Managing Front Office Operations

1. Managing Front
Office
SQA I HOT 333

2. Reservations
Reservations and Sales
Types of Reservations
Reservation Inquiries
Group Reservations
Reservation Availability
Reservation Records
Reservation Confirmation/ Cancellation
Reservation Reports
Other Reservation Considerations

3. Who is the Revenue Manager?
Implement revenue
management strategies &
processes, in order to optimize
& maximize its revenues
At some point, revenue
management started out as
being in charge of reservations

4. Activities Associated with Reservation
Process
Formulating
reservation inquiry
Determining room &
rate availability
Creating reservation
record
Confirming
reservation record
Maintaining
reservation record
Producing
reservation reports
Research, Planning &
monitoring

5. Reservations and Sales
Prior to front office automation, reservations agents focused on basic room availability; they could not
reserve specific types of rooms
Automation provides accurate & current room & rate information
Due to automation, much of responsibility for room sales, revenue projections, & profitability analyses has
shifted to reservations department
Reservations agents are now salespeople
Many reservations are now made online; hotels need websites that are designed to make it easy for guests
to make reservations

6. Role of the Sales Department
Primary source of group
reservations, typically from
corporations & trade
associations
Go after social, military,
educational, religious &
fraternal groups (SMERF),
business traveler, TA market
Sales must familiarize
distribution channels with
hotel’s characteristics &
surrounding areas
Sales managers are often
given financial or other
incentives to meet or exceed
sales goals

7. Reservation sales planning process
Sales department can book
business months or years
in advance
Groups may limit number
of rooms to be sold
Reservations Manager
monitors group & non
group business
Reservations manager
evaluates requests &
reports potential financial
impact

8. Types of Reservations
Prepayment Payment card Advance deposit
Voucher or MCO
Corporate
Non-Guaranteed
Reservations

9. Guaranteed Reservations—
Prepayment
Requires payment in full be received prior to guest’s day of arrival
Generally most desirable form of guaranteed reservation for hotel
Commonly used at resort hotels

10. Guaranteed Reservations—Payment
Card
Common form of guaranteed reservation
Properly canceled before stated cancellation hour, hotel charges one
night’s room rate plus tax
Resort hotels may charge for more since typical length of stay is longer

11. Guaranteed Reservations—Advance
Deposit
Specific amount prior to arrival (enough to cover 01 night)
Failing to register or cancellation, retains deposit & cancels remainder
Hotels apply deposit to last night of guest’s stay; to ensure revenue
collection if guest depart earlier

12. Guaranteed Reservations—Voucher or
MCO
TA vouchers & miscellaneous charge orders (MCOs), guest prepays to TA
TA forwards voucher or MCO to hotel as payment proof & guarantee payment on voucher returned for
payment
MCOs are issued by Airline Reporting Corporation (ARC)
Hotels prefer MCOs over TA vouchers because ARC guarantees payment if travel agency defaults

13. Guaranteed Reservations—Corporate
Corporation enters into agreement with hotel
Corporation sponsors will pay for any no-show business travelers
Popular in hotels catering large number of business travelers
Corporation receive comprehensive invoice, simplifying billing

14. Non-Guaranteed Reservations
Hold room until stated reservation cancellation hour on day of arrival
(1500-1800)
Hotel will not receive payment for no-shows
If guest does not arrive by cancellation hour, hotel can release room for
sale

15. Reservation Inquiries
Handled by reservations agent or website
Information collected
• Guest’s name, address, e-mail address, telephone number; company or
travel agency name, date of arrival & departure
• Type & number of rooms requested; room rate; number of people in
party, method of payment or guarantee; or any special requests

16. Distribution Channels
Property reservations
department
Central reservations
systems
Cluster reservations
office
Global distribution
systems
Intersell agencies Internet distribution

17. Property Reservations Department
Handles direct requests for rooms, monitors any communication
links with central reservations systems & intersell agencies,
maintains updated room availability information
Direct requests can reach department in several ways:
telephone, mail, property website, property-to-property, faxes,
text messaging

18. Reservations Agent Sales Process
Greet caller
Identify caller’s needs
Provide overview of hotel’s features & benefits, based on caller’s needs
Propose room recommendation, adjust it according to caller’s response
Close sale

