Hospitality Management

Undistributed operating expenses The expenses of various service or cost centers – e.g., administrative and general, information systems, human resources, marketing, security, property operation and maintenance, etc. – are normally grouped under the heading ‘undistributed operating expenses.’ The costs comprising the two principal subcategories of each cost center’s expenses, namely payroll and related expenses and other expenses, are direct costs of their respective cost centers, but indirect costs (overhead expenses) of the property’s revenue centers. Thus, in the usual departmental accounting presentation under the Uniform System of Accounts for the Lodging Industry, undistributed operating expenses are treated as overhead expenses, and there is no attempt to allocate them to revenue centers. For example, a hotel general manager’s salary is included in the line item administrative and general expenses. Since the role of a hotel general manager is to manage the business as a total entity – allocating his time and managerial expertise among the various departments as needed – treating the salary as an overhead expense recognizes the reality of the function. Thus, in the case of a hotel property, the undistributed operating expenses essentially reflect the resources put in place to support the business as a whole (including cost and revenue centers), rather than to focus on any one particular department or aspect of the property’s business activities. Understay This refers to a guest who leaves the hotel prior to the departure date that they had originally indicated. Pleasure travelers may find their tourist attraction less interesting than anticipated. Urgent business may require the corporate client to return to the office sooner than expected. It is also known as early departure or curtailment. Like overstays, this situation has to be monitored, especially in periods when the hotel is busy. Front office management review and analyze various data produced during check-out. Most of this information is financial. The data can be grouped into categories as requested by management and must include understays. Understays are lost revenue in that the hotel had not anticipated the departure and thus may be unable to sell the room to another guest to recoup the anticipated revenue. To minimize understays, upon check-in a guest is often asked to initial the departure date and thus may be charged for an early departure. Reference Kasavana, M.L. and Brooks, R.M. (1995) Front Office Procedures, 4th edn. Lansing, MI: Educational Institute of the American Hotel and Motel Association. IRENE SWEENEY INTERNATIONAL HOTEL MANAGEMENT INSTITUTE SWITZERLAND, SWITZERLAND U

Uniform system of accounts 629 References Geller, A.N. and Schmidgall, R.S. (1980) Cost allocation under the Uniform System of Accounts for Hotels. Cornell Hotel and Restaurant Administration Quarterly, 21 (3), 31–39. Uniform System of Accounts for the Lodging Industry, 9th edn (1996) Lansing, MI: Educational Institute of the American Hotel and Motel Association. PAUL BEALS UNIVERSITY OF DENVER, USA Uniform Resource Locator (URL) Uniform Resource Locator (URL) – also known as Uniform Resource Identifier (URI), Uniform Resource Name (URN), and previously called Universal Resource Locator – is the global address of documents and other resources accessible on the World Wide Web. These resources include Hypertext Markup Language (HTML) pages, image files, virtual tours, or any other file supported by Hypertext Transfer Protocol (HTTP). URLs are typed into the browser window to access Web pages and are embedded within the pages themselves to provide hypertext links to other pages. The URL contains the protocol prefix, port number, domain name, subdirectory names, and file name. URLs may also be numbers but words are easier to use and remember. To access a home page on a website, only the protocol and domain name are required. In the URL http://www.expedia.com, for example, the first part of the address indicates what protocol to use ‘HTTP’ while the second part, ‘www. expedia.com,’ specifies the IP address or domain name, thereby identifying a specific computer on the Internet where the resource is located. URLs are important as they make hospitality brands, such as Hilton.com, easy to identify and locate on the Web. References The National Center for Supercomputing Applications (NCSA) (2003) A Beginner’s Guide to URLs. Availbale from: http://archive.ncsa. uiuc.edu/demoweb/url-primer.html World Wide Web Consortium (W3C) (2003) Architecture Domain: Naming and Addressing: URIs, URLs. Available from: http://www.w3.org/ Addressing/ JULINE E. MILLS PURDUE UNIVERSITY, USA Uniform system of accounts Uniform systems of accounts are standardized charts of accounts developed to reflect the specific operating and financial characteristics of individual hospitality-industry segments. The Uniform System of Accounts for the Lodging Industry (USALI) is by far the most widespread in its use, in part because it brings order to the complexity inherent in the numerous revenue and cost centers comprising a multi-faceted lodging property, but the Uniform System of Accounts for Restaurants (USAR) and the Uniform System of Financial Reporting for Clubs are also widely used. Uniform systems of accounts are designed to meet four distinct yet overlapping objectives: ● Comparability: Because uniform systems provide carefully developed formats reflecting evolving operating and financing trends in their segments, the comparisons of financial results among adopters’ operations are more reliable. ● Responsibility accounting: Uniform systems distinguish between direct and indirect costs, thus permitting the assignment of costs to the activities – and their managers. A direct cost is an expense that is readily and reliably assigned to a revenue-generating activity or a cost center. In the USALI, for example, the cost of food sold is readily identified if appropriate record-keeping procedures are followed, and it can reliably be assigned as a cost of generating food sales. Similarly, payroll and related expenses of both revenue centers (e.g., rooms department, food and beverage department) and cost centers (e.g., marketing, property operations, and maintenance) are direct costs because

630 Uniform system of accounts for restaurants they are the responsibility of individual revenue- and cost-center managers. An indirect cost is an expense that cannot be readily and reliably assigned to a revenuegenerating activity. For example, under the USALI, no cost of sales is assigned to the rooms division. Obviously, significant costs are incurred to generate the sale of room nights, but assigning the bricks-and-mortar (and other) costs of generating the rooms department revenue would (a) violate the objective of responsibility accounting, since the rooms division manager does not control the size of the rooms division (or its marketing budget) and (b) require the use of subjective allocation bases. Indirect costs are thus considered overhead costs, or burden. Under the USALI, operating overhead costs are termed undistributed operating expenses, while occupancy and financial overhead costs are termed fixed charges. ● Adherence to accounting standards: Careful use of uniform systems helps ensure that property level accounting personnel are reporting transactions according to Generally Accepted Accounting Principles (GAAP). ● Flexibility: Uniform systems typically contain far more classifications and accounts than are used by most adopters, but this feature permits individual operations to customize the system to their needs while preserving comparability and accuracy. Efficient systems of accounts summarize operating results succinctly, relegating more detailed information on revenues and costs to departmental schedules. This yields an uncluttered, more usable picture of operating performance while preserving a ‘drill-down’ capability if greater detail is needed. Similarly, expense dictionaries provide users with guidance by categorizing into their appropriate departmental schedules the myriad transactions a hospitality operation records. Although most adopters seek above all to generate operating statements that permit performance comparisons, uniform systems of accounts provide guidance on the presentation of other financial statements, including: the balance sheet, statement of owners’ equity, and the statement of cash flow. The evolution of ownership entities, changing operating characteristics, and evolving accounting standards require periodic revision of the guidelines for presenting the financial data for the industry’s various sectors. Finally, although the above discussion emphasizes the record-keeping function, an effective uniform system also provides analytical guidance. This might include procedures for the application of standard managerial accounting tools, e.g. ratio analysis, cost–volume–profit (CVP) analysis, operational budgeting and budgetary control, and allocation and apportionment of expenses (responsibility accounting) to the hospitality segment. References National Restaurant Association (1996) Uniform System of Accounts for Restaurants, 7th edn. Washington, DC: National Restaurant Association. Schmidgall, R.S. (2002) Hospitality Industry Managerial Accounting, 5th edn. Lansing, MI: Educational Institute of the American Hotel and Lodging Association. Schmidgall, R.S. (2003) Uniform System of Financial Reporting for Clubs, 6th rev. edn. Hospitality Financial and Technology Professionals and Club Managers Association of America. Uniform System of Accounts for the Lodging Industry, 9th edn (1996) Lansing, MI: Educational Institute of the American Hotel and Motel Association. PAUL BEALS UNIVERSITY OF DENVER, USA Uniform system of accounts for restaurants By nature, restaurant operators are protective of their proprietary information. In other words, they are reluctant to share operating results with their neighbors for fear that it will give those neighbors a competitive advantage. For generations, this meant that every small or large restaurant had its

Uniform system of accounts income statement 631 own way of ‘keeping score’ financially. Unfortunately, this made it difficult for one restaurant to compare itself with others, or to compare standardized knowledge across segments, regions, or even on occasion within organizations themselves. As the National Restaurant Association became a stronger advocate for the disparate voices of the industry, it was a driving force behind determining a standardized way to compare one restaurant with another. The outcome was the Uniform System of Accounts for Restaurants (USAR) (National Restaurant Association, 1996). Originally published in 1930, the Uniform System has undergone numerous updates and revisions over the intervening years. The Uniform System has nevertheless become the accounting basis for all restaurants, even though many larger chain organizations have adapted or altered it to suit their own particular reporting needs. Reference National Restaurant Association (1996) Uniform System of Accounts for Restaurants. Washington, DC: National Restaurant Association. CHRISTOPHER MULLER UNIVERSITY OF CENTRAL FLORIDA, USA Uniform system of accounts income statement Income statements for hotels and restaurants are organized above all to provide responsibility accounting information to users, although restaurant operating statements provide a lesser degree of detail. The hotel income statement communicates the dual retail-real estate nature of lodging. In its most useful format, entitled ‘Summary Statement of Income’ (Uniform System of Accounts for the Lodging Industry, 1996, 33), the income statement is readily divided into three panels or levels. The first level, summarized at the line ‘Total operated departments,’ reports the combined results of the property’s revenue centers. Each department’s revenue is recorded in the first column, while its direct costs are deducted horizontally, yielding the department’s profit (loss). The individual revenue centers’ results are summed and appear as a single figure captioned ‘Total operated departments.’ The gross margin contributed by the operating departments will depend on three factors: (1) management’s ability to drive revenue, especially in departments such as the rooms division, which enjoys a high degree of operating leverage; (2) management’s acumen in controlling the departments’ direct costs; and (3) the hotel’s sales mix, since some departments (e.g., food and beverage) are inherently less profitable than others and product offerings within the same department provide smaller (e.g., group rooms versus transient rooms) or larger (e.g., banqueting versus room service) contribution margins than others. The second panel describes the costs of the various service centers supporting the operating departments of the hotel, and is captioned ‘Undistributed operating expenses.’ As the term ‘undistributed’ suggests, the Uniform System of Accounts for the Lodging Industry (USALI) does not allocate these costs to the revenue-generating departments. This level is summarized at the line formally called ‘Income after undistributed operating expenses,’ but more commonly called ‘GOP’ (for gross operating profit) or ‘house profit.’ The third level, summarized at the ‘Net income’ line, is the province of ownership and reports the expenses related to the hotel’s real estate component and capital structure. A common industry term for these expenses is ‘fixed charges,’ although some (e.g., management fees, rent) vary with sales volume. Like undistributed operating expenses, fixed charges are indirect costs that are not allocated to the hotel’s revenuegenerating departments. The hotel income statement’s emphasis on responsibility accounting is evident at every level. Individual department heads are responsible for driving their profit centers’ revenues, as well as the departmental costs under their control. Although department heads in the cost centers (e.g., human resources, marketing, security) have no revenues attributed to their activities, they have direct responsibility for the costs their departments incur. The hotel income statement’s GOP is the line of demarcation between the hotel’s retail and

632 United States Environmental Protection Agency (US EPA) real estate components. The hotel’s general manager is ultimately responsible for all the operating activities reflected in the financial data above this line. The entity owning the property is responsible for decisions regarding the hotel’s mode of operation (e.g., self-operation versus a third party operator), the composition and cost of its assets, and its capital structure. Accordingly, these elements of cost are reported separately from operations. In contrast to the hotel income statement, the restaurant income statement provides less responsibilityaccounting information. In the Uniform System of Accounts for Restaurants (USAR) format only the cost of sales is presented as a direct cost of the two revenue centers, food and beverage, while labor and other expenses are treated as indirect costs. Similarly, the real estate component, reflected in the line items ‘Occupancy’ and ‘Depreciation,’ is not distinguished from the operating component. Capital-structure charges are, however, reported separately. The limited degree of cost allocation reflects the small business nature of unit level restaurant operations but probably does not represent a significant disadvantage in the USAR’s day-to-day use. The most significant costs of restaurant operations – food and beverage, wages, and operating supplies – are identified separately, allowing performance comparisons among operations on these important measures. It is also very likely that, whether at an independent restaurant or the unit level of a chain, the ultimate responsibility for controlling revenues and costs resides in a single individual, thus reducing the level of detail necessary for effective management. References National Restaurant Association (1996) Uniform System of Accounts for Restaurants, 7th edn. Washington, DC: National Restaurant Association. Schmidgall, R.S. (2002) Hospitality Industry Managerial Accounting, 5th edn. Lansing, MI: Educational Institute of the American Hotel and Lodging Association. Uniform System of Accounts for the Lodging Industry, 9th edn. (1996) Lansing, MI: Educational Institute of the American Hotel and Motel Association. PAUL BEALS UNIVERSITY OF DENVER, USA Unit week The unit week is the traditional use period that is conveyed to and used by the purchaser of a timeshare interest. It consists of seven days in a particular accommodation in a timeshare property. A unit week generally begins and ends on the same day of the week, but that day may vary from accommodation to accommodation in the timeshare property, especially in larger resort properties where there is a need to stagger check-in times to avoid overloading the front desk. If the unit week is the unit of measurement used, there are fifty-two seven-day unit weeks created with a fifty-third unit week created for years with excess days. The fifty-third unit week can be conveyed separately, given to the purchaser of the fifty-second unit week, or retained by the developer for its own use or the use of the management company. Depending on the jurisdiction and the documents underlying the timeshare plan, the unit week may be recognized as the actual timeshare interest that is being purchased, tied to a particular timeshare interest as a fixed timeshare interest pursuant to fixed timeshare plan, or not tied to a particular timeshare interest and made available for reservation pursuant to a float timeshare plan. Reference American Resort Development Association (2002) The Timeshare Resource Manual. Washington, DC: ARDA. KURT GRUBER ISLAND ONE RESORTS, USA United States Environmental Protection Agency (US EPA) The United States Environmental Protection Agency, or US EPA, which is located in

Upscale restaurants 633 Washington, DC, is an independent executive agency of the US federal government responsible for the formulation and enforcement of regulations governing the release of pollutants and other activities that may adversely affect the public health or environment. The EPA also approves and monitors programs established by state and local agencies for environmental protection and is also concerned with noise pollution and sponsors research into the effects of pollution on ecosystems. The EPA also works with other nations to identify and solve transboundary pollution problems and to ensure that environmental concerns are integrated into US foreign policy, including trade, economic development, and other policies, as well as to provide technical assistance and scientific expertise to other nations. The EPA has developed some extremely helpful programs that have assisted facilities professionals in the management of their operations. Among these are the EPA Energy Star Program (focusing on energy-efficient building equipment and operations), the WAVE Program (dealing with water conservation), and an energy benchmarking tool. EPA also has resources to assist with solid waste management and indoor air quality issues. References Franck, I. and Brownstone, D. (1992) The Green Encyclopedia: An A–Z Sourcebook of Environmental Concerns and Solutions. New York: Macmillan, p. 323. Stevenson, Harold L. and Wyman, B. (1991) The Facts on File Dictionary of Environmental Science. New York: Facts on File, p. 90. www.epa.gov LYLE THOMPSON BURNABY, BC, CANADA Unsystematic risk Unsystematic risk is the stock volatility caused by firm-specific events such as lawsuits and labor disputes. This type of volatility or risk can be diversified away because it is independent of economic, political, and other factors that affect all securities in a systematic manner (Van Horne and Wachowicz, 2001). For hospitality investors, firm-specific volatility or unsystematic risk can be eliminated by holding a well-diversified portfolio that includes both hospitality and non-hospitality stocks. Since unsystematic risk is avoidable via diversification, those hospitality investors need not be compensated for bearing it. Consequently, unsystematic risk is not a relevant factor affecting their required rate of return within the theoretical framework of Capital Asset Pricing Model (CAPM). In reality, however, hospitality investors are unlikely to ignore unsystematic risk completely because of imperfections of capital markets (Van Horne, 1998). In the real world, market imperfections, such as transaction costs, costly information, and unequal borrowing and lending rates, limit the effectiveness with which investors are able to diversify away unsystematic risk. As a result, unsystematic risk may still need to be compensated by adding a premium to the required rate of return, thus playing some role in firm valuation. References Van Horne, C. (1998) Financial Management and Policy, 11th edn. Englewood Cliffs, NJ: Prentice-Hall. Van Horne, J.C. and Wachowicz, J.M. (2001) Fundamentals of Financial Management, 11th edn. Upper Saddle River, NJ: Prentice-Hall. HYUNJOON KIM UNIVERSITY OF HAWAII, USA Upscale restaurants The most traditional segment of the restaurant and foodservice industry is fine dining. Historically, the idea of an upscale restaurant included certain key organizing principles: efficiency in the production of freshly prepared food and professionalism in service. Prices are typically the highest of any segment, because the food is almost exclusively ‘hand-made,’ not unlike a Rolls–Royce

