Chapter Three

Rooms Division Operations

I. Chapter Objectives
After reading and studying this chapter, the student should be able to do the following:
1. Outline the duties and responsibilities of key executives and
department heads.
2. Draw an organizational chart of the rooms division of a hotel and
identify the executive committee members.
3. Describe the main functions of the rooms division departments.
4. Describe property management systems and discuss yield
management.
5. Calculate occupancy percentages, average daily rates, and actual
percentage of potential rooms revenue.
6. Outline the importance of the reservations and guest services
functions.
7. List the complexities and challenges of the concierge, housekeeping,
and security/loss prevention departments.

II. Key Teaching Elements/Chapter Outline/Lecture Suggestions

The Functions and Departments of a Hotel Object.

The primary function of a hotel is to provide lodging 1
accommodations. A hotel is comprised of several business or
revenue centers and cost centers. Each business center must be
committed to quality and cooperation throughout the hotel operation.
Hotels exist to provide service and to generate a profit for the owners.
Hotels sell thousands of products and services every day.

Hotels are people places. They are intended to provide all the 1
comforts of a home away from home.

Management Structure
Management structure differs among larger, midscale, and smaller 1
properties. The midscale and smaller properties are less complex in
their management structures than are the larger ones. However,
someone must be responsible for each of the key result areas that
make the operation successful. For example, a small property may not
have a director of human resources, but each department head will
have general day-to-day operating responsibilities for the human
resources function.

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Role of the Hotel General Manager
The hotel General Manager has a multitude of responsibilities. 1
He/she must ensure a reasonable return on investment, keep guests
satisfied, and keep employees happy.

The GM not only focuses on leading and operating the hotel 1

departments but also on aspects of the infrastructure, from room
atmosphere to security.

Larger hotels can be more impersonal. Here, the general manager may 1
only meet and greet a few VIPs. In the smaller property, it is easier—
though no less important—for the GM to become acquainted with
guests to ensure that their stay is memorable and to secure their return.

The GM is ultimately responsible for the performance of the hotel 1

and the employees. The GM is the leader of the hotel. As such, she or
he is held accountable for the hotel’s level of profitability by the
corporation or owners.

Effective GMs hire the best people and set the tone, a structure of 1
excellence. GMs must also be familiar with the cultures of guests
staying in the hotel and the employees working in the hotel.
Progressive general managers empower associates to do anything
legal to delight the guest.

Cesar Ritz began at the bottom and quickly brought himself to the top
of the hotel industry by learning the tricks of the trade at an early age.
By 38, Ritz was manager of one of the most famous and luxurious
hotels in the world. After starting his own hotel, the Ritz name
became synonymous with refined, elegant hotels and service.

The Executive Committee

The Executive Committee is comprised of key managers of the 1
hotel. Typical members of the Executive Committee would be
directors of the following departments: human resources, food and
beverage, rooms division, marketing and sales, engineering, and
accounting.

Executive Committee meetings usually last 1 to 2 hours, once a week. 1

Typical topics of discussion will focus on occupancy %, Total
Quality Management, forecasts, guest and employee satisfaction,
training, etc.

These senior executives determine the character of the property and 1

determine the goals and objectives for the hotel. If the hotel is a
chain, goals & objectives must support the corporate mission.

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The Departments
Rooms Division
The rooms division director is held responsible by the GM for the 2
efficient and effective leadership and operation of all the rooms
division departments. The Rooms Division is comprised of the front
office, reservations, housekeeping, concierge, guest service, security,
and communications. Main concerns of the department are financial
performance, employee satisfaction, guest satisfaction, guest services,
guest relations, security, and gift shop.

Front Office
The main duty of the Front Office manager is to enhance guest 3
service by developing services to meet guest’s needs. He/she
supervises Guest Service Associates (GSAs), who interact directly
with the guest during check-in, check out, etc.

Often, the front office is described as the hub or nerve center of the 3
hotel. The guest relies on the desk for information and service
throughout his/her stay.

The main functions of the front office are: (a) to sell rooms, (b) to 3
maintain balanced accounts, (c) to offer services such as handling
mail, faxes, messages, and local and hotel information.

In selling rooms, the front office attempts to achieve 100% 3

occupancy.

Upselling and Yield Management can help increase room sales. The 3, 4
interaction of supply and demand also impacts the ability to sell
rooms.

