front office

About the American Hotel & Lodging Association (AH&LA) Founded in 1910, AH&LA is the trade association representing the lodging industry in the United States. AH&LA is a federation of state lodging associations throughout the United States with 11,000 lodging properties worldwide as members. The association

-tions, marketing, hospitality operations, training and education, technology issues, and more. For information, call 202-289-3100.

LODGING,

About the American Hotel & Lodging Educational Institute (EI)

-

About the American Hotel & Lodging Educational Foundation (AH&LEF)

-

of dollars in scholarship funds for students pursuing higher education in hospitality

practices in the U.S. lodging industry. For more information, go to www.ahlef.org.

Keep this book. You will need it and use it throughout your career.

MANAGING FRONT OFFICE OPERATIONS

UNIFORM SYSTEM OF ACCOUNTS FOR THE LODGING INDUSTRYTenth Revised EditionwORLD OF RESORTS: FROM DEVELOPMENT TO MANAGEMENTThird EditionChuck Yim GeePLANNING AND CONTROL FOR FOOD AND BEVERAGE OPERATIONSEighth EditionJack D. NinemeierUNDERSTANDING HOSPITALITY LAwFifth EditionJack P. Jefferies/Banks BrownSUPERVISION IN THE HOSPITALITY INDUSTRYFifth EditionJack D. Ninemeier/Raphael R. KavanaughMANAGEMENT OF FOOD AND BEVERAGE OPERATIONSFifth EditionJack D. NinemeierMANAGING FRONT OFFICE OPERATIONSNinth EditionMichael L. KasavanaMANAGING SERVICE IN FOOD AND BEVERAGE OPERATIONSFourth EditionRonald F. Cichy/Philip J. Hickey, Jr.THE LODGING AND FOOD SERVICE INDUSTRYSeventh EditionGerald W. LattinSECURITY AND LOSS PREVENTION MANAGEMENTSecond Edition Raymond C. Ellis, Jr./David M. StipanukHOSPITALITY INDUSTRY MANAGERIAL ACCOUNTINGSeventh EditionRaymond S. SchmidgallPURCHASING FOR FOOD SERVICE OPERATIONSRonald F. Cichy/Jeffery D ElsworthMANAGING TECHNOLOGY IN THE HOSPITALITY INDUSTRYSixth EditionMichael L. KasavanaHOTEL AND RESTAURANT ACCOUNTINGSeventh EditionRaymond CoteACCOUNTING FOR HOSPITALITY MANAGERS Fifth EditionRaymond CoteCONVENTION MANAGEMENT AND SERVICEEighth EditionMilton T. Astroff/James R. AbbeyHOSPITALITY SALES AND MARKETINGFifth EditionJames R. AbbeyMANAGING HOUSEKEEPING OPERATIONSRevised Third EditionAleta A. Nitschke/William D. FryeHOSPITALITY TODAY: AN INTRODUCTIONSeventh EditionRocco M. Angelo/Andrew N. VladimirHOSPITALITY FACILITIES MANAGEMENT AND DESIGNThird EditionDavid M. Stipanuk

