BASIS OF CHARGING

CHECK-IN / CHECK-OUT BASIS

As per this system, a particular time of the day is fixed as the check-out time. The most common is a 12 noon check-in / check-out system. According to this, the day starts at 12 noon daily and ends at 12 noon the next day, immaterial of the time at which the guest checks-in. If the guest has checked-in in the morning before 12 noon and intends to stay overnight, then from the point of his check-in, till 1200 hrs that day makes one day and from 1200 hrs till the next day, becomes another day. As a result, when the guest stays sometimes for 24 hours or lesser, he could be charged for more than a day. In other words, the same room may be sold twice in the same day.

Since it is not practical for any guest to check in at exactly 1200 hrs, most hotels permit a grace period (of about 2 hours), before and after checkout time. Though the system is good for the hotelier, many guests may think of this system as unreasonable. To ensure renewed patronage by the guests, many hotels today tell a guest that there exists a two hour grace period for check-in or check-out, but actually give a leeway of three hours to avoid disputes. Also, for an early morning check-in after 0600 hrs, instead of a full day extra to be charged, most hotels charge only a half day’s charges. Following the same systems, when a guest checks-out as late as 1800 hrs, a half day tariff is again charged instead of a full day’s charge. The logic that is explained in this system, is that the room cannot be sold after that point of the day. For an early morning check-in, the guest could be told that the room could not have been sold the previous night. However, the least amount charged is a minimum of one day’s charge.

e.g., (1) Mr. A. checks-in on Sunday at 1200 hrs to room # 101.

Mr. A checks-out on Monday at 0030 hrs from room # 101.

Mr. B. checks-in on Monday at 0200 hrs to room # 101 and checks-out at 1200 hrs on Monday.

Mr. A. And Mr. B will both he charged for one day each.

e.g., (2) Mr. X checks - in at 0500 hrs on Monday.

Mr. X checks-out at 0600 hrs on Tuesday.

Mr. X will be charged for two days as per this system.

24 HOURS BASIS

As per this system, the guest is entitled to keep his room for a period of 24 hours from the point of the guest’s check-in, for a day’s charge. There is no fixed time of arrival for the guest. This system of charging is generally practised at resort hotels.

e.g. Mr. X checks-in at 1300 hrs on Tuesday. He will be charged for one day till 1300 hrs on Wednesday.

PER NIGHT BASIS

According to this system, the guest is charged on the basis of the number of nights he stays. This system has evolved from the 24 hours system of charging, and is not very much in use in the modern day hotels.

Very much connected to this system of charging is the concept of Day Rate or ‘Day Use Rate’. This is a concessional rate given to guests who do not stay over-night in the hotel. Usually this is targeted at business clientele who use the room from 0900 hrs to 1800 hrs. The guest may check-in to the hotel for a wash and change in the morning, leave his baggage in the room and carry on for his business. He may return in the evening, have a wash and change, check-out and take the evening flight out.

FOOD PLANS

1. European Plan (EP) :

This plan includes only the room charges and morning tea in some cases. All other charges are charged extra. Most commercial hotels run on this plan.

2. Continental Plan (CP.) :

This plan includes room charges and a continental breakfast. All additional charges are considered extra. [ A continental b/f consists of juices, toast or rolls, butter, cheese, jam, tea or coffee but no eggs.]

3. Bermuda Plan (BP) :

This plan includes room charges optional early morning tea and an American breakfast.

[ American b/f is a buffet breakfast not served in the room]

4. American Plan (AP) :

This plan includes all principal meals. It includes room charges with morning tea, English B/F, lunch, afternoon tea and dinner. It is mostly found in resort hotels and in commercial hotels catering to groups sent by airlines and companies or travel agents. This plan is also known as 'all inclusive plan' or 'full board' or 'en pension' [English breakfast has all courses like American B/F and ham, beacon, meat is also included].

5. Modified American Plan (MAP) :

This plan has evolved out of the American plan. It includes room charges with morning tea, English B/F and an option of lunch or dinner. It is also called as 'demi pension' or 'half board'. This facilitates the guests to eat out for one meal. It is usually used for groups where meal coupons are provided to the guests (coupon is valid only for a day ) and the coupon cost is included in the room rent.

The use of these plans:

· Commercial hotels prefer EP because:

1. Commercial hotels are situated in the urban areas, there are bound to be numerous restaurants in the vicinity. Hence the guest will prefer to keep his option open as far as meals are concerned. Moreover the hotel may not have a particular cuisine which the guest likes.

2. On the other hand hotel being situated in an urban area would get plenty of chance guests in their restaurants. Thus their F&B income is not restricted to only hotel residents. They do offer meal inclusive plans but only to groups sent by travel agents and company bookings for conventions, seminars, etc.

· Resort hotels prefer AP/ MAP because

1. They may be situated in an isolated area with hardly any restaurant in the vicinity. Guests therefore prefer to have meals in the hotel. For the tourists wishing to go sight seeing during the day, an MAP will be more appropriate.

2. The hotel itself benefits from this plan since the hotel relies only on the resident guests for their food and beverage income.

The CP. & BP lie between EP & AP So they can be offered by any hotel.

Above five are food plans.

There is another plan called 'GO PLAN'

It is not a food plan. It is an adjustment made in the settlement of accounts.

If a guest stays in different hotels of the same chain in the course of his tour, his bills will be forwarded to his next destination every time he changes the place of stay. The guest can make the payment at the last hotel he visits belonging to the same chain.

SPECIAL RATES

Very often a room may not be sold at the tariff quoted on the tariff sheet. The rooms may be discounted or special rates may be applied under certain conditions, or as a special case.

