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Unit 6 Rooms Division Operations Management Assignment
Diploma in Hospitality Management
Unit Number and Title
Unit 6 Rooms Division Operations Management
The main aim of a hotel is to provide its customers with utmost satisfaction and hence increasing its profit margins. This can be done only via altering and adopting a strong strategy for rate at which the room get occupied which requires compatibility and clear communication between departments of the hotel. The hospitality business also needs follow several legislative and regulatory norms of the industry. Room division operations management is one of the most important areas of a hotel organization and this report analyses the different features of room division (Landberg, 1994). Also techniques to measure and maximize room revenue and occupancy are discussed.
Park Hyatt Zurich is sophisticated and stylish hotel located in the heart of Zurich’s business district. It is located perfectly for travellers who are looking out for a contemporary as well as sleek option which caters to travellers who are in the city for business as well as pleasure. It consists of 142 standard, deluxe rooms and suites that offer and extraordinary view of Zürich. The hotel houses a selection of major art pieces. Its interior includes the stunning Ingo Maurer ‘Porca Miseria!’ chandelier with warm coloured interior. The location of the hotel provides access to the designer boutiques of Bahnhofstrasse, Lake Zurich, attractions of Altstadt (Old Town), Opera House, Niederdorf and the Congress Hall.
The hotel has various options for dining which include Lobby Lounge featuring an open kitchen. Café Z, the in-house delicatessen and Onyxbar where the guest can unwind for a relaxing cocktail. It offers a spa under the Club Olympus Spa name, a fitness centre which includes all modern training equipment, concierge services for planning of activitiesand signature conference halls. The hotel also has event and banquet halls for conducting meeting and weddings. The rooms are equipped with high end luxury amenities and high speed internet with 24- hour room service (Hyatt, 2014).
Part A: Legislatory and Regulatory Requirements
It is mandatory for any hotel to follow the legal and regulatory framework as defined for the hospitality industry, especially in line with the countries requirements where the hotel holds its operations. The key aspects of Park Hyatt’s legislative and regulatory requirement regarding room operations are presented below (Jones, 1996).
Duty towards guest is the most basic feature of a hotel. There is no specific contract relating to accommodation of the guest but on basis of the issue, tenancy law, safekeeping law may or general contractual law may apply.
Employment and pension Laws- according to the International Treaty regarding Labour Conditions in Hotels, Restaurants and Similar Services, the employment agreement for hotel applies to all its employees in the non- executive sector. It consists of an agreement which outlines points like minimum wages and pension structure among other provisions.
Food and Hygiene- The hotel is obligate under the Swiss Law of Foodstuffs and Objects of Utility (Lebensmittelgesetz), to provide hygienic food. It forbids any sort of harmful substances and encompasses the food storage regulations. The declaration of the composition and origin of food is also included.
Health and safety- The standard health and safety laws apply. Also the requirement of non-smoking areas at various parts of the hotel is necessary. The requirements for handicap access should be accounted for in toilets, lifts entrance etc. There are certain cantons like at least 3 non-alcoholic beverages need to be cheaper than the cheapest alcoholic beverage and these cantons need to be adhered to.
Guest Information- The data protection law binds the hotels in collecting identification of the guest by an official document. It is mandatory for the hotel to so during the guest check in process.
Licensing- The Cantonal law overseas the licensing of the hotel. Casinos as well as alcoholic beverages each require a separate licence. The association of Swiss hotel operates chalk out the number of stars for a particular hotel.
Taxation- Switzerland is primarily a tourist destination. Hence guest enjoys a reduced Vat rate of 3.6% for accommodation and breakfast. However the other services are the usual rate of7.6%. In addition to this customers may be chargedKurtaxe, visitor’s tax under the municipal law.
Others include intellectual property, insurance, planning and zoning which need to addressed to (Law& vanderveen, 2008).
Part B: Accommodation and Reception Staff
The hotel contains the front end and back end staff. The front end consists of the first point of contact for the guests. It attends the guest inquiry and it also assists in the promotion of its products and services. The back end is the support system of the hotel and carries out the operational activities (Woods, 2000).
