-employer relationship. For some time now, data privacy has been codified in both statutory and case law since innkeepers become privy to innumerable details of personal interactivity with various facets of the property. The obligation of hoteliers and the expectation of guests and employees regarding data privacy are paramount. If a hotel company is not vigilant about proper data collection and protection processes, potential security threats will likely arise. The threat of undesirable publicity, litigation, or fraud serves as a driver for industry adoption of sound privacy practices. Articulating and executing strong privacy policies typically strengthens and reinforces guest and employee relations.

Section Keywords skippers A guest who has left a hotel and has intentionally not settled his or her account. unpaid account balances Charges remaining in a guest account after the guest has left the hotel. late charge A transaction requiring posting to a guest account that does not reach the front desk for posting until after the guest has checked out and closed his or her account. account aging A method for tracking past-due accounts according to the date the charges originated. current accounts A city ledger account that is within the current billing period. overdue accounts A city ledger account that is unpaid beyond the current billing period, usually between 30 and 90 days. delinquent accounts A city ledger account that has not been settled within a reasonable collection period, usually 90 days. guest history file A collection of guest history records, constructed from expired registration cards or created through sophisticated automated systems that automatically direct information about departing guests into a guest history database. guest history record A record of personal and financial information about hotel guests relevant to marketing and sales that can help the hotel serve guests on return visits.

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Summary Check-out and account settlement are among the final transactions the guest has with the front office. Before departing the hotel, the guest will generally stop at the front desk to review his or her folio, pay any outstanding account balance, receive a copy of the account statement, close his or her safe deposit box, and return the room key. During check-out and account settlement, the front office accomplishes several important functions, including reconciliation of the guest account balance, updating of the room status information, and initiation of a guest history file. Through the use of pre-settlement verification activities, the front office can reduce the guest's check-out time and improve the front office's ability to collect outstanding account balances. Effective front office operations also involve the resale of rooms once a guest has checked out. This entails prompt communication of room status information with the housekeeping department. In addition to collecting any unpaid balances and updating room status information, the front desk agent may check for mail, messages, and faxes; post outstanding charges; verify account information; inquire about additional recent charges; present a final guest folio; verify the method of payment; process account settlement; secure the room key; and create a guest history file. A guest account can be brought to a zero balance in several ways. Methods of settlement include cash or debit card payment, credit card or direct billing transfer, or a combined settlement method. To minimize late check-outs, the front office should post check-out time notices in conspicuous places. A reminder of the check-out time can also be included in any pre-departure materials distributed to guests expected to depart on the current day. Changes in technology have prompted the front office to develop alternatives to standard check-out and settlement procedures. These check-out options help to minimize the time required for completing departure activities. Express check-out is a popular pre-departure activity that involves producing and distributing guest folios to guests expected to check out in the morning. The folios are quietly slipped under the guestroom doors before 6 A.M. This enables guests in a hurry to depart without having to stop at the front desk. Another check-out option involves self check-out. In some properties, guests can check themselves out by accessing self check-out terminals in the lobby or by using an in-room system. Self check-out terminals and in-room systems are interfaced with an automated front office system and are intended to reduce check-out time and front office traffic. No matter how carefully the front office monitors the guest's stay, it is always possible that a guest will leave without settling his or her account. Some guests may honestly forget to check out, while others may intentionally avoid paying their bill. The front office may also discover late charges after a guest has legitimately checked out. Regardless of the reason, after-departure (late) charges or outstanding apprises account balances represent unpaid account balances. Guest accounts not settled at check-out by payment in full, regardless of the credit established or prepayments made during registration, are transferred from the guest ledger to the city (non-guest) ledger for collection. At the time of transfer, responsibility for account settlement is transferred from the control of the front office to the hotel's general accounting division. Hotels monitor accounts in the city ledger carefully to ensure prompt payment. Accounts are aged according to the date of the last billing. Hotels work hard to minimize accounts that are older than 30 days. Master accounts are set up for some meetings and conventions held at hotels. The designated manager should review group transactions with the group leader daily to obtain his or her written authorization for the transactions. The daily meeting allows for the resolution of any billing disputes before the group departs, and also apprises the group leader of billing totals. 361

Many hotel companies have implemented frequent guest or frequent traveler clubs. Such clubs award guests with credits for room nights occupied or dollars spent at the property or brand of properties. The hotel marketing department may rely on front office agents to verify the guest's membership status or to offer membership opportunities in the frequent travel program. Hospitality managers and employees are guardians of guest and employee proprietary data because the hotel's property management system stores information regarding guest and employee preferences, transactions, and behaviors. Hotels must vigilantly collect and protect private guest and employee data.