634 Upselling automobile or a man’s tailored suit. Fine dining is defined by having a well-trained and professional staff of waiters, usually including a dining room managed by someone in the role of maître d’hôtel. This type of restaurant will almost always have an extensive wine list, as well as a full range of other alcoholic beverages. Meals are most often created by a culinary artiste called an executive chef, with dishes best described as consisting of elaborately and freshly prepared food. For more than a century the kitchen production system and the dining room service system have remained basically unchanged. The fabled French chef Auguste Escoffier designed the hierarchical structure of the kitchen. His colleague, the eponymous Cesar Ritz, an equally legendary maître d’hôtel, designed the dining room. Escoffier took what was essentially a loose, craftbased system and turned it into a paramilitary food production factory. At the top of the line is an executive chef, supported by a battery of sub-chefs, cooks, and stewards called a ‘kitchen brigade.’ Each has a well-defined role, often specializing in just one part of the otherwise complex menu: for example, the saucier makes all of the soups and stocks, while the poissonier is responsible for anything to do with fish. Dining room service is just as efficient as the kitchen’s, with captains leading teams of waiters, busboys, and food runners, supported by sommeliers (wine stewards), and other various players. References Kuh, Patric (2001) The Last Days of Haute Cuisine: America’s Culinary Revolution. New York: Viking. Spang, Rebecca L. (2000) The Invention of the Restaurant. Boston, MA: Harvard University Press. CHRISTOPHER MULLER UNIVERSITY OF CENTRAL FLORIDA, USA Upselling Upselling represents the efforts of reservation agents and front desk agents to convince guests to rent rooms in categories above standard rate accommodations. Hotels typically have several rate categories based on such factors as décor, size, location, view, and furnishings. Often the difference in rate between two similar guestrooms can be substantial. To upsell, front office and reservations staff must be trained to be more than simply ordertakers. They must be trained as professional sales people. These personnel must see that they can upsell rooms in much the same way that a food server can sell an extra food item. 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 nonpressuring way and how to direct the sale from the guest’s perspective. 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 are likely to have similar sales opportunities with walk-in guest. Some hotels, as a matter of policy, offer registering guests more than one room option and then let them state their preferences. To create guest acceptance, the front desk agent must know how to describe the hotel’s facilities and services in a positive manner. A guest will probably provide several clues about what is acceptable for his/her stay and some information might already be available on a reservation record. Upselling to walk-in guests often holds the best opportunity to create more revenue for the hotel. In some cases, only the highest rated rooms may be available. In other cases, a good selling effort, creating the impression of additional value, will convince a guest that the increased room rate is worth the expense. Reference Stutts, Alan T. (2001) Hotel and Lodging Management – An Introduction. New York: John Wiley & Sons. ALAN T. STUTTS AMERICAN INTERCONTINENTAL UNIVERSITY, USA

Use period 635 Urban timeshare An urban timeshare at a fundamental level is a high-rise condominium with a penthouse exposure that is located in thriving business districts within major cities. Timeshare resort developers have been successful in certain demographic markets by pricing the urban timeshare product against other vacation long-term stay alternatives such as high-end condominiums and high-end hotels to a limited degree. To cater to this upscale, long-term, business consumer an urban timeshare must be located in an area that has access to a high volume of tourists and business clientele. Good current examples of urban timeshare locations include New York, London, and Paris. The urban timeshare product is not for everyone. According to industry research, there are four distinct markets. These markets encompass: upscale urbanites that exchange for the purpose of meeting friends and/or relatives; people that live within a 150-mile radius that want to take advantage of the city’s arts, entertainment, and retail outlets; an international tourist market that is drawn to the arts and educational offerings of the city; and businesses that have need of longterm stays for national and international travelers. Reference http://www.hotel-online.com/Trends/Andersen/ 1998_TimeshareWave.html. Accessed 29 January 2003. PIMRAWEE ROCHUNGSRAT JAMES COOK UNIVERSITY, UK Use period A use period is the generic name given to the defined period of time in a timeshare plan during which an accommodation in a timeshare property is subject to reservation and use by the timeshare owner. Use periods can be as short as a single day or as long as a larger fractional interest, which commonly refers to more than one week of timeshare interest. The use period traditionally used in timeshare plans is the week, consisting of seven days starting and stopping on the same day, and with or without the option to split the week into a three-day and a four-day stay or into other usage increments. Depending on the jurisdiction and the documents underlying the timeshare plan, the use period may be tied to the underlying timeshare interest, such as a fixed week, or may not be tied to the underlying timeshare interest, such as a floating week. The smaller the increments of time that can be reserved and the more flexibility in the use options given to the timeshare owner with respect to use periods, the greater the cost for operating the timeshare plan and the greater the complexity of the reservation program for timeshare consumers. Reference American Resort Development Association (2002) The Timeshare Resource Manual. Washington, DC: ARDA. KURT GRUBER ISLAND ONE RESORTS, USA

When the mid-1970s condo boom went bust, many developers of whole-ownership condominium properties subsequently converted their projects to timeshare. RCI was uniquely poised to enhance the attractiveness of the timeshare product by offering ‘like-for-like’ vacation exchanges. In 1976, Interval International was formed to compete in the timeshare exchange marketplace. Vacation exchange allows timeshare owners the opportunity to trade their vacation week(s) for different vacation experiences at other comparable resorts around the world. The developers of timeshare resorts clearly understand the intrinsic value of affiliating their properties with an Exchange Company. The ability to exchange enhances the value of their product by adding flexibility, providing vacation alternatives, and offering additional leisure benefits and services. Industry studies validate the importance of exchange during the sales process and indicate 84.2% of timeshare owners cited the opportunity to exchange as their primary motivation to buy. Timeshare owners typically become consumer members of the exchange company at point of sale. Since most developers treat exchange as an integral component of their timeshare plan, they agree to enroll new owners at the developer’s expense for their first years(s) of membership. Thereafter, the exchange company solicits renewals directly from their members. In addition to exchange, both major exchange companies offer a variety of leisure-oriented benefits to their members, including bonus vacations, travel services, vacation insurance, and cruise exchange. Vacation exchange history The history and evolution of vacation exchange is directly tied to the history and evolution of the timeshare industry, which dates back to the 1960s in the French Alps. Demand for the vacation pleasures of a ‘second home’ were extremely limited, prices were high and consumers did not want the financial burdens of year-round second property ownership. In order to expand the potential customer base, companies began marketing a concept which involved buying only specific weeks of time in a resort condominium unit. The idea spread to the United States in the early 1970s. From the beginning it was clear the product still had one basic flaw: vacation owners were unwilling to buy an inflexible product that limited their vacation options by locking them into taking their vacation at the same time and at the same place year after year. Timeshare owner and entrepreneur Jon DeHaan recognized that timeshare owners wanted more flexibility to take a vacation when and where they wanted. The idea of an exchange network took hold. Jon and his wife, Christel, with the support of a few key developers and ALDA (the precursor to ARDA), were convinced the exchange component was needed to facilitate timeshare sales, and in 1974 they founded RCI, the world’s first exchange network. The DeHaans originally intended to help developers of vacation condominiums sell new units by offering the buyers of those units’ opportunities to exchange into other vacation destinations. V

Vacation exchange history 637 Timeshare owners ‘deposit’ their vacation week(s) with the exchange company. As other vacation owners deposit their weeks, the exchange company builds up an inventory of weeks that are available for vacation exchanges. The inventory pool is typically enhanced by unsold weeks deposited by resort operators and developers. When a member deposits their week with the exchange provider, the company compares the week the depositor is relinquishing with weeks deposited by other members and provides a suitable match based on availability and value. Factors affecting the ‘trading value’ are: demand for the vacation time (prime time versus offseason), the size of the unit relinquished, the resort’s quality rating, and how early the week was deposited in advance of the start date of the vacation week. Once the exchange provider matches an owner’s request to a vacation week, the owner pays an exchange transaction fee. The exchange provider will advise the host resort of all inbound exchange guests for each applicable arrival date. Members receive a written confirmation, which includes information about the unit they confirmed and the features and amenities of the host resort. As stated, exchange offered at the sales table is proven as a powerful inducement for new owners to buy. Developers also benefit from their exchange company affiliation when they host inbound exchange guests. These guests are highly desirable sales prospects as they already have a general understanding of vacation ownership and are on the premises at no additional cost to the developer. Existing owners who remain active members of the exchange company are equally important to developers, resort operators, and owners’ associations. Satisfied owners are much more likely to continue paying off the purchase contract, stay current in their annual assessments, and refer their family and friends as sales prospects. Since the inception of timeshare, the industry has grown dramatically. Resort developers have continued to refine their vacation products and have found creative ways to sell vacation weeks. Today’s vacation ownership products include traditional fixed week intervals, floating reservation plans, fractional interests, points programs, and vacation clubs. Developers are taking advantage of other travel and leisure alternatives and showcasing them to new owners in their sales centers. Exchanging vacation weeks for cruises, airfare, car rentals, and urban hotel stays are part of today’s sales presentations, yielding improved sales efficiencies. Leading exchange providers have continued to enhance the diversity of the products they offer to their members. In 2000, RCI launched the world’s first global points-based exchange system, RCI Points. This system allows timeshare owners to have their vacation ownership interests expressed as an annual quantity of points. RCI Points members can utilize their points for resort accommodations with greater flexibility in length of stay and/or size of unit. Points can also be used for airfare, rental cars, hotel stays, golf outings, and many other travel products. RCI also brought new benefits to private residence club developers and owners through the introduction of Global Registry. The Global Registry provides flexibility and added value to the luxury segment of the vacation ownership industry by providing property owners at private residence clubs access to a portfolio of fine leisure assets. Given the importance of the exchange option, it is gratifying that, based on a recent survey, 61% of US timeshare owners report themselves ‘very satisfied’ with their most recent exchange vacation, while 24% are ‘somewhat satisfied.’ By contrast, only 9% express any level of dissatisfaction. Exchange providers will continue to find new and innovative ways to enhance their offerings and seek new ways to provide quality vacation experiences. References Miner, Steven (2001) Timeshare Purchases: A Profile of Recent Activity. Ragatz Associates/RCI, NJ. Miner, Steven S. and Leavitt Jackman, Lisa (2000) Increase in Weeks Owned and High Satisfaction Levels. KPMG Peat Marwick LLP and Steven Miner Research and Appraisal. JOY TALBOT-POWERS RESORT CONDOMINIUMS INTERNATIONAL, USA

638 Value-added statement Vacation ownership The term is used to describe a method of use and ownership of vacation property in commoninterests subdivisions including timeshare resorts, second homes, fractional interest resorts, membership campground interests, and recreationalsubdivision lots. ‘Timeshare unit’ means an accommodation of a timeshare plan which is divided into timeshare periods. The smallest timeshare period is a unit week, which means that the purchaser buys one week out of 52 possible weeks. ‘Timeshare plan’ means any arrangement, plan, scheme, or similar device, other than an exchange program, whether by membership, agreement, tenancy in common, sale, lease, deed, rental agreement, license, or right-to-use agreement or by any other means, whereby a purchaser, for consideration, receives ownership rights in or a right to use accommodations, and facilities, if any, for a period of time less than a full year during any given year, but not necessarily for consecutive years. It is important to differentiate this from the exchange program because all timeshare plans reside with a specific developer and not an exchange company. References American Resort Development Association (2002) The Timeshare Industry Resource Manual. Washington, DC: ARDA. http://www.flsenate.gov/Statutes/index.cfm? App_modeDisplay_Statute&Search_String &URLCh0721/SEC05.HTM&Title-> 2003-> Ch0721-> Section percent2005. MICHAEL HAUSHALTER ORLANDO, FLORIDA, USA VALS VALS is one of several consumer profiling and segmentation services available through market research firms. VALS was created by Scarborough Research. The VALS system consists of eight different segments to which a consumer may belong, based on the consumer’s primary motivation and his or her access to resources to fulfill their needs and motivations. These segments include Innovators, Thinkers, Achievers, Experiencers, Believers, Strivers, Makers, and Survivors. There are many ways to use VALS. The system may be used in new product development by comparing the company’s proposed targeted customer base with the profiles most closely associated with the target. VALS can offer insight into the likes and dislikes of the proposed target group, as well as offer suggestions on how best to structure and present an advertising message. VALS may also be used for existing products and services, where the current customer base is surveyed using the VALS survey to gain greater insight into the current customer. This tool may be useful in increasing sales of existing products, developing new products, and uncovering potential new customer segments. Reference Scarborough Research – Scarborough Consulting Business Intelligence. Available from http:// www.sric-bi.com/VALS/. DINA MARIE V. ZEMKE UNIVERSITY OF NEW HAMPSHIRE, USA Value-added statement The difference between what a hotel pays for the goods and services that it sells and the price that it sells them for represents the hotel’s valueadded. Preparation of a value-added statement can allow management to consider what proportion of value-added is consumed by expenses such as staff costs, rent paid, etc. As can be seen from the example below, this can be facilitated in a value-added statement by stating all elements of the statement as a percentage of the total value-added. A value-added statement should not be confused with ‘economic value-added,’

Value drivers 639 which can be calculated by taking an organization’s operating profit minus its annual cost of capital. ABC HOTEL Value-Added Statement for the year ended 31 December, 200X $ % Sales revenue 85,000 Bought-in goods and services 35,000 Value-added 50,000 100 Applied the following way: To pay employees Wages, pensions, etc. 24,000 48 To pay providers of financial capital Interest on debt capital 4,500 9 Dividends 6,500 13 To pay providers of physical capital Lease payments 5,000 10 To pay for fixed asset maintenance 9,000 18 and expansion Depreciation 1,000 2 Retained profit Value-added 50,000 100 Reference Owen, G. (1998) Accounting for Hospitality, Tourism and Leisure, 2nd edn. Harlow: Longman. CHRIS GUILDING GRIFFITH UNIVERSITY, AUSTRALIA Value drivers Value drivers are indicators of a company’s core values. Expressed in terms of measurable operating variables or activities that approximate the potential and often intangible assets of companies, changes in value drivers significantly impact the market value of a company. For example, a hotel company’s value drivers may include growth, market share, technology, level of service, and amenities. The main utility of a value driver lies in its function to measure an overall corporate performance and estimate the company’s market value by adding non-financial aspects to the evaluation process. To this end, value drivers are of interest to anyone concerned with measuring corporate performance such as investors, operators, and shareholders. The significance of value drivers may be inferred from the estimation that non-financial performance accounts for as much as 35% of institutional investors’ valuation for public companies (Low and Seisfeld, 1998). In this respect, value drivers have significant implications for the hospitality industry, given the intangible nature of hospitality products. They provide some critical insights into foodservice operations that often go unnoticed under the conventional accounting-based approach to property valuation often based on Uniform System of Accounts or RevPASH. Although there is no specified list of value drivers, critical value drivers may be categorized into nine areas (Kalafut and Low, 2001): 1. Innovation involves a company’s value in terms of its future growth. Value drivers for innovation in the hospitality industry may include, for example, R&D expenditures. 2. Quality reflects a company’s focus toward product and service features as its core values. Specified quality standards or product features are examples of value drivers reflecting quality. 3. Customer relations address a company’s commitment to its clients. Loyalty programs for customer relations or online reservation services may be examples of value drivers in this category. 4. Management capabilities reflect the value of human resources and leadership in a company. Performance appraisals for key managerial employees or the quality of executive development programs may be used as value drivers to measure management capabilities. 5. Alliances refer to a company’s strength in terms of external resources. Value drivers in alliances may be measured in terms of the number of external alliances and joint ventures, or the market value of the alliance companies. 6. Technologies are the fastest growing category of value drivers. In-room Internet connections and express check-out using TV monitors are examples of technology-related value drivers.

