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  • 1. Keep this book. You will need it and use it throughout your career.About the American Hotel & Lodging Association (AH&LA)Founded in 1910, AH&LA is the trade association representing the lodging industry inthe United States. AH&LA is a federation of state lodging associations throughout theUnited States with 11,000 lodging properties worldwide as members. The association -tions, marketing, hospitality operations, training and education, technology issues,and more. For information, call 202-289-3100.LODGING,About the American Hotel & Lodging Educational Institute (EI) -About the American Hotel & Lodging Educational Foundation(AH&LEF) -of dollars in scholarship funds for students pursuing higher education in hospitalitypractices in the U.S. lodging industry. For more information, go to www.ahlef.org.
  • 2. MANAGINGFRONT OFFICEOPERATIONS
  • 3. Educational Institute BooksUNIFORM SYSTEM OF ACCOUNTS FOR THE LODGING MANAGING HOSPITALITY HUMAN RESOURCESINDUSTRY Fifth EditionTenth Revised Edition Robert H. Woods, Misty M. Johanson, and Michael P. SciariniwORLD OF RESORTS: FROM DEVELOPMENT TO RETAIL MANAGEMENT FOR SPASMANAGEMENT HOSPITALITY INDUSTRY FINANCIAL ACCOUNTINGThird Edition Third EditionChuck Yim Gee Raymond S. Schmidgall/James W. DamitioPLANNING AND CONTROL FOR FOOD AND BEVERAGE INTERNATIONAL HOTELS: DEVELOPMENT & MANAGEMENTOPERATIONS Second EditionEighth Edition Chuck Yim GeeJack D. Ninemeier QUALITY SANITATION MANAGEMENTUNDERSTANDING HOSPITALITY LAw Ronald F. CichyFifth Edition HOTEL INVESTMENTS: ISSUES & PERSPECTIVESJack P. Jefferies/Banks Brown Fifth EditionSUPERVISION IN THE HOSPITALITY INDUSTRY Edited by Lori E. Raleigh and Rachel J. RoginskyFifth Edition LEADERSHIP AND MANAGEMENT IN THE HOSPITALITYJack D. Ninemeier/Raphael R. Kavanaugh INDUSTRYMANAGEMENT OF FOOD AND BEVERAGE OPERATIONS Third EditionFifth Edition Robert H. Woods/Judy Z. KingJack D. Ninemeier MARKETING IN THE HOSPITALITY INDUSTRY Fifth EditionMANAGING FRONT OFFICE OPERATIONS Ronald A. NykielNinth EditionMichael L. Kasavana UNIFORM SYSTEM OF ACCOUNTS FOR THE HEALTH, RACQUET AND SPORTSCLUB INDUSTRYMANAGING SERVICE IN FOOD AND BEVERAGEOPERATIONS CONTEMPORARY CLUB MANAGEMENTFourth Edition Third EditionRonald F. Cichy/Philip J. Hickey, Jr. Edited by Joe Perdue and Jason Koenigsfeld for the Club Managers Association of AmericaTHE LODGING AND FOOD SERVICE INDUSTRY RESORT CONDOMINIUM AND VACATION OwNERSHIPSeventh Edition MANAGEMENT: A HOSPITALITY PERSPECTIVEGerald W. Lattin Robert A. Gentry/Pedro Mandoki/Jack RushSECURITY AND LOSS PREVENTION MANAGEMENT ACCOUNTING FOR CLUB OPERATIONSSecond Edition Raymond S. Schmidgall/James W. DamitioRaymond C. Ellis, Jr./David M. Stipanuk TRAINING AND DEVELOPMENT FOR THEHOSPITALITY INDUSTRY MANAGERIAL ACCOUNTING HOSPITALITY INDUSTRYSeventh Edition Debra F. Cannon/Catherine M. GustafsonRaymond S. Schmidgall UNIFORM SYSTEM OF FINANCIAL REPORTING FOR CLUBSPURCHASING FOR FOOD SERVICE OPERATIONS Sixth Revised EditionRonald F. Cichy/Jeffery D Elsworth HOTEL ASSET MANAGEMENT: PRINCIPLES & PRACTICESMANAGING TECHNOLOGY IN THE HOSPITALITY Second EditionINDUSTRY Edited by Greg Denton, Lori E. Raleigh, and A. J. SinghSixth Edition MANAGING BEVERAGE OPERATIONSMichael L. Kasavana Second EditionHOTEL AND RESTAURANT ACCOUNTING Ronald F. Cichy/Lendal H. KotschevarSeventh Edition FOOD SAFETY: MANAGING wITH THE HACCP SYSTEMRaymond Cote Second EditionACCOUNTING FOR HOSPITALITY MANAGERS Ronald F. CichyFifth Edition UNIFORM SYSTEM OF FINANCIAL REPORTING FOR SPASRaymond Cote FUNDAMENTALS OF DESTINATION MANAGEMENT ANDCONVENTION MANAGEMENT AND SERVICE MARKETINGEighth Edition Edited by Rich HarrillMilton T. Astroff/James R. Abbey ETHICS IN THE HOSPITALITY AND TOURISM INDUSTRYHOSPITALITY SALES AND MARKETING Second EditionFifth Edition Karen Lieberman/Bruce NissenJames R. Abbey SPA: A COMPREHENSIVE INTRODUCTIONMANAGING HOUSEKEEPING OPERATIONS Elizabeth M. Johnson/Bridgette M. RedmanRevised Third Edition HOSPITALITY 2015: THE FUTURE OF HOSPITALITY ANDAleta A. Nitschke/William D. Frye TRAVELHOSPITALITY TODAY: AN INTRODUCTION Marvin Cetron/Fred DeMicco/Owen DaviesSeventh Edition REVENUE MANAGEMENT: MAxIMIzING REVENUE INRocco M. Angelo/Andrew N. Vladimir HOSPITALITY OPERATIONSHOSPITALITY FACILITIES MANAGEMENT AND DESIGN Gabor ForgacsThird Edition FINANCIAL MANAGEMENT FOR SPASDavid M. Stipanuk Raymond S. Schmidgall/John R. Korpi10/12
  • 4. MANAGINGFRONT OFFICEOPERATIONSNinth EditionMichael L. Kasavana, Ph.D.
