- •Contents
- •Preface
- •Acknowledgments
- •Founders of the Hotel Industry
- •E. M. Statler
- •Conrad Hilton
- •Cesar Ritz
- •William Waldorf Astor and John Jacob Astor IV
- •Kemmons Wilson
- •Ernest Henderson and Robert Moore
- •Ray Schultz
- •Historical Developments
- •Atrium Concept
- •Select-Service Hotels
- •Technological Advances
- •Marketing Emphasis
- •Total Quality Management
- •Major Reorganization, 1987–1988
- •Hotel Investment
- •September 11, 2001
- •Economic Downturn of the Late 2000s
- •Overview of the Hotel Industry
- •Types of Lodging Facilities
- •Hotels
- •Motels
- •All-suites
- •Select-service Hotels
- •Extended-stay Hotels
- •Market Orientation
- •Sales Indicators
- •Occupancy
- •Average Daily Rate (Average Room Rate)
- •Yield Percentage
- •RevPAR (Revenue per Available Room)
- •Levels of Service
- •Business Affiliations
- •Chain Affiliation
- •Referral Property
- •Company-owned Property
- •Management Contract Property
- •Brands
- •Independent Properties
- •Trends That Foster Growth
- •Leisure Time
- •The Me/Pleasure Concept
- •Discretionary Income
- •Family Size/Household Size
- •Business Travel
- •Female Business Travel
- •Travel as Experience
- •Career Development
- •Educational Preparation
- •Work Experience
- •Professional Memberships
- •Ports of Entry
- •Researching Growth Areas in the Hospitality Industry
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Notes
- •Key Words
- •Organization of Lodging Properties
- •Organization Charts
- •Typical Job Responsibilities of Department Managers
- •General Manager
- •Assistant General Manager
- •Food and Beverage Director
- •Physical Plant Engineer
- •Executive Housekeeper
- •Human Resources Manager
- •Marketing and Sales Director
- •Front Office Manager
- •Controller
- •Director of Security
- •Parking Garage Manager
- •Organization of the Front Office Department
- •Typical Front Office Organization
- •Select-service Hotel Front Office Organization
- •Function of the Front Office Manager
- •Job Analysis and Job Description
- •The Art of Supervising
- •Staffing the Front Office
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Key Words
- •Role of the Front Office in Interdepartmental Communications
- •Front Office Interaction with Other Departments in the Hotel
- •Marketing and Sales Department
- •Housekeeping Department
- •Food and Beverage Department
- •Banquet Department
- •Controller
- •Maintenance or Engineering Department
- •Security Department
- •Human Resources Management Department
- •Analyzing the Lines of Communications
- •Situation 1: Marketing and Sales Knows It All—But Didn’t Tell Us
- •Situation 2: Peace and Harmony in 507
- •Situation 3: I Know What You Said, and I Think I Know What You Mean
- •The Role of Total Quality Management in Effective Communication
- •An Example of Total Quality Management in a Hotel
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Key Words
- •Physical Structure and Positioning of the Front Desk
- •Guest First Impression
- •Creating a Balance Between Guest Flow and Employee Work
- •Selecting a Property Management System
- •Importance of a Needs Analysis
- •Procedure for Performing a Needs Analysis
- •Selecting a Team
- •Analyzing the Flow of Guests through the Hotel
- •Communicating Information
- •Reviewing Administrative Paperwork
- •Management Review of Information
- •Evaluate Needs That Have Been Identified
- •Assessing Needs Based on Findings
- •Choosing Software
- •Choosing Hardware
- •Other PMS Selection Considerations
- •Vendor Claims
- •Hardware Installation Plans
- •Computer Training Programs
- •Backup Power Sources
- •Maintenance Agreement
- •Financial Considerations
- •PMS Applications
- •Reservations
- •Revenue Management
- •Registration
- •Room Status
- •Posting
- •Call Accounting
- •Checkout
- •Night Audit
- •Inquiries/Reports
- •Back Office
- •Housekeeping
- •Food and Beverage
- •Maintenance
- •Security
- •Marketing and Sales
- •Personnel
- •Electronic Mail
- •Time Clock
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Notes
- •Key Words
- •Importance of a Reservation System
- •Overview of the Reservation System
- •Choice Hotels International
- •Hilton Hotels
- •Marriott International
- •Global Distribution Systems (GDS) in Securing Reservations
- •Role of the Internet in Securing Reservations
