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INTRODUCTION TO HOSPITALITY

MANAGEMENT
Fifth Edition

CHAPTER 3
Room Division
Operations

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Chapter Objectives

• After reading and studying this chapter


you should be able to:
1. Outline the duties and responsibilities
of key executives and department
heads.
2. Draw an organizational chart of the
rooms division of a hotel and identify
the Executive Committee members.
3. Describe the main functions of the
rooms division departments. continued on next slide
Copyright © 2017, 2013, 2009
Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Chapter Objectives

• After reading and studying this chapter


you should be able to:
4. Describe property management
systems and discuss yield
management.
5. Calculate occupancy percentages,
average daily rates, and actual
percentage of potential rooms
revenue.
continued on next slide
Copyright © 2017, 2013, 2009
Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Chapter Objectives

• After reading and studying this chapter


you should be able to:
6. Outline the importance of the
reservations and guest services
functions.
7. List the complexities and challenges of
the concierge, housekeeping, and
security/loss prevention departments.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
The Functions and Departments of
a Hotel
• The primary function of a hotel is to
provide lodging accommodations.
• A hotel is comprised of several business
or revenue centers and cost centers.
• Hotels exist to provide a service and to
generate a profit for the owners.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Management Structure

• Management structure differs among


larger, midscale, and smaller
properties.
• The midscale and smaller properties are
less complex in their management
structures than are the larger ones.

continued on next slide


Copyright © 2017, 2013, 2009
Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Management Structure

• A small property may not have a


director of human resources, but each
department head will have general day-
to-day operating responsibilities for the
human resources function.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Role of the Hotel General Manager
(GM)
• The hotel GM must ensure a reasonable
return on investment, keep guests
satisfied, and keep employees happy.
• The GM not only focuses on leading and
operating the hotel departments but
also on aspects of the infrastructure,
from room atmosphere to security.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Role of the Hotel General Manager
(GM)
• The GM is ultimately responsible for the
performance of the hotel and the
employees.
• The GM is the leader of the hotel.
• As such, she or he is held accountable
for the hotel’s level of profitability by
the corporation or owners.

continued on next slide


Copyright © 2017, 2013, 2009
Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Role of the Hotel General Manager
(GM)
• Effective GMs hire the best people and
set the tone—a structure of excellence.
• GMs must also be familiar with the
cultures of guests staying in the hotel
and the employees working in the
hotel.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
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Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
The Executive Committee

• The Executive Committee is comprised


of directors of the following
departments:
– Human resources
– Food and beverage
– Rooms division
– Marketing and sales
– Engineering, and
– Accounting.
continued on next slide
Copyright © 2017, 2013, 2009
Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
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Lorraine
John R. Walker
M. Papazian-Boyce
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The Executive Committee

• Executive Committee meetings usually


last 1 to 2 hours, once a week.
• Typical topics of discussion will focus on
occupancy percentage, Total Quality
Management, forecasts, guest and
employee satisfaction, training, etc.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Fifth Edition
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Lorraine
John R. Walker
M. Papazian-Boyce
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Rooms Division

• The rooms division director is held


responsible by the GM for the efficient
and effective leadership and operation
of all the rooms division departments.
• The rooms division is comprised of the
front office, reservations,
housekeeping, concierge, guest service,
security, and communications.

continued on next slide


Copyright © 2017, 2013, 2009
Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
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Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Rooms Division

• Main concerns of the department are


financial performance, employee
satisfaction, guest satisfaction, guest
services, guest relations, security, and
gift shop.