  • 5. DisclaimerThis publication is designed to provide accurate and authoritative information in regard to the subjectmatter covered. It is sold with the understanding that the publisher is not engaged in rendering legal,accounting, or other professional service. If legal advice or other expert assistance is required, the ser-vices of a competent professional person should be sought. —From the Declaration of Principles jointly adopted by the American Bar Association and a Committee of Publishers and AssociationsThe author, Michael L. Kasavana, is solely responsible for the contents of this publication. All viewsexpressed herein are solely those of the author and do not necessarily reflect the views of the AmericanHotel & Lodging Educational Institute (the Institute) or the American Hotel & Lodging Association(AH&LA).Nothing contained in this publication shall constitute a standard, an endorsement, or a recommenda-tion of AH&LA or the Institute. AH&LA and the Institute disclaim any liability with respect to theuse of any information, procedure, or product, or reliance thereon by any member of the hospitalityindustry.©1991, 2013By the AMERICAN HOTEL & LODGINGEDUCATIONAL INSTITUTE2113 N. High StreetLansing, Michigan 48906-4221The American Hotel & LodgingEducational Institute is a nonprofiteducational foundation.All rights reserved. No part of thispublication may be reproduced, stored ina retrieval system, or transmitted, in anyform or by any means—electronic,mechanical, photocopying, recording, orotherwise—without prior permission of thepublisher.Printed in the United States of America1 2 3 4 5 6 7 8 9 10 17 16 15 14 13 12ISBN: 978-0-86612-412-6ISBN: 978-0-86612-413-3 (with online component)Editor: Jim Purvis
  • 6. ContentsPreface.................................................................................................. xiiiAbout the Author.................................................................................. xv 1 The Lodging Industry.............................................................. 3 The Hospitality Industry........................................................................ 3 Classifying Hotels.................................................................................... 5 Size • Target Markets • Levels of Service • Ownership and Affiliation Classifying Guests................................................................................... 20 Business Travelers • Pleasure/Leisure Travelers • Group Travelers • International Travelers Buying Influences on Travelers............................................................. . 22 Blogging and Social Networking The Green Hotel....................................................................................... 25 LEED Certification and the Energy Star Program • Green Meetings Summary................................................................................................... 29 Endnote, Key Terms, Review Questions, Internet Sites, Case Studies........................................................................................ 30 Chapter Appendix: Case Study for Green Hotel Practices................ 41 2 Hotel Organization................................................................. 57 Organizational Missions......................................................................... 57 Goals • Strategies and Tactics Hotel Organization.................................................................................. 60 Organization Charts • Classifying Functional Areas • Rooms Division • Food and Beverage Division • Sales and Marketing Division • Accounting Division • Engineering and Maintenance Division • Security Division • Human Resources Division • Other Divisions Front Office Operations.......................................................................... 77 Organization of the Front Office • Work Shifts • Job Descriptions • Job Specifications
  • 7. vi Contents Summary................................................................................................... 80 Key Terms, Review Questions, Internet Sites, Case Study................ 82 Chapter Appendix: Selected Front Office Model Job Descriptions.. 91 3 Front Office Operations. ........................................................ 103 . The Guest Cycle....................................................................................... 103 Pre-Arrival • Arrival • Occupancy • Departure Front Office Systems............................................................................... 110 . Front Office Activities Front Office Documents.......................................................................... 113 Pre-Arrival Documents • Arrival Documents • Occupancy Documents • Departure Documents The Front Desk......................................................................................... 115 Functional Organization • Design Alternatives Telecommunications. .............................................................................. 118 . Telecommunications Equipment Property Management Systems............................................................. 122 Reservation Management Software • Rooms Management Software • Guest Accounting Management Software • General Management Software • Back Office Interfaces • System Interfaces • Sales Automation Systems Summary................................................................................................... 