ȱ 45 equivalent occupancy—Given a contemplated or actual change in the average room rate, the occupancy percentage required to produce the same net revenue as was produced by the old price and occupancy percentage. fair market share—A comparison of a hotel’s ADR and occupancy percentage, ȱǰȱȱȱȱȱȱ ȱȱȱĴȱȱȱȱ business in the market. ę¡ȱȯCosts that remain constant in the short run even though sales volume varies. forecast—A projection of estimated business volume. ȱĴȯȬȱǰȱȱȱȱǰȱȱĴȱȱ of group room nights. group booking pace—The rate at which group business is being booked. hurdle rate—In the context of revenue management, the lowest acceptable room rate for a given date. marginal costs—The variable or added costs of selling a product, incurred only if the room is sold; also called cost per occupied room. minimum length of stay—A revenue management availability strategy requiring ȱȱȱȱȱȱȱȱȱęȱȱȱȱȱȱȱȱ accepted. potential average rate—ȱȱȱȱě¢ȱȱȱȱ average single and double rates, multiple occupancy percentage, and rate spread to produce the average rate that would be achieved if all rooms were sold at their full rack rates. rate potential percentage—The percentage of the rack rate that a hotel actually receives, computed by dividing the actual average room rate by the potential average rate; also called the achievement factor. rate spread—ȱȱěȱ ȱ ȱȂȱȱ ȱ single rate and potential average double rate. revenue management—A technique based on supply and demand used to maximize revenues by lowering prices to increase sales during periods of low demand and raising prices during periods of high demand to increase revenue. RevPAR—A revenue measurement that focuses on revenue per available room. sell-through—A revenue management availability strategy that works like a minimum length of stay requirement, except that the length of the required stay can begin before the date the strategy is applied. stay-sensitive hurdle rate—In the context of revenue management, a hurdle rate (or minimum acceptable room rate) that varies with the length of the guest reservation. wash factor—The deletion of unnecessary group rooms from a group block.
46 ȱŗ weighted average contribution margin ratio—In a multiple product situation, an average contribution margin for all operated departments that is weighted to ĚȱȱȱȱȱȱȱȱȱȂȱ¢ȱȱ ¢ȱę¡ȱȱȱȱęǯ yield statistic—The ratio of actual rooms revenue to potential rooms revenue.
47 2 Reservations From ȱȱĜȱǰ Seventh Edition by Michael L. Kasavana, Ph.D. and Richard M. Brooks, CHA FROM A GUEST’S POINT OF VIEW, the most important outcome of the reservations process is the hotel having a guestroom ready and waiting for the guest when he or she arrives. This guestroom should not be just any room, but room that best meets the needs the guest expressed during the reservations process. At the same ǰȱ ȱȱȱ ȱ ȱȱěȱȱ ȱ ȱ ȱ process. They would like the reservation process to provide the highest occupancy and room revenue possible. ȱȱ ȱǰȱ¢ȱȱȱȱĜȱ- vations procedures in place. Finely tuned methods allow reservations agents to identify what the guest requires and what the property has to sell for the dates requested, record and act on reservation details, promote hotel services, and ensure accuracy. Reservations agents must be able to respond in a quick, accurate, and pleasant manner. The time they spend on researching rates and package ǰȱ ǰȱęǰȱȱȱȱȱȱȱȱȱȱǯ Processing reservations involves matching room requests with room avail- ȱ ȱ Dzȱ ǰȱ ęǰȱ ȱ ȱ Dzȱ ȱ producing management reports. Reservation information is especially useful in ȱ ȱĜȱ ǯȱȱ¡ǰȱ ȱ ȱȱȱȱ ȱ ȱǰȱ ȱĜȱȱȱȱ ȱ¢ȱȱ ¢ȱ ȱ ę£ȱ ȱ ǰȱ ȱ ȱ ǰȱ ȱ ęȱ Ȃȱ special requests. At the same time, achieving high occupancy and revenue takes considerable research, planning, and monitoring. The person assigned to these tasks is usually ȱȱȱȱǯȱ ȱȱǰȱȱȱĜȱǰȱ rooms division manager, or even general manager may have these responsibilities. Although selling rooms is a very important role for the reservations department, deciding which rooms should be sold and at what price is just as important. Without proper planning and control, rooms may be vacant that otherwise could be sold. In addition, rooms may be improperly priced, leading to lost revenue opportunities. This chapter describes typical activities associated with the reservations process. These activities include: Formulating the reservation inquiry Determining room and rate availability Creating the reservation record x x x
48 ȱŘ ęȱȱȱ Maintaining the reservation record Producing reservation reports Researching, planning, and monitoring reservations The nature of reservations will be examined before these activities are addressed in detail. Reservations and Sales Prior to automation, reservations agents focused primarily on basic room avail- ¢ȱ Dzȱ ¢ȱ ȱ ȱ ȱ ȱ ěȱ ȱ ¢ȱ ȱ ȱ ¢ȱ available rooms by room type. When a guest requested a room, the reservations ȱȱęȱȱa room was available. The agent, however, could not be sure that a particular ¢ȱ ȱ ȱ ȱ ȱ ęȱ ȱ ȱ ȱ ȱ available. Reservations agents would note special requests—such as a no-smoking room or a room with a nice view or a certain type of bedding—on the reservation ǰȱȱȱ ȱȱȱȱȱȱȱȱęȱȱȱȱȱȱȱ check-in. At the same time, the front desk agent was considered to be primarily ȱȱȱȱȱȱȱ¡£ȱȱǯȱȱȱ ȱ ȱ Ğȱȱȱ ȱ ȱ ȱ Ȭȱ ȱ ȱ they arrived. Automation of the reservations process provides accurate and current ȱȱȱǯȱȱȱȱȱ¢ȱ£ȱ ȱ the rooms management module, reservations agents can review room and rate ȱ ȱ ȱ ęȱǯȱȱ ȱ ęȱ ȱ ¢ǰȱǰȱ ȱ ȱȱȱȱ¢ȱ ȱȱ¢ȱęȱȱȱ of the reservations process. Many reservation systems enable reservations agents ȱȱęȱǯȱ Given its role in the selling function, much of the responsibility associated ȱ ȱ ȱ ȱ ȱ ę¢ȱ ¢ȱ ȱ Ğȱ ȱ ȱ resides within the reservations department. For this reason, many lodging companies now view reservations as part of the sales department, even though the function has traditionally been part of the rooms division. Reservations agents are not order-takers; they are trained in sales techniques. Many hotel companies conduct extensive sales training programs with reservations agents, and use the position to ¢ȱěȱȱ ȱ ȱȱȱȱȱȱǯȱ¢ȱ- ȱĜȱȱȱǰȱȱȱȱȱǰȱȱȱǰȱ and room revenue booked. ȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ ȱ ǰȱ ¡£ȱ - ǰȱȱ¢ȱǰȱ ȱȱȱȱȱĞȱȱ ȱ ȱȱ ęȱ ȱȱ ȱ ȱ Ĝȱ ǯȱȱ ȱ emphasis on sales and marketing techniques, properties can more accurately fore- ȱȱĴȱȱȱȱǯȱ ȱȱȱȱ ȱȱȱ ȱȱȱ ȱ ȱ ȱ ȱȱ Ğȱ ȱ ȱ ȱ ȱǯ x x x x
49 The Role of the Sales Department in Reservations Because a great deal of the responsibility for achieving occupancy and revenue ȱ ȱ Ğȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ǰȱ ȱ ȱ department has taken a more important role in reservations. There are several reasons for this. First, the sales department is a primary source of reservations for the hotel. Group sales managers or representatives create group reservations. These reservations are most commonly from corporations or trade associations holding impor- ȱǯȱ ȱ ǰȱ ȱ ȱ ȱ¢ȱ ȱ ȱ ȱ Ĵȱ social, military, educational, religious, and fraternal groups—these groups together are usually referred to as the ȱ. Although the actual guest reserva- ȱ¢ȱȱ¢ȱȱȱȱĜȱ¢ȱǰȱȱȱ Ĝǰȱ ȱ ȱǰȱ ȱ ȱ ȱ ¢Ȃȱ ǰȱ ȱ ȱ Ĝȱ originated the group sale. Therefore, management evaluates the sales department on how many group guestroom reservations it creates. Senior property managers frequently compare the number of rooms in a group’s sales contract to the actual number of rooms the group reserves. By doing this, managers are able to verify that the sales department or the sales manager working with the group researched the group thoroughly before accepting the sales contract. Second, the sales department is usually responsible for generating sales from other markets as well as the group market. The sales department may have a specialist assigned to corporations (to woo the business traveler market) and perhaps travel agencies as well (to pursue the travel agent market). In large or complex hotels, there may be several managers assigned to these markets. Their job is to £ȱȱȱȱȱȱ ȱȱȱȱęȱȱ ȱ¢ǯȱ ȱȱȱ¢ȱȱȱ¢ȱȱȱȱęȱȱȱ ǰȱȱȱĞȱ¡ȱȱǯȱȱȱȱȱȱ that companies provided with discount plans are meeting their commitments. ȱȱȱĞȱȱ ȱęȱȱȱȱȱ- ing or exceeding their sales goals. In the past, goals were commonly established for room nights sold—that is, the total number of room nights the department and ȱȱȱȱȱȱȱĜȱǯȱ¢ǰȱ ȱĞȱȱȱȱȱę¢ȱȱȱȱȱȱȱȱ ȱǯȱ ȱȱĴȱȱȱȱȱȱǻȱǼȱȱȱ related to the total revenue a sales manager generates, so that sales managers are ȱȱȱȱȱȱȬĴȱȱȱȱ¢ȱȱȱȬ nights-sold quotas. The Reservation Sales Planning Process The sales department can book business many months or years in advance. It is ȱȱȱȱȱȱęȱ¢ȱȱȱȱǰȱȬ oriented hotels. Some hotels have group contracts even further into the future, ȱȱ£ȱȱȱȱ¢ȱȱȱȱȱȱȱȱȱǯȱȱ hotels may have the majority of their group business booked no more than six months in advance. Either way, it is usually the sales department that initiates the
50 ȱŘ reservation and revenue management processes, simply by focusing on committing rooms well into the future. ȱ ȱ ȱ ȱ ȱ ȱ ȱ ¢ȱ ȱ ěȱ the hotel’s occupancy and revenue opportunities. In some cases, it is the reservations manager who monitors group and non-group business and informs the sales department of room availability. In other cases, the reservations manager may also be responsible for the hotel’s revenue objectives. Every proposed group ȱȱȱȱȱȱȱȂȱȱȱȱęȱ ȱ ěȱȱ ȱ £ȱ ȱ ǯȱȱ ȱǰȱ hotel managers can plan and control future business, instead of merely reacting to market conditions. One example of planning and controlling group business is the mix of group and transient reservations a hotel accepts. This is generally decided in the annual budgeting process. The mix of business is very important, as it impacts total room revenue. Since a hotel’s sales department is generally focused on group sales, it is ¢ȱȱȱęȱȱȱȱȱȱǯȱȱȱȱȱȱ . The sales department is allowed to sell the rooms within the group allocation without additional approval. However, should sales managers desire to sell more rooms than have been set aside in the group allocation, they generally need the approval of the hotel’s sales director or general manager. The reservations manager is usually the person who evaluates these requests and reports on their ȱȱȱȱĴȱǯ Types of Reservations The majority of hotel guests make reservations. Reservations may take many forms, but they can all be placed in one of two broad categories: guaranteed or non-guaranteed. It is important for hotel managers to know their state’s law con- ȱȱȱȬȱǯȱ ȱȱǰȱęȱ a guaranteed reservation is considered a binding contract. If the hotel then fails to ȱȱǰȱȱȱȱȱȱȱȱȱęȱȱȱ ȱ the state. Guaranteed Reservations A guaranteed reservation assures the guest that the hotel will hold a room until a ęȱȱȱȱ¢ȱ ȱȱȂȱȱȱǯȱȱȱ¢ȱ ȱȬȱǰȱȱȱȱȱȱ¢ȱǻȱǰȱ ȱȱȱĜȱȱȱ been completed), or any time the hotel chooses. The guest, in turn, guarantees to pay for the room, even if it is not used, unless the reservation is canceled according to the hotel’s cancellation procedures. Guaranteed reservations provide some protection for the hotel’s revenues even in the case of a no-show, a situation in which a guest makes a reservation but does not register or cancel the reservation. Variations of guaranteed reservations are discussed in the following paragraphs. Prepayment. A prepayment guaranteed reservation requires that a payment in full be received prior to the guest’s day of arrival. From the perspective of the ȱĜǰȱ ȱȱ¢ȱ ȱȱȱ ȱȱȱ ǯȱ
51 This type of guaranteed reservation is commonly used at U.S. resorts and at hotels outside the United States. Credit Card. Major credit card companies have developed systems to ensure that participating lodging properties receive payment for no-shows through credit card guaranteed reservations. Unless a credit card guaranteed reservation is properly canceled before a stated cancellation hour, the lodging property will charge the guest’s credit card account for one night’s room rate plus tax; the card company will then bill the cardholder. Credit card guaranteed reservations are the most common form of guaranteed reservation. Resorts may charge for more room nights, since the length of stay at a resort is usually longer and it is more difęȱȱȱȱȱęȱȱȱȱȱǯȱȱȱȱȱȱȱȱ guaranteed reservations. Advance Deposit. An advance deposit guaranteed reservation requires that the ȱ¢ȱȱȱȱęȱȱȱ¢ȱȱȱǯȱȱȱȱȱ advance deposit is typically large enough to cover one night’s room rate and tax. (At resorts that traditionally have longer guest stays, advance deposits of several Ȃȱȱȱȱ¡ȱȱĞȱǯǼȱȱȬȱȱ ȱ¢¢ȱ be larger if the reservation is for more than a one-night stay. If a guest holding an advance deposit guaranteed reservation fails to register or cancel, the hotel may retain the deposit and cancel the reservation for the guest’s entire stay. This type of guaranteed reservation is most common at destination resorts and convention center hotels. A variation on this type of deposit applies the deposit received to the last night of the stay. This is intended to ensure room revenue should the guest depart earlier than scheduled. Travel Agent. Travel agent guaranteed reservations are a less common form of guaranteed reservation. Under a travel agent guaranteed reservation, travelers pay the travel agent in advance for their transportation and room charges, and the travel agent guarantees the client’s reservation. In the case of a no-show, the hotel generally bills the travel agency for payment, and the travel agent must then collect from the guest. This format has become less common, since both travel agents and hotels prefer the protection provided by credit card or advance deposit guarantees. Hotels generally accept travel agent guaranteed reservations from ¢ȱȱȱȱȱę¢ȱȱǯ Voucher or MCO. Another type of travel agent guarantee is the travel agency voucher or miscellaneous charge order (MCO). The MCO is a voucher issued by the Airline Reporting Corporation (ARC) and is controlled by many of the same travel agency regulations that control airline tickets. Many resorts prefer MCOs if they must accept vouchers, because ARC guarantees payment if the travel agency defaults on the payment. With travel agency vouchers and MCOs, the guest has prepaid the amount of the deposit to the travel agent. The agent forwards a voucher or MCO to the hotel as proof of payment and a guarantee that the prepaid amount will be sent to the hotel when the voucher is returned to the travel agency for payment. Usually, with vouchers and MCOs, the travel agency deducts its commission before sending payment to the hotel.
