Accommodation Operation and Management AOAM 311 Week 7-9 PDF

ACCOMMODATION OPERATION AND MANAGEMENT AOAM 311 WEEK 7-9 FRONT OFFICE OPERATIONS LEARNING OBJECTIVES: Illustrate how the Front Office Department is organized and how positions are structured. Understand the different stages of the guest cycle (reservation, registration, and check-out)....

ACCOMMODATION OPERATION AND MANAGEMENT AOAM 311 WEEK 7-9 FRONT OFFICE OPERATIONS LEARNING OBJECTIVES: Illustrate how the Front Office Department is organized and how positions are structured. Understand the different stages of the guest cycle (reservation, registration, and check-out). Execute the process of reservation and registration through role playing. Articulate sales indicators to measure a hotel’s sales performance. Outline the importance of front office accounting for guests and the hotel. Understand the nuances of a hotel’s night audit process.  FRONT OFFICE DEPARTMENT The front office is the nerve center or hub of a hotel. It is the department that makes the first and last impression on the guests, and the place that guests approach for information and service throughout their stays. The three main functions of the front office are as follows: 1. Selling rooms; 2. Maintaining balanced guest accounts; and 3. Providing services and information to guests. ORGANIZATION OF THE FRONT OFFICE DEPARTMENT DUTIES OF KEY POSITIONS Front Office Manager The front office manager performs the following duties: Monitoring reservation status Looking over market mix and preparing occupancy forecasts Determining rate structures and supervising policies Reviewing occupancy and average room rate Reviewing arrivals and departures daily Making staffing adjustments needed for arrivals and departures Reviewing, checking, and meeting VIPs and entertaining them DUTIES OF KEY POSITIONS The Assistant Manager The main duties of the assistant manager include: Responsibility for developing and executing plans developed by the owner, general manager and other members of the management team. Checking on operations, providing feedback and offering assistance when needed. Completing, reviewing and summarizing statistical reports and sharing them with the general manager. Assuming responsibilities for the daily operations and management of the hotel. DUTIES OF KEY POSITIONS The Guest Relations Officer Duties for the guest relations officer can include: Greeting all arriving individual guests, especially those under commercial accounts Provide local information for guests Promoting in-house functions, facilities and services Assisting front desk staff when they are busy and assisting guest to check out DUTIES OF KEY POSITIONS The telephone department Duties for the guest relations officer can include: Provide general information regarding the hotel or local attractions to guests Place international calls, morning calls and wake-up calls as required by guests Administer the paging system of the hotel, which provides a communication service between certain hotel staff and management staff Administer the in-room movie system of the hotel Stay familiar with the names of Very Important Persons (VIPs) in the hotel Protect guest privacy by not disclosing room number or guest information Communicate with management, engineering, security and guests Perform the role of communications center in the event of emergency DUTIES OF KEY POSITIONS Reservation Reservations manager Reservations supervisor Reservation clerk Duties include: Handle reservation requests and prepare reservation confirmation slips Request guests to confirm or guarantee their room reservations Keep records of each reservation and the number of room reservations taken Provide the front desk with details of reservations due to arrive the next day Prepare VIP lists Update guest history records DUTIES OF KEY POSITIONS Front Desk (Reception)  A. Front Desk Manager Duties of the Front Desk Manager may include: Overseeing the smooth running of the front desk Compiling staff duty roster Greeting important guests, VIPs Assigning rooms to guests Dealing with group arrivals Handling guest requests and complaints DUTIES OF KEY POSITIONS Front Desk (Reception)  B. Front Desk Clerk Duties of the front desk clerk include: Greeting the guest Providing information and promoting hotel facilities and services to guests Checking in the guest Maintaining guest account Checking out the guest Administering the safe deposit system of the hotel Providing foreign currency exchange service to guest DUTIES OF KEY POSITIONS Concierge  A. Chief Concierge The following guest services are provided by the concierge: Providing information/advice on hotel products/services Confirming airline passages and purchasing airline tickets Reserving tables at restaurants and tickets to shows Arranging the hire of the hotel limousine or other transportation services Handling guest requests and inquiries DUTIES OF KEY POSITIONS Concierge  B. Airport Representative Duties include: Greeting hotel guests at the airport Arranging hotel transportation for guests from the airport to the hotel Answering inquiries from guests Taking hotel room bookings Assisting departing guests at the airport Liaising with airlines for special arrangements for guests DUTIES OF KEY POSITIONS Concierge  C. Hotel Drivers Duties include: Taking guests to and from the airport Upon request, acting as a personal driver for a guest  D. Parking