Educational Institute Books

10/12

MANAGING HOSPITALITY HUMAN RESOURCESFifth EditionRobert H. Woods, Misty M. Johanson, and Michael P. SciariniRETAIL MANAGEMENT FOR SPASHOSPITALITY INDUSTRY FINANCIAL ACCOUNTINGThird EditionRaymond S. Schmidgall/James W. DamitioINTERNATIONAL HOTELS: DEVELOPMENT & MANAGEMENTSecond EditionChuck Yim GeeQUALITY SANITATION MANAGEMENTRonald F. CichyHOTEL INVESTMENTS: ISSUES & PERSPECTIVESFifth EditionEdited by Lori E. Raleigh and Rachel J. RoginskyLEADERSHIP AND MANAGEMENT IN THE HOSPITALITY INDUSTRYThird EditionRobert H. Woods/Judy Z. KingMARKETING IN THE HOSPITALITY INDUSTRYFifth EditionRonald A. NykielUNIFORM SYSTEM OF ACCOUNTS FOR THE HEALTH, RACQUET AND SPORTSCLUB INDUSTRYCONTEMPORARY CLUB MANAGEMENTThird EditionEdited by Joe Perdue and Jason Koenigsfeld for the Club Managers Association of AmericaRESORT CONDOMINIUM AND VACATION OwNERSHIP MANAGEMENT: A HOSPITALITY PERSPECTIVERobert A. Gentry/Pedro Mandoki/Jack RushACCOUNTING FOR CLUB OPERATIONSRaymond S. Schmidgall/James W. DamitioTRAINING AND DEVELOPMENT FOR THE HOSPITALITY INDUSTRYDebra F. Cannon/Catherine M. GustafsonUNIFORM SYSTEM OF FINANCIAL REPORTING FOR CLUBSSixth Revised EditionHOTEL ASSET MANAGEMENT: PRINCIPLES & PRACTICESSecond EditionEdited by Greg Denton, Lori E. Raleigh, and A. J. SinghMANAGING BEVERAGE OPERATIONSSecond EditionRonald F. Cichy/Lendal H. KotschevarFOOD SAFETY: MANAGING wITH THE HACCP SYSTEMSecond EditionRonald F. CichyUNIFORM SYSTEM OF FINANCIAL REPORTING FOR SPASFUNDAMENTALS OF DESTINATION MANAGEMENT AND MARKETINGEdited by Rich HarrillETHICS IN THE HOSPITALITY AND TOURISM INDUSTRYSecond EditionKaren Lieberman/Bruce NissenSPA: A COMPREHENSIVE INTRODUCTIONElizabeth M. Johnson/Bridgette M. RedmanHOSPITALITY 2015: THE FUTURE OF HOSPITALITY AND TRAVELMarvin Cetron/Fred DeMicco/Owen DaviesREVENUE MANAGEMENT: MAxIMIzING REVENUE IN HOSPITALITY OPERATIONSGabor ForgacsFINANCIAL MANAGEMENT FOR SPASRaymond S. Schmidgall/John R. Korpi

MANAGING FRONT OFFICE OPERATIONS

Ninth Edition

Michael L. Kasavana, Ph.D.

Disclaimer

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the ser-vices of a competent professional person should be sought. —FromtheDeclarationofPrinciplesjointlyadoptedbytheAmericanBarAssociationandaCommitteeof

Publishers and Associations

The author, Michael L. Kasavana, is solely responsible for the contents of this publication. All views expressed herein are solely those of the author and do not necessarily reflect the views of the American Hotel & Lodging Educational Institute (the Institute) or the American Hotel & Lodging Association (AH&LA).

Nothing contained in this publication shall constitute a standard, an endorsement, or a recommenda-tion of AH&LA or the Institute. AH&LA and the Institute disclaim any liability with respect to the use of any information, procedure, or product, or reliance thereon by any member of the hospitality industry.

©1991, 2013By the AMERICAN HOTEL & LODGINGEDUCATIONAL INSTITUTE2113 N. High StreetLansing, Michigan 48906-4221

The American Hotel & LodgingEducational Institute is a nonprofiteducational foundation.

All rights reserved. No part of thispublication may be reproduced, stored ina retrieval system, or transmitted, in anyform or by any means—electronic,mechanical, photocopying, recording, orotherwise—without prior permission of thepublisher.

Printed in the United States of America1 2 3 4 5 6 7 8 9 10 17 16 15 14 13 12

ISBN: 978-0-86612-412-6ISBN: 978-0-86612-413-3 (with online component)

Editor: Jim Purvis

Preface ................................................................................................. xiii

About the Author ................................................................................. xv

1 The Lodging Industry ............................................................. 3

The Hospitality Industry ....................................................................... 3Classifying Hotels ................................................................................... 5

Size • Target Markets • Levels of Service • Ownership and Affiliation

Classifying Guests .................................................................................. 20Business Travelers • Pleasure/Leisure Travelers • Group Travelers • International Travelers

Buying Influences on Travelers ............................................................. 22Blogging and Social Networking

The Green Hotel ...................................................................................... 25 LEEDCertificationandtheEnergyStarProgram • Green Meetings

Summary .................................................................................................. 29Endnote, Key Terms, Review Questions, Internet Sites,

Case Studies ....................................................................................... 30Chapter Appendix: Case Study for Green Hotel Practices ............... 41

2 Hotel Organization ................................................................ 57

Organizational Missions ........................................................................ 57Goals • Strategies and Tactics

Hotel Organization ................................................................................. 60Organization 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 ......................................................................... 77OrganizationoftheFrontOffice • WorkShifts • Job Descriptions • JobSpecifications

Contents

vi Contents

Summary .................................................................................................. 80Key Terms, Review Questions, Internet Sites, Case Study ............... 82Chapter Appendix: Selected Front Office Model Job Descriptions . 91