640 Value pricing 7. Brand value is one of the major concerns of chain hospitality corporations. The image associated with a brand has significant impact on a company’s performance. The value of the brand may be influenced by value drivers such as strength of brand image among main competitors. 8. Quality of employees also impacts value creation. After all, employees play a main role in service delivery in the hospitality industry. Value drivers that reflect employee quality include performance appraisals and the quality and quantity of training offered to employees. 9. Environmental and community concerns also affect a company’s value. For example, two restaurants offering identical products and services may perform differently in different neighborhoods. A recent study of US hospitality operations from the perspective of the operators revealed that value drivers have changed for them in the recent years (Watkins, 2003). Operators use value drivers to identify specific product features that motivate customers to purchase their products and services. While the price and location are still the dominant value drivers that attract customers, increasing numbers of customers lead to new value drivers. The findings suggest that while traditional value drivers, such as price and location, still account for approximately 70% of customers’ selection criteria, approximately 30% of the selection process is led by new value drivers such as technology, loyalty points, and customization options. The study further suggests that hospitality corporations, in an effort to respond to rapidly changing market needs, are offering varieties of new value drivers such as wireless Internet access (e.g., cyber cafés) and customized frequent customer programs. However, merely adding new drivers without identifying what a company’s core values are will be misleading. In order to maximize the gain from their value drivers, hospitality companies should first thoroughly understand their markets, identify the core values that differentiate them from the competition, and add or create new value drivers that are meaningful. Obviously, different value drivers influence different market segments, and the value is added only if the new drivers tap into target markets that are significant for the company. A good example of this is McDonald’s strategy in 2004. In response to concerns of obesity and possible linkages with diets high in fat, the multinational quick service giant launched a campaign surrounding a line of salads. Tying quality, brand value, and community concerns together, the firm successfully increased stock price and customer loyalty. References Kalafut, P.C. and Low, J. (2001) The value creation index: quantifying intangible value. Strategy and Leadership, 29 (5), 9–15. Low, J. and Seisfeld. I. (1998) Measures that matter: Wall Street considers non-financial performance more than you think. Strategy and Leadership, 26 (2), 24–28. Watkins, E. (2003) How guests choose hotels. Lodging Hospitality, 59 (20), 36–40. MASAKO TAYLOR TAYLOR ASSOCIATES, JAPAN Value pricing Value pricing is a marketing tool that bases product prices primarily on the consumer’s perception of value for a given product. The application of value pricing is an effort to satisfy consumer demand for value without decreasing the quality of the product (Hayes and Huffmann, 1995). There are several value pricing strategies that a hospitality firm can apply, such as everyday value pricing, bundling, and special offers at given times. However, value pricing can be a risky technique if hospitality firms apply it merely as a discounting strategy in order to increase their market share, hoping to achieve a profit with increased sales volumes. In order to make value pricing a financial success, hospitality operators have to learn what represents value in their customers’ minds and set prices accordingly. Value pricing strategies ideally are based on knowledge of how relationships between price and quality affect perceptions of value. These relationships

Variable costs in foodservice 641 can be investigated by applying price sensitivity measurement (PSM) techniques. The results then can serve as the basis for successful valuepricing, as was demonstrated by Taco Bell who created its very successful 59-cents value menu based on such an analysis (Lewis and Shoemaker, 1997). References Hayes, D. and Huffman, L. (1995) Value pricing: how low can you go? Cornell Hotel and Restaurant Administration Quarterly, 36 (1), 51–56. Lewis, R. and Shoemaker, S. (1997) Price sensitivity measurement: a tool for the hospitality industry. Cornell Hotel and Restaurant Administration Quarterly, 38 (2), 44–54. CAROLA RAAB UNIVERSITY OF NEW HAMPSHIRE, USA Variable costs A variable cost varies in direct proportion to the level of business activity. Thus, where the level of business increases by 10%, variable costs can be expected to rise by approximately 10%. Examples of variable costs include cost of casual labor, guest supplies, travel agents’ commission, laundry in a hotel, and beverage cost of sales and the cost of raw material such as food in a restaurant. If variable costs are linear, then the cost per unit is independent of the volume (remains constant) and there are no economies or diseconomies of scale effects. When variable cost per unit is decreasing (e.g. if there are discounts for the purchases of larger quantities of raw material), there are scale advantages, but when variable cost per unit is increasing (e.g. need for more overtime work if the volume increases) there are scale disadvantages. The balance between fixed and variable costs is open to strategic choice. Variable costs can be turned into fixed cost through automation. Fast food chains normally have comparatively high fixed costs. Purchasing semi-finished dishes may be a means to turn fixed labor costs into variable costs. References Horngren, C.T., Foster, G., and Datar, S.M. (2000) Cost Accounting: A Managerial Emphasis, 10th edn. London: Prentice-Hall International. Schmidgall, R.S. (2002) Hospitality Industry Managerial Accounting, 5th edn. Lansing, MI: Educational Institute of the American Hotel and Lodging Association. TOMMY D. ANDERSSON GOTEBORGS UNIVERSITY, SWEDEN Variable costs in foodservice Total variable costs change based on the number of customers patronizing a foodservice establishment. As the number of customers increases, the total variable costs for that restaurant also increase. Conversely, if the number of customers decreases, the total variable costs decrease. However, over the short term, the variable cost per customer will not change. This means that for each customer who patronizes the establishment, total variable costs will increase by the same amount, on average. Examples of variable costs include food, beverages, and some labor costs, as well as some costs of supplies used in food production and service areas. In larger operations, variable costs may not be as linearly correlated with guest volume as is the case in smaller restaurants. This is due to rebate programs and other economies of scale that allow larger-volume operators to reduce variable costs increasingly with guest patronage. This has ramifications for pricing strategies and breakeven analysis. It is also important in budgeting and places even more importance on the accuracy of related forecasts. Reference Reynolds, D. (2008) Foodservice Management Fundamentals. Hoboken, NJ: John Wiley & Sons. DEBORAH BARRASH UNIVERSITY OF NEVADA, LAS VEGAS, USA

642 Vertical transportation Vending According to the National Automatic Merchandising Association (NAMA), vending is defined as ‘providing service at an unattended point of sale through the use of monetarily-driven equipment’ (NAMA, 2004). Vending machines can be found in many locations, ranging from schools to businesses to medical facilities to hospitality properties. While vending operations are very impersonal, they are also very convenient for customers whose purchasing needs fall outside of traditional business hours or where desired services and products are not otherwise available. A major advantage from an operator’s perspective is the ability to provide food/drink/snack service while incurring low or no labor costs. The four most common items distributed through vending machines are candy, cigarettes, soda (soft drinks), and coffee. Through technology and innovation the industry has evolved to include such products as hot and cold entrées, frozen foods, and dairy products, which may be purchased using coins, bills, or credit cards. NAMA (2004) estimates that the vending industry racks up US$19–28 billion in sales annually. Based on the National Restaurant Association’s ‘Restaurant Industry Forecast’ for 2004, these numbers equate to 4.3–6.4% of total projected food and drink sales in the United States (2004). References National Automatic Merchandising Association (2004) Vending 101 (online). Available at http://www.vending.org/doc/vending101_ english.doc. Accessed on 9 March 2004. National Restaurant Association (2004) Restaurant Industry Forecast (on-line). Available at http://www.restaurant.org/research/ ind_glance.cfm. Accessed on 9 March 2004. NANCY SWANGER WASHINGTON STATE UNIVERSITY, USA Ventilation system Ventilation contributes to human comfort. Air inside an occupied building can become stale and stagnant. In hotels, activities such as smoking and cooking tend to magnify this problem. Consequently, the air in the building needs either to be filtered or to be replaced with fresh outside air. The replacement of inside air with air from the outside will raise heating and cooling costs because this outside air must be brought to the inside air temperature; thus a good air filtration system may be a cost-effective investment. In addition, building surroundings that allow free movement of winds may have positive impact on ventilation. Buying a ventilation system based strictly on low price is generally not a wise economic decision in the long run. A well-insulated building is always easier to ventilate than one with too little or poor insulation. The ventilation system also interacts with the heating and cooling systems. Ventilation requires air movement and this can have a cooling effect. Heated or cooled air is sometimes distributed around a building by ventilation-assisted air movement; when this occurs, the ventilation system becomes a part of the heating and/or cooling system. Thus, although the ventilation system alone is responsible for providing fresh, clean air, all the elements of the HVAC system must work together to provide the most comfortable combination of temperature, humidity, and air speed. References http://www.gov.on.ca/OMAFRA/english/ engineer/facts/94-045.htm Palmer, J.D. (1990) Principles of Hospitality Engineering. New York: Van Nostrand Reinhold. BENNY CHAN THE HONG KONG POLYTECHNIC UNIVERSITY, HONG KONG SAR, CHINA Vertical transportation There are many ways of moving people and equipment vertically through a multi-story building. The most common method is using the stairs. Most modern commercial buildings have one or more pieces of equipment that allow them to move people and objects mechanically.

Vertical transportation 643 This equipment falls into the general category of vertical transportation. Vertical transportation systems that are most commonly found in the hospitality buildings include elevators, escalators, and dumbwaiters. Elevators Elevators are the most common type of vertical transportation equipment found in hospitality properties. They are equipped with numerous redundant safety devices, resulting in a form of transportation that is one of the safest in the world for transporting both equipment and passengers. There are three basic types of elevator equipment, each serving a different set of operational parameters – hydraulic elevators, geared elevators, and gearless elevators. Hydraulic elevators are the most prevalent type of elevator. They are designed to be used in buildings with a relatively low vertical rise, usually serving between two and six stops. Traditional hydraulic elevators operate using a piston-andcylinder arrangement, where a cylinder is buried in the ground beneath the elevator cab and a piston, attached to the bottom of the cab, travels up and down the cylinder to raise and lower the elevator. The piston is propelled by fluid, usually a specially formulated oil that is pumped in and out of the cylinder. This mechanical process results in a relatively slow elevator, with speeds ranging from 50–150 feet/minute (0.254–0.762 meters/second). Many new hydraulic elevators are being installed that use piston-and-cylinder arrangements that are not buried in the ground, which greatly reduces installation time and expense, since it does not require a hole to be drilled into the ground for the cylinder. The ‘holeless’ hydraulic elevator also reduces the risk of a hole forming in the side of the cylinder which can result in hydraulic fluid leaking into the surrounding ground. Buildings that require greater speed and travel height typically turn to geared and gearless elevators to accomplish the task. Geared and gearless elevators do not use a piston-and-cylinder arrangement to raise and lower the elevator. Instead, the elevator cab is attached to a ‘rope,’ or wire cable, that travels over a grooved sheave at the top of the hoistway. The other end of the rope is attached to a counterweight that travels in the opposite direction of the elevator. Geared elevators are designed to serve mid-rise buildings (i.e., 6–20 stops) at medium speeds, ranging from 250–500 feet per minute (1.27–2.54 meters/ second). Gearless elevators are designed to serve buildings with a higher rise, and usually travel at higher speeds, ranging from 400 to 1500 feet/minute (2.03–7.62 meters/second). Escalators Escalators are moving staircases. They are complex mechanical systems that are very effective at moving large volumes of people over relatively short distances. Some escalators are capable of moving more that 6000 passengers per hour. The escalator carries passengers from one floor to another. Escalators are the most expensive type of vertical transportation equipment, both to install as well as to maintain. The expense is due to the complexity of the equipment and the hundreds of moving parts in the system that must be maintained regularly and properly to insure safe and consistent operation. The basic parts of an escalator include the steps, the handrail and balustrade, the truss, motors, and safety equipment. The steps are the part of the escalator that passengers stand on. The handrail is a moving rail that travels in sync with the steps. The handrail sits on top of the balustrade, which rises vertically above the steps. The balustrade may be skinned in metal or may be made of glass. The truss is the structure in which the escalator components are located and provides the support for the entire system. A modern hotel escalator may be equipped with several safety devices to prevent injury, depending on the age of the escalator and national and local code requirements. Some of the more common devices include lighting at the top and bottom landing, lines painted on the steps to help passengers identify the edges of the steps, manually-operated emergency stop switches, stop switches that are activated in the event of equipment failure, and special panels designed to close the gap between the balustrade and the moving steps.

644 Vortal Dumbwaiters Dumbwaiters are small elevators that are designed to carry materials only. Dumbwaiters are usually hoisted using a drum-style machine, where a cable is wrapped around a drum. The dumbwaiter descends when the cable is unwrapped and ascends when the drum reverses direction and rewraps the cable. Dumbwaiters can land at floor level, or anywhere above the floor to facilitate easy loading and unloading of materials. Foodservice operations will often use dumbwaiters to transport food to service areas located on floors different from the food preparation areas, as well as to transport dirty dishes to a kitchen stewarding area on a different level. Hotels often use dumbwaiters to transport linens as well as to move room service food and beverages. Unlike elevators, there are no safety systems built into a dumbwaiter that make it safe for passengers to ride. It is important that hotel and restaurant managers ensure that their employees do not ride in dumbwaiters. Reference Starkest, G.R. (ed.) (1998) The Vertical Transportation Handbook, 3rd edn. New York: John Wiley & Sons. DINA MARIE V. ZEMKE UNIVERSITY OF NEW HAMPSHIRE, USA Virtual reality Virtual reality is a computer simulation that offers the user the opportunity to experience different kinds of pre-produced programs, as if in real time (Williams and Hobson, 1995). It enables users to enjoy computer-generated environments that offer three-dimensional perspectives through the use of sound, sight, and touch technology. Using virtual reality, it is possible to simulate the physical environment of almost any tourism destinations or hospitality facility. Virtual reality enables people who have the equipment to experience artificial tourism products and services at low cost. It can also provide tourism experiences to those who are unable to travel because of physical disabilities or illnesses, lack of skills, or lack of sufficient time (Bennett, 1996). There are challenges to address in giving a feeling for the social and cultural aspects of a destination or of smelling and tasting. Regarding the impact of virtual reality on the future of the hospitality industry, some commentators argue that people will have no need to visit a hospitality facility because ‘virtual’ conditions can provide the perfect experience. Others suggest that the chance to test or practice an experience will generate higher demand to visit the real place. References Bennett, M.M. (1996) Information technology and databases for tourism. In A.V. Seaton and M.M. Bennett (eds), Marketing Tourism Products. Oxford: International Thomson Business Press, pp. 421–443. Williams, P. and Hobson, J.S.P. (1995) Virtual reality and tourism: fact or fantasy? Tourism Management, 16 (6), 423–427. METIN KOZAK MUGLA UNIVERSITY, TURKEY Vortal A vortal is a gateway to Web content on a particular subject area. A vortal may also be more simply defined as the industry-specific equivalent of the general-purpose portal (e.g. Yahoo.com) on the Web. Vortals are also known as vertical portals, VEP or vertical enterprise portals, vertical-market websites, vertical industry portals, or voice portals. Vortals can be corporate portals, business intelligence portals, Web hubs, or Interest community websites. Vortals provide information and resources including research and statistics, discussions, newsletters,

Vortal 645 online tools, and many other services that educate users about a specific industry such as travel, insurance, automobiles, food manufacturing, and healthcare. Vortals also give users a single place to communicate with and about a single industry. Some vortals may be accessible by telephone, hence the term voice portal. Examples of hospitality vortals are www.hospitalityindia.info and www.hotelshop.co.za that provide information for suppliers to the hospitality industry and their purchasers. On the consumer side, www. travelplan.it is a vortal on Italian tourism providing consumers with booking as well as national, regional, and local information on Italy. References Jafari, A. and Sheehan, M. (2003) Designing Portals: Opportunities and Challenges. Hershey, PA: Idea Group Publishing. Wang, S. (2001) Vortal defined. IT-specific Encyclopedia. Available at http://whatis. techtarget.com. JULINE E. MILLS PURDUE UNIVERSITY, USA

Stutts, Alan T. (2001) Hotel and Lodging Management – An Introduction. New York: John Wiley & Sons. MORGAN GEDDIE UNIVERSITY OF HOUSTON, USA Walking the guest When a guest arrives at a lodging facility with a guaranteed reservation and there are no rooms available the guest must be sent to a similar lodging facility at the expense of the facility that did not honor the reservation. The guest should be given free transportation to the facility and one free long-distance phone call to notify someone of the change in where they will be staying. If the guest had a reservation for more than one night, every effort should be made to move the person back to the property the next day. The key to minimizing the negative impact of walking a guest is preparation. According to the Educational Institute of the American Hotel and Motel Association (1996), when facing a sold-out situation the front desk should contact similar properties to inquire of their availability and be prepared to send a guest to a different establishment prior to their arrival. PBX should be notified so calls and messages may be forwarded to the displaced guest. If the guest returns the next day, a gesture can be made such as arranging for an upgrade on their room and placing a gift basket in the room with a letter of apology. Walk-in A walk-in refers to a person who arrives at a lodging facility without a reservation. According to the American Hotel and Motel Association, a walk-in is an excellent opportunity to increase sales and occupancy. Therefore, treat the walk-in guest just as warmly as a guest who has a reservation. First ask the guest the length of his/her stay to ascertain that a room is available for the requested days. If space is available for the entire length of his/her stay then the available rate should be quoted. The walk-in guest is an excellent opportunity to practice upselling and maximizing potential revenue for the property. A person who says they have a reservation that cannot be found would also be treated as a walk-in. In this case the front desk staff must try to minimize the loss of the reservation by moving on quickly and asking the guest for the necessary information to check him/her into the property. However, if the lodging facility is in a sold-out situation, the clerk should make every effort to find the reservation, and if it cannot be found should apologize and offer to locate the person in alternative accommodation (walking the guest). Reference American Hotel and Motel Association (1996) Hospitality Skills Training Series: Front Desk Employee Guide. Lansing, MI: Educational Institute of the American Hotel and Motel Association. W