129 Key Terms, Review Questions, Internet Sites, Case Studies............. 130 4 Reservations. .......................................................................... 139 . Reservations and Sales............................................................................ 140 The Role of the Sales Department in Reservations • The Reservation Sales Planning Process Types of Reservations. ............................................................................ 142 . Guaranteed Reservations • Non-Guaranteed Reservations Reservation Inquiries.............................................................................. 144 Distribution Channels • Distribution Channel Revenues Group Reservations................................................................................. 152 Group Reservation Issues
  • 8. Contents vii Reservation Availability.......................................................................... 157 Reservation Systems Reservation Records................................................................................ 159 Reservation Confirmation/Cancellation............................................... 161 Confirmation/Cancellation Numbers • Modifying Non-Guaranteed Reservations • Canceling a Reservation Reservation Reports................................................................................ 164 . Expected Arrival and Departure Lists • Processing Deposits • Reservations Histories Other Reservation Considerations........................................................ 166 Legal Implications • Waiting Lists • Promotional Packages • Potential Reservation Problems • E-Commerce Summary................................................................................................... 174 Key Terms, Review Questions, Internet Sites, Case Studies............. 175 5 Registration. ........................................................................... 187 . The Registration Process......................................................................... 187 Preregistration Activities • Creating the Registration Record • Assigning the Guestroom and Room Rate • Establishing the Guest’s Method of Payment • Verifying the Guest’s Identity • Issuing the Room Key or Access Code • Responding to Special Requests Creative Registration Options............................................................... 209 . Self-Registration Selling the Guestroom............................................................................. 210 Denying Accommodations..................................................................... 212 Walk-In Guests • Guests with Non-Guaranteed Reservations • Guests with Guaranteed Reservations Summary................................................................................................... 215 Key Terms, Review Questions, Internet Sites, Case Studies............. 217 6 Communications and Guest Services...................................... 229 Front Office Communications. .............................................................. 229 . Guest Communications • Transaction File • Information Directory • Reader Board • Group Résumé Book/File • Mail and Package Handling • Telecommunications Services Interdepartmental Communications.................................................... 239 Housekeeping • Engineering and Maintenance • Revenue Centers • Marketing and Public Relations
  • 9. viii Contents Guest Services.......................................................................................... 240 Equipment and Supplies • Special Procedures Guest Relations........................................................................................ 243 Complaints Summary................................................................................................... 249 Key Terms, Review Questions, Internet Sites, Case Studies............. 250 7 Security and the Lodging Industry.......................................... 261 Developing the Security Program......................................................... 262 Doors, Locks, Key Control, and Access Control • Guestroom Security • Control of Persons on Premises • Perimeter and Grounds Control • Protection of Assets • Emergency Procedures • Communications • Security Records • Staff Security Procedures Management’s Role in Security............................................................. 274 . Areas of Vulnerability • Security Requirements Setting Up the Security Program........................................................... 275 Relations with Local Governmental Agencies • Security Staffing • Security Training Security and the Law. ............................................................................. 287 . Legal Definitions Summary................................................................................................... 