COMPANY VOLUME GUARANTEED RATE

Based on the room night potential of different companies, certain hotels give a special rate to those companies which contribute a large volume of room nights. This special rate offered came to be called as the ‘Company Volume Guaranteed Rate’ (C.V.G.R) or ‘Company Guaranteed Rate’ (C.G.R.). The higher the volume of business, the higher was the percentage of discount given. For this purpose, all those companies which offer a large quantum of business could be ‘A’ rated. As the contribution figure dipped, the company rating would also drop to ‘B’ or even ‘C’ for those with a relatively poor volume of business.

Many hotels today, in order to accommodate all category of employees from one particular organisation, have gone ahead and offered very low rates to the lower down officers, and higher rates to the top brass of the company, based on their entitlements and expenditure capabilities. A record of the room night contribution (R.N.C.) of individual companies are maintained either on a computerized system or manually by an alphabetically indented register. Periodically, the companies are informed of their volume contribution. If the expected room night contribution was not maintained by any one company, they would fall to a lower rating or even be left out of the C.G.R. list after the total period of assessment.

PACKAGE RATES

Many resort hotels (especially during lean/Off season periods) and some commercial hotels from time to time coin seasonal packages for different durations (e.g: two nights three days/three nights four days), which may include besides the room and meal, a complimentary airport transfer, sightseeing, entertainment etc.

OFF-SEASON RATES

Most resorts and other seasonal hotels have separate tariffs for peak and off-seasons. The off-season rates are much lower than regular or peak-season rates.

EMPLOYEE RATE

Employees of major hotel chains have a special employee rate for all employees at their member hotels within the chain. This is however based on the availability of space and policy of the individual hotel.

F.H.R.A.I DISCOUNT

The Federation of Hotel and Restaurants Association of India (F.H.R.A.I) is a major association of hotels and restaurants in India. As a gesture of goodwill for members of the same fraternity, the association issues membership cards to the Proprietor / Partners / Chairman / M.Ds of these establishments, which entitles them to a special discount( presently 30% on room rent, food and beverage (excluding liquor), if paid by cash and 25% if settled through a credit card. The percentage of discount and other conditions are subject to change).

AIRLINE CREW

Most airlines enter into a contract with hotels in different cities where its flights commute, wherein staff of the airline (crew) are given a very special rate for a fixed period. Their duration of stay may be a few hours upto a maximum of 24 hours. There is also another special rate negotiated for the lay-over passengers. The food-plan applied would be based on the requirement, but the food element computed is also on a discounted basis.

GROUPS

Groups (G.I.T - Guest in Transit) are given special rates due to the number of rooms taken by them at a time. A group under standard stipulation, comprises of 15 guests or more. Based on the discretion of the Management, the group leader may be given a complimentary room for a minimum of 15 paying customers.

Guests who do not come into any of the above groups are called as ‘F.I.Ts’ or Free Individual Travellers. i.e., they are not part of any group or company enjoying special rates. When these are Indians or Domestic clientele, they are referred to as ‘D.F.I.T’. or ‘Domestic Free Individual Traveller’. Similarly, if the guest is not a domestic traveler i.e., if he is a foreigner, then he is called as ‘F.F.I.T’. or ‘Foreign Free Individual Traveller’.

CRIB RATE

This is a special rate applicable in some hotels to children. Most Indian hotels prefer to compliment upto a maximum of two children below the age of twelve.

EXTRA BED / EXTRA PERSON CHARGES

As most five star hotels today do not have single rooms, but have only double rooms which could accommodate a minimum of two guests, a third person if present, is given an extra bed and charged. This charge is in most hotels levied even if an extra bed is not given. The rate charged could be approximately 20 to 25% of the room rate.

Besides the above, special rates may also be given to a hoard of other category of people based on the discounting policies of the management. Some of these might be commercially important persons (C.I.Ps) for publicity and promotion purposes, influential persons like company directors, decision makers, top executives, travel writers, etc. Such discounts have to be authorised by a senior member of the Management.

TAXES AND SPECIAL RATES

TAXES :

The guest must be well informed of all extra charges levied on him. Some of these extra charges are

1. Luxury Tax : It is a state govt. tax levied on the room rate. It is a tax levied on the guest for staying in the hotel. This tax differs from one state to the other. Within a state, all hotel of the same type have a uniform luxury tax. e.g. In Maharashtra the tax for hotels with 200 or more rooms is 7%, for those with 100-199 rooms is 5% sand from 50-99 rooms is 3%, hotels with less than 50 rooms have no luxury tax.

2. Service Charges : It is an intangible charge for good service and could be equated to compulsory tip. Some hotels do not charge this but raise room tariff.

3. Hotel Receipt Tax : This is no longer in force.

4. Sales Tax : 15% is charged on food & beverages. If special items like foreign liquor, entertainment, etc. are provided, then the taxes are increased. An extra charge is levied if the customer brings his own liquor. This is known as ‘corkage.

SPECIAL CHARGES :

Hotels have fixed rates for rooms which are printed on guest tariff card. There are certain circumstances however, when certain reduced rates or discounts may be offered. Examples of these special rates can be given as follows:

Ø Off Season Discounts : In resorts these off season discounts are given as the business is highly seasonal.

Ø Package Discount or Group Discount : Package tours arranged by travel agents or group tours get special rate at the hotels. A group consists of 15 guests or more. Groups of 15 to 30 earn a complimentary room.

Ø Hotel Employee : Employees of a hotel chain get a discount for the stay in other units of the same chain.

Ø Company Guaranteed Reservations (C.G.R) : The companies which guarantee a large no. of bookings in the hotel are charged with a discounted rate. Different companies will get different rates. A List of such companies is maintained at the reservation section.

Ø C.I.Ps : The commercially important guests or very regular guests are also given a special rate.

Ø Promotional Discounts : Discounts are offered to the persons which may prove beneficial to the organisation for advertising and publicity. e.g. press or media people.