Waste factor/yield 647 Reference American Hotel and Motel Association (1996) Hospitality Skills Training Series: Front Desk Employee Guide. Lansing, MI: Educational Institute of the American Hotel and Motel Association. Stutts, Alan T. (2001) Hotel and Lodging Management – An Introduction. New York: John Wiley & Sons. MORGAN GEDDIE UNIVERSITY OF HOUSTON, USA Wall reader A wall reader is an important part of a smart card system. A small fob or card can be held near the reader, at a distance of from 4 to 24 feet depending on the model, and an electric strike or magnetic lock opens. The reader can be mounted inside or behind the wall in areas where vandalism is a problem. Each reader has a unique identification number. Some of the readers have a keypad built in to use for programming. Programming is easy to do and is actually done right at the reader itself, using either the proximity keys that come with the reader or by using the number buttons (keypad) built into the unit. A laptop or PC can also be used to program the system and do audit trails (who entered and when). The system can monitor who goes in and who goes out of the area, offering greater security control. In hotel operations, it can lower operation cost through fewer handling errors, decreasing production time, and minimizing excess programmed proximity cards in inventory. It is simple to use and the software allows the administrator to set usage permission for the users. References http://www.nokey.com/proxread.html http://www.vttech.com/Products/products_ PW.htm BENNY CHAN THE HONG KONG POLYTECHNIC UNIVERSITY, HONG KONG, SAR, CHINA Warnings to employees Poor performing employees need to be managed carefully and fairly through separate performance appraisals with formal and documented processes. In many cases employers will also use verbal and written ‘warnings’ in an attempt to improve employee performance (De Cieri and Kramar, 2003). A verbal caution given to a hospitality employee usually represents the first step of the disciplinary action process relating to management action aimed at controlling, punishing, modifying or inhibiting undesirable employee behavior (e.g. absenteeism, poor performance, inefficiency, negligence, safety violation etc.). In most instances where there is a strong human resources management (HRM) focus, there is a formal disciplinary code or procedure to be followed. In some industrial jurisdictions, disciplinary action or a disciplinary code or grievance procedure are codified either by statute or in industrial awards or determinations. A formal warning or reprimand of a hospitality employee usually represents the second stage of the disciplinary process (Woods, 2002). Whilst there are no specific legislative guidelines in most countries, as a rule, there is a verbal warning, followed by either one or two written warnings alerting the employee that their behavior is unsatisfactory and may lead to the termination of their employment should they not improve. References De Cieri, H. and Kramar, R. (2003) Human Resource Management in Australia: Strategy, People, Performance. Sydney: McGraw-Hill. Woods, R.H. (2002) Managing Hospitality Human Resources, 3rd edn. Lansing, MI: Educational Institute of the American Hotel and Lodging Association. NILS TIMO GRIFFITH UNIVERSITY, AUSTRALIA Waste factor/yield When calculating recipe and portion costs, allowances need to be made for unavoidable

648 Water and waste water systems waste when calculating the recipe yield. Failure to do so will result in understating portion costs. Subsequently, instead of figuring on 100% yield from a recipe, assume that only 98% will be actually used, allowing 2% for evaporation, overportioning, and quality control waste. This percentage of waste will differ depending on the menu item. There is a higher allowance for waste on items prepared from scratch than on items that are purchased pre-portioned. For example, if steaks are purchased pre-cut, there would be zero tolerance for waste and over-portioning. However, if steaks were cut in-house, the yield (number of steaks) from a primal cut of meat will vary depending on the weight of the primal cut and the skill of the butcher. Once the steaks are cut and sent to the kitchen for sale, however, there would be zero tolerance for waste or quality control. Furthermore, yield calculations are most critical for more expensive items, such as meats, since these have a more dramatic impact on cost and profit outcomes. Reference Mutkoski, S.A. and Schurer, M.L. (1981) Meat and Fish Management. North Scituate, MA: Breton. DAVID V. PAVESIC GEORGIA STATE UNIVERSITY, USA Water and waste water systems Hospitality facilities require relatively large amounts of water and create large amounts of wastewater as well. Water is used by hotels in guestroom areas for bathing and sanitary purposes. Food and beverage operations use water for food preparation, cooking, and a variety of cleaning purposes. Laundry operations are also substantial consumers of water. Grounds and landscaping can consume significant amounts of water as well. Swimming pools require a substantial amount of water when filled and ongoing amounts to replace water lost to evaporation and other losses. Finally, operations with cooling towers can evaporate large amounts of water in their operation. Usage of water in hotels can range from 40,000 gallons per room per year for economy properties to 80,000 gallons for upscale and as much as 150,000 gallons for resort operations. The variation is primarily due to the items discussed in the paragraph above (e.g. does the property have F&B, etc.). Water costs are typically composed of a charge for water supply and a charge for wastewater removal and treatment. In the United States, total water costs typically range from $3 to $8 per 1000 gallons – about 50% being supply charges. Water can be produced by the property itself from a well or other water source rather inexpensively. Water can also be produced by operation of a desalinization plant – a very expensive but sometimes unavoidable option. In addition to the water cost itself, the cost of hot water is increased by the cost of the fuel. The result is that hot water can cost an additional $8 to $20 per 1000 gallons. Water systems require water at a proper pressure and in adequate quantity. Pumps may operate on the water system within the building to provide pressure and quantity as needed. The hot water system also needs water supplied at an appropriate temperature. Many hotel operations in the United States attempt to supply hot water at approx. 120 F (48 C) at the supply point with a target of approx. 115 F (46 C) at the actual point of use. Water for sanitizing purposes in F&B is generally produced at 140 F (60 C) with supplemental heating done at the point of use as needed. Each usage of water within the building has requirements regarding the quality of the water. Water quality refers to the bacteriological, physical (taste, clarity, and odor), radiological, and chemical characteristics of water relative to its safety for human consumption. Standards specify maximum contaminant levels that may occur in potable (drinkable) water. Quality water standards governing potable water in the United States (US) are set forth in the Safe Drinking Water Act of 1974; it was amended in 1986 and again in 1996. The law is enforced by the US Environmental Protection Agency. If the facility’s water comes from a source other than a public water utility, maintaining water quality becomes the responsibility of the hospitality manager.

Water and waste water systems 649 If the water supplied by the water utility is potable, the operation does not need to do further treatment. However, sometimes this is not the case for the utility water or the property is supplying water from its own source. In this instance water treatment is needed. This treatment involves the removal of any suspended solids as well as some sort of treatment to kill bacteria. Bacteria are often killed using chlorine although in some locations this is done via ultraviolet radiation or ozone. Sometimes there is a need for additional treatment as well to remove some other contaminants. A common water treatment is softening. This is done to remove calcium or magnesium from the water. Removal of these minerals allows the water to more easily create a soap lather when bathing. It also reduces the chances of a mineral buildup on plumbing fixtures and of spotting on surfaces. There are also advantages of softening for water used in other equipment, as is noted below. Additional water treatment will be necessary for water supplied to boilers and cooling towers (CT), pools and laundry equipment in a facility. These additional specifications concern maximum allowable limits on hardness (calcium and magnesium), alkalinity, dissolved solids, suspended solids, dissolved oxygen, carbon dioxide, iron, manganese, silica, and microorganisms. If the equipment water quality is not controlled properly it can cause formation of inorganic deposits and corrosion in boiler tubes and CT, soap curd (scum), and fabric damage. Untreated or stagnant water in CT, air conditioning (AC) drip pans, fountains, hot tubs, showerheads, and faucets, etc. encourages algae formation that can foul pumps and equipment and foster bacterial growth that can lead to Legionnaire’s disease. Managers are responsible for ensuring that preventative maintenance is done on all AC coils and that AC pans are clean and treated. They are also responsible for insuring that proper chemical levels are maintained at all times in spas, hot tubs, indoor fountains, and cooling towers. Showerheads and aerators should be cleaned or replaced on a schedule. Waste water is the used water and solids from the facility flowing into a septic system or treatment plant. Storm water, surface water, and ground water are included in the definition of waste water and depending on location, may also enter a waste water treatment plant. Waste water standards define maximum contaminant allowances rather than ‘quality’ specifications. Of particular concern for discharged waste water is the water temperature, biological oxygen demand, and the amount of fat, oil, and grease, total suspended solids, and microorganisms present. In facilities there are essentially two waste water systems – the sanitary sewer system and the storm sewer system. Additional subsystems may feed into these two systems. Bathroom, restroom, and other waste water discharges flow into the sanitary sewer system, which are treated by the local or regional sewage treatment facilities. Kitchen discharges also flow into this system, but must first pass through a grease trap (grease separator) for grease removal. Circulating boiler and cooling tower water discharges – ‘bleed streams’ – and laundry water discharges should also enter the sanitary sewer system. Chemical content of these two subsystems may have to be monitored to avoid surpassing waste water contaminant allowances. ‘Gray water’ or ‘run-off ’ water from roof drains, parking lots, and other outdoor areas of the property enter the storm sewer system. This waste water may be diverted into holding ponds to be used for landscape or other outdoor watering systems. However, this water will also have contaminants that may have to be monitored. Back flow prevention devices are installed in the main water line to a building just after the water meter. The devices are used to prevent a hotel’s water system from over-pressurizing and forcing the water back into the municipality’s system. This can happen if a domestic booster pump is higher pressure than the municipality’s water pressure or if the municipal system were to lose pressure. Back flow prevention devices are becoming a standard requirement in a majority of cities. Typically, annual or bi-annual testing of the device is required by the municipalities or fines can be incurred, including having the water turned off at the meter.

650 Weighted average cost of capital (WACC) References Harrison, J.F. and McGowan, W. (1997) WQA Glossary of Terms. Lisle: Water Quality Association. Kemmer, F.N. (ed.) (1988) Nalco Water Handbook. New York/St Louis: McGraw-Hill. Stipanuk, D.M. (2002) Hospitality Facilities Management and Design, 2nd edn. Lansing, MI: Educational Institute of the American Hotel and Lodging Association. www.epa.gov/OGWDW/wot/appa.html CONNIE E. HOLT WIDENER UNIVERSITY, USA Weighted average cost of capital (WACC) The WACC calculates the overall cost of capital for a company. The funds of capital of a company are divided into equity capital (E) and debt capital (De). The costs of each of the funds are different because they bear different levels of risk for the lenders. Namely: dividend (D) is the cost of the use of equity capital provided by the shareholders, and interest (I) is the cost of the use of debt capital provided by capital lenders. The average between the rate of dividend (total dividend paid divided by equity capital) and the rate of interest (total interest paid divided by debt capital) is the average cost of capital. Such a measure can be calculated as follows: WACC  I  [De/(De  E)]  D  [E/(De  E)] By rearranging the formula in a few steps it is possible to demonstrate that WACC is the IRR of the overall company, coming to the following formula, where the assumption is made that dividend and interest are perpetual: De  E  [D1/(1  WACC)  I1/ (1  WACC)]  [D2/(1  WACC)2  I2 / (1  WACC)2 ] ...  [Dn /(1  WACC)n  In /(1  WACC)n ] Therefore, the WACC is the average cost of capital employed by the company as well as the average rate of return expected by both shareholders and capital lenders – adjusted by adding the company’s costs – if considered together. The expected cost (I) of debt capital (De) – which includes bonds (B) and preferred stock (PS) – is calculated as the weighted average of: The discount rate (Kb) that makes the present value of the sum of the future flows of interest (Cfb) paid to the bondholders and the present value of the bond’s maturity (M) equal to the net proceeds from the bonds (NPb), where the adjustment for considering the issuing costs is included by using NPb rather than the market value of the bond, as follows: NPb  Cf1/(1  Kb)  Cf2/(1  Kb) 2  Cf3/(1  Kb) 3  ···  Cfn/ (1  Kb) n  M/(1  Kb) n and the rate (Kps) calculated as the preferred stock dividend (Dps) divided by net proceeds from preferred stocks (NPps), where the adjustment for considering the floating costs is included by using NPps rather than the market value of the preferred stock, as follows: Kps  Dps/NPps resulting in: I  Kb [B/(B  PS)]  Kps [PS/(B  PS)] The expected cost (D) of equity capital (E) is calculated as the sum of the risk-free rate (Krf) and the gap between the risk-free rate and the expected rate of return of the market (Km), adjusted by the stock’s risk (b), as follows: De  Krf  b (Km  Krf) An easier, but less accurate, way of calculating I and De is as follows: I  (current interest  current preferred stock dividend)/(B  PS) De  current ordinary stock dividend/E

Wireless 651 This simplified method assumes that the ordinary stock dividend is constant and that the nominal value of bonds, ordinary, and preferred stock is equal to their market value. The WACC is used to discount the cash flows when the net present value (NPV) method is applied to evaluate a project. The concept underpinning this choice is known as the ‘pool of funds’ concept, which refers to the cash entering the company’s general pool of cash, which is then used for different projects. This cash is not earmarked for use when it enters the company, and therefore the cost related to the company cash is the same for all projects, as it is impossible to track where the specific cash comes from. Some assumptions limit the validity of the use of WACC to discount cash flows in the NPV: ● The capital structure is assumed to be constant, in order for the two funds of capital to weigh the same before and after the project. ● The level of risk of the project should be comparable to that of the company in order to be equally well represented by the WACC. ● The size of the new project must be small relative to the size of the company in order for the rate of interest and the rate of dividend to be a realistic cost of the new cash needed for the project. ● All cash flows (dividend, interest, project cash flows) should be level perpetuities in order to make the calculation stated above possible. The WACC is also used to calculate the economic value-added of a project, which is the after tax residual operating income after a figurative cost Table 1 How to use discount cash flows when NPV is applied WACC: project to enlarge a hotel’s capacity from 150 rooms to 175 rooms, with outlay of 1 million dollars paid in 2001 Equity capital of the company $10,000,000 Dividend  20% Debt capital of the company $5,000,000 Interest  5% WACC  20% 10,000,000 / (10,000,000  5,000,000)  5% 5,000,000 / (10,000,000  5,000,000)  15% The WACC applicable to the NPV of the project is 15% of capital has been deducted, where the figurative cost of capital used is the WACC multiplied by the capital employed (CE) (which is the working capital plus the fixed assets). Figurative cost of capital  WACC  CE For different situations the relevant WACC of a project might be different, e.g. when a company establishes a subsidiary in another country, the WACC relevant to the subsidiary is based on the cost of the capital that the company is raising in the host country (in the calculation the interest paid to the parent company should arguably be replaced with a figurative interest), whilst the relevant WACC for the parent company is based on its own sources of capital. References Drury, C. (2000) Management and Cost Accounting, 5th edn. London: Thomson Learning. Horngren, C.T., Foster, G., and Datar, S.M. (2000) Cost Accounting: A Managerial Emphasis, 10th edn. Upper Saddle River, NJ: PrenticeHall International. Keown, A.J., Martin, J.D., Petty, J.W., and Scott, D.F. Jr (2002) Financial Management Principles and Applications, 9th edn. Upper Saddle River NJ: Prentice-Hall International. Lumby, S. and Jones, C. (1999) Investment Appraisal and Financial Decisions, 6th edn. London: Thomson Learning. McLaney, E.J. (1994) Business Finance for Decisionmakers, 2nd edn. London: Pitman Publishing. MARCO MONGIELLO UNIVERSITY OF WESTMINSTER, UK Wireless Wireless is a term used to describe telecommunications in which electromagnetic waves (as opposed to wire) carry a signal. Early wireless transmitters used radiotelegraphy to transmit Morse code and later voice. Information communication technology (ICT) developments

652 Wireless Table 1 Wireless devices: standards and descriptions Device Standard Range Description Laptop IEEE802. Up to Standard for WALNs used for office, residential, and public access environments IIb 100 m to connect a number of computers together. Operates in the 2.45 GHz frequency spectrum and enables devices to link to a network over a range of 100 m at speeds of up to 11 Mb per second. Multiple users can share the bandwidth. The closer the client adapter is to the access point, the faster the speed. Wi-Fi Up to Wi-Fi is a specification and certification for IEEE802.11b equipment based on 100 m an interoperability test plan. Wi-Fi is the seal of approval that the equipment will work with all other brands of Wi-Fi certified equipment. Wireless labeled Wi-Fi meets the WECA standards for interoperability IEEE802. Up to New specification for WLANs operating in the 5 GHz frequency spectrum. IIa 100 m Five times faster than IEEE802.IIb, enabling devices to link to a network at speeds of up to 54 Mbps. Its range is shorter at higher data rates, but because it has higher bandwidth, eight channels per access point, and uses new multiplexing technology, it can support more bandwidth-intensive applications and more users. As 802.IIa and 802.IIb are in different frequency bands and use different modulations, they do not interoperate but they can be used together in the same coverage area without conflicts IEEE802.IIg Up to Like 802.Iib it operates in the 2.4 GHz frequency, but like 802.IIa, it reaches 100 m speeds of up to 54 Mbps. Compatible with 802.IIb products, sports ranges similar to 802.IIa produce higher data rates, and shares the 802.IIb version’s three channels HiperLA Up to New European standard for WLANs operating in the 5 GHz frequency spectrum. N2 100 m Delivers higher quality of service and allows voice data to be prioritised Laptop Bluetooth Up to 20 m Wireless standard for connecting PDAs, cell phones, computer mice, and other Cellular peripherals to computers based on short-range radio transmission in the 2.45 GHz frequency spectrum. Connections are secure, instant, and maintained even if devices are not within line of sight Cellular GSM Up to 12 km GSM (Global System for Mobile Communication) is the de facto wireless telephone standard in 120 countries. Operates at 900 MHz or 1800 MHz frequency band. Roaming agreements between foreign operators support usage of mobile phones around the world WAP Up to 12 km WAP (Wireless Application Protocol) is a specification for a set of communication protocols to standardize the way that wireless devices can access the Internet over GSM WML WML (Wireless Markup Language), is a language that allows the text portions of HTML Web pages to be presented on cellular telephones and personal digital assistants (PDAs) operating WAP GPRS General Packet Radio Services (GPRS) is a packet- based wireless communication service that promises data rates of up to 114 Kbps and always on connection to the Internet for mobile phone and computer users. The higher data rates will allow users to take part in video conferences and interact with multimedia websites and similar applications using mobile handheld devices as well as notebook computers. GPRS is based on GSM communication and it is an evolutionary step toward the UMTS UMTS UMTS (Universal Mobile Telecommunications Service) is a 3G broadband, packet-based transmission of multimedia data at rates of up to 2 Mbps. Based on GSM communication standard, UMTS is the planned standard for mobile users around the world i-Mode i-Mode is the packet-based service for mobile phones offered by Japan’s NTT DoCoMo. i-Mode uses a simplified version of HTML, Compact Wireless Markup Language (CWML), instead of WAP’s WML to enable Web browsing Source: Adapted from Searchnetworking http://searchnetworking.techtarget.com/

