Summary: Rooms Devision Management

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• Realizing the goals/budget

  
  
  The goals set by management:
  •The hotel is at all times clean and fresh
  •The housekeeping payroll is in line with hotel occupancy
  •The operating expenses are in line with hotel occupancy

• Outsourcing Room Attendants

  
  
  Contractors base their price on:
  •size of the area
  •ease and frequency
  •time of cleaning
  •methods of cleaning
  •quality standards
  Advantages
  •trained cleaners
  •recruitment, selection, training
  •equipment + supplies
  •flexible use of manpower
  Disadvantages
  •less control
  •security risks
  •not representative

• Calculating labour costs

  
  
  Salaries and social security premiums – 75%
  Overhead and profit – 20%
  Equipment, machines, cleaning products – 5%
  When calculating the labour costs take into account:
  •Floor supervisors to check the rooms, 8 minutes
  •Housemen assist with heavy work
  •Cleaning of other areas
  •Turn down service
  •Wages Manager + Assistant Manager

• Cross training advantages

  
  •Associates feel proud of new skills; improved motivation
  •More valuable to the hotel; increase chance of promotion
  •More flexibility in scheduling
  •Increases understanding between departments

• Contents Front Office

  
  
  •Organization
  •Core processes & departments involved
  •Reservation channels
  •Property Management System
  •Arrival
  •Night audit
  •Types of accounts
  •Posting system

• Central Reservation System (CRS)

  
  ·Special logins for corporates and travel agents
  ·Room allotments assigned by market segment
  ·Easy to change allocation and rates
  ·Direct promotion
  ·Less work for hotels themselves
  ·Easy to use and manage

• Business format franchise

  
  
  Advantages franchisee
  •profiting from reputation
  •assistance with design
  •training of staff before opening
  •sales, marketing assistance
  •CRS and GDS links
  •purchasing assistance & quality control
  •tried and tested business concept

• Subjects included in a management contract

  
  •Financial participation of the management company
  •Financial control procedures
  •Length, terms of cancellation, penalties for breach of contract
  •Fees for services and consultancy by management company
  •Possible bonus
  •Right to put in a first bid if the owners want to sell the property
  •Competition clause
  •Responsibility for the labour contracts
  •Lease contracts for shops and offices
  •Insurances

• Types of management fees

  
  

  1. Basic fee: may be as high as 5% of gross revenue, increase sales but no control for costs
  2. Basic fee + incentive fee: incentive fees looking at the gross operating profit + cash flow, different variations
  3. Basic fee or incentive fee, whichever the highest

   
  Guaranteed GOP management agreements
  In fast growing markets investors demand a guaranteed Gross Operating Profit

• Average Room Rate

  Management must check the average room rate
  Total net room revenue
  ---------------------------------= Average room rate
  Total number of occ rooms
  Average rate too low:
  –Not enough up-selling
  –Room types fault
  –Less double occupancy
  –Wrong rate -> wrong target group