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Internet Sites For more information, visit the following Internet sites. Remember that Internet addresses can change without notice. If the site is no longer there, you can use a search engine to look for additional sites. American Express Company Asian Information Management Systems Ltd. Diners Club International Ltd. Discover Card Fair Credit Billing Act (PDF) Fair Debt Collection Practices Act InnQuest Software MasterCard Worldwide On Command Corporation Visa

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Case Study 1 Accounts Receivable at the Montrose Hotel For about two months, Kathy Cole, the general manager of the Montrose Hotel, has been noticing a problem with the accounts receivable ledger. It has grown more than it should have, even though occupancy has been improving recently. The total ledger has grown by over 50 percent, with most of the growth being aged at over 30 days. Kathy cannot let this condition continue for very long, so she is addressing it with Glenna Danks, the hotel controller. Glenna tells Kathy that they are having trouble collecting on accounts sent to them from the front office. The front office manager, Russ Fleming, has been on the job for about three months. Russ came to the Montrose Hotel from another of the chain's properties, where he was the assistant front office manager. The hotel Russ came from has a front office computer system, but the Montrose Hotel will not have one until next year. Kathy asks Russ to work with Glenna to find an answer to the issues. Upon researching the problems, Russ and Glenna find the following:

Registration cards are not being filled in by guests with correct, billable, or readable addresses. Guests are sometimes leaving the space open. Credit card vouchers are difficult to read. Many credit card vouchers have after-departure charges on them. Groups are paying their master accounts more slowly than usual. Guest comment cards show many complaints about inaccurate bills and the time it takes to check out of the hotel.

Kathy, Glenna, and Russ must act quickly to bring the accounts receivable ledger back to its usual small amount. Discussion Questions 1. Identify which departments must be involved in the actual problem resolution.

2. Write an action plan describing what each department must do to resolve the problem. Be sure to include employee training, updating departmental procedures, and specific accountabilities for ensuring the work is done properly.

3. Since the front office computer system is not scheduled to be installed for some time, what can hotel managers do now, with what they currently have to work with, to resolve the guest comment card complaints?

Case Number: 3328CA 364

The following industry experts helped generate and develop this case: Richard M. Brooks, CHA, Vice President, TWE Group; and Michael L. Kasavana, NAMA Professor in Hospitality Business, The School of Hospitality Business, Michigan State University, East Lansing, Michigan. This case also appears in Case Studies in Lodging Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 1998).

