The Hotel

Business

Back to Table of Contents

Chapter 4

The Hotel Business

The Hotel Business

Types of Lodging Businesses

Hotel Operations

The Hotel Business

Chapter Objectives
Identify the types of hotel classifications.
Differentiate between business and leisure
guests.
Explain the importance of yield management.
Identify the front-office positions in the rooms
division of a hotel.
Describe the guest services in the hotel industry.
Identify the support-staff positions in the back
house of a hotel.
3

The Hotel Business

Lodging Businesses
According to the American Hotel and Lodging
Association, the United States has more than
47,040 properties, generating 2 million jobs and
$102.6 billion in sales.

Section 4.1

The Hotel Business

Classification of Facility
Lodging classification is based on four factors:

Guest
Guest
type
type

Section 4.1

Price
Price

Location
Location

Style
Style and
and
function
function

Classification of Facility
Guest
Type

Price

Location

Style and
Function

Business
Business

Budget
Budget

Resorts
Resorts

All
All suite
suite

Leisure
Leisure

Midprice
Midprice

Airport
Airport

Extended
Extended stay
stay

Upscale
Upscale

Highway
Highway

Bed-and-Breakfast
Bed-and-Breakfast
(B&Bs)
(B&Bs)

Downtown
Downtown

Spas
Spas

Conference
Conference
centers
centers

Boutique
Boutique
Vacation
Vacation
Properties
Properties
Retreat
Retreat centers
centers

Section 4.1

The Hotel Business

Classification of Facility
The four categories of guest
travel type or stay are:
Walk-in guest
Transient guest
Corporate guest
Group guest

Section 4.1

transient guest an
individual traveler with
a reservation, staying
in a hospitality property
for a maximum of 30
consecutive days

The Hotel Business

Classification of Facility
The price of a room is based on a number
of factors:
Location of property
Location of room
Amenities
Length of stay

Section 4.1

Season
Types of guest
Meals

The Hotel Business

Classification of Facility
Meal plan types include:

meal plan a room rate

that includes meals

European Plan (EP)

Continental Plan (CP)
Bermuda Plan (BP)
Modified American Plan
(MAP)
American Plan (AP)
Section 4.1

The Hotel Business

Classification of Facility
Hotels use yield
management to help
maximize revenue.

Section 4.1

yield management a
system of maximizing
revenue through adjusting
room rates according to
demand

10

The Hotel Business

Classification of Facility
Calculation tools used in
yield management are:
Average daily rate
(ADR)

Section 4.1

average daily rate (ADR)

a rate based on total
sales for the day divided
by the total number of
sold rooms

11

The Hotel Business

Classification of Facility
Calculation tools used in
yield management are:
Occupancy percentage
(OCC%)

Section 4.1

occupancy percentage
(OCC%) a percentage
calculated daily and based
on the number of rooms
sold as a percentage of
the total number of rooms
available

12

The Hotel Business

Classification of Facility
Calculation tools used in
yield management are:
Revenue per available
room (revPAR)

Section 4.1

revenue per available

room (revPAR) a rate
that reflects a hotels
revenue per available
room

13

The Hotel Business

For All Types of Travelers

Lodging accommodations come in all types and
sizes to suit the needs of many kinds of guests.
Travelers consider price, location, and style of a
property when making reservations.

Section 4.1

14

The Hotel Business

4.1

1.

What are three different types of hotel

properties?

2.

What are the two categories of hotel guests?

3.

What are three factors that can determine the

price of a room?

Section 4.1

15

The Hotel Business

Hotel Organization
The general manager of a
hotel is responsible for
both front-of-the-house
and back-of-the-house
operations.

Section 4.2

front of the house

(lodging) the area in a
lodging facility that guests
view, such as the lobby
back of the house
(lodging) the area in a
lodging facility where
support services take
place that guests
usually do not view

16

The Hotel Business

The Rooms Division

The largest revenue center of a lodging facility is
the rooms division.
The rooms division includes the front desk,
reservations, housekeeping, guest or uniformed
services, and communications.

Section 4.2

17

The Hotel Business

The Front Office

From a guest perspective, the front office is
considered the heart and soul of any property.
The primary functions of the front-desk staff are:
Selling
Selling
rooms
rooms

Section 4.2

Maintaining
Maintaining
accounts
accounts

Providing
Providing
guest
guest services
services

18

The Hotel Business

The Front Office

The sales division or the reservations staff sells
rooms during the day.
In the evening the front-desk staff assumes this
responsibility.

Section 4.2

19

The Hotel Business

The Front Office

Many lodging facilities have property
management systems (PMS).
Sophisticated information technology allows the
front desk to provide better service while also
reducing costs for the property.

Section 4.2

20

The Hotel Business

The Front Office

The most important task of the front-desk staff is
providing exemplary guest service.
During check-in, guests contact the front desk
with questions, requests, and special needs.

Section 4.2

21

The Hotel Business

The Front Office

The night auditor is a
front-of-the-house
accounting position.

night auditor the hotel

staff member who does
the night audit and
balances the guests
accounts each evening

Some properties may

employ a guest service
agent (GSA).

guest service agent

(GSA) a hotel staff
member who performs all
the functions of a desk
clerk/agent, concierge,
and valet

Section 4.2

22

The Hotel Business

The Front Office

Guests can often make reservations directly with
a property through a centralized reservation
system (CRS).

Section 4.2

23

The Hotel Business

The Front Office

The housekeeping department directly affects a
guests perception of cleanliness, safety, and
security at a property.

Section 4.2

24

The Hotel Business

The Front Office

Guest or uniformed
services staff members
wear the official uniform of
the hotel and are the first
people whom guests
approach upon arrival at
the property.