Attendant Duties include: Parking cars for guests Assisting the door attendant in ensuring that traffic flow at the hotel main entrance is free flowing DUTIES OF KEY POSITIONS Concierge  E. Door Attendant Door duties include: Greeting all new arrivals Providing door service to guests Summoning baggage porter to assist arriving guests Calling taxis and providing the hotel address card for guests Paying taxi fare on behalf of the hotel guests who do not have local currencies Directing traffic and parking of vehicles at the main entrance DUTIES OF KEY POSITIONS Concierge  F. Baggage Supervisor (Bell Captain) Duties include: Answering telephone calls from guests regarding baggage pick up from rooms Assigning baggage porters to handle the guest baggage Receiving guest deliveries Handling guest requests for postal services DUTIES OF KEY POSITIONS Concierge  G. Baggage Porter (Bell Attendant) Duties include: Handling guest baggage Escorting guests from the front desk to their rooms Running errands for the executive office and hotel guests Delivering mail/messages to guest rooms Handling storage of guest baggage/belongings for late check-out DUTIES OF KEY POSITIONS Concierge  H. The Executive Floor Manager Duties include: Express check-in and check-out services on the executive floor Complimentary breakfast buffet, afternoon tea, and all-day refreshments in the executive floor’s lounge Complimentary in-room local calls and high-speed Internet access Garment ironing service Complimentary use of the hotel’s fitness center and boardroom Personalized business and concierge services GUEST CYCLE IN HOTEL Guest cycle refers to the distinct stages of guest interaction between the hotel and guests. The four different phases of the guest cycle are: Pre-arrival - The stage where the guest makes a reservation. Arrival - The point when the guest arrives at the hotel. Occupancy - The period during which the guest stays in the hotel. Departure - The point when the guest checks out and leaves the hotel. GUEST CYCLE IN HOTEL PRE-ARRIVAL It is the stage when the customer is planning to avail an accommodation in the hotel. In this first stage, the customer or the prospective guest enquires about the availability of the desired type of accommodation and its amenities via telephonic call or an e-mail. The customer also tries to find out more information about the hotel by visiting its website. At the hotel end, the front office accounting system captures the guest’s information such as name, age, contact numbers, probable duration of stay for room reservation and so on.  GUEST CYCLE IN HOTEL ARRIVAL The front office reception staff receives the guest in the reception. The porters bring in the guest luggage. For the guest with confirmed reservation, the front office clerk hands over a Guest Registration Card (GRC) to the guest and requests the guest to fill in personal information regarding the stay in the hotel. The clerk then registers the guest in the database thereby creating a guest record and a guest account along with it. Later, the clerk hands over a welcome kit and keys of the accommodation. After the procedure of registration, the guest can start occupying the accommodation. GUEST CYCLE IN HOTEL OCCUPANCY During occupancy, a front office accounting system is responsible for tracking guest charges against his/her purchases from the hotel restaurants, room service, bar, or any outgoing telephone calls made via the hotel’s communication systems. The front office staff is responsible to manage and issue the right keys of the accommodations to the right guests. On guests’ request, the staff also makes arrangement for transportation, babysitting, or local touring while the guest is staying in the hotel. GUEST CYCLE IN HOTEL DEPARTURE During guest departure, the front office accounting system ensures payment for goods and services provided. If a guest’s bill is not completely paid, the balance is transferred from guest to non- guest records. When this occurs, collection becomes the responsibility of the back office accounting division. At the time of guest departure, the front office staff thanks the guest for giving an opportunity to serve and arrange for handling luggage. In addition, if the guest requires airport or other drop service, the front office bell desk fulfils it. FRONT OFFICE: RESERVATION Reservation of the hotel accommodation is one of the important responsibilities of the front office department. A potential guest contacts a hotel for availability of the desired type of accommodation and any allied services that the hotel offers. The front office department needs to react to the enquiry of the guests. For a guest, reservation increases the chances of a better deal for assured accommodation on arrival. For a hotel, reservation can enable a better management of guest experience during usual as well as peak seasons. Reservation procedure varies depending on the size and brand of the hotel and the reservation system employed. FRONT OFFICE: RESERVATION Type Of Reservation: Guaranteed Reservations - For guaranteed reservations, the hotel will hold the room for the guest overnight or during the guaranteed period as the guest has prepaid for the room but no refund will be given if the guest does not show up. In order to guarantee a reservation, guests might opt for one of the following methods: a. Prepayment Guaranteed Reservation b. Credit Card Guaranteed c. Travel