52 ȱŘ Corporate. A corporate guaranteed reservation involves a corporation entering into an agreement with a hotel. A corporation may sign a contractual agreement ȱȱȱ ȱȱȱȱȱ ȱȱęȱ¢ȱ for any no-show business travelers the corporation sponsors. Such contracts are Ğȱȱȱ ȱȱȱȱȱȱȱȱȱȱ of transient guests. The corporation, in turn, receives one invoice from a hotel for several stays, thereby simplifying the billing process. Non-Guaranteed Reservations In the case of a non-guaranteed reservation, the hotel agrees to hold a room for the guest until a stated reservation cancellation hour (usually 4 ѝǯњǯ or 6 ѝǯњǯ) on the day of arrival. This type of reservation does not guarantee the property will receive payment for no-shows. If the guest does not arrive by the cancellation hour, the hotel is free to release the room, meaning that it can add the room to the ȱȱȱȱȱȱǯȱ ȱȱȱȱĞȱȱȱǰȱ the hotel will accommodate the guest if a room is available. It is common for hotels planning on full occupancy or nearing full occupancy to accept only guaranteed reservations. The goal behind this strategy is to maxi- £ȱȱȱ¢ȱȱȱȱȱȱȬ ǯȱȱĜ¢ȱ and accuracy of a hotel’s reservations process is especially critical in full or nearly full occupancy conditions. Reservation Inquiries A property receives reservation inquiries in a variety of ways. Regardless of the source, the reservations agent or website will collect information about the guest’s stay through a process known as a ȱ ¢ǯ The reservations agent or on-line process should collect such information as the guest’s name, address, and telephone number; company or travel agency name (if applicable); date of arrival and date of departure; and the type and number of rooms requested. The reservations agent or on-line sequence should also try to establish the room rate, number of people in the party, method of payment or guarantee, and any special requests. Distribution Channels ȱȱȱȱȱ£ȱȱȱȱȱȱȱ their goods and services is critical to success. The more channels of distribution, the more opportunities guests will have to inquire about and book rooms. Reservation inquiries may come in through the property’s reservations department (property direct), through a central reservations system, through a cluster reserva- ȱĜǰȱȱȱȱȱ¢ȱǻȱȱȱȱ Ǽǰȱȱ an intersell agency, or through Internet distribution systems (see Exhibit 1). We’ll take a look at each of these distribution channels in the following sections. Property Reservations Department. Hotels handle many of their reservation transactions directly. Depending on the volume of direct customer contact, a hotel may have a reservations department handle reservation inquiries rather than the
53 front desk. This arrangement is common in hotels of 200 rooms or more. A reservations department handles all direct requests for accommodations, monitors any communication links with central reservations systems and intersell agencies, and maintains updated room availability status information. Property-direct reservation requests can reach a hotel in several ways: DZ Prospective guests may telephone the hotel. For most hotels, this is the most common method guests use to request a reservation directly from the hotel. DZȱĴȱȱȱȱȱȱȱǰȱǰȱȱ- vention business. Generally, mail requests are sent directly to the reservations department. ¢ȱ DZ A hotel can also handle reservation transactions through its ¢Ȭȱǻ¢ȬęǼȱ ǯ ¢ȬȬ¢DZ Hotel chains typically encourage guests to plan their ¡ȱȱ¢ȱ ȱȱȱĜȱ¢ȱ¢ȱěȱȱ- ȱ ȱǯȱȱȱȱę¢ȱȱȱȱ ȱȱȱȱȱĜȱǯ ¡ȱȱȱDZ Faxes and other methods of communication account for a small proportion of total reservation transactions (see Exhibit 2). Another option involves communicating reservations through TDD equipment. This equipment is a specially designed teletype machine that allows people with hearing disabilities to communicate by telephone. x x x x x : 0. 14/ 1< /.1/ fi423)46;-4)'6 )164%/ )5)48%6-215!;56)0 **-/-%6) )5)48%6-21ffl)6924.A26)/,%-15B ffl21**-/-%6) )5)48%6-21ffl)6924. fl)%(-1+26)/52*6,)K24/( fi4)*)44)(26)/5 -56-1+7-5,)(26)/5 /756)4 )5)48%6-215ff**-') /2&%/-564-&76-21!;56)05 ! %/-/)216)41%6-21%/ 0%()75 K24/(!3%1 16)45)//+)1'-)5 16)41)6-564-&76-21!;56)0
54 ȱŘ Reservations agent sales process.ȱȱȱȱęȱȱȱ they want their reservations agents to use when taking a reservation. Common components of the reservations agents’ sales process include: 1. ȱȱǯ A warm greeting always sets the proper tone for the conversation. A greeting such as, “Thank you for calling the Casa Vana Inn. This is Mary speaking. How can I help you today?” is always more favorably accepted than a curt greeting such as, “Reservations.” 2. ¢ȱȱȂȱǯ It is appropriate to ask the caller about arrival and departure dates, the number of guests, bed preference (double, king, etc.), ȱ ȱ ȱ Ĝǰȱ ȱ ȱ ȱ ȱ ȱ ęȱ ȱ caller’s needs. For example, if a caller states that he or she is traveling with ǰȱȱȱȱȱĴȱȱ¢ȱȱȱȱ- dren and their ages. 3. ȱȱ ȱȱȱȂȱȱȱęǰȱȱȱȱȂȱǯ Reservations agents should listen closely to what the caller has said in Step : 0. fl >1-. ff. /.1/F=G A:;ffi B@=ffi >;>?:C ffi BC>ffi ff;ffi ?=Cfflffi ffi Affi 3C=: ffi + ffi ffi 2A;fflD(ffi :> : : Affi BC>ffi :;ffi :;>:flffi Cffi fiC>ffi <=: ;ffi ffACffi CCDffi fl=:ffl=ffi >;>?:C ;Effi fflffi CBffi >;> ?:C ffi Affi < ffi ffi ?> ffi :<C ;fl: ffi Cffi ffl=<ffi C?>ffi Affi =fflAC
55 2. Based on that discussion, the agent should highlight the hotel features and ęȱȱȱȱȂȱǯȱȱ¡ǰȱȱȱ¢Ȭȱ swimming pool might be a feature welcomed by families, but they probably would not be interested in the hotel’s business center. On the other hand, the ȱȱ¢ȱȱȱĴȱȱȱȱȱǯ 4. ȱȱȱǰȱȱȱȱȱ ȱ ȱȂȱǯ ȱȱȱĞȱȱȱȱȱ¢ȱȱȱȱǻȱřǼȱ and lets the caller know that the reservations agent has truly been listening. If the caller says the recommended room is too expensive or doesn’t meet his or her needs, the agent should revise the recommendation as necessary. 5. ȱȱǯ Ask for the reservation; don’t wait for the caller to make a decision. Such phrases as, “Mr. Jones, would you like me to reserve that room for ¢ȱ ǵȄȱ¢ȱȱȱĞȱǯȱ Ȃȱȱȱȱǯ 6. ȱȱȱǯ Record all the reservation information necessary, following hotel procedures. This process typically involves repeating the guest’s name, arrival date, departure date, room type and rate, and special ȱȱ ȱ ȱȱ ȱęȱ ȱǯȱȱȱ ȱ ȱ ȱ ȱȱ ȱ ȱȱ ȱȱ ȱ ȱęȱ number. 7. ȱȱǯ Closing a call as warmly as opening it leaves callers with a ȱȱęȱȱ¢ȱȱȱȱȱǯ First and foremost, the reservations function is a sales process. One important ¢ȱȱȱȱȱĜȱȱȱȱȱȱȱȱȱȱ hotel instead of being merely order-takers. They create a positive image of the property and instill a desire on the part of the person calling to make a reservation. If the agents are excited about their work, their enthusiasm will carry over to callers. Conversely, if the reservations agent sounds unenthusiastic, the caller will not have a positive impression of the property and may decide to make a reservation elsewhere. Most of the information gathered during the reservation inquiry will be used to create the reservation record, a process discussed later in the chapter. Exhibit 3 shows a sample reservation display screen used in an automated reservation system. Reservations can be made for individuals, groups, tours, or conventions. A guest coming to the hotel as an individual and not part of a group is typically referred to as a free independent traveler (FIT). Reservations of persons com- ȱȱȱȱȱȱȱȱȱ¢ȱȱȱě¢ȱȱȱȱ ȱ guests. For example, reservations for group members may be found under both the group’s name and the guests’ individual names. In addition, group reserva- ȱ¢ȱȱȱĴȱȱȬȱǯȱ Central Reservations Systems. A majority of lodging properties belong to one or more central reservations systems. A central reservations system is responsible for maintaining a room availability inventory for each property participating
56 ȱŘ ȱȱ¢ǯȱȱȱ ȱȱ¢ȱȱȱȱ¢DZȱĜȱ ȱȱȬĜȱ ǯ An Ĝȱȱ is a hotel chain reservation system in which all participating properties are contractually related. Nearly every chain operates its own reservation network or outsources the central reservations function to a reservation technology supplier. Chain hotels link their reservations operations to streamline the processing of reservations and reduce overall system costs. Another intended outcome is that ȱ ȱ¢ȱ ȱ Ĵȱ ȱ ȱ ǻȱ ȱ ȱ Ǽȱ ȱ ȱ property. In the case of group reservations, information may be shared among ĜȱȱȱȱȱĜȱȱǯ ȱ ȱ Ğȱ ȱ ȱ ȱ ȱ ¢ȱ ȱ ȱ ȱ an automated reservation network. If one property is fully booked, the reservations system handling the transaction may provide an on-line referral to accommodations at a chain property in the same local area. Referrals may also be made : 0. # -6 4.1. /.1 =1 A:; =<>C :< >;>?:C ><C> :; B>C 3C==: @(ffi ffi ffl>Cffl> ; ; CBB> 3C==: @ 0 ;; 4( fl>Dfl( ,: = A <Cffl $; + > ;: ffffffAC==: @<Cffi ffl>C?:;ffi ::C =ffi ;<> ffi ;=<:C ;ffi B>Cffi :;ffi ; ;
57 to properties whose locations appear more convenient or suitable to the guest’s ǯȱĜȱ ȱ ȱ ȱ ȱ Ȭȱȱ ȱ- pate in the reservation system are able to represent themselves to a broader mar- ǯȱȬȱȱȱȱĜȱȱ¢ȱȱȱȱȱoverĚ ȱǯȱȱȱ¢ȱȱȱȱĚ ȱȱ¢ȱĞȱ all the available rooms in chain properties (within the nearby geographic area) ȱȱǯȱĚ ȱȱ¢¢ȱ¢ȱȱȱȱȱȱȱȱ network for these referrals. A ȬĜȱ ȱ is a subscription system designed to ȱȱȱȬȱǯȱȬĜȱȱ ȱ ȱȱȱȱȱ¢ȱ¢ȱȱȱȱęȱȱȬ ĜȱǯȱȱȱĜȱȱ ǰȱȱȬĜȱ ȱ ¢ȱȱ¢ȱȱȱȱǯȱ¡ȱȱȬĜȱ reservation networks are The Leading Hotels of the World, Preferred Hotels & ȱ ǰȱȱȱǯȱ ȱ¢ȱǰȱȱȬĜȱ networks accept only hotels of a certain quality or a limited number of hotels in any geographic area, to keep the value of their service high to participating members. ȱȱȱĜȱǻǼȱ¢¢ȱȱ¢ȱ ȱȱȱ¢ȱ means of a toll-free telephone number or on-line Web address. Most large lodging chains support two or more reservation centers, with calls and contacts being directed to one of the centers. Reservation centers and websites operate 24 hours per day, most days of the year. At peak times, reservation centers have a large number of agents on duty simultaneously. ȱȱĜȱ¢¢ȱ¡ȱȱ¢ȱȱ with member properties and communicate reservation transactions as they occur. This may be accomplished through an on-line communications connection at the ȱǯȱ ȱ ȱ ¢ǰȱ ȱȱȱ¢ȱ Ĵȱ ȱȱȱȱĜȱȱȱǯȱȬȱȱ¢- ȱȱȱȱȱȱȱȱȱȱĜȱȱǰȱ up-to-date information on room availability and rates. Where is this information kept and maintained? Some hotel companies maintain this information at the cen- ȱ ȱ ĜDzȱ ȱȱ ¢ǰȱ ǰȱ ȱ ȱ ȱ ȱ system. Another approach is to have each hotel’s property management system hold the master information for its room availability, rates, amenities, and so on, ȱ ȱȱȱĜȱȱȱ ȱȱǯȱ ȱ ȱǰȱ ȱȱȱȱȱȱȱȱȱĜǰȱ¢Ȭ ęȱȱȱ¢ȱȱȱȱȱȱȱȱȱ¢- tem, and completed reservation transactions processed by the central reservations Ĝȱ ȱȱȱȱȂȱ¢ȱȱ¢ǯ Central reservations systems normally provide participating properties with the communications equipment necessary for handling reservation transactions. Communication equipment may take the form of a desktop or notebook computer, an Internet Web site, an integrated network, a fax machine, a hand-held communication device, or a TDD (telecommunications device for the deaf). The central reservations system typically charges a fee to participating hotels for the services and ȱȱȱǯȱȱ¢ȱ¢ȱȱĚȱȱȱȱȱ
58 ȱŘ equipment and an additional fee for each reservation transaction processed ȱȱ¢ǯȱ¢ǰȱȱȱȱ¢ȱȱȱĚȱ percentage of room revenue to cover all CRO operational expenses. In turn, each property provides accurate and current room availability data to the central reser- ȱĜǯȱȱȱǰȱȱȱȱĜȱȱě¢ȱ process reservation requests. ĜȱȱȬĜȱȱȱ¢ȱĞȱȱȱ¢ȱ of services in addition to managing reservations processing and communications. A central reservations system may also serve as an inter-property communications network, an accounting transfer system, or a destination information center. For instance, a central reservations system is used as an accounting transfer system when a chain hotel communicates operating data to company headquarters for processing. When a central reservations system communicates reports on local weather, special events, and seasonal room rates, it serves as a destination information center. ȱȱĜǯ Chains that have several properties in a geographic ȱ¢ȱȱȱȱȱȱȱȱȃȄȱĜǯȱȱȱĜȱ operates similarly to a hotel chain central reservations system, but serves one spe- ęȱȱȱȱȱȱȱ¢ǯȱ ȱȱȱȱȱ at the hotel answering the telephone and processing reservation requests, all res- ȱȱȱȱȱȱȱȱĜǯȱȱ a guest calls the hotel directly for a reservation request, the hotel transfers the ȱȱȱȱĜǯȱ¢ǰȱȱ¢Ȃȱȱȱ ȱȱ ȱȱȱȱĜȱȱ ȱȱȱ¢ȱǯȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ Ĝǯȱ ǰȱ ȱ ȱ ¢ȱ ȱ ȱȱDzȱȱ ȱ ȱ ȱ ȱ ȱěȱ ȱȱ ĜȱȱȱěȱȱȱĜȱȱ¢ȱ¢ǯȱȱȱȱȱ single highest expense at a hotel, any reduction in labor cost is generally welcome. Second, since reservations agents are serving several hotels at the same time, they are able to cross-sell other properties. For example, if Hotel A is full because of a ǰȱȱȱȱȱȱĜȱȱěȱȱ¢ȱȱ¢ǯȱ This is a convenience for the guest and improves the occupancy of the other hotel. Finally, room rates and availability can be coordinated among properties, the brand’s central reservations network, and the GDSs. This makes reservation pro- ȱȱȱĜǯ ȱ ȱ Ĝȱ ¢ȱ ȱ ȱ ȱ ¢ȱ ȱ ǰȱ ȱ ȱȱȱĜȱȱ ¢ȱȱȱǯȱȱ¢ȱ- tion makes good communication between the hotels being served and the cluster Ĝȱ¢ȱǯȱȱǰȱȱȱȱ¢ȱȱ ȱ ȱȱȱ ȱȱ¢ȱ¢ȱȱȱĜȱ ȱȱȱ ȱȱǯȱȱǰȱȱ ȱȱĜȱȱȱ- lenges. Perhaps the most important of these is training the reservations agents. Since they are not working in the hotel, they have less opportunity to become familiar with the hotel’s rooms, facilities, and amenities. It is essential, therefore, ȱȱȱȱ ȱȱĜȱ ¢ȱȱȱ ȱȱ ȱ informed about events, facilities, and services at the hotel.
