Case Study 1
ABC Management Company: Organizing for Mid-Range Service
ABC Management currently oversees the operation of ten very large, independent, world-class hotels. These hotels are located throughout the Midwest, and each targets business travelers as its primary market. All the properties are doing well and the owners are more than satisfied with the ability of the management company to meet their profit requirements. The president of ABC Management attributes much of the company’s success to the efficiencies gained by managing hotels of similar size and service levels.
The owners of one hotel currently operated by ABC Management recently approached the company about managing three mid-range service properties. These properties are located in Midwest suburban areas and cater to the business traveler. All three hotels are chain-affiliated. The hotels range in size from 350 to 450 rooms and have limited meeting room facilities. Each hotel has a single dining room that provides breakfast, lunch, and dinner. Room service is also available.
1. List some of the important organizational and service factors that the executives of ABC Management should consider before responding to the owners of the three mid-range service properties.
Since the hotels are within the mid-range (350-500 rooms), a room director will be needed to supervise the departments that make up the rooms division, another director for the food and beverage department and supervisors in the subdivision under the food and beverage department. Other key members of the management team that should be included are a director of sales and marketing, controller, and a director of human resources. Other hotel service and organizational factors should also include an executive housekeeper and director of catering as part of the management team. Some of these positions may be limited as some of them can be done by one person. I am a strong believer in department heads. Considering that they are taking in three hotels with a range in size of 350-450 rooms each, it would be best to consider department heads for more control and organization.
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2. Create an organization chart that ABC Management could use to identify management positions for the operation of a 450-room, mid-range service hotel. Aside of the organization chart, briefly describe each management position’s primary responsibilities.
1. Rooms Division: In a statistics conducted by the U.S. Lodging Industry in 1995, it has been shown that the majority of hotels revenues (60.2 %) are generated from Rooms Division Department under the form of room sales. This very department provides the services guests expect during their stay in the Hotel. Lastly, the Rooms Division Department is typically composed of five different departments:
a) Front Office
d) Uniformed Services
Beneath is a brief description of the different departments decomposing the Rooms Division Department, along with their related main responsibilities?
a) Front Office:
Sell guestrooms; register guests and design guestrooms
Coordinate guest services
Maintain accurate room statistics, and room key inventories
Maintain guest account statements and complete proper financial settlements
Receive and process reservation requests for future overnight accommodations.
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There should be close relation-ships with Sales and Marketing Division concerning Large Group Reservations
Inspects rooms before they are available for sale
Cleans occupied and vacant rooms
Communicates the status of guestrooms to the front office Department
Cleans and presses the property’s linens, towels, and guest clothing (if equipped to do so, free of charge or for a pre-determined fee)
Maintains recycled and non-recycled inventory items
d) Uniformed Services:
Bell Attendants: Ensure baggage service between the lobby area and guestrooms
Door Attendants: Ensure baggage service and traffic control at hotel entrance(s)
Valet Parking Attendants: Ensure parking services for guest’s automobiles
Transportation Personnel: Ensure transportation services for guests from and to the hotel
Concierge: Assists guests by making restaurant reservations, arranging for transportation, and getting tickets for theater, sporting, or any other special events
e) Telephone Department:
Answers and distributes calls to the appropriate extensions, whether guest, employee, or management extensions
Places wake-up calls
Monitors automated systems
Coordinates emergency communications
‘Protects Guest Privacy‘
2. Food & Beverage Department:
According to U.S. Lodging 1995 statistics, F&B Department constitutes the second largest revenue generator of a typical hotel with an average of 23.1 for Food sales, and 8.6 % for Beverage sales. In a five-star hotel, Food and Beverage outlets might have the following forms:
* Quick Service
* Table Service
* Specialty Restaurants
* Coffee Shops
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* Catering Functions such as Wedding, Birthdays…
3. Sales & Marketing Division:
A typical hotel should usually have Sales & Marketing division. However, if the staff size, volume business, hotel size, expected group arrivals is low enough, the hotel might have marketing staff placed under the reservation department (i.e. No need for a Sales & Marketing Division).