Agent Guaranteed Reservation d. Voucher or Miscellaneous Charge Order [MCO] e. Corporate Guaranteed Reservation FRONT OFFICE: RESERVATION Type Of Reservation: Non-Guaranteed Reservations - A non- guaranteed reservation means that the hotel will hold the room until a stated cancellation time, normally up to 6 p.m. on the arrival date and then release the room for sale if the guest does not arrive. FRONT OFFICE: RESERVATION Reservations may originate from different sources, including: 1. Travel and Tour Organization 8. UN organization and Banks 2. Airlines 9. Free Individual travelers (FIT) 3. Companies and Commercial 10. Chain Hotel and Referable from Business role uses other hotels 4. NGOs and INGOs 11. Global Distribution System 5. Embassy and consulate offices (GDS) 6. Universities and other 12. Central Reservation System Educational Institutions (CRS) 7. Ministries and Government 13. Meeting planners offices 14. Walk-in. FRONT OFFICE: RESERVATION Mode of Reservation - generally refers to the ways of receiving the accommodation booking through various communication system. 1. Fax/ Facsimile - The word facsimile derived from Latin facsimile, “Make similar” i.e. “Make a copy.” is a tele- communications technology used to transfer copies of documents especially using affordable devise operating over the telephone network. 2. E-Mail - It is most commonly abbreviated email is a method of exchange digital messages across the internet that is very essential to operate input/ output operation for reservation of rooms. FRONT OFFICE: RESERVATION Mode of Reservation - generally refers to the ways of receiving the accommodation booking through various communication system. 3. Telephone - The telephone is a telecommunication device that transits speech by means of electric signals. It is one of the most common mode of reservation which is very easy to handle. 4. Internet - Hotel industries offer online reservation services through their internet sites. The variety of potential guests accessing internet sites to place reservation has prompted travel and hotel to simple reservation procedure. FRONT OFFICE: RESERVATION Reservation Process and Procedure Within the Front Office, the reservations section is responsible for taking guest enquiries and turning them into reservations. A person working in this section needs a sound knowledge of the room types, room rates and packages the hotel has available. The reservations staff member will constantly be referring to availability for every reservation enquiry they take. FRONT OFFICE: RESERVATION Reservation Process and Procedure 1. Take reservation and enter the appropriate information: Determine the guest's arrival and departure dates Confirm room type and room rate Obtain the guest name and related details Identify how many guests will be staying Determine how guest will pay for room Describe related house policies (cancellation policy, check-in, check-out times, late arrivals etc.) Process payment Send reservation confirmation. Pick up details. Any other Details or special remarks. FRONT OFFICE: RESERVATION Reservation Process and Procedure 2. Determining the room availability: The second most important step in reservation is determining the room availability. In this process one can check the demand of guest encoded during the first step. The availability can be checked by referring to forecast chart, conventional chart or density chart. In fully automated system you can begin checking the same availability by computerized system or software. FRONT OFFICE: RESERVATION Reservation Process and Procedure Guest name Length of stay 3. Reservation Acceptance: Room type and rate A reservation can either be accepted or denied or turned away based on the availability of rooms in the Method of day(s) in question. An acceptance would lead the payment receptionist into the confirmation phase, while a denial or turn away could cause a series of other Guest contact options to be exercised like for example recording information and the turn away reason etc. When a reservation special requests. request is accepted, the details of the room reservation will be recorded on a reservation form and in the computer. Reservation information details include the following: FRONT OFFICE: RESERVATION Reservation Process and Procedure The arrival and departure dates 4. Reservation Confirmation The room type booked The rate All reservations require confirmation to the person making the reservation. Confirmation is usually Any special requests of the made using the same method as the reservation. guest This means that if the reservation is made by phone Your property's guaranteed try if possible to confirm the reservation to the guest check-in time, i.e. The time while the guest is on the line. Whatever method is the room should be ready for used, reservations should be confirmed within 24 the guest hours of the booking request. Your property's check-in and check-out time When confirming a reservation, it is important to reiterate the following: FRONT OFFICE: RESERVATION Reservation Process and Procedure Locate original reservation Verify original information with the guest Identify required changes adding Change or Cancel suggestions if necessary Check availability and/or make reservation cancellation Confirm changes or offer alternatives Identify any charges for cancellation according to house policy and inform the caller (if applicable) Thank