59 Global Distribution Systems. Most central reservations systems, whether they ȱȱĜȱȱȱȬĜȱ ǰȱȱ ȱȱȱȱglobal distribution systems (GDSs). Most airlines around the world are connected to one of four GDSs: SABRE, Galileo International, Amadeus, or WorldSpan. Historically, GDSs have been owned by an airline or consortium of airlines, but that has changed, since airlines are no longer very involved in the lodging industry. For example, Galileo International was formed by a consortium of airlines but is now owned by Cendant Corporation. GDSs provide worldwide distribution of hotel reservation information and allow selling of hotel reservations around the world. GDSs also support the distribution of airline tickets, automobile rentals, and other services required by travelers. By directly linking the reservation systems of hotels, airlines, car rental agencies, and travel agency companies on a world-wide basis through the Internet or a private network, global distribution systems provide access to travel and tourism inventories around the world. Selling hotel rooms is usually accomplished by connecting the hotel company reservation system with the GDSs. Most travel agents around the world have terminals connected to one or more of the many airline reservation systems to book airline travel. By having hotel accommodations and automobile rentals available in the automated system at the same time, most GDSs provide single-source access to most of a travel agent’s selling requirements. In one transaction, a travel agent can sell an airline ticket, hotel room, and automobile rental. Travel agents may be reluctant to book hotel rooms through GDSs, fearing ȱȱ¢ȱȱȱȱȱȱǰȱȱȱęȱ- cess can be frustrating. Hotel companies have improved their service to guests and travel agents by linking their central reservations systems to GDSs, which allows travel agents to book reservations directly into hotel systems and verify room availability and rates. This linkage is called seamless integration or seamless connectivity. Intersell Agencies. An intersell agency is a reservation system that contracts to handle reservations for more than one product line. Intersell agencies typically handle reservation services for airline companies, car rental companies, and lodging properties—a “one call does it all” type of approach. Although intersell agencies typically channel room reservation requests to a hotel central reservations system, they may also communicate directly with a destination hotel. The fact that a hotel participates in an intersell arrangement does not preclude its participation in other types of central reservations systems. Internet Distribution Systems. Many airlines, hotel companies, and car rental ęȱěȱȬȱȱȱ ȱȱInternet distribution system or IDS. Examples of IDSs include Expedia, Hotwire, Priceline, and Travelocity (see Exhibit 4Ǽǯȱ ȱȱȱȱ¢ȱěȱȱȱȱȱ ȱ ȱ ȱ ȱ ȱ Ěǰȱ ȱ ȱ ǰȱ ȱ ȱ ȱ ǯȱȱ ǰȱȱ ǰȱȱ ȱĜǰȱȱ visitors—all are able to use the World Wide Web to make their own travel and accommodation reservations. The variety of potential guests accessing Internet
60 ȱŘ sites to place reservations has prompted travel and hospitality companies to develop user-friendly reservation procedures. ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ǯȱ ȱ Ğȱ ȱȱȱȱȱęȱȱȱȱȱȱǰȱȱȱȱȱ properties within the chain. Most chain Internet sites allow visitors to book reservations. Independent hotels also support Web sites that, while they may not be as technically sophisticated as chain sites, provide similar information and allow visitors to make reservations. Exhibit 5 presents a series of screens that walk prospective guests through the process of reserving rooms at the Internet site of the Holiday Inn hotel chain. ȱȱȱȱǰȱȱęȱ¢ȱȱȱȱȱ ȱ- ȱ ȱ ȱ ȱȱ ȱ ȱȱȱ ǯȱĞȱ ȱ ȱǰȱȱ input the necessary reservation information. They can guarantee their reservations by providing personal or corporate credit card data. Some prospective hotel guests have concerns about the privacy and security ȱęȱȱȱȱ ǯȱ ǰȱȱȱȱȱȱ security procedures based on reliable encryption methods that protect against : 0. ! -6 ;.. ff/.04.1 /.F 61. >?=C<: ffi ffffff>?=C<: <Cffi :;ffi Affi + > ffi @ ;:C ffi CBffi Affi 0 . ffi 6>Cflffl(ffi + <(ffi :>=: ffi >;>?:C ffi ; ;ffi ffl>C?:: ffi ffi =C=ffi :;>:fl:C ffi ; ;ffi BC>ffi AC=;(ffi <>ffi > = <Cffl :;(ffi ffi ffi >DB;ffi Cffl:C ;(ffi ffi <>fl:;ffi =: ;
61 fraud. When users access on-line reservation systems, Web browsers automatically engage a high-level security feature. In addition to providing a user-friendly reservations process and securing transactions, on-line systems also perform important marketing functions for the hospitality company. Reservation features of many Internet sites enable users to participate in special events and rate promotions. Some enable users to download ȱ ȱ ȱ ȱ ȱ ȱ ęȱ ȱ ȱ ȱ ȱ ȱ ȱ individual hotels—complete with a “walk through” of the property and a virtual ȱȱȱȱȱȱȱěǯ : 0. " -6 1.6 C0 .$/ /.1 >1//F16 ; = fl
62 ȱŘ : 0. "
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64 ȱŘ Distribution Channel Revenues Revenues derived by hotels (suppliers) and agents (sellers) forming distribution channels vary widely, depending on the channel or supplier/agent relationship. ȱȱĜȱ¢¢ȱȱĜȱȱȱȱę¡ȱȱ per night per room, regardless of reservation activity, or a transaction fee, or both. ȱ ȱ ȱ ȱ ȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ ęȱ - ments contracted between the chain and its member properties. Global distribution systems and Internet distribution systems receive revenues from hotels through commissions, by levying transaction fees or transmission fees, and/or by selling hotel rooms that have been discounted. To illustrate how revenues might be distributed through various distribution channels, let’s look at a sample transaction. Suppose that a chain hotel is selling a guestroom for $100. If the sale came to the hotel directly, via its property reservations department, the hotel would receive $100. However, if a GDS agent sells the $100 room, the hotel receives less money. Why? Because there are multiple fees that reduce the net revenue to the hotel. The seller—a travel agency, for example— earns a 10 percent commission ($10 in this case) and the GDS is paid a $3 transaction fee. In addition, the reservation transaction may be processed through the chain’s CRS, which might charge as much as $5. In this example, the hotel receives $82 for the sale, and $18 is paid out for commissions and fees. When hotels sell their hotel rooms via the various distribution channels ȱȱȱǰȱ¢ȱȱȱȱȱȱěȱȱȱ- ȱȱȱȱȱ ȱȱȱȱěȱ¢ȱȱȱȱ¢ȱȱ ȱȱ¢ȱ ȱȱȱȱ£ǯ Group Reservations Group reservations can involve a variety of contacts: guests, meeting planners, convention and visitors bureaus, tour operators, and travel agents. Group reservations typically involve intermediary agents and require special care. Usually, when a group selects a hotel, its representative deals with the hotel’s sales or res- ȱǯȱ ȱĜȱȱȱǰȱȱȬȱ number of guestrooms, called a ǰ is set aside for the group’s members. Group ȱ¢ȱȱȱȱȱȱęȱȱȱȱȱ to use to reserve rooms within the group’s assigned block. Reservations received from group members are applied against the rooms held in the group’s block, thereby reducing the number of rooms available within the block. Rooms reserved ȱęȱȱȱȱ ȱȱǯ As group members reserve rooms, the room statuses change from to ǯ Normally, the hotel will establish progress dates to evaluate the progress of conversions from blocked to booked rooms. Unreserved rooms in the block may be released to the hotel’s available room inventory at a predetermined date. This time frame is usually referred to as the group reservation Ȭěȱǯȱ¢¢ǰȱ ȱȬěȱȱȱ¢ȱȱȱ the contract the group’s representative signs with the hotel. The hotel may honor ȱȱȱĞȱȱȬěȱȱȱȱȱȱȱǯ
65 Group Reservation Issues Although group reservation procedures appear simple, a number of potential problems may develop. The following sections consider common group reservations players and issues. ȱȱ ȱǯȱ ȱȱȱĞȱ¢ȱȱ¢ȱǯȱflǰȱ- ating and controlling a group block has its pitfalls. When handling group blocks, the reservations manager should be aware of the following procedures: Group business demands that a contract be created specifying the exact number of rooms required and the quoted rates. The contract must also specify the main group arrival and departure dates, any special considerations such as suites or complimentary rooms, method of reservation, and the group and individual billing arrangements. Early arrival and late departure dates may also be included in the contract. The contract should also note the group cut- ěȱȱȱȱ¢ǯȱȱȱȱȱȱȱȱȱ Ĝȱ¢ȱȱȱȱȱȱ¢ȱǯ The reservations manager should verify the total number of rooms required for the group against what is available in the hotel. The sales department ĞȱȱȱȱȱȱĜȱȱȱ¢ȱȱ¢ȱȱ ȱȱǯȱ ǰȱȱȱȱȱ ¢ȱȱęȱ¢ȱ the reservations manager to be sure the system inventory is accurate before ęȱȱȱȱȱȱǯȱ ȱȱȱ ȱȱ ¢ȱȱ from transient (non-group) business, the reservations manager should notify ȱȱȱȱȱȱȱȱěǯȱȱȱȱnon-group displacement. Determining displacement is important, because the hotel may block rooms for group guests that it would normally sell to non-group guests, Ğȱȱȱȱǯȱ ȱǰȱȱȱȱȱȱ¢ȱȱȱȱ turned away and disappointed when a group takes these rooms. Transient guests may feel uncomfortable in a hotel dominated by group business and may choose to go elsewhere if they are not able to reserve rooms due to group blocks. Before blocking the rooms, the reservations manager should check the group’s history with the hotel, if available. For example, if the group requests a 50- room block and the record shows the group only booked 40 rooms the year before, the reservations manager may wish to confer with the sales manager ȱę£ȱȱǯȱȱȱȱȱȱȱȂȱ¢ȱȱ called a wash down or a wash. If the group does not have a history at the hotel, it is sometimes possible to check with the hotel that last accommodated the group. By following these steps, the reservations manager helps control room inventories and ensures that as many rooms are available for sale as possible. It is important to note that the wash down process must be handled very carefully. Contracts are legally binding and the hotel must provide the ȱȱȱȱȱǯȱ ȱȱȱȱęȱȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱǰȱȱȱȱęcant legal consequences. x x x
66 ȱŘ As group reservations arrive, the reservations manager must monitor the room availability in the block. It is important for the reservations manager ȱ¢ȱȱȱȱ ȱȱȱȱȱȱȱȱ ȱęȱȱȱ more rooms are needed in the block due to strong demand. The sales department can then contact the group and make adjustments to the room block. If more rooms are needed, there may be an impact on the group allocation and the hotel may have to choose between taking the additional reservations or referring them to other hotels. If fewer rooms are needed than blocked, this can be an opportunity for the sales department to sell additional rooms. Group room sales programs are an important issue for the reservations man- ȱȱǯȱ¢ȱęǰȱȱȃęȱȄȱȱȱȱȱȱȱȱ ȱǯȱȱęȱȱȱȱȱȱȱȱ¢- tem as soon as they have signed the contract, in order to maintain an accurate room inventory. A “tentative group” is a group that has had a contract sent to them, but the group has not signed or returned the contract. Some hotels choose to enter tentative groups into their reservation system. In this way the hotels can keep track of what they believe they have sold of their group allocation. However, it is necessary to track these tentative groups to be sure ¢ȱȱȱȱęȱȱȱȱȱȱȱ¢ǯȱ Holding tentative groups on the books for too long may prohibit the booking ȱȱęȱȱȱȱȱȱ ȱȱȱȱȱ Ĝǯ The method of sending group reservations to the hotel is also important and ĞȱȱȱȱȱǯȱĴȱ¢ȱȱ ȱȱȱ- vations directly with the hotel and through the central reservations network or on-line. Direct registration activity may not always be desired. In other cases, the group sponsor may want to receive the reservation requests before they go to the hotel. Many corporate group reservations are provided to the hotel on a rooming list from the company; this may also apply to tour groups ȱ ȱǯȱ ȱȱĞȱȱ ȱ¢ȱȱȱ ȱ ȱ ǯȱȱȱ ȱ ȱ Ĝȱȱ ȱ ȱ that they honor these arrangements and not accept reservations outside of the agreed-upon procedures. Conventions and Conferences. Problems can occur during a convention or conference if a close working relationship is not established between the hotel’s sales ěȱȱȱȂȱȱǯȱ ȱȱȱȱȱȱȱ- eration are established early on, many problems can be avoided. Suggestions for hotels dealing with convention groups include: ȱȱȱȂȱęǰȱȱȱǰȱȬ ǰȱȱ last-minute reservation history. Review all relevant hotel reservation policies with the convention planner. Inform reservations agents that the convention has been scheduled and go over the reservation process set up for the convention. x x x x x x