Ø Credit Card Holders : Some of the credit cards also allow the guest to avail some amount of discount on his stay in the hotel.

Ø F.H.R.A.I. Members : Federation of Hotel & Restaurant Association of India members get a 20% discount.

Ø VIPs : Complimentaries are given to the influential people like Officials of some organisation or politicians, etc.

Ø Airlines : For their crew members and the detailed flight passengers.

Ø Crib Rate : The rate or charge for a child below 6 years of age, staying with the parents.

Ø Day Rate : Rate charged for guests who are staying in the hotel for less than 6-8 hours.

RESERVATIONS

Reservation is a process of booking and blocking rooms in advance for the prospective guests. It is the hotel’s ability to equate the guest’s inquiry with the room availability. Approximately 70% of room sales business comes from reservations. Various reservation records are maintained so that the reservation section is able to provide the guest with efficient service and also deal with the guest inquiries regarding room availability, rates, discounts, food plans and services and facilities offered.

IMPORTANCE OF RESERVATION

(I) Importance for the guests :

1. Ensures room on arrival - A guest who makes prior reservation is ensured of the required type of room, no of rooms for his entire stay in the city. This saves him from the difficulty of finding accommodation on arrival specially during peak seasons when most of the hotels are full.

2. Budgeting - As he is informed of the tariff at the time of reservation, he is able to budget his holiday or tour, taking in account the amount he spends on his stay, food, entertainment etc.

3. He is able to plan his holiday or tour without worrying about the basic needs of accommodation and food. Any business trip, sight seeing tour or excursions may be planned separately after fixing the accommodation.

4. Other facilities - the guest is ensured of certain facilities offered by the hotel which can be confirmed by making the reservation e.g. sight seeing tours, business center offering secretarial services, entertainment etc. He is also able to give the hotel address to his associates for any meetings, correspondence transfers to and from the hotel.

(II) Importance for the hotel :

1. Prior reservation gives the hotel an indication of the level of business likely to be encountered during any particular period. The reservations manager knows the amount of business ensured during that period from the confirmed reservations. It enables him to forecast future revenue generation and take necessary action to improve the amount of revenue expected.

2. Guest satisfaction - The hotel is able to plan its activities and be prepared to receive an expected guest. They are able to provide the necessary services and facilities like security, transfers, preference of rooms to known guests, providing complim entaries and any particular service asked by the guest at the time of making the reservation.

3. The front office manager is able to make the necessary decision regarding the no of walk-instant that can be accommodated on a particular day. Rooms requiring to be repaired or taken off for redecoration can be blocked during the slack period as shown by the reservations. The no of rooms to be blocked for such purposes will also be determined according to the expected guest arrivals.

4. Scheduling of staff - Hotel staff may be scheduled more accurately to void under staffing or over staffing problems.

FUNCTIONS OF RESERVATIONS

1. Taking reservations for hotel rooms - This is the main function. They receive and process the requests for bookings from prospective guests and after checking the various charts on the room availability position for the required dates the booking may be confirmed. In case the room availability position is negative, alternate accommodation is suggested and alternate dates may be offered.

2. Information regarding various services and facilities may be given if asked for. It may be volunteered when alternate room and dates are suggested.

3. Amendment of booking - Guest wishing to change the type and no of rooms and/or dates of stay booked earlier would be amending their booking. This is also done through the reservations department.

4. Cancellation - This releases more no of rooms for sale for the dates specified and reservations must keep track of this in order to sell the rooms to other guests.

1. Overbooking - Overbooking of rooms is carried out to ensure against loss of revenue through last minute cancellations and no-shows. The percentage of overbooking will vary from hotel to hotel depending on various factors like environment, star classification, type of guests etc. The percentage of overbooking in a hotel will vary according to the time of the year. Thus the reservation department must be aware of the percentage of overbooking to be taken by the hotel at any time of the year.

MODES & SOURCES OF RESERVATION

MODES OF RESERVATION

VERBAL	NON-VERBAL (WRITTEN)
a) In person	a) Letter
b) on phone	b) Telegram
c) mobile	c) Telex
	d) Fax
	e) Computer

SOURCES OF RESERVATION

1. FITS

Free Individual Travellers/Free Independent Travellers

DEIT - Domestic Free Individual Traveller.

FFIT - Foreign Free Individual Traveller

2. GIT

Group Inclusive Tour

Always has 1 group leader who remains in contact with the hotel.

3. COMPANY / CORPORATES

Hotels get a lot of bookings from companies or corporates at CGR-COMPANY GUARANTEED RATE.

They are given special discounted rates as well as additional privileges.

The hotel should make sure that the Co. is able to pay the bill check the credit standing of the Co.

4. GOVERNMENT

Also a source of booking for the hotel. (Both Central and State Govt.)

5. EMBASSIES

All diplomatic offices and officials.

6. TRAVEL AGENCIES / TRAVEL AGENTS

Smaller in operations.

7. TOUR OPERATORS

They have tie ups with many local travel agents work on a much larger platform, helped by travel agents.

8. AIRLINES

Can be clubbed with company but that is not done since the kind of discounts and business given by airlines is different.

9. OTHER HOTELS OF THE CHAIN

Sister hotels of the concerned property also become sources of booking.

10. COMPETITORS

Cases like walking a guest.

11. REFERRAL GROUPS

Groups such as UTELL and LHW provide business to their member hotels.

12. CRO (CENTRAL RESERVATION OFFICE)

It can be in the hotel itself or can be another booking office.

13. CRS (CENTRAL RESERVATION SYSTEM)

Entire chain of hotels is connected to the CRS. CRO is one of the chains.

14. GDS (GLOBAL DISTRIBUTION SYSTEM)

Set up by airline companies. They fly across the globe and here require an efficient system for managing database. The hotels require a similar system, so they subscribe to GDS.