caller. FRONT OFFICE: RESERVATION Reservation Record Each reservation department shall prepare a reservation record, which depicts the various personal and financial data of guests, for each reservation transaction. The aim is to identify guests and their occupancy needs before guest’s arrival. Moreover, the hotel can personalize or customize guest services and better schedule staff accordingly. FRONT OFFICE: RESERVATION In order to create a reservation record, the following details are needed: a. Guest name (and group name, if applicable) b. Guest’s home or billing address c. Guest’s telephone number, including area code d. Name, address, and telephone number of guest’s company, if appropriate e. Name and other pertinent information about the person making the reservation, if not the guest f FRONT OFFICE: RESERVATION In order to create a reservation record, the following details are needed: f. Number of people in the group, and perhaps ages of children, if any. g. Arrival date and time h. Number of nights required or expected departure date, i. Reservation type [Guaranteed versus Non-guaranteed] j. Special requirements [i.e. infant, disabled guest, or no smoking accommodation] k. Additional information, if needed [i.e. late arrival, method of transportation, flight number, room preferences, etc.] FRONT OFFICE: RESERVATION Reservation Record At the reservation process, reservation agents shall keep in mind that a rate quoted and confirmed must be honored. Moreover, reservation clerks should be aware of the following: a. Supplementary charges for extra services or amenities b. Minimum stay requirements, if any, for dates requested c. Special promotions in effect for dates requested, if any d. Applicable currency exchange rates, if quoting rates to an international tourist e. Applicable room tax percentages f. Applicable service charges or gratuities FRONT OFFICE: RESERVATION CRS – Central Reservations System CRS stands for: Central Reservations System. It is a computerized reservation software used to maintain the hotel information, room inventory and rates, to manage the reservation and process. A CRS provides hotel room rates and availability for many different distribution channels such as the GDS, IBE, OTA, 3rd party websites etc. Essentially speaking it is an application with various functionalities to manage a hotel’s distribution / bookings. It can also be called a database distribution system, since the CRS of a hotel transfers data to the distribution channels. This way hotels are able to reach travelers and travel managers on a global scale. FRONT OFFICE: RESERVATION CRS – Central Reservations System Bookings are made via multiple sources (OTA, travel agencies, the IBE on the hotel’s own website), and all reservations sources will appear in the system via interfaces. Major hotel brands view the CRS as their core technology - providing the core hotel distribution and channel management infrastructure to succeed in a hyper-competitive industry. One of the top reasons to use a CRS is to gain better exposure on distribution channels. A CRS links your rates and availability to a multitude of online and offline channels. These channels include online travel agencies like Booking.com and Expedia, brick-and- mortar travel agencies, independent travel agents, the booking engine on your own website, your reservations call center, metasearch sites like Kayak and Trivago, and global distribution systems (GDS). With a CRS, you can easily sell rooms on many different channels, which increases your exposure to potential bookers. FRONT OFFICE: RESERVATION CRS – Central Reservations System Its main functions are: Administration of room allocations (of single properties and hotel chains) as well as control and monitoring of rates and availability in the distribution channels. A CRS is beneficial for a hotel because it allows reservations to be checked and booked with a simple search. It also allows revenue managers or front office managers to easy adjust the prices corresponding to demand for multiple distribution channels and platforms at the same time. It is kind of a mission control software for hotel distribution. FRONT OFFICE: RESERVATION Information commonly stored in a CRS: Room Rates Room Allotments Room availability Reservation information Room Types Generic hotel information (address, phone number, fax number) Geocode information Nearby IATA cities and airports Room and hotel features On-site or nearby restaurants, bars, attractions, and recreational activities Hotel cancellation, deposit, and minimum stay information FRONT OFFICE: RESERVATION Property Management System PMS stands for: Property Management System. It is a local hotel administration system used for reservation, availability and occupancy management, check-in/out, images, guest profiles, report generation etc. This application is used in-house (in an individual hotel) to control the onsite property activities. The PMS can be connected with other applications such as the hotel point-of-sale (POS) or the CRS. The interface to a CRS is an additional option in order to transfer availability, reservations and guest profile information. FRONT OFFICE: RESERVATION Property Management System Additionally, various interfaces are available to create further links to internal and external systems such as room key systems, restaurant and banquet cash registers, minibar, telephone and