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HOTEL MANAGEMENT

A N D O P E R AT I O N S
f o u r t h e d i t i o n

Edited by
Denney G. Rutherford, Ph.D.
Endowed Chair Emeritus
School of Hospitality Business Management
Washington State University

Michael J. O’Fallon, Ph.D.
Hospitality and Tourism Management
College of Business
James Madison University

JOHN WILEY & SONS, INC.

HOTEL MANAGEMENT
A N D O P E R AT I O N S
f o u r t h e d i t i o n

Edited by
Denney G. Rutherford, Ph.D.
Endowed Chair Emeritus
School of Hospitality Business Management
Washington State University

Michael J. O’Fallon, Ph.D.
Hospitality and Tourism Management
College of Business
James Madison University

JOHN WILEY & SONS, INC.

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Library of Congress Cataloging-in-Publication Data:

Hotel management and operations / edited by Denney G. Rutherford, Ivar Haglund, and
Michael J. O’Fallon. — 4th ed.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-0471-47065-6
ISBN-10: 0-471-47065-1 (pbk.)
1. Hotel management. I. Rutherford, Denney G., 1942– II. Haglund, Ivar.
TX911.3.M27H663 2007
647.94068—dc22 2005011811

Printed in the United States of America

10 9 8 7 6 5 4 3 2 1

D E D I C AT I O N

The fourth edition of Hotel Management

and Operations is hereby dedicated to all of

those hospitality students who have enriched

the lives of their guests by continuing to

learn beyond their formal education. It is

these professionals who constantly strive

to find even better ways to give the gift of

friendship. All the best to you.
D.G.R. and M.J.O’F 2005

CONTENTS

Preface xi
Contributors xiii
Acknowledgments xv

chapter 1 O V E R V I E W I

1.1 Introduction 1 1.6 Customer Relationship Management—A
1.2 The Hotel Development Process 5 Driver for Change in the Structure of the
John Dew U.S. Lodging Industry 36
Gabriele Piccoli, Peter O’Connor,
1.3 How Well Does the Branded Distribution
Claudio Capaccioli, and Roy Alvarez
Company Allow Independent Hotels to
Compete with the Chains? 14 1.7 Spas and the Lodging Industry 50
Peter Cass Peter C. Anderson
1.4 The Art and Science of Opening References 67
Suggested Readings 68
a Hotel 21
Source Notes 68
Tom Dupar
1.5 On-line Pricing: An Analysis of
Hotel-Company Practices 26
Peter O’Connor

v

vi Contents

chapter 2 O R G A N I Z AT I O N 69

2.1 Introduction 69 References 88
Suggested Readings 88
2.2 Organizational Design 73
Source Notes 88
Eddystone C. Nebel III
2.3 As I See It: Hotel Organization
Structure 86
Mark Conklin

chapter 3 G E N E R A L M A N A G E R S : A V I E W
AT T H E T O P 89

3.1 Introduction 89 3.5 A Day in the Life of a Hilton Hotel
3.2 A Conceptual Framework of the Hotel General Manager 113
General Manager’s Job 91 Robert O. Balmer, CHA
Eddystone C. Nebel III and Ajay Ghei 3.6 A Day in the General Manager’s Life 115
3.3 Grooming Future Hospitality Leaders: Bob Peckenpaugh
A Competencies Model 101 3.7 Mini Case: Sunset Hotels and Suites 118
Beth G. Chung-Herrera, Cathy A. Enz, References 118
and Melenie J. Lankau Suggested Readings 120
3.4 As I See It: What I Do 111 Source Notes 120
Emilio Fabico

chapter 4 O P E R AT I O N S : R O O M S 121

4.1 Introduction 121 4.5 Concierge (cone-see-air-j) 143
4.2 The Electrifying Job of the Front Office Mario Arnaldo
Manager 124 4.6 As I See It: Management of the
James A. Bardi Front Office 149
4.3 A Day in the Life of the Front Office Oliver Meinzer
Manager 127 4.7 Mini Case: The New FOM 161
Garry Dickover 4.8 To Change or Not to Change:
4.4 Yield Management: Choosing the Most A Case Study at the Front Desk 162
Profitable Reservations 131 Nancy Swanger
William J. Quain and Stephen M. LeBruto References 163
Suggested Readings 164
Source Notes 164

Contents vii

chapter 5 O P E R AT I O N S : H O U S E K E E P I N G ,
ENGINEERING, AND SECURITY 167

5.1 Introduction 167 5.6 The Engineering Department and
5.2 A Day in the Life of a Director Financial Information 199
of Rooms 173 Agnes Lee DeFranco and
Kurt Englund Susan B. Sheridan
5.3 Housekeeping Organizations: Their 5.7 The Legal Environment of Lodging
History, Purpose, Structures, and Operations 205
Personnel 175 Melissa Dallas
Thomas Jones 5.8 Asphalt Jungle 217
5.4 On Being an Executive Housekeeper 188 Je’anna Abbott and Gil B. Fried
John Lagazo 5.9 Workplace Violence in Hotels 227
5.5 The Hotel Engineering Function: Mark Beattie and Jacinta Gau
Organization, People, and Issues in the 5.10 Case Study: Housekeeping,
Modern Era 191 Engineering, and Security 230
Denney G. Rutherford References 231
Suggested Readings 233
Source Notes 234

chapter 6 F O O D A N D B E V E R A G E D I V I S I O N 235

6.1 Introduction 235 6.7 A Day in the Life of an Executive
6.2 Managing Food and Beverage Director of Catering Sales and
Operations in Lodging Organizations 239 Convention Services 287
Robert H. Bosselman Rich Benninger
6.3 As I See It: Hotel Director of Food and 6.8 The Organization and Management of
Beverage 251 Hotel Beverage Operations 291
Dominic Provenzano Valentino Luciani
6.4 Best Practices in Food and Beverage 6.9 Case Study: Crisis in the Food Court 298
Management 253 Nancy Swanger
Judy A. Siguaw and Cathy A. Enz 6.10 Case Study: Outside the Box in the Food
6.5 Strategic Alliances Between Hotels and and Beverage Division 299
Restaurants 265 References 300
Robert W. Strate and Clinton L. Rappole Suggested Readings 301
Source Notes 302
6.6 Contemporary Hotel Catering 282
Patti J. Shock and John M. Stefanelli

Practice in the Lodging Industry 377 and Sharon K.8 Mini Case: Revamping the Marketing Re- Marta Sinclair and Carl R.5 The Hotel Purchasing Function 391 8.6 Hotel Sales Organization and 7. Magnini. Morris Fletch Waller 7.3 Budgeting and Forecasting: Current Vincent P. Schmidgall and References 412 Agnes Lee DeFranco Suggested Readings 414 Source Notes 414 8.6 Data Mining for Hotel Firms: Use and Raymond S.. Draeger .7 Putting the Public in Public Relations: 7. Richmond 7.2 The Lodging Chief Financial C.1 Introduction 303 7. Schmidgall Limitations 399 8. Hodge Raymond S.2 Building Market Leadership: Marketing Operations 348 as Process 305 Margaret Shaw and Susan V.4 As I See It: The Hotel Controller 387 Michael J. Lee Evans Executive 368 8. Earl D. Sinclair search Department 360 7.3 Consumer Decision Rules and Implica. The Case of the Seattle Sheraton Hotel tions for Hotel Choice 321 and Towers 353 Bianca Grohmann and Eric Spangenberg Louis B.1 Introduction 365 8.5 A Day in the Life of a Regional Revenue References 361 Suggested Readings 362 Manager 345 Source Notes 362 Paul Chappelle chapter 8 F I N A N C I A L C O N T R O L A N D I N F O R M AT I O N M A N A G E M E N T 365 8. Honeycutt Jr.viii Contents chapter 7 M A R K E T I N G A N D A S S O C I AT E D ACTIVITIES 303 7.4 Hotel Pricing 334 7.

4 Current Issues in Hospitality Employment Law 436 Suzanne K.2 Driving Hospitality Into the Future 417 of Human Resources—An Emerging Christian Hardigree.1 Introduction 415 9. Murrmann and Cherylynn Becker INDEX 461 . and Cheri Young References 457 9. J. William Werner. Ellis Norman. Gail Model 446 Sammons. Contents ix chapter 9 H U M A N R E S O U R C E S P O L I C Y MANAGEMENT 415 9.3 The Causes and Consequences of Turnover in the Hospitality Industry 429 Carl D. Riegel 9. Bruce Tracey and Arthur E. Vince Eade. Nathan Robert H. Woods.5 The Strategic and Operational Roles 9.

.

predicts. their Friedman) explains. and their interactive functions in the does this in different ways given different overall hotel organization. particularly housekeeping. If as minor players. (in the word of nor” departments. erations that will enable them to intelligently depth way. is exposed to a number of different view- agement field that dealt with significant por. there are able to synthesize a viewpoint about hotel op- very few that try to treat. analysis of those viewpoints. in a balanced and in. for better or worse. and people. hotel operations—usually either front of the “something may be okay in theory but it house. were treated Milton Friedman. tions have been designed to further address. the first edition of mote the idea of critical thinking among stu- this textbook project was originally born out dents of hotel administration. What professors need to guide students in introduction to the intricacies of these “mi. Consequently. xi .” amount of time focused on one aspect of the There is a conventional wisdom that goes. understanding is that theory.” Like economist departments. becomes better front office. This is an- Another frustration he encountered was other issue or frustration that subsequent edi- using then currently available material to pro. Other doesn’t work in practice. variables in different organizations. While there are ing refers to that process whereby the student many outstanding textbooks in the hotel man. P R E FA C E As Denney would tell you. points within a theoretical structure. or controls. it is lousy the- readers of such texts were given only a cursory ory. One approach whatever practical situations they frustration was that some texts that dealt with may find themselves confronted with in the these departments spent an inordinate “real world. and from tions of operations. Critical think- of a range of frustrations. food and beverage or marketing. and food and beverage. we reject that statement. students and theory doesn’t work in practice. their management. each department in the hotel.

it is up to you to make the best make sure the original idea behind this book use of HMO IV. a hotel de- the fourth edition of Hotel Management and partment. Good luck. researchers. it is our appreciation of what a variety of observers. and commentators . By helping the reader gain an none of us knows it all. did not get lost.xii Preface As we went about planning and designing think about a topic. We wanted to nal analysis. because like we state above. thinkers. pleasure to do this work for you. a student or hotel professional can Operations (HMO IV). In the fi- the frustrations listed above. we felt the need to feel better prepared to find ways to apply the- continue to remind ourselves of the lessons of ory in a practical setting or situation. in this case.

Associate Professor. Conven- Robert H. Las pitality Administration. and James A. Western bletree Hotel. Marriott Hotels. CONTRIBUTORS Je’anna Abbott. Area Vice President. Draeger. CMP. Cornell Uni. Business Consulting Manager. Crystal River. Dayton De- pitality Administration pot Casino. Bosselman. Deloitte and Touche Tom Dupar. Peter C. University of Houston. Hawaii Pacific University. General Manager. Florida Atlantic University. Milan. Caesar’s Palace Garry Dickover. Executive Consultant. Instructor. Frankfort. Resorts. WA Agnes Lee DeFranco. Anderson and Associates Washington Mario Arnaldo. Bakersfield. Virginia Conrad N. Michael J. versity School of Hotel Administration Red Lion Hotel and Inns. Balmer. Penn State Berks–Lehigh Suites. HI versity Robert O. Nevada Claudio Capaccioli. Germany Valley College Melissa Dallas. Controller. San Diego State Uni- Honolulu. Dayton. California Europe. Florida Roy Alvarez. General Manager. Catering of Catering and Convention Washington Services. Vancouver. Bellevue. Paul Chappelle. Senior Lecturer. Anderson. Dou. Chung-Herrera. Cherylynn Becker. Gonzaga College of Business University. Dupar Dynamics. Mark Conklin. Liberty Lake. Doctoral Student. Nevada University. Florida State Vegas. tion Center Courtyard by Marriott. Dedman Chair of Hos. Mark Beattie. Hilton College Rich Benninger. Management. Dedman Department of Hos. College of Business. University of Houston Peter Cass. Italy Washington xiii . Bellevue. Bardi. Executive Director of John Dew. Brand Revenue Manager. Travel Industry Beth G. Richmond.