- •Background on Room Rates Offered via the Internet
- •Effect of Internet on Pricing Rooms
- •Consumers Response to Use of the Internet—Third-Party Websites
- •Social Media
- •Financial Effects of Third-Party Reservations
- •Types of Reservation Systems
- •Franchisee
- •Referral Member
- •Sources of Reservations
- •Corporate Clients
- •Social/Military/Educational/Religious/Fraternal (SMERF)
- •Meetings/Incentive/Conference/Event (MICE)
- •Group Travelers
- •Leisure Travelers
- •Current Guests
- •Forecasting Reservations
- •Overbooking (Occupancy Management)
- •Revenue Management
- •Processing Guest Reservations
- •Systemwide Reservation Systems
- •Outsourcing Reservations
- •Types of Reservations
- •Reservation Codes
- •Cancellation Codes
- •Blocking Procedure
- •Process of Completing Reservations through a PMS
- •Database Interfaces
- •True Integration
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Notes
- •Key Words
- •Occupancy Percentage
- •Average Daily Rate
- •RevPAR
- •History of Yield Management
- •Use of Yield Management
- •Revenue Manager
- •Components of Revenue Management
- •Definition of Yield
- •Optimal Occupancy and Optimal Rate
- •Strategies
- •Forecasting
- •Star Report
- •Block-out Periods
- •Systems and Procedures
- •Channel Management
- •Feedback
- •Management Challenges in Using Revenue Management
- •Considerations for Food and Beverage Sales
- •Applications of Revenue Management
- •Scenario 1
- •Scenario 2
- •Scenario 3
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Notes
- •Key Words
- •Importance of the First Guest Contact
- •Components of the Registration Process
- •Capturing Guest Data
- •Guest Registration Procedure
- •Guest Hospitality
- •Inquiry about Reservation
- •Completion of Registration Card
- •Review Completeness of Registration Card
- •Extension of Guest Credit
- •Room Selection
- •Room Assignment from Inventory
- •Assigning Room Rates
- •Discuss Sales Opportunities
- •Assigning Room Keys
- •Security of the Key System
- •Maintaining the Key System
- •Registration with a PMS
- •Retrieving Reservation Form
- •Checking Room Inventory Option
- •Checking Room Status Option
- •Verifying Room Rate
- •Issuing Room Key
- •Obtaining Reports from the PMS
- •Self-Check-In
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Notes
- •Key Words
- •Common Bookkeeping Practices
- •Debits and Credits
- •Forms Used to Process Guest Charges and Payments
- •Folio, Transfers, and Paid-out Slips
- •Account Ledgers
- •Guest Ledger and City Ledger
- •Posting Guest Charges and Payments
- •Point-of-sale
- •Room and Tax
- •Transfers and Adjustments
- •Paid-Out
- •Miscellaneous Charges
- •Phone
- •Display Folio
- •Reports
- •Transferring Guest and City Ledgers to Accounts Receivable
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Key Words
- •Organizing Late Charges to Ensure Accuracy
- •Guest Checkout Procedure
- •Inquiring about Quality of Products and Services
- •Retrieving the Room Key
- •Retrieving and Reviewing the Folio
- •In-room Guest Checkout
- •Determining Method of Payment and Collection
- •Credit Cards
- •Bill-to-account (Direct Billing)
- •Cash and Personal Checks
- •Traveler’s Checks
- •Debit Cards
- •Assisting the Guest with Method of Payment
- •Money Wire
- •Travelers Aid Society
- •Auto Clubs
- •International Currency Exchange
- •Obtaining Future Reservations
- •Filing Documents
- •Relaying Guest Departures to Other Departments
- •Removing Guest Information from the System
- •Transfer of Guest Accounts to the Back Office
- •Checkout Reports Available with a Property Management System
- •Guest Histories
- •ZIP Code or Postal Code
- •Developing Conventions and Conferences
- •FAM Tours
- •Origination of Reservation
- •Frequency of Guest Visit
- •Types of Room Requested
- •Room Rates versus Occupancy Patterns
- •Tracking Social Media
- •Last Impressions of the Hotel
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Notes
- •Key Words
- •Importance of the Night Audit
- •The Night Auditor
- •The Night Audit Process
- •Posting Room and Tax Charges
- •Assembling Guest Charges and Payments
- •Reconciling Departmental Financial Activities
- •Reconciling Accounts Receivable
- •Running the Trial Balance
- •Goal of Preparing the Night Audit Report
- •Preparing the Night Audit Report