call centers, revenue management etc. PMS is also known as Hotel Operating System (Hotel OS). FRONT OFFICE: GUEST REGSITRATION Most hotels allow their guests to check-in at 2 p.m. or after. The registration procedures performed by receptionists should be efficient and accurate. These contribute to a positive first impression to guests upon their arrival. FRONT OFFICE: GUEST REGSITRATION Greet the Guest Receptionists should always be attentive to the presence of guests at the front door and lobby areas. They should give warm greetings to the guests when they approach the front desk. FRONT OFFICE: GUEST REGSITRATION Verify the Guest’s Identity Ask if the guest would like to check-in. Verify the guest’s identity by checking his/her passport, booking voucher and confirmation number FRONT OFFICE: GUEST REGSITRATION Present the Registration Form to the Guest Confirm booking information printed in the registration form with the guest. For example, room type, room rate, length of stay and special requests if any. Ask the guest to complete and sign the registration form if he/she agrees with the terms of accommodation arrangement. FRONT OFFICE: GUEST REGSITRATION Confirm the Method of Payment If a credit card is used, check the guest’s name, the card’s validity and its date of expiry. For guests who prefer paying cash, make sure they have paid in advance with cash deposit. Guests should also be reminded that they will not be allowed to post any charges to their guest accounts if no credit card is provided at the time of checking-in. Procedures of handling other types of payment, e.g. personal checks or direct billings should also be handled with extra care. FRONT OFFICE: GUEST REGSITRATION Check and Update the Guest’s Information Check if any mail, message or article is received before the guest’s arrival. Select and assign a suitable room to the guest according to his/her booking information. FRONT OFFICE: GUEST REGSITRATION Issue Room Key and Give Further Information While issuing the room key and giving directions to the guest, staff should also take the chance to provide more information on the hotel. For example, the breakfast arrangements; the operation hours of the hotel’s outlets and facilities and; how to contact the hotel’s staff for assistance during the stay, etc. FRONT OFFICE: GUEST REGSITRATION Escort Guest to the Room Ask if the guest needs assistance from the baggage attendant who can take the guest’s baggage and escort the guest to their room. FRONT OFFICE: GUEST REGISTRATION Variations of Registration The registration procedures of group guests (e.g. tours and event attendees) are different from the general procedures of checking-in an individual guest. In order to speed up the service process and prevent guests from waiting too long in the lobby, the following procedures are usually performed by staff at the hotel reception desk. Pre-registration - Some preparation works can be performed by receptionists before group guests’ arrivals, including the confirmation of room numbers and number of rooms available for groups. Key cards are always prepared by receptionists in advance according to the room lists provided by travel agents or event organizers. FRONT OFFICE: GUEST REGSITRATION Variations of Registration Group Registration - Some hotels have group check-in counters which specifically serve group guests. Tour escorts or event organizers check-in at the group check-in counter without the need of checking-in each guest individually. Some hotels would also set up a tour assembly point for large groups by using meeting rooms if necessary. Such a practice can control the traffic of hotel lobby and enhance the comfort of guests upon their arrivals. During the process of registration, the front desk clerk will request to see the guest’s identity card or passport, for verification purposes. When all formalities are completed, the front desk clerk will issue the room key to the guest. The baggage porter will then take the guest’s baggage and escort the guest to the guest room. It is also common practice for hotel staff to obtain a deposit or credit card before checking a guest into the hotel. FRONT OFFICE: GUEST REGSITRATION Note: Guests who arrive at the hotel without having made a reservation are known as walk-ins. It is a common practice for hotel staff to obtain from the guest a substantial deposit or credit card imprint before checking the guest into the hotel. FRONT OFFICE: GUEST CHECK-OUT Check-out Procedures The standard hotel check-out time is usually set at 12 p.m. or before, although this can vary by hotel and location. The check-out procedures are as important as check-in since guests would expect they can leave with no troubles on their bills. Important issues that the reception staff should put into focus are payment collection, customer assistance and to create a positive parting impression to guests. FRONT OFFICE: GUEST CHECK-OUT The standard check-out procedures that should be followed by reception staff at the front desk, include the following: FRONT OFFICE: GUEST REGSITRATION Check-out Procedures Greet the Guest - Same as the check-in procedure, through greeting, reception staff can take the chance to ask the guest for his/her comments on their stay. Check Guest Details - It is important to check guest’s details, e.g. the guest’s name and room number. Double check with the guest so to make sure satisfactory services were