This is a solution of City of London College Room Division Operations Management assignment based on the Atlantic Hotel UK.
a) Range of services delivered by Atlantic Hotel
The Atlantic Hotel in U.K is a plush 3 – star hotel located in the La Palm city having close to 300 rooms and visitors to the tune of 300000 every year. In order for the hotel to perform well in terms of revenue it needs to comply with the rules and provisions of hospitality industry. The key aspects of the legislation and regulatory guidelines that are relevant to the room division operations in the Hospitality industry have been analysed below:
- Privacy of Clients: Taking special consideration of the privacy of the clients is the ethical, moral, business and social responsibility of the hotel. The personal information of the clients should be kept confidential and keys of their room should not be given to any third person without confirming the identity of the person.
- Safety and Security of Clients: Maintaining the safety of the clients is the prime responsibility of the hotel. This is called as duty of care standard. To ensure the safety of the guests the hotel should make sure that there are no wet floors or naked wires. For maintaining the security of the clients, the hotel should make sure that all doors and windows are intact and can be properly locked. The hotels often appoint special security officers or special equipment to ensure the complete safety and security of the clients (Baum, 1990).
- Hygiene: It is very important for the hotels to maintain proper hygiene so that clients have a pleasant stay in the hotel. Atlantic hotel needs to ensure the housekeeping staff regularly cleans the room and corridors and keep the rooms and lobby absolutely clean as cleanliness goes a long way in leaving an everlasting impression on the customers.
- Property of Clients: Taking care of the personal belongings of the clients is also the duty of the hotel. These days, hotels provide a safe the clients to ensure that their personal property is safe and intact. The safe has a unique password which the client can set or keys which only the client possesses.
b) Roles and responsibilities of the reception staff
The hotel has two main segments i.e. Accommodation and Reception. The functions of both these segments are different and the staff of these segments also different roles and responsibilities.
The Reception contains a number of sub departments. These are:
The roles and responsibilities of the Front office managers are:
- To provide all the required services to the clients and enrich the overall client experience (Jones, 1999).
- To review the arrivals and departures of the clients.
- To make demand forecasts for the supply of rooms in the hotel.
- To make adjustments in the duty allocation as per the staff available and prepare shift schedules.
- To target the desired market and ensure that the desired market is captured.
The main roles and responsibilities of the Day Clerks are:
- To provide services to the clients like fax, mail, messages etc.
- To maintain balanced account statements of the clients.
- To review the occupancy of the previous night.
- To take special care of the clients in the VIP rooms.
The bell service includes Doormen, Bellmen and others like elevator operators, clerks and lobby porters.
- To greet the guests when they arrive. This is the responsibility of the Doorman
- To carry the luggage of the guests and escort them to their respective rooms. This is the responsibility of the Bellman in the hotel.
- To take care of the mail and information services of guests. This is the responsibility of the clerks.
Concierge is basically an extension of the front desk agent and is generally available in luxury hotels (Jones, 1993). The staff of this department must have a sound knowledge of the city and know many languages. The main responsibility of this department is to process the special request of the clients like:
- Handling emails and other information
- Providing information and directions
- Making ticket bookings
- Arranging sightseeing tours
The responsibilities of the Cashier and Night Auditor are:
- To close the books on a daily basis.
- To post daily charges in the account books.
- To balance the accounts of the guests on a routine basis
- To complete the daily reports.
Role played by front of house in the management of the Atlantic Hotel & the influence of principles of planning and management in the overall performance of Atlantic Hotel
The key to the success of a business is Planning and Management. The main aspects of planning and management for the Front House service have been mentioned below:
- Planning and Management of the front house service includes compiling with the rules and regulations of the building. The building should have a well-structured design and layout and the premises should be neat and clean and ensure the safety and security of the clients (Kimes, 1989).
- Making arrangements to inculcate all the latest facilities like internet, e-mail, fax etc. to the guests ensure better client satisfaction. These facilities should be planned in such a way that there is no chaos in the operations and well-trained staffs is also available. This has been showed by the consistent increase in the number of guest nights for Atlantic Hotel as compared to the other hotels. 86.3 % of guests prefer booking Atlantic hotel for conferences.
- The planning should be done so as to ensure the best quality services to the clients. This includes laundries, linen, television, cold and hot water, air conditioners food etc. The planning of the rooms should be in such that they have good light and ventilation. This was shown by the fact that 75 % of the total revenue came from Room sales.
- The front desk is the point of sale terminal in the hospitality sector. Efficient planning and management at the point of sale can win or lose a customer as the first impression is the last impression (Morrison, 1996), this phenomenon is know sales planning. This has ensured an increase in the guest nights owing to conferencing. The guest nights in 2007 were 18456 which has increased to 34520 which is an increase of almost 87 % in 4 years.
- Well planned software may be used for coordinating the operational functions of front office and managing sales like guest details and bookings, online reservations, sales and marketing and HR. This increases the efficiency of work.