Section 4.2

guests or uniformed
services staff members
in uniforms, including the
bell staff, valet, security
officers, concierge, and
door or garage attendants

25

The Hotel Business

The Front Office

The concierge position is
found at larger properties,
often in city or resort
locations.

Section 4.2

concierge a hotel staff

member who helps guests
make arrangements for
transportation, restaurant
reservations, event
reservations, and
entertainment tickets, and
advises guests about
activities in the area

26

The Hotel Business

The Front Office

The communications department of a hotel is
another revenue center.
In-house communications can include voice
mail, fax service, e-mail, message centers, and
pagers.

Section 4.2

27

The Hotel Business

Systemwide Departments
Larger hotels maintain centralized systems for
groups of units.
Employees are classified as line employees and
staff employees.
Line employees are in daily
contact with guests.

Section 4.2

Staff employees support the

front of the house; they do not
interact much with guests.

28

The Hotel Business

Support Staff
Support staff in the back of the house include:
Engineers
Groundskeepers
Attendants
Sales and marketing staff
Human resources staff

Section 4.2

29

Support Staff
Engineers

Oversee the hotels physical plant, buildings, and

grounds

Groundskeepers

Maintain and upgrades the exterior of the facility by

landscaping the property

Attendants

Oversee recreational facilities such as pools, tennis

courts, and golf courses

Sales and
Marketing

Persuades guests to stay at a particular property or

chain

Human
Resources

Oversees recruiting, selecting, training, and

compensating hotel employees

Section 4.2

30

The Hotel Business

Support Staff
The sales force of a lodging business may
include different types of sales personnel:
Sales representatives
Technical-support staff
Sales assistants
Telemarketers

Section 4.2

31

Hotel Staffing
Food & Beverage

General
Manager
Food & Beverage

Restaurant

Section 4.2

Lounge

Banquet

Room
Service

Kitchen

32

Hotel Staffing
Front Office

General
Manager
Front Office

Uniformed
Staff

Reservations

Front Desk

Housekeeping

Concierge

Reservations
Manager

FD Manager

Executive
Housekeeper

Door Attendants

Asst. FD Mgr.

Bell Captain

FD Clerk

Security

Guest Service
Agent

Security

Inspectors
Room
Attendants
Laundry

PBX Operator
Night Auditor
Section 4.2

33

Hotel Staffing

General
Manager

Support Staff

Support Staff

Marketing

Accounting

Human
Resources

Engineering

Sales
Marketing

Section 4.2

34

The Hotel Business

Hotels Online
Hotels.com
rooms
at over
hotels throughout
the
Operatingbooks
an e-tail
business
on4,500
an electronic
channelthe
Webcan
costly,
due to
design,have
delivery,
and
world.
Similar be
hotel
booking
services
madereturns,
it easier
and
operating
expenses.
cheaper
for travelers
to find accommodations. These Web
sites feature photos and descriptions of rooms and amenities.
Though
Manyhelp
larger
dot-com
companies
crashed
thecan
Rating
systems
guests
know
the level of
quality in
they
1990s,
storesdestination.
like Harris Cyclery of West Newton,
expect
in asmall
particular
Massachusetts, actually increase sales using a basic Web
site. reservation
Today, a third
of Harriss
business
rides
in on
Online
services
also bicycle
save travelers
the
hassle
of
the Web
to get hard-to-find
parts and
personallanguages
service.
calling
and booking
overseas rooms
in different
and time zones.
Describe an e-businesss home page to your class after
viewing one through marketingseries.glencoe.com.
For more information, go to marketingseries.glencoe.com.
Section 4.2

35

The Hotel Business

4.2

1. What are three functions of the front office?

2. What are examples of three uniformed
services positions?
3. What is the difference between line and staff
employees?
Section 4.2

36

The Hotel Business

Checking Concepts
1. Name the factors used to
classify lodging facilities.
2. List the categories used
to describe types of
guests by type of stay.
3. Describe a business
guest.
continued

1. Categories
2.
3.
Business
The
factors
guests
used
used to
to
categorize
describe
are
thoseguests
traveling
lodging
by
facilities
type
for
business
of stay
are are
guest
type, price,
business
purposes.
and
location,guests.
leisure
and style
of service, and
function.

37

The Hotel Business

Checking Concepts
4. Identify three rates
hotels use for yield
management.
5. Identify properties by
type of style and function.
6. List three positions in the
rooms division.
continued

Rates
used forin
yield
4. Properties
5.
6.
The
positions
the
management
are
identified
rooms
division
by style
are
average
daily
rate
and function
front-office
jobs
are
atall(ADR),
occupancy
suitefront
the
facilities,
desk, in
percentage
(OCC
extended-stay
reservations,
%),
and revenue
per
facilities,
housekeeping,
bed-andavailable
breakfasts,
guest
androom
spas,
(RevPAR).
boutique hotels,
uniformed
vacation properties,
services,
and
and retreat centers.
communications.

38

The Hotel Business

Checking Concepts
7. Name the staff in
uniformed services.

Critical Thinking
8. Discuss the importance
of the sales and
marketing staff in the
back-of-the-house
lodging operations.

The importance
of
7. Staff
8.
in uniformed
the
sales includes
and
services
marketing
staff is
bell staff, valet
that
persuade
staff,they
concierge,
guests
to staystaff.
at a
and security
particular property
or chain. Accept all
reasonable answers
that demonstrate an
understanding of
sales and
marketing.
39

End of

The Hotel
Business

Back to Table of Contents

The Hotel Business

41