Unit 7 Rooms Division Operations Management-Btechnd
Planning and management of accommodation service
For the upkeep of quality in a hotel it is very important that there is a service strategy is place. This will help the management in order to plan its resources accordingly. It is important that all employees of the hotel be given an opportunity to voice their opinion about hotel matters such that they feel an active part of the network. This will improve customer satisfaction and hence result in customer retention. The housekeeping department should be also brief its employees in a manner that they maintain top most quality and hygiene in the hotel. A discussion on the guest cycle, selection of potential candidates and quality control is important feature of service planning (Korczynski, 2002).
Part F: Operational Issues
The main operating issue that front house are is finding relevant employees and labour. There are lot of factors which contribute to this especially long hours of working. For example the front office manager has to be on their toes for the entire duration of the shift which is very taxing. Also finding skilled housekeeping staff is difficult. Opening of hotels at remote locations, low wages is another operating issue faced by this industry (Jones and Edwards, 2005).
Increased quality at reduced cost is another major issue faced by the accommodation services. Due to the increasing cost based on the current economic situation, accommodations find it very difficult to maintain standard and at the same time be cost efficient (Baum, 2006).
Increasing competition has made it very difficult for hotels to fill their room occupancy. This leads to hotels selling their rooms at a cheaper price at the same time bundling it with offers such as free breakfast and free airport transfer. In order to deal with this competition, accommodation has to come up with innovative ways of dealing with it (Austin, Hayes &Ninemeier, 2007).
Part A: Revenue and Yield Management
Yield management focuses on increasing the revenue yield by the combination of volume of activity and selling price. Revenue management is nothing but selling the right product or service to the right customer at the right time. It is a systematic and proof based concept which is not based on a mere human judgement of the hotel manager (Rutherford, 2001). In order to maximise its revenue, Five Seasons should ensure that it increases its occupancy rate trying to make it 100 % to gain maximum revenue
Yield management is represented by
YM% =Achieved revenue* 100/ (Potential revenue)
Where YM= yield management
Part B: Sales Technique to Improve Revenue
Five Seasons hotel can come up with advertisement and promotion activities to increase its occupancy. It can offer a free night stay for guests who have booked a room for 3 nights or more. It can also offer its guests complimentary fruits and chocolates in the room which will be an incentive to book its free rooms. Also free upgrades for customers who have booked their rooms in a 30 day advance can act as an attractive factor for the guests. Charging a premium for room service is another way to improve sales. In addition to the usual food and beverage items kept in the bar menu, the hotel can add travel adapter and earphones for selling purposes because these are necessary items which guest forget to carry and can be bought of the hotel (Foster, 1993).
Part C: Forecasting Data
Forecasting uses statistical data to estimate trends, expectations or patters based on historical data, a certain value which cannot be controlled for a certain period in the future. Other variables such as inflation, interest rates, competition and economic rates are also accounted for other than the historical values. The person who is forecasting has to adjust these variables according to the current trend before proceeding. Forecasting uses three types of statistical data which are trend projection, seasonal and trend projection and smoothing technique. Forecasting uses three types of judgemental data based on expert opinion, market surveys and Delphi technique. Usually the sales manager along with other employees make this forecast room demand by analysing the occupancy rates, number of hotel rooms and average guest per room/length of stay (Cooper & Schindler, 2003).
Part D: Performance Indicators
They help the room division managers to measure the success of the accommodation sales. The most widely used performance indicator is room occupancy. For Five Seasons it can be calculated as
Room occupancy= (Number of rooms sold in hotel / Total rooms in hotel) x 100
Number of rooms sold in hotel=180
Total rooms in hotel=215
Room occupancy= (180/215) x 100 = 83.7 %
It can be seen that 83.7 % of the room are occupied. The sales can be analysed by using this as an indicator.
Also average room rate, revenue per available room and room yield are used as performance measure indicators. The other performance indicator is the analysis of financial ratios from the financial statement analysis. Also cost volume profit analysis s another valuable technique to measure performance (Rutherford, 2001).
It can be seen that room division plays a vital role in the revenue generation of a hotel organization. The front desk and housekeeping, both are very important for the smooth functioning of the hotel. Interdepartmental communication is essential to flourish understanding between employees and lead to the successful management of the hotel (Farrell, Souchon & Durden, 2001). A hotel faces many operational issues so the room division managers should ensure that the come up with innovative solutions in order to deal with such issues. For maximum revenue generation, the occupancy of the rooms has to close to 100 percent. Forecasting and using performance indicators can help the hotel organization to maximise their revenue in a more structured manner.
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Jones, N.and Edwards, J.(2005)Operations Management for the hospitality Industry; Aresource based approach for the hospitality and Tourism Industries British LibraryCataloguing, Berwick. Order Now