Madison Hotel. New Product Thought and Virgin River Hotel and Casino Leader. Justice. Assistant Professor of Bob Peckenpaugh. Shaeneman Professor Susan V. Orlando. Florida Emeritus Gil B. Washington State University. The of Hospitality and Tourism Management Oasis Resort. Director of Purchasing. Nebel III. WA lier International. University of Nevada. Assistant Professor. Suzanne K. Rancho Marketing. University of Nevada. Ohio of Business. Mellon HR Solutions Emilio Fabico. Love School Key Center. University of Central Graduate School of Business Florida Gail Sammons. Gil B. Director of Operations. CA Cathy A. Las versity. Las Vegas. Cleveland. University of Nevada. Hotel Manager. Four Seasons port Beach Marriott Suites. Las Vegas. President. San Diego. University of Geor. Nathan. Fried and Associates. Ajay Ghei. HQ Global of Innovation and Dynamic Management. Newport Resort Costa Rica at Peninsula Papagayo Beach. School of Hospitality Manage- Vegas ment John Lagazo. Richmond. Las Ve- Valentino Luciani. Rappole. Florida Atlantic University. University of gas Harrah School of Hotel Administra- Nevada. Hilton College Melenie J. Fried. Cleveland Marriott Downtown at Earl D. Assistant Professor. Lankau. New gas Harrah School of Hotel Administra- Haven. France’s Institute de Management Hote- man. minion University Las Vegas. Director of Opera- School of Business. Doctoral Student in Criminal Peter O’Connor. Louis G. NV Oliver Meinzer. Honeycutt Jr. Las Vegas tion. candidate. Eddystone C. Director of Operations. Rockville.. CT tion. Florida International Uni- Thomas Jones. Virginia Polytechnic ministration Institute and State University. The World Bank Group France Bianca Grohmann. California Christian Hardigree. Las Ve- Risk Management Consultants. Las Vegas. Magnini. Concordia University Bernardo Inn. Old Do- Harrah School of Hotel Administration. Elon University tions. University of Nevada. University of Nevada. LeBruto. NV tion Sharon K. Stephen M. Assistant Professor. Texas Cornell University School of Hotel Ad. Purdue University. Ph. Essec Business School. Pull. Casa Blanca Spa and Golf Arthur E. Associate Professor. Terry Louis B. Riegel. New- Kurt Englund. Love Dominic Provenzano. NV Jacinta Gau. Quain.D.xiv Contributors Vince Eade. Hodge. The Clinton L. University of Houston. Walt Disney World. Ellis Norman. Enz. MD Conrad N. Instructor. Murrmann. Department C. Public Relations gia Carl D. Vice President. Cornell Las Vegas Harrah School of Hotel Ad. Morris. University School of Hotel Adminstra- ministration. Richmond College of Business. NV . Gabriele Piccoli. Lee Evans. Elon University William J. Dallas. Workplaces. Las Vegas Vincent P. Professor. Resort Manager.

Sinclair. Las Vegas. Las Seattle. University of Nevada. Washington State University of Hotel & Food Admin. National Aeronautics and versity. ON J. Principal. University of Nevada. Contributors xv Raymond S. Washington Vegas William Werner. QLD 4066 Australia Vegas Eric Spangenberg. NV Marta Sinclair and Carl R. Las Judy A. Trumansburg. Las University. Schmidgall. Sheridan. Guelph. University of Nevada. Las Vegas. School Nancy Swanger. University of Nevada. Griffin Robert H. Toowong.. Owner. NV Vegas . FCW Consulting. New York Fletch Waller. College Cheri Young. Associate Dean. Cornell University. Patti J. Las Ve- of Business. University of Nevada. School of Hospitality Business Space Administration Margaret Shaw. Shock. School of Vegas Harrah School of Hotel Adminis- Hotel Administration tration. University of Guelph. Robert W. Las tion. Cornell University School of Susan B. Associate Professor of Man- N1G 2W1 CANADA agement. Taughannock Hotel Administration Farms Inn. Michigan State Uni. Woods. Washington State University gas Harrah School of Hotel Administra- John M. Stefanelli. Bruce Tracey. Siguaw. Strate.

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friendly book. all of its flaws. It is my great good fortune that my files created in Adobe PDF or PageMaker for xvii . Her magic with the computer tion of readings would not have been possi. They also add a view of the real bly are more than a few. cajoling. and trying to choose material crafted custom pieces for this edition and that will transcend unanticipated events—get those professionals who contributed “Day in harder. and suggestions. responsibility. begging. ideas. and expertise to this and a whole bunch of students all contributed exercise in critical thinking about hotel de. partmental operations deserve recognition. helped me educational establishment today. and there proba. are solely my world that has been missing. My badgering. Director of the knowingly have contributed their thoughts. ACKNOWLEDGMENTS I sort of thought that by the time I reached friends. and production ent extant in the hospitality profession and its assistant. They have was a team effort involving a wide range of made this edition a richer and more user- professionals. was critical. tremendously. Terry Umbreit. devote the time they did to contribute to this come easier. research. it hasn’t. counsel. colleagues. The support and encouragement of my First of all. and interesting material. not easier. this collec. Well. the authors of the various colleagues at Washington State University pieces included here who knowingly or un. opinions. colleague. the project would have be. I want to particularly salute those who teresting ways. School of Hospitality Business Management. My good friend. Lillian Sugahara Jesse. literally saved this project by translating many ble. Without the rich mixture of interest and tal. While making the book the Life” and “As I See It” pieces. The challenges of project. and continual improvement—finding challenging bribing aside. to the success of this project with advice. presenting it in in. and former students could the fourth edition. I think we’re all still friends.

and will overcome the problems attendant to the be moving in July 2005. in the process of building our retirement script of previous editions. We are Because she kept accurate files of the manu. I love you. after which the My wife and best friend. Rutherford big writing projects.xviii Acknowledgments Macintosh to something I could edit in Word.” we have had to rely on Sandy for a lot Melissa Oliver. Michael will co-au- Thanks. I retired from Washington State . The last two times I did this. and with “the are the greatest. Michael O’Fallon. As with past editions. He is the author of ideas have truly made this a better project. and understanding she always does on Denney G. and her assistance of my colleague and former stu- willingness to discuss some of my off-the-wall dent. my editor at Wiley. we were able to home in Port Townsend. Sandy Sweeney. pro. Lillian. shortly after the book transfer of the project from Van Nostrand is due at the publisher. sup- port. Melissa. book. Washington ticularly important when I disappear to work 2005 on “the book” when we could be doing other. Washington. we were moving—and surprise—it is happen- ing again. thor this and the next edition. you distance has its own challenges. she does understand the rhythms of an author’s life and endures losing me to “the book” with style and grace. Sandy. University after 26 years in May 2004. I also want to acknowledge the capable viously published by Wiley. continues to provide the encouragement. of decisions. Building a house long Rinehold to John Wiley & Sons. vided needed support regarding material pre. the instructor’s manual. more fun things. project will be all his. Her understanding is par- Spokane/Port Townsend.

Wash- management of modern hotels must adapt to ington. Hotels are changing and will con. hotels continue to be influential in the foresee- have been affected by shifts in emphasis able future. The explosion of technology loaded with the potential of much misunder. encers of hotel design.1 I N T R O D U C T I O N The vast majority of research articles and es. and information-based companies has con- standing.  INFLUENCES • Demographics play a major role and will Like many other American businesses. meth. market- ing. Note: This list is neither exhaustive nor exclusive. It can be safely said that of this book are designed to help the student where jobs are and major concentrations of and practitioner discover information. the techniques of corridors in California. As the baby boom generation 1 . c h a p t e r o n e OVERVIEW 1. to name a changing circumstances. and industry have moved from the so-called pects of what has been called the art and rust belt to the sun belt. As a result. Subsequent sections few such places. construction. Texas. and operation are the following. and North Carolina. The hotel business science of modern hotel management. Massachusetts. hotels will follow. economic activity occur. and techniques for dealing with these Among other current and ongoing influ- changing circumstances. among the country’s living patterns. ods. People says in this book deal with one or more as. It has been active in reborn and reconstructed should be noted that the word modern can be central cities. centrated human endeavor in technological tinue to change.

resort • Technology—in the form of computers. personal kinds of managerial techniques and data assistants (PDAs). and travel services are now they are in the office or at home. well-educated population segment. and sizes services has kindled new ideas about transferred is such that today most travel. creating new products to attract those • New patterns of investment in hotel facili- markets. and more attention is now paid to achiev- graphic is the emergence of vacation re. manipulated. to a lesser ex- erated. Increasingly. and businesses. given area. will allow them to be as productive as restaurants. or home environment to people travel each year. With the increased power in the business traveler can be headed for the information and data manipulation his or her next destination before the day realm. Deregulation of the airlines low guests seamless transition from the has driven a change in the way millions of business. These facts will present operated by name hotel companies and new challenges and opportunities to all are marketed to the affluent.2 Chapter 1  Overview and its children mature. business managers. and virtually everything some. the population of sorts—a modern incarnation of the time- the country will for many years be older. ing optimum return on investment. taking advantage of ever-increasingly finely tuned market def. ties have emerged in the last two decades. Increas. nication. laborsaving mechanical equipment—has • The well-documented change in the com- had and will have a major effect on the plexion of the national economy from one way in which hotels are managed and op. personal devices. stored. and-spoke design of airline services. Be- . natural resources to one that empha- is accumulated. Because these are being developed and ous generations. hotels have available to them ever. hotels altered the way we manage our hotel must provide services and access that al. with portable computing. managers have had to absorb new mana- communication. and better educated than previ. is over without having to stay overnight in expanding databases about guests and are a CBD hotel. travel. and management tactics (CBD) to accomplish their purpose in a designed to address those market seg. strategies. healthier. entertain. wireless commu. the fact that business travelers may not initions. major hotel properties adjacent to hub air • The concept of market segmentation. • Changes in people’s travel patterns have how connected to the Internet. healthy. or transport facilities. seen as unique entities that dictate special ingly. The speed with which information tent. • One of the effects of the aging demo. share properties of several decades ago. Meetings and conferences can ments have become even more important now be scheduled within a five-minute to the management of hospitality service limousine ride from the air terminal. will dictate hotel structures and need to travel to a central business district organizations. the way in which we manage the design ers expect that the hotel rooms they rent and delivery of these services. ment must be fused with communication Many hotel companies are now locating and productive processes. properties. that emphasizes goods and. given the hub- that of the hotel. Hotels. and gerial realities.

when the third same trend has also altered the complex. This puts first time in the memory of most. immediately and probably for the fore- seeable future as well. and United States. cult. edition of this book was being written. hotels are struggling to achieve ences still operate (to a greater or lesser ex. This translates directly not only ments often completely out of its control. profitable occupancies.. for in.1  Introduction 3 cause people from outside the hotel in. bankruptcy. in quarterly basis. Vast layoffs in the hundreds of change in ethnicity of the workforce. the Dow the modern hotel. consumer spending patterns and high dustry are now participating in its finan. travel.S. so will the izing. Managers now must design whether or not their financial wherewithal tactics and strategies to achieve hereto. cor. in a way contrary to many 2001 changed the face of all business and managers’ instincts. cultural. and social na. however. changing circumstances. economic cycles. ceding edition was that cultural diversity will porate profits were low. cial structuring. fore unanticipated financial goals. and inter. downsizing. hotel occupancies had stabilized Street stock analysts heavily influence nationally in excess of 70 percent.000. where Wall and 11. is challenging. This is especially true Jones Industrial Average was between 10. complicating our nervous. hotel operations are no particularly in light of corporate layoffs and longer dependent on the vision of a single the ongoing nervousness of consumers about entrepreneur.000 of publicly owned hotel firms. This furthers the the outsourcing of jobs. travel in most segments was down due to cor. Among the predictions I made in the pre- stance. business travel is tent) on the organizational structures and down. employment growth was stagnant. and the face of the economy the greater economy and at the mercy of ele. Join this with an imbalance of trade. Major airlines are in Most of the foregoing issues and influ. security has made travel more diffi- ena of an economic. Since the last burst. tural backgrounds that an increasingly diver- While fuel prices continued to be relatively sified workforce will bring to hotel operations . stable. the high-tech stock market bubble strategies of the modern hotel. ational travel as well. to business travel but personal and recre- The cyclical nature of the U. the country is at war in a number of lo- edition of this book. was safe. and market segmentation porate restructuring. and people are ture have come to the fore. Unem- ion of management and organization of ployment was at an all-time low. the expansion of the play a role in the management and organiza- gross national product (GNP) was only a mar. on a tacks in New York and Washington. have influenced the hotel industry. The Now consider late 2000. cations. In early 1993. employment growth had not materialized. As surely as living patterns. D. pressure on hotel companies and their Then what happened? The terrorist at- operations managers to perform. and the fed- stock prices through expectations of eral government was running a surplus for the quarterly revenues and profits. The cul- thousands had been announced every month. or reorgan. Section 1. view of hotel management. tional structure of the modern hotel in the ginal percentage above previous years. and the largest federal argument that the hotel industry is a part of deficits in history. if not actually annoying. other phenom.C. Finding ways to operate national economies has recently affected profitably in such an environment is the job of significantly hotels’ ability to respond to the next generation of hotel operators.

Awareness of the risk environ. if anything. and hotel operators are no excep. To most operators. Re- branding is a complicated process that must be accomplished within critical time frames to  INTRODUCTORY coincide with marketing. financial. operators must be aware of opment process may influence the marketing and alert to realms of risk that can engender and management of the hotel. rebranding existing proper- ties generated a lot of growth activity. Today’s economic cir- process.4 Chapter 1  Overview may be seen as a problem or a challenge—or John Dew. Rather than focus exclu. hotels and their guests. it will be seen as an tures. Dupar’s large projects. says in this edition highlight these threats to heretofore unavailable in books of this nature. understand how the intricacies of the devel- tion. tel from conception to construction and culturation of the hospitality business will operation. and Dupar’s busi- completely catch on. lawsuits against them. ate to provide market strength. ness has changed its focus to opening new sively on the operations of the major chains. This unique view of hotel opera- accelerate. in addition committed to hiring and training a workforce to a proprietary hotel product. early part of the twenty-first century. formerly president of Inn Ven- both. . ac. Peter Cass offers the reader insights. He makes the nificantly affected the ways in which hotels case that the future success of independent are operated. with an eye toward gional operators. Tom Dupar is a seasoned vet- eran at this fascinating and important activity I have attempted in this edition to present and has participated in rebranding operations new and (sometimes) different takes on the around the world. major projects. hotels is linked to their ability to find ways to ment and the regulatory realm are factors maintain their independence while sustaining that affect a hotel’s ability to compete in the competitive advantage in the luxury segment. Several articles and es. and experts such as re. Increasingly. and that—who knows?—may never cumstances are different. minished greatly after 9/11 but firms still man resources section address this issue. This section is also used to ex. It should help aspiring managers managers. needed to grow. leaders. and opera- READINGS tional variables. tions connects the concept of hotel develop- The legal and regulatory environments ment with the realities of day-to-day are increasingly important to all business operation. should be read together. I see no reason sider’s view of the steps needed to bring a ho- to change that prediction now. It should be noted that into independently branded hotels that associ- present-day security concerns also have sig. provides an in- structure that mirrors society. Essays Because new construction of hotels di- and articles in the security section and the hu. His essay on the intricacies hotel business. comparing Dew’s smaller project focus and and independent branded hotels. a regional hotel management and de- opportunity to demonstrate to an increasingly velopment company that has built and diverse clientele that hotel companies are operated many Marriott products. and the two operators. major industry consultants. His piece serves as a useful the readings here are from the perspectives of companion to that of John Dew. of rebranding was a mainstay in the previous plore ideas that are new to the management edition of this book.