290 Endnotes, Key Terms, Review Questions, Internet Sites, Case Studies........................................................................................ 292 8 Front Office Accounting......................................................... 307 Accounting Fundamentals..................................................................... 307 Accounts • Folios • Vouchers • Points of Sale • Ledgers Creation and Maintenance of Accounts............................................... 313 Automated Recordkeeping Systems • Charge Privileges • Credit Monitoring • Account Maintenance Tracking Transactions............................................................................. 316 . Cash Payment • Charge Purchase • Account Correction • Account Allowance • Account Transfer • Cash Advance Internal Control. ...................................................................................... 321 . Cash Banks • Audit Controls Settlement of Accounts........................................................................... 323 . Summary................................................................................................... 327 Key Terms, Review Questions, Internet Sites, Case Study................ 328
  • 10. Contents ix 9 Check-Out and Account Settlement. ...................................... 335 . The Check-Out and Settlement Process............................................... 335 . Departure Procedures............................................................................. 336 Methods of Settlement • Late Check-Out Check-Out Options.................................................................................. 341 Express Check-Out • Self Check-Out Unpaid Account Balances....................................................................... 343 Account Collection.................................................................................. 345 Account Aging Front Office Records................................................................................ 349 Guest History File • Marketing Follow-Through • Data Privacy Summary................................................................................................... 354 Key Terms, Review Questions, Internet Sites, Case Studies............. 355 10 The Role of Housekeeping in Hospitality Operations. ............ 363 . Communicating Room Status................................................................ 363 Housekeeping and Maintenance........................................................... 366 Communicating Maintenance Work • Types of Maintenance Identifying Housekeeping’s Responsibilities...................................... 370 . Planning the Work of the Housekeeping Department....................... 372 Area Inventory Lists • Frequency Schedules • Performance Standards • Productivity Standards • Equipment and Supply Inventory Levels Supervisor Dilemma............................................................................... 377 . Summary................................................................................................... 380 Key Terms, Review Questions, Internet Sites, Case Studies............. 382 11 The Front Office Audit............................................................ 393 Functions of the Front Office Audit...................................................... 393 The Front Office Auditor • Establishing an End of Day • Cross-Referencing • Account Integrity • Guest Credit Monitoring • Audit Posting Formula • Daily and Supplemental Transcripts • Front Office Automation The Front Office Audit Process.............................................................. 398 Complete Outstanding Postings • Reconcile Room Status Discrepancies • Verify Room Rates • Balance All Departmental Accounts • Verify No-Show Reservations • Post Room Rates and Taxes • Prepare Reports • Prepare Cash Receipts for Deposit • Perform System Back-Up Routine • Distribute Reports
  • 11. x Contents System Update......................................................................................... 407 Centralized Front Office Audits............................................................ 408 Summary................................................................................................... 409 Key Terms, Review Questions, Internet Sites, Case Study................ 410 Night Audit Problem.............................................................................. . 413 12 Planning and Evaluating Operations....................................... 419 Management Functions.......................................................................... 419 Planning • Organizing • Coordinating • Staffing • Leading • Controlling • Evaluating Establishing Room Rates........................................................................ 422 Market Condition Approach • Rule-of-Thumb Approach • Hubbart Formula Approach • Planned Rate Changes Forecasting Room Availability............................................................... 