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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Fifth Edition
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Lorraine
John R. Walker
M. Papazian-Boyce
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Front Office

• The main duty of the front office


manager is to enhance guest service by
developing services to meet guests’
needs.
• He/she supervises Guest Service
Associates (GSAs), who interact directly
with the guests during check-in, check-
out, etc.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
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John R. Walker
M. Papazian-Boyce
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Front Office

• Often, the front office is described as


the hub or nerve center of the hotel.
• In selling rooms, the front office
attempts to achieve 100% occupancy.
• Upselling and yield management can
help increase room sales.
• The interaction of supply and demand
also impacts the ability to sell rooms.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Fifth Edition
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John R. Walker
M. Papazian-Boyce
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Front Office

• Maintaining balanced guest accounts


begins with advanced deposits and
opening the guest account, called a
folio.
• As appropriate, charges from the
various departments of the hotel are
posted to the guest folio.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
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John R. Walker
M. Papazian-Boyce
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Front Office

• Payment is either received on guest


check-out or transferred to the city
ledger.
• Because the front office is staffed 24
hours a day, it is the logical center to
handle guest information needs such as
mail, faxes, messages, and local and
hotel information.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Fifth Edition
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John R. Walker
M. Papazian-Boyce
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Night Auditor

• A hotel must balance its accounts on a


daily basis.
• At approximately 1:00 a.m., when the
hotel has “quieted” down, the night
auditor begins the task of balancing the
guest accounts receivable.
• The daily report contains a key
operation ratio—Room Occupancy
Percentage (ROP).
continued on next slide
Copyright © 2017, 2013, 2009
Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Fifth Edition
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John R. Walker
M. Papazian-Boyce
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Night Auditor

• This is calculated by dividing the


number of rooms occupied by the
number of rooms available.
• The Average Daily Rate (ADR) is,
together with the ROP, one of the key
operating ratios that indicates the
hotel’s performance.

continued on next slide


Copyright © 2017, 2013, 2009
Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
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Lorraine
John R. Walker
M. Papazian-Boyce
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Night Auditor

• ADR is calculated by dividing the total


of room revenue by the total number of
rooms sold.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
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John R. Walker
M. Papazian-Boyce
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Revenue Management

• Revenue management is used to


maximize room revenue at the hotel.
• It is based on the economics of supply
and demand, which means that prices
rise when demand is strong and drop
when demand is weak.
• Although management would like to
sell every room at the highest rack
rate, this is not possible.
continued on next slide
Copyright © 2017, 2013, 2009
Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Revenue Management

• Conventions, groups, and organizations


are often granted a reduced room rate
as an incentive to stay at a particular
property.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Revenue Management

• Revenue management will monitor


reservations and based on previous
trends and current demand, will
determine the number and type of
rooms to sell at what price to obtain
the maximum possible revenue.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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John R. Walker
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Revenue Management

• Revenue per available room, or REV


PAR, was developed by Smith Travel
Research.
– It is calculated by dividing room
revenue by the number of rooms
available.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Fifth Edition
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John R. Walker
M. Papazian-Boyce
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Revenue Management

• Revenue per available room, or REV


PAR, was developed by Smith Travel
Research.
– For example, if room sales are $50,000
in one day for a hotel with 400 available
rooms, then the REV PAR formula is
$50,000 divided by 400, or a REV PAR
of $125.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
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Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Revenue Management

• Hotels use REV PAR to see how they


are doing compared to their
competitive set of hotels.
• Hotel operators use REV PAR as an
indicator of a hotel’s revenue
management program.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Fifth Edition
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John R. Walker
M. Papazian-Boyce
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Energy Management Systems

• Passive infrared motion sensors and


door switches can reduce energy
consumption by 30 percent or more by
automatically switching off lights and
air-conditioning, thus saving energy
when the guest is out of the room.

continued on next slide


Copyright © 2017, 2013, 2009
Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Fifth Edition
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John R. Walker
M. Papazian-Boyce
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Energy Management Systems

• They also can keep tabs on room


occupancy, lighting, minibar, smoke
detectors, locks, and guest amenities.
• Some software programs cut out non-
essential equipment during peak billing
times.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
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John R. Walker
M. Papazian-Boyce
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Call Accounting Systems

• Call accounting systems (CASs) are


systems that can track guest room
phone charges, working in conjunction
with private branch exchange (PBX)
and product management systems
(PMS).
• They can be used to offer different
rates for guest calls.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
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Lorraine
John R. Walker
M. Papazian-Boyce
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Guest Reservation Systems