67 Produce regularly scheduled reports to update the status of the convention block. Generate an up-to-date list of registrants at regular intervals. Correct errors found by the convention planner immediately. ęȱȱȱĴȱȱȱȱ¢ȱȱǯ Return the rooms to the group’s block when cancellations are received and inform the convention planner. ȱ ȱęȱ ȱȱ ȱ ȱ ȱȱ ȱ ȱȱ ěȱ involved with the convention. Convention and Visitors Bureaus. Large conventions sometimes require the ȱȱȱȱȱ ȱȱȱ ȱȱȱ ȱȱĴ- ǯȱȱȱȱȱȱ¢ȱȱȱȱ¢ǰȱ¢ȱȱĞȱȱ city-wide conventions. Frequently, room requirements at several hotels are coordinated by a separate housing or convention bureau within the city. Special applica- ȱĞ ȱ¢ȱȱȱȱȱȱȱȱȱěǯȱȱȱ must determine the number and type of available rooms it is willing to set aside ȱȱǯȱȱȱȱ ȱȱȱ ȱȱȱĴȱ by coordinating hotel availabilities with reservation requests. The convention and visitors bureau normally uses a communications network to notify participating hotels on a daily (or more frequent) basis. In return, each hotel informs the bureau of any requests or cancellations communicated directly to the hotel’s reservation system. Through such an exchange of information, the bureau assists each hotel in ě¢ȱȱȱȱǯ Tour Groups. Tour groups are groups of people who have had their accommodations, transportation, and related travel activities arranged for them. Hotels should be especially careful to research the reliability and past performance of tour operators and travel agents. Once acquainted with a tour operator’s history, reservations managers may feel more secure when blocking and booking reservations for a tour group. Suggestions for dealing with tour group reservations include: Specify the number and types of rooms to be held in a group block, including rooms for drivers and guides. ¢ȱ ȱ ȱ Ȭěȱ ǰȱ Ğȱ ȱ ȱ ȱȱ ȱ ȱ ȱ ȱ ȱȱȱȱǯȱȱȱȱȱȬěȱǰȱȱȱȱ should supply the hotel with a guarantee on the number of rooms the group ȱȱǻȱȱȱȂȱ¢ȱȱęȱȱȱ¢ȱȱǼǯ ¢ȱȱȱ¢ȱ ȱȱ£ȱ ȱȱȱęȱȱȱǻȱȱ ȱȱěȱȱȱȬěȱǼǯ Monitor the amount and due date of advance deposits required. Note on the reservation record any services and amenities the property will provide as part of the group package. x x x x x x x x x x x
68 ȱŘ Include the name and telephone number of the tour group’s representative or agent. Note any special arrangements, such as early arrival, baggage handling, registration, or check-out procedures. Ĵȱȱȱȱ¢ȱĞ ǯȱĴȱȱ ȱȱ¢ȱĞ ȱȱȱȱȱȱ ǯȱ- ¢ǰȱȱȱȱ ȱȱ ȱ ěȱȱ ȱȱ ȱ Ĵȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ¢ǯȱ Group reservations were once handled by telephone or via a printed reservation ǯȱ ȱȱ ȱȱȱȱȱĴǰȱ ȱ ȱ complete the mailer and return it to the hotel. This was a time-consuming process ȱ ȱ Ğȱǰȱ ȱ ȱȱ ȱ ȱ ȱ ȱ ȱ dates and rate plans or other issues. Hotels then had to report the reservations they received to group leaders, so they could keep track of group reservations on their end. These problems were relieved when hotel companies allowed group reservations via their Web sites and call centers. Although a Web site can be helpful, ȱ ȱ ěȱȱ ȱ ȱ ȱ Ȃȱ ȱȱȱ ǯȱ ȱ Ĵȱ ȱ ȱȱ ȱ ȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ guestroom allocated to the group if the information is accessible at the time of the reservation. Ĵȱȱ ȱȱ ¢ȱ Ğ ȱ ȱ ȱ ȱ ȱȱȱǯȱȱĞ ȱȱȱȱ ȱȱ- ȱ ȱȱĴǯȱĴȱȱȱȱ¢ȱ on meeting registration activities, while housing system applications are designed to handle guestroom reservations and meeting registration activities. ȱ ȱ Ĵȱȱ ȱ ȱ ȱ ¢ǰȱ ȱ ȱ leader creates a special Web site that provides information about the group event and reservation availability. The information is then linked to the group’s main Web site, so people visiting the site can see the information. Some systems allow group leaders to load e-mail and postal addresses; the group leader can then send Ȭȱ ȱ ȱȱ ȱ ȱȱ ȱ ȱ ĴǯȱĴ- ees receiving the e-mail message can click on the Internet link contained in the ǰȱȱȱȱȱȱȱȱȱǯȱȱĴȱ receiving the printed message are given the Web address, so they can log on and make their reservations. These systems capture guest information, including the guest’s name, mailing address, e-mail address, credit card information, guestroom request, and much more. Guests can usually identify special needs; they may indicate that they plan ȱȱ¢ǰȱȱ¡ǰȱȱȱȱȬȱǯȱ ȱĴȱȱ ȱȱȱęȱǰȱǰȱȱȱȱǻȱȱ tee times or making spa reservations, for example). Once the guest provides the information requested on the Web site, the information is sent to the group for processing. Simpler systems provide meeting planners with reports that are forwarded to the hosting hotel for manual processing. x x
69 More sophisticated systems, like Passkey, actually interface with hotel reservation systems. When a reservation is made through a Passkey Web site to a “Passkey- Ȅȱǰȱ ȱ ȱȱǰȱ ȱęȱȱ ȱ ȱǰȱ - matically. This eliminates the manual processing associated with transcribing printed reports into the hotel’s reservation system. It also keeps the room inventories accurate between the group and the hotel. For large meetings, some systems combine the inventories of many hotels, thereby giving guests a choice of where to stay. This is especially important for meetings that use much of a city’s guestroom ¢ǯȱĴȱȱȱȱ¢ȱĞ ȱȱȱ¢ȱȬ ěȱȱȱęȱȱȱȱȱȱǯȱ This is important to meeting planners and hotels alike, since it improves communications between them and reduces the amount of manual labor. Reservation Availability When a property receives a reservation inquiry, it is important to compare the inquiry data with previously processed reservations. Processing a reservation request results in one of several responses. A property can: Accept the reservation as requested Suggest alternative room types, dates, and/or rates Suggest an alternative hotel In any reservation system, it is necessary to closely monitor the number of reservations in order to control ǯ A hotel should use care when accepting reservations beyond its room capacity. Some states have laws concerning guests with guaranteed reservations who do not receive rooms when they arrive at a hotel. Reservation systems can be programmed to closely monitor overbooking. Comparing historical reservation volumes against actual arrivals can produce an overbooking factor to serve as a booking guideline. Depending on the property’s no-show reservation history, management may allow the reservations system to overbook. Overbooking is a strategy aimed at helping the hotel to achieve 100- percent occupancy by hedging against no-shows, cancellations, and unexpected early departures. Based on historical data and the experience of knowledgeable managers, reservation systems are able to forecast cancellations and no-shows with accuracy. This forecast must be shared with the sales department and general manager, who may have additional information not contained in the reservation system, such as information about competitive pressures and other issues. When ȱȱȱ¢ȱ¢ȱȱȱȱ¢ǰȱȱ¢ȱĴȱȱ ensure that as many rooms as possible are occupied. Overbooking should be approached cautiously. If a reservation system is ȱȱȱȱ¢ȱǰȱȱ ȱęȱȱ¢ȱȱ to be turned away. This creates poor guest relations and discourages repeat business. To properly control overbooking, managers must monitor reservation system activity by controlling booking, blocking, and cancellation information. x x x
70 ȱŘ Reservation Systems An in-house automated reservation system can keep close track of reservations. Such systems can tightly control room availability data and automatically generate many reservation-related reports. Exhibit 6, for example, presents a daily expected arrival, stayover, and departure report. It shows that for January 19, 19 arrivals, 83 stayovers, and 4 departures are expected. In addition, this report projects estimated room revenue based on reported reservation information. Automated systems can ȱȱȱ£ȱȱ¢ȱȱ¢ǰȱȱęǰȱȱ many other characteristics. The biggest advantage of an automated reservation system is the improved accuracy of room availability and rate information. As ȱȱȱȱȱȱęȱȱ- tions into the system, the inventory of available rooms is immediately updated. In addition, front desk transactions involving no-shows, early departures, or walkins will immediately update the room availability. This is important, as it provides sales managers with the occupancy and room-rate information they need to help them achieve revenue objectives. Exhibit 7ȱ ȱ ȱ ȱ ȱȱ ȱ ȱ ȱ ȱ Ğ ȱ - age. For each day of the week, the screen shows the total number of rooms still ȱȱǰȱȱ ȱȱȱȱȱȱȱȱęȱȱ- ȱȱȱȱȱȱȱȱȱȱȱĜȱȱȱ transient business. Room sales are coordinated in real time as salespeople, reserva- ȱǰȱȱȱȱĜȱȱȱȱȱȱȱȱȱ information. ȱȱȱȱȱęȱ¢ȱȱǰȱȱȱ¢ȱȱȱ programmed to refuse any further reservations in that category. When checking availability in a closed category, a reservations agent may receive a message such as the following displayed on the screen: ȱ ¢ȱ ȱ ȱ ȱȱ ȱ ǯ Some reservation systems are programmed to automatically suggest alternative room types or rates, or even other nearby hotel properties. Systems can ȱȱȱ£ȱȱ¢ȱȱȱȱȱ¢ȱ¢ȱ ff3"fffi6 ff4-"6 'ff5 %- /fifi-&& . ff& 778 78#89#11 8:;7< 'ff ff3" ff4-. 'ff &5 -fi' 5.-fi' ".5 78#89 89 =< > 8<: 87? >< :68=:(77 78#?7 <> :@ >: 8<8 98 :> >6A7>(77 78#?8 <@ :: <A 8<7 9? :< >6>9:(:7 78#?? 8: A =A ?9 ?8 8?> 8688A(77 78#?< 8? 8> @ <A ?A 8?@ 86?:?(77 : 0. ' ff6 6ffl .1ffl ff-.4 -1. G ffl fi>>== G I= fl # - = I=
71 open, closed, and special event dates for an extended period of time. ȱ refer to available room days, while ȱ depict full-house forecasts. ȱ ȱ can be programmed to alert reservations agents that a convention or large group is expected to occupy the hotel either before, during, or immediately following a caller’s requested day of arrival. In addition, many reservation systems have a management override feature that enables overbooking. This override provision should be exercised with extreme care. Reservation systems store reservation records electronically, thereby allowing the creation of waiting lists for high-demand periods. This feature contributes to the processing of group reservations and the implementation of revenue management strategies. The future time frame for tracking reservations is called the “res- ȱ£ȄDzȱȱȱ¢ȱȱ£ȱȱ ȱȱęȱ¢ǯ The Reservation Record Reservation records identify guests and their occupancy needs before the guests’ ǯȱȱȱȱȱȱȱ£ȱȦȱ£ȱȱ- ȱȱȱ¢ȱȱěǯȱȱȱȱȱȱ¢ȱ of data that can be used to generate several important management reports. : 0. ( 4/.11 1.16 817 fl2 1> ffl :ff9+ff@% .> .? 1@ +ff @? @ .ffl@ # @/ . ffffff?ff@%?@?