GDS helps to maintain the reservation network of different hotels.

15. INTERSELL AGENCIES

Different agencies in the hospitality industry come together and form an organisation called ‘intersell agencies’.

Each writ of the agency is called ‘co-marketeer’. It is a concept that is fast catching up. It happens by the virtue of networking.

Intersell agencies are agencies that do all the arrangement starting from arranging rooms at different destinations to arranging travel, local sight - seeing, etc. They give business to their co-marketeers like airlines, banks, hotels, car rentals, travel agents, etc.

RESERVATION

Reservation is a process of booking and blocking rooms in advance for the prospective guests.

It is the hotel’s ability to equate the guest’s inquiry with the room availability. It helps the hotel to provide right type of accommodation to the prospective guest at the same time to provide sufficient time to the reservation section to arrange for the most suitable accommodation for the prospective guest.

Importance of Reservation

(a) Importance for the Hotel

1. 70% of the total revenue is generated through reservations.

2. Forecasting revenue generation and rooms availability.

3. Plan their activities and actions for the arrival of the prospective guest.

(b) Importance for the Guest

1. He is sure that he will get a room.

POINTS TO BE CONSIDERED WHILE ACCEPTING A RESERVATION

1. Write names clearly. Surname in block letters. A slight difference in the spelling may delay a receptionist in locating the reservation of a guest on arrival. Ask for the first name or the initials of the guest name. Always get the last name and the first name correctly with spelling.

2. Ask for the exact date and time of arrival and departure.

3. Avoid taking a reservation for an indefinite date. This will create additional correspondence with the guest. If it is impossible to give the exact date, inform the guest to write or to telephone the hotel as far in advance as is possible but do not confirm the booking.

4. For the time of arrival apply the European system of 24 hr.

5. Clarify the type of plan to the guest.

6. If the arrival time is given after midnight, make sure the reservation is recorded for the next day. e.g. Arrival Saturday night, 30 min. after midnight, Sept. 15 - Check-in time is 0030 hr. Sunday Sept. 16.

7. Always specify the type of rooms and the no. of rooms required. e.g. request for accommodation for Mr./s Sigh and a party of 5 pax does not reveal whether the party is one family, single people or couples. Therefore the hotel is not in a position to offer the type of rooms that are best suited.

8. Guests who want rooms before 0600 hr. are usually charged for the previous night also as the hotel has to hold the room for the guest from the previous night itself. Explain this carefully to the guest.

9. Explain to the guest that the rooms may not be available at the early morning hours since the check-out hour is generally noon or later in most of the hotels. The only way a guest can be guaranteed a room for very early occupancy is to have it reserved from the night before.

10. When referring to previous correspondence or booking in case of a change or cancellation, inquire from the guest their original date of arrival as all records are filled under original date of arrival.

11. In case of the reservation for the honeymooners always check that the reservation is made in the bridegroom’s name and not in the maiden name of the bride.

GROUP RESERVATION

General Features :

Reservation of rooms form the largest percentage of business of a large hotel. Out of this total business the group business is maximum in many hotels. Hence the hotels getting their maximum revenue from the group business should be extra careful while dealing with group reservations.

Generally group business is handled by the front office manager or a senior reservationist or by the reservations manager. In some hotels the group reservations are a responsibility of the sales and marketing department. Reservation department or sales department maintains a ‘Group Production Report’. This report is meant to show the percentage materialization of booked groups From various travel agents and other sources. In other words this report tells as to what is the percentage of materialized group booking for each travel agent or a source of booking. This reports guides the hotel management in deciding the future policy for each travel agent or source of booking.

Group Market :

Following are the market segments giving group business to the hotels:

1. Holiday makers.

2. Conference delegates.

3. Convention participants.

4. Sales persons attending sales meetings.

5. Sports teams.

6. People attending festival/fair or important event in the town.

7. Incentive travel groups.

8. Business men attending trade fairs or training seminars, etc.

Generally the groups are offered special discounted rates. The amount or percentage of discount offered depends on the size of the group. The group can be offered a special plan like American plan or Modified American plan at the rate of CP or BP. In such cases advance negotiations with the travel agent are necessary. The travel agent is requested to submit the meal preference and arrangements for the group in advance. A meal information sheet will be made. Discounts can be given to the guests in the form of complementary rooms. For example:

10-14 Full paying PAX 50% on one member.

15-30 Full paying PAX 1 room complementary.

31-45 Full paying PAX 2 rooms complementary.

These rates are flexible. The rates can be negotiated with the travel agent.

Group Reservation Procedure:

The information of group booking comes much in advance as compared to the FIT booking. The reservation request comes to the hotel at least three months prior to the date of arrival of the guest. This is important as the group arrangements take longer time and the final confirmation of the reservation takes longer to materialize. All the necessary information is taken down on a ‘Bulk Reservation Form’. The group is then given a code number and number of rooms are blocked for the group. This room blocking is shown on the charts and a slip for the rack is made as usual.

A ‘cut off date’ or ‘close out date’ or ‘cancellation dead line’ is agreed with the travel agent or tour operator. This date is generally 20/30 days before the date of arrival of the guest, sot that the hotel gets good margin to sell these rooms to other customers. This dead line is fixed to keep a check against the cancellation of a large no. of rooms at the last minute. Before the dead line the hotel official responsible for the reservation sends an offer letter or reminder to the travel agent stating the date of arrival of the tour, no. of rooms blocked, length of stay, rate and cut off date for the group booking. The hotel can charge the travel agent for any cancellation or amendment done to the reservation after the dead line. The retention charges in case of cancellation after the cut off date or no show can be calculated depending upon: Size of the group (total no. of persons in the group), Relation between travel agent and the hotel, Loss of revenue, etc.