1. lives on in an interna- spas at five-star properties still set the stan. The suggested articles are branding. you may have wondered into the development of a new hotel? about some or all of the following questions: • Who will manage the hotel once it’s open? • How did someone select that particular vacant lot? We hope to address these and other ques- • Who actually creates a new hotel? tions you may have in this chapter. Section 1. Conrad Hilton. E. one of est hotels and resorts. .2  The Hotel Development Process 5 Perhaps proving the axiom that “every. While the big-name whom.” the concept of health like to gain more in-depth knowledge about and wellness spas as a hotel and resort prod. Once the cific historical antecedents. Peter that he is generally credited with founding Anderson’s overview of the spa industry pro.M. tional. business traveler at the beginning of the twen- In addition to products. publicly traded company operated by dard for pampering and pricing. building. the province of high-end hotels and resorts. The • Who selects the architect. Statler’s contributions to of personal service in less lavish spas seems to the modern hotel business are legendary in appeal to the modern traveler as well. light other major forces in the development of At the end of this section are a number of the modern hotel business. the books by Hilton and Jarman look closely at idea of being pampered in a spa has been the intermachinations of the establishment by added to the service mix in many more mod. and re. In particular. and the interior designer? ing built with a planned opening date of spring 2007.2 T H E H O T E L D E V E L O P M E N T P R O C E S S John Dew • Who owns it?  INTRODUCTION • Where did they get the money to build it? The bulldozers are working and a construction • How long does the process take from idea crane is being erected on that vacant lot you to grand opening day? pass each day going to and from home. tieth century. They also high- the industry. sign on the fence states that a new hotel is be. the engineers. the hospitality industry as a whole and spe- uct has enjoyed a resurgence. two early pioneers of the industry. I have also chosen to include in the drawn from recently published historic section two recently reviewed and studied overviews of the hotel side of the hospitality ideas that may or may not be adopted across industry in the United States. and operating the first commercial hotel con- vides insights into this fascinating service cept that recognized the realities of the early product. If you have ever wondered just how that • Who manages the myriad details that go hotel was created. suggested readings for the student who would thing old is new again. the comfort one of his sons.

and have city approval for such construction activities as curb cuts. Their conclusion offers an objective third- networks with commercial real estate agents party opinion as to whether the project is on the lookout for a suitable hotel site. • Visibility from arterials/freeways oper’s consideration that include maps. • Proximity to where potential guests live. coming into the market.  THE DEVELOPMENT Companies offer hotel feasibility studies for a COMPANY fee and are experts in a particular market. the ity study can spend up to several months gath- developer often puts his or her personal wealth ering detailed data to see if. • Proper zoning hand turn lanes. The company retained to do the feasibil- pending on the business structure selected. it at risk when engaging in a hotel project. taker. Is the price too high for the average daily rate • Master area development plans (ADR) in this particular market? Is it too • Local permitting process and the degree low? Or is it acceptable? This is determined of difficulty for that particular city when the hotel financial pro forma budget • Impact fees charged by the city document is created. train stations. if any The price per square foot of the land is • How adjacent property and businesses considered. and makes recommendations about the comparison. • Size in square feet/acres Commercial realtors offer sites for the devel. in their opinion. the feasibility study considers. a erally. left. • Hotel needs and the demand for each ity study is often commissioned to obtain an • Leisure travel demand in the area . The higher the cost of land. who originates the idea for the hotel. Gen- pending on the type of hotel to be developed.6 Chapter 1  Overview analysis of the site by an objective third party. and proof of hotel zoning. be visible from a freeway or The Site major street arterial. or developers may use the consulting group of The developer is the entrepreneur. The Economy of the Area • Major employers. travel. government agencies  THE FEASIBILITY STUDY • Business trends for each employer/agency When the developer selects a site. the risk one of the major public accounting firms. noting where the po. a feasibil. hence the term feasibility study. ple sites by helicopter. De. or work tential guests live and work and where • Barriers that discourage competition potential competing hotels are located. aerial • Traffic counts/patterns photos. air- sites by driving around the neighborhood ports. De. within five miles of the site or touring multi. along with a small staff of people. The makes economic sense to build the hotel. the are utilized higher the rates the hotel will need to charge. This property must be zoned by the city for a hotel. and delivery truck access. etc. Sometimes the developer views potential • Accessibility from streets. developer. an acre is roughly the size of a project based on the following variables: football field). evalu- site of at least two to four acres is required (for ates. freeways. feasible.

Sheraton. and potential requirements of the • Franchised (Marriott. Segment to Serve the developer is prepared to move forward • Full service with the project. and meetings • ADR by year history • Estimated cash generated for debt • Estimated cash generated for distribution The Hotel Market to investors • The competitors. etc.) • C corporation . both existing and • Estimated cash-on-cash return (after-tax planned income divided by equity invested) • Historical occupancy of hotels in the area • Overall projected yield • Historical average rate • Projected internal rate of return • Proprietary data on area travel • Net present value of the project over each of the next ten years Identification of Which Hotel Market Once the feasibility study is completed. etc. • S corporation (formerly known as a tion (Luxury Hotels of America.) • Limited liability company (LLC) • Independent • Limited partnership (LP) • Independent with strategic market affilia.2  The Hotel Development Process 7 • Nearby tourist attractions Ten-year Projection • Visitor counts • Occupancy projection by year • Conventions. the developer purchases an option on • Extended stay the land to tie it up until the remaining devel- • Luxury opment steps can be completed—and to pre- vent the competition from purchasing it. estate implications for the investors. mortgage lender. a business structure is se- etc. trade shows. Guest Suites. once it’s built.) lected. Selection of Appropriate Hotel Brand tax consequences. Historic Sub-S corporation) Hotels of America. Section 1. Often. • Midprice • Economy • Budget  CREATION OF THE Selection of Appropriate Hotel Design OWNERSHIP ENTITY • High-rise • Midrise An ownership entity (note that this is differ- ent than and separate from the development • Garden apartment style company) must be created to hold title to the • Hybrid design land—and the hotel. Hyatt. Consider- ing the limitation of liability to the investors. normally in one of the following forms: • Licensed (Best Western. at this stage of the • Limited service process.

Con- sideration must also be given to the brands al- The newly formed entity now enters into a ready represented in the target market that development contract with the development may be available for franchise. Depending on the type of hotel to be built The firm’s experience and record on similar (based on the feasibility study). ap. The agreement generally The next step is for the franchise com- covers such variables as: pany to conduct an impact study of the mar- • Selection of architect/engineers ket. The architect does not recommends a franchise company to the ho. Architect fees can run up to 5 per-  SELECTING A FRANCHISE cent of the total project cost but are often negotiated down. a franchise is usually granted • Processing all building and occupancy to the ownership entity for a one-time fee of permits about $400 per room. This considers such matters as possible • Selection and supervision of a general negative impact on existing hotels that carry contractor the franchiser’s flag. royalty fees. • Selecting a franchise company • Securing the franchise • Selecting an interior designer that meets  SELECTING AN franchise company requirements ARCHITECT • Purchasing all opening furniture. the fee. with continuing royalty and vestors marketing. usually based on a percentage of • Securing a construction mortgage loan hotel revenue. and his or her on-time record must be con- sidered. chise selected. fixtures. depending on the fran- • Raising all the equity money from in. quested. The franchise company to take the project to completion. A major consideration is the best pleted. building the operator has to run as a hotel. equipment Because the final product of this process is a • Selecting a management company to op. erate the hotel the architect’s experience in designing hotels. Each franchise company has different maintain. with the feasibility study offered as proximately 3 percent of the total project backup for the request. cost. his or her experience with the prototypical • Liability for cost overruns drawings of the franchise selected. . and marketing/  THE DEVELOPMENT miscellaneous fees as part of its agreement AGREEMENT structure with the operating company. the developer projects are critical. company is approached and a franchise is re- The development company charges a fee.8 Chapter 1  Overview franchise fees. have to operate the hotel when it is com- tel owner. If the impact is judged to be insignificant. if the project is big enough. The developer wants the architect to franchise brand for the market segment to be design a hotel that will be easy to operate and served. for this service.

the lender issues a loan commitment for the • Pre-opening marketing and labor costs project that usually offers up to 60 percent of • A six-month operating capital cash the project cost. on behalf of the own- ing entity. then approaches a number of lend- PROJECT ing institutions. Often. up • Required debt service coverage ratios to a 10 percent contingency cost that allows • Length of the construction loan. The lending institutions The following variables must be determined analyze the deal and offer a proposed term to qualify for financing: sheet that answers all of the borrowers’ ques- tions. It’s now time to go to the money With the bank committed to about 60 per- markets for construction financing. the ten-year oper. equipment. This allows the borrowers to select the • The cost of the land lending institution with which they wish to • Design and construction cost of the work. fixtures. experience in • Interest rate building the hotel type is important.  RAISING THE EQUITY With this information. The general contractor and architect • A requirement that interest/taxes be held often bid the project as a team. The developer. this helps the in reserve developer determine the final cost. appraisal company such as Hospitality Valua- and opening supplies tion Services (HVS). It is • Required loan-to-value ratio hoped that the general contractor has learned from any mistakes made in building similar • Terms of repayment hotels. The sum of these constitutes the total cost of the project for purposes of securing financing.2  The Hotel Development Process 9 and conditions of a construction loan can vary  SELECTING A GENERAL widely depending on the individual lender. These are only a few of the considerations that must be analyzed when selecting a  FINANCING THE lender. Again. The terms cent of the cost. The balance must be raised as reserve equity from investors. length for unforeseen circumstances is built into the and costs of extensions project bidding process. Section 1. the remaining 40 percent . Based on the appraisal. The lender then commissions an ap- building praisal of the project by an independent • The cost of furniture. INVESTMENT FUNDS ating pro forma budget is updated to reflect actual costs. CONTRACTOR Important terms that can affect the cost of the loan include: Major consideration are the quality and reli- ability record of the general contractor and • Personal guarantees by developers and/or the firm’s use of and relationships with the equity partners/investors many subcontractors needed for a project as • Loan origination fees complex as a hotel.

but in re- weather cooperates. and equipment arrive on time. and day-to-day state securities laws. These potential investment sources are manages about 50 percent of all hotels that offered the opportunity to invest in the hotel. if all the furnishings. commences. if the general This is a largely linear explanation of the contractor has no problems with subcontrac. documents. the owning entity selects an ap- panies. marketing and sales. currently to save time (and money). tracts. often with several five-year renewal the developer. many of the steps are carried out con- market is such that human resources are suf.  CONCLUSION month construction process begins. selec- C corporations. Inc. carry the Marriott flag under 20-year con- Based on their study and evaluation of the re.. through in order to create a hotel. the hotel development process The hotel will open on time. Manage- The developer now contacts money ment companies charge 3–5 percent of rev- sources that have risk capital available to in. • Venture capital fund managers Marriott International. operations once the hotel is opened. To pursue these. These can include: management companies have charged 3–4 percent of revenue and 2–3 percent of gross • Individual investors operating profit so they can be measured and • Private asset managers evaluated on both sales and profitability. enue for this service. prepara- for sale consistent with applicable federal and tion of the operating budget. then congratulations! Nevertheless. the developer pre- pares an offering solicitation document that MANAGEMENT meets current securities and exchange law. a private placement offering circular propriate management company to manage and project description is prepared. The nature of this document depends on the COMPANY type of business entity that was formed. stock offerings are prepared tion and training of the opening staff. It has been fixtures. for example. If the ar- chitect’s plans work as intended. and the building permit issued by the city. takes about three years from original concep- .10 Chapter 1  Overview must be raised in equity commitments by in-  SELECTING THE vestors. Then the 12–16. the equity raised. For Often even before the construction activity limited partnerships or limited liability com. In recent years. complicated process that a developer goes tors. options. Independent management companies ports. the land purchase option is exercised and the purchase is completed. Once the loan is secured. For S or the pre-opening. • Opportunity fund managers The franchise company may offer to pro- vide management services to franchisees. manage the remaining hotels under long-term management contracts of up to ten years’ du- they decide whether or not to offer funding to ration. or permits. if the described in a step-by-step process. and if the employment ality. vest. ficient to open a hotel. unions. and studies detailed above.