A typical Sales & Marketing Division is composed of four different departments:
b) Convention Services
d) Public Relations
4. Accounting Division:
The Accounting Division monitors the financial activities of the property. Some of the activities that are undertaken in the Accounting Division are listed below:
a) Pays outstanding invoices
b) Distributes unpaid statements
c) Collects amounts owed
d) Processes payroll
e) Accumulates operating data
f) Compiles financial reports
g) Makes bank deposits
h) Secures cash loans
i) Performs other control and processing functions
5. Engineering and Maintenance Division:
This very department maintains the property’s structure and grounds as well as electrical and mechanical equipment. Some hotels might have this very division under different names, such as maintenance division, property operation and maintenance department…
6. Security Division:
Security division personnel are usually screened from in-house personnel, security officers or retired police officers, across certain physical skills, and prior experience.
Some of the functions of the security division are listed below:
a) Patrols the property
b) Monitors supervision equipment
c) Ensures safety and security of guests, visitors, and employees
7. Human Resources Division:
Some of the duties of the human resources division are listed below:
a) Responsible for external & internal recruitment
b) Calculates employees’ salaries, compensation, and tax withholding…
c) Administrates employees’ paperwork, monitors attendance…
d) Maintains good relations with Labor Unions
e) Ensures employees’ safety and working conditions
The front office plays a key role in promoting other hotel services as they are a main and considerable point of communication with the guests. Guests must go through the front office for check-in and check-out; this is the greatest opportunity for front office staff to engage the guests and inform them of other services the hotel offers; for instance, food and beverage, spa services, guest shop, ...
8. Other Divisions:
All the above mentioned departments and/or divisions should exist in a typical five-star hotel; however there might be some revenue generators that are specific to certain hotels but not existing in others. Below is a list of some possible extra or other divisions that might exist in a hotel:
a) Retail Outlets (i.e.: Shops rented to outsiders or managed by the hotel)
b) Recreation Facilities (ex: Fitness Center, Tennis Courts, and Cinema Saloons…)
c) Conference Centers
3. Create an organization chart that ABC Management could use to identify front office positions for the operation of a 450-room, mid-range service hotel. Aside of the organization chart, briefly describe each front office position’s primary responsibilities.
The Front Office organization chart shall be designed according to Functions. Doing so not only enhances the control the Front Office has over its Operations, but also provides guests with more specialized attention. Such a division according to functions, however, is not practical in middle and small size hotels due to the fact that these very hotels don’t possess enough and sufficient monetary resources to ensure the existence of at least 3 jobholders (i.e. one for each shift) for each job position. Therefore, in middle size hotels, a front office clerk might be responsible for more than one work position. This is ensured via cross training. On the other hand, in small size hotels, one or two front office clerk(s) might be responsible for all front office activities.
Typical functions and positions under the Rooms Division Department:
Front Desk Agent: Registers guests, and maintains room availability information
Cashier: Closes guest folios, and properly checks out guests
Accounts Receivable Clerk: Posts charges in correct guest folios and updates folios’ outstanding balances
Night Auditor: Controls the job of the Accounts Receivable Clerk, and prepares daily reports to management (ex: Occupancy Report and Revenue Report)
Mail & Information Clerk: Takes Messages, provides Directions to Guests, and maintains Mail
Telephone Operator: Manages the Switchboard and coordinates Wake-up Calls
Reservation Agent: Responds to Reservation Requests and creates Reservation Records
“To be a good salesman requires an assertive personality that is credible and pleasant” – a statement that which summarizes the chapter. In this chapter, it deals with all the skills expected from front desk personnel in order to create good will and continuous patrons in the industry. Creating good will and continuous patrons has been a great challenge for the hotel industry nowadays. The ...
Uniformed Service Agents: Handles Guest Luggage, escorts Guests to their Rooms, and assists guests for any bit of information requested
Balivet, Bittner, Johnson, Purvis, Raber (1998).
Case Studies in Lodging Management.
Lansing, MI: Educational Institute of the American Hotel & Lodging Association.