Maintaining balanced guest accounts begins with advanced deposits 3

and opening the guest account, called a folio. As appropriate, charges
from the various departments of the hotel are posted to the guest
folio. Payment is either received on guest check-out or transferred to
the city ledger (a special account for a company that has established
credit with the hotel).

Because the Front Office is staffed 24 hours a day, it is the logical 3

center to handle guest information needs such as mail, faxes,
messages, and local and hotel information.

The evening shift’s responsibilities include – checking the logbook, 3

checking of room status, handling guest check-ins, and reservation
functions once the reservation office closes for the day.

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 Night Auditor
A hotel must balance its accounts on a daily basis. At approximately 3
1:00 am, when the hotel has “quieted” down, the night auditor begins
the task of balancing the guest accounts receivable.

The daily report contains a key operation ratio – Room Occupancy 3, 5

% (ROP). This is calculated by dividing the number of rooms
occupied by the number of rooms available.

The Average Daily Rate (ADR) is, together with the occupancy 3, 5
percentage, one of the key operating ratios that indicates the hotel’s
performance. ADR is calculated by dividing the total of rooms
revenue by the total number of rooms sold.

A more recently popular ratio to gauge a hotel rooms division’s 3, 5

performance is the percentage of potential room’s revenue, which is
calculated by determining potential rooms revenue and dividing the
actual revenue by the potential revenue.

While these figures are of great importance to running a successful 3, 5

hotel, the most important of the lodging ratios is revenue per
available room (REV PAR), which is discussed in the next section.

Revenue Management
Revenue management is used to maximize room revenue at the 3, 4
hotel. It is based on the economics of supply and demand, which
means that prices rise when demand is strong and drop when demand
is weak.

Although management would like to sell every room at the highest 3, 4

rack rate, this is not possible. Conventions, groups, and organizations
are often granted a reduced room rate as an incentive to stay at a
particular property.

Group reservations tend to be made months in advance, whereas 3, 4

individual reservations are usually made a few days before arrival.
Revenue management will monitor reservations and based on
previous trends and current demand, will determine the number and
type of rooms to sell at what price to obtain the maximum possible.

With revenue management, not only will the time before arrival be an 3, 4
important consideration in the pricing of guest rooms, but also the
type of room to be occupied.

Revenue per available room, or REV PAR, was developed by 3, 4

Smith Travel Research. It is calculated by dividing room revenue by

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the number of rooms available. For example, if room sales are
$50,000 in one day for a hotel with 400 available rooms, then the
REV PAR formula is $50,000 divided by 400, or a REV PAR of
$125.

Hotels use REV PAR to see how they are doing compared to their 3, 4
competitive set of hotels. Hotel operators use REV PAR as an
indicator of a hotel’s revenue management program.

Smith Travel Report is the publisher of the STAR reports, a 3, 4

benchmarking suite that tracks one hotel’s occupancy, average daily
rate, and REV PAR against a competitive set of hotels for comparison
purposes. The information provided helps identify if a particular
property is gaining or losing market share and helps the organization
make necessary corrections to its management, marketing, and sales
strategies.

Energy Management Systems

Passive infrared motion sensors and door switches can reduce energy 4
consumption by 30 percent or more by automatically switching off
lights and air-conditioning, thus saving energy when the guest is out
of the room. They also can keep tabs on room occupancy, lighting,
minibar, smoke detectors, locks, and guest amenities.
Some software programs cut out non-essential equipment during peak
billing times.

Call Accounting Systems

Call accounting systems (CAS) are systems that can track guest room 4
phone charges working in conjunction with PBX and PMS. They can
be used to offer different rates for guest calls.

Guest Reservation Systems

Airlines were the first industry to start using global distribution 4
systems (GDS) for reservations. Global distribution systems are
electronic markets for travel, hotel, car rental, and attraction
bookings.

A central reservation system (CRS) houses the electronic database 4

in the central reservation office (CRO). Hotels provide rates and
availability information to the CRO usually by data communication
lines. This automatically updates the CRS so that guests get the best
available rate when they book through the central reservation office.
Guests instantly receive confirmation of their reservation or
cancellation.

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With such a system, hotels can avoid overselling rooms by too large a 4
margin. The CRS database can also be used as a chain or individual
property marketing tool because guest information can easily be
stored. A CRS can also provide yield management information for a
hotel.