- •Departmental Totals
- •Bank Deposit
- •Accounts Receivable
- •Cashier’s Report
- •Manager’s Report
- •Formulas for Balancing the Night Audit Report
- •Room and Tax
- •Total Restaurant Sales and Sales Tax
- •Tips for Restaurant, Room Service, Banquet, and Lounge Employees
- •Room Service
- •Banquet Sales
- •Banquet Bar and Total Lounge Sales
- •Room Rental
- •Valet
- •Telephone Charges
- •Gift Shop Sales and Tax
- •Vending
- •Parking
- •Total Revenue and Total Write-Offs
- •Cash Sales and Accounts Receivable Balance
- •Credit Cards and Cash Applied to Accounts Receivable
- •Analysis of Accounts Receivable
- •Bank Deposit and Amount Transferred to Accounts Receivable
- •Cashier’s Report
- •Operating Statistics
- •Daily Flash Report
- •Reading the Flash Report
- •Reading the Night Audit
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Key Words
- •Importance of Hospitality
- •Managing the Delivery of Hospitality
- •Management’s Role
- •The Service Strategy Statement
- •Financial Commitment
- •Total Quality Management Applications
- •Developing a Service Management Program
- •Guest Cycle
- •Moments of Truth in Hotel Service Management
- •Employee Buy-in Concept
- •Screening Employees Who Deliver Hospitality
- •Empowerment
- •Training for Hospitality Management
- •Evaluating the Service Management Program
- •Follow-through
- •Interfacing with Other Departments in Delivering Hospitality
- •Customer Relationship Management
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Notes
- •Key Words
- •Determining Employee Hospitality Qualities
- •Job Analysis and Job Descriptions
- •Positive Hospitality Character Traits
- •Practicing Promotional Skills
- •Screening for Hospitality Qualities
- •An Outgoing Personality
- •Patience
- •Ability to Accept Constructive Criticism
- •Interest in Selling
- •Developing an Orientation Program
- •Economic Position of the Property in the Community
- •Overview of the Lodging Establishment
- •Employee Handbook
- •Policy and Procedure Manual
- •Introduction to the Front Office Staff
- •Equipment Overview
- •Interdepartmental Cooperation
- •Administering the Orientation Program
- •Selection of Orientation Leader
- •Developing a Training Program
- •Identification of Tasks and Job Management Skills
- •Preparing Step-by-Step Procedures
- •Management Concepts
- •Steps in the Training Process
- •Preparation: Get Ready
- •Delivery: Show Me
- •Administering a Training Program
- •Cross-training
- •Developing a Trainer
- •Job Knowledge
- •Training for Empowerment
- •Americans with Disabilities Act
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Notes
- •Key Words
- •The Role of the Front Office in Marketing and Sales
- •Planning a Point-of-sale Front Office
- •Set Objectives
- •Brainstorm Areas for Promotion
- •Evaluate Alternatives
- •Devise Incentive Programs
- •Theories of Motivation
- •Douglas McGregor
- •Abraham Maslow
- •Elton Mayo
- •Frederick Herzberg
- •Applying Motivation Theories
- •Maslow
- •Mayo
- •Herzberg
- •Training Programs for a Point-of-sale Front Office
- •Train in Sales Skills
- •Develop an Attitude of Presenting Opportunities
- •Let Employees Experience Hotel Services
- •Use Role-Playing to Create Your Own Training Video
- •Budgeting for a Point-of-sale Front Office
- •Feedback
- •Guest Test
- •Financial Results
- •Planning a Point-of-sale Front Office—An Example
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Notes
- •Key Words
- •Importance of a Security Department
- •Organization of a Security Department
- •Job Analysis of the Director of Security
- •In-House Security Departments versus Contracted Security
- •Room Key Security
- •Hard-key System
- •Electronic Locks System
- •Smart Card
- •Contactless Electronic Locks
- •Fire Safety
- •General Fire Code Requirements
- •Guest Expectations
- •Fire Safety Plan
- •Employee Training in Fire Safety
- •Guest Instruction in Fire Safety
- •Fire Action Communication Procedure
- •Emergency Communication
- •Developing the Emergency Communication Plan
- •Employee Safety Programs
- •Employee Safety Committee
- •Composition and Activities of the Safety Committee
- •Department Supervisors’ Responsibility
- •Safety Training Programs
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Notes
- •Key Words