72 ȱŘ Reservations agents or on-line forms can create reservation records based on ȱ ȱȱ¢ȱĞȱȱȱȱȱȱȱȱȱ be met. These electronic records initiate the guest cycle. To create a reservation record, the reservations system typically captures such guest data as: Guest name (and group name, if applicable) Guest’s home or billing address Guest’s telephone number, including area code Name, address, and telephone number of the guest’s company, if appropriate Name of and pertinent information about the person making the reservation, if not the guest Number of people in the party, and perhaps the ages of any children Arrival date and time Number of nights required or expected departure date, depending on how the system is designed Reservation type (guaranteed, non-guaranteed) Special requirements (infant, disabled guest, or no-smoking accommodations, for example) Additional information as needed (method of transportation, late arrival, ĚȱǰȱȱǰȱȬȱǰȱȱȱǼ ȱȱȱȱȱȱĞȱȱȂȱȱȱȱǰȱ the guest should be informed of the property’s policy for non-guaranteed reservations. Once the necessary information has been captured, the system may immedi- ¢ȱȱȱȱęȱǯȱęȱȱȱ provides both the guest and the reservations department with a unique reference for the reservation record. In the case of a guaranteed reservation, additional information is generally needed for the reservation record. Depending on the guest’s method of guarantee, the following information may be required: ȱȱDZ This information consists of the credit card type, number, expiration date, and the cardholder’s name. On-line reservation systems may be connected to a transaction processing service that allows for auto- ȱęȱȱȱȱǯ ¢ȱȱȱDZ This information comes in the form of an agreement from the guest to submit a required deposit to the hotel before a ęȱǯȱȱȱȱȱȱ¢ȱȱȱ be closely monitored to ensure the correct amount is paid by the designated Dzȱȱȱȱǰȱȱȱ¢ȱȱȱȱȱȱęȱȱȬ guaranteed. If the hotel’s policy is to collect the deposit at the time of reserva- ǰȱȱȱȱȱęǯȱ ȱȱȱȱȱȱȱȱȱȱ reservation is made, the transaction processing services will post the deposit to the hotel immediately. x x x x x x x x x x x x x
73 ȱȱȱ¢ȱȱDZ This information includes the name and address of the booking company, the name of the person making the reservation, and the client’s corporate or travel agency direct billing ȱȱǻȱ¢ȱȱ¢ȱȱǼǯȱȱĜ¢ǰȱȱȱ may preload an approved list of corporate and travel agency account numbers ȱ¡ȱȱęȱǯȱȱȱȱȱȱȱ¢ȱ does not require billing, a tracking account is usually set up in the reservation system to monitor the business the corporation or travel agency provides to ȱǯȱ ȱȱ ¢ȱȱȱĜȱ ȱȱȱȱ¢ȱȱ negotiate or renegotiate contracts with these companies. Reservations systems should disclose important aspects of guaranteeing a reservation. Guests must be aware that their accommodations will be held until a ęȱȱȱȱȱǯȱ ȱȱȱ ȱȱȱ¢ȱȱ ȱȱȱȱȱȱęȱǰȱ¢ȱ¢ȱȱȱȱȱȱ hotel may levy a charge against the guarantee. ȱȱȱȱ¢ȱěȱ ȱȱȱȱȱ- ęȱȱȱȱȱȱȱȱȱǯȱȱȱ ȱ¢ȱȱȱȱȱ ȱǰȱȱȱȱȱęȱȱ the reservations process must be honored. Reservation systems must be capable of modifying rates based on such factors as: Supplementary charges for extra services or amenities. ȱ ȱȱ ¢ȱ ȱȱ ěȱ ȱ ȱ ȱ ǰȱȱ any. ȱȱȱěȱȱȱȱǰȱȱ¢ǯ Applicable currency exchange rates, if quoting rates to an international guest. Applicable room tax percentages. Applicable service charges or gratuities. Reservation Confirmation/Cancellation ȱ ȱ ęȱ ȱ ȱ ȱ ȱ ȱ ȱ ęȱ ȱ guest’s room request and personal information by telephoning, faxing, telexing, or ȦȬȱȱĴȱȱęǯȱȱ Ĵȱęȱȱȱȱ ȱȱȱȱęȱȱȱȱDZȱǰȱǰȱ ǰȱ type of accommodation, number of rooms, deposit required or received, and number of guests. ęȱȱ¢ȱȱȱȱȱȬǯ ȱ¢ȱ¢ȱȱȱęȱȱȱȱ¢ȱȱ reservation request is received. Information can be retrieved from the reservation ȱ ȱ ¢ȱ Ĵȱ ȱ ȱ ¢ȱ ȱ Ĵȱ ȱ Ȭȱ ǯȱȱ ȱ ȱ ¢ȱ ȱ¢ȱ ȱ ȱ ęȱĴȱ ȱ Ȭȱȱȱȱǰȱȱęȱȱ¢ȱDZ Name and address of guest Date and time of arrival x x x x x x x x x
74 ȱŘ Room type and rate Length of stay Number of persons in party ȱęȱǻȱȱȬǼ ȱęȱ Special requests, if any ȱȱȱȱȱȱǰȱȱęȱȱ¢ȱȱ include a request for a deposit or prepayment, or an update of the original reserva- ȱȱęǰȱęǰȱȱǯ For guests requesting accommodations and services covered by the Ameri- ȱ ȱ ȱ ǰȱ ȱ ęȱ ȱ ȱ ȱ ȱ ȱ ȱ communication. It lets them know that their special needs are understood and the ȱ¢ȱȱ ȱȱ¢ǯȱȱ ȱĞȱȱȱȱ that are specially equipped for disabled guests in a separate inventory category for improved control. Confirmation/Cancellation Numbers ȱȱȱȱȱęȱǰȱ¢ȱ¢ȱȱȱȱ ęȱǯȱȱęȱȱȱȱȱȱȱȱ- ȱȱ¡ǯȱ ȱȱȱ¢ȱȱȱȱȱȱȱȱęȱ ȱ ȱ ȱ ęȱ ȱ ǯȱ ¢ǰȱ ȱ systems may issue a reservation cancellation number to guests properly canceling a reservation. Issuing a reservation cancellation number protects both the guest and the hotel. In the event of any future misunderstanding, the assignment of a reservation cancellation number can prove that the hotel received the cancellation. In the case of a canceled guaranteed reservation, a reservation cancellation number may relieve the guest of an obligation to pay any charges posted against the guarantee. Without a reservation cancellation number, a guest may have trouble disputing a no-show billing. Cancellation numbers are not normally assigned to guests who ȱ ȱ ȱ Ğȱ ȱȂȱ ȱ ȱǯȱȱ - tions are considered canceled outside the available time frame. If the canceled reservation is non-guaranteed, the guest is not obligated to pay the hotel. Procedures for issuing cancellation numbers may be part of an established agreement between the hotel and a credit card company relative to no-show billing. Each reservation system typically uses unique methods of generating conęȱȱȱǯȱȱȱȱȱȱȱ ȱ guest’s scheduled arrival date, the reservations agent’s initials, a property code, and other relevant information. For example, under one system, the cancellation number 36014MR563 represents these facts: 360 = guest’s scheduled date of arrival (from consecutively numbered days of the year) 14 = property code number x x x x x x
75 MR = initials of the reservations agent issuing the cancellation number 563 = consecutive numbering of all cancellation numbers issued in the current year Calendar dates can be expressed in three digits when the days of the year are numbered consecutively from 001 through 365 (366 in a leap year). These are Ğȱȱȱȱ ȱǯ For example, the number 360 in the example corresponds to December 26 in a non-leap year. ęȱȱȱȱȱȱȱȱȱęȱȱ quick referencing. Cross-referencing reservation cancellation numbers by scheduled date of arrival can help facilitate other related functions. For example, the cancellation of a reservation will result in updated reservation reports that assist ȱȱĜȱȱ¢ȱǯ ȱĴȱ ȱȱȱȱǰȱȱȱȱ ¢ȱȱȱȱ occasional reservation change or cancellation. This fact does not make the proper creation of a reservation record any less important. A system’s capabilities for ȱȱȱȱȱȱȱęȱȱȱȱȱ- tions process. If a person contacts the hotel to change a reservation, for example, the reservations agent must be able to quickly access the correct record, verify its ǰȱȱȱȱęǯȱȱ¢ȱȱȱȱȱȱ¢ȱ Ȭęȱȱȱȱȱȱȱȱǯȱ Modifying Non-Guaranteed Reservations Guests sometimes make non-guaranteed rather than guaranteed reservations when they expect to arrive at the property before the hotel’s reservation cancellation hour. However, situations can arise that make it impossible for a guest to ȱȱǯȱȱ¡ǰȱ¢ȱȱĚǰȱȬȱĴǰȱ or weather conditions may hinder travel. When delays are apparent, experienced ȱĞȱȱȱȱȱ¢ȱȱěȱȱȱ¢ǰȱȱȱȱ reservations from non-guaranteed to guaranteed in order to avoid being canceled at the hotel’s reservation cancellation hour. Reservations systems capable of processing reservation changes must closely adhere to hotel policies. Typically, a system would: 1. Access the correct non-guaranteed reservation record. 2. Capture the guest’s credit card type, number, and expiration date. ȱ řǯȱ ȱȱȱȱ ȱȱęȱǰȱȱȱȱȱ¢ǯ 4. Complete the change from non-guaranteed to guaranteed reservation status according to additional system procedures, if any. Canceling a Reservation A prospective guest does the hotel a service when he or she takes the time to cancel a reservation.Areservation cancellation informs the hotel that a previously reserved ȱȱȱȱǰȱȱȱȱȱĜȱȱě¢ȱȱ its rooms inventory. Hotels should make processing reservation cancellations easy
76 ȱŘ ȱĜǯȱȱǰȱȱ¢ȱȱǰȱȱȱ- ȱȱȱĜȱěȱȱȱȱǰȱǰȱȱěȱȱǯ Non-Guaranteed Reservations. To cancel a non-guaranteed reservation, the reservations system requires the guest’s name and address, number of reserved rooms, ȱ ȱ ȱȱǰȱ ȱ ȱęȱǰȱȱ available. This information will ensure that the correct reservation is accessed and ǯȱĞȱ ȱ ȱ ǰȱ ȱ ¢ȱ ȱ ȱ ȱ ȱ number. Credit Card Guaranteed Reservations. Most credit card companies will support no-show billings only if the reservation system issues cancellation numbers for properly canceled reservations. Reservations systems may follow a cancellation procedure for credit card guaranteed reservations that involves the following steps: 1. Access the correct reservation record. 2. Assign a reservation cancellation number. ȱ řǯȱ ȱȱȱȱȱȱȱȱęǯȱ 4. Verify updated room availability information (room returned to available inventory). Advance Deposit Reservations. Policies related to the cancellation of advance deposit reservations vary greatly among hotel companies and reservation systems. The reservation system should handle advance deposit cancellations similar to its procedures for processing reservation cancellations. Deposits are normally returned to guests who properly cancel reservations. While reservation systems must always be precise when assigning and recording reservation cancellation numbers, it is especially important when an advance deposit is involved. Reservation Reports ȱěȱȱ¢ȱȱ¡£ȱȱȱ¢ȱ¢ȱ- ing room availabilities and forecasting rooms revenue. The number and type of management reports available through a reservation system are functions of the hotel’s needs and the system’s capability and contents. Popular reservations management reports include: ȱ ȱ DZȱ ȱ ȱ £ȱ ¢ȱ ȱ ¢ȱȱȱȱȱȱǰȱęǰȱȱǯȱ ȱ ȱ ȱ ȱ £ȱ ȱ ȱ ȱ ȱ reports, blocked room reports, and no-show reports. ȱȱDZ Agents with contractual agreements may be owed commissions for business booked at the property. This report tracks the amounts the hotel owes to each agent. ȱ ȱ ȱ DZ Regrets and denials are ways of classifying lost business. Regrets are recorded when guests choose not to make a reservation. x x x
77 There may be several reasons for this, including room rate, room type availability, location, and other factors. Denials are recorded when the hotel is ȱȱȱȱȱǯȱȱȱȱĞȱȱȱȱ- ability or restrictions put on new reservations. In many hotels, each of these situations is recorded, and then reviewed by management. If the hotel is getting too many regrets due to rate, management may need to adjust the rate to be more competitive. Denials help management decide such things as group allocations, or whether more rooms of a certain type need to be added to the property. Some companies call this report the “turnaway report” or “lost business report.” ȱ ȱ DZ This report projects future revenue by multiplying predicted occupancies by applicable room rates. This information can be especially important for long-range planning and cash management strategies. Expected Arrival and Departure Lists Expected arrival and departure lists may be generated according to a predetermined schedule or on demand to indicate the number and names of guests expected to arrive, depart, or stay over. A list of expected arrivals may be displayed or printed in the reservations department or at the front desk. Front desk agents depend on having expected arrival information to facilitate the guest registration process. Similarly, expected ȱȱȱȱȱȱȱȱ¡ȱȱȱĴ- ȱȱȬǯȱ¡ȱȱȱȱȱȱȱȱěȱ¢ȱ guests who may be staying beyond their expected departure date but have not told the hotel (overstays). This can be very important, especially when the hotel expects high occupancies and has already reserved the room for an incoming guest. Reservation systems can also perform preregistration functions and provide other services for special guests, such as VIPs or those staying in specially prepared rooms. Depending on the amount of information collected during the reservations process, a guest may only need to sign a pre-arrival form or submit his or her credit card for processing to complete the registration process. By securing ȱȱȱȱȱǰȱȱȱĜȱȱ registration process may be possible. Processing Deposits Advance deposits for reservations should be processed by employees who do not have direct access to reservation records. Reservations personnel should not ¢ȱȱȱȱDzȱȱȱȱȱȱĴȱ¢ǯȱȱ general manager’s secretary or the hotel’s general cashier are two possible candidates for independent reviewer. These employees should endorse deposit checks ȱȱȱȱ¢ȱĞȱȱȱȱȱȱ ȱ ȱȱȱȬȱȱȱ¢ȱęDZȱȱǰȱȱǰȱ ȱǰȱȱǰȱȱǰȱȱęȱȱǻȱ Ǽǯȱȱ ȱȱęȱȱ ȱȱȱ ȱ ȱ ȱǯȱȱ ȱ x
78 ȱŘ record should be updated with the status of its deposit information. A transaction report should verify that the recorded deposits balance with the total reservation deposits entered for the day. Generally speaking, advance deposits received from guests should be processed with special care. Hotels should discourage guests from sending cash ȱȱǯȱȱȱĴǰȱȱȱȱȱȱǰȱȱ though the hotel pays a service charge to the credit card processing company. Reservations Histories ȱ Ĝȱȱ ȱȱ ȱ ȱ ȱ ȱ Ȃȱ ȱ Ĵȱ ¢ȱ ¢£ȱ ȱ ǯȱ ȱ Ȃȱ ȱ ȱ ȱ division can use reservations data and assorted system reports to identify trends, review available products and services, and assess the impact of its marketing strategies. Reservations histories include statistics on all aspects of the reservations process, including the number of guests, occupied rooms, reservations (by distribution channel), no-shows, walk-ins, overstays, and understays (people who checked out before a stated departure date). ¢ȱěȱȱ¢ in that a stayover is simply a guest who ȱȱ¢ a room between his or her day of arrival and expected departure date. Knowing overstay and understay percentages, for example, can help management devise a plan for accommodating walkins or guests who request reservations at the last minute. Histories are also very ȱȱȱȱǯȱ ȱȱȱȱĴȱǻȱ ȱȱȱȱȱȱȱȱȱĞȱȱȱȱȱȱǰȱ for example) is important for future bookings. Tracking group guests who depart before their expected departure date is important because it may indicate to the hotel reservations manager that additional reservations can be taken on certain dates, since certain convention guests traditionally leave early. Other Reservation Considerations The topics covered in this section are not part of the typical reservations process. Nonetheless, it is important for front desk and reservations personnel to understand the legal implications of a reservation and be familiar with waiting lists, promotional packages, potential problems in the reservations process, and the impact of e-commerce on reservations. Legal Implications The reservation agreement between the hotel and the guest begins at the time of ȱǯȱȱȱ¢ȱȱȱȱ Ĵǯȱęȱȱȱȱ a prospective guest in language which states that the guest will be accommodated on a particular date may constitute a contract binding the hotel to provide accom- ȱȱȱǯȱ ȱȱęȱȱȱȱȱȱȱȱ from the prospective guest, it may bind both the hotel and the prospective guest ȱęȱȱǯ