• Airlines were the first industry to start


using global distribution systems
(GDSs) for reservations.
• GDSs are electronic markets for travel,
hotel, car rental, and attraction
bookings.
• A central reservation system (CRS)
houses the electronic database in the
central reservation office (CRO).
continued on next slide
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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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John R. Walker
M. Papazian-Boyce
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Guest Reservation Systems

• Hotels provide rates and availability


information to the CRO, usually by data
communication lines automatically
updating the CRS.
• With such a system, hotels can avoid
overselling rooms by too large a
margin.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Guest Reservation Systems

• The CRS database can also be used as


a chain or individual property
marketing tool because guest
information can easily be stored.
• A CRS can also provide yield
management information for a hotel.
• A CRS can be used in several areas of a
hotel.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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John R. Walker
M. Papazian-Boyce
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Guest Reservation Systems

• If a hotel has a reservations


department, the terminals or personal
computers in that department can be
connected to the CRS.
• Another form of technology is an
application service provider (ASP),
delivering a booking system tied to
hotel inventory in real time via the
Internet.

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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Billing Guests

• Billing guests has become much easier


with the aid of computers.
• Billing guests can be a long process if
information technologies are not used
to complete transactions.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Billing Guests

• PMSs aid large hotels to make


transactions faster and provide a more
efficient service to their guests.
• These systems help the hospitality
associates bill their guests within
seconds.

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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Security

• Peace of mind that the hotel or


restaurant is secure is a key factor in
increasing guest satisfaction.
• Security is one of the highest concerns
of guests who visit hospitality
businesses.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
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John R. Walker
M. Papazian-Boyce
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Security

• Hospitality information technology


systems include surveillance systems,
electronic door locking systems, and in-
room safes, some using biometric
technology.

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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Guest Comfort and Convenience

• In order to provide a homey and


convenient experience for the guest,
hotels provide services and amenities
such as dining, televisions, telephones,
Internet connections, minibars, hygiene
products, pools, meeting spaces, and
business and concierge services.

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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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John R. Walker
M. Papazian-Boyce
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Reservations

• The reservations manager is the head


of the reservations department and
reports directly to the rooms division
manager.
• The reservations department is
responsible for selling hotel rooms for
the maximum dollar amount while
exceeding guest expectations.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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John R. Walker
M. Papazian-Boyce
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Reservations

• Reservations may originate from a


telephone call to the property,
corporate 1-800 numbers, travel
agents, the Internet, meeting planners,
tour operators, referrals, airport
telephones, and walk-ins.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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John R. Walker
M. Papazian-Boyce
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Reservations

• The corporate CRS interfaces with hotel


inventory and allows reservations by
individual hotel reservations personnel.
• Once a reservation has been made, the
room is immediately deducted from the
inventory of rooms for the duration of
the guest’s stay.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Lorraine
John R. Walker
M. Papazian-Boyce
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Reservations

• Important details are recorded when


the reservation is made, such as name,
billing information, duration of stay,
special requests, etc.
• Guaranteed reservations are made
when the person making the
reservation wants to ensure the room
will be held until arrival.

continued on next slide


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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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John R. Walker
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Reservations

• This usually occurs when the guest will


be arriving late and the room is held
until the guest arrives.
• In the event that the guest does not
show, the credit card is charged for one
night’s room and tax.

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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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M. Papazian-Boyce
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Communications Connect Business
Exchange (CBX) or PBX
• The CBX or PBX includes in-house
communications, guest
communications, voice mail, messages,
and emergency centers.
• It is a profit center for the hotel
because hotels generally add a fee of
50% to all long distance calls and may
charge fees as high as $1.25 for local
calls.

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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Guest Services/Uniformed
Services
• First impressions are very important.
• The guest service staff has the unique
opportunity to make or break that first
image of the hotel and the experience
the guest will have.
• The staff of this department consists of
door attendants, bell persons, and the
concierge.