A CRS can be used in several areas of a hotel. If a hotel has a 4

reservations department, the terminals or personal computers in that
department can be connected to the central reservation system.

Another form of technology is an application service provider 4

(ASP) delivering a booking system tied to hotel inventory in real time
via the Internet.

Billing Guests
Billing guests has become much easier with the aid of computers. 4
Billing guests can be a long process if information technologies are
not used to complete transactions. PMSs aid large hotels to make
faster transactions and provide a more efficient service to their guests.
These systems help the hospitality associates bill their guests within
seconds.
Security
Peace of mind that the hotel or restaurant is secure is a key factor in 4
increasing guest satisfaction. Security is one of the highest concerns
of guests who visit hospitality businesses.

Hospitality information technology systems include surveillance 4

systems, electronic door locking systems, and in-room safes some
using biometric technology.

Guest Comfort and Convenience

In order to provide a homey and convenient experience for the guest, 4
hotels provide such services and amenities as dining, televisions,
telephones, Internet connections, minibars, hygiene products, pools,
meeting space, and business and concierge service.

Reservations
The Reservations Manager is the head of the reservations department. 6
He/ she reports directly to the Rooms Division Manager. This
department is often the first one that a prospective guest has contact
with and therefore impressions made are lasting. Quality service and
attention to detail are critical.

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The reservations department is responsible for selling hotel rooms for 6
the maximum dollar amount while exceeding guest expectations.
Reservations may originate from a telephone call to the property,
corporate 1-800 numbers, travel agents, Internet, meeting planners,
tour operators, referrals, airport telephones, and walk-ins.

The corporate central reservations system interfaces with hotel 6

inventory and allows reservations by individual hotel reservations
personnel.

Once a reservation has been made, the room is immediately deducted 6

from the inventory of rooms for the duration of the guest’s stay.
Important details are recorded when the reservation is made, such as
name, billing information, duration of stay, special requests, etc.

Guaranteed reservations are made when the person making the 6

reservation wants to ensure the room will be held until arrival. This
usually occurs when the guest will be arriving late. The room is held
until the guest arrives. In the event the guest does not show, the
credit card is charged for one night’s room and tax.

Communications CBX or PBX

The CBX or PBX includes in-house communications, guest 6
communications, voice mail, messages, and emergency centers.

It is a profit center for the hotel because hotels generally add a fee of 6
50% to all long distance calls and may charge fees as high as $1.25
for local calls.

The Communications center is staffed 24 hours a day. Staff should 6

be well versed in guest service techniques and emergency procedures.

Guest Services/Uniformed Services

First impressions are very important. The guest service staff has the 6
unique opportunity to make or break that first image of the hotel and
the experience the guest will have. The staff of this department
consists of door attendants, bell persons, and the concierge.

Door attendants are the hotel’s unofficial greeters. These tipped 6

positions can be very lucrative. Their job requires them to greet
guests, assist with the opening and closing of doors, handling
luggage, and providing information.

The bell person is responsible for escorting the guests and 6

transporting luggage to their rooms. He/she must have knowledge
about the area as well as the hotel and its services.

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Concierge
The concierge is a uniformed employee of the hotel who has a 6
separate desk in the lobby or on a separate concierge floor.

Some of the ways the concierge may assist guests are by arranging 6
tickets to popular events/shows in town, making reservations at
restaurants, providing advice on local activities, reserving airline
tickets and reconfirmation of flights, and special requests such as
shopping.

It is important that the concierge has excellent knowledge of the 6

hotel, the city, and international details. It is a definite strength if the
concierge is able to speak several foreign languages.

The concierges’ organization is the UPPGH (Union Professionelle 6

des Portiers des Grands Hotels).

Housekeeping
The housekeeping department employs the largest number of 1, 6
employees in the hotel. The executive housekeeper is the head of the
department. It is necessary for the executive housekeeper to have
exceptional leadership, organizational, motivational skills, and a high
level of commitment to maintaining high standards.

By far, the greatest challenge for the executive housekeeper is the 1, 7

leadership of the department. Often the employees in this department
are of different nationalities.

One of the first tasks to be completed each workday is to break the 1, 7

hotel into sections to allocate the room attendants’ work schedules.