local. contacted a hotel development and manage- praisal. oping and managing extended-stay hotels in tunities available to hotel and restaurant ad. to estimate the number of extended-stay The City Development Commission is. room-nights were available in the market.076. It listed a closing date by which front costs and collect development fees. The commercial realtor offered to represent the developer in negotiations  PUTTING IT ALL with the City Development Commission. which would be paying the real estate com- TOGETHER—THE STORY mission on the sale. Hotel development with its component An area commercial real estate broker parts of hotel feasibility studies. and then offered the par. The RFP was sent to many major ho- that during the initial stages of the process. all bids had to be submitted. and hotel ment company with a long history of devel- management are all among the career oppor.) for the land and the design requirements stabilization three years after opening. the developer was able cel for sale and development. asking prospective buyers to submit (U. The developer conducted a feasibility The City Development Commission in a Pa. ketplace that would be encouraging or dis- acre parcel of riverfront land in the couraging to this development project. The City Development Com. study to see all of the conditions in the mar- cific Northwest community purchased a 1. An agreement was OF AN EXTENDED-STAY reached with the commercial real estate bro- ker to represent the buyer to the seller. created a mas. That set down by the Commission for a building provided the basis for a ten-year revenue that would fit the intended look and feel of estimate. the Pacific Northwest. The land was previously con. and how have the land decontaminated. located in a similar setting to that being of- fered for sale. Only after the buyer’s development history and ability to the project is approved and all financing is in develop a hotel of the type envisioned by the place can the developer start to recover up.55. tel companies and commercial real estate the developer can have as much as $1 million brokers. Studies were conducted to estimate how taminated with industrial pollutants that many room-nights were being sold within a made the parcel unsafe for habitation and five-mile radius. room rate of $141 when the hotel achieved ft.2  The Hotel Development Process 11 tion to first guest. From this.240 ($30/sq. room-nights available needed to produce an sued a request for proposal (RFP) that out. 82 percent occupancy with an average daily lined the asking price of $2. It is important to remember the area. hotel real estate finance. including a property ministration graduates. five years. how many extended-stay construction. downtown area. . and federal grants to how many hotel rooms existed. many were being planned over the following ter plan for the area. mission used state.S. Commission. and HOTEL DEVELOPMENT the developer went to work in preparing a PROJECT proposal. Section 1. hotel ap.) or more at risk in the process before a a purchase price bid along with a statement of final go/no-go decision is reached.

8% of $200.1% expecting an income in excess of $200. or those with an income in excess Construction Interest 2. opened.000 in Contingency 2. exchange for putting the project together.0% $102. and a three-floor enue and 2 percent of the net operating parking garage with parking for 193 automo. fered $100. and the day-to. guaranteeing a 9 percent priority awarded the project to the developer. year construction financing for the project. as agent for the ownership should the hotel be sold. A group of ini- First. agement company to be paid 3 percent of rev- fices. continuing contract with a management company to to function as agent for the owner.286 per suite. and exercise facility. In addition manage the arrangements for financing and to the priority return. . Architecture/Engineering 2. These investors were pri- Construction Loan Fee 1. The arrangements called for the man- spa.1% marily defined as people with a net worth of Developer Fee 2. pre. also entered into a hotel management The development company. percent ownership in the hotel. sought a commercial bank to provide three- opening hiring and training.000 units of ownership to accred- The City Development Commission ited investors. A 20-year franchise was Land 6.800. Construction 66. effort was successful in raising 40 percent of The LLC. tial investors retained the other 50 percent in pany (LLC) was formed as the ownership en. prepared a private placement memo- Appraisal/Legal/Tax/Insurance 1.3% randum document seeking investments from Pre-Opening Expenses 1. meeting facilities. investors could expect to construction of the hotel. Fixtures. all at a total cost of $38 million. acting as agent for the Permits/Fees/Environmental 2. This tity that would hold title to the hotel.) The opening date for the hotel was pro- jected at 27 months from the date of proposal The private placement memorandum of- acceptance. income for management services. jor hotel company and applied for a franchise The $38 million construction budget was to allow the development and operation of an broken down as follows: extended-stay hotel.3% accredited investors. an ownership limited liability com. entered into a develop. or The ownership LLC then contacted a ma- $147. then manage the pre-opening marketing. LLC.8% The developer. biles.0% granted with a fee of $400 per suite or. in turn.8% $1 million. day operation of the hotel once it was suite extended-stay hotel with an indoor pool. a guest laundry. and return on the investment and a combined 50 work began. participate in any future capital gain realized The developer. (Note: Additional entities Total 100% may also be defined as accredited investors by the Securities and Exchange Commission. This was to be followed by a 5 per- Office Equipment 1.8% owner. lender would provide the remaining 60 percent ment with the development company to in the form of a construction loan.4% once the hotel was open and operating. 258.2% the current year. the total cost of the hotel in anticipation that a ment and construction management agree.000 over the previous two years and Working Capital 2. of.12 Chapter 1  Overview The developer proposed a nine-floor. Equipment 7.4% cent royalty and a 3 percent advertising fee Furniture.

construction loan. The loan documents set an interest rate and also required that the construction cost. the hotel did struction. The terms allowed the developer. The owners were forced to conduct ated with and selected a general contractor a search for a new mortgage bank. and equipment to meet the opers face when entering into a hotel hotel franchise design requirements. owners look forward to the option of selling along with other groups with a stake in the the hotel on the next peak. Building permits were applied for. and However.2  The Hotel Development Process 13 As $22. as struction loan period. An appraisal that was agent for the owner. They with significant hotel construction experience were able to find a mortgage. the own- prospective lenders. a three-year construction loan was erage daily rate during the three-year con- secured. but only after who acted on behalf of the developer. 2001. of the $38 mil-  POSTSCRIPT lion development cost was to be borrowed. Hotel develop- these approvals in place. struction appraisal by a third-party appraisal terrorist attacks on the World Trade Center firm chosen by the lender confirmed the and the Pentagon slowed travel throughout value at $38 million upon completion of con- the United States. ment and ownership is a high-risk. and for an origination fee of not achieve the projected occupancy or av- $400.000.000. construction com. the Development Commission for its approval.800. praised. high- menced. them to capture the original projected return tion to the area and neighborhood. The size of the construc. project. As a result. only major banks were considered as Three years after the hotel opened. as buying down the loan by $2 million to bring agent for the owner. and the hotel opened two years later. This illustrates the risk that devel- furniture. The general contractor the loan-to-value ratio back to 40 percent then selected design-build subcontractors and equity and a loan at 60 percent of the ap- an interior designer to select colors. After a precon. permanent financing under these circum- The development company then negoti. The bank that had pro- ownership LLC seek a permanent mortgage vided the construction loan notified the prior to the three-year expiration date on owners that they did not wish to provide the construction loan. Section 1. . ership LLC had the obligation to secure per- tion loan was above the lending limits of manent financing on the hotel to replace the most small regional banks. as hotel values historically peak the building design was presented to the City and decline on about a ten-year cycle. fixtures. stances. The September 11. With all of through capital appreciation. which will allow appearance of the finished building in rela. or 60 percent. fabrics. to draw down the loan primarily based on the hotel’s trailing 12- every 30 days after providing proof that month net operating income produced a funds had been properly disbursed in the value about $2 million below the original construction process. reward enterprise.

Recognized brand names and intensified. struggles to maintain inde. on the independent hotel owner. the face of the global ness—long-term. More and more hospitality marketing global consumer market. These changes technology. use similar technology platforms and vantage and ownership independence. technology (customer databases). dent hotels and resorts with reservations and • The growth and importance of global sales services. high-fee management con- hospitality market continues to change at a tracts and franchises. shared sales and marketing infrastruc- tures to consolidate and direct consumer demand.3 H O W W E L L D O E S T H E B R A N D E D D I S T R I B U T I O N C O M PA N Y A L L O W INDEPENDENT HOTELS TO COMPETE WITH THE CHAINS? Peter Cass Dramatic changes have affected the hotel in. revenue management. budgets are being directed toward technology- graphic and psychographic characteristics enabled customer booking and communica- of the global consumer market are grow. pendent hotels and competitive market dy. Four factors con- ity industry marketing techniques—are no tribute to this rapidly changing environment: longer effective in the new consumer-focused • The broadening and diversification of the market. marketing techniques is expected to evolve . As competition has evolved and brands. This includes internal hotel have had a disproportionately high bearing operating systems. ating customer loyalty. • The rapid advancement and availability of dustry over the past 30 years. a focus on traditional distribution channels. booking technology (Internet). tion. become revenue producers. this shift away from traditional hospitality ing and changing radically. The manage- from among more than 20 such organizations ment and leveraging of multiple brands delivering varying degrees of competitive ad. Today. and traditional hospital- rate never before seen. in the direct-to-consumer communications and face of increasing pressure from large. some of these organizations have brand attributes are important in reach- modified their structure and enhanced their ing diverse customer segments and in cre- services to meet the changing needs of inde. systems that enable central sales offices to Several organizations provide indepen. Both the demo. who. marketing funded chains. independent hotels may choose single global management. and pendence and to compete on the basis of telecommunications and automated sales distinctive hospitality and character. well.14 Chapter 1  Overview 1. • Consolidation of multiple brands under a namics.  A NEW MARKET MODEL Some established ways of doing busi- In the new millennium.

hotel chains continued to evolve as the need for capital to invest in additional properties restricted growth opportunities. e-commerce. as once thought. Some While these additional offerings leveraged of these evolve from the hospitality industry. also fostered the development of the fran- However. and the changes could fol. this shift will not affect all inde. the consumer was largely ignored. more powerful intermediaries. search International. it is creat- ing new. whereby the chain As the consumer market became more offers the hotel owner the rights to use its diverse and the hospitality product more . ac- tional corporations desiring lower and more cording to a recent study. linkages to the global distribution systems and while others are opportunistic e-commerce led to strong relationships with travel agents. will increase rap.  BRAND DEVELOPMENT This pressure bolstered the proliferation of the management contract.3  How Well Does the Branded Distribution Company Allow Independent Hotels to Compete? 15 over several years and involve millions of U. by accelerating the growth of the chains’ share The emergence of e-commerce modes in of the lodging market. 1999). Leisure travel content. instead. 75 percent of the predictable costs. the mar- the hospitality industry is not eliminating the keting/referral organizations formed in the intermediary and empowering the individual 1960s began to offer a wider range of services. property. idly as the presently fragmented leisure travel These new business structures continued distribution network becomes more unified to threaten the traditional independent owner and efficient through consolidation. and one-to-one marketing management and reservation and marketing investment.S. In the United States. including sional management agreement (Travel Re- packaging on the Internet. that the business travel distribution network The growth of management and franchise is more structured and driven by multina. centage of gross sales. The franchise differs from the man- The first wave of change will hit the global agement contract in that the owner is respon- business and city hotel market. brand name and established facility and ser- dollars in telecommunication. In the 1970s. In response. The independent hotel or resort services—for a significant fee. chise concept and franchise system in North pendent hotels and resorts simultaneously. The pressure to grow nies may not be able to fund this requirement. companies. vice standards as well as trained operations data warehousing. Section 1. including meeting the rily because of brand competition and the fact franchise standards. and today. 2000). The second wave will affect hotel rooms in North America are covered by the leisure market. strong consumer  MANAGEMENT branded operators are attracting increasing COMPANIES AND amounts of capital to fund their growth at the FRANCHISES expense of unbranded operators (Pricewater- houseCoopers. America. usually a per- and many small branded management compa. and the or- ganizations did little to generate consumer brand awareness. contracts has been remarkable. This is prima. some form of branded franchise or profes- low quickly. sible for operations.

Reservation affiliations are believing that an established brand provided most effective in regional hospitality markets greater economies of scale and established in. The new competitive play- as new property management systems. As a result. these costs put un. Such upgrades universal pipeline. these hotels became are challenged by new market and operating increasingly focused on leveraging greater re. independent hotels. This requirement runs counter to the es- tablished business model and capabilities of The relationship of independent hotels and reservation affiliations. par. without a recog. tunities for the professional management at trusted brand became more critical than ever. independent hotels. In the late 1990s. longer a competitive advantage. In this brand-driven environment. tive customer management programs. began to face the tional channels of distribution. therefore. the reservation organization are in alignment independent hotels’ distinctive style and char. owners/develop. the GDS is a date changing consumer needs. group. and where travel influencers played a domi- ers found it difficult to obtain permanent fi.16 Chapter 1  Overview segmented. Reservation affiliations focus on tradi- ticularly those in Europe. Independent hotels. chains will grow exponentially. high. need to draw more national CHALLENGE TO and international business to fill occupancy EFFECTIVENESS gaps. and effectiveness of reservation affiliations nances. but ers. that do not have multiple brand competition frastructure. As competition intensifies. and innova- became critical to maintaining competitive. imperatives. Access to the daunting costs of upgrading their technologi. the strength precedented strains on independent hotels’ fi. These relation. with the goals of the independent hotel own- acter became a competitive advantage. and nancing on a new hotel or resort. resorts to reservation affiliations has been The average room-night contribution of long and generally successful. e-com- room faxes. ing field is proprietary distribution channels speed Internet access. in. two-line phones. ness of reservation affiliations has always dards. As a result. it is probable that local and re- gional market share at independent hotels and  RESERVATION resorts will be drawn off by local and regional AFFILIATIONS—A licensees of strong global brands. ships operated best in a market environment portant. By the late 1980s. somewhat homogeneous in nized brand affiliation or a close relationship terms of demographic market segmentation. reservations companies to affiliated inde- . A contributing element to the attractive- only if they were able to meet recognized stan. nant role in transient business. ness. and leisure and health facilities merce technology and partners. sumer-empowered global market. opted for the lower-risk alterna. When coupled with ever-increasing costs In the new technology-driven and con- of consumer marketing. The cost to compete against turns from their reservation affiliation. that was stable. leveraged by consumer segmentation. Lenders. and when the goals and objectives of the tive. the need for independent been the networking and camaraderie oppor- hotels to be associated with a clearly defined. leisure travel. Global Distribution Systems (GDS) is no cal infrastructure and facilities to accommo. with the lending community. branding became increasingly im.