The front house of the Hotel is called the nerve centre of the hotel. Some hotels appoint a special GSA i.e. A Guest Service Agent to provide specialized and best quality services to the clients. The importance of the front of the house is as follows:
- The front of the house is the first impression of the hotel for the client. A neat and clean premise and a well-structured layout with good quality services at the front office can really make a good impression in the minds of the client and lead to better customer service. Customers and guests seemed to be satisfied with the services of Atlantic hotel and this is shown by the fact that more than 50 % of the customers are repeat customers.
- The front of the house has the prime responsibility of selling rooms and ensuring that the clients get the basic facilities like clean rooms, hot water, air conditioners, room services etc. The total revenue for the Atlantic hotel has increased to £ 11320080 out of which £ 84777890 is just because of room sales which is 75 %.
- In order to make the stay of the client a memorable one many hotels also include special service agents to provide additional service to the customer like information and direction, planning sightseeing, arranging travel tickets and cab bookings. This is to give the client a feeling that he is being given personal care and attention. The Atlantic hotel has free recreational facilities for clients staying in the hotel which include Gym, swimming pool etc. and more than 70 % of the guests preferred using these services and really valued them.
- The front of the house is also responsible for making the reservations and answering the query of the clients (Sigala, 2005). This includes providing the best rates and packages to the client, maintaining the inventory of rooms, processing the requests of the travel agents and avoiding over bookings.
- Good quality front of the house and accommodation service also help to stimulate repurchase and increase the business.
The given data clearly shows that for the leisure travellers the occupancy has risen gradually from 28.1 % in 2007 to 30.4 % in 2010. The year 2010 also saw a huge inflow of customers for conferences and business meetings wherein occupancy increased to 29.4% in 2010 from a mere 19 % in 2009. This shows that the Atlantic hotel has started positioning itself also as conferencing and business meetings oriented Hotel. Though the corporate gatherings have decreased but conferencing events have increased. However, revenue from leisure activities has gradually increased. The room division and sales proceeds still contribute the maximum to the Atlantic hotel revenues. Thus the Atlantic Hotel continues to put extra emphasis on improving their accommodation and housekeeping services at the same time focusing on improving their conferencing facilities.
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a) Management of available facilities in targeting different categories of customers
The Atlantic hotel categorized the guests visiting the city into a number of categories. The first category was of the business travellers who mainly visited the city for business meetings and stayed for just one night and then flew back to their base location. These people preferred bring their family along so that they can experience the luxuries staying in Hotel Atlantic. The second category of travellers were the conference and company meeting visitors who visited the base location of the companies in and around la palm city. They also planned to stay for 4 nights as the conferences were of long duration and then return back the following day. The property was a 300 room plush hotel with a variety of conferencing facilities. That’s why customers preferred staying in the facility and conduct conferences at the same place (Walker, 1996). The Atlantic hotel had state of the art conference room. The third category of travellers were the organized groups of people visiting the city for leisure purposes. They planned to stay for a couple of days and travel to nearby locations and return back the same evening to relax in the hotel. These travellers always travelled in groups thus requiring more rooms for the stay and that too together. The fourth category of travellers were the independent leisure travellers. Now Atlantic Hotel had a range of facilities catering to the different categories of customers visiting the hotel for different purposes. The Bee- Bar was open from 6 am till 12 in the night serving all alcoholic and non-alcoholic drinks. This was one of the favoured venues of business meetings. The Lepoque, restaurant served all kinds of continental cuisines and was normally availed for conferences as they were a day long affair. The room lunch and dinner services and bar/lounge services that were served in the room were also major contributors to the revenue to the tune of 80 % of accommodation revenue. Thus Atlantic hotel consistently focused on room service so that clients feel satisfied with the same. The hotel also had 24 hours open recreational facility being operated free of costs for guests with a per employee operating cost of £ 3. They also had state of the art conference room for providing conferencing facilities to regular clients.
b) Operations issues affecting the performance of the accommodation function of Atlantic Hotel
A number of operational issues affect the effective quality management and business performance of the front house area and the accommodation service (Worsfold, 1989). They have been discussed here:
The operational issues related to accommodation can be explained as:
- Controlling Costs: The main aim of business is to maximize the profits. Because of the increase in the basic operation costs, the hotels often adopt a lot of cost controlling methods to ensure maximum profits. This is leads to client dissatisfaction and affects the overall business of the hotel.
- Forecasting Room Availability: It sometimes gets difficult to forecasting the availability of rooms for future allocation. This is because clients may make last minute cancellations or sometimes even extend their stay
- Shortage of Labour: In the peak seasons, the balance of demand and supply for the labour gets disturbed. It sometimes happens that the demand is more but sufficient labour is not available. In such circumstance the clients do not receive the quality of services as per their expectations. This can affect the business as well as the brand image of the hotel.
- Overbooking: Overbooking done at the hotels, especially in the peak season is yet another operational issue which affects business performance and efficient management. Bookings for more than what can be managed by the hotel lead to an overall distasteful experience for the customers. This again hampers the business.