Wireless 653 have proliferated the use of wireless applications and devices, including: cellular phones and pagers; global positioning systems (GPS); cordless computer peripherals and telephones; homeremote control and monitor systems. Wireless technology has been evolving rapidly. The development of mobile telephony over the Global System for Mobile Communication (GSM) and Wireless Application Protocol (WAP) allowed the communication of voice and data over mobile phones. General Packet Radio Service (GPRS) and Universal Mobile Telecommunications System (UMTS) as well as I-Mode in Japan have gradually introduced the 3rd Generation (3G) mobile phones and services empowering the communication of multimedia information on interactive mobile devices. In addition, wireless local area networks (WLANs) allow users to connect their laptop computer through a wireless-radio connection, whilst Bluetooth connects personal digital assistants (PDAs), cell phones, computer mice, and other peripherals over short distances. A number of wireless technologies and standards have been developed (Table 1). Figure 1 demonstrates that increasingly these technologies will be converging, enabling the mobile user to utilize a variety of systems and network applications to access a range of multimedia data. Location, distance range, speed required, cost, purpose of access, easiness to use and even style determine which combination will be used at the time. Wireless in hotels Hotels are taking advantage of the wireless revolution to improve their own operations and strategies and to enhance customer service. GPRS is expanding, allowing users to pay only for data packets received and allowing both faster connectivity to WAP and to Internet browsers. Wi-Fi networks are also becoming widely available, through the installation of wireless hotspots for hotel guests and employees. These hotspots allow individual users to access the network via wireless cards in their laptops or wireless-enabled Internet Protocol (IP) telephone handsets or other mobile devices such as a PDA. From the hotel customer’s point of view, wireless services can facilitate the reservation process, especially for last minute bookings, when a traveler has arrived at a destination with no reservation. Consumers can communicate with the hotel, alter their reservations or make special requests. Whilst at the hotel, wireless access to the Internet is becoming a critical feature for accessing work information, but also for communicating with family and friends or organizing leisure activities. This is the case for people attending meetings, conferences, and exhibitions, whereas wireless access supports easy connectivity and the ability to move around within the area. Wi-Fi or Bluetooth have enabled high-speed Internet access to become a significant benefit that can augment the hospitality product. This may work as complementary to GPRS or UMTS access over mobile networks, especially for visitors from a different country who would have had to pay expensive roaming charges. In the short to medium term, offering this service can differentiate the hotel product, improve the value for money and time for guests, and lead to competitive advantage. In the longer term, access will be widely available and will be treated as a normal utility function. From the hotel operations point of view, wireless technologies play an increasingly vital role for hotels, linking together everything from pointof-sale terminals to housekeeping and security management systems. Wireless allows mobility and freedom to work more productively, for both hotel employees and guests, by allowing users to access the Internet, e-mail, instant messages, and the corporate intranet from any location. Faster communication with the workforce enables better access to information and operations. Better and up-to-date communications between departments can minimize waiting times, reduce errors and increase overall productivity. In addition, hotels can use wireless portals to expand their distribution network. Also wireless services allow additional opportunities for providing addedvalue and location-based services. For example, a hotel hotspot may incorporate access to a pizza delivery service to complement or outsource in its entirety the room service function. Table 2 demonstrates some best practice of wireless applications in hotels.

654 Wireless Table 2 Examples of best practice Hotel chains Applications Applications providers Six Mobile directions and reservations Air2Web Continents Remote check-in OperaPalm: Micro/Fidelio and Palm Bluetooth technology Swissotel Wireless high-speed access for all guests and meeting rooms Hotels North America WAP access to static guest information Best Western Research locations, check availability, check frequent traveler club balance and click-to-dial reservations Online booking and m-wallet capabilities Hilton Reservations, information or retrieve/cancel a reservation OpenGrid mobile via any wireless PDA or mobile phone solution Access to loyalty programs HHonors Marriott Housekeeping audits of guestrooms using palms, handheld PDAs Acadian Embedded Wireless conference rooms and group meetings Solutions; STSN802.11a and 802.11b (Intel Communications Fund) Fairmont Wireless LAN for guests offering Web-based branded Cisco Systems (Wi-Fi) Hotels and services provides interactive source for destinationResorts based content Omni Hotels Free wireless high-speed Internet service Core Communications Source: Adapted from mTravel.com Bluetooth Access on Devices 2 G 3 G GSM WAP UMTS Mobile Cellular-based Public access through hotspots WiFi 802.11 a/g 802.11b Wireless LAN Short range Long range 100 m 20 m UP TO 12 Km Wireless PC / PDA connection 2.5 G GPRS WNL Figure 1 Convergence of wireless technologies

Wireless 655 Wireless in hotel operational and strategic management Hotels involve network-enabled business solutions, to improve their business functions. These include marketing and reservations, customer relationships, front and back office, training, and communications. Wireless technologies are expected to have a major impact throughout the hospitality value chain by integrating and making accessible data and processes, whilst enhancing guest experiences. Wireless Internet can also facilitate internal operations, improve effectiveness and efficiency as well as enhance guest experiences. The wireless Internet can facilitate the innovation, adoption, and integration with existing systems. This allows further technology development, which can improve communications with employees, partners, and customers. Hotels can improve their firm infrastructure by enabling the exchange of real-time information through integrating centralized data warehouses on a comprehensive enterprise resources planning (ERP) system. Authorized members of staff access data whist on the move, making better-informed decisions, faster. Real-time communication can instigate paperless administration for planning and allocation of resources, whilst it can assist hotel mangers to share knowledge faster and to make proactive and reactive decisions. Human resources management (HRM) also benefits, as hotels can communicate more effectively with employees in the property and outside. Employees can access rota schedules and changes to programs as well as receive information on their remuneration and commissions, access training courses, and other potential benefits. Internal marketing can also be facilitated, by providing employees with information about the current status of the hotel and also special benefits for them. Wireless communications can assist a more flexible deployment of the workforce, improving productivity. Procurement also benefits as hotel buyers attending local markets access remotely real-time data, including requirements, stock levels, alternative sources, pricing, and historical data on suppliers. Wireless systems facilitate purchasing, order acceptance process, storekeeping and control functions whilst they support real-time inventory and financial tracking for suppliers, supporting inbound logistics. Wireless solutions bring mobility, flexibility, and productivity for hotels as they can facilitate communications using real-time data. The hotel guest is at the center and is surrounded by various applications. Integration of wireless POS (point of sales) systems and customer relationship management (CRM) gives hotels opportunities for real-time sales statistics, tracking of frequent guests/diners and personalized information. This can assist operational management and enable a wide range of proactive and reactive procedures to deal with seasonality, demand fluctuations or unexpected events. They empower hotel front-line employees, such as receptionists, waiters and chambermaids and enhance their operational efficiencies. For example, receptionists may collaborate with group leaders and check-in guests during the transfer to the hotel. Frequent customers can check-in wirelessly as soon as they arrive by using a Bluetooth-enabled device. A waiter can have access to all information related to availability of dishes, food orders, time required, kitchen delays, and bill payments at the customer’s table. Housekeeping can monitor room status, cleaning process, and maintenance in real time. As this information is updated constantly, it can be followed by all relevant employees who can then adapt their schedule. Staff can reduce the time spent going forwards and backwards to their control center and dedicate more time to doing their job and serving guests. Wireless technologies have unprecedented implications for marketing and sales. Consumers can make and change reservations anytime, anywhere, from any Internet-enabled device. Hotels will need multi-channel distribution strategies to support real-time availability with dynamic pricing to maximize their yield. Wireless-enabled devices will also provide hotel marketers with another distribution channel empowered with location-based services and customer profiling. Finally, wireless solutions can assist after-sales services such as instant feedback, update of guest history, and CRM-based marketing. Wireless technologies can also allow hotels to expand their value chains through partnerships with

656 Wireless application protocol (WAP) Computer Associates (2002) Enabling Mobile eBusiness Success. White paper, http://wp.bitpipe.com/resource/org_943197149_209/ena bling_mobile_ebiz_wp_bpx.pdf. O’Connor, P. (1999) Electronic Information Distribution in Tourism and Hospitality. Wallingford: CABI Publishing. O’Connor, P. and Frew, A. (2000) Evaluating electronic channel distribution in the hotel sector: Delphi study. Information Technology and Tourism, 3 (3/4), 177–193. Olsen, M. and Connolly, D. (2000) Experiencebased travel: how technology is changing the hospitality industry. Cornell Hotel and Restaurant Administration Quarterly, February, pp. 30–40. Porter, E.M. (1985) How information gives you competitive advantage. Harvard Business Review, July–August, p. 3. Sangster, A. (2001) The importance of technology in the hotel industry. Travel and Tourist Analyst, 3, 43–55. Sheldon, P. (1997) Tourism Information Technology. Wallingford: CABI Publishing. Turban, E., King, D., Lee, J., Warkentin, M., and Chung, H.M. (2002) Electronic Commerce – A Managerial Perspective, 2nd edn. Upper Saddle River, NJ: Pearson Education, pp. 48, 858. Zilliox, D. (2002) The Get-Started Guide to m-Commerce and Mobile Technology. New York: American Management Association. DIMITRIOS BUHALIS UNIVERSITY OF SURREY, UK KAREN TANG UNIVERSITY OF SURREY, UK Wireless application protocol (WAP) The WAP-Forum was founded in 1997 on the initiative of Ericsson, Nokia, Motorola, and Phone.com to develop a uniform and open standard for the transmission of wireless information and telephone services to mobile devices. The goal was to bypass transmission bottlenecks through a simplified transmission language. The content is represented in WML (Wireless complementary suppliers constantly updating and differentiating their product. Strategic developments and challenges Wireless technologies have revolutionized the entire hotel value chain. Innovative hotels need to reengineer their processes and reexamine how to profit from emerging technologies. For example, purchases on mobile devices can add value to hotel guests through ‘location/destinationbased services’; whilst providing self-services through wireless technologies can mean operational and productivity gains. Hotels need to focus on the abilities of wireless technologies to enhance their competitiveness by improving their customer service and differentiation advantage, whilst reducing costs and increasing efficiency. A number of challenges remain open. Hotels will need to readjust their business model to account for revenue lost through wired telephony/Internet and also to provide for investments required. A number of new stakeholders/partners also emerge, and they need to be addressed in the new business models. Wireless solutions will increase price transparency further. That will have implications for hotel pricing and yield management. Security of data and transactions also remains a major challenge. Finally, consumers would expect hospitality organizations to be always ready to interact, putting additional pressure on small and medium-sized enterprises that already lack expertise and capital to invest in those technologies. Sheldon (1997) suggests that ‘high-tech and high-touch’ can bring efficiency, reduced costs, and the potential for higher levels of personal services. Wireless applications will propel customer-centric approaches, placing knowledge and information at the core of the competitive profile of tomorrow’s hospitality enterprise (Olsen and Connolly, 2000). References Buhalis, D. (2003) eTourism: Information Technology for Strategic Tourism Management. Harlow: Pearson Education.

Working capital 657 Markup Language) for which a WAP-capable microbrowser is needed. Cut-down Internet sites thus can be displayed on WAP browsers on mobile phones, organizers, palmtops or pagers with a standard speed of 9.6 kbit/s. However, the appropriate devices were launched late – only in the year 2000. The initial over-hype and the technical problems meant WAP brought the mobile network operators only 1–2% of their total turnover. The reasons for the slow penetration were expensive per minute charges, insufficiently developed technologies and standards (long connection establishment times, frequent connection breakdowns, slow speed), limited offers and services, as well as bad business models of mobile service providers (Zobel, 2001). According to research by Marcussen (2002), the most relevant WAP applications for tourism and hospitality are: providing information on flight delays, the traffic situation, weather and road conditions, flight schedules, and restaurant information. Accordingly, tourists seem to be interested mostly in location-based services and schedule information. There is an opportunity therefore for hospitality organizations to benefit. References Marcussen, Carl (2002) SMS, WAP, m-commerce – opportunities for travel and tourism services. Available at http://www.crt.dk/uk/staff/chm/wap/ itb.pdf Zobel, Jörg (2001) Mobile Business und M- Commerce. Die Märkte der Zukunft erobern. Munich/Vienna: Hansen. ROMAN EGGER SALZBURG, AUSTRIA Work orientation The concept of work orientation refers to individuals’ attitudes towards work. It emphasizes how people construe their roles and work environments. According to Burke and Deszca (1988, p. 646), work orientation draws on ‘the meaning of work for individuals; it includes goals, values, wants and outlooks, career-related aspirations and desired rewards.’ Goldthorpe et al. (1968) identified three main types of orientation to work: ● Instrumental – viewed as ‘a means to an end’ rather than the central focus of their life. Hospitality work provides opportunities as the first work experience for young people, extra income for students, and a supplement to the household income for women and so can contribute to an instrumental orientation to work. ● Bureaucratic – considered critical component of employee life. There is positive involvement with work issues because work is considered as a profession. Individuals may seek to enhance their hospitality career prospects by undertaking career-oriented programs, such as diplomas or degrees in hospitality management. ● Solidaristic – enjoyed for its associated social and group activities. There is a strong involvement with work groups such that work and non-work activities are closely linked. The existence of occupational communities within the hospitality sector means that work attitudes can be dependent on the social aspects of hospitality work. References Burke, R.J. and Desza, G. (1988) Career orientations, satisfaction and health among police officers: Some consequences of person–job misfit. Psychological Reports, 62 (2), 639–649. Goldthorpe, J.H., Lockwood, D., Bechhofer, F., and Platt, J. (1968) The Affluent Worker: Industrial Attitudes and Behaviour. London: Cambridge University Press. JOSEPHINE PRYCE JAMES COOK UNIVERSITY, AUSTRALIA Working capital Working capital is normally defined as the monetary value of current assets less the current liabilities. When the value of the current assets exceeds the current liabilities this is known as positive working capital, where current assets are funded partly from the current liabilities, such as

658 Working capital Managing inventories requires specific expertise. Too much inventory held ties up cash in the business but insufficient inventory available can result in lost sales and loss of customer goodwill. To manage inventory effectively it is essential to identify the fast- and slow-moving stock items within the total inventory and determine optimum stock levels. Factors to consider when determining optimum inventory levels include: ● Accurate projected usage of the product ● Frequency and availability of supply ● Relationship between products. Specific models exist which can help the business to determine optimum stock levels but these are usually dependent on consistent annual demand for products. Managing accounts receivable In the hotel sector in particular, it is necessary to offer credit to customers in order to secure the business. However, slow payment of the outstanding debt can have a serious impact on the business and ultimately can lead to bad debts. An effective debtor policy should include: ● Clearly established policies for giving credit ● Procedures for checking credit-worthiness of customers ● Established credit limits for each customer ● Prompt and accurate invoicing ● Penalties for late payment ● Procedures for monitoring outstanding balances. The monitoring of outstanding payments is commonly undertaken using the accounts receivable ratio: Debtors due over 90 days should receive immediate attention and are usually clear indicators of future bad debt problems. Increasing debtor days can be an indicator of internal operational problems such as: ● Poor procedures for collecting debt ● Slow issue of invoices and statements ● Errors in invoices ● Customer dissatisfaction. Accounts receivable ratio  Receivables Credit sales  365 accounts payable (creditors) and bank overdrafts, and also from long-term sources of funds, such as bank loans or equity. The term negative working capital arises when current liabilities exceed current assets. In this case current liabilities are funding both current assets and a proportion of long-term assets. Working capital management is concerned with the management of business liquidity in order to attain a balance between profitability and risk. This balance is monitored by the current ratio. The current ratio is calculated as follows: The quick ratio (or acid test ratio) takes account of the fact that it may take time to convert inventory (stocks) into cash, and is calculated as follows: Working capital is required to fund the time lag between expenditure being made for the purchase of raw materials and the subsequent collection of cash for the sale of the finished product. This is called the working capital cycle. If a business is operating profitably then it should, in theory, generate cash surpluses. Without cash the business will eventually become insolvent and, therefore, it is widely recognized that the way in which companies manage their optimal cash position can make a difference to shareholder value. There are two major components of the working capital cycle that use cash – inventory and accounts receivable (debtors). The main sources of cash inflow are accounts payable and, for long-term sources, equity and loans. Each element of working capital has two important dimensions, namely time and money. Inventory management Generally a hospitality business should seek to reduce the amount of money tied up in inventories and aim to move inventory stocks more quickly (inventory turnover):  365 days Inventory turnover (days)  Average inventory Cost of goods sold Quick ratio  Total current assets  Inventory Total current liabilities Current ratio  Total current assets Total current liabilities