433 Forecasting Data • Forecast Formula • Sample Forecast Forms Budgeting for Operations....................................................................... 444 Forecasting Rooms Revenue • Estimating Expenses • Refining Budget Plans Evaluating Front Office Operations...................................................... 448 Daily Report of Operations • Occupancy Ratios • Rooms Revenue Analysis • Income Statement • Rooms Schedule • Rooms Division Budget Reports • Operating Ratios • Ratio Standards Planning for Disasters............................................................................. 463 Summary................................................................................................... 464 Key Terms, Review Questions, Internet Sites...................................... 466 Chapter Appendix: Manual Operations Plans.................................... 469 13 Revenue Management. ........................................................... 477 . The Concept of Revenue Management................................................ 477 . Hotel Industry Applications Measuring Revenue................................................................................. 483 Formula 1: Potential Average Single Rate • Formula 2: Potential Average Double Rate • Formula 3: Multiple Occupancy Percentage • Formula 4: Rate Spread • Formula 5: Potential Average Rate • Formula 6: Room Rate Achievement Factor • Formula 7: Yield Statistic • Formula 8: RevPAR • Formula 9: Identical Yields • Formula 10: Equivalent Occupancy • Formula 11: Required Non-Room Revenue per Guest • RevPAG and GOPPAR
  • 12. Contents xi Elements of Revenue Management....................................................... 496 Group Room Sales • Transient Room Sales • Other Revenue Opportunities • Local and Area-Wide Activities • Special Events • Fair Market Share Forecasting The Revenue Manager............................................................................ 506 Using Revenue Management................................................................. 508 The Revenue Meeting • Potential High- and Low-Demand Tactics • Implementing Revenue Strategies Revenue Management Software............................................................ 518 Summary................................................................................................... 519 Endnotes, Key Terms, Review Questions, Internet Sites, Case Study.......................................................................................... 521 . 14 Managing Human Resources. ................................................. 529 . Recruiting. ................................................................................................ 529 . Internal Recruiting • External Recruiting Selecting.................................................................................................... 535 Selection Tools • Evaluating Applicants • Interviewing Hiring........................................................................................................ 548 Job Offers • Processing Personnel Records Orienting................................................................................................... 549 Skills Training........................................................................................... 551 Prepare to Train • Present the Training • Practice Skills • Follow Up Staff Scheduling....................................................................................... 563 Alternative Scheduling Techniques Staff Motivation. ...................................................................................... 566 . Training • Cross-Training • Recognition • Communication • Incentive Programs • Performance Appraisals Summary................................................................................................... 570 Key Terms, Review Questions, Internet Sites, Case Studies............. 571Appendix: Internet Concepts................................................................ 581Index. ................................................................................................... 611 .Forms for Night Audit Problem............................................................. 619