3 Front Office Operations ......................................................... 103

The Guest Cycle ...................................................................................... 103

Pre-Arrival • Arrival • Occupancy • Departure

Front Office Systems ............................................................................... 110

FrontOfficeActivities

Front Office Documents ......................................................................... 113

Pre-Arrival Documents • Arrival Documents • Occupancy Documents • Departure Documents

The Front Desk ........................................................................................ 115

Functional Organization • Design Alternatives

Telecommunications ............................................................................... 118

Telecommunications Equipment

Property Management Systems ............................................................ 122

ReservationManagementSoftware • Rooms Management Software • GuestAccountingManagementSoftware • General ManagementSoftware• BackOfficeInterfaces • System Interfaces • Sales Automation Systems

Summary .................................................................................................. 129Key Terms, Review Questions, Internet Sites, Case Studies............. 130

4 Reservations ........................................................................... 139

Reservations and Sales ........................................................................... 140

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

Types of Reservations ............................................................................. 142

Guaranteed Reservations • Non-Guaranteed Reservations

Reservation Inquiries.............................................................................. 144

Distribution Channels • Distribution Channel Revenues

Group Reservations ................................................................................ 152

Group Reservation Issues

Contents viiReservation Availability ......................................................................... 157

Reservation Systems

Reservation Records ............................................................................... 159Reservation Confirmation/Cancellation .............................................. 161

Confirmation/CancellationNumbers • Modifying Non-Guaranteed Reservations • Canceling a Reservation

Reservation Reports ................................................................................ 164Expected Arrival and Departure Lists • Processing Deposits • Reservations Histories

Other Reservation Considerations ....................................................... 166Legal Implications • Waiting Lists • Promotional Packages • Potential Reservation Problems • E-Commerce


5 Registration ............................................................................ 187

The Registration Process ........................................................................ 187Preregistration Activities • Creating the Registration Record • Assigning the Guestroom and Room Rate • Establishing the Guest’s Method of Payment • Verifying the Guest’s Identity • Issuing the Room Key or Access Code • Responding to Special Requests

Creative Registration Options ............................................................... 209Self-Registration

Selling the Guestroom ............................................................................ 210Denying Accommodations .................................................................... 212

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


6 Communications and Guest Services ..................................... 229

Front Office Communications ............................................................... 229

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

Interdepartmental Communications ................................................... 239Housekeeping • Engineering and Maintenance • Revenue Centers • Marketing and Public Relations

viii Contents

Guest Services ......................................................................................... 240EquipmentandSupplies•SpecialProcedures

Guest Relations ....................................................................................... 243Complaints


7 Security and the Lodging Industry.......................................... 261

Developing the Security Program ........................................................ 262Doors, 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 • StaffSecurityProcedures

Management’s Role in Security ............................................................. 274Areas of Vulnerability • Security Requirements

Setting Up the Security Program .......................................................... 275Relations with Local Governmental Agencies • SecurityStaffing • Security Training

Security and the Law .............................................................................. 287LegalDefinitions

Summary .................................................................................................. 290Endnotes, Key Terms, Review Questions, Internet Sites,

Case Studies ....................................................................................... 292

8 Front Office Accounting ........................................................ 307

Accounting Fundamentals .................................................................... 307Accounts • Folios • Vouchers • Points of Sale • Ledgers

Creation and Maintenance of Accounts .............................................. 313Automated Recordkeeping Systems • Charge Privileges • Credit Monitoring • Account Maintenance

Tracking Transactions ............................................................................. 316Cash Payment • Charge Purchase • Account Correction • Account Allowance • Account Transfer • Cash Advance

Internal Control ....................................................................................... 321Cash Banks • Audit Controls

Settlement of Accounts ........................................................................... 323Summary .................................................................................................. 327Key Terms, Review Questions, Internet Sites, Case Study ............... 328

Contents ix

9 Check-Out and Account Settlement ....................................... 335

The Check-Out and Settlement Process ............................................... 335Departure Procedures ............................................................................ 336

MethodsofSettlement • Late Check-Out

Check-Out Options ................................................................................. 341Express Check-Out • Self Check-Out

Unpaid Account Balances ...................................................................... 343Account Collection ................................................................................. 345

Account Aging

Front Office Records ............................................................................... 349Guest History File • Marketing Follow-Through • Data Privacy