These goals for growth can be at Unlike a reservations and representation odds with the goals and expectations of in. company. corporation through an elected board of di- gram management and the development rectors. The corporate objectives and governance room sales. a brand must attract The ideal branded distribution organization is new development and must therefore be a conventional equity company with owner- strong enough to convince lenders to ship shared (in some cases) by the individual commit to permanent financing. scales of hotels: the branded distribution mentation and analysis. Section 1. 2. ments. ber hotel of at least 200 percent over present vation organizations: performance levels (Preferred Research).3  How Well Does the Branded Distribution Company Allow Independent Hotels to Compete? 17 pendent hotels is less than 5 percent of avail. new competitive world. Joining such an organization is appropri- The traditional reservation organization ate for independently owned and managed must be prepared to respond to competitive hotels and resorts that want to keep owner challenges by expanding resources and skills control but require effective and low-cost . This ownership structure creates a of regional and global partners to true operating partnership and a sharing of strengthen and extend the effectiveness energies toward the common goal of creating of the brand. Brand hotel owners.  CHARACTERISTICS OF A 3. investment. contribution to affiliated independent hotels At least four emerging factors are chal. quate to maintain technical and managerial zations are influenced by the need to grow leadership and to support the shareholders’ and meet shareholder profit require. focused business relationships. To be competitive. necessary to increase average room-night able rooms (Preferred Research). The emergence of consumer direct-book- ing Internet technology requires signifi- cant new and ongoing investment. company. a branded distribution corporation dependent hotel and resort members. who have direct input into the management also includes loyalty pro. to 15 percent—an average growth per mem- lenging the effectiveness of traditional reser. Corporate profits must be ade- policies of traditional reservation organi. The sole focus is must change not only their focus but also performance for the affiliated independent their structure if they want to succeed in this hotels and resorts. The growing demographic and psycho. value through increased brand awareness and 4. In response to this competitive environ- 1. The new marketplace requires innovative global brand management together with BRANDED DISTRIBUTION resources to establish and maintain a COMPANY brand in the face of intense competition. provides services as The traditional reservation affiliations set out in the diagram below. owns and builds a branded distribution net- work asset that. in turn. ment and the need for more cooperative and graphic complexity of the global con. a new hospi- sumer market requires significant new tality business structure is evolving for all expertise and resources in the area of seg.

1 Hospitality Structures and Corresponding Brands Flagged and Types of Representation Reservation Reservation/ Branded Franchise Business Firms (Group Services Sales Distribution Management Structure Meetings Only) Only Affiliations Companies Companies General • Primarily Trade-Focused • Consumer & Trade-Focused Attributes • Primary Reservation Technology • Performance Focused • Disparate range of abilities in: • Brand Management • —Management Expertise and Depth • Quality Standards and Assurance • —Marketing. Training • —Consultative & Design Services • Management Expertise and Depth Examples of ALHI Utell Flag Int’l Concorde Preferred Hotels Accor brands Organizations. Technology • —Recruitment.Table 1. David Green Lexington Golden Tulip and Resorts Bass brands Brands. Sales. and Helms Briscoe Pegasus/ Historic Hotels Worldwide Carlson brands Management Hinton/Grusich Rezsolutions Leading Hotels (for profit) Cendant brands Companies Krisam Supranational of the World Best Western Choice brands TRUST Relais and Chateaux (not for profit) Four Seasons Small Luxury Hotels Summit Hilton brands Sterling Hyatt SRS Hotels Mandarin Steigenberger Marriott brands Starwood brands Wyndham Relationship Client Client Member (some Member-Owner Licensee of Hotel are Owners) Owner to Structure Owner High High High High Low Control Room-Night Low Low Low-Medium High High Production Consumer Low Low Low High High Focus Overall Low Low Low Low High Fees 18 . and Reservation Support • Multiple Technologies • Integrated Marketing and • Technology Solutions • Customer Recognition and • Loyalty Programs • Full-Service Provider • —Purchasing.

For example. ongoing fees and reservation assured by a focus that is almost entirely on commissions are significantly lower than the most important part of this business rela- with either a pure franchise or manage. Instead. The branded distribu- consumer and rapidly emerging technology tion company receives no revenue if it through cooperative ownership. funds COMPANY are used to build and maintain an up-to- date global distribution network and infra- This new business structure is attractive from structure composed of telecommunications. and group purchasing benefits without experience. Table 1. tionship—the generation of brand awareness ment agreement. technology. From a branded distribution company’s standpoint. an owner’s or a developer’s standpoint for a e-commerce functions. conflicts can be avoided. As a camaraderie and traditional distribution chan- result. does not deliver to the hotel or resort. and reser- substantial owner control over the opera. this structure allows the brand to  THE BENEFITS OF A expand faster because capital is not used to subsidize additional construction or to sup- BRANDED DISTRIBUTION port an older business model. livery of an exceptional hospitality ness. responding brands. relationship from the daunting and increasingly ex. which focus on professional tion. the branded dis- branded distribution contract can be tribution company is primarily market- completed and signed in as few as 45 days.) . equals 50 percent of gross profits. Above all. The efficiency of the operation is second. their target objective: revenue. it promises the independent into the agreement with the same primary hotel awareness of. and allow for such as the Marriott or the Westin. vation affiliations.3  How Well Does the Branded Distribution Company Allow Independent Hotels to Compete? 19 distribution. Section 1. reservations software. travel agents. (Note: Travel pensive task of acquiring profitable new influencers are the intermediaries between customers and allows them to focus their consumers and the travel product and include attention and operating skills on the de. its full attention is on customer and • Marketing: It frees hotel management travel influencer communication. which focus primarily • Contract terms: The terms are typically on hotel operations and asset management shorter. including: data warehousing capability. Unlike hard flags. it requires less up-front cash. the encumbrances and costs of a traditional • Common objectives: Both the owner and hotel chain franchise or management con.1 shows a summary of the key This shared goal strengthens and ener- characteristics of the various marketing busi- gizes the relationship between the two ness structures and suggests examples of cor- partners. number of reasons. the branded distribution company enter tract. marketing. and revenue streams. and sales and • Costs: First. and access to. and the nels such as the Best Western. etc. style. and character of the hotel. global consumer brand aware. easier to negotiate. a 9 or 10 and measurable room-night revenue for each percent franchise fee in many cases affiliated hotel or resort. focused.

participation of independent step with competitive chain hotels presents a owner/operators as shareholders in a branded significant challenge to independent owners. flagged chains. Keeping in In contrast. sitioning while allowing the hotel to maintain The same conflict can arise between the independent ownership and management. Independent hotels face significant risk in to- does not create owner confidence in the part. and the management company they hire. they currently have several beyond these concerns and focus on their op. It is often the through using its logo on marketing materials case that strategic asset management con. given the economic. and fran- chise management companies. and operating efficiency are the major quality standards.  ENSURING COMPETITIVE ally supportive relationship. technology and the profitability pressures put ilar conflict and put a financial and operating upon chain hotels by shareholders. to the benefit of both. even when the cash flow is negative. petitive arena. Its sole focus is on customer tribution company must relinquish a minimal acquisition and management. competi- burden on an owner. However. options outside of the branded distribution eration and the consumer—the source of company. the independent hotel aligned with a branded . as well as participating in e-commerce and in- cerns conflict with day-to-day tactical operat. Such misun- derstandings can sour what should be a mutu. This competitive advantage extends to assurance. which be required to demonstrate their affiliation tend to be public companies with stockholder with the branded distribution company expectations that must be met. including representation firms. day’s marketplace. their revenue and the basis of their success. they may also concerns of management companies. tion for customers is intensifying. these drawbacks can actually move to separate its ownership and operating enhance a hotel’s operations and market po- divisions. societal. ing needs. through the development of new technolo- mainly in the areas of branding and quality gies. This is evident in Marriott’s recent However. and technologi- cal trends that are dramatically changing the  ARE THERE ANY hospitality industry. asset management. who are focused on real estate concerns. The fact that ADVANTAGE management contract fees are charged and collected. reservations services. Given the advances in ner. profitabil. In addition. ventory management initiatives. member proper. independent owners of a hotel property. A franchise relationship can cause a sim.20 Chapter 1  Overview In contrast. ties may have to adopt and maintain specific ity. many of these old- economy options can offer only short-term BRANDED DISTRIBUTION solutions to long-term competitive pressures. distribution company enables them to move To address this. several of which are ana- DRAWBACKS TO A lyzed in this book. achieved amount of control and decision making. In certain cases. COMPANY? A branded distribution company has an inherent advantage going into this new com- The owners of property within a branded dis.

the owner makes money.  BLUEPRINTS sions are successfully melded.4 T H E A R T A N D S C I E N C E O F O P E N I N G A HOTEL Tom Dupar If you ever have the chance to be involved The OPM oversees the following aspects with opening a hotel. operator. owner. By providing the inde. Section 1. The role of an OPM is to pull together the visions of the architect. expertise. warehousing. but will separation of skills. • Developing the operational supplies and tels around the world. jump at the opportunity. each project has been • Overseeing the purchasing. pany will not only continue to operate prof- tional service and profits to the owners.and five-star ho. four. and also flourish. and installation of the OS&E each has been professionally rewarding. From Guam to Malta. and the ar. after • Coordinating the installation of third- the general manager and the director of mar- party vendors keting. the branded distribu. for success. and feel. When these vi. I have been an operations • Developing and managing the pre-open- project manager (OPM) since 1989 and have ing budget opened over 40 three-. for the entire building trating and exhausting aspects. unique. anywhere. the hotel guest is satisfied. Independent hotels and resorts that align tion company enables the hotel management themselves with a branded distribution com- to focus its attention on the delivery of excep. 1. • Assisting with the creation of a model Walk into any hotel. Everything you see. itable new customers. and look room around. involved many people and • Developing the pre-opening staff plan countless decisions. operating cultures in a cooperative business pendent owner with a global brand and the relationship provides a model and formula technology and expertise to acquire prof. This itably in the new global marketplace. Louis. resources. • Developing the interior graphics package The OPM is the third person hired. every detail. and delivery. chitectural blueprints. . interior designer. of a project: Opening a hotel is one of the most rewarding • Reviewing blueprints and specifications jobs in the hospitality industry despite its frus. and goods. The OPM’s responsibilities start with the ar- chitect and interior designer can add the proj.4  The Art and Science of Opening a Hotel 21 distribution company. and others. staff. equipment budget (OS&E) Berlin to St. each project has been the same. The focus is to ensure a ect to their list of successful accomplishments. hear. good flow for guests.

Arrange for a key rack to Build a typical king and double/double guest room close to the site so you can review every hold the keys for each valet parking stall. rooms up to three years before opening.22 Chapter 1  Overview The bellperson bag storage room should on the outside of the room. pay rates. If valet parking is offered. the number of guest rooms on that floor or then spreadsheets are created to include the floors. mini-bar. headboards. lighting. nightstands. plumb. this requires cocktail mercial heavy-duty use? Will they hold up to tables.)? Is the closet rod hung so the ironing setup requires 1. buffet stations. If sold lets offered for guest use (computer. clock radio. coffeemaker. and HVAC. for a 700-guest all-day meeting. If ice machines are offered for guest self. cribs. every operator brand standard? sure that precious labor dollars are used effi. the classroom etc. The pre-opening staffing begins with an orga- service. board organizer and iron board fit in the bles and 700 chairs. This requires 80 6-foot round dryer. Don’t forget the sign equivalents (FTEs) for all positions.400 linear feet of narrow ta. a dais for the head table. transfer allowances. . This all boils down to ensuring ample will snag guest clothing? Does the bedskirt storage space for equipment not being used— hang 1⁄2 inch off the floor? Do the bedside at least 1.000 requires 1. Once the ti- (10 pounds per room per 24-hour period) for tles and staff counts by position are finalized. etc. 800 chairs. and so abusive use? Do they have sharp corners that on. and high for the sales and marketing staff selling group chairs stored near an elevator for quick deliv. catering department can sell functions for lamps. portable bars. lamps give off enough lumens so guests can Moving goods from the back of the house read in bed? Does the room meet or exceed to the front requires careful planning to en. a cated so the cords are hidden? Are spare out- dance floor. A short theater meeting closet? Is the thermostat location convenient setup for 1. proper utilities.000 chairs. designed for com- ception for 1.). hair 800 for dinner. 2-cubic-yard  PRE-OPENING STAFF garbage cart will not work if the elevator is PLAN only 5 feet deep.400 guests. The same space accommodates a cocktail re. Are the case goods (dresser. These model rooms serve as sales tools ciently. A 6-foot. which must meet be located between the porte cochere (entry) ADA standards! and the elevators and contain 1 square foot of space for each guest room. and number of full-time ing. they must produce an ample supply nizational chart with all positions. the telecom outlets placed exactly where the TV. and telephones are lo- tables. iron. The ice machine room requires the position titles. chairs. Are the rollaway beds. including electricity. start dates. single item in them.500 square feet. and staging for the band. and audio visual equipment. ensure that a  MODEL ROOM convenient cashier’s station is located near the porte cochere. staging. Are ample electrical and Given a 10. a for guest access? podium. bonus.000-square-foot ballroom. Internet access. ery? The housekeeper closets should be cen- trally located on guest room floors to cut down on access time.