  • 13. PrefaceFrom the time a guest makes a reservation and arrives at a hotel through thetime he or she departs, front office personnel play a central role in coordinatingresources and services designed to meet the guest’s needs. Guests generally havemore contact with front office staff than with any other hotel department staff; as aresult, to many guests, the front office is the hotel. Guests will contact front officestaff with questions, requests, comments, and complaints. Front office staff mem-bers who effectively anticipate, respond, and address these challenges help exceedthe expectations that hotel guests have. A capable, courteous, and professional front office staff member can contributeto making each guest’s stay a pleasant experience and, in the process, encourage theguest to return. In so doing, front office staff members strive to meet guest needswhile also ensuring smooth and profitable hotel operations. This may not alwaysbe an easy task. Poorly trained front office employees can do great harm to a hotel’sreputation, reduce or eliminate profitability, and antagonize guests. This ninth edition of Managing Front Office Operations will help you—whetheryou are a front office manager or staff member or a hospitality student—to under-stand, organize, perform, and evaluate the front office functions that are critical toa hotel’s success. This book details information about numerous aspects of frontoffice operations and management. It examines complex relationships betweenhotel departments, technological advances, and unique front office strategies. Alltopics are presented in an easy-to-read and easy-to-understand format. Althoughthe book concentrates on the many technical aspects of front office management, italso emphasizes the importance of guest service. Indeed, the quality of guest ser-vices often separates a great hotel experience from an average one. This edition’smany discussions on guest service provide the reader with appropriate insightinto this important area. Model job descriptions for selected front office positions are in various sec-tions of the book. The text also touches on such important industry concerns asmulticultural workforce management, employee recruitment and retention, andcompliance with the Americans with Disabilities Act. Review questions and defi-nitions of key terms appear at the end of each chapter, followed by a section pro-viding relevant website addresses for those seeking more in-depth information ona broad range of topics mentioned in the text. In addition to preserving the strengths of the eighth edition, this editionincorporates many improvements. New material describes the potential impactof automated information technologies on a variety of front office functions. Alsoincluded in this edition are sections on the revenue manager, the ways in whichblogging and social networking affect hotels, manual backup procedures in caseof automated system failure, identity theft prevention, payment card securitystandards, the green hotel, and Internet concepts and protocols (in the extensiveappendix at the end of the book). These topics have become critical to front officeoperations, and front office managers must be knowledgeable of and fluent in thecapabilities and language of a revised front office toolbox. In addition, important
  • 14. xiv Prefacediscussions of front office operations have been expanded throughout the text,especially with respect to human resources management, business forecasting,revenue management, budget planning, and front office staff interaction withsales, housekeeping, and security personnel. I am confident these revisions andinnovations will provide each reader with a clear, systematic view of front officeoperations and management. Michael L. Kasavana, Ph.D. East Lansing, Michigan
  • 15. About the AuthorMichael L. Kasavana, Ph.D., is the NAMA (National Automatic MerchandisingAssociation) Endowed Professor in Hospitality Business in The School of Hospital-ity Business at Michigan State University. He is considered the School’s residenttechnology expert. Dr. Kasavana completed his undergraduate and graduate workat the University of Massachusetts—Amherst. He received a bachelor’s degree inhotel, restaurant, and travel administration; a master of business administrationin finance; and a doctorate in management information systems. He has writtenseveral books, instructional software packages, and a host of research journal andtrade industry magazine articles. Dr. Kasavana’s teaching and research efforts have been sharply focused on ITapplications for hotels, restaurants, casinos, and private membership clubs, with aspecial emphasis on self-service technology. He is an active consultant and a recip-ient of the MSU Distinguished Faculty Award, the MSU Teacher-Scholar Award,and the Eli Broad College of Business Withrow Teacher/Scholar Award. He haspresented numerous seminars on a variety of topics in the United States, Canada,Rome, Hong Kong, and other areas of the world. Dr. Kasavana is a member of theInternational Technology Hall of Fame sponsored by Hospitality Financial andTechnology Professionals (HFTP) and a recipient of the Distinguished Achieve-ments Award from the Food Service Technology Consortium (FS/TEC). He is cred-ited with creating the terms “Menu Engineering” and “V-Commerce.” In addition to his responsibilities at the MSU hospitality business school, Dr.Kasavana serves as the university’s Faculty Athletic Representative to the NCAA,Big Ten, and CCHA athletic conferences. He also chairs the MSU Athletic Council.