Front end roles and responsibilities
Hotel Manager- prepares the budget for the various departments and forecast of the hotel. He ensures that the policies and procedures of the hotel operation are adhered to. The rate structure is decides by the hotel manager along with the training structure. It’s the responsibility of the hotel manager to ensure that the hotel follows the standard service guidelines.
Front Office manager- Receives the guest and helps them in the check in process. Answers the queries of guests and has an assistant manager in caseit’s a big hotel like Hyatt.
Night Auditor- balances all the transactions that happened through the day. Also manages the switch board control and manages the reception duties at night.
Doorman/Valet /Porters- Manage the handling of bags, takes guest to the airport and back, parks guest’s cars, runs errands for the hotel. Porters transfer the luggage to the guest rooms and keep the lobby clean and tidy (Jerris, 1999).
Back end roles and responsibilities
Reservation officer- supervises and manages the incoming reservation queries and event queries. They also allocate rooms and keep a track of the deposits done by the guests.
Housekeeping services- they take care of the hygiene and the maintenance of the rooms and hotels. They ensure that the rooms are cleaned, amenities replaced and overall cleaning of the room. The upkeep of public areas as well as faults in plumbing and electricity is taken care of by the housekeeping.
Security- They monitors the hotels security and ensures that no illegal activities are taking place. They provide the hotel with a safe business environment (Harkison, Poulston & Kim, 2011).
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Part C: Services Offered by Rooms Division
The hospitality industry can be divided into various businesses
Business hotels- Cater primarily to business customers and are located in the heart of the city. Guest amenities include complimentary newspaper, Wi-Fi and free morning coffees. The accommodation services include high quality room service, internet bookings, regular housekeeping etc. Usually have 100 and up rooms. Park Hyatt, Zurich falls in this category
Motels-They have limited services and reservations are usually done on a first come first serve basis. There is no well-maintained front desk and room service and luggage carriers are generally not in their description. They usually have rooms from 10- 40 and are found on highways or close to airport.
Airport Hotels- They are found near airports. They can be budget or luxury. These hotels cater to people who have an overnight stay or have to stay back due to a flight cancellation. Some also charge an hourly rate. These hotels usually provide services like free shuttle between hotel and airport
Extended stay hotels- These hotels include services like a kitchen and living room along with the bedroom. They cater to guests who look at staying at a hotel for usually a week or more. These hotels most likely do not have services like food or laundry.
Resort and casino hotels- They are usually in the luxury segment. Located in exotic areas like mountains, beaches, they have many recreational services like hiking, golf, tennis, skiing and provide a place where the guest come to enjoy themselves. Casino hotels prime service is gambling and though they have really gourmet food and beverages, it is only secondary to gambling (Tim Bottorff, 2013).
Part D: Importance of Front of House Area
The front house area is one of the most important aspects of a hotel since this is the first impression that a guest gets of the hotel. They have to create a welcoming atmosphere in order to retain the customers. Sales facilities and high standards of customer service are of prime importance for the front of house area. Customers are dependent on them for taking messages and answering the calls. Everyday accounts are also made by them which are then handed to the back office account team (Johns, 1995).
The interiors and design of the property should be appealing to the customers. Designing such that the front office is located in an area where the front office manager can see the people entering from outside as well as from the elevators. There should be designated areas for trolley and other equipment so the hotel looks clean and tidy. Business centre should be placed right behind the front desk in order to maintain guest payments, deposits and for printing receipts. Also the design should ensure that all rooms are located in a way that there is minimal noise. All guest areas should have adequate lighting so that they do not trip. Amendments for handicap and children should be made accordingly (Baker, Jeremy& Bradley, 2000).
Part E: Planning of Front House Area
Planning and management plays a pivotal role in the smooth functioning of hotel.
Planning and management of front house area
The front house area manager should constantly brief its staff for customer service, payment records and telephone skills in answering queries. New and trainee staff should be introduced to the other front line workers such that they can feel as comfortable as the current staff. A special induction programme for the front area people should also be formulated where all the staffs are explained the importance of front line management (Tanke & Mary, 2000).
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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