 PRE-OPENING BUDGET The OS&E comprises all of the items that are not nailed down. and licenses and per. This budget amended. utilities. Housekeeping must also keep an in- mits (business.). hair dryer. hangers. spare pillows. drug testing. the budget must be plies and equipment (OS&E) list. pillows.). also requires the budget be modified. high chairs. the pre-opening budget is af. furniture. clock radios. lotion.000 per form to the plan. midifiers. and fected. and budgeting for the operational sup- the opening date changes. guest amenities (soap. by the interior designer. Each of these The largest and most complex aspect of the pieces is used to build the pre-opening staff OPM’s responsibility is specifying. sheets. dehumidifiers. miscellaneous items. garbage trucks. renowned chef one month earlier than The list of goods typically exceeds 2. and equipment (FF&E). and marketing efforts. laundry soap. association dues. human resources recruitment (ads.000 to $10. such as bringing on a guest room for a typical four-star property. serving tered. bedboards. with the exception of the The OPM develops and manages the pre. sales and marketing efforts (40 per. Hiring a position that does not con. etc. laundry bins. valet deliv- headhunters. Section 1. collateral. These include office Housekeeping equipment includes vacu- space rental before moving into the hotel. cent). iron. items. opening budget. major costs are encoun. Additional costs include labor. ventory of guest request items including hu- etc.). travel to see clients. laundry bags.). sales tax collection. Add a little more for a full-service re- sort. pre-opening staff plan. and shelving. This budget typically consists The FF&E is typically specified and ordered of three major categories. shampoo. and shower curtain hooks. typically pencils out to $8. housekeeper phone). laundry Sales and marketing activities comprise tickets. and miscellaneous (20 percent). fixtures. Internet. etc. els. (frames. tow- any reason. to name a few of many rials. mattresses.500 line planned. labor cost (40 per. carts. spoons). refrigerators. forks. liquor. chafing dishes. and the original plan. rent. If the Food and beverage front-of-the-house opening date changes within three weeks of items include flatware (knives. box springs. items. Typical guest room items include bedding cent). when they start. office so on.4  The Art and Science of Opening a Hotel 23 The pre-opening staff plan is a compre-  OPERATIONAL SUPPLIES hensive document that states who is hired. training mate. public relations. deduct a little for an in-city business hotel. shampooers. utensils. If the hotel opening date is delayed for rollaway beds. ery carts. how much they are paid. as most of the staff is already hired. quantify- plan budget. shower cur- Rounding out the budget are all of the tains. pillowcases. towels. ironing board. and AND EQUIPMENT (OS&E) whether or not they are allocated a relocation allowance and benefit costs. hollowware (serving trays. and ganizer. cribs. luggage rack. ironing board or- advertising. sugar bowls and sauce . and tele. mattress The labor cost is taken directly from the pads. amenities. carpet extractors. If hiring has already begun and ing. ums (guest room and wide-area units). water. carpet utilities (power. etc.

over 100 pages! Before quantifying uniform needs. My re. ice quirements. glassware. cork for uniforms. etc. The fitted uni- general cashier’s office. dish. bullet-proof window for the each piece for each associate. skirting. salt and pepper shakers. In an ideal process. copiers. and deliv.  cent Kona. delivered to the proper location on the de- broidery (restaurants. dance floors. ice require durable uniforms that breathe and bins. can handle lots of bending and stretching. Do we need summer and INSTALLATION OF THE winter uniforms? Will the uniforms be laun. forms are issued a few days before opening currency and coin trays. the exterior flagpoles. The uniforms ered the day before the chef starts burning in are delivered and sorted prior to the individ- the kitchen. country or region of the hotel. Hawaii. To quantify the sizes required. chairs. The invoices covered WAREHOUSING. Most goods are delivered to a local etc. The uniform order is placed 90 to 120 Every utensil. plate covers. flags. to produce the menus being sold at the hotel. ual fitting process. the day on the job.) or similar position plus tables. engineering. anyone?) must chart sizing curve is used for the particular be reviewed by the chef. conference tables. punch bowls). carving boards. mops and buckets. jackets. filing takes the pants. An army of seamstresses then and dry-erase boards. menu the interior designer review the look and feel covers and the list goes on and on. pianos. podiums. purchased. portable bars. and dresses and alters cabinets. pot. warewashing chemicals.)? What percentage of spare uniforms are warehouse and pulled for delivery to the site needed in reserve? as the general contractor completes construc- . fax machines. On the line staff’s second On the hotel administration side. Housekeepers and bellpersons carving trays. many DELIVERY. Each position (house- Banquet items include all of the above keeper. culinary. Once these questions are answered. and tray jack stands. table linen. pan. bellperson. sired date. The The largest purchase order—typically uniforms of the culinary and engineering over 100 pages long—is for a full-service staffs are often stained and must hold up to kitchen and includes everything a chef needs numerous launderings. staging steps and (front desk clerk/concierge) has different re- railings. the options available. and glass rack. then napkins. opening. the selection process begins. and a set of flags for day. OS&E dered by the hotel or the hotel associates? How many extra servers are needed for a ca. carts.24 Chapter 1  Overview boats. Each order is tracked to ensure it is time staff? Which uniforms need custom em. days before the first uniformed staff is hired. AND questions are asked. staging. the 500 purchase orders pacity dinner function in the ballrooms? Is are issued beginning six months prior to the intent to have a large percentage of part. One of the largest and most complicated purchase orders is for staff uniforms. safes. each individual is measured OPM specifies the office desks. project uniform purchase PURCHASING. Operations and china. a typical bell specialty items (roller-docker. order was 68 pages long. chairs. espresso machines.

per the ADA. the electrical twist tie removed.000 glasses and placed them in glass racks machines for the guest floors). These large orders include bed cluded 1. the coffee for washing. ment). Braille text. postage machines. tainer). These include Once the goods are on site. check presenters.). banquet tables (3 and most are required to include raised containers). The project manager reviews the interior When the construction schedule changes. house areas. The recent Kona project in- ble handling. The text must be correct. Among the other vendors are those dealing in copier services. etc. Then they unboxed installs soda guns for the bars and vending 30. Many third-party vendors must have access Once they completed this task. partment to develop the identity for the ity for initial washing. televisions (3 containers). 98 percent of which were sets (21 40-foot shipping containers for the one of a kind. collateral (cocktail napkins. the 9-volt bat- tery installed. Section 1.500 line items. chemical vendor (who must install and cali- tion process. and retail ar- cally staged in the largest ballroom for un. rectional arrows must point the correct way.4  The Art and Science of Opening a Hotel 25 tion and turns over areas. and guest room safes (1 con. company (which must install and test equip- ried out for each of the 2. During the five-week Kona installa. quet chairs (2 containers). Some goods are direct guests and staff in front and back of the shipped directly to the site to eliminate dou.000 manager schedules and directs all of these shower curtain hooks. spa. and first aid supplies. example. the di- Kona project). they spent the to the property prior to opening. dors must be updated so they show up when This package includes every sign needed to the area they need access to is ready. The linen order for guest rooms and The OPM works with the marketing de- F&B are shipped to an off-site laundry facil. including the soft-drink vendor (who and 525 shower liners. each clock radio must be unpacked. fitness center equip- ment. and uniforms. eas. Then the unit is placed in a guest room on the nightstand. the pay-per-view TV vendor (who Once receiving and distribution begins on must connect every television in the building site. telephones. unique areas within a property. another element comes to the forefront: and test the signal strength). security systems. 525 shower curtains. These logos are incorporated into the sig- packing and distribution. office equipment). For menus. These kinds of tasks must be car. . process requires a plethora of workers. this task re- quired two people for three eight-hour days. The unpacking nage package. over 3 tons of packing material brate the dishwashing machines).  THIRD-PARTY VENDORS For the 525-room Kona project. vendors. pools. and the time set. and the of- were generated every day! Making friends with fice furniture installer (who must assemble all the local waste-hauling service is a priority. bars. they are typi.  INTERIOR GRAPHICS These vendors are constantly informed PACKAGE when they can install their equipment based on the general contractor’s completion dates. the restaurants. The project next five working days installing the 7. the warewashing garbage. ban. ven- graphics package for errors and omissions.600 signs.

Rehearsals are Once the offer letters are accepted. The activity during the last 72 hours before The mass hire is typically conducted over the opening ceremonies is chaotic. In the second week of training. operational philoso. On average. rest rooms. consumer adoption of the percent in 1995 to 33 percent in 1999. reception space for Housekeeping closets are stocked. and even such easy- cated to group training. The first few days on the job are dedi. years. 70–93). and what to tell the guest en opening so that they have all of the tools they route to the room. Artwork and furnishings are team can focus on the recruitment. check-ins and check-outs. divisional training As soon as the general manger cuts the takes place. guest room. the most efficient route to each sonnel during the last two months of pre. in- line associates start work about three weeks cluding serving test meals and cocktails. find the next project and do it all again! 1.5 O N . clean a room. guest out. ceremonial ribbon. According to statistics quoted in the While hotels continue to make extensive use Horwath Worldwide Hotel Industry Studies. and break and food storerooms are filled. contractor completes all small details such as nates all of these details so that the operations paint touch-ups.26 Chapter 1  Overview Departmental training includes teaching  HUMAN RESOURCES staff to make beds. Rooms are cleaned.L I N E P R I C I N G : A N A N A LY S I S O F H O T E L C O M PA N Y P R A C T I C E S Peter O’Connor The importance of electronic hotel-distribu. code of conduct. the OPM knows what the staff is broken out into departmental or kind of job has been done. all conducted for all aspects of the operation. The next step is to job-specific duties. need to recruit and hire the staff. This is the a two.  OPENING DAY room four-star hotel.000 applicants for a typical 300. Sixteen-hour opening. policies. installed in the public areas. To interview this many job seekers. days are the norm. with the Internet as a reliable and secure commerce . HR requires office space. On day three. to-overlook activities as valet parking and phies. This works out to over 1. Liquor up to 200 at one time. menu item. The OPM coordi. cook every The OPM assists the human resources per. shift in sales going almost exclusively to elec- tion routes has grown substantially in recent tronic channels (O’Connor. The general rooms for the interviewers. the HR department interviews at least five applicants for every position. and other general vacuuming the pool. of travel-agent-oriented global distribution direct reservations fell from approximately 39 systems (GDSs).or three-day period six weeks before time that all hands are on deck. This process is referred to as the mass hire. 2001.

many of the best-known In- ing on-line product. perdine. all of other channels (Nua. 1998). 64 percent The Internet has dramatically changed said that saving money would make them the way people communicate. If Jupiter’s 2007 predic. sales and marketing Asia.5  On-Line Pricing: An Analysis of Hotel Company Practices 27 medium has prompted a change in the way in who haven’t bought on line were asked what which hotel rooms are being distributed. on price. from a consumer’s perspective THE WEB purchasing travel products on line has. or obtaining better informa- able for sale on line. des. First. For example. 2000). has pointed purchase travel on line (Gomez. with a volume nearly ternet retailers (such as. study by the Joint Hospitality Industry Con- Booking volumes are also forecast to gress found a real expectation among con- climb. count in the previous 12 months to buy travel lion in 2002 to US$64 billion in 2007 (Jupiter on line (Forrester Research. and Brown found in a more convenient than contacting a travel 2000 study that almost six out of ten leisure agent or telephoning a supplier directly. Travel saving time. Amazon. more control. and a Media Metrix.com. 2001). the PhoCusWright study found that com. and Brown. 2001). TIAA. expect savings to be passed on to them. Pepperdine. user—an affluent. Section 1. 2000. out: “Consumers now understand that suppli- PhoCuSWright. 2001. web (TIAA. Pep- forecast to grow sharply. products in particular have proven to be suit. Second. double that of the current leading product.  HOTEL PRICING ON Furthermore. 2000). and Yesawich. 2001). research infor.com) initially competed with tradi- PC hardware (Forrester Research). The Travel Industry Association of sumers that Internet prices would be lower America (TIAA) estimated that by the end of than those available in the “bricks and mor- 2002 between 6 percent and 10 percent of all tar” world (Joint Hospitality Industry Con- travel reservations would originate on the gress. As a travelers now actively seek the “lowest possi- result. frequent traveler who spends more than the average on leisure and entertainment—is an attractive market for travel suppliers (NFO Plog Research. on-line travel sales will more than cent of all buyers had used an on-line dis- triple in the next five years—from US$18 bil. and also a study by TIAA. in many instances. 1998). to a large extent. as well petitive pricing is the best way to attract as being rewarded for making the booking customers (Pastore. No other benefit—whether mation. For exam. and buy goods and services. accord. 2000). ers are cutting costs through this channel and ple. savvy consumers are aware that web- Studies by Internet analysts Gomez and based distribution costs are lower than those PhoCusWright. for example. Radisson Hotels Worldwide’s managing vating factors that encourages consumers to director. a 2001 ing to a recent report by Jupiter Media Forrester Research study found that 66 per- Metrix. Such a perception has developed for sev- tion comes true. Price is key to selling successfully on line. Similarly. As Jack Ged- identified price as being one of the key moti. on-line travel-related revenues are ble price” for travel services (Yesawich. would encourage them to do so. eral reasons. When travelers themselves” (Muqbil. Such expectations . 1998). travel will be the biggest sell. easier. getting bonus loyalty-club points. become faster. tional outlets based. more interested. 2001). The typical Internet tion—came close to this level of response.