- Market competition: The competitive forces existing in the market, performance of all the major competitors and the overall growth of the market put a lot of pressures on the management to deliver the maximum. This leaves an impact on the overall business management (Powers, 1999).
- Staff: The number and quality of the staff is important. Quality includes the basic education and the overall experience of the staff. If the staff at the hotel is not well trained it will affect the quality of services delivered to the clients and the overall business and the image of the hotel will be affected.
- Physical factors: The value of the property in the market and the cost of the basic infrastructure are increasing rapidly. These physical factors can cause changes in the initial plan designed to deliver the best quality services to the clients and can hamper the overall experience of the customers.
- Financial analysis: Another problem which can affect the quality of the business and the efficiency of management is the regular analysis and evaluation of the budget.
- Marketing & Sales: The various business marketing activities performed by the hotel to bring an increase in the revenue also affects the efficiency of the management and the quality of the business.
a) Revenue or yield management strategies adopted by Atlantic Hotel
The total amount of money produced from the sales of the rooms in a Hotel is called as the Total Revenue of the Hotel. Hotel Atlantic is a well-known hotel in U.K. The rooms in the hotel are categorized into three different types depending on the facilities operations available in the room. The pricing of the different categories of rooms is different. The price of the rooms of the hotel is based on mainly two things i.e. the demand and the type of the room.
The revenue of the hotel = Room Rent of Type A Multiplied by Number of rooms of Type A + Room Rent of Type B Multiplied by Number of rooms of Type B +Room Rent of Type C Multiplied by Number of rooms of Type C
Yield management is defined as a variable pricing strategy which is done on the basis of understanding, anticipating and influencing the behaviour of the consumer. The sales of a limited quantity of goods like hotel rooms are managed in a way to maximize the profits. Demand forecasting technique may be used for yield management (Kimes, 1989).
The different revenue and yield maximizing strategies adopted by Atlantic hotel are: -
- Price Bundling: The technique of price bundling is used when two to three products are sold at a price less than what would be charged if the three products were sold separately. Dinning. Breakfast and recreational facility usage are sold together for price of one room in the case of Atlantic hotel.
- Individual based variable pricing: According to the pricing technique of Individual based variable pricing, different price is charged from different clients for the same service. The pricing is based on the paying capacity of each individual.
- Cost Method: In this kind of pricing technique the room rate is calculated by involving the direct and indirect costs.
- Market Skimming: This involves setting a high price for the rooms for the rooms with additional benefits for the elite class or the business class people as they are the ones who will be ready to pay. This has been followed by Atlantic hotel for leisure seeking travellers.
- Market Penetration: The room rents can be kept low initially so that a larger audience may be captured. This will help Atlantic hotel to gain a bigger market share.
- Leader Pricing: In the method of Leader Pricing, the frequently preferred products are sold at prices less than the normal. This is done basically to attract the customers to the product and increase the sales.
- Suggestive Selling: Suggestive Selling is a sales technique where the salesman makes recommendations to a client for a product according to the requirements of the client. For the prices to be set according to the technique of suggestive selling, it is important that the salesman has a got rapport with the customer. Atlantic Hotel has consistently increasing conference room sales due to the rapport built with corporate clients.
b) Comparative analysis to measure the success of Atlantic Hotel
To measure the success of accommodation sales,
- Average Daily Room Rate: The average daily room rate helps to analyse if the cost is being covered in the room rent or not. It may be calculated by dividing the Total Rooms Revenue / Total Rooms Sold (Morrison, 1996).
For Atlantic Hotel,
Average Daily Room Rate =Total Rooms Revenue / Total Rooms Nights
= £ 8477890 / 117600
Thus average Daily room rate was £ 72. The average price the rooms of the hotel available at, is £ 70. Thus according to the 2010 data the Hotel is in profit.
The competitor performance in terms of average room rate clearly shows that the percentage increase in prices of the Kings Hotel is greater than Atlantic or Moon’s Hotel.
- Percentage of Occupancy: Percentage of Occupancy is calculated by dividing the Total Rooms Occupied by total rooms available (Powers, 1999).
For Atlantic Hotel, the Percentage Occupancy = 64.4 %. The competitors’ occupancy
- Total Revenue Sales with respect to Revenue Centres:The graph below shows the total revenue sales for the different revenue centres in the hotel along with the percentage of the total revenue earned. Room division sales are still the maximum revenue generator.
The hospitality industry is growing rapidly and room division management forms an important part of managing a hotel. Room division management ensures that the clients have a pleasant and comfortable stay in the hotel and are completely satisfied with the services. The room division department in a hotel basically cover two sub departments-Front Office, House Keeping and back office. The assignment covers in detail the various aspects of room division operation management for Atlantic Hotel in U.K. The Atlantic Hotel in U.K. has 300 rooms and past trends show it’s a favourite amongst the leisure visitors. Gradually the positioning of this hotel has changed to a conferencing facility in the La Palm city as the corporate tie ups and corporate relationships has bolstered the sales of the Atlantic hotel in U.K.