- •Importance of the Housekeeping Department
- •Overview of a Housekeeping Department
- •Relationship of the Executive Housekeeper to the General Manager
- •Management of a Housekeeping Department
- •Room Assignment/Workload
- •Outsourcing Housekeeping Activities
- •Housekeeper’s Report
- •Communication
- •Situation 1: Why Can’t Room Attendants Get Those Rooms Cleaned More Quickly, or, If That Guest Asks One More Time…
- •Inventory Control
- •Fixtures
- •Theft Control of Inventory
- •In-house Laundry versus Outsourced Laundry
- •Occupational Safety and Health Administration
- •Material Safety Data Sheets
- •Americans with Disability Compliance
- •Professional Associations
- •Role of Chief Engineer in a Lodging Property
- •Job Analysis
- •Job Description
- •Technology
- •Managing Maintenance Inter-departmental Communications
- •Energy Management
- •The Greening of the Lodging Industry
- •Leadership in Energy and Environmental Design (LEED)
- •Solution to Opening Dilemma
- •Chapter Recap
- •End-of-Chapter Questions
- •Notes
- •Key Words
- •Glossary
- •Index
282 C H A P T E R 1 0 ■ P R E PA R AT I O N A N D R E V I E W O F T H E N I G H T A U D I T
F I G U R E 1 0 - 5 (continued)
|
Manager’s Report |
|
|
|
|
|
|
Actual |
Budget |
Difference |
|
|
ROOMS AVAIL |
100 |
100 |
0 |
|
|
ROOMS SOLD |
65 |
85 |
20 |
|
|
ROOM VAC |
30 |
15 |
–15 |
|
|
ROOMS OOO |
0 |
0 |
0 |
|
|
ROOMS COMP |
0 |
0 |
0 |
|
|
OCC % |
65.00% |
85.00% |
20.00% |
|
|
DBL OCC % |
15.38% |
11.76% |
–3.62% |
|
|
YIELD % |
52.94% |
88.24% |
35.30% |
|
|
REVPAR |
$45.00 |
$75.00 |
$30.00 |
|
|
ROOM INC |
$4500.00 |
$7500.00 |
$3000.00 |
|
|
NO. GUESTS |
75 |
95 |
20 |
|
|
AV. RATE |
$69.23 |
$88.24 |
$19.01 |
|
|
RACK RATE |
$85.00 |
$85.00 |
$0.00 |
|
|
NO-SHOWS |
3 |
1 |
–2 |
|
|
|
|
|
|
|
Departmental Totals
Each department in the hotel is required to provide a daily sales report to the front office. These figures are listed and compared to the budget goal. General managers of hotels use these figures to determine the profitability of income-generating departments and the success of marketing programs.
Bank Deposit
Bank deposits are also part of the night audit. In large hotels, bank deposits are made several times a day to satisfy security concerns. The bank deposit includes both cash and credit card deposits. It is important to note that cash, business checks, and checks from credit card companies are received several times throughout the business day. After these are received and recorded, they are turned over to a cashier at the front desk for posting to the corresponding guest or city ledger account.
Accounts Receivable
The accounts receivable is an ongoing listing of outstanding amounts owed to the hotel. As mentioned in chapter 8, these potential sources of revenue are essential to positive
P R E PA R I N G T H E N I G H T A U D I T R E P O R T 283
cash flow. Managing and updating these accounts by reviewing them daily is a primary responsibility of the controller and general manager.
Cashier’s Report
Some hotels run the traditional three shifts (7:00 a.m.–3:00 p.m., 3:00 p.m.–11:00 p.m., and 11:00 p.m.–7:00 a.m.) for cashiers. In larger hotels, several cashiers may work each shift. No matter how many cashiers work per shift, each is responsible for actual cash and credit card payments received; these are compared to PMS totals. The cashier’s report, discussed earlier in the chapter, lists cashier activity including cash and credit cards and PMS totals; it is an important part of the financial control system of a hotel. The front office manager and the controller review this part of the night audit and look for discrepancies between the actual amount received and the PMS total. They also assess the cashier’s accuracy.
Manager’s Report
The manager’s report is a listing of occupancy statistics from the previous day, such as occupancy percentage, yield percentage, average daily rate, RevPAR, and number of guests. Data such as these are necessary for monitoring the operation of a financially viable business. The general manager, controller, front office manager, and director of marketing and sales review these statistics daily.
Formulas for Balancing the Night Audit Report
The following formulas will provide you with an understanding of how to balance the night audit.