Working capital 659 Managing accounts payable Hospitality businesses can benefit by getting better credit terms from suppliers and increasing short-term financing. This is monitored by the accounts payable ratio: Improved purchasing techniques not only serve to improve the profitability of the business but also improve the liquidity of the business too. In the hospitality industry a large proportion of accounts payable arise from the purchase of perishable products such as food and beverages. Effective purchasing includes: ● Coordination of the purchasing process to achieve maximum discounts and best quality ● Accurate forecasting of demand ● Understanding of stock holding and purchasing costs ● Effective alternative sources of supply ● Knowledge of delivery frequency and availability. Managing supplier relationships is crucial to managing working capital. Slow payment to suppliers can create bad feeling and undermine the potential to work with suppliers to enhance the future profitability of the business. Overtrading Revenue expansion without sufficient working capital can easily overstretch the financial resources of the business. This position is called overtrading and is a common feature of growth Accounts payable ratio  Payables Cost of sales (or Purchases)  365 businesses that fail, not because of insufficient product profitability, but due to insufficient liquidity to purchase current assets such as inventories. The working capital ratio measures the relationship between working capital and sales as a percentage: Working capital ratio  The faster a company expands in terms of investment, the more working capital it will require. Therefore, a company that borrows long term and invests in short-term assets such as cash and stocks is creating liquidity for the business that can create a buffer against risk in times of financial distress. Similarly, using cash to purchase long-term assets will reduce the liquidity of the business and other forms of longer-term financing should be considered, such as equity, loans or leasing. References Dyson, J.R. (2004) Accounting for Non-Accounting Students, 6th edn. London: FT Prentice-Hall. Jagels, M. and Coltman, M. (2003) Hospitality Management Accounting, 8th edn. New York: John Wiley & Sons. Owen, G. (1998) Accounting for Hospitality, Tourism and Leisure. London: Longman. Schmidgall, R.S. (2002) Hospitality Industry Managerial Accounting, 5th edn. Lansing, MI: Educational Institute of the American Hotel and Lodging Association. DEBRA ADAMS ARENA4FINANCE LTD, UK Inventory  Receivables  Payables Sales  100

Water-Efficient Landscaping: http://www.epa. gov/OW-OWM.html/water-efficiency/final_ final.pdf. JIM ACKLES THARALDSON ENERGY GROUP, USA XML (extensible markup language) XML is an open standard for describing data from the World Wide Web Consortium (www.w3.org). XML is written in Standard Generalized Markup Language (SGML), the international standard meta language for defining the structure of different types of electronic documents. It is used for defining data elements on a Web page using a similar tag structure as HTML. However, whereas HTML defines how elements are displayed by using predefined tags, XML allows the tags to be defined by the website developer, allowing Web pages to function like database records. The design and use of XML by Web developers improves functionality, providing more flexible and adaptable information identification, as well as a more robust and verifiable file format for the storage and transmission of data on and off the Web. XML is an important development in Web design as it removes two major constraints of Web development: that of the dependence on a single, inflexible document type (HTML) and the complexity of full (SGML), whose syntax allows many powerful Xeriscape Xeriscape was derived from the Greek word xeros, meaning ‘dry’ and ‘landscape.’ Xeriscape means gardening with less than average water. Xeriscape is landscape consisting primarily of native, drought-resistant species, less than average turf, and other practices that require little or no maintenance, watering or fertilization. Welsh et al. (2004) suggest that xeriscape landscaping incorporates seven basic principles which lead to saving water: planning and design, soil analysis, practical turf areas, appropriate plant selection, efficient irrigation, use of mulches, and appropriate maintenance. A Xeriscape-type landscape can reduce outdoor water consumption by as much as 50% without sacrificing the quality and beauty of the environment. Xeriscape is particularly beneficial to hotels that can use anywhere from 100,000 gallons to 1,000,000 gallons of water for irrigation each month. References Welsh, D.F., Welch, W.C., and Duble, R.L. (2004) Landscape water conservation . . . Xeriscape http://aggie-horticulture.tamu.edu/ extension/xeriscape/xeriscape.html. Accessed 28 April 2004. Xeriscape (n.d.) www.csu.org/xeri/. X

XML (extensible markup language) 661 but hard-to-program options. XML is good for hospitality because its interoperability between hospitality businesses and distributors such as aggregators, GDS, and electronic travel agencies. References Harold, E. and Means, W. (2002) XML in a Nutshell: A Desktop Quick Reference, 2nd edn. Sebastopol, CA: O’Reilly & Associates Publishing. XML.org (2003) XML Beginner’s Guide, FAQ , Tutorials, and Articles. Available at http:// www.xml.org/xml/resources_focus_ beginnerguide.shtml. JULINE E. MILLS PURDUE UNIVERSITY, USA

customers and still retain their high-paying passengers. As a result, People’s Express went into bankruptcy. Consequently, YM was introduced as a method of utilizing capacity and maximizing revenue or ‘yield’ where airline companies sought to fill their planes with the optimum mix of passengers. In similar highly competitive circumstances, YM began to be adopted in the hotel industry around the middle of the 1980s. At this time the industry was being confronted with excess capacity, severe short-term liquidity problems, and increasing business failure rates. Major hotel chains such as Hyatt, Marriott, Quality Inn, and Radisson endeavored to redress these difficulties by adopting YM. Opportunities for applying YM in small to medium-sized hotels are actively being developed following the report for the European Union (Arthur Andersen, 1996). Definition In general terms, Kimes (1997) has described YM as the process of allocating the right type of capacity or inventory unit to the right type of customer at the right price so as to maximize revenue or ‘yield.’ Applying this to airlines, YM can be considered to be the revenue or yield per passenger mile, with yield being a function of both the price the airline charges for differentiated service options (pricing) and the number of seats sold at each price (seat inventory control). Larsen (1988) further crystallizes the meaning of YM in the airline context by dividing it into two distinct functions: overbooking and managing discounts. Yield management Yield management (YM) is a management tool or technique which is currently being utilized by an increasing number of group- and independently owned hotels in order to maximize the effective use of their available capacity and ensure financial success. YM is not entirely new, and most hoteliers practice some form of YM, such as the adjusting of room rates to temper fluctuations between peak and off-peak seasons, mid-week, and weekend rates. This chapter, therefore, examines the use and application of YM in the hotel industry and hopes to demonstrate its ability to effectively maximize revenue and profit generation in this highly competitive and capital-intensive industry. Historical development of YM from airlines to hotels The airline industry has been credited with the development and refinement of YM following deregulation of the US airline industry in the late 1970s. The resulting heavy competition led to a price-cutting war with some airlines going out of business. Kimes (1997) cites the example of People’s Express, which emerged briefly as a lowprice, no-frills airline. In response, large carriers such as American and United began to offer a small number of seats at even lower fares whilst maintaining the higher-priced fares on the remainder of the seats. This strategy allowed American and United to attract the price-sensitive Y

number of new bedrooms or a new function suite but this usually involves a large financial investment in terms of equipment and plant. ● High fixed costs: The industry is characterized by high fixed costs and, as explained above, the cost of adding incremental capacity can be very high and is not quickly adjusted. Adding new bedrooms to a hotel not only entails a large capital outlay but may also involve a long planning and construction period. ● Low variable costs: The costs incurred by, for example, selling a bedroom to a customer in otherwise unused capacity is relatively inexpensive and incurs only minor servicing costs. ● Time-varied demand: Since hotel capacity is fixed, organizations cannot easily adjust their capacity to meet peaks and troughs in demand. Kimes (1997) explains that when demand varies, hotels can benefit from controlling capacity when demand is high and relaxing that control when demand is low. As with airlines, utilization of reservation systems can assist in managing demand since they log requests for rooms in advance. ● Similarity of inventory units: As a general rule, YM systems operate in a situation where inventory units are similar. However, it should be noted that service firms like hotels can differentiate their units by, for example, offering add-on luxury features or the possibility of upgrades. The ingredients for successful YM include: ● Market segmentation: Hotels normally have the ability to divide their customer base into distinct market segments such as leisure, business, and long and short stay. Business or corporate clients who are usually time-sensitive are willing to pay higher rates whilst leisure travelers who tend to book longer in advance are price-sensitive. ● Historical demand and booking patterns: Detailed knowledge of a hotel’s sales and booking data per market segment should help managers predict peaks and troughs in demand and assist the hotelier in more effectively aligning demand with supply. ● Pricing knowledge: Kimes (1997) describes YM as a form of price discrimination. In practice, hotels operate YM systems that depend on opening and closing rate bands. In order to In hotels, YM is concerned with the marketsensitive pricing of fixed room capacity relative to a hotel’s specific market segments. Kimes (1997) states therefore that YM in hotels consists of two functions: rooms inventory management and pricing. The goal of YM is the formulation and profitable alignment of price, product, and buyer. As such, Donaghy et al. (1995, 140) define YM in hotels as a ‘revenue maximization technique which aims to increase net yield through the predicted allocation of available bedroom capacity to predetermined market segments at optimum price.’ It is the predicted nature of YM that is the key to its ongoing successful financial management of hotels in today’s increasingly competitive market. On a strategic level, Jones and Kewin (1997) have extended the definition of YM as ‘a decision-making tool based on an analysis of past performance and forecast of future demand that enables the goal of revenue maximization to be achieved through the strategic management of a hotel’s market positioning and the operational management of the hotel’s room sales.’ This definition further highlights the differentiation between the strategic and tactical role that yield management plays in managing capacity. Preconditions and Ingredients of YM YM suits the hotel industry, where capacity is fixed, where the demand is unstable, and where the market can be segmented (Kimes, 1997). As with many service organizations, a feature of hotels is that they have low marginal costs and usually sell their perishable product to their customers well in advance of consumption. Developing these ideas further, Kimes (1997) has outlined a number of pre-conditions for the success of YM and suggested a number of factors or ingredients which are prerequisites for the implementation of YM as a functioning, workable system. The preconditions for YM include: ● Fixed capacity: Hotels tend to be capacityconstrained with no opportunity to inventory their products or goods. Simply put, many hotel services and products are perishable. Capacity can be changed by, for example, adding a Yield management 663

stimulate demand in periods of low demand, hotels can offer discounted prices whilst during periods of high demand low rates can be closed off. Additionally, by offering a number of rates in the hotel the manager will, ideally, profitably align price, product, and buyer and increase net yield. ● Overbooking policy: Overbooking is an essential YM technique. Overbooking levels are not set by chance but are determined by a detailed analysis of what has happened in the past and a prediction of what is likely to happen in the future. Predicted no-shows, cancellations, and denials all form part of a complex calculation carried out in advance. In this way the risk of disappointing a customer who has booked in advance is minimized. ● Information systems: Effective management information is essential for successful YM whether the hotelier is operating a manual or computerized system. However, information technology can assist greatly in the sorting and manipulation of required data. The use of artificial intelligence (AI) has enormous potential for handling the complexities of YM because of its abilities in complex problemsolving, reasoning, perception, planning, and analysis of extensive data (Russell and Johns, 1997). Expert systems (ES) are ‘knowledgebased’ software packages that reflect the expertise in the area of the application and these types of systems have extensive capacity in dealing with non-numeric, qualitative data. Measuring yield Traditional methods of performance measurement in hotels such as occupancy rate and average room rate have tended to focus on the volume or value aspects of accommodation sales. However, high occupancy rates are no indication of financial success since the rate per room charged to the customer may be a highly discounted rate well below the rack rate. While the average room rate gives an indication of the level of revenue generated per sold room, it gives no indication of the actual number of rooms sold. Indeed, as the hotelier increases one, he/she tends to decrease the other. Furthermore, where room night productivity becomes a valuation technique for sales and reservation staff, lowerpaying group business will increase while higherpaying transient business is turned away ( Jones and Hamilton, 1992; Orkin, 1988). YM, on the other hand, aims to optimize both occupancy and average room rate simultaneously and this can easily be seen in Orkin’s (1988) Yield Efficiency Statistic: Orkin (1988) defined revenue realized as ‘actual sales receipts’ and potential revenue as ‘the income secured if 100% of available room are sold at full rack rates.’ Therefore, a 250-bedroom hotel with a £145 rack rate which sells 190 rooms at an average of £98 yields: The nearer the percentage is to 100, the better the yield. Yield management decision variables Yeoman and Watson (1997) identify the variables that hotel managers use to make YM decisions. These variables are based upon the principles of forecasting, systems, procedures, strategies, and tactics. ● Forecasting is the foundation of yield management. This forecasting must be done on a daily basis, with 30 day, 60 day, 180 day, and 365 day projections. A continuous examination of demand and supply variables is required in order to take effective YM decisions. The factors that may affect demand and supply include past business forecasts, sales mix, special events, weather, and competitors’ behavior. ● Systems and procedures: A computerized system manages all the variable decisions in order to recommend appropriate pricing decisions. 190 £98 145 250  51.37%  Rooms sold Average room rate Room rate Available rooms Yield efficiency  Revenue realized 664 Yield management

Management in Small to Medium Sized Enterprises in the Tourism Industry. Luxembourg: Eur-Op. Donaghy, K., McMahon, U., and McDowell, D. (1995) Yield management – an overview. International Journal of Hospitality Management, 14 (2), 139–150. Donaghy, K., McMahon-Beattie, U., and McDowell, D. (1997) Implementing yield management: lessons from the hotel sector. International Journal of Contemporary Hospitality Management, 9 (2 and 3), 50–54. Jones, P. and Hamilton, D. (1992) Yield management: putting people in the big picture. Cornell Hotel and Restaurant Administration Quarterly, 33 (1), 88–95. Jones, P. and Kewin, E. (1997) Yield management in UK hotels: principles and practice. Paper presented at 2nd International Yield Management Conference, University of Bath. Kimes, S.E. (1997) Yield management: an overview. In I. Yeoman and A. Ingold (eds), Yield Management: Strategies for the Service Industries. London: Cassell. Larsen, T.D. (1988) Yield management and your passengers. Asta Agency Management, June, 46–48. Orkin, E.B. (1988) Boosting our bottomline with yield management. Cornell Hotel and Restaurant Administration Quarterly, 28 (4), 52–56. Russell, K.A. and Johns, M. (1997) Computerized yield management systems: lessons learned from the airline industry. In I. Yeoman and A. Ingold (eds), Yield Management: Strategies for the Service Industries. London: Cassell. Yeoman, I. and Watson, S. (1997) Yield management: a human activity system. International Journal of Contemporary Hospitality Management, 9 (2), 80–83. IAN YEOMAN SCOTLAND NATIONAL TOURISM AGENCY, UK UNA MCMAHON-BEATTIE UNIVERSITY OF ULSTER, UK Appropriate systems and procedures enable the hotel manager to store, track, and make appropriate decisions. ● Strategies and tactics: Decisions are made in relation to pricing policy and market demand. Therefore on high demand days, management concentrates on decisions regarding average room rate. This will involve restricting access to accommodation from groups and low-spending customers. Whereas on low demand days, management is concerned with market mix in order to maximize occupancy. In both scenarios, hotel management will have to design a policy that relates to overbooking. Overbooking occurs when customers cancel accommodation, check-out early or don’t show up on the day of arrival. As accommodation can only be sold once in the hotel industry, the hotel manager needs to set a level, i.e., a number of rooms, at which they are prepared to overbook. This level will depend on the forecast for the given period, anticipated no-shows, cancellations, and early check-outs. Yield management offers hotels an opportunity for a focused methodology for improving revenue that integrates the characteristics of the hotel industry. The hotel sector is both distinct and diverse in the characteristics of the unit of inventory compared to the manufacturing sector. The benefits of YM have been drawn from the airline industry but tailored to suit the hotels. Many hotels are facing financial pressures that are focusing hotel managers to come up with imaginative and new ways of managing accommodation. YM provides that edge as a means of helping the hotel manager take decisions on how much accommodation to sell, to which customer, and at what price. References Arthur Andersen/European Commission DGXXIII, Tourism Unit (1996) Yield Yield management 665

adopted to control the density and uses of land. In the United States zoning codes are developed by a town’s council and enforced by the zoning officer, sheriff or police officer. When necessary, they are interpreted by the judicial system, beginning with a Zoning Board of Appeals and then to the county, state, and federal court system. Reference Haar, C.M. and Kayden, J.S. (eds) (1989) Zoning and the American Dream. Washington, DC: Planners Press. CAROLYN LAMBERT PENNSYLVANIA STATE UNIVERSITY, USA Zoning codes The objective of zoning codes is to promote the safety and welfare of the public. Topics covered in zoning codes include land use, setback, building codes, easements, parking restrictions, density, and building heights. Some include regulations for the aesthetics of buildings. The earliest zoning ordinance on record in the United States was enacted in 1913 in New York City to regulate the height, size, and layout of buildings. The motion made by the president of Manhattan Borough stressed the need to limit building heights to put a stop to congested living and street conditions. In 1916, a more comprehensive ordinance was Z

A la carte, 2, 427–30 Accepted Practices Exchanges (APEX), 538 Accommodation: Accommodation, demand for, 2–3 Accommodation, supply of, 3–4 see also Booking; Hotels; Reservation(s); Room.… Account aging, 4–5 Accounting/accounting terms see Financial accounting Accounts receivable turnover, 179 Acronyms, pricing, 494 Activity-based costing (ABC), 5–6, 124 Activity-based pricing (ABP), 5–6 Additive DEA model, 148 Adjacent rooms, 558 Adjoining rooms, 558 Adopter groups, 159–60 ADS (alternative distribution system), 304 Advance-deposit reservations, 253 Advertising, 516–17 Affiliate resort, 7 Affiliations, 168–9 Agency theory, 7 Aims and objectives, 7–8 Air conditioning see Facilities.…; HVAC; Maintenance management Alarm annunciators, 8 Alliances, 8–10, 98–9 Ambient conditions, 21 American Automobile Association (AAA) room rating, 318 American Hotel and Lodging Association, 14 American Marketing Association, 40–1 American plan room rates, 317 American Resort Development Association (ARDA), 12–16, 435 American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE), 229 Analysis, internal analysis, 348–50 Annunciator panels, 8 APEX – accepted practices exchange, 111 APEX Industry Glossary, 595–7 Application service provider (ASP), 10 Apprenticeship, 10–11 see also Training Arbitration, 11, 189–90 Architectural plans, 11–12 ARDA international foundation, 12–14 ARDA resort owners coalition, 14–16 ARDA State Affairs, 15 ARDA-ROC, 14–16 Artificial intelligence (AI), 16 Asset turnover/utilization ratio, 178–9 Associate Resort Professional (ARP), 14 Association events, 593 Association market, 16–20 educational programs, 17–18 networking, 19 size and scope, 17 see also Convention; Events Assurance, and the gap model, 272 Atmospherics, 20–1 Attendee, 21–2 Attitudes, Behavior, and Reasoned Action, 22–3, 102 Beliefs and attitudes, 34–5 see also Behavior Attitudes and beliefs, 34 Attribution theory, 23–4 Attrition clauses, 24 Auberges, 3–4 Australian Chamber of Commerce and Industry (ACCI), 197 Auto closing device, 24–5 Automated mini bar, 25 Index Main entries are in bold type including those also appearing as sub entries under other headings. Regular type is used for all other entries.