provided to the guest during their stay. Also ask the guest to return the room key. Check for Late Check-out Charges - Normally, hotels would request their guests to check-out before 12pm. Receptionists should follow the hotel’s policy for handling the cases of late check-out. Some hotels would charge 50% of the daily room rate for those who check-out before 6pm and a full rate is charged after 6pm. FRONT OFFICE: GUEST REGSITRATION Check-out Procedures Double-Check the Hotel Charges - Produce guest folios (guest bills) for guest inspection and master folios (master bills) for tour escort’s inspection. The receptionist should print and present the bill to the guest for his/her checking before settlement. It is the responsibility of the receptionist to explain the charges to the guest and if he/she has any queries, make corrections if necessary. Settle the Guest Account - Re-confirm the method of payment. Some guests, especially business travelers and tours would like to split their bill into two different bills: FRONT OFFICE: GUEST REGSITRATION Check-out Procedures Master folios (master bills), include room and breakfast charges only, which should be paid by enterprises to cover the necessary expenses of their travelling staff or; by travel agents which have already received the payments from tourists included in packaged prices beforehand. Incidental folios contain personal expenses, such as telephone, spa, and in-room movies, would be put into the incidental bills as guests’ own responsibilities. FRONT OFFICE: GUEST REGSITRATION Check-out Procedures Offer Assistance - Ask if the guest needs any assistance with bell service, shuttle bus or arrangement of other transportation. Some may request the front desk to keep their baggage for a certain period before their departure. Staff should also take the chance to help guests in making future reservations upon request. Update Room and Guest History Record - After checking out the guest, make sure to update the room status ((i.e. from OD to VD) to facilitate room cleaning and make the room available for sale as efficiently as possible. Through the help of new information technology, guest-history profiles can be automatically created and updated upon check-out by the property management system (PMS). FRONT OFFICE: GUEST REGSITRATION Handling Overbooking Overbooking occurs when a hotel takes more reservations than the number of rooms available. It is a common practice of hotels which contributes to a higher chance of full house while reducing the loss of no-shows and last minute cancellations. Major problems of overbooking should be noted, which include the loss of reputation, increase in guest dissatisfaction and complaints, etc. If no rooms are available, prioritize expected arrivals for room assignment according to hotel policy, e.g. put VIPs, guests with guaranteed reservation and frequent guests at top priorities. Contact and reserve rooms in sister hotels or hotels nearby before guests’ arrivals. For those who cannot get a room upon arrival, the hotel will have no choice but ‘walking the guests’. It means that the hotel has to reject guests even they have made reservations. By turning a guest away who is supposed to get his/her room reserved, the hotel has breached the contract which can lead to legal actions of guests. Therefore, ‘walking the guests’ should only be handled by experienced receptionists or front desk managers. FRONT OFFICE: GUEST REGSITRATION Handling Overbooking The proper procedures include the followings: a. Apologize to the Guest b. Provide Alternatives c. Provide Baggage Assistance and Transportation d. Follow-up Services ROOM SALES AND SALES INDICATORS Revenue from Room Sales Room sales normally contribute to the majority of a hotel’s revenue, followed by sales in the food & beverage sections. Variations on revenue contribution of different units occur in different types of hotels. Small- scaled hotels with no restaurant outlets mainly depend on their revenue in room sales for survival. ROOM SALES AND SALES INDICATORS Sales Indicators Sales indicators refer to how hotels count and measure their business performances. Some basic indicators which are applied by hotels include the following: Occupancy Rate The Occupancy rate is a common sales indicator which tells how well the hotel has fully utilized the room resources to maximize profit. It is always the objective of hotels to achieve full-house, i.e.100% occupancy, when all the rooms are sold out for the night. ROOM SALES AND SALES INDICATORS Sales Indicators Guests per Occupied Room This gives the ratio between guests staying in the hotel and the quantity of occupied rooms. Regardless of the room types available in the hotel, it gives a general idea of how many guests are being staying in each room. The information is useful for different departments, e.g. housekeeping can refer to the guest ratio to estimate the consumption rate of guest supplies. ROOM SALES AND SALES INDICATORS Sales Indicators Average Daily Room Rate (ADR) While occupancy rate tells the ‘quantity’ of businesses, top management are also interested to know about the ‘quality’, i.e. how much they charge for a hotel room. The ‘average daily room rate’ is calculated which gives a general estimate of the average room charge received by a hotel, regardless of the differences in room types and rates.  