Before the cut off date the travel agent sends a ‘Rooming List’ to the hotel. Rooming List contains the full names of all the group members, their respective room preference, Nationality and passport details, etc. It also contains any special instructions or information about the group booking. A ‘Travel Voucher’ or ‘Travel Agent’s Voucher’ will be sent by the travel agent to the hotel along with the rooming list or after the offer letter is received. These vouchers must be handled by the reservation staff to avoid any confusion. These vouchers clearly state the services offered to the group members without any extra charge and the services provided for which the guest has to pay extra. The travel voucher has to filed along with the reservations as the guest coming to the hotel will also have a copy of the voucher. The two copies will be checked at the time of arrival of the guest to establish the identity of the group.

Permanent allocation of rooms: Some companies or oragnisations or Airline companies may negotiate on allocation of rooms for their organisation for a long period of time. This gives the hotel assured rooms business for that period of time. This is also called as ‘Back To Back Rooms Blocking’.

Blanket Booking: This is a type of group booking. The booking for the entire group given by one person but the members of the group do not check-in as a group. They check-in individually(may be at different times.)These booking are common in case of conventions or conference bookings.

RESERVATION TERMINOLOGY

no show: This term refers to those bookings made by the prospective guests who due to some reason, fail to arrive on the day of arrival and also do not cancel the booking on time. this situation increases the availability of rooms for sale and may cause loss of potential revenue.

It is preferable to keep a record of the ‘no shows’ fort each day. This record is kept in the form of a ‘No Show Register’. This record helps the reservation department to take policy decisions like charging retention charge, calculation of the no show factor for room availability forecast or calculation of overbooking percentage. Billing the guest for retention charge depends on the relationship of the guest with the guest or with the source of booking.

Time Limit: This term means specifying a particular time by which the prospective guest with reservation must check-in the hotel and after that the room will be released to any other person who may be a walk-in. Time limit is fixed for those reservation where the guest does not pay any advance or does not provide any guarantee. It is also called as the ‘6 p.m. release reservation’. Generally 6 p.m. is fixed as the time limit for hotels with 12 noon as their standard check-in check-out time. This done to avoid total loss of revenue in case the guest does not arrive and becomes a ‘no show’. If the guest arrives at the hotel after the has been released, may be refused the accommodation. This condition must be made very clear to the guest at the time of reservation or in the confirmation letter. The hotel should also make efforts to accommodate the guest, if not in the same hotel, some other hotel of similar standards in near vicinity.

Guaranteed Reservation: The kind of reservation in which the hotel does not have to worry about the loss of room revenue even in the event of ‘no show’ of the guest. The guarantee can be given by a company for a company guest, or by credit card company for a guest paying by credit card or by travel agent for travel agency bookings. So the hotel is assured about the business and the guest is assured about the room since the room for such reservations will not be released at the time limit but will be blocked till the end of the day.

Over Booking: This term refers to the process of accepting more bookings than the total no. of rooms available. All the prospective guests are sent with confirmation letters. Purpose of over booking is to compensate for (a) no shows (b) early departures (c) cancellations (d) walk outs. The objective is to achieve 100% occupancy or at least maximum possible occupancy. The front office department should have the no shows, cancellations and early departure records for taking over bookings. There are various factors which determine the over bookings figure or the over bookings percentage. Some of them are as follows :

1. Business segment: covers the type of clients

2. Source of booking and it’s past record.

3. purpose of visit of the prospective guests.

4. Type of hotel.

5. Lead time or the time gap between the date of booking and the date of arrival.

6. Period of business or the season.

7. Any special festival or event held in the town.

Although no definite figure can be fixed for the over bookings, a rough guideline can be calculated with help of a formula:

cancellations + no shows + early departures

Percentage over booking = --------------------------------------------------------*100

total no. of rooms lettable

Walk In: This a very common term. This term refers to those guests of the hotel who arrive without any prior notice or reservation in the hotel. These guests arrive at the hotel hoping that there will be some room available for them. The hotel has to be very careful while dealing with the walk-ins. If the guest is paying by cash, then it is preferable for a hotel to ask for some advance from the guest. The advance should be sufficient enough to cover at least one night stay and some extra expenditure in the hotel. Such guests should be referred to the lobby manager and authorization should be taken from him on the registration cards of such guests. It also important to inform the other revenue centers about these PIA (Paid In Advance) or Cash Only guests. These guests will not be allowed credit for any services or amenities provided to them. The desk agent should try and sell a higher priced rooms to such guests (upselling).

Turn Away: This term refers to those guests who come to the hotel without prior reservation and the hotel does not provide them with accommodation. This can be basically because the hotel is completely booked or because the guest is not in fit condition to be received or he is a black listed guest. In any case the hotels staff will have to be very tactful in refusing accommodation to such person. Generally the safest way is to tell them ‘Sorry, we are fully booked and are in no position to accommodate you’. In case the guests are refused accommodation due to non availability of rooms, the front desk staff should make an effort and help the guest in seeking accommodation at some other similar hotel in the near vicinity.

Advance Payment: It is the procedure of collecting the cash or the cheque from the guest much before his arrival at the hotel. Advance payment may be asked by the hotel from the prospective guest in case he is a new customer, not known to the hotel management. Advance can also be requested from a walk-in guest or a guest with scanty baggage. This acts as a precaution against the revenue loss in case of no-show or skipper. When the advance payment is taken at the time of reservation, a cash receipt is prepared and the original copy is mailed or faxed to the guest. The advance payment will also be indicated on the reservation form and Whitney slip (in case of Whitney system being followed). When the guest leaves after having stayed at the hotel, this amount is adjusted in his bill. Similar procedure is followed if the advance is taken from a guest at the time of arrival. The receipt of the payment is not mailed to the guest but is handed over to him. In case an advance payment is taken and the guest becomes a no-show, the money can be forfeited. By making an advance payment the guest has an added guarantee that the room for him will be ready at the hotel even if he reaches the hotel late and will not be released and given to any walk-in.