10 The Role of Housekeeping in Hospitality Operations ............. 363

Communicating Room Status ............................................................... 363Housekeeping and Maintenance .......................................................... 366

Communicating Maintenance Work • Types of Maintenance

Identifying Housekeeping’s Responsibilities ...................................... 370Planning the Work of the Housekeeping Department ...................... 372

Area Inventory Lists • Frequency Schedules • Performance Standards • Productivity Standards • Equipment and Supply Inventory Levels

Supervisor Dilemma ............................................................................... 377Summary .................................................................................................. 380Key Terms, Review Questions, Internet Sites, Case Studies............. 382

11 The Front Office Audit ........................................................... 393

Functions of the Front Office Audit ..................................................... 393TheFrontOfficeAuditor • Establishing an End of Day • Cross-Referencing • Account Integrity • Guest Credit Monitoring • Audit Posting Formula • Daily and Supplemental Transcripts • FrontOfficeAutomation

The Front Office Audit Process ............................................................. 398Complete Outstanding Postings • Reconcile Room Status Discrepancies • Verify Room Rates • Balance All Departmental Accounts • Verify No-Show Reservations • Post Room Rates and Taxes • Prepare Reports • Prepare Cash Receipts for Deposit • Perform System Back-Up Routine • Distribute Reports

x Contents

System Update ........................................................................................ 407Centralized Front Office Audits ........................................................... 408Summary .................................................................................................. 409Key Terms, Review Questions, Internet Sites, Case Study ............... 410Night Audit Problem .............................................................................. 413

12 Planning and Evaluating Operations ...................................... 419

Management Functions.......................................................................... 419

Planning • Organizing • Coordinating • Staffing • Leading • Controlling • Evaluating

Establishing Room Rates ....................................................................... 422

Market Condition Approach • Rule-of-Thumb Approach • Hubbart Formula Approach • Planned Rate Changes

Forecasting Room Availability .............................................................. 433

Forecasting Data • Forecast Formula • Sample Forecast Forms

Budgeting for Operations ...................................................................... 444

Forecasting Rooms Revenue • Estimating Expenses • RefiningBudget Plans

Evaluating Front Office Operations ..................................................... 448

Daily Report of Operations • Occupancy Ratios • Rooms Revenue Analysis • Income Statement • Rooms Schedule • Rooms Division Budget Reports • Operating Ratios • Ratio Standards

Planning for Disasters ............................................................................ 463Summary .................................................................................................. 464Key Terms, Review Questions, Internet Sites ..................................... 466Chapter Appendix: Manual Operations Plans ................................... 469

13 Revenue Management ............................................................ 477

The Concept of Revenue Management ................................................ 477

Hotel Industry Applications

Measuring Revenue ................................................................................ 483

Formula 1: Potential Average Single Rate • Formula 2: Potential Average Double Rate • Formula 3: Multiple Occupancy Percentage • Formula 4: Rate Spread • Formula 5: Potential Average Rate • Formula 6: Room Rate Achievement Factor • Formula 7: Yield Statistic • Formula 8: RevPAR • Formula 9: Identical Yields • Formula 10: Equivalent Occupancy • Formula 11: Required Non-Room Revenue per Guest • RevPAG and GOPPAR

Contents xiElements of Revenue Management ...................................................... 496

Group Room Sales • Transient Room Sales • Other Revenue Opportunities • Local and Area-Wide Activities • Special Events • Fair Market Share Forecasting

The Revenue Manager ........................................................................... 506Using Revenue Management ................................................................ 508

The Revenue Meeting • Potential High- and Low-Demand Tactics• Implementing Revenue Strategies

Revenue Management Software ........................................................... 518Summary .................................................................................................. 519Endnotes, Key Terms, Review Questions, Internet Sites,

Case Study .......................................................................................... 521

14 Managing Human Resources .................................................. 529

Recruiting ................................................................................................. 529Internal Recruiting • External Recruiting

Selecting ................................................................................................... 535Selection Tools • Evaluating Applicants • Interviewing

Hiring ....................................................................................................... 548JobOffers • Processing Personnel Records

Orienting .................................................................................................. 549Skills Training .......................................................................................... 551

Prepare to Train • Present the Training • Practice Skills • Follow Up

Staff Scheduling ...................................................................................... 563Alternative Scheduling Techniques

Staff Motivation ....................................................................................... 566Training • Cross-Training • Recognition • Communication• Incentive Programs • Performance Appraisals


Appendix: Internet Concepts ............................................................... 581

Index .................................................................................................... 611

Forms for Night Audit Problem ............................................................ 619

PrefaceFROM THE TIME a guest makes a reservation and arrives at a hotel through the time he or she departs, front office personnel play a central role in coordinating resources and services designed to meet the guest’s needs. Guests generally have more contact with front office staff than with any other hotel department staff; as a result, to many guests, the front office is the hotel. Guests will contact front office staff with questions, requests, comments, and complaints. Front office staff mem-bers who effectively anticipate, respond, and address these challenges help exceed the expectations that hotel guests have.