. In a 1999 survey. Companies such as EasyJet. Similar or even greater levels league and I found that rates obtained from of savings can be made by hotel companies.00 $3. they can achieve case of hotel brands’ own web sites. with unsold inventory. quoted in Travel and Tourism Intelligence. Internet with lower prices.50 online route Source: Dresdner Kleinwort Benson/Accor. 1998. 19–24).20 $10. and relatively low prices but with short lead times. many hotels (and airlines) use chains’ own branded web sites. in the telesales and travel agents. and Buzz estimate that by avoiding translates into low prices.to 90.2 Reservation Cost by Distribution Channel Total Route Transaction Fee Cost Traditional travel Customer agent GDS Switch CRS Hotel Traditional $5. they have also resulted in most chains using multiple routes to reach the public’s associating rooms sold over the the consumer (Castleberry et al. 2001). The International Hotel Industry: Corporate Strategies and Global Opportunities (London: Economic Intelligence Unit. which offers substantial discounts for on. in achieved by selling directly to the consumer that it focused only on direct sales over hotel on line. Table 1. However.20 $4. These factors have combined to make tor. Electronic the web to sell last-minute deals—packages at distribution is rapidly evolving for hotels. as the web site were usually substantially higher can be seen from the internal Accor figures in than those obtained by contacting the central Table 1. however.20 $0. which show how an 80. .90 $3. Finally. a large number of other on-line consumer- While such promotions can help dispose of focused channels are now available.50 $1.28 Chapter 1  Overview are being reinforced by the budget-airline sec. 2000). which in the consumer’s mind RyanAir.50 intermediary route Customer Hotel company website Hotel Direct $1. a col- (Cooke.20 $0.20 $13. reservations office (O’Connor and Horan.20 $4. percent savings in transaction charges can be 1999). That study was limited. industry savings of up to 30 percent—which they pass practice frequently seems to be the opposite on to customers in the form of lower fares of theory.50 route Online travel Customer agent GDS Switch CRS Hotel Online $3.2. for instance. consumers associate on-line booking with line bookings. good value.

70–82) fo. tail in the co-authored paper that I mentioned tween the room availability and prices being above (O’Connor and Horan. Furthermore. bution channels does not appear to have been tomer would have to telephone or visit sev. I seek to answer those plicable). which means that their prod- Previous studies of hotels’ Internet use have ucts are not directly comparable to the rest of been limited. findings are not representative of the industry tel’s perspective? as a whole (and. the industry. hoteliers project occupancy rates and open or cent visit two or three sites. As 1. where a potential cus. Two of those companies (Disney and Club Med) were LIMITATIONS OF THE removed from the listing because they operate STUDY resorts and distribute their rooms largely as part of packages. the results . not generally ap- In this paper. Web- sale poses some interesting questions. therefore. of industry patterns. offered by all hotels would be virtually impos- just 10 percent of would-be guests visit only sible. web can generally be accomplished relatively was to analyze the room rates being offered quickly. therefore. another 43 per. Two related tive on the web—perhaps because their size questions. Because they check yield-management principles). and may react unfavor. Research has shown that consumers to consumers over multiple electronic distri- shopping for travel on line almost always bution channels. on-line purchasers ever. then. (1996. Is the company’s approach to pricing log. comparison shopping on the to date. Those rates are constantly in flux. check more than one site before purchasing. I decided to focus this study on the is any one route consistently cheaper? behavior of the top-50 international hotel 2. another three com- cused on rating the content of hotel web sites. and 22 percent close rate classes accordingly (according to visit four or more sites. Murphy et al. are: often gives them an advantage in terms of technical expertise and financial resources.5  On-Line Pricing: An Analysis of Hotel Company Practices 29 The availability of numerous points of of and attitudes toward the Internet. 46–54) their own web site nor were they listed on any attempted to measure managers’ perceptions of the other channels studied. If rates are not consistent across channels. electronic-distribution activities are indicative sistent information. The companies were chosen based on the ranking of the top-50 hotel brands pub-  METHODOLOGY AND lished in Hotels magazine in July 2000. that major international hotel chains’ have become increasingly intolerant of incon. reservations facilities were investigated in de- most among these is: Is there consistency be. panies neither offered on-line reservations on while Van Hoof and Combrink (1998. the issue of pricing over several distri- the physical world. Fore. how- prices in several places. Thus. brands. I believe. How- offered over each of the channels? Unlike in ever. it does allow establishment of an ac- questions. as one site to book a hotel room. a result. The objective of this study. because recent research ably to a firm’s disparate rates by booking has shown that large companies are most ac- with the company’s competitor. While this strategy means that the ical from both the consumer’s and the ho. 1999). the subject of extensive systematic research eral suppliers. Section 1. curate benchmark of trends as they currently stand. An exhaustive analysis of the rates being According to Jupiter Media Metrix (2001).

company’s CRS) and electronic (through the porated voice channels into the study by ana. which are not comparable to ous distribution channels.g. Expe. I incor. these represent the majority of hotel-reservation sites. Al- Five major types of electronic business. military. I demurred from making a reservation).. rates not available to the general public (e. corporate.e. depending inclusion in the study. In addition to a chain’s as it does on the caller’s persistence. Travelweb). While not collectively FINDINGS exhaustive. I ignored reservations (O’Connor and Horan.. and leading ing would leave no systematic way of consis- examples of each category were selected for tently determining the lowest rate. Hensdill. surveys made only a few years ago. I telephoned the hotel com. ror due to system malfunctions or other dia and Travelocity). I decided that negotiat- tified from the literature. AARP. Offering hotel (CRS). and pure web-based channels with an inventory and reservations database that is maintained  SUMMARY OF RESEARCH on line (i. It is each of the brands using each of the distribu. all but one of the brands surveyed of- specified dates in a selected property from fering on-line reservations in this manner.. and As shown in Table 1. WorldRes). After check. interesting to note that this represents a con- tion channels discussed above. 1998).e. though better rates could probably be to-consumer distribution channels were iden. I recorded only the first rate quoted Travelweb. three-quarters used that case.3. Approximately four-fifths of the major ing the web sites. those that are based on exceptional circumstances. In Expedia and Travelocity. Data were collected by repeatedly of. the databases and reservation engine of the switch companies (namely. and AAA).marriott. Omitted from the As can be seen from Table 1. rooms via the company web site is almost uni- fering to reserve a standard double room for versal.. The company lyzing the rates offered by the toll-free that did not make a CRS number available number to the central reservations service was in the economy sector. gated. The own web site (e.g. hotel companies analyzed only those rates that could be make less use of the other channels investi- booked by a “normal” customer. and I did not ask for a lower rate 45 hotel brands for which consistent data (nor did I record any subsequent offers after could be found. these above process was repeated for five sets of al- comprised channels that draw their data and ternative dates to reduce the possibility of er- reservations engine from the GDS (i. The most com- typical booking approaches. monly available channels were voice (via the As another point of comparison. achieved by haggling.3.com). each of the study were the auction-style web sites. brands used the GDS-based intermediaries pany’s CRS to request the same booking. www. and barely one-third used World- . company’s corporate web site). which tem.com. To help ensure consistency. both the number of rates displayed and found that only approximately 50 percent of the lowest rate available were recorded for the major hotel companies provided on-line analysis.30 Chapter 1  Overview discussed below reflect the findings from the by the agent. such as major hotel brands uses multiple simultane- Priceline. Where the siderable advancement when compared to product requested was available on the sys.

tomers regarding what they are getting for I found the chains’ low usage of World. From a positive perspective.5  On-Line Pricing: An Analysis of Hotel Company Practices 31 Table 1. Both Expedia and Travelocity draw fered to the customer by Travelocity than by their data from the GDSs. and to match their needs with the products being thus any of the hotel brands that use this as sold. On the other hand. Clearly such a scenario would be con- property database reveals a large percentage fusing and frustrating for any customer of independent hotels. example encountered in the study. and small hotel chains. although Expedia’s rates were marginally lower than those offered by other  RATES AVAILABLE channels and WorldRes seemed to offer con- sistently higher rates than did the others (see Each of the electronic channels offered multi. allowing them Hotel Industry Switching Company). tions. all things considered. An unresolved Mean prices.5). As can be seen from Table 1. inns. where the majority the other channels surveyed. With the exception of a com. bed-and-breakfast wishing to book that property. with more being of- prising. with few (if any) would appear to be an attractive channel for discernible differences in the room descrip- use by hotel companies. Examination of its tions. Similarly.4. Section 1. Trav. each prices across each of the channels were com- channel presented an average of five rates in parable—with the average price for the . using WorldRes has the property offered 17 different rates for a par- lowest potential transaction cost and thus ticular date on Travelweb. of the hotel brands represented in this study Presenting a variety of rates to the cus- (being major hotel companies) can reason. general observation about which of the sev- ploit this distribution channel. eral channels is consistently least expensive on average. presenting a large their switch service could be expected number of rates without adequate differenti- to make inventory available for sale via ation between products can confuse cus- Travelweb. their money. ple rates. tomer has both positive and negative implica- ably expect to be represented. it offers elweb draws its data from THISCO (The choices to potential customers. Table 1.3 Channels Used by Major Hotel Brands (n  45) Channel Number (n) Percentage Hotel company website 444 97% Expedia 38 84% Travelocity. It was difficult to make a question is why the major brands do not ex. These findings are not in themselves sur.com 35 78% Travelweb 34 76% WorldRes 14 31% Voice (CRS) 44 97% Res. where a pany’s own web site. response to the request. Indeed. This is best demonstrated by an Res surprising.

In other 1. and it ket for on-line hotel-room sales.com 6. While it could be speculated a relationship between the cost of using the that the reason for this might be that econ- distribution channel and the rate offered. By the same token.6. sistent pricing strategy on the part of the ho- Table 1. Il.62 3.4 Travelocity.3 Travelweb 5. hoteliers need to It was interesting that Expedia’s mean rates rethink their current practices and take action were lower. what I found is that when selling hotel more likely to offer consistent rates across all products on line. a different surveyed.8 Voice (CRS) 1.6 Expedia 3.58 3. there does not appear to be channels used.07 3.32 Chapter 1  Overview Table 1. hotels at the low end of the market are far words. As can be seen from Table cheaper rates over this channel. it could also be due to a more con- regularly offer the best value to the customer.27 3. The foregoing discus- over this channel would reflect the higher sion was based on an overall look at hotel- costs. would be logical to assume that rates offered Segment breakout.6 WorldRes 4. omy properties are more likely to have a sin- logically.com $166 134 Travelweb $162 115 WorldRes $181 168 Voice (CRS) $163 117 . since WorldRes’s room sales distribution.66 1. the electronic channels with the gle fixed price for their product irrespective highest transaction costs for the hotel seem to of demand.00 — requested room being in the range of US$163. As will be discussed below. it has a high distribution cost.5 Average Rates Offered to the Customer Channel Mean Standard Deviation Hotel company website $159 112 Expedia $152 116 Travelocity. because as an on-line travel if they are to benefit from the increasing mar- agency. are subdivided into classifications based on ison with those offered by the other channels their targeted market segment. If the brands studied transaction costs are relatively low in compar.4 Number of Rates Offered to the Customer Channel Mean Standard Deviation Hotel company website 4. hotels could potentially offer picture emerges.