19. Central Reservations Systems
Responsible for
maintaining room
availability
inventory for each
property in system
Affiliate
Networks
Hotel chain reservation system
Typically, all participating hotels are contractually related
Some affiliate networks allow non-chain properties in network as “overflow
facilities”
Overflow facilities pay commission for these referrals
Non-
Affiliate
Networks
Connect independent (non-chain) properties
Examples: The Leading Hotels of the World, Preferred Hotels & Resorts
Worldwide, Distinguished Hotels

20. Cluster Reservations Office
Serves several hotels in geographic area
Similar to CRS, except that it serves one specific destination area instead of entire hotel company
Eliminates separate reservations departments in participating hotels
Advantages: labor costs are reduced, cross-selling opportunities are created, room rates & availabilities can
be coordinated
Disadvantages: communication & coordination challenges

21. Global Distribution Systems
Distribute hotel reservation information worldwide & provide platform for selling
hotel reservations worldwide
Support worldwide distribution of airline tickets, automobile rentals, & other
traveler services
Directly link reservation systems of hotels, airlines, car rental agencies, & travel
agencies
Examples of GDSs: SABRE, Galileo International, Amadeus, & Worldspan

22. Intersell Agencies
Businesses that contract to handle reservations for more than
one product line
Handle reservation services for airline companies, car rental
companies, & lodging properties
Channel room reservation requests to hotel central reservations
system, may also contact hotel directly

23. Internet Distribution Systems
IDSs enable travelers from many different market segments to use desktop &
mobile devices to reserve hotel rooms, book flights, select rental cars
Examples include Expedia, Hotels.com, Orbitz, Hotwire, Priceline, Travelocity
Individual hotel websites commonly feature user-friendly & secure procedures for
making & paying for reservations
Hotel websites also feature marketing tools such as links to hotel products &
services, & photographs & virtual tours of property

24. Distribution Channel Revenues
Revenues vary widely, depending on hotel (supplier) & agent (seller) relationship
CRS charge affiliate properties either fixed rate per room /per night, or transaction fee
based on reservation activity or both
GDS systems & IDS receive revenues from hotels through commissions, by charging
transaction fees or transmission fees by selling hotel
Hotels sell rooms via distribution channels, goal is to offset associated commissions & other
fees with increase in occupancy & overall room revenue

25. Group Reservations
Involve variety of contacts: guests, meeting planners, convention, visitors bureaus, tour operators, travel agents
Involve intermediary agents & require special handling
Group’s representative deals with hotel’s sales or reservations department
Agreed-upon number of rooms, called block, is set aside for group’s members
Group members may be given special reservation identification code or reservation web address to use to reserve
their rooms within group’s assigned block
Un booked rooms in group block may be released to hotel’s available rooms inventory at predetermined date i.e.
cut-off date

26. Creating a Group Block
Contract created specifying number of rooms, rates, arrival & departure dates, special considerations (suites,
comp rooms, group vs. individual billing arrangements, etc.), early arrival & late departure dates, & cut-off
date
Reservations manager should make sure availability before confirming block
If group will absorb rooms from transient business, reservations manager should notify sales or GM of this
non-group displacements
Reservations manager should check group’s history with hotel (if available) before finalizing the block; it may
be possible to reduce room block, based on group’s history (termed a “wash down” or a “wash”)

27. Creating a Group Block
Reservations manager must monitor room availability in block as reservations
come in & adjust room block as needed
“Definite group” has signed sales contract; “Tentative group” contract sent,
but not signed & returned
Reservations manager make sure group is not allowed to remain in “tentative”
status for too long, jeopardizing business
Some groups allow attendees to make reservations directly with hotel, others
do not; reservations agents must honor arrangements

28. Dealing with Convention Groups
Review relevant hotel reservation policies with convention planner
Inform agents that convention has scheduled & go over group’s reservation
process
Produce regular reports to update status of convention block
Generate an up-to-date list of registrants at regular intervals
Correct errors found by convention planner immediately

29. Convention and Visitors Bureaus
Large conventions sometimes
require use of rooms at more
than one hotel
In these cases, room
requirements at various hotels
often are coordinated by a
separate convention & visitors
bureau
Convention & visitors bureaus
may use special software to help
monitor & coordinate room
reservations in various hotels in
city/local area