An important point to be considered while taking advance payment against the booking of a room from the prospective guest is to inform them about the refund, cancellation and forfeiting of amount policy of the hotel preferably through the ‘offer letter’.

Stay Over: This term refers to all the guests staying in the hotel on a particular night and further continuing staying in the hotel for next night. In other words, stay overs are those guests who have been registered in the hotel and are not leaving the next morning at the check-out time but will continue to stay for another one or more nights. This can also be called as House count for a particular night and the guests can be called ‘in-house guests’.

Over Stay: This is one of the biggest problems a hotel front office management may have to face at times. Over stay term refers over staying of a guest. In other words it refers to those guests who are scheduled to leave or check-out of the hotel on a particular day as specified by them at the time of reservation or registration, but due to some reasons they do leave the hotel on that particular day and insist on staying further for one or more nights. this situation can create a problem while accommodating the guests who are supposed to arrive on that day.

Over stays are allowed by the receptionist generally with the permission of the front office manager or the lobby manager. If there are sufficient no. of rooms available, the over stay does not create a problem but if the position is minus, it may cause problem. So the receptionist should consult his/her seniors before allowing any over stay.

Departure: The term departure for the day refers to the total no. of guests who are supposed to check-out on that particular day. every morning the receptionist on duty notes down the expected departures for that day from the room rack or computer. This also helps the management in calculating the room position for that day.

Under Stay/ Early Departure: This term refers to those guests who due to some reason may not want to continue staying in the hotel, although according to the records they are supposed to stay in the hotel for one or more nights. This situation creates more no. of rooms available for sale. Another problem caused is of the refund of advance payment (if any). Hotel may be able to sell such rooms to walk-ins but there is greater possibility of loosing the revenue for such rooms.

Early Arrivals: This term refers to those guests who arrive for check-in at the hotel before their scheduled date and time of arrival. There may not be rooms available at that time. It is always advisable to inform the prospective guest about the check-in check-out time of the hotel through the offer letter that is sent to him. A guest wanting to arrive much before the check-in time should be advised to book the room from the previous night as well, so that the room can be kept ready for him when he arrives at the hotel. Although an early arrival guest can not claim a room before the check-in time, every effort should be made to accommodate him as soon as possible. Such guests may be given temporary rest room or parlor, till the availability of room. In case of a regular guest, he can be registered and the room assignment is done later when the rooms become available (RNA - registered not assigned).

SYSTEM OF RESERVATIONS

I. DIARY SYSTEM

uses a large register like log book in which all the reservations are noted. It is the primary system of reservation. Hotels using the diary system of reservation do not have a different reservation section.

The register has 365 pages (plus a few more so that the reservations of the subsequent year can be recorded). It has a practical usage in small properties (<100#s).>

II. WHITNEY SYSTEM

Whitney system is a manual system of reservation used for Managing reservations and other front office operations. It was introduced by the Whitney Duplication and check company (New York).

It is a highly efficient system of reservation. It drastically changed the way hotels worked. It can be used in hotels have any no of rooms.

When the computers started being used, this system was used to design the program for reservation.

THE WHITNEY SYSTEM OF RESERVATION

Why it is called Whitney system ?

This system was produced by WHITNEY DUPLICATION AND CHECK CO. of New York from which it takes it’s name.

Tools required for the effective functioning of Whitney system are as follows:

1. Room Reservation Request Sheet

2. Peg Board

3. Whitney slip

4. Advance Reservation Rack

5. Correspondence File

6. Registration Card

7. Temporary Arrival Notification Slips

8. Permanent Arrival Notification Slips

9. Bill

1. The information of request for future reservations, whether by telephone or telex or in person or mail, is entered on a room reservation request sheet or room reservation form. This becomes the master document for all future actions in this system.

2. The booking is entered on the Peg Board, one peg for each day the room has been booked.

3. The key information is typed on to a Whitney slip, size 4” x 1.5” in duplicate, showing on the top line the date of arrival, the guest name, room rate and expected date of departure. Other information, like date on which the reservation was received and the person who took the reservation is also mentioned. A colour code which is a vertical bar, in the centre, enables quick visual distinction between private bookings, travel agent bookings, blanket bookings and bookings requiring special attention.

4. The top copy of the Whitney slip is folded in half and slipped into a metal slide or carrier and this in turn is placed in chronological & alphabetical order in the Advance reservation rack for the date of arrival of the guest. There is a separate rack for each day of the current month, then they are less frequent for the remaining months and years. The Whitney slip is placed on the rack for the day when it is anticipated that the stay of the guest will begin. The advance reservation rack or the whiney rack replaces the booking diary of the conventional system.

5. The second copy of the whitney slip and any correspondence regarding the booking along with the room reservation request sheet is clipped together and put inside the Correspondence File for the date of arrival of the guest. There are as many correspondence files as there are Advance reservation racks.

6. One day before the date of arrival of the guest, the Correspondence File for the next day is taken, and the correspondence arranged in alphabetical order. Then the duplicate whitney slip is “married with the original in the Advance Reservation Rack for the next day and any adjustments for confirming the reservations is now done.

7. For all confirmed reservations, a Registration Card is typed out with all the known information of the guest. The registration card is serially numbered and the process is called Pre-registration. The typed registration card is put into the correspondence file and both the Correspondence File and the Advance Reservations Rack goes to the Front Desk the evening before the guest arrives. During the night the room allocation for the confirmed reservations is done. The Advance reservations rack and the correspondence file is kept at the Registration section. The Advance Reservations Rack replaces the Expected Arrivals List of the conventional system.