Formula to Balance Guest Ledger |
|
Formula to Balance City Ledger |
|||
total revenue |
|
yesterday’s outstanding A/R |
|||
2 paid-outs and noncollect sales |
|
1 today’s outstanding A/R income |
|||
5 daily revenue |
|
|
5 total outstanding A/R |
|
|
2 total cash income |
|
2 credit card received and applied to A/R |
|||
2 today’s outstanding A/R income |
|
2 cash received and applied to A/R |
|||
5 0 |
|
|
5 balance of A/R |
|
|
Formula to Balance Bank Deposit |
|
|
|
|
|
total bank deposit |
|
|
|
|
|
2 total cash sales |
|
|
|
|
|
2 credit card received A/R |
|
|
|
|
|
2 cash received A/R |
|
|
|
|
5 0
284 C H A P T E R 1 0 ■ P R E PA R AT I O N A N D R E V I E W O F T H E N I G H T A U D I T
Room and Tax
The room sales figure represents the total of posted daily guest room charges. The night auditor obtains this figure from the PMS by activating the cumulative total feature, an electronic feature that adds all posted room rate amounts previously entered into one grand total. This figure is only as accurate as the posting of daily room rates. If a desk clerk transposes figures, then the total room sales amount will be incorrect. Because a large portion of room income is considered profit, management watches this figure closely. The room sales figure is verified by the housekeeping report, which lists the occupancy status of each room according to the housekeeping department. The corresponding tax total is obtained by activating the tax cumulative total feature, which adds all posted room tax amounts previously entered into one grand total. This figure is necessary for tax collecting and reporting.
Total Restaurant Sales and Sales Tax
The total restaurant sales figure comprises all sales incurred at restaurants or food outlets in the hotel. Restaurant 1 may represent breakfast sales; 2, lunch sales; and 3, dinner sales. Or Restaurant 1 may represent all food sales from Restaurant A; 2, food sales from the pool snack bar; and 3, sales from Restaurant B. These figures are verified against the daily sales report, a financial activity report produced by a department in a hotel that reflects daily sales activities with accompanying cash register tapes or point-of-sale audit tapes from each of the restaurants or food outlets. The sales tax figure is also obtained from the daily sales reports.
Tips for Restaurant, Room Service, Banquet, and Lounge Employees
Tips paid out to service employees represent an important control feature. Not only is management required to report this amount to state and federal agencies, but also the tips may be paid out from the desk clerk’s cash drawer or the restaurant cash drawer. In any case, tips charged to a guest’s account on restaurant guest checks, tips paid immediately to service employees from the desk clerk’s cash drawer on paid-out slips, room service guest checks, and charged tips on credit card vouchers are used to verify this total.
Room Service
Some hotels report room service sales as a figure separate from total restaurant sales. If a hotel has organized a special marketing and merchandising campaign to increase room service sales or feels careful monitoring of this potentially profitable service is necessary, the night auditor reports this figure. Room service 1 may represent breakfast sales only; 2, lunch sales; and 3, dinner sales.
P R E PA R I N G T H E N I G H T A U D I T R E P O R T 285
Banquet Sales
Hotels with large banquet operations report the banquet sales figure separately from restaurant sales. These figures are a total of the guest checks, which tally the individual banquet charges. The night auditor also checks the daily function sheet to ensure all scheduled functions have been billed.
The general manager can use banquet sales figures to determine how effective the food and beverage manager is in controlling related expenses for this division. Banquet sales also indicate how effective the director of marketing and sales is in generating business. Banquet breakfast, banquet lunch, and banquet dinner figures are reported separately because they provide marketing information on which areas are successful and which could be more successful. The banquet sales figures (and the room sales figure) also provide information on the cash flow activity of the hotel. If the hotel has scheduled $25,000 of banquet business and $25,000 of rooms business for a weekend, it can meet various financial obligations due on Monday, depending on method of payment. The controller therefore watches room and banquet sales closely.
Banquet Bar and Total Lounge Sales
The sales figures for the banquet bar and lounge areas originate from the point-of-sale cash registers. The total sales figures from the outlets that serve alcoholic beverages are reported to the front office on a daily sales report after each shift. Each report is accompanied by the cash register tapes or audit tapes.
Sales figures from the lounges and banquets are reported separately because the food and beverage manager must determine how well cost-control efforts are maintained for that department, and the director of marketing and sales may want to research the success of certain marketing and merchandising campaigns.
Room Rental
The charges for room rental—not guest rooms but rather meeting and function rooms— are reported on special room rental guest checks. The night auditor cross-checks these guest checks against the daily function sheet to be sure the banquet manager charged room rentals to the appropriate guests. It is important to note that guest rooms can also be rented on a half-day rate for business meetings.
This figure is reported separately at hotels that charge fees for the rental of facilities when no food or beverage is ordered. For example, banquet rooms may be rented for seminars, meetings, demonstrations, and shows. Because room rental represents a potentially large profit area (especially during slow banquet sales periods), general managers want to know how effective the marketing and sales department is in maximizing this profit center.