668 Index Automation, room system automation, 566 Average check, 25–6 Average cost pricing, 121 Average daily rate (ADR), 26, 310, 315 Average room rate (ARR), 315 Awareness, trial, and usage, 26 Back flow prevention, 27, 648–50 Back-of-the-house in hotels, 27–8 Back-of-the-house in restaurants, 28 Back office systems, 28–9 Balance sheet, 29–30 see also Financial accounting Baldrige award, 30–1, 526 Band of investment hotel valuation, 320 Bandwidth, 31 Banquet event order (BEO), 31–2, 107 Bargaining, collective bargaining, 82 Bargaining power, 32–3 conflict, 96–7 Barnacles, 180 Barriers to entry, 33 Barriers to exit, 33–4 Basic elements of cost, 34 BCC DEA model, 148 Bed and breakfast, 3–4 Behavior: attitudes, behavior, and reasoned Action, 22–3 contextual effects in consumer behavior, 102 customer complaint behavior, 128–31 deviance, 159 disciplinary action, 163 laddering techniques, 376–7 see also Complaints Beliefs and attitudes, 34–5 Benchmarking, 35 benchmarking performance, 35–6 benchmarking in property management, 36 Green Globe 21 (global benchmarking/certification), 289 Benefits and pay, 462–4 Biases in consumer decision-making, 36–9 Biennial timeshare, 39 Bluetooth, 39–40, 184 see also Communication Booking: On-line booking, 449 Overbooking, 460 see also Reservation(s) Booth, 40 Brand, 40–1 Branding, 4, 41–2, 420 brand erosion, 304 brand segmentation, 311 brand standards (hotels), 322 co-branding, 81 and customer expectations, 134–5 multi-branding, 438 soft branding, 588–9 Break-even analysis, 42 see also Financial accounting Break-even chart, 124 Break-even point (BEP), 42 Breakout sessions, 42–3 Bricks and clicks, 67–8 Broadline distributors, 170 Budget methods, 43–4 see also Financial accounting Budget variances, 44–6 Budgetary controls, 46 Budgetary preparation, 47–9 capital expenditure budget, 49 cash budget, 49 operating budgets, 47–8 zero-based budget, 48–9 Buffet service, 578 Building codes, 49–50 Building components, 50 Building Official and Code Administrators International (BOCA), 50 Building Owners and Managers Association (BOMA), 229 Burnout, 50–2 Business centers, 52–3 Business environment, 53–4 Business level strategy, 54–5 corporate level strategy, 117–18 differentiation, 54 focus strategy, 54 low-cost leadership, 54 Business Management Institute (BMI), 55 Business process reengineering (BPR), 55–6 Business risk, 56 Business-to-business (B2B), 337–8 Cafeteria service, 579 Call accounting system, 310 Call centers, 167 Capital assets pricing model (CAPM), 57 see also Financial accounting Capital costs of equipment, 229–31 Capital expenditure budget, 49 Career planning and development, 57–8 see also Training Cash budget, 49 Cash flow, 58 Cash flow statement, 58–9 direct method, 58 indirect method, 58 see also Financial accounting Casinos, 59–60 Casino events, 593

Index 669 Cause-related events, 593–4 CCR DEA model, 148 Cellular wireless communications, 652 Cendant Corporation, 4 Central reservation office (CRO), 167, 337 Central reservation systems (CRS), 177 Centralization, 60–1 Centralized guestroom HVAC, 61 Centricity, customer centricity, 127–8 Certified Meeting Professional (CMP), 110–11 Certified Timeshare Supervisor qualification, 14 CHAID (Chi-Square Automatic Interaction), 410–11 Chain hotels, 310–11 Chain restaurants, 61–2 Change management, 62–4 Kotter and Schlesinger strategies, 63–4 management of change, 403 see also Management.… Characteristics of service, 64–6 Chartered Institution of Building Service Engineers (CIBSE), 229 Check-out, 66–7 express checkout, 225 self check-out, 573 CHP see Combined heat and power cogeneration City-athletic clubs, 79 Classification variables, 310–12 Cleaning, 27 Cleaning schedule, 67 Clicks and mortar, 67–8 Closed circuit television (CCTV), 572 Clubs: club board of directors, 68 Club Corporation (ClubCorp), 68–9 club entertainment, 69 club fitness programs, 69–71 club management, 71 club manager certification programs, 71–2 Club Managers Association of America (CMAA), 55, 71, 72–3, 381, 501, 502 charitable support, 73 educational focus, 73 value added services, 73 club membership categories, 73–5 club membership nomination, 75 club membership process, 75–6 club officers, 76 club professionals, 76–8 aquatics director, 77 assistant general manager, 77 executive chef, 76–7 general manager, 78 golf professional, 77 grounds superintendent, 77 tennis professional, 77–8 club reciprocity, 78 club types, 78–80 city club, 78–9 city-athletic clubs, 79 corporate clubs, 79 country club, 79 developer clubs, 80 equity clubs, 80 golf clubs, 79 health clubs, 79 member-owned clubs, 79 military clubs, 80 non-equity clubs, 80 semi-private clubs, 80 university clubs, 80 yacht clubs, 79 clubhouse, 80–1 see also Private clubs Coaching, 11, 81 Coalition campaign to advance face-to-face meetings, 111 Co-branding, 81 see also Branding Cognitive dissonance, 82 Collective bargaining, 82 Colloquium, 424 Combined heat and power cogeneration (CHP), 82–3 District heating/cooling plants, 82–3 see also Electric power purchasing; Energy management; Power (energy) purchasing Comfort zones and human comfort, 83 Commercial home, 83–4 Commitment, 84 Common-size statements, 84–5 Communication, 31, 86 Bluetooth, 39–40, 184 communication channels, 160 front office communications, 263–5 ICT (information communication technology), 336–9 local area network (LAN), 390 m-Commerce, 423 PBX, 464 TCP/IP, 611 telephone systems, 611 wireless, 651–6 Wireless application protocol (WAP), 656–7 see also Internet; Websites/web pages; Wireless Comparative statement analysis, 86–7 see also Financial accounting Compensation, 87 Competencies, 87 Competency profiling, 87–8 Competition-based pricing, 496 Competitive advantage, 88 Competitive analysis, 234

670 Index Competitive information, 304 Competitive position, 88–9 Competitive strategy, 33, 89 see also Strategy, management and implementation Complaints: complaint resolution, 129–31 customer complaints behavior, 128–31 in foodservice, 142–3 see also Behavior Computer, 16, 89–90 File Transfer Protocol (FTP), 238 hardware, 299 interactive systems, 347–8 operating system, 451 software, 589 virtual reality, 644 see also Software Computer reservation system (CRS), 90–2, 167 and the front office, 267 in house reservation networks, 91 In-house computerized reservation system, 343–5 integration with external reservation networks, 91 property management system (PMS), 91 single-property reservation systems, 91 and switch companies, 608 see also Global distribution system (GDS) Computerized maintenance management system (CMMS), 396–7 Concept mapping, 92–3 Concierge, 93 Concurrent sessions, 94 see also Meeting.… Condominium, 94 Conference, 94–5 see also Congress; Convention.…; Meeting.… Conference center, 95 Conference plan, 95–6 Confirmed reservation, 96 Conflict, 96–7 Congress, 424 congress center, 97–8 professional congress organizer, 511–12 Connecting rooms, 558 Connectivity, 304 Consortia groupings of hotels, 312 Consortium, 8–10, 98–9, 168 Constructive dismissal, 99 Consumer buying (decision) process, 99–101, 215–16 Consumer rights under the purchaser deposit, 101–2 Contests, 568 Contextual effects in consumer behavior, 102 see also Behavior Continental plan room rates, 317 Contingency theory, 102–3, 405 Continuous improvement, 103–4, 621–3 see also Quality control Contract catering, 449 Contract of employment, 104, 197–8 Contracts: hotel management contracts and lease, 313–15 psychological contract, 521 rescission, 538 Contribution margin, 104–5 see also Financial accounting Contribution pricing, 122 Controllable and non-controllable costs, 105–6 see also Financial accounting Controllable costs in foodservice, 106 Convention, 18–19, 106, 432 convention catering, 106–8 convention center, 108–9 Convention Industry Council (CIC), 109–12, 538 convention service manager, 112 convention and visitors bureau (CVB), 112–13 pre-convention meeting, 485–6 see also Association market; Conference.…; Corporate event market; Exhibitions; General session; Meeting.… Convergence theory, 3 Cook-chill, 113 Cook-freeze, 113–14 Cooperative arrangements, 8–10 Core competencies, 87 Corporate clubs, 79 Corporate event market, 114–17 Corporate events, 593 Corporate level strategy, 117–18 Corporate meeting, 118 Corporate travel agents, 168 Cost of goods sold (COGS), 118–19, 237–8, 291 Cost per available room (CostPar), 85 Cost of replacement hotel valuation method, 319 Cost of sales, 119 Cost strategy, 119–20 Cost-based approach to pricing, 497 Cost-benefit analysis, 120, 126 Cost-informed pricing methods, 120–3 Cost-plus pricing, 120–1 Cost-volume-profit (CVP) analysis, 123–4 Costing, 487–500 activity-based costing (ABC), 5–6, 124 basic elements of cost, 34 see also Financial accounting; Price/pricing Council of Hotel, Restaurant, and Institutional Education (CHRIE), 413 Country club, 79 Coupons, 567–8 Craftsmen entrepreneurs, 203

Index 671 Credit cards: credit card guarantee, 125 and e-commerce, 181–2 smart card, 582–3 Critical incidents technique, 125–6 Critical success factors (CSF), 126–7 Cross-selling, 127 CRS see Computer reservation system (CRS) Curriculum vitae (CV), 550 Custom training seminars, 116 Customer centricity, 127–8 Customer complaint behavior, 102, 128–31 Customer expectations, 132–5 and branding, 134–5 Customer lifetime value, 135–6 Customer loyalty, 136, 575 Customer motivation, 472 Customer relationship management/ marketing (CRM), 4, 28, 130–1, 136–40, 534–6 Customer relationship management in foodservice, 140–1 Customer satisfaction, 141–3 Cyber-enhanced retailing, 67–8 Cycle menus, 143–4 Daily operations report, 145 Data collecting, storing, and processing, 402–3 secondary data, 571 Data envelopment analysis (DEA), 145–9 Data mining, 149 Data warehouse, 149 Database marketing, 150 see also Marketing Database systems, 150–1 Day rates (rooms), 317 Daypart, 151 Debtor turnover/collection period, 179 Decentralization, 60 Decentralized guestroom HVAC, 151–2 Decision-making, 152 Decision support system, 152–3, 224 Decision-making bias, 36–8 Deeded timeshare ownership, 153 see also Timeshare industry Demi pension room rates, 317 Demonstrations, 568 Departing the guest, 153–4 Depreciation of fixed assets, 154–5 Destination management company (DMC), 155 Destination management system (DMS), 155–6, 168, 304 Destination marketing, 156–7 Destination marketing organization (DMO), 155–6, 157–8 Developer clubs, 80 Developer rights under the purchaser deposit, 158–9 Deviance, 159 see also Behavior Diffusion models, 159–61 diffusion rates and direction, 160–1 Dilution effect, and bias, 38 Dining room turnover, 161–2 Direct billing, 162 see also Financial accounting Direct cost-plus pricing, 121 Direct costs, 162–3 see also Financial accounting Direct mail marketing, 163 Direct marketing, 518 Disabilities Act (ADA), 565 Disciplinary action, 163 see also Behavior Disconfirmation theory, 164 Discounted cash flow (DCF), 441 hotel valuation methods, 319–20 Discounted rate of return, 353–5 Discrimination, 164, 210–11 Discriminatory pricing, 165 Dismissal, 165–6 constructive dismissal, 99 see also Employee.…; Employment Dispute settlement/resolution, 11 Distinctive capabilities, 166 Distribution channels, 166–9 Distribution channels in foodservice, 169–71 Distributors, broadline, 170 District heating/cooling plants, 171–2 Combined heat and power cogeneration, 82–3 Diversification, 118, 172–3 Domain name, 173–4 Door locking, electronic systems, 183–4, 460–1 Double occupancy room rates, 317 Double rooms, 558 Double-double rooms, 558 Downsizing, 174 Drayage, 174–5 Dumbwaiters, 644 Duty of care, 175 e-commerce (electronic commerce), 67–8, 181–3 e-hospitality, 336–9, 338–9 e-Marketing (electronic marketing), 185 e-procurement (electronic procurement), 185–6, 337 Earnings before interest, taxes, depreciation, and amortization (EBITDA), 450 Earnings per share, 176 see also Financial accounting Economies of scale, 176–8 see also Financial accounting

672 Index Economies of scope, 178 Educational meetings, 596 EER (energy efficiency ratio), 333 Efficiency, data envelopment analysis, 145–8 Efficiency ratios, 178–80 see also Financial accounting Eighty-six, 180 Eighty-twenty customer pyramid, 180–1 Electric power purchasing, 181, 290, 500 see also Energy management; Facilities; Power (energy) purchasing Electronic commerce (e-commerce), 67–8, 181–3 see also Internet Electronic data interchange (EDI), 183 Electronic distribution system (EDS), 304 Electronic locking systems, 183–4, 460–1 Electronic mail (eMail), 184–5 Electronic marketing (e-Marketing), 185 Electronic POS systems (EPOS), 480 Electronic procurement (e-procurement), 185–6, 337 Elevators, 643 eMail (electronic mail), 184–5 Embedded organization perspective, 9 Emotional labor, 186–8 Empathy, and the gap model, 272 Employee assistance program (EAP), 188 Employee orientation and mentoring, 188–9 see also Training Employee participation, 189 Employee performance: job analysis, 367–8 performance evaluation, 468 performance indicators, 468 performance measurement, 469–71 Employee relations (ER), 189–93 see also Human resources management (HRM) Employee rules, 193 Employee satisfaction, 193–5 Employee selection techniques, 195–7 Employer association, 197 Employment: Dismissal, 165–6 employment law, 104, 197–8 equal employment opportunity (EEO), 164, 210–11 labor employment, 373–5 labor turnover, 375 multi-skilling, 439 redundancy, 531–2 resignation, 543–4 warnings to employees, 647 see also Recruitment Empowerment, 198–200 En pension room rates, 317 En suite rooms, 559 Energy, renewable, 536–7 Energy management, 82–3, 181, 200, 290, 500 energy conservation and management, 206 energy management system, 201 room energy management system, 559–60 see also Electric power purchasing; Environment; Facilities Enterprise resource planning (ERP), 201, 545 Entertainment, club entertainment, 69 Entrée, 2 Entrepreneurism, 202 Entrepreneurship, 202–4 small business entrepreneurship, 582 Entry strategies, 204 Environment: environment and atmospherics, 20–1 environmental determinism, 204–5 environmental management, 205–6 environmental management in hotels, 207–8 environmental management system (EMS), 208 environmental scanning (ES), 209–10, 307 International Hotels Environment Initiative (IHEI), 356 United States Environmental Protection Agency (US EPA), 632–3 see also Energy management Equal employment opportunity (EEO), 164, 210–11 Equity alliances, 9 Equity clubs, 80 ER see Employee relations (ER) Ergonomics, 211 Escalators, 643 European plan room rates, 317 Evaluative attributes, 211–12 Events: association events, 593 casino events, 593 cause-related events, 593–4 corporate events, 593 event histories, 425 event operations manual, 212 event planners, 426 event profile, 426 event project management, 212–15 event timeline, 426 fairs, festivals, and parades, 594 retail events, 594 social events, 594–5 special events management, 592–5 sporting events, 594 tourism events, 595 Evoked set, 215–16 Exchange company, 216–18 see also Timeshare industry