8. When the guest arrives, he mentions that he has a booking and you find out the Pre-registered Card and give it to him to fill up the remaining blank spaces and sing. During this time the receptionist will fill up the Key Card. After verifying the entries on the Registration Card, call the bell boy and give him the key asking him to escort the guest to his room. After the guest has left, Temporary Arrival Notification Slips are written out and sent to the various departments. One copy goes into the Room Rack and another goes into the Alphabetical Rack.

9. Whenever there is some free time, the Permanent Arrival Notification Slips and the Bill are typed out simultaneously. When the Permanent Arrival. Notification Slips are received, the Temporary Arrival Notification Slips are destroyed. Then the Registration Card and the Bill are sent to the Cashier. At the end of the day the Correspondence File and the Advance Reservations Rack is sent back to the Back Office to be reused.

10. When the guest checks out and settles his bill, the Receptionist folds the Room Rack Slip in half, (or writes a “H’ on it) to indicate that the guest has checked out. When the house-keeping informs that the room has been cleaned and ready for the new guest, the room rack slip is taken out and collected. At night it goes to the back office to enter in the Arrival and Departure Register.

11. After the Bill is settled, the Cashier stamps “PAID” and the bill and registration card are sent to the receptionist. At the end of the day, the registration card is sent to the Back Office where it is field in Alphabetical Order or Numerical Order.

Computer-Based Reservation Systems

Intersell Agencies

Domestic competition for hotel reservation commissions is intense since other segments of the travel industry also operate reservation systems. Airline carries, travel agencies, car rental companies, and chain hotels offer stiff competition to independent central reservations systems entering the reservations marketplace.

The term intersell agency refers to a reservation network that handles more than one product line. Intersell agencies typically handle reservations for airline flights, car rentals, and hotel rooms. The spirit of an intersell promotion is captured by the expression "one call does it all." Although intersell agencies typically channel their reservation requests directly to individual hotels, some may also communicate with central reservation systems and, on occasion, to a global distribution system.

It is important to note that a local, regional, or national intersell arrangement does not exclude a hotel property from participating in a global distribution system.

It is important to note that a local, regional, or national intersell arrangement does not exclude a hotel property from participating in a global or central reservation system or from processing reservations directly with an in-house front office reservation module.

Central Reservation Systems

Since the early 1970s, the hospitality industry has seen many independent central reservation systems enter and leave the marketplace. The problems encountered by these systems are not related to difficulties in generating demand for their services. Rather, they are related to servicing demand at an acceptable level of profitability. Expensive computer equipment (hardware components and communication devices), high overhead, and extensive operating costs have made it difficult for many independent central reservation systems to succeed. The staff required to process individual reservation requests and maintain diverse reservation records for a multitude of hotel properties can lead to dwindling revenues and soaring operating costs.

Increased on-line interaction between hotel properties and a central reservation office (CRO) decentralizes the reservation function but centralizes marketing and sales efforts in relation to the reservation process. This results in greater control of reservations handing at the property level and increased sales efforts at the CRO on behalf of the participating properties.

Central Reservation System Functions

Central reservation services are provided by the central reservation office (CRO). The CRO receives room rate and availability information from participating properties. Non-automated properties send this information in the form of hard copy and the CRO manually entered the information in the form of hard copy and the CRO manually enters the information into the electronic database. Information from automated properties is typically sent over communication lines and enters the database directly. With this system, the responsibility and control of central reservation information lies with managers at the property level. The key to successful central reservation management is that the property and the central system must have access to the same room and rate availability information. When this is the case, reservationists at the CRO can directly confirm room rates and availability at the time of reservation.

The timely delivery of reservation confirmations from a CRS to individual properties is vital. Many chain systems provide multiple delivery alternatives to ensure that properties receive all new reservations, modifications, or cancellations. For example, some central reservation systems relay processed transactions to member properties through on-line interfaces and telephone call-out techniques. Although on-line interfacing between central reservation offices and property-level computers is fast and effective, some networks place telephone calls to properties to ensure successful completion of the reservation process.

The goals of a central reservation system are to improve guest service while enhancing profitability and operating efficiency. A CRO accomplishes these goals by :

· Providing access to special room rates and promotional packages

· Instantly confirming reservations

· Communicating with major airline, travel and car rental agencies

· Building extensive guest files

Basic services provided by most central reservation systems include automatic room availability updating and corporate-wide marketing.

Automatic Room Availability Updating.

As a room is sold, whether through the CRO, the individual property, or a remote intersell agency, the inventory of rooms available for sale is automatically updated at both the property and the CRO. Having current room availability information for each participating property provides a central reservation system with the ability to automatically close out room types without obtaining direct property approval. The advantage of an effective CRO is that reservationists can directly confirm room rates and availability at the time reservations are made.

In the past, the CRO was provided room availability data from participating properties at regularly scheduled intervals. This meant that when a property booked its own reservations, there would be no immediate record sent to the CRO; updating waited until the next scheduled reporting period. As the CRO booked reservations for a property, messages were sent to the property and printed on dedicated reservation printed transactions into its in-house reservation system so that accurate room availability data could be recalculated. In turn, this recalculated data was sent back to the CRO as an update on room availability.

Corporate-Wide Marketing. A CRO can function as a powerful marketing resource. The CRO information system contains important marketing data on individual guests and may provide individual properties with profiles of groups booked. New central reservation systems technology allows hotels to vary room rates for each room type on a daily basis. Varying conditions of supply and demand enable the room rates to slide within the ranges prescribed by each individual property.

Guest history data can be extremely helpful in processing reservations. These data also serve as the basis for determining demographic and geographic patterns of guests staying at participating hotel properties. Repeat guests may qualify for special frequent traveler programs offered by a hotel chain or individual property. By accessing guest history data, central reservation systems are usually able to direct and support frequent traveler and other marketing-oriented programs. For example, data maintained in relation to guests in a frequent traveler program generally include:

· Guest identification number.