ROOM SALES AND SALES INDICATORS Sales Indicators Revenue per Available Room (REVPAR) This is similar to the Average daily room rate in indicating the hotel’s performance. The only difference between REVPAR and ADR is the denominator. Instead of just considering the actual number of rooms sold, hotels tend to use all rooms available in calculating the REVPAR, i.e. to include all vacant rooms, out-of-order rooms and rooms for ‘house use’ in the calculation. The value is always smaller than the ADR which serves as a good means to check the ability of management in utilizing all room resources to maximize the hotel revenue. FRONT OFFICE: ACCOUNTING A front office accounting system is an essential process designed to monitor and chart the financial transactions of guests and non-guest at the hotel during each stage of the guest cycle. An effective guest accounting system includes tasks performed during each stage of the guest cycle: FRONT OFFICE: ACCOUNTING During the pre-arrival stage of the guest cycle, a guest accounting system captures data related to the form of guarantee for a reservation, and tracks pre- payment and advance deposits. When the guest arrives at the hotel, a guest accounting system documents the application of room rate and tax at registration. During occupancy, a guest accounting system is responsible for tracking guest charge purchase. During guest checkout, a guest accounting system ensures payment for goods and services provided. After guest check out- if a guest’s bill is not fully paid at checkout, the balance is transferred from guest to non –guest records. When this occurs, collection becomes the responsibility of the back office accounting division. FRONT OFFICE: ACCOUNTING So, the specific functions of a front office accounting system (FOAS) are to: Create and maintain an accurate accounting file for each guest or non-guest account Track financial transactions throughout the guest cycle Ensure internal control over cash and non-cash transaction Obtain settlement for all goods and services provided The front office’s ability to monitor and chart guest and non-guest transaction will directly affect its ability to collect outstanding balances. Incomplete of inaccurate monitoring may lead to difficulties in settlement. FRONT OFFICE: ACCOUNTING Accounts An account is a form on which financial data are summarized. An account may be imagined as a bin or a container which stores the results of various business transactions. The increases and decreases in an account are calculated and resulting monetary amount is the account balance. Any financial transaction that occurs in a hotel may affect several accounts. Front Office accounts are recordkeeping devices to store about guest and non-guest financial transactions. In its simplest written form, an account resembles the letter T: FRONT OFFICE: ACCOUNTING In the domain of front office accounting, the charges are entered on the left side of the ‘T’. They increase the account balance. The payments are entered on the right side of the ‘T’. They decrease the account balance. FRONT OFFICE: ACCOUNTING Basic Front Office Accounting Formula: Most of the contemporary hotel businesses employ automated accounting system. FRONT OFFICE: ACCOUNTING Types of Accounts Guest Account Non-guest or City Account Management Account FRONT OFFICE: ACCOUNTING Types of Accounts Non-Guest Account A hotel may extend in-house charge privileges to local businesses or agencies as a means of promotion, or to groups sponsoring meetings at the hotel. The front office creates non-guest account to track such transactions. These accounts may also be called house accounts or city accounts. Management Account Some hotels allow the managers to entertain the guests’ queries or grievances, or any possibility of acquiring a business deal over a brief interaction with the guests. For example, if a guest has some problem about the hotel policy, the manager calls the guest for interaction over a coffee or a drink and tries to resolve the same. The expenses towards this interaction are then recorded on the management account. FRONT OFFICE: ACCOUNTING Folios and Types The front office staff records all the transactions between the guest and the hotel on the folio. The folio is opened with zero initial balance. The balance in the folio then increases or decreases depending upon the transactions. At the time of check-out, the folio balance must return to zero on settlement of payment. FRONT OFFICE: ACCOUNTING Folios and Types 1. Guest folios: accounts assigned to individual persons or guest rooms 2. Master folios: accounts assigned to more than one person or guest room; usually reserved for group accounts. 3. Non-guest or semi-permanent folios: accounts assigned to non-guest businesses or agencies with hotel charge purchase privileges. 4. Employee folios: accounts assigned to employees with charge purchase privileges. Executives like Sales and Marketing Director, Front Office Manager may charge the hotel for travel and entertainment to promote the business FRONT OFFICE: ACCOUNTING Postings and Types The process of recording the entries on the folio is called ‘Posting’ of transactions. There are two basic types of postings: 1. Credit − they reduce the guest’s outstanding balance. These entries include complete or partial payment, or adjustments against tokens. 