1. FRONT OFFICE OPERATIONS MANAGEMENT
The Hotel Guest

2. Typical Lodging Guests
28.8%
are transient business travelers
25.3%
are attending a conference/group meeting
24.6%
are on vacation
The text describes the characteristics of “typical” business guests and leisure guests.
21.8%
are traveling for other reasons (for example, personal, family, or special event)

3. Lodging Industry Characteristics
Emphasis on safety, cleanliness & service
Guests also consider “intangible” aspects of the purchase
decision
Inseparability of manufacture & sales
A room exists & is sold at the same site
Perishability
- If a room is not rented on a specific date, the revenue is
lost forever
Repetitiveness
- Some operating procedures are routines
* The text provides an example of each characteristic applied to lodging industry.
Labor Intensive
- Much of a hotel’s daily work involves employees
providing services

4. Current Issues confronting Hoteliers: Marketing Issues
Market segmentation is increasing
Efforts to focus on a highly defined, smaller group of travelers.
Brands overlap
The more the number of brands increase, the harder consumers find it to differentiate between them.
Increased sophistication of consumers
Results in a more competitive selling environment for hoteliers (e.g., online room booking)
Increased number of amenities
Various amenities (e.g., business centers) increase costs for hotel owners yet sometimes appeal to only a small segment of the hotel’s market.

5. Contents Room Sales Differentiation Market Segmentation Group Rooms
Transient Rooms
Transient Reservation Avenue
Market Segmentation
Group Market Segments
Transient Market Segments

6. Room Sales Differentiation
The group catering contribution plays an important role in food and beverage revenue and also impacts the sleeping room portion of the hotel success triangle (see text)
Occupancy is the measurement of room sales verses available rooms
The rooms that are sold fall into two categories: group and transient
The combination of these two groups makes up the hotel’s occupancy

7. Group Rooms
Group rooms originate from reservations that are made to bring more than one guest to the hotel
Group rooms involve a series of bookings that correspond to specific functions
Most hotels consider bookings of 10 or more rooms per night a group booking
The purpose of the group room sales effort is to seek group bookings and bring them to the hotel

8. Group Rooms (Cont…)
Groups sales is counted upon to fill a certain number of hotel rooms per night
The group base is the measurement of how many group rooms are “on the books” on a given night
Because groups can be booked far in advance, they are sought after
It’s important to note that group rooms are often offered at lower rates

9. Transient Rooms
Transient rooms are rooms that originate from individual reservations
Transient rooms are non-group rooms
These differ from group rooms as there is no way to predict when these guests will arrive
Predicting the level of individual reservations on any given night is difficult
Looking at historical data helps in determining the most likely level

10. Transient Rooms (Cont…)
The individual booking cycle is the time between when the individual reservation is made and when it is due to arrive
Whereas the group base can be reserved far in advance, the individual booking cycle can be more short term
Walk-in reservations are made by guests arriving unannounced at a hotel and cannot be measured as part of the booking cycle as they are hard to predict

11. Group v Transient Rooms
The group and transient makeup of a hotel depends on many factors including location type, service level, target market, size and other factors
A sample relationship at a fictitious downtown hotel is as follows:
500
Transient Rooms
400
Number of Hotel Sleeping Rooms
300
200
Group Rooms
100
M T W T F S S
Figure 3-1

12. Transient Reservation Avenues
Any hotel that wants to minimise the opportunity cost associated with transient sleeping room sales will incorporate as many reservation avenues as possible
A reservation avenue is defined as the means by which a guest is able to make a reservation at a hotel
The greater the access guests have to specific hotels, the more likely they are to book

13. Transient Reservation Avenues (Cont…)
The most common reservation avenues are:
GDS system (Global Distribution System)
CRS (Central Reservation System)
Direct travel agent or travel management company contact
Direct guest contract

14. GDS System
The Global Distribution System (GDS) is a network of travel and hospitality entities that communicate via an integrated computer system
The computer systems were developed by airlines to link their availability to travel agents
Through fee agreements hotels and car rental companies now also link their individual products to the GDS systems

15. CRS
A central reservation systems provides the customer with an avenue to locate a hotel of choice in a certain location
Using an easy to find toll free number such as 1800-hotels-1 or Web site such as the CRS can generate demand for a hotel through brand loyalty

16. Travel Agent or Travel Management Companies
Within the transient reservation process, travel agents and travel management companies act as intermediaries, making money in one of two ways:
1. They may charge a flat management fee
2. They are paid a commission

17. Direct Guest Contact
The guests themselves can make a reservation via phone, fax or internet
Most hotels offer a direct booking capability on their websites

18. Transient Reservation Avenues
Transient Guest
Travel Mgmt Co or Travel Agent
Via Internet
Via Phone or Fax
CRS
GDS
Hotel
Figure 3-2

19. Market Segmentation
A market segment is a portion or segment of the actual or potential business mix at any given hotel
Grouping this business pool into segments with similar characteristics is called market segmentation
The main group market segments are corporate, association and SMERF
The main transient market segments are business and pleasure

20. Group Market Segments
The corporate market segment consists of for-profit companies and frequently pays higher rates than other segments to ensure quality programs
The association market segment consists of groups of individuals or companies that share common purposes or goals, and is more cost-conscious than the corporate segment

21. Group Market Segments (Cont.)
The SMERF segment consists of groups that have characteristics that set them apart from the previous two categories, and has five primary components
Primary Component
Market
Social
Weddings, Proms, Fund Raisers, etc
Military
Reunions, Award Ceremonies
Educational
Continuing Education, Classes, Training
Religious
Revivals, Enlightenment Gatherings
Fraternal
Fraternities, Sororities

22. Transient Segments
A business transient guest is one who stays at a hotel because of its location in relation to another organisation
The business guest makes his/her hotel choice based on many factors, but one of the most common is brand loyalty
Many hotels offer various incentives for guest loyalty

23. Transient Segments (Cont…)
The pleasure transient guest stays at hotel because of its proximity to an attraction and/or because of a signature attraction at the hotel itself
A signature attraction is an event, activity or facility identified with a specific hotel

24. Guest Room Demand
The following figure illustrates how both group and transient market segments come together to make up guest room demand
Corporate
Business
Hotel
Guest
Room
Demand
Group
Transient
Association
Pleasure
SMERF
Figure 3-4