30. Dealing with Tour Groups
Specify no & types of rooms in group block, including rooms for drivers & guides
On or before cut-off date, tour operator supply guarantee on number of rooms, or rooming list if available
Specify date tour operator will provide rooming list, if differ from cut-off date
Monitor advance required & their due date
Services & amenities will be provided as part of group package
Contact details of tour operator include on reservation record
Special arrangements (early arrival, baggage handling, registration, check-out procedures)

31. Attendee Management & Housing
Systems Software
Automates & simplifies group
reservations & registration
process
Relies on Internet to
communicate with potential
attendees
Provides information about
group event & reservations
availability
Allows group leader to load e-
mail & postal addresses so that
leader can more quickly & easily
send out e-mails & letters to
prospective attendees
Captures attendee details when
attendee makes reservation
Provide reports for manual
processing by hotel, may
interface with PMS

32. Reservation Availability
Overbooking is strategy aimed at helping hotel achieve 100% occupancy by hedging against guests who
do not arrive or cancel their reservations
Reservations must be closely monitored to control overbooking
Whenever a reservation is received, hotel can
Accept reservation as requested Suggest alternative room types, dates, &/or rates Suggest alternative hotel

33. Reservation Systems
Automated reservation management module in PMS can keep track of reservation activities
PMS can tightly control room availability & automatically generate reports
Advantage of automated system is improved accuracy of availability & rate
Once all rooms in specific category are sold, PMS are programmed to refuse further reservations;
automatically suggest to over book or alternative room types
PMS can create waiting lists for high-demand periods

34. Reservation Record
Guest name (group
name, if applicable)
Home/billing address E-mail address Telephone number
Company name &
telephone number
Name of person
making reservation (if
not guest)
Number in party Arrival date & time
Number of nights
required or expected
departure date
Type of reservation
(GTD/Non GTD)
Special requirements
Additional information
as needed late arrival,
preference & so on

35. Reservation Confirmation/Cancellation
Reservation confirmation, hotel
acknowledges & verifies guest’s
room request & personal
information
Written confirmation states intent of
both parties & confirms important
points of agreement (name, dates,
rate, room type, etc.)
Confirmed reservations may be
guaranteed or non-guaranteed
Confirmations are sent out via e-
mail or letter soon after reservation
Confirmations may also include
request for deposit or prepayment,
or request for updated information,
depending on nature of reservation
Confirmations are especially
important for guests with disabilities
Confirmation number helps assure
guest that reservation record exists;
cancellation number assures guest
that cancellation has been properly
processed
Confirmation/cancellation numbers
helps hotel to quickly reference
specific reservation record
Confirmation/cancellation numbers
protect both guest & hotel, can
reduce misunderstandings
Confirmation/cancellation numbers
should be stored in separate files for
quick referencing

36. Modifying Non-Guaranteed
Reservations
When changing non-guaranteed reservation to guaranteed reservation, system would typically;
Access correct non-guaranteed
reservation record
Capture guest’s payment card
information
Complete change from Non-GTD
to GTD status
Guests sometimes make Non-GTD reservations, later modify them (because of delayed flight,
road-construction bottlenecks, bad weather conditions, etc.) to guaranteed reservations, to
avoid cancellation at hotel’s reservation cancellation hour

37. Canceling a Reservation
Guest does hotel a service when takes time to cancel reservation
Canceled reservation allows hotel to return room to inventory
Hotels make processing reservation cancellation as easy & efficient as possible for guests
Canceling Non-GTD reservation: may require relevant details to verify (if available)
Canceling payment card guaranteed reservation: must access correct reservation, assign cancellation
Canceling advance deposit reservation: policies vary deposits normally returned if properly cancel reservations; assign & record
cancellation number

38. Typical Reservation Reports
Reservation transactions report
Commission agent report
Regrets & denials report
Revenue forecast report
Expected arrival & departure lists

39. Expected Arrival & Departure Lists
Indicate number & names
of guests expected to
arrive, depart, or stay over
Generated according to
pre-determined schedule
or on demand
Displayed or printed in
reservations department or
via any connected device
Facilitates guest
registration & check-out

40. Processing Deposits
Advance deposits for reservations
should be processed by employees who
do not have direct access to reservation
records
Designated employee endorse & record
payments immediately
Information recorded in deposits-
received system file include: form of
payment, amount , date received, guest
name, arrival date, reservation
confirmation; file should be accessible
by reservations department
Each reservation record should be
updated with status of its deposit
information
Transaction report should verify that
recorded deposits balance with total
reservation deposits entered for day
Guests should be discouraged from
sending cash; checks are better, but
payment card deposits are almost
always preferred

