Paper: 07, Front Office Operations & Management Module: 33 ...
FRONT OFFICE OPERATIONS MANAGEMENT
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Transcript of FRONT OFFICE OPERATIONS MANAGEMENT
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FRONT OFFICE OPERATIONS MANAGEMENT
The Hotel Guest
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Typical Lodging Guests
28.8% are transient business travelers
25.3% are attending a conference/group meeting
24.6% are on vacation
21.8%are traveling for other reasons (for example, personal, family, or special event)
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Emphasis on safety, cleanliness & service- Guests also consider “intangible” aspects of the purchase decision
Lodging Industry Characteristics
Inseparability of manufacture & sales- A room exists & is sold at the same site
Perishability- If a room is not rented on a specific date, the revenue is lost foreverRepetitiveness- Some operating procedures are routines
Labor Intensive- Much of a hotel’s daily work involves employees providing services
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Various amenities (e.g., business centers) increase costs for hotel owners yet sometimes appeal to only a small segment of the hotel’s market.
Results in a more competitive selling environment for hoteliers (e.g., online room booking)
The more the number of brands increase, the harder consumers find it to differentiate between them.
Efforts to focus on a highly defined, smaller group of travelers.
Market segmentation is increasing
Current Issues confronting Hoteliers: Marketing Issues
Brands overlap
Increased sophistication of consumers
Increased number of amenities
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Contents
Room Sales Differentiation Group Rooms Transient Rooms Transient Reservation Avenue
Market Segmentation Group Market Segments Transient Market Segments
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Room Sales Differentiation The group catering contribution plays an
important role in food and beverage revenue and also impacts the sleeping room portion of the hotel success triangle (see text)
Occupancy is the measurement of room sales verses available rooms
The rooms that are sold fall into two categories: group and transient
The combination of these two groups makes up the hotel’s occupancy
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Group Rooms Group rooms originate from reservations that
are made to bring more than one guest to the hotel
Group rooms involve a series of bookings that correspond to specific functions
Most hotels consider bookings of 10 or more rooms per night a group booking
The purpose of the group room sales effort is to seek group bookings and bring them to the hotel
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Group Rooms (Cont…) Groups sales is counted upon to fill a certain
number of hotel rooms per night The group base is the measurement of how
many group rooms are “on the books” on a given night
Because groups can be booked far in advance, they are sought after
It’s important to note that group rooms are often offered at lower rates
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Transient Rooms Transient rooms are rooms that originate from
individual reservations Transient rooms are non-group rooms These differ from group rooms as there is no
way to predict when these guests will arrive Predicting the level of individual reservations
on any given night is difficult Looking at historical data helps in determining
the most likely level
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Transient Rooms (Cont…) The individual booking cycle is the time
between when the individual reservation is made and when it is due to arrive
Whereas the group base can be reserved far in advance, the individual booking cycle can be more short term
Walk-in reservations are made by guests arriving unannounced at a hotel and cannot be measured as part of the booking cycle as they are hard to predict
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Group v Transient Rooms The group and transient makeup of a hotel depends on many
factors including location type, service level, target market, size and other factors
A sample relationship at a fictitious downtown hotel is as follows:
200
300
400
500
100
Nu
mb
er
of
Hote
l S
leep
ing
Room
s
M T W T F S S
Transient Rooms
Group Rooms
Figure 3-1
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Transient Reservation Avenues Any hotel that wants to minimise the
opportunity cost associated with transient sleeping room sales will incorporate as many reservation avenues as possible
A reservation avenue is defined as the means by which a guest is able to make a reservation at a hotel
The greater the access guests have to specific hotels, the more likely they are to book
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Transient Reservation Avenues (Cont…)
The most common reservation avenues are: GDS system (Global Distribution System) CRS (Central Reservation System) Direct travel agent or travel
management company contact Direct guest contract
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GDS System The Global Distribution System (GDS) is a
network of travel and hospitality entities that communicate via an integrated computer system
The computer systems were developed by airlines to link their availability to travel agents
Through fee agreements hotels and car rental companies now also link their individual products to the GDS systems
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CRS A central reservation systems provides the
customer with an avenue to locate a hotel of choice in a certain location
Using an easy to find toll free number such as 1800-hotels-1 or Web site such as www.hyatt.com the CRS can generate demand for a hotel through brand loyalty
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Travel Agent or Travel Management Companies
Within the transient reservation process, travel agents and travel management companies act as intermediaries, making money in one of two ways:
1. They may charge a flat management fee
2. They are paid a commission
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Direct Guest Contact
The guests themselves can make a reservation via phone, fax or internet
Most hotels offer a direct booking capability on their websites
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Transient Reservation Avenues
Transient Guest
Hotel
Travel Mgmt Co or Travel Agent
CRS
GDSV
ia P
hon
e o
r Fax
Via
In
tern
et
Figure 3-2
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Market Segmentation A market segment is a portion or segment of
the actual or potential business mix at any given hotel
Grouping this business pool into segments with similar characteristics is called market segmentation
The main group market segments are corporate, association and SMERF
The main transient market segments are business and pleasure
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Group Market Segments The corporate market segment consists of for-
profit companies and frequently pays higher rates than other segments to ensure quality programs
The association market segment consists of groups of individuals or companies that share common purposes or goals, and is more cost-conscious than the corporate segment
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Group Market Segments (Cont.) The SMERF segment consists of groups that have
characteristics that set them apart from the previous two categories, and has five primary components
Primary Component Market
Social Weddings, Proms, Fund Raisers, etc
Military Reunions, Award Ceremonies
Educational Continuing Education, Classes, Training
Religious Revivals, Enlightenment Gatherings
Fraternal Fraternities, Sororities
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Transient Segments A business transient guest is one who stays
at a hotel because of its location in relation to another organisation
The business guest makes his/her hotel choice based on many factors, but one of the most common is brand loyalty
Many hotels offer various incentives for guest loyalty
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Transient Segments (Cont…)
The pleasure transient guest stays at hotel because of its proximity to an attraction and/or because of a signature attraction at the hotel itself
A signature attraction is an event, activity or facility identified with a specific hotel
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Guest Room Demand The following figure illustrates how both group
and transient market segments come together to make up guest room demand
Hotel
Guest
Room
Demand
Transient
Pleasure
Business
Group
SMERF
Association
Corporate
Figure 3-4