Some hotel corporations have empowered the best daily attendants to 1, 7

check their own rooms, enabling them to become “stars” and
reducing the need for supervisors.

The executive housekeeper is responsible for a substantial amount of 1, 7

record keeping. In addition to the scheduling and evaluation of
employees, an inventory of all guest rooms and public area
furnishings must be accurately maintained with the record of
refurbishment. Most of the hotel’s maintenance work orders are
initiated by the housekeepers who report the maintenance work.

Productivity in the housekeeping department is measured by person 1, 7

hours per occupied room. The labor cost per person hour for a full
service hotel ranges from $2.66 to $5.3 per occupied room. Labor
cost is expected to be 5.1% of room sales.

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 Spas
The spa business has four mantras: decompression, revitalization, x
beauty, and spiritual uplift, not necessarily in that order. The
objective is to achieve maximum relaxation, renewal, and recreation
for the client.

Many people, perhaps most, see the spa as a time of renewal or x

decompression chambers and for pampering and mental adjustment,
increase in physical strength, and intellectual and spiritual
enrichment.

Laundry
Nowadays, more hotels are operating their own laundry services. 3, 7
Modern laundry operates computerized washing/drying machines and
presses. Some smaller hotels contract out their laundry services.

Sustainable Lodging
Green Hotel Initiatives
This sub-department generally reports to the executive housekeeper. 3
Environmentally conscious companies are helping to avoid
environmental degradation and are saving money while being good
corporate citizens.

Ecoefficiency, also generally termed green, is based on the concept of 3

creating more goods and services while using fewer resources and
creating less waste and pollution. In other words, it means doing
more with less. So what does this have to do with your bottom line?
Ecoefficiency helps hotels provide better service with fewer
resources; reducing the materials and energy-intensity of goods and
services lowers the hotel’s ecological impact and improves the
bottom line.

Triple bottom line, sometimes called the TBL or 3P approach 3

(people, planet, and profits), requires thinking in three dimensions,
not one. It takes into account ecological and societal performance in
addition to financial. Today, quantifiable environmental impacts
include consumption of finite resources, energy usage, water quality
and availability, and pollution emitted. Social impacts include
community health, employee and guest safety, education quality, and
diversity.

Sustainable lodging, also known as green hotels, has become a 3

powerful movement. The American Hotel and Lodging Association

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(AH&LA) and various state associations are leading the way with
operational suggestions for best practices that lead to a green
certification.

Being green is also financially good for certified properties. By 3

saving energy and water, reducing waste, and eliminating toxic
chemicals, green properties lower their operating costs, which allows
them to provide enhanced services to their guests and a healthier
environment for both their guests and employees.

Security/Loss Prevention
Hotels are responsible for the safety of their guests. Protection of 7
guests and their property is a key element of hotel operations.

Security/loss division is responsible for maintaining security alarm 7

systems and implementing procedures aimed at protecting property of
guests, employees, and the hotel itself.

A comprehensive security plan must include security officers, 7

equipment, safety procedures, and identification procedures.

Trends in Hotel and Rooms Division Operations

Some trends include diversity in workforce, increases in use of 1
technology, security, diversity of guests.

III. Teaching Techniques/Classroom Exercises

Note: The content of these exercises is such that they may also be used as essay
questions.

Exercise One:
Invite a guest speaker from a local hotel property or a guest industry panel of at
least 3 persons - a General Manager, a Front Office Manager, and an Executive
Housekeeper. Have students prepare 3 questions each prior to the guest lecture.

Exercise Two:
Organizational Chart Scramble: Copy the Overhead Master for the Hotel
Organizational Chart (text p. 129). Cut the chart up into individual positions and place in
a bowl. Have students draw a position (have as many cut up charts as necessary to allow
all students to draw a position) and research information about the position. Students
should research education background needed, salary, and responsibilities. This
assignment can be given at the end of a class period. At the next class meeting, assign
the students to “find” the rest of their hotel. Have students assemble the organizational
chart correctly and share information about their position.
Note: This exercise is an excellent lead-in to exercise number three.

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Exercise Three:
Hold a mock Executive Committee meeting. Provide students with parameters
about the hotel they manage and assign each student a management role (may be used in
combination with exercise two). Provide students with topics to discuss or have like
positions “meet” in a mock department meeting – i.e., all students assuming the role of
Rooms Division Manager together, F&B Directors together, etc. – and determine the
information they will report/need to gather at the EC meeting.