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Guest Services/Uniformed
Services
• Door attendants are the hotel’s
unofficial greeters.
• Their job requires them to greet guests,
assist with the opening and closing of
doors, handling luggage, and providing
information.

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Guest Services/Uniformed
Services
• The bell person is responsible for
escorting the guests and transporting
luggage to their rooms.
• He/she must have knowledge about the
area, as well as the hotel and its
services.

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ICD-10-CM/PCS Coding: A Management,
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Concierge

• Some of the ways the concierge may


assist guests are by arranging tickets to
popular events/shows in town, making
reservations at restaurants, providing
advice on local activities, reserving
airline tickets and reconfirming of
flights, and fulfilling special requests
such as shopping.

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Concierge

• It is important that the concierge has


excellent knowledge of the hotel, the
city, and international details.
• It is a definite strength if the concierge
is able to speak several foreign
languages.

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Housekeeping

• The housekeeping department employs


the largest number of employees in the
hotel.
• The executive housekeeper is the head
of the department.

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Housekeeping

• It is necessary for the executive


housekeeper to have exceptional
leadership, organizational, and
motivational skills, as well as a high
level of commitment to maintaining
high standards.
• By far, the greatest challenge for the
executive housekeeper is the leadership
of the department.
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Housekeeping

• Often the employees in this department


are of different nationalities.
• The executive housekeeper is
responsible for a substantial amount of
record keeping.

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Housekeeping

• In addition to the scheduling and


evaluation of employees, an inventory
of all guest rooms and public area
furnishings must be accurately
maintained with the record of
refurbishment.
• Most of the hotel’s maintenance work
orders are initiated by the
housekeepers.
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ICD-10-CM/PCS Coding: A Management,
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Housekeeping

• Productivity in the housekeeping


department is measured by person
hours per occupied room.
• The labor cost per person hour for a
full-service hotel ranges from $2.66 to
$5.3 per occupied room.
• Labor cost is expected to be 5.1% of
room sales.

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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Spas

• The spa business has four mantras:


decompression, revitalization, beauty,
and spiritual uplift—not necessarily in
that order.
• The objective is to achieve maximum
relaxation, renewal, and recreation for
the client.

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Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
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Spas

• Many people, perhaps most, see the


spa as a time of renewal or
decompression and for pampering and
mental adjustment, increase in physical
strength, and intellectual and spiritual
enrichment.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Laundry

• Nowadays, more hotels are operating


their own laundry services.
• Modern laundry operates computerized
washing/drying machines and presses.
• Some smaller hotels contract out their
laundry services.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Green Hotel Initiatives

• This sub-department generally reports


to the executive housekeeper.
• Environmentally conscious companies
are helping to avoid environmental
degradation and are saving money,
while being good corporate citizens.

continued on next slide


Copyright © 2017, 2013, 2009
Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Green Hotel Initiatives

• Ecoefficiency, also generally termed


“green,” is based on the concept of
creating more goods and services while
using fewer resources and creating less
waste and pollution.

continued on next slide


Copyright © 2017, 2013, 2009
Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Green Hotel Initiatives

• Ecoefficiency helps hotels provide


better service with fewer resources;
reducing the materials and energy-
intensity of goods and services lowers
the hotel’s ecological impact and
improves the bottom line.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Security/Loss Prevention

• Hotels are responsible for the safety of


their guests.
• Protection of guests and their property
is a key element of hotel operations.
• Security/loss division is responsible for
maintaining security alarm systems and
implementing procedures aimed at
protecting the property of guests,
employees, and the hotel itself.
Copyright © 2017, 2013, 2009
Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.
Trends in Hotel and Rooms
Division Operations
• Some trends include diversity in the
workforce, increases in the use of
technology, security, and diversity of
guests.

Copyright © 2017, 2013, 2009


Introduction to Hospitality
ICD-10-CM/PCS Coding: A Management,
Map to Success
Fifth Edition
by Pearson Education, Inc.
Lorraine
John R. Walker
M. Papazian-Boyce
All Rights Reserved.