79 Waiting Lists Occasionally, a reservation request must be denied because the hotel is fully booked. However, with enough lead time, interested guests may be put on a waiting list for the proposed date. Hotels experiencing high-volume reservations may satisfy excess demand through this technique. A waiting list might be developed and used according to these guidelines: Advise the guest that no rooms are currently available for the requested dates. ěȱȱȱȱȂȱǰȱȱǰȱȦȱȬȱǯ Agree to notify the prospective guest immediately if a room becomes available due to a cancellation or change. ȱȱȱęȱȱȱȱȱȱȱȱȱ available. Having a waiting list, when properly implemented and managed, is a good business practice that provides a service to guests and helps foster an atmosphere of good will. Promotional Packages ¢ȱȱȱȱěȱȱȱȱȱǯȱȱ- ages always include the guestroom, plus features such as meals, golf, tennis, sports lessons, limousine service, and sight-seeing or other activities in or near the property. Generally, hotels and resorts provide guests with some sort of discount for ȱ ȱǯȱ ȱ Ğȱ ȱȱȱ ȱ ȱ and a convenience, since they don’t have to arrange to purchase separately the ȱȱȱěȱȱȱǯ Reservations personnel and Web site content must be very informative about ȱ ȱȱȱ¢ȱěǯȱȱ¢ȱȱǰȱȱ ȱ¢ȱ talk with a reservations agent or visit the property’s Web site to learn more about the package in detail, including features and all related prices. If a guest wishes to ¢ȱȱȱȱȱȱǰȱȱȱȱ¢ȱěȱȱȬȱǰȱȱ reservations agent or the Web site must be capable of pricing an extra night’s stay. ȱȱȱ¢ȱěȱȱȱȱǰȱ¢ȱ ȱ¢ȱȱ ȱ designed and properly sold. Potential Reservation Problems Some steps of the reservations process are more susceptible to error than others. If reservations agents are aware of these trouble spots and can successfully deal with them, mistakes will be less likely. The following sections discuss some common reservation problems. Errors in the Reservation Record. Unfortunately, there are many opportunities for a reservations agent or a guest at a Web site to make an error when creating a reservation record. For example: x x x x
80 ȱŘ The record may be created with an incorrect arrival or departure date, a mis- ȱȱǰȱȱęȱȱȱȱ¢ȱȱǻȱ¡ǰȱ ¢ȱ might be recorded as ȱ¢Ǽǯ The name of the person making a reservation for the guest may be accidentally entered as the guest’s name on the reservation record. To avoid such problems, the reservations system or agent should verify the information entered on the reservation record by displaying or reciting the information back to the person creating the reservation record. In addition, displaying or quoting the hotel’s cancellation policy is appropriate at this time, to help avoid any problems over no-show billing or non-return of deposits. Such communication can be especially important to hotels catering to international travelers. An error that prevents access to a reservation record can be disastrous to a hotel-guest relationship. Misunderstandings Due to Industry Jargon. Sometimes, reservations agents or systems use industry jargon that is not widely understood. This can lead to problems. For example: A family with a ęȱȱ¢ȱȱ ȱȱĞȱȱ- ȱȱ¢ȱȱęȱȱȱȱȱȱȱDzȱȱ¢ȱȱ ȱęȱȱ ȱȱȱȱȱȱǯ Two business travelers book a ȱ ǰ anticipating two beds; they are displeased to learn their room has only ȱȱǯ Parents wishing to have their children stay in a ȱ mistakenly request an ȱǯȱȱȬǰȱȱȱęȱȱȱȂȱȱ is across the hall or next door with no direct connection. To avoid such problems, reservations agents or systems should make every ěȱȱ£ȱ¢ȱȱȱ¡ȱ ȱȱȱȱȱȱ ȱ ¢ǯȱ Ğȱ ȱ ȱ ǰȱ ȱ ȱ ȱ ȱ ȱ reserved accommodations should be provided in addition to the hotel’s general reservations policies and procedures. Miscommunication with Central Reservations Systems. There are some unique possibilities for miscommunication between guests and reservations agents at central reservations systems. For example: A central reservations system serving several hotels in the same city may book the guest into the wrong hotel; for instance, a chain’s airport property rather than its mid-city property. A system that handles hotels in similarly named cities may book the guest into a hotel in the wrong city or state (for example, Charleston, West Virginia, instead of Charleston, South Carolina; Pasadena, California, instead of Pasadena, Texas). To avoid such problems, the hotel’s reservations agents or Web site should furnish the guest with the full name and address of the property at which a x x x x x x x
81 reservation has been made. When a reservation system serves more than one hotel in the same city, a thorough description of the hotel’s location can be extremely ȱ ȱ ǯȱ ȱ ȱ ȱ ȱ ¢ȱȱ ȱ £ȱ ȱ ǯȱȱ ȱǰȱȱȱȱȱȱȱȱ£ȱȱȱȱȱȱ ȱ ¢ȱęȱ ȱ¢ȱ ȱ ȱ ȱ £ȱǰȱȱ ȱ£ȱ address errors. On-line Reservation System Failures. Unless communication between the hotel ȱȱȬȱȱ¢ȱȱȱě¢ǰȱȱȱǯȱ For example: The hotel may fail to update the on-line reservation system database with current room availabilities and rate changes. The on-line reservation system may be delinquent in communicating reservations it has booked to the property. Communications equipment, at either the on-line reservation system or the hotel, may become inoperable. The hotel may close reservations on a particular date with the on-line reserva- ȱ¢ǰȱȱȱȱȱȱȱěǯ ȱ ȱȱ ȱǯȱȱȱ¢ȱęȱ ȱ ȱ ȱ ȱȱ minute due to cancellations or early departures and fail to update the on-line reservation system in time to gain last-minute reservations. Global distribution systems and Internet distribution systems may present ȱǯȱȱ ¢ȱ ȱěȱȱ ȱ ȱ ȱ ȱ¢ȱȱȱ¢ȱȱȱȱěȬȱǯȱȱȱ be time-consuming and error-prone. To avoid such problems, reservations agents must be aware of the need for accurate and timely communication between the hotel and the on-line reservation systems. When closing reservations for a certain date, the hotel must try to iden- ¢ȱ¢ȱȱȱȬȱȱ¢ȱȱęȱȱȱȱ¢ȱ communicated. Many companies have automated links between the hotel reservations system and central reservations network that eliminate the timing issues of opening and closing availability and changing rates (seamless integration). Faulty ȱȱȱȱȱȱȱȱ¢ȱȱȱě- ȱȱȱȱǯȱĴȱȱȱȱȱȱȱȱ - ing relationship with the reservations system. In addition, it is appropriate to frequently double-check the global distribution systems and Internet distribution systems to be sure hotel availability and rates are correctly displayed. This can be done by reviewing copies of GDS and IDS listings on a regular basis through GDS and IDS Internet sites. E-commerce E-commerce is an important force in hotel reservations management. (Although this subject was touched on earlier in the chapter, because of its importance and relative newness, we thought we should close the chapter by discussing e-commerce x x x x x x
82 ȱŘ again in more detail.) E-commerce extends the reach of hotels far beyond the tra- ȱȱȱȱȱȱȱĜǰȱȱǰȱȱȱ distribution system. Hotels have a presence in multiple distribution channels and direct access to the consumer through the Internet. Regardless of whether a hotel is part of a chain or is independent, it can participate in on-line commerce via the Internet. Linking with guests through the Internet is actually the easiest part of ȬǯȱȱȱĜȱȱȱ ȱ ȱȱȱȱȱ- tribution opportunities, which hotel features to present, and which room rates to display. ȱȱȬŗşşŖǰȱȱ ȱ ȱ£ȱȱȱȱȱȱȱ reservation distribution, and most hotel companies sought a Web presence. At ęǰȱȱȱ ¢ȱȱ ȱ ȱ ȱ ȱȱ¢ȱ ȱ ǯȱȱęȬȱȱǰȱȱȱȱ ȱȱȱ- ȱ ȱ ȱ Ȃȱ ȱ Ĝȱ ¢ȱ ȱ ȱ ȱ ¢ȱ ȱ ȱȱ ǯȱ ȱ ȱ ȱ ȱ ȱȱ ȱ ȱ ěȱ ȱ ȱ ¢ȱ ȱȱ ȱǯȱěȱ ¢ȱȱ - ȱȱ ȱȱ ȱ ¢ȱ ȱ ȱ ȱ Ȭȱęȱ quickly became the standard. ȱęǰȱ¢ȱȱȱȱȱ ȱȱȱȱȱ- tion, then called the hotel to make their reservations. But, over time, “lookers” ȱȱȃǰȄȱȱȱęȱȱȬȱȱȱ- cessing increased. Hotel companies then expanded their Web site capabilities by adding search engine capabilities and advanced navigational features. Today, visitors to many hotel Web sites are able to experience 360-degree panoramic pictures, view dining room menus, and receive hotel-generated Web-cam streaming video. Searches can ȱȱȱȱȱȱDZȱ¢ǰȱ£ȱȱȱȱǰȱȱ ¢ǰȱ ȱ ȱ ¢ǰȱ ȱ Ĵǰȱ ¢ȱ ǰȱ ȱ ¢ȱ points of interest. For example, potential guests can search for hotels with swimming pools, located near an airport, with high-speed Internet access and 24-hour room service. With some additional mouse clicks and key strokes, a reservation ȱȱȱȱęǯȱ ȱȱȱǰȱȱȱȱȱ tee-times, reserve a massage treatment in the spa, make a table reservation in the ȱǰȱȱȱȱĴȱȱȱȱȱǯ E-commerce has become so important that a hotel may assign a dedicated manager to be responsible for managing electronic business transactions. This manager may be responsible for coordinating revenue management activities of the reservation function and therefore may be referred to as the “revenue manager.” Some hotel companies assign corporate managers and implement elaborate technology to oversee the revenue management and e-commerce requirements for ȱęȱ¢Ȭ ǯ Buyers who search the Internet for overnight accommodations do so for convenience as well as price. Many Web sites now combine air transportation and car rentals with hotel reservations into one booking engine for the ease of bundled ȱȱȱȱȱȱĞȱ¢ȱȱǯ ȱ ȱȱ¢ȱ£ȱȬȱȱȱęȱ- ȱęǯȱȱ¡ǰȱȱȱȱȱDZ
83 Ȭ¢ȱ ȱ ǻȱ ¡ǰȱ ǯǰȱĴǯǰȱ ȱ ǯ com, and so on) Meeting professionals (for example, mpoint.com, starcite.com, etc.) Bargain shoppers (priceline.com, site59.com, etc.) Cruise travelers (celebrity.com, cruise.com, cruisesonly.com, and so on) All-inclusive hotels (resortvacationstogo.com, for example) Interval-ownership vacations (rci.com, intervalworld.com, etc.) There are many more travel-related Web sites, some general-purpose, others ȱȱęȱȱǯ Ȭȱȱȱěȱȱ¡ȱȱȱȱȱ ȱǯȱ ǰȱȬȱȱȱě¢ȱȱȱȱ¢ȱ basis, so that hotel managers can be sure that their hotel’s information and pricing are properly presented. Single Image Inventory.ȱ ȱ ȱ ȱ Ȭȱ ȱ ȱ ěǰȱ ȱ ȱ timely rate and inventory data must be available to all electronic distribution channels simultaneously. The best means to accomplish this is through single image inventory technology. Simply stated, ”single image inventory” means that all reservation distribution channels draw from the same room availability, pricing, rate rules, services, and amenities information. Failure to have all on-line distributors working from the same data source can be chaotic and lead to overselling, shortages, and erratic levels of occupancy. When using single image inventory, all sellers base transactions against identical information. E-commerce Site Categories.ȱȬȱȱȱȱ£ȱȱȬ model or wholesaler sites, and as opaque or transparent sites. We will look at each of these categories in the following sections. Merchant model. The merchant model, also called the ”markup model,” is an e-commerce strategy for an on-line intermediary, such as an IDS, negotiating room pricing with a hotel. The participating hotel is asked by the on-line seller (merchant) to provide rooms at 20 to 30 percent below the lowest published rate normally charged for the room type, or an alternate discounted rate (at the discretion of the hotel). This discounted rate is called the ”net rate.” In turn, the on-line seller takes on the responsibility for marketing the inventory allocated to it. The merchant will multiply the net rate by a similar percent to achieve the gross rate. For example, consider a standard room with a lowest published rate of $100. To determine the net rate, assume the merchant has negotiated a 25 percent discount, thereby producing a net rate of $75. The merchant then determines the new selling price of the room (i.e., the room’s gross rate) by multiplying the net rate by a percent similar or equal to the discount percentage. In the present example, using a 25 percent markup, this will generate a gross rate of $93.75 ($75 plus the 25 percent markup of $18.75). Therefore, the merchant earns a gross margin (gross rate minus net rate) of $18.75, and the guest pays $6.25 less than the $100 rack rate, which means the guest experiences a discount of 6.25 percent. x x x x x x