· Level of membership in the program.

· Home and business address and telephone numbers.

· Full name and preferred salutation.

· Type of guestroom preferred.

· Amenities, such as king-size bed, non-smoking room, or newspaper preference.

For each guest's stay, the system tracks the guest's arrival and departure dates, number of room nights by room type and a revenue breakdown by rooms, food and beverage and other categories.

Additional Central Reservation Services

In addition to maintaining up-to-date information about room availability and rates, a comprehensive hotel central reservation system typically maintains such data as:

· Room types

· Room rates

· Room décor

· Room location

· Promotional packages

· Travel agent discounts

· Alternative booking locations

· Guest recognition programs

· Special amenities

In addition to processing reservations, a CRO may perform a variety of other services. A reservation system may serve as an administrative network for inter-property communications. The reservation system may also be used to transfer accounting data from individual properties for processing at company headquarters. In addition, the system may operate as a destination information center by serving as a communications channel for local weather, news, and reports on special hotel features. Central reservation systems can report:

· Travel or airline agent performance statistics.

· Effectiveness of special promotional packages.

· Sales forecasting information.

Newer systems enable the participating hotels to build in specific rules and procedures for each of the hotel's promotional packages or products. Some central reservation systems expand their basic services to include such functions as:

· Yield management (revenue management).

· Centralized commission reporting.

· Deposit/refund accounting.

Yield management, also called revenue management, is a set of demand forecasting techniques used to develop pricing strategies that will maximize rooms revenue for a lodging property. Centralized commission reporting details the amounts payable to agencies booking business with a hotel through the central reservation system. Hotel companies that require advance deposits to ensure reservations may find the central reservation system helpful in maintaining accounting records. Records can be kept of deposits made with reservation requests and of amounts refunded to individuals or groups who cancel reservations within the allotted time specified by management.

Property-Level Reservation Systems

Property-level reservation systems are specifically designed to meet the particular needs of the lodging industry. These systems have streamlined hotel operations with respect to guest, staff, and management needs. The specific needs and requirements of individual properties determine whether application software is purchased and operated separately or as a part of an overall property management system (PMS).

A reservation module of a computer-based property management system enables a reservationist to respond quickly and accurately to callers requesting future accommodations. The module significantly reduces paperwork, physical filing, and other clerical procedures. This provides the reservationist with more time for giving personal attention to callers and for marketing the various services the hotel offers. Stored information can be accessed quickly, and many of the procedures for processing requests, updating information, and generating confirmations are simplified.

The reservationist's initial inquiry procedures create a reservation record that initiates the hotel guest cycle. Reservation records identify guests and their needs before their arrival at the property and enable the hotel to personalize guest service and appropriately schedule needed personnel. In addition, reservation modules can generate a number of important reports for management's use. The following sections describe typical activities associated with the use of a reservation module. These activities include:

· Reservation inquiry

· Determination of availability

· Creation of the reservation record

· Confirmation of the reservation

· Maintenance of the reservation record

· Generation of reports

New Developments

Reservations was the first functional area of hotels to be computerized and, therefore, has received a great deal of vendor research and development. Additionally, the airline industry has spent millions of dollars developing its own reservation techniques, many of which have been adapted to the needs of hotels. Two of the more interesting developments in the reservations area are self- reservation systems and voice output systems.

Individuals with microcomputers are presently able to place their own reservations via the Internet. Soon, consumers may use this same technology for all travel-related needs. Interactive television-based self-reservation systems allow users with satellite capabilities to retrieve computer-stored reservation packages and view them on their television screens or display monitors. These reservation programs typically require users to respond to a series of questions. Users may enter their responses through a specially designed keypad, touch-tone phone, or infrared remote control device, and thereby create their own bookings.

RESERVATION FORM

NAME: __________________________________________________________

ADDRESS: ___________________________________________________________

PHONE: ____________ FAX:____________________ E-mail: ___________

ACCOMMODATION

No. of pax

Date of arrival: ____________ SGL ÿ ÿ @ _____________

Flight/ time: ______________ DBL ÿ @ ______________

Date of dep. ______________ ÿ ÿ @ ______________

Flight / Time:_____________ STATUS: Confirmed / Wait Listed

Billing instructions: ______________________________________________________

BOOKED BY

Name: _____________________________________________________________

Address: ____________________________________________________________

____________________________________________________________

Special instructions

______________________________________________________________________

__________________

Signature & Date

REVISION OR CANCELLATION OF RESERVATION

NAME:

ADDRESS:

ORIGINAL RESERVATION

ROOM:

ARRIVAL: | DEPARTURE:

|

REVISION

ROOM:

ARRIVAL: | DEPARTURE:

REMARKS:

� PHONE � VERBAL

REQUESTED BY RECEIVED BY: DATE:

RESERVATION CONFIRMATION FORM

Address:

Telephone:

Telex:

Fax:

Thank you very much for your request for a reservation at the ABC Hotel.

We are pleased to confirm the following accommodation.

Confirmation number:____________________________________________________

Guest name: ________________________ No. of persons _______________________

Address: _______________________________________________________________________________________________________________________________________________________________________________________Telephone:_______________________

Arrival date: ___________________ ETA/ Flight: ____________________________

Accommodation:________________________________________________________

Rate :__________________________ (Plus 31% tax)

Remarks:______________________________________________________________

Date:______________________ Front Office Manager :________________________

We look forward to welcoming you and assure you that everything possible will be done to make your stay an enjoyable one.

Important: Please retain this letter and present it to the receptionist upon registration. Reservations are held until 6 p.m. unless otherwise notified or the reservation is guaranteed.