2. Debit − they increase the outstanding balance in the guest account. Debit entries include charges under restaurant, room-service, health center/spa, laundry, telephone, and transportation. FRONT OFFICE MANAGEMENT: NIGHT AUDIT What is Night Audit? It is the process of auditing where the night auditor reviews all financial activities of the hotel that has taken place in one day. The auditing process for the day is generally conducted at the end of the day during the following night, hence the name ‘Night Audit’. It can be performed by the conventional method of using papers, receipts, vouchers, coupons, and files. But performing audit using modern PMS systems is easy, fast, and efficient. FRONT OFFICE MANAGEMENT: NIGHT AUDIT Basic Activities during Night Audit The night auditor performs the following steps during night audit activity : Posting accommodation and tax charge Accumulating guest service charges and payments Settling financial activities of various departments Settling the account receivables Running the trial balance for the day Preparing the night audit report FRONT OFFICE MANAGEMENT: NIGHT AUDIT The Need for Night Audit The objective of night audit is to evaluate the hotel’s financial activities. Night audit not only reviews guest accounts by checking credits and debits but also tracks the credit limits of the guests and tallies projected and actual sales from various departments. Night audit reviews daily cash flow into and out of the hotel’s account. Night audit has a large significance in hotel business operations. The management body refers night audit report to plan future goals and control the expenses. The managers can react immediately on the acquired information. FRONT OFFICE MANAGEMENT: NIGHT AUDIT Responsibilities of a Night Auditor Taking over from the last shift. Checking-in or checking-out the guests after 11:00 pm at night. Registering the guests. Allocating accommodations to the newly checked-in guests. Settling transactions in the newly created guest accounts. Verifying guest folios. Verifying room status report. FRONT OFFICE MANAGEMENT: NIGHT AUDIT Balancing all paperwork with the accounts in the PMS. Remaining liable for security of the premises. Handling guest accommodation keys. Taking backup of the PMS generated reports. Preparing lists of expected guest arrivals for the next day. Closing financial activities for a day. Starting financial activities for the next day. Receiving and recording bank deposits. FRONT OFFICE AND OTHER DEPARTMENTS Front Office Management – Communication The front office is the center of guest transactions in a hotel and so often acts as the center for collection and distribution of guest information. Such information may help other departments in providing the best service to guests throughout the different stages of the guest cycle. FRONT OFFICE AND OTHER DEPARTMENTS Front Office Management – Communication 1. Front Office and Housekeeping Check-in, occupied and check-out rooms in order to organize room cleaning Special requests from guests, such as baby cot or extra blanket, etc., so that extra amenities and services can be provided to guests 2. Front Office and Engineering The engineering department is responsible for maintaining properly the hotel facilities under the care of the front office department such as the proper of functioning of the guest lift. FRONT OFFICE AND OTHER DEPARTMENTS Front Office Management – Communication 3. Front Office and Security The front office needs to provide guest information to the security department in the event of emergency; such as fire alarm, power failure and so on. When guest reports loss of property to the front office, security department will be informed to handle the case together with front office’s assistant manager. 4. Front Office and Human Resources The human resources department provides staff training and recruitment service to the front office. It also sets up the staff grooming and discipline standard for staff to follow. FRONT OFFICE AND OTHER DEPARTMENTS Front Office Management – Communication 5. Front Office and Food and Beverage Department The front desk will provide the food and beverage department with a guest room special amenities request form. The food & beverage department then arranges for item such as welcome fruit baskets, chocolates and wine to be placed in the guest room. 6. Front Office and Sales and Marketing Department The sales and marketing needs to work closely with the front desk and reservations department when dealing with corporate bookings or for the reservations of groups/tours. The front desk will also provide the sales and marketing department an updated rooming list, with guest room numbers upon the arrival of large tours or groups. FRONT OFFICE AND OTHER DEPARTMENTS Front Office Management – Communication 7. Front Office and Accounts Department Information concerning advance deposits received by the reservations department and payments received by the front desk must be recorded and passed to the accounts department which is responsible for monitoring guest accounts, checking credit limits and seeking settlements of guest accounts. FRONT OFFICE AND OTHER DEPARTMENTS Front Office Management – Communication 7. Front Office and Accounts Department Information concerning advance deposits received by the reservations department and payments received by the front desk must be recorded and passed to the accounts department which is responsible for monitoring guest accounts, checking credit limits and seeking settlements of guest accounts.