Check Your Knowledge

1) Question: What is the role of the general manager?
Answer: Management functions are generally classified into forecasting, planning,
organizing, communicating, and evaluating. Depending on the organization these
functions may be somewhat decentralized allowing greater empowerment or more
centralized where the GM plays somewhat of a “puppet” role.

2) Question: What topics do the members of the executive committee usually

address in their weekly meetings?
Answer: The general manager, using input and feedback from his/her executive
committee, makes all the major decisions affecting the hotel. These executives
include the directors of human resources, food and beverage, rooms division,
marketing and sales, engineering and accounting. Text page 157 shows an
executive committee chart in the form of figure 4-1.

Check Your Knowledge

1) Question: What are the principle concerns of a rooms division director?
Answer: Responsible for the efficient and effective leadership and operation of all
the rooms division departments such as: financial responsibility for rooms
division, employee satisfaction goals, guest satisfaction goals, guest services,
guest relations, security, gift shop. The rooms division consists of the front
office, reservations, housekeeping, concierge, guest services, security, and
communications.

2) Question: Describe the duties performed by the front office manager (FOM).
Answer: to enhance guest service by developing services to meet guest needs.
See list on page 160 of duties performed by this department

3) Question: What is the rack rate and what other types of room rates are there?
Answer: Rack rate is the rate that is used as a benchmark quotation of a hotel’s
room rate. Other types of room rates include, corporate, association rate,
government rate, encore, cititravel, entertainment cards, AAA, AARP, wholesale,
group rates, and promotional special. Room rates are based on American plan,
modified American plan and European plan (see figure 4-4 on page 163.)

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 4) Question: How do you calculate the room occupancy percentage and the average
daily rate?
Answer: ROP equals rooms occupied divided by rooms available and the average
daily rate is calculated by dividing the rooms revenue by the number of rooms
sold.

Check Your Knowledge

1) Question: What functions does the PMS perform?
Answer: Property Management Systems (PMS) are designed to aid front office
employees in functions relating to:
• Reservation management
• Rooms management
• Guest Account management
• General management

2) Question: What is revenue management? How is revenue management applied in

the hotel industry?
Answer: Revenue or Yield management is a demand-forecasting technique used
to maximize room revenue that the hotel industry borrowed from the airline
industry. Based on the economics of supply and demand, revenue management
allows hotels to increase profitability by allocating the right type of capacity to
the right customer at the right price so as to maximize revenue or yield per
available room.

Check Your Knowledge

1) Question: Describe the different types of reservations that guests make at hotels.
Answer: Confirmed reservations are made with sufficient time for a confirmation
slip to be returned to the guest and guaranteed reservations are given when the
person making the reservation wishes to ensure that the reservation will be held
(line late arrival.) There are advance deposit, advance payment reservations to
discourage no-shows.

2) Question: What is the role played by uniformed services?

Answer: Uniformed services or guest staff constitute contact service, meaning
they interact with the guest one-on-one or face-to-face. This may include door
attendants, bell staff, and the concierge. Their roles include greeting guests at the
hotel entrance clear of vehicles and giving guests information about the hotel and
local area in a courteous and friendly way. Concierges provide specialized
services in luxury hotels.

3) Question: Explain the responsibilities of an executive housekeeper.

Answer: All these can be found on text.
• Leadership of people, equipment, and supplies
• Cleanliness and servicing the guest rooms and public areas

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 • Operating the department according to financial guidelines prescribed by
the general manager
• Keeping records

IV. Answers to Chapter 3 Review Questions

1) The primary purpose of a hotel is to provide accommodations and lodging. They are
meant to provide all the comforts of home to those away from home. They exist to
serve society and at the same time make a profit. For the successful operation of a hotel,
general managers need to empathize with the diversity of cultures of both guests and
employees. For example, in Asia, hotels with floors numbered four are not likely to be
successful because the pronunciations of the number four and the Japanese word for
death sound the same. Architectural details are also of cultural importance. It is
important to adjust the theme, construction, and outlook of the hotel to the culture it is
trying to attract. For efficient operation of the company, the different values and ethics
of employees need to be accepted.