Case Study 2 Owning the Problem! "You own the problem," the valet heard from his supervisor. He took a deep breath, recovering from the shock of learning that he would have to solve this one for the departing guest. It was Matt's first day on valet after two weeks of intensive training. The training had begun with the twoday orientation program during which the vision and mission of the company were explained, guest service values were presented, and general policy and procedures were discussed. Following the orientation were five days of practical training in the functions of the front office, including all uniformed services such as bell attendant, valet, concierge, and front desk. Matt had thought that this was overkill. He often thought to himself that if they would just let him do the job, he would have the opportunity to gain the skills. But no, this resort and lodge demanded that everyone, including the groundskeeper and housekeeping staff, go through the full orientation and training program. So, after five days, Matt hoped he was prepared for this one. Mr. Nauman had been a frequent guest at the Boden Resort and Lodge for many years. His wife and daughter usually accompanied him, but on this occasion he was on business and had decided to take a side trip to the lodge for a little relaxation. He was now on his way back to the city for an important business meeting, but Matt couldn't find his rental car. Mr. Nauman was a patient but efficient man. He was accustomed to the highest level of service; his typical business hotel was a Ritz-Carlton. Matt knew that Mr. Nauman was an important guest. Matt was responsible for solving this problem no matter what it took. Fortunately for Matt, the resort would back him upeven if it meant spending a lot of money or time to solve the problem. The Boden's philosophy was to satisfy every guest need. Matt thought for a moment. He had brought around the Lincoln Town Car that he thought was Mr. Nauman's. However, Mr. Nauman had said that his wallet and briefcase had been left in the car and they were nowhere to be seen. Mr. Nauman was certain that this was not his rental car. Matt wondered if someone else who had checked out earlier may have also rented a Lincoln Town Car and perhaps the valet had switched the cars. What a nightmare that would be! He checked with valet services and, sure enough, a Mr. Bowman had checked out earlier that morning driving a Lincoln Town Car of the same color. Mr. Bowman had left for the airport many miles away and would be difficult to reach. Matt wondered if Mr. Bowman would realize that he had the wrong car once he looked around. Matt concluded that Mr. Bowman would have to turn in the rental car upon arrival at the airport. In the meantime, Mr. Nauman was waiting for an answer. He was an action-oriented person and Matt knew he didn't have much time to make some decisions before Mr. Nauman would get antsy. He had to think fast, and he knew from his orientation and training that he had to focus on the guest. Matt thought about Mr. Nauman's business meeting and the need to get there immediately. He also knew that he would have to somehow retrieve Mr. Nauman's valuables from the other car.

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It occurred to Matt that he would have to take a car to the airport rental agency 50 miles away, and he would have to find Mr. Nauman a car so that he could get to his meetings that were in the opposite direction. Mr. Nauman was planning to return for another night, so Matt could bring him his valuables plus his rental car. Matt thought about lending Mr. Nauman his vehicle, but only for a moment, as it wasn't in the best of condition. He decided that he'd ask the Boden's general manager whether Mr. Nauman could borrow the company sedan for the day while Matt drove the other rental to trade in at the airport. A novel idea, thought the general manager, and perhaps the only real solution to this messy problem. Five minutes later, Mr. Nauman, while still pretty angry, was on his way to his business meetings and Matt was on the phone to the rental agency at the airport. They would be on the lookout for Mr. Bowman, who was scheduled to arrive within the half hour. Matt jumped into the Lincoln Town Car and raced off toward the airport. He wondered whether this was the right approach and whether his supervisor would back him on this solution. The general manager already demonstrated support, so he was pretty sure that his direct supervisor would go along with it. But who would cover for him while he was away? This was a busy check-out time, and all valets were needed to meet the demand of the guests. As he pulled onto the freeway, he wondered whether this was the only time that this problem had ever happened. Discussion Questions 1. Is Matt prepared for this level of responsibility after five days of training?

2. How can Matt's supervisor show his support for this action to solve the problem?

3. What else could Matt do to solve this problem?

Case number: 608C18 This case also appears in Todd Comen, Case Studies in Front Office Management (Lansing, Mich.: American Hotel & Lodging Educational Institute, 2003).

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Review Questions 1. What are three important functions of the check-out and account settlement process? Why are these functions essential to the hotel's accounting, housekeeping, and marketing functions?

2. What is the definition of zeroing out? What happens to a guest account that is not settled at checkout?

3. What are four methods of guest account settlement at check-out? How are they different from each other? What effect does each have on the guest ledger and city ledger?

4. What are the differences between a debit card settlement and a credit card settlement?

5. What difficulties arise from late check-outs? How might these problems be reduced by the use of late check-out fees?

6. How does a typical express check-out procedure work? How does a typical self check-out terminal work? What are the advantages and disadvantages of each?

7. What are late charges? What steps can the front office take to reduce late charges?

8. What types of guest information are useful in collecting payment for late charges and unpaid account balances?

9. What are some elements of an effective billing and collection process? How can tracking uncollectible accounts to the departments responsible improve internal control?

10. What is account aging? Why is it important? Who might be responsible for account aging analysis?

11. What are the uses of guest histories? How can the front office construct a guest history file? 367