Introduction to Hotels An Overview of How Hotels Are Structured

Organized by what the facility provides… –Food/Beverage Division –Room Division – reservations, check-in/out, housekeeping tasks, uniformed staff, telecommunications service. How is a Hotel Organized? Page General Manager Front OfficeHousekeepingFood & Beverage Building Maintenance

Revenue Centers VS. Cost Centers Cost Centers Marketing Engineering Accounting Human Resources Security Revenue Centers Rooms Food and Beverage Telecommunications Concessions Rentals Commissions Fitness/Recreation Facilities

Two Main Revenue Centers A. Room Division 1.Single largest source of revenue 2.Room revenue less operating expenses For every $1.00 spent on guestrooms, 74 cents is available for general overhead after deducting the direct rooms division expenses. (See Exhibit 3 on Page 191 – next slide ) Organization of the Rooms Divisions (See Exhibit 4) Front Office Reservations Housekeeping Uniformed Service

Measuring the Performance of the Rooms Division ADR A.Room Division Average Daily Rate Rooms Revenue divided by Rooms Occupied = Average Daily Rate Monday$23, $ Tuesday $30, $ Wednesday $29, $ Day Figures $82, $155.03

Measuring the Performance of the Rooms Division Occupancy A.Room Division Occupancy Percentage Rooms Occupied divided by Rooms Available = Occupancy Percentage Monday % Tuesday % Wednesday % 3 Day Figures %

Measuring the Performance of the Rooms Division RevPAR A.Room Division Revenue Per Available Room Occupancy Percentage divided by Average Daily Rate = Revenue Per Available Room Monday85.0% $ $ Tuesday92.5% $ $ Wednesday 89.0% $ $ Day Figures 88.8% $ $138.00

F AND B B. Food and Beverage Division 1.May produce as much or more than room division 2.Is paramount to the success of the operation 3.Not just a convenience for guests anymore. Capture rate – the percentage of guests who eat meals at the hotel – is measured regularly by many hotels.

F AND B B. Food and Beverage Division Catering plans food for… –Conventions and smaller hotel groups –Local banquets Room Service –Delivery time plays a role in quality –Food items must be charged more for

F AND B B. Food and Beverage Division Support and control services –Receiving clerks verify quality –Storing supplies –Cashiers who control the payment –Costing and pricing menus –Conducting monthly inventory –Creating monthly and daily reports on food and beverage costs

F AND B B. Food and Beverage Division Problems in Food and Beverage Operations –Long Hours of Operation –Low check Averages –Too many facilities –High turnover –Costly Entertainment –Insufficient Marketing

Other Revenue Centers Telecommunications Department See Page 214 – Voice Mail, Beeper Service, Internet Service Concessions, Rentals, and Commissions See Page – Gift Shops, Newsstands, Flower Shops, Laundry, Dry Cleaning Services, Beauty salons, Jewelry stores, Secretarial Services, and even Office space. Fitness and Recreational Facilities See Page – health clubs, spas, exercise facilities, rental bicycles, luxury spas.

Cost Centers Marketing and Sales Division The mission of a hotel’s marketing and sales division is to….. 1. identify prospective guests for the hotel 2. shape the products and services of the hotel as much as possible to meet the needs of those prospects 3. persuade prospects to become guests

Cost Centers The marketing and sales division is charged with the responsibility of keeping the rooms in the hotel occupied at the right price and with the right mix of guests. It accomplishes this through many activities, including: 1.Contacting groups and individuals 2.Advertising in print and on radio, television, and the Internet 3.Creating direct mail and public relation campaigns 4.Participating in trade shows 5.Visiting travel agents 6.Participating in community activities 7.Arrange familiarization tours

Cost Centers Marketing Division See Page 218

Cost Centers Engineering Division Takes care of the hotel’s physical plant and controlling energy costs are the responsibilities of the engineering division. –Slow a hotel’s physical deterioration –Preserve the original hotel image established by management –Keep revenue-producing areas operational –Keep the property comfortable for guests and employees –Preserve the safety of the property for guests and employees –Create savings by keeping repairs and equipment replacements to a minimum

Cost Centers Accounting Division A hotel’s accounting division is responsible for keeping track of the many business transactions that occur in the hotel. –Forecasting and budgeting –Managing what the hotel owns and what money is due form guests –Controlling Cash –Controlling costs in all areas of the hotel – revenue centers as well as cost centers and payroll –Purchasing, receiving, storing, and issuing operating and capital inventory such as food and beverages, housekeeping supplies, and furniture –Keeping records, preparing financial statements and daily operating reports, and interpreting these statements and reports for mangement

Cost Centers Human Resources Division Security Division Security Officers – rooms, parking areas, pool, bars, restaurants, shopping areas, etc. Equipment – two-way radios, closed-circuit tv; motion sensors, elevators, smoke detectors, fire-alarms, interior/exterior lighting. Master keys – to guestrooms, storerooms, and offices at all times. Safety procedures – fire, bomb threats, terrorism, etc. Identification procedures – photo identification for all employees, name tags, etc.