Index 673 Executive information system (EIS), 218 Executive recruiters/headhunters, 218–19 Exhibit prospectus, 219–20 Exhibitions, 40, 220–2, 432–3 drayage, 174–5 see also Convention; Fairs Exhibits, 222 Expectations: customer expectations, 132–5 predicted, and ideal/desired, 132–3 Expenditure variances, 45–6 Expenses, 222–3 Undistributed operating expenses, 628–9 see also Financial accounting Experience economy, 223 Experimentation, 223–4 Expert systems, 224–5 Express check-out, 67, 225 External analysis, 225–7 Extranet, 227, 337–8, 361 see also Internet Facilities: facilities engineering, 228 facilities management, 228–9 facilities management association, 229 facilities operating and capital costs, 229–31 Facility obsolescence, 231 lighting equipment and systems, 387–8 renovation, 537 room system automation, 566 routine maintenance, 566 water and waste water systems, 648–50 see also Energy management; HVAC Fading (apprentices), 11 Fairs, 231–3, 594 see also Exhibitions; Festivals Family rooms, 559 Family service (service à la française), 578 Fast casual, 233 Feasibility study, 233–5 Federacion Latinoamericana De Desarrolladores Turisticos (LADETUR), 235 Federal Emergency Management Agency (FEMA), 580 Festivals, 232, 235–7, 594 FF&E (furniture, fixtures and equipment), 50, 231, 269 FIFO, 237–8 File Transfer Protocol (FTP), 238 Financial accounting, managing and operating: account aging, 4–5 actual-cost pricing method, 494–5 average check, 25–6 basic elements of cost, 34 break even analysis, 42 capital assets pricing model (CAPM), 57 contribution margin, 104–5 controllable and non-controllable costs, 105–6 depreciation of fixed assets, 154–5 direct costs, 162–3 expenses, 222–3 financial accounting, 238–9 financial leverage, 239 financial risk, 239 gross profit in foodservice, 291 gross profit and net profit, 290–1 gross-profit pricing method, 495 human resource accounting (HRA), 326 international aspects of financial management, 355–6 inventory management, 658 inventory turnover analysis, 363–5 labor costs, 373 life cycle costing, 386 management accounting, 397–8 managing accounts payable, 659 managing accounts receivable, 658 mass customization, 422–3 overtrading, 659 prime costs, 500 productivity, 507–11 purchasing, 523 recipe costing, 530 reserve for replacement, 542–3 revenue management, 551–2 revenue management in restaurants, 552–3 service profit chain, 575 standard cost accounting in foodservice, 598–9 timeshare financing, 615–16 Turnover, 626–7 uniform system of accounts income statement, 631–2 uniform system of accounts for restaurants, 630–1 value drivers, 639–40 value pricing, 640–1 variable costs, 641 variable costs in foodservice, 641 working capital, 657–9 see also Budget.…; Cash flow; Cost.…; Hotel accounting and finance terms; Price/pricing Financial accounting, terms and documents: balance sheet, 29–30 debtor turnover/collection period, 179 discounted cash flow (DCF), 441 earnings before interest, taxes, depreciation, and amortization (EBITDA), 450 earnings per share, 176 efficiency ratios, 178–80 fixed assets turnover, 179 free cash flow (FCF), 261 gross operating profit (GOP), 290 hotel accounting and finance terms, 309–10

674 Index Financial accounting, terms and documents (Continued) hotel income statement, 313 income statement, 513 Indirect costs, 340–1 internal rate of return (IRR), 353–5 inventory turnover, 179 liquidity ratios, 389–90 marginal costs, 406 net present value (NPV), 441–2 net profit/income ratio, 513–14 non-controllable expenses, 444 operating cash flow (OCF), 450 operating leverage, 450 operating ratios, 450–1 petty cash fund, 476 pre-costing, 486 price earnings ratio, 493–4 profit and loss statement, 313, 513 profitability ratios, 513–14 purchase order, 522–3 required rate of return (RRR), 555 return on capital employed (ROCE), 514 return on equity ratio, 515 return on investment (ROI), 514–15 return on total assets, 514 revenue, 550–1 revenue per available seat hour (RevPASH), 554 risk-to-return tradeoff, 555 solvency ratios, 589–91 value-added statement, 638–9 weighted average cost of capital (WACC), 650–1 see also Hotel accounting and finance terms Fire protection, 240 alarm annunciators, 8 auto closing devices, 24–5 fire seal, 240–1 fire sprinklers, 240, 241 heat detectors, 302 hotel fire fighting team, 312–13 kitchen fire suppression system, 371 Life Safety Code, The, 386–7 National Fire Protection Association (NFPA), 240 site inspection, 579–81 smoke detectors, 583 Fitness programs, club fitness programs, 69–71 Fixed asset turnover, 179 Fixed charges, 241–2 Fixed costs, 242 Fixed costs in foodservice, 242–3 Fixed timeshare plan, 243 Flexible working, 243–5 Float timeshare plan, 245 Focus groups, 245–6 Folio, 246 see also Financial accounting.… Food and beverage department ratios, 316–17 Food code, The, 247 Foodborne illness, 247–9 health codes, 300–1 see also Illness Foodservice: complaints, 142–3 controllable costs in foodservice, 106 customer relationship management in foodservice, 140–1 customer satisfaction, 141–3 daypart, 151 distribution channels, 169–71 fixed costs in foodservice, 242–3 forecasting in foodservice/restaurants, 249–51 gross profit in foodservice, 291 layout and design in foodservice facilities, 378–9 market segmentation in foodservice operations, 411–12 on-site foodservice, 449 outsourcing of foodservice, 459–60 performance measures in foodservice/restaurants, 471 portion control, 483 portion cost, 483–4 pricing methods in foodservice/restaurants, 494–6 production schedule, 507 profit in foodservice operations, 512 research and development in foodservice, 538–40 seasonality in foodservice, 570 seat turnover, 316–17 self service, 233 standard cost accounting in foodservice, 598–9 storage, 599–600 tables per server, 610–11 variable costs in foodservice, 641 see also Menus; Restaurants; Service types Forecasting, 249 Forecasting in foodservice/restaurants, 249–51 Forecasting rooms availability, 252–5 Forecasting rooms revenue, 255–6 Fractional, 256 Framing, 256–7 Franchising, 9, 257–9 Franchising in restaurants, 260–1 International Franchise Association (IFA), 259 Uniform Franchise Offering Circular (UFOC), 258 Fraternal meetings, 596 Free cash flow (FCF), 261 see also Financial accounting.…; Operating cash flow (OCF) Frequent guest programs, 261–2 Front-of-the-house in hotels, 262 Front-of-the-house in restaurants, 262–3

Index 675 Front office accounting, 263 Front office communications, 263–5 see also Communication Front office ledger, 265 Front office operations, 145, 265–7 Front office organization, 268 Front office systems, 91, 268, 448, 519–20 Full board room rates, 317 Full cost pricing, 121 Full-time equivalent (FTE), 268–9 Furniture, fixtures, and equipment (FF&E), 50, 231, 269 Gala fundraising events, 116 Game theory, 270 Gap model of service quality, 270–2 General manager, 272–3 General session, 273 Generic strategies, 273–5 Global Alliance for Timeshare Excellence (GATE), 275 Global distribution system (GDS), 167, 275–6, 304, 337, 361, 608 GDS provider, 305 Global distribution systems: development and major players, 276–9 market share, 278 see also Computer reservation system (CRS) Global Registry LLC, 217 Global strategies, 279–80 Globalization, 4, 280–2 Glocalization, 282 Golf: Club Corporation (ClubCorp), 68–9 golf clubs, 79 golf facilities, 282–4 golf professional classifications, 284–6 golf programs, 286–7 golf tournaments, 287–9 PGA of America, 477 Gratuities, convention catering, 107 Grease trap, 289 Green Globe 21 (benchmarking/certification), 289 see also Benchmarking Green power energy purchasing, 290, 537 Gross margin pricing, 121–2 Gross operating profit (GOP), 290 Gross profit in foodservice, 291 Gross profit and net profit, 290–1 Group decision support systems (GDSSs), 152–3 Group programs and incentive travel, 340 Group reservation, 291–2 Group travel agents, 168 Groups, 292–3 reference group, 532–3 Growth strategy, 172 Guaranteed reservation, 252, 293–4 Guarantees: convention catering, 107 credit card guarantees, 125 Guéridon service (service à la russe), 578 Guest accounting, 520 Guest cycle, 294 Guest history, 294 Guest history file, 294–5 Guest houses, 3–4 Guest operated interfaces, 295 Guest profile, 295–6 Guest safety, 296 Guestroom floor configurations, 297 Guestroom occupancy sensors, 297 HACCP (hazard analysis of critical control points), 298–9 Half board rates, 317 Hardware, 299–300 see also Computer Harvey Restaurant Company, 61 Haute cuisine (‘high cookery’), 300 ‘Have a nice day’ approach, 186–7 Hazardous substances, 206 Health: foodborne illness, 247–9 health clubs, 79 health codes, 300–1 occupational safety and health, 447–8 OSHA (occupational safety and health administration) [USA], 457–8 Hearing conservation, 301–2 Hearing Protection Program, 302 Hearing impaired guests, facilities for, 265 Heat detectors, 302 Heating and ventilation see HVAC Heuristics, 37 High-tech high-touch, 302–3 Hiring crunch, 303 see also Recruitment Holiday camps/villages, 4 Homeowners association, 303–4 see also Timeshare industry Homeowners Association Clarification Act 1997, 16 Hospitality, market segmentation in hospitality, 413–14 Hospitality distribution channels, 166–7 Hospitality distribution terms and initials, 304–6 Hospitality strategic management, 306–9 Hotel accounting and finance terms, 309–10 account allowance, 309 account correction, 309 account posting, 309 account settlement, 309 account transfer, 309–10

676 Index Hotel accounting and finance terms (Continued ) average daily rate (ADR), 26, 310 average rate per guest, 310 average room rate, 310 call accounting system, 310 comparative statement analysis, 86–7 direct billing, 162 expenses/expense ratios, 316 facilities operating and capital costs, 229–31 fixed charges, 241–2 fixed costs, 242 folio, 246 Food and beverage department ratios, 316–17 forecasting rooms revenue, 255–6 front office accounting, 263 front office ledger, 265 hotel income statement, 313 hotel rate structures, 317–18 hotel rating systems, 318 hotel valuation methods, 318–21 house limit, 321 market segments and customer profitability analysis, 414–15 night audit, 442–4, 520 revenue per available room, 85, 310, 553–4 room rate, 560–1 room rate pricing, 561–3 room revenue analysis, 563–4 semi-variable costs, 574–5 undistributed operating expenses, 628–9 uniform system of accounts, 629–30 uniform system of accounts income statement, 631–2 Uniform System of Accounts for Lodging Industry (USALI), 290, 415 see also Financial accounting.… Hotel classification, 310–12 Hotel consortia, 312 Hotel Distribution System (HDS), 304 Hotel fire fighting team, 312–13 Hotel income statement, 313 Hotel management contracts and lease, 313–15 Hotel operating department ratios, 315–17 Hotel rate structures, 317–18 Hotel rating systems, 318 Hotel valuation methods, 318–21 Hotels, 3–4 back-of-the-house in hotels, 27–8 chain hotels, 310–11 front-of-the-house in hotels, 262 independent hotels, 310 service levels, 311 see also Front office.…; Front-of-the-house.… House limit, 321 Housekeeping, 321–2, 519–20 Housing process, 322–4 HTML (Hypertext markup language), 324, 629, 660 Human capital, 324–6 Human relations approach to management, 404 Human resource accounting (HRA), 326–7 Human resource development (HRD), 327–8 Human resource information systems, 328–9 Human resources management (HRM), 329–33 Employee relations (ER), 189–93 HRM departments, 11 Human capital, 324–6 HVAC (heating ventilation and air conditioning): centralized guestroom HVAC, 61 comfort zones and human comfort, 83 decentralized guestroom HVAC, 151–2 energy management system, 201 HVAC equipment and systems, 333–4 HVAC loads, 334–5 indoor air quality, 341 Legionnaire’s disease, 384–5 room energy management systems (EMS), 559–60 ventilation system, 642 see also Electric power purchasing; Energy management; Facilities; Maintenance management; Power (energy) purchasing Hybrid e-commerce, 67–8 ICT and e-hospitality, 336–9 Illness: foodborne illness, 247–9 Legionnaire’s disease, 384–5 musculoskeletal disorders (MSDs), 440 National Institute for Occupational Safety and Health (NIOS), 440 repetitive strain injuries (RSIs), 440 Incentive travel, 339–40 Income capitalization hotel valuation, 319 Income statement, 313, 513 Independent hotels, 310 Independent restaurants, 340 Indirect costs, 340–1 see also Financial accounting.… Individual capital, 325 Individual programs and incentive travel, 340 Indoor air quality (IAQ), 341 see also HVAC Industrial relations: Employee relations (ER), 189–93 see also Human resources management (HRM) Industrial tribunal, 341–2 Industry analysis, 342 Industry life cycle, 342–3 Information communication technology (ICT), 336–9

Index 677 Information system (IS), 343 executive information system (EIS), 218 integrated information systems, 345–6 management information system (MIS), 401 Information technology: domain names, 173–4 high-tech high-touch, 302 In-house computerized reservation system, 343–5 Inns, 3–4 Inspections, site inspection, 579–81 Instructional capital, 325 Integrated information systems, 345–6 Intelligent agents, 347 Interactive marketing, 518 Interactive systems, 347–8 see also Computer Interactive television, 348 Internal analysis, 348–50 Internal control, 350 Internal marketing, 350–3 Internal rate of return (IRR), 353–5 see also Financial accounting.… Internal Revenue Code (IRC) (US), 17 Internal Revenue Service (IRS) (US), 17 International aspects of financial management, 355–6 see also Financial accounting.… International Association of Conference centers (IACC), 95 International Conference of Building Officials (ICBO), 50 International Facilities Management Association (IFMA), 229 International Franchise Association (IFA), 259 International Hotels Environment Initiative (IHEI), 356 International meeting, 357 International Timeshare Foundation (ITF), 12–13 Internationalization, 357–9 Internet, 9, 10, 304, 338, 359 bandwidth, 31 electronic commerce (e-commerce), 181–3 electronic data interchange, 183 electronic mail (eMail), 184–5 electronic marketing (e-Marketing), 185 electronic procurement (e-procurement), 185–6, 337 extranet, 227 HTML (Hypertext markup language), 324, 629, 660 Internet channels, 169, 359–62 see also Websites/web pages Interval, 362 Interval International (II), 216 Interval International and Resort Condominiums International, 7 Interviewing, 196 Intranet, 362–3 Inventory, 363 inventory management, 658 inventory turnover, 179 inventory turnover analysis, 363–5 perpetual inventory, 473 physical inventory, 477 see also Financial accounting Invitational tournaments, 365 ISO 9000, 365–6, 525 ISO 14000, 366 IT back office systems, 28 Job analysis, 367–8 Job evaluations, 462–3 Job specialization, 368–9 Junior suite, 559 Key control, 370–1 King room, 559 Kitchen fire suppression system, 371 Knowledge management (KM), 371–2 Knowledge-based systems, Expert systems, 224–5 Labor costs, 373 Labor employment, 373–5 Labor turnover, 375 Laddering techniques, 376–7 see also Behavior Landing page, 361 Laptops, wireless communication for, 652 Late arrival, 377–8 Law, employment law, 197–8 Layout and design in foodservice facilities, 378–9 Leadership, authority, power, and control, 84, 379–81 Leadership in energy and environment design (LEED), 381 Learning, 381–3 Learning environment, 383 Learning organization, 383–4 Leases, hotel management contracts and lease, 313–15 Legacy, 384 Legionnaire’s disease, 384–5 Les clefs d’Or, 385 Leverage, Financial leverage, 239 Life cycle costing, 386 Life Safety Code, 8 Life safety code, The, 386–7 Lifetime value, customer, 135–6 Lighting equipment and systems, 387–8