84 ȱŘ Merchant-model sites tend to rank hotels based on their discounts; the more a hotel discounts its rooms, the more prominently the hotel is listed. Therefore, ¢ȱȱȱȱȱȱȱęȱȱȱȬ model Web sites, fearing that otherwise their hotel will not be promoted as well as their competition. Examples of merchant-model sites include Hotels.com (www. ǯǼǰȱ ǯȱ ǻ ǯ ǯǼǰȱ £ȱ ǻ ǯ£ǯǼǰȱ Lodging.com (www.lodging.com), and Travelocity (www.travelocity.com). Wholesaler model. With the wholesaler model, the hotel tends to maintain greater control over its room price, as a commission is paid the wholesaler based on a percentage of the hotel’s net rate. Simply stated, the hotel sets the selling price and the wholesaler receives an agreed-upon sales commission (i.e., percentage of ȱǼǯȱȱ¡ǰȱȱȱȱ¢ȱȱěȱȱȱ ȱȱȱȱ $100 to a wholesaler at a net rate of $80, and agrees to let the seller add a 10 percent ($8) commission. In this example, the room will have a gross rate of $88 and the guest will pay $12 less than the hotel’s $100 published rate. Some wholesalers, like Priceline and Hotwire, may negotiate a minimum margin (for example, $5 per room) to be added to the net rate rather than work on a percent commission. Sellers using the wholesaler model tend to earn less than sellers using the merchant model. It is for this reason that on-line sellers tend to favor the merchant model; hotels, on the other hand, tend to favor the wholesaler model, because ¢ȱ ȱ ȱ ȱ ȱ ȱ Ȃȱ ęȱ ȱ ȱ ǯȱ ¡ȱ of wholesaler model sites include Expedia (www.expedia.com), Hotwire (www. hotwire.com), Priceline (www.priceline.com), and Travelweb (www.travelweb. Ǽǯȱ £ȱ ǻ ǯ£ǯǼǰȱȱ ȱ ȱ ȱ ǰȱ ěȱ ȱ ȱ- chant model a wholesaler model platform. Opaque sites. At an opaque Web site, a hotel room is marketed by a price Ȧȱȱ¢ȱǻȱȱȱěȱ¢ȱȱȄȬȱ¢ǰȄȱȱ¡- Ǽǰȱȱ¢ȱȱȱ¢ȱęǯȱȱȱȱȱȱȱȱ- ity being sold to the highest bidder. The services, amenities, and ambiance of the property may not be considered in the selection process. With opaque Web sites, the brand of the hotel and its features are hidden from the buyer until the transaction is completed. Only a quality rating and the room’s general location are known to the buyer at the time of purchase, hence the use of the term ǯ Since nei- ȱȱȂȱ¢ȱȱȱȱȱȱȱĞȱȱȱȱǰȱ ęȱ ȱȱȱȱȱȱȱȱȬȱȱȱȱȱȱȱ ȱȱǯȱȱȱȱȱȱȱ¢ȱěȱ¢¢ȱȱ points or frequent shopper rewards, this can be important to determine. ȱȱĞȱ ȱȱȱȱǯȱȱȱ¢ȱ¢ȱȱ rate they are willing to pay, and the site then works with available inventory in ȱȱǯȱ ȱȱȱȱ¢ȱȱȱȱȱȱȱęǰȱȱ¢ȱ contact participating hotels to see if they will accept the guest’s bid price. Since ȱ ȱ¢ȱ ȱ ę¢ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱȱ ȱǰȱęȱȱȱ ǯȱȱ ȱ ǰȱ¢ȱȱ- ȱ ȱ ȱ ȱ ěȱ¢¢ȱ ȱ ȱ ȱ ȱ ȱ ȱȱ
85 through opaque sites. Examples of opaque sites include Priceline (www.priceline. com) and Hotwire (www.hotwire.com). Transparent sites.ȱȱȱǰȱȱȱęȱȱ£ȱ based on room rate or star ranking, just as in opaque sites, but several hotels in the ¢ȱȱȱęȱȱ¢ȱȱ¢ȱȱȱǯȱ¡ȱȱ transparent sites include Expedia (www.expedia.com), Hotels.com (www.hotels. com), Site 59 (www.site59.com), Travelocity (www.travelocity.com), and Travelscape (www.travelscape.com). E-commerce Trends. Although on-line booking engines are capable of reserving space for corporate and group meeting sales, most hotel Web sites so far have focused on individual guests. As e-commerce evolves, however, this focus is ¢ȱ ȱ Ğȱ ȱ ȱ ȱ ȱ ȱǰȱ ȱȱ ȱ as large room blocks, food and beverage catering menus, tradeshow space allocation, meeting room reservations, and audiovisual equipment scheduling. On some hotel Web sites, group leaders can use an on-line request for proposal (RFP) script to enter meeting dates, room and space requirements, and other meeting needs, to which the hotel can respond based on a database query. Catering considerations, ȱ ȱ ȱ ȱȱ ǰȱ ȱ ȱ ȱ ȱ¡£ȱ ȱ ȱ make an automated response beyond the capabilities of most hotel companies. However, a few are moving toward automating the group RFP response process, based upon sophisticated formulas that involve guestroom to meeting space ratios and projected revenue ratios. Examples of on-line group search and RFP engines ȱĞȱǻ ǯǯǼȱȱȱǻ ǯǯǼǯ ȱ Ȭȱ ȱ ȱȱ ȱ ȱ ȱ Ĝ¢ȱ ȱ¢¢ȱ club points (generated by the on-line booking site) for hotel, auto, air, cruise, rail, and other travel services. In awarding points to guests, the on-line booking site becomes the featured product, not the destination hotel. Some hotel companies are now allowing loyalty club members to redeem rewards in real-time on their Web sites as well. However, as hotels struggle to promote their unique identity on-line, such on-line booking agency practices may be considered confusing and harmful. Another on-line trend is dynamic package pricing. To date, on-line booking ȱȱěȱ¢ȱǰȱ¢ȱęȱǻǼȱȱȯȱ ¡ǰȱ ȃ¢ȱ ęȱ ȱ ȱ ȱ ȱ ¡ȱ ȱ ȱ ȱ ǰȱ ȱ ȱ ȱ discount on a rental car and airfare.” As on-line booking engines become more ǰȱȱȱ ȱȱěȱȬȬĚ¢ȱǻ¢Ǽȱȱȱȱ packages selected and assembled by the guest (e.g., inclusive of accommodations, food service, recreational activities, holiday events, special occasions, etc.). E-commerce technology will allow guests to build and bundle package components to create a unique package, generate a unique package price, and simultaneously make multiple reservations for the services they requested in their custom package. Finally, another e-commerce trend involves on-line booking sites creating a virtual hotel brand by forming a proprietary set of preferred hotel properties grouped at their travel site (for example, Expedia’s Bargain Hotels). This creates a new level of competition within the marketplace.
86 ȱŘ Summary ěȱȱȱȱȱĜȱȱǯȱȱ systems must be able to respond quickly, accurately, and pleasantly to requests for overnight accommodations. Processing reservations involves matching room ȱ ȱȱDzȱǰȱęǰȱȱȱ- tions; and producing management reports. Reservation information is especially ȱȱȱȱĜȱǯ ȱ ȱ Ĝȱ ȱ ȱ ȱ Ĝȱ ȱ ȱ ȱ - ties and information regularly. The reservations manager participates in regular sales meetings and ensures that current reservation information is provided to the sales department. Successful reservations agents sell their hotel, creating pos- ȱȱ ȱ ȱ ȱ ȱ ǯȱȱ ȱ ęȱ ȱ ȱ ȱ ensure that guests have the right information about the property and the reservations agent collects all the guest information necessary to process a reservation. The reservation system should contain detailed and timely information covering room types and available rates. Given the capabilities of automation, much of the ¢ȱȱȱȱȱĞȱȱȱȱĜȱȱȱȱ ȱȱȱȱǯȱȱȱęȱȱ¢ǰȱǰȱ ȱȱȱȱȱ ȱȱęȱȱȱȱȱ- tions process. The two major types of hotel reservations are guaranteed and non-guaranteed. Hotels can draw reservations from various market sources within the hospitality industry, including central reservations systems, intersell agencies, and propertydirect reservations. There are two basic types of central reservations systems: Ĝȱ ȱȱȬĜȱ ǯȱ ȱȱ¢ȱȱ central reservations systems with airline computer systems and terminals around the world. The term “intersell agency” describes a central reservations system that contracts to handle more than just hotel rooms. A property-direct system handles all requests for accommodations, monitors any communication links with central reservations systems and intersell agencies, and maintains updated room availability status reports for a single hotel. Processing a reservation request can result in one of several responses: reservation acceptance; suggestion of alternative room types, dates, and/or rates; and suggestion of an alternative hotel property. In any reservation system, it is necessary to closely monitor the number of reservations accepted in order to avoid overbooking. A reliable reservation system can assist management in maintaining tight control over room availability data and can generate many reservationrelated reports. Reservation records identify guests and their occupancy needs prior to actual ǯȱȱȱȱȱȱȱ£ȱȱȱȱȱ- ¢ȱȱěǯȱȱȱȱȱȱȱȱ ȱ potential guests. A reservation record initiates the hotel guest cycle. A reservation ęȱȱ ȱ Ȃȱ ȱ ȱ ęȱ ȱ ȱ Ȃȱ ȱȱȱȱǯȱȱ Ĵȱęȱȱȱȱ ȱȱȱȱęȱȱȱȱǰȱȱȱȱ ¢ȱ ȱ ȱ ȱ ȱ ęȱǯȱęȱ ȱ¢ȱȱȱȱ
87 Ȭǯȱ ȱ ȱ ȱ ȱ ȱ ęȱ ǰȱ ȱ - ȱęȱȱ¢ȱȱȱ ȱȱȱȱǯȱ ȱęȱȱȱ ȱȱ ȱȱȱȱ¡ǯȱ ȱȱ be especially useful to the hotel in retrieving a reservation record for updating, prior to guest registration. Similarly, hotels may issue a reservation cancellation number to guests properly canceling a reservation. Issuing a cancellation number to guests protects both the guest and hotel in the event of a no-show or a misunderstanding. ȱěȱȱ¢ȱȱ¡£ȱȱȱ¢ȱ¢ȱ- toring room availabilities and forecasting rooms revenue The number and type of management reports available through a reservation system are a function of the hotel’s needs and the system’s capability and contents. Typical reservations management reports include: reservation transactions report, commission agent report, regrets and denials report (or turnaway report), and a revenue forecast report. ȱ ȱ ȱȱ ȱȱ ęȱ ȱ - tions, waiting lists, promotional packages, potential problems in the reservations process, and the impact of e-commerce on reservations. Key Terms advance deposit guaranteed reservation—A type of reservation guarantee that ȱȱȱȱ¢ȱȱęȱȱȱ¢ȱȱȱȱȱȱȱ arrival. Ĝȱ ȱ ȯA hotel chain’s reservation system in which all participating properties are contractually related. ȯAn agreed-upon number of rooms set aside for members of a group planning to stay at a hotel. ȯTo sell or reserve rooms ahead of time. cancellation hour—ȱ ȱ Ğȱ ȱ ȱ ¢ȱ ¢ȱ ȱ ȱ ȱ ȱ unclaimed non-guaranteed reservations, according to property policy. cancellation number—A number issued to a guest who has properly canceled a reservation, proving that a cancellation request was received. central reservations system—A network for communicating reservations in which each participating property is represented in an automated database and is required to provide room availability data to the central reservations center on a timely basis. ęȱȯA code that provides a unique reference to a reservation record and assures the guest that the reservation record exists. corporate guaranteed reservation—A type of reservation guarantee in which ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ęȱ responsibility for any no-show business travelers it sponsors. credit card guaranteed reservation—A type of guarantee supported by credit card companies; these companies guarantee participating properties payment for reserved rooms that remain unoccupied.
88 ȱŘ Ȭěȱȯȱȱȱȱ ȱȱȱȱȱȱĞȱ ȱȱ unreserved rooms in the group’s block will be released back to the general rooms inventory for sale. free independent traveler (FIT)—A traveler who is not part of a group. global distribution system (GDS)—A distribution channel for reservations that provides worldwide distribution of hotel reservation information and allows the selling of hotel reservations around the world; usually accomplished by connecting the hotel company reservation system with an airline reservation system. guaranteed reservation—A reservation that assures the guest that a room will be held until check-out time of the day following the day of arrival; the guest guarantees payment for the room, even if it is not used, unless the reservation is properly canceled. Internet distribution system (IDS)—A direct-marketing distribution channel that provides property exposure and reservations management for independent hotels, chain hotels, and third-party intermediaries representing hotel companies. ȬĜȱ ȱ ȯA central reservations system that connects independent (non-chain) lodging properties. non-group displacement (or displacement)—The turning away of transient guests for lack of rooms due to the acceptance of group business. non-guaranteed reservation—A reservation agreement in which the hotel agrees to hold a room for the guest until a stated reservation cancellation hour on the day of arrival; the property is not guaranteed payment in the case of a no-show. no-show—A guest who made a room reservation but did not register or cancel. ȯAccepting more reservations than there are available rooms. Ě ȱ ¢ȯA property selected to receive central system reservation ȱĞȱȱȱȱȱ¢Ȃȱȱȱ ȱȱ geographic region have been exhausted. prepayment guaranteed reservation—A type of reservation guarantee that requires a payment in full before the day of arrival. reservation record—ȱȱȱȱȱęȱȱȱȱȱȱȱ- ipated occupancy needs before arrival at the property; enables the hotel to person- £ȱȱȱȱ¢ȱȱěǯ reservation system—Ğ ȱę¢ȱȱȱȱȱǰȱ- ęǰȱęǰȱȦȱȱȱȱǯ seamless connectivity—The ability of travel agencies to book reservations directly into hotel reservation systems, as well as verify room availability and rates. travel agent guaranteed reservation—A type of reservation guarantee under ȱȱȱ¢ȱȱȱȱ¢ȱĞȱȱȱȱȱ ȱęȱȱȱȬ ǯ wash down (or wash)—Blocking fewer rooms than the number requested by a group, based on previous group history.
89 3 Security and the Lodging Industry From ȱȱĜȱǰ Seventh Edition by Michael L. Kasavana, Ph.D. and Richard M. Brooks, CHA This chapter has been adapted from material found in Chapter 1 of ¢ȱȱ ȱȱ, 2E, by Raymond C. Ellis, Jr., and David M. Stipanuk LODGING PROPERTY MANAGERS have many responsibilities, one of which is security. From the earliest days of the hospitality industry, one of the most important duties of an innkeeper has been to protect guests from harm while on the property. Although interpretations of protection may vary from state to state, every legal jurisdiction imposes some form of security obligation on hotels. Security regulations go beyond the innkeeper-guest relationship to include hotel employees and others on-property who are not guests. Therefore, providing security in a hotel is the broad task of protecting people—guests, employees, and others—and assets. ȱȱȱĞȱȱȱ¢ȱȱȱȱȱ¢ȱ losses to lodging properties than crimes against persons, but crimes against per- ȱȱȱȱěȱȱȱȱǻȱȱ¢Ǽȱȱ¢ȱ lead to high legal expenses and large punitive damage awards. ȱ¢ȱ¢ȱěȱ¢ȱȱȱȱȱȱȱ- room security, key control, locks, access control, perimeter control, alarm systems, communication systems, lighting, closed-circuit television, safe deposit boxes, ¢ȱ ǰȱ ȱ ȱ ȱ ǰȱ ȱ ¢ǰȱ Ĝǰȱ pre-employment screening, employee training, responsible service of alcoholic beverages, emergency procedures, safety procedures, recordkeeping, and more. The industry’s concern with security has increased greatly since the terror- ȱĴȱȱȱŗŗǰȱŘŖŖŗǯȱǰȱȱ¢ȱȱȱȱȱȱǰȱ ȱ ȱ ȱ ȱ ȱ ǯȱ ȱ ¡ǰȱ ¢ȱ Ğȱ ȱ tragic events of 9/11, hotels in New York and Washington, D.C., received dozens of bomb threats, including threats to use poisonous gas and other types of destructive devices. Of course, terrorism is not the only security concern hotels face. The crime rate against both people and assets continues to increase. In addition, the ¢ȱ ȱȱȱ ȱęȱȱȯȱȱ- ual employees—for failure to provide adequate security has raised the industry’s security awareness. Newspaper and television exposés make the public aware of many hotel security issues.