2) The front office manager's main duty is to enhance guest services by constantly
developing services to meet guest’s needs. His/her responsibilities include checking the
occupancy and average rate of the previous night, checking market mix, and verifying
special notes. During the day he/she needs to review arrivals and departures for the next
day, schedule and attend meetings and in general, oversee the efficient and effective
operations of the front office which are to sell rooms, maintain balanced guest accounts,
and oversee services such as mail, faxes, and other information.

3) Using the central reservation system (CRS), hotels can avoid overselling rooms by too
large a margin. The CRS database can also be used as a chain or as a property marketing
tool because guest information can be easily stored. CRS can also provide yield
management information for a hotel. The more flexible a central reservation system is,
the more it will help with yield management.

4) The concierge provides specialized personal service in a manner unlike any other
member of the hotel's staff. Often these individualized services are of great
importance to the guest, and the successful fulfillment of these needs builds goodwill
toward the hotel.

5) Guests trust hotels to protect them and their belongings as a part of the services
provided. This trust cannot be broken without serious, long-term costs to the hotel.
Controls such as key inventories, key logs, and strict company policies can help
ensure success in this area.

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V. Mini-Case Discussion Question Answers

Case 1: Checking Out a Guest

1) When working at the front desk, one will likely encounter guests who are having a bad
day and thus may have a difficult time in dealing with them. In this particular situation, the
guest service agent (GSA) could have done some of the following to maintain better control.
The agent could excuse herself and have another agent or a superior take over. Front desks
usually have an arrangement where other employees work to help take the heat off their co-
workers. However, here the agent decided to grin and bear it, not letting the guest get the
better of her. She deserves credit for that. The associate could have asked another agent, or
even someone from the business center, for help in copying and faxing the papers for the
guest.

Note: Responses to questions 2 and 3 are interrelated. Depending upon the response to
question 2, there may not be a response to question 3.

Case : Overbooked: The Front-Office Perspective

Regarding Jill's situation, she had the reservation manager look over the files of the
incoming guests. This information revealed that nine guests had not sent in a deposit, nor
had they given their credit card numbers in order to reserve the rooms. These reservations
were made several months in advance and the hotel had not heard back from them,
despite correspondence having been sent. This reduced the overbooking status to
twentyone rooms.
She was later approached by the Front Desk Shift Supervisor with the news that a
group of eight rooms wanted to check out that day instead of their originally scheduled
departure date--the following day.
As she worked with the new information, Jill received a call from a guest wishing to
stay longer in order to finish his business. Jill appreciated the call and told him that she
would work on it, although because of the overbooking, she would make a reservation at
a nearby hotel as back up.
Once she put the customary 5% no show factor into effect, she was able to give the
remaining rooms easily, allowing the guest to stay for business and walking only one
guest.

Case 3: Overbooked: The Housekeeping Perspective

Rodondi had to think fast and focus on getting all rooms ready for the guests. The
options were limited to calling employees who were scheduled off that day. Of the two
employees who were off, only one was available to work.
Rodondi felt the pressure build. After allocating the standard sixteen rooms per
housekeeper, there were still thirty-two rooms not covered. Rodondi decided to sell
rooms to the housekeepers. It is common practice to offer housekeeper's additional
money to clean extra rooms when the hotel is short-staffed. When purchasing additional
rooms, each housekeeper receives overtime and $3 additional per room. Selling rooms to

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the housekeepers reduced the number of rooms not covered to twenty. By implementing
this strategy, Rodondi had less rooms to work with and the employees were content.
Rodondi then contacted the evening crew, who offered to service ten additional
rooms, dropping the count to ten. Since the PM staff is much smaller, they took a lot
upon themselves to complete the room services.
The day was going by fast and Stephen still had ten rooms remaining without service.
He decided to take the situation on a more personal level by speaking to each
housekeeper on a one-on-one basis. By doing so, he was able to distribute five more
rooms.
At this point each available housekeeper had obviously taken additional
responsibilities. In order to cover the remaining rooms, each supervisor, who normally
inspects rooms, took part in the cleaning. This left Rodondi having to inspect all of the
rooms himself. He had to verify that all rooms had been serviced to the Hyatt standards
of quality.
Although this was an unusual situation for Stephen Rodondi and his housekeeping
team, tactful management skills and team effort from the department managed to provide
the service expected by guests in all four hundred rooms.

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