41. Reservations Histories
Include statistics on all aspects of
reservations process: number of
guests, occupied rooms, reservations
organized by distribution channel, no-
shows, walk-ins, overstays, under stays
Helpful in tracking individual groups &
their booking patterns

42. Other Reservation Considerations
Legal implications Waiting lists Promotional
packages
Potential reservation
problems
E-commerce

43. Legal Implications
Reservation agreement between hotel & guest begins at time of guest contact
Agreement may be oral or written
Confirming reservation by stating guest will be accommodated on particular date may
constitute contract binding hotel
If confirmation is response to reservation request from prospective guest, it may bind both
hotel & guest to fulfill reservation

44. Waiting Lists
Advise guest that no
rooms are currently
available for requested
date(s)
Offer to take guest’s name,
telephone number, e-mail
address
Agree to notify prospective
guest immediately if room
becomes available
Help guest find alternative
dates or accommodations
if no rooms become
available

45. Promotional Packages
Include guestroom plus other
features, such as meals, golf,
tennis, sports lessons, limousine
service, sight-seeing or other
activities in or near property
Properties provide guests with
discount for purchasing
promotional package
Guests consider promotional
package, bargain & convenience
Reservations personnel & website
content must be very informative
about all packages property offers

46. Potential Reservation Problems
Errors in the reservation
record
Misunderstandings due to
industry jargon
Miscommunication with
central reservations systems
Online reservation failures

47. E-Commerce
E-commerce is online commerce via Internet
E-commerce extends reach of hotels far beyond traditional distribution channels of hotel reservations office, call center, & GDS
Allows hotels access to multiple distribution channels
Gives hotels direct access to consumers
Guests can search for hotels & make reservations online
Hotels assign manager to oversee online content & transactions (Revenue /E-Commerce Manager)
E-commerce must be carefully monitored, to be sure that hotel information & pricing are properly presented
Single image inventory: all online distribution channels draw from same room availability, pricing, rate rules, services, amenities information

48. E-Commerce Site Categories
Merchant model Wholesaler model Opaque sites Transparent sites

49. Merchant Model
Also called “markup model”
Online intermediary negotiates discount for rooms, it will sell on its site (for example, 20 to 30 percent off the hotel’s lowest published room rate)
Discounted rate is called “net rate” & represents amount intermediary will pay hotel for every room it sells at agreed-upon discount
Intermediary marks up net rate to achieve room rate it will charge guests; this is termed “gross rate”
Gross rate minus net rate represents profit intermediary makes on selling room on its site
Merchant-model sites tend to rank hotels based on their discounts, from highest discounts to lowest
Examples of merchant-model sites include Hotels.com & Travelocity

50. Wholesaler Model
Hotel sets selling price for rooms it will give to the online wholesaler; receives agreed
commission (% of price) for selling rooms
Online sellers using wholesaler model typically earn less than sellers using merchant model
Hotels favor wholesaler model, because they maintain control over rooms’ final price to
guests; online sellers tend to favor merchant model, because they can earn more from per
room sale

51. Opaque Sites
Hotel rooms are marketed by online sellers by price &/or rating category; there is no reference
to hotel brand or property specifics
Brand of hotel & features are hidden from buyer until transaction is completed
Hotel rooms are treated as commodity
Examples of opaque sites include Priceline and Hotwire

52. Transparent Sites
Hotel rooms are marketed
by online sellers by price
&/or rating category;
however, unlike with
opaque sites, transparent
sites reveal identify of
hotels before purchase
Transparency allows buyers
to select preferred brand or
property among competing
hotels
Examples of transparent
sites include Expedia,
Hotels.com, Travelocity

53. E-Commerce Trends
Hotels exercise caution in selecting e-
commerce sites to partner & have
developed distinct strategies for each
Most hotel branded websites offer best
rate guarantee
Hotel websites become sophisticated in
services they offer to groups, making it
easier to process group room
reservations & meetings
More hotels & other online travel
service providers are offering affinity or
loyalty club points
More hotels are offering dynamic
package pricing, which allows online
shoppers to select from a menu of hotel
products & services & create their own
custom package at special price
Online booking sites can create “virtual”
hotel brands by grouping proprietary
set of preferred hotels at destination site
(for example, Expedia’s Bargain Hotels)

54. ?
Any Questions