A capable, courteous, and professional front office staff member can contribute to making each guest’s stay a pleasant experience and, in the process, encourage the guest to return. In so doing, front office staff members strive to meet guest needs while also ensuring smooth and profitable hotel operations. This may not always be an easy task. Poorly trained front office employees can do great harm to a hotel’s reputation, reduce or eliminate profitability, and antagonize guests.

This ninth edition of ManagingFrontOfficeOperations will help you—whether you are a front office manager or staff member or a hospitality student—to under-stand, organize, perform, and evaluate the front office functions that are critical to a hotel’s success. This book details information about numerous aspects of front office operations and management. It examines complex relationships between hotel departments, technological advances, and unique front office strategies. All topics are presented in an easy-to-read and easy-to-understand format. Although the book concentrates on the many technical aspects of front office management, it also emphasizes the importance of guest service. Indeed, the quality of guest ser-vices often separates a great hotel experience from an average one. This edition’s many discussions on guest service provide the reader with appropriate insight into this important area.

Model job descriptions for selected front office positions are in various sec-tions of the book. The text also touches on such important industry concerns as multicultural workforce management, employee recruitment and retention, and compliance with the Americans with Disabilities Act. Review questions and defi-nitions of key terms appear at the end of each chapter, followed by a section pro-viding relevant website addresses for those seeking more in-depth information on a broad range of topics mentioned in the text.

In addition to preserving the strengths of the eighth edition, this edition incorporates many improvements. New material describes the potential impact of automated information technologies on a variety of front office functions. Also included in this edition are sections on the revenue manager, the ways in which blogging and social networking affect hotels, manual backup procedures in case of automated system failure, identity theft prevention, payment card security standards, the green hotel, and Internet concepts and protocols (in the extensive appendix at the end of the book). These topics have become critical to front office operations, and front office managers must be knowledgeable of and fluent in the capabilities and language of a revised front office toolbox. In addition, important

xiv Preface

discussions of front office operations have been expanded throughout the text, especially with respect to human resources management, business forecasting, revenue management, budget planning, and front office staff interaction with sales, housekeeping, and security personnel. I am confident these revisions and innovations will provide each reader with a clear, systematic view of front office operations and management.

Michael L. Kasavana, Ph.D.East Lansing, Michigan

About the AuthorMichael L. Kasavana, Ph.D., is the NAMA (National Automatic Merchandising Association) Endowed Professor in Hospitality Business in The School of Hospital-ity Business at Michigan State University. He is considered the School’s resident technology expert. Dr. Kasavana completed his undergraduate and graduate work at the University of Massachusetts—Amherst. He received a bachelor’s degree in hotel, restaurant, and travel administration; a master of business administration in finance; and a doctorate in management information systems. He has written several books, instructional software packages, and a host of research journal and trade industry magazine articles.

Dr. Kasavana’s teaching and research efforts have been sharply focused on IT applications for hotels, restaurants, casinos, and private membership clubs, with a special emphasis on self-service technology. He is an active consultant and a recip-ient of the MSU Distinguished Faculty Award, the MSU Teacher-Scholar Award, and the Eli Broad College of Business Withrow Teacher/Scholar Award. He has presented numerous seminars on a variety of topics in the United States, Canada, Rome, Hong Kong, and other areas of the world. Dr. Kasavana is a member of the International Technology Hall of Fame sponsored by Hospitality Financial and Technology Professionals (HFTP) and a recipient of the Distinguished Achieve-ments Award from the Food Service Technology Consortium (FS/TEC). He is cred-ited with creating the terms “Menu Engineering” and “V-Commerce.”

In addition to his responsibilities at the MSU hospitality business school, Dr. Kasavana serves as the university’s Faculty Athletic Representative to the NCAA, Big Ten, and CCHA athletic conferences. He also chairs the MSU Athletic Council.