90 ȱř In most states, innkeepers have a legal duty to provide “reasonable care” to protect guests and guests’ invitees. Innkeepers may be held responsible if employees injure guests. Innkeepers accused of negligence for not providing reasonable care for someone who was injured or victimized on their premises are losing millions ȱȱ¢ȱ¢ȱȱȱȱȱȬȬȱĴǯ ȱȱęȱȱ ȱ ȱ¢ȱ¢ȱȱ ǻ ȱ ¢ȱ ¢ȱȱǼǰȱȱȱȱȱȱȱȱȱ¢ȱȱȱ one is not already in place is obvious. It must be stated, however, that each lodg- ȱ¢ȱȱěȱȱȱěȱ¢ȱǯȱǰȱȱȱ included in this chapter should not be construed as recommending any industry standard. We can only explore general security concerns in the following pages. Developing the Security Program A lodging property’s security program should stress the prevention of security problems. It is far more desirable to keep security incidents from occurring than ȱȱȱȱĞȱȱȱȱȱĴǯȱȱ¢ȱȱȱ procedures may help to prevent or discourage incidents. Nonetheless, it must be recognized that ȱȱȱȱ. Each property should continually review its security procedures and update them to meet changing security needs. The following list indicates general areas that might be part of a property’s security program: Doors, locks, key control, and access control Guestroom security Control of persons on premises Perimeter and grounds control ȱȱȱǻ¢ȱȱǰȱȂȱǰȱǰȱǼ Emergency procedures Communications Security records ěȱ¢ȱ We will discuss each of these security areas in the following sections. Doors, Locks, Key Control, and Access Control During a grand opening, a hotel traditionally throws out the keys to the front door. This symbolizes that everyone is welcome. Yet the symbolism doesn’t preclude the need to provide access control to all parts of the building and grounds. When most ȱȱȱȱǰȱ¢ȱęȱȱȱȱǰȱȱȱȱ ¢ȱȱȱȱ ȱȱ¢ȱǰȱȱĜǰȱȱȱ ęȱǰȱȱǰȱȱȱǰȱȱȱǯȱȱ¡- ple, locking hotel storerooms helps prevent hotel employees from unauthorized entry and from stealing hotel property, whether it is food, linen, or other supplies. ȱęȱȱ ȱȱȱȱǰȱǰȱ ȱ¢ȱ from using the facilities when they cannot be properly supervised. x x x x x x x x x
¢ȱȱȱȱ ¢ 91 Guestroom-access security is the most common security need, however. Electronic guestroom locks have replaced mechanical systems in most lodging proper- ǯȱȱ¢ȱȱȱĚ¡¢ǯȱěȱ¢ȱ¢ȱȱȱȱȱ guests and hotel employees. Electronic systems can record every authorized entry ȱ ¢ȱ £ȱ ¢ȱ Ĵǯȱ ȱ ȱ ȱ ȱ ȱ ¢ǰȱ ȱ ȱ responsible for hotel security can query the guestroom lock and identify the keys ȱ ȱȱȱ ȱȱ ŗŖǰȱ ŘŖǰȱ ȱ śŖȱǯȱ ȱ ǰȱ ¢ȱȱȱ because new key codes are issued each time a guest checks in. Keys are issued during the check-in process, and usually will only work for a limited time period— for example, the issued key is good until noon on the scheduled date of departure. If the guest decides to extend the stay, the key must be recoded. Similarly, if the guest departs a day early, the key can be rendered invalid by checking in another guest to the room. For employees, guestroom keys are coded by department, and may also have time limits on them. For example, a hotel maintenance employee may be given a ¢ȱȱ¢ȱȱę¡ȱȱȱȱȱǯȱȱ¢ȱ¢ȱȱȱ ȱ ȱ ęȱ ȱ ǰȱ ȱ ȱ ȱ ŗŖȱ юǯњǯ and 11 юǯњǯ If more time is needed, the key must be recoded. Guestroom door locks also may include chains or other backup locks on the inside of the door, so that guests can control access once they are in the room. Most guestroom locks have a deadbolt mechanism. This allows the guest to provide extra security by turning a lever that extends a thick piece of metal into the guestroom doorframe. Guestroom locks are also found on connecting-room doors and balcony or patio doors. These locks are usually not electronic, so extra care must be taken to ensure that they provide guests with good security. Balcony and patio locks may include not only the lock on the door, but also an extra lock that is controlled from the inside of the room. When connecting rooms are not needed, it is important that the connecting door be closed and locked. Only hotel employees should have the keys to open those doors. Most hotels have multiple key-security levels. The lowest level is the individ- ȱǰȱĜǰȱǰȱȱȱǯȱȱ¡ȱȱȱĞȱȱ a “section master” key. Section master keys are generally used in housekeeping ȱȱȱĴȱȱȱȱęȱȱȱȱȱȱȱDzȱȱ or she can carry one section master key instead of carrying many separate guest- ȱ¢ǯȱȱĚȱȱ¢ȱȱ¢ȱȱ¡ȱȱDzȱȱȱȱȱ ȱȱĚǯȱȱȱȱȱȱȱ¢ǯȱȱȱȱȱ cover the guestroom section of the building, including all storage closets in that part of the building. Another building master can cover all public areas, such as dining and meeting rooms. A grand master key gives access to all door locks in the building. An emergency key or “E-Key” is an emergency override key that allows access to all rooms, even if they have been locked from the inside. ȱȱȱȱ¢Ȃȱ¢ǰȱȱĴȱ ȱȱ¢ȱǰȱȱȱ controls on them. Guestroom keys are recoded every time new guests check in or ȱȱȱǯȱȱ¢ȱȱȱȱȱȱȱȱĞǰȱȱ still need to be controlled. For example, an E-Key should be issued only upon the permission of the hotel general manager or security manager. When an E-Key is
92 ȱř issued, an entry should be made in the security log, stating who was issued the key, the time and date it was issued, who approved the issue, what lock it was issued for, and the reason for the key’s issuance. E-Keys must have a time limit on them ȱ ǯȱȱȱ¢ȱȱĚȱȱ¢ȱȱȱȱȱ¢ȱȱȱǰȱ with the original keys being returned to a security checkpoint at the end of every Ğǯȱ ȱȱ¢ȱȱȱȱǰȱȱȱȱȱ¢ȱȱȱ actions taken to invalidate that key. Guestroom Security We have been discussing guestroom key control, but guestroom security extends beyond the guestroom’s door locks. Another security device found on guestroom ȱȱȱǯȱȱ¢ȱȱȱę¢ȱȱȱ ȱȱ ȱȱ ȱ ȱĞȱȱȱ ȱȱǯȱȱȱ¢ȱȱ- veniently in the door for guests of average height. In rooms that are specially equipped to comply with the Americans with Disabilities Act, a second peephole is provided for guests in wheelchairs. Hotel hallways should be brightly lit, to allow guests to see all areas of the hall. Telephones are also an important part of guestroom security, as they allow ȱȱȱȱȱ ȱ¢ǯȱȱǰȱȱȱȃȱŖȱȱ- gencies,” should be on or near every guestroom telephone. Control of Persons on Premises ȱȱȱȱȱȱȱȱȱȱĜȱȱȱȱ- agers and security personnel. By their nature and history, hotels hold themselves open for public accommodation. Unfortunately, however, there are times and circumstances when not everyone is welcome. Hotels are private property, so people ȱȱ¡ȱȱ¢ȱȱȱęȱȱȱȱȱȱǯȱ ȱȱȱ ȱȱ ȱ ȱ ȱȱěȱȱ¢ȱȱȱȱǯȱ Training should include how to identify people who may not belong at the hotel, ȱ ȱȱȱȱȱȱȱęǯȱȱ¢ȱǰȱȱ¢ȱ ȱȱȱěǰȱȱ¢ȱȱ¢ȱ ȱ¢ȱȱȱȱȱȱ all times. Surveillance systems use video cameras, motion detectors, and other security devices to monitor hotel areas. Cameras are usually connected to moni- ȱȱȱ¢ȱĜǰȱȱǰȱȱǰȱȱȱȱ ȱ there is generally someone to watch them. Motion detectors and other forms of ȱ¢ȱȱȱěȱǯȱȱȱȱȱȱȱȱ¢ȱ are private property. This public warning may be required to take advantage of local trespass laws. Perimeter and Grounds Control Perimeter and grounds control can take many forms. Surveillance systems are very useful in providing security monitoring of such outdoor areas as parking lots, ǰȱ ȱǰȱȱȱǯȱȱȱȱȱ ȬDzȱȱȱ employees feel safer in well-lighted parking lots or structures. Parking facilities ¢ȱȱȱȱȱȱĜDzȱȱȱȱȱěȱȱ¡ȱ
¢ȱȱȱȱ ¢ 93 ǯȱ ȱ ȱ Ğȱ ǰȱ ¢ȱȱ Ȭȱ ǯȱ ȱ ¡ǰȱ most states require swimming pools to be fenced and gated if they are outside and not physically surrounded by the hotel structure. Fences may also be used to separate the hotel from its neighbors. The hotel’s management should train valet park- ȱĴǰȱȱěȱǰȱȱěȱǰȱȱȱ to watch for unauthorized people on the grounds. Protection of Assets The physical and intellectual assets of the hotel must be protected as well. Important devices for securing the assets of guests are hotel safe deposit boxes and, for ȱ ȱ ȱ ěȱ ǰȱȬȱ ǯȱȱ ȱ ȱ ȱ ȱ ȱ some sort of safe deposit box facility for guests at no charge. Guests must be notięȱȱȱ¢ȱȱȱ¡ǰȱ¢ȱȱȱȱǯȱȱ states also require that notices be posted in public areas, such as the front desk. The safe deposit boxes are usually at or near the front desk. Upscale and worldclass hotels usually have a separate room for safe deposit boxes, where guests can have privacy while using the boxes. These rooms cannot be entered from the lobby without someone from the hotel opening the door. In other properties, the safe deposit boxes are at the front desk, and guests may have to open and close them in the lobby. Guests must sign a signature card every time they use the safe deposit box, and the hotel employee must verify the signature before allowing access to the safe. In addition, the safe deposit box keys must also be secured to prevent them from being lost or stolen. Hotels usually have only one key per safe deposit box. If the key is lost or stolen, the box lock must be removed and a new lock installed. If a hotel has more than one key per safe deposit box, a guest claiming a loss from the contents of the box may have legal grounds for claiming that hotel employees could open the box with the other key. ȱ ȱ ȱ ȱȱ ǰȱ ȱ ¢ȱ ěȱ ȱ ȱ guests. However, some states do not have clear rulings at this time as to whether in-room safes can take the place of guest safe deposit boxes. Some in-room safes have unique keys, some are digital and use codes entered by the guest, and some work with guest credit cards. Another important security device is a robbery alarm at the front desk. Usually this is a silent alarm that sends a signal to the local police department. The activation device is generally placed out of sight, such as near an employee’s foot where it can’t be easily seen from the guest side of a counter. This device may work with the hotel’s surveillance system, so that when it is activated, a camera records what is going on at the alarm location. There may be more than one safe for hotel use. For example, a hotel can have ȱȱǰȱ ȱȱȱȱȱȱǯȱȱȱĞ ȱ ȱȱǰȱȱȱȱȱ ȱęȱ ȱĞ ȱȱȱ ȱ hotel safe, or in another secure area, such as the computer room. There may also be a cashier drop safe. A cashier drop safe is a special safe that allows items to be ȱȱDzȱȱ¢ȱ ¢ȱȱȱȱȱȱȱȱȱȱ ȱȱ- bination. Drop safes are used to temporarily store the cash received in the day’s transactions from the front desk and the various hotel revenue outlets. When a
94 ȱř deposit is made into the safe, the amount, date, time, revenue outlet, and name of the person dropping the amount is entered in a log near the safe. Many hotels require someone other than the person responsible for the drop to witness the deposit and co-sign that a drop was actually made. The person opening the safe ȱȱȱȱȱȱȱȱȱȱȱȱȱȱęȱȱȱ assuring that the contents are accurate. Both general hotel safes and drop safes are ęȬȱȱȱȱȱȱęǯ An important procedure used to protect the contents of a cashier bank is the bank audit. Bank audits may be done on a scheduled basis or without notice. Most hotels conduct audits without notice so that employees do not have time to make corrections to their banks. The purpose of the bank audit is to make sure that the contents of the bank are correct and money is not missing. This prevents hotel employees from making “loans” to themselves. Hotels must also protect the assets of employees. Employee changing and locker rooms should be secure and safe. Many hotels provide locks for employees. When uniformed employees arrive for work, they each receive a uniform and a lock for the locker they store their personal valuables in. When they leave the hotel Ğȱ ȱĞǰȱ ȱȱȱ¢ȱ ȱǯȱȱȱȱȱȱ Ě¡ȱ¢ǰȱȱȱȱȱȱȱȱ¢ȱȱȱ ȱǯȱȱȱȱȱȱȱȱȱȱȱĞȱȱȱęǰȱȱȱȱ ȱȱȱȱȱȱ¢ȂȱĞǯ Most departments have secure storage areas for women’s purses and other employee personal items that may be needed during the day. Good front desk designs allow for lockable drawers at the front desk or in a nearby area. Each ¢ȱȱȱ ȱȱȱȱȱȱȱĞǯ Emergency Procedures Sooner or later, every hotel will have some sort of emergency situation to deal ǯȱ ǰȱǰȱȱȱǰȱęǰȱȱȱ¢ȱȱ ȱȱ¡¢ȱȱȱ ȱȱȱ ȱȱěǯȱȱȱȱ have well-documented procedures for all emergencies that can be anticipated. These procedures should be included in the initial and ongoing employee training ǯȱȱ¡ǰȱ¢ȱȱȱȱȱęȱȱȱȱȱȱ ȱ¢ȱȱȱȱȱȱęȱ¡ǯȱȱȱȱ- ¢ȱȱȱ ȱ¢ȱȱȱ¢ȱȱǻǼǯȱȱȱ employees must know what to do during a robbery or when a guest calls asking ȱȱǯȱȱěȱȱ ȱȱȱȱȱȱ ȱĚȬȱȱȱȱ ȱ ȱȱȱ ȱȱȱǯ ȱȱęȱȱǰȱȱ¢ȱȱ ȱ ȱȱǯȱȱ¢- ees may be assigned to directing guests out of the building, while others may be ȱȱȱȱęȱȱȱȱęȂȱǯ One of the most important emergency procedures is to assist guests with disabilities during an emergency. Most hotel computer systems have special codes in them for identifying where guests with disabilities have been roomed. If a hotel is being evacuated, employees must go to these guestrooms to assist the disabled ǯȱȱ¡ǰȱȱȱȱȱȱęǰȱȱ ȱȱ ǰȱȱȱ ȱ