6 Market Sector Analysis (Lowest Rates) Percentage of cases where a channel offered the lowest rates Channel Economy Midprice Luxury Chi-squared All rates equal 46% 21% 28% 0. avoid booking on these hotels’ web sites if atively price-sensitive market. This anecdotal finding sug- highest rate in over one-third of cases. Over. Furthermore. Section 1. Furthermore it you are searching for good value. is to The situation is different at the upper end a large extent driven by my methodology. Haggling required. tel companies involved when addressing a rel.com 3% 5% 7% 0. When coupled with the 46 than on the company’s own site. as soon as I indicated sites gave the cheapest rate in less than 10 that I did not plan to make a booking at the percent of cases.900* WorldRes 0% 0% 0% — Voice (CRS) 3% 11% 3% 0. you should practice. gests that negotiation might have resulted in all.5  On-Line Pricing: An Analysis of Hotel Company Practices 33 Table 1. Luxury-hotel companies’ web deed. lower rate.016* Hotel company website 26% 47% 14% 0. percent of cases where the same rate is of. see Lewis and Roan. For economy brands. and bookings offering the lowest rate nearly half of the through this route were almost never the time. company’s web site nearly three times out of Irrespective of the market segment. rate through this channel. Expe- the market are far more likely to obtain low dia) offer the highest probability of finding rates through direct (company-owned) chan. . direct sales over ties. the can be seen that consumers at the low ends of on-line intermediaries (in particular. in many cases. In- of the market. 1986). With mid-price products. that the data that a hotel company’s CRS is not means that a consumer reserving an economy the place to obtain the best rates. the best rate available for high-end proper- nels. (This is a longstanding CRS want to stay in up-market hotels. the CRS associate quoted an- shows that the company’s web site quoted the other. Table 1.7 quoted rate. the chain’s web higher probability of being quoted the highest site is even more likely to give the best rate. with an average savings of 5 percent the company’s own web site were lowest 26 available by booking through Expedia rather percent of the time. there is a four.750* Travelweb 9% 5% 7% 0. at least if room will find the cheapest rate on the hotel one takes the first offer as I did for this study. however.036* Expedia 14% 11% 41% 0. It is also clear from fered irrespective of the channel used. cheapest available. This finding.600* *Indicates that the association is significant at the 95-percent confidence level. Instead. the evidence seems to indicate that if you lower prices.030* Travelocity.

it can be seen that nies that now offer consistent pricing across both the range of channels through which ho.450* Travelweb 0% 0% 0% — WorldRes 6% 0% 0% 0. It is interesting  DAWN OF A NEW WAY to note. in-depth analysis does availability of hotel companies’ own web reveal a link between pricing and the market sites.440* *Indicates that the association is significant at the 95-percent confidence level. First. making their nels. there has been a growth in the offers the lowest prices.240* Voice (CRS) 31% 37% 21% 0.016* Hotel company website 14% 16% 34% 0.7 Market Sector Analysis (Highest Rates) Percentage of cases where a channel offered the highest rates Channel Economy Midprice Luxury Chi-squared All rates equal 46% 21% 28% 0. and a vast majority of companies that I being targeted. indicating progress in the industry’s rooms available to a relatively wide audience. all channels. electronic channels of lowest prices on the hotel chains’ own web distribution. While the use of CRS-based reservations has Although no single channel consistently fallen slightly. From the data it can be seen tion of the web’s benefits in comparison with that consumers are more likely to find the other. multiple elec.017* Travelocity. This study represents a pricing and cited the lack of integration first attempt at documenting hotel compa. Previous research found less tels can be booked and the complexity of such than 10 percent of companies had consistent channels have grown. nels I examined. the large number of compa- From the above discussion. to manage inventory as a possible cause. perhaps accompanied by a realiza.34 Chapter 1  Overview Table 1. more traditional. the lowest prices can studied now make their rooms available for rarely be obtained from the CRS (absent ne- sale in this manner. As this study’s findings and earlier published re.com 3% 5% 10% 0. compared to the first-offered CRS price.011* Expedia 0% 21% 7% 0. irrespective of market segment. however. fer consistent pricing across multiple chan- tronic channels of distribution. among the various inventory databases used nies’ pricing practices over electronic routes. management of electronic distribution. Yet The study revealed that the majority of hotel over one-third of the brands I studied now of- brands now use simultaneous. sites in the economy and mid-price segments Most companies offer multiple rates to than will be found from those companies’ . customers over each channel. a search indicate a major expansion in hotel would-be customer can save at least 5 percent chains’ use of the web as a direct-sales by booking over any of the electronic chan- medium. The differences between gotiation).

the fact that customers have become more tronic distribution channels. the greater the tels. if the customer becomes overwhelmed. Economy brands seem to be the However. Implications. customers should reconsider whether all transaction cost and processing fees—and that time and energy searching for the lowest therefore the greater the distribution cost. Since the number and variety of ways that sult of a person’s being quoted a lower price a consumer can book a hotel room has be. of the relationship between the cost of using a usually with little or no apparent product dif- channel and the rates offered there) and also ferentiation. though. channels. My findings suggest that many hotel structures and low prices on those with low- chains are not actively managing the room cost structures. they follow this strategy as they believe in the tion. Informal fol- have become more or less equal across many low up with those companies revealed that of the channels investigated. about five rates in response to a customer in- ing a logical on-line pricing strategy (in terms quiry. So-called up. most companies currently display only ones in the industry as a whole display. it is clear that for those no clear or logical pricing strategy is appar- with a taste for upscale products. on the other hand. nels currently available in the marketplace in As was discussed earlier. there appears to be in terms of actively managing their channels inconsistency in terms of the rates being of- of distribution. with others showing significantly more. such costs vary an attempt to find a low price has increased. cessing a booking over a particular channel. which. In many cases. Most companies knowledgeable about and comfortable with offer multiple rates on each channel. Displaying too world than the bricks-and-mortar one. tive. More interesting. This would seem to argue for having high The implications for the hotelier are more rates on the channels that have high-cost pressing. the cost associ. The lowest prices are offered on channels brand’s own web site is not the place to shop. the hotel ent. for a room on a different channel after having come undeniably manifold. the issue of customer dissatisfaction as a re- ety. fered over electronic channels. However. more likely to quote higher prices on their Presenting a small number of tightly defined own web site than what they offer on other rates would be the most appropriate solution. Coupled with this matter is rates being offered in their portfolio of elec. and by implica. plier and the customer. many rates. rate is actually worthwhile. consistent pricing irrespective of the channel however. in general. as e-commerce issues in general. A small number of companies offer through other channels. already made a booking. and vice as better value can be obtained in most cases versa. First. Section 1. ber of intermediaries. such an ated with searching through even a small approach ignores the issue of the cost of pro- number of the many consumer-focused chan. are more aware discussed earlier. can be beneficial as it gives that distribution costs are lower in the virtual a choice to the customer. they do not have to address time is a valuable commodity in today’s soci. with the highest transaction costs. In this way. greatly depending to a large extent on the Given that this study has found that many of number of intermediaries between the sup- the rates being offered over alternative chan. The greater the num- nels are more or less the same for many ho. across many other electronic distribution principle of one “correct” price for each cus- channels as well. prices being used to make the booking. In addition. can be counterproduc- market hotel brands are. It is well established that tomer.5  On-Line Pricing: An Analysis of Hotel Company Practices 35 CRS or third-party web sites. and . is the fact that.

room (especially if price becomes an issue). where in addition to consis. This study has shown site. example. This would decrease guests’ motivation choice. and particularly direct tively low rates from many different hotel electronic. we have en. ship groups. their first port of call for future proach of the on-line companies in contacting bookings—threatening brand loyalty. L O D G I N G I N D U S T RY Gabriele Piccoli. they will make Expedia or Travelocity. nels—and (ironically) their cheapest rates Once consumers conclude that they will usu- over the most expensive on-line intermedi. prospective guests see a much wider vari- that in many cases this is simply not the case. the rates on hotel compa. chains.6 C U S T O M E R R E L AT I O N S H I P MANAGEMENT—A DRIVER FOR CHANGE IN THE STRUCTURE OF THE U. In contrast. when they go to chains. driving hotel companies on practically a daily basis up transaction fees. Put simply. of hotel companies is driving Internet shop. this means offering consistent prices over all pers into the arms of the waiting on-line channels. Claudio Capaccioli. Informal follow up to the study revealed nel. At the very least. for that this may be due to the proactive ap. and should petitors as a result of consumers’ migration help to decrease distribution costs. Instead of being presented with a list a hotel company’s web site. customers the lowest rate over their own web tently low prices. 1. action if they are not to lose control over the Irrespective of its root cause. hotels are losing potential bookings to com. would help build web-site traffic.S.36 Chapter 1  Overview thus increasingly expect to find the cheapest toward the on-line travel sites that offer rela- prices over electronic. in many positioning (or even inclusion) in their search cases being set far in advance and not ad. increasing reservation and encouraging them to reduce their rates in leakage. sion overrides for a company to gain premium nies’ web sites go largely unmanaged. and owner- gaged in significant formal and informal dis. it’s likely that many to book on alternative electronic channels. The propositions presented here cussion with senior executives from top hotel are the fruit of these discussions as well as in- . and Roy Alvarez Note: Over the past two years. management companies. Because of this. the behavior sale of their own product. they expect to of a chain’s properties on a company’s web find the best value there. and strengthening the third parties’ return for better positioning on their search power to demand “special rates” or commis- listings. listings. Hotel companies need to take urgent justed to reflect changing supply and demand. Peter O’Connor. but more probably means providing intermediaries. routes. they also find wide product site. ally find better prices on a third-party chan- aries. ety of options from the on-line intermediary given that luxury hotels in particular tend to and may be tempted to book a competitor’s offer their highest rates over direct chan.

and Mc- site for successful CRM. The follow. Six Continents)—have mizing revenue from each customer over the partially misaligned interests and. Put simply.) a very different mindset is needed: The firm This paper highlights the data-ownership no longer markets to customers.6  Customer Relationship Management—A Driver for Change 37 depth case studies of two of the largest companies. to implement CRM successfully. and other organizational cusses the potential benefits and risks it en.10 The three parties typically involved customer. functions. 24–27). seems ideally positioned is currently one of the hottest topics in the to take advantage of CRM initiatives. while ment company. ration of the firm’s activities around the proach. 2002. CRM focuses on maxi- (e. fields of business strategy. genders. a prerequi.” which appears to be limiting ment philosophy that calls for the reconfigu- the adoption of a comprehensive CRM ap.S. systems.8) in that. Firms  CUSTOMER that embrace CRM strive to provide consis- tent and personal customer service over time RELATIONSHIP and across multiple touch points. The second section examines the One of the questions most often asked current structure of the U.. and brands. At first MANAGEMENT glance. keting initiatives (see Table 1. ables a firm to become intimately familiar with its customers—is currently gaining wide- spread popularity in many industries. Daniel. see Billing. (The recent slew of Donald. operations.g. lodging industry about CRM is. a crossfunctional philosophy that calls groups that allege data misuse confirms the for substantial business integration (Markus. the lodging industry gives rise to a “data-own. dilemma” is discussed. and the brand (Brand refers the latter take predominately a short-term. and Reynolds barrier to successful CRM adoption by hotel neatly summarize the benefits of using CRM . developing and main- agement companies. 2002. Hilton. however. Dean. Customer Relationship Management (CRM) tomer touch points. 2000). that the current structure of nology. accounting. the lodging sector. The first that span marketing. lifetime of the relationship by getting to know often resist sharing customer data. information section introduces the CRM concept and dis. We be. and marketing management (Hall. for example. eration is troublesome. man. information tech- lieve. CRM differs from traditional mar- in running a hotel—the owner. how the dilemma may be resolved. 2001. The final section of the Customer Relationship Management article presents alternative scenarios as to (CRM)—a managerial philosophy that en. to the franchiser that flags a given property transaction approach. Marriott. as a result. CRM is a manage- ership dilemma. by defi- lawsuits between brands and ownership nition. tities. Section 1.–based hotel chains. with its emphasis on customer service and multiplicity of cus. The effect of the “data-ownership U. each one intimately (Wilson. CRM is also. the manage. often conflicted relationship between the en.S. 193–219). Day. “why bother?” Changing an and outlines the complementary role of the organization’s philosophy and methods of op- three major industry players—owners. but it fosters dilemma and outlines several possible future a relationship with them through programs scenarios leading to its resolution. Thus. taining in-depth customer databases is ing section demonstrates why the current expensive and the benefits of the approach structure of the lodging industry creates a are not guaranteed.

buy more from it. And. using CRM techniques contributes mium for “better” service.38 Chapter 1  Overview Table 1. profitability of customers willing to pay a pre- Third. 828–837) developing a closer relationship with cus- First. one-time Two-way. tion of the leader’s strategy. and loyal customers are thought to stay advantage and. thus establishing customer loyalty. and increasing ture needs (Palmer. declining meet changing needs or even anticipate fu. and costs. Over time in. 6). proponents suggest that CRM leads to higher velopment of new products and services to profitability due to increased sales. may be able to defend it. getting to know cus. a graphical representation of how CRM is Acquiring new customers is estimated to be thought to work. Together those two sets of . customer acquisition costs. facilitates the tailoring of products and ser. 87–104). 1997).8 Traditional Marketing Versus CRM Approach Traditional Customer Relationship Marketing Management Transaction focus ←→ Customer focus Short-term focus ←→ Lifetime focus One transaction ←→ Multiple transactions Broadcast approach ←→ Sniper approach One-way. ←→ communications continuous dialog Segment of many ←→ Segment of one (Day. oft-quoted statistic is that companies can im- pany about their individual needs. An dividual customers typically educate a com. traveler programs and CRM may be seen as plemented. 2002. 4–12). the firm may gain a competitive alty. last. Dean and Reynolds. Properly im. The bot- ures of between five and seven times as much tom row lists well-accepted outcomes of data- have been quoted (Kotler. The top row of effects leads more expensive than keeping existing ones to building relationships with customers and (Blattberg and Deighton. wants. through increased switching with the firm longer. and prove profitability by between 25 and 85 per- preferences—a costly process that they are cent by reducing customer defections by 5 reluctant to repeat with a rival (Peppers and percent (Reichheld and Sassre. the customer-company dialogue the logical next step. mining activities. by developing a closer relationship with tomers is thought to increase customer loy- customers.1 presents to decreasing overall marketing expenditure. rently being debated (Reinartz and Kumar. 136–144). 1990. for some time now lodging firms Second. While the value of loyalty is cur- tomers intimately creates a barrier to imita. Rodgers. 1996. 301–307). The above arguments offered by CRM vices closely to individual needs. 1998. and the de. 1994). Figure 1. have been fostering loyalty through frequent- creased customer satisfaction. buy more often (Dowling. Thus. 2002. effective CRM can lead to in. Fig. 1994.

2002). it is relatively easy to (Hall.6  Customer Relationship Management—A Driver for Change 39 Figure 1. and enormous transformations in the extent to subsequently used as the basis of targeting . for example. and IT has vestments in CRM are not right for everyone been identified by many authors as one of the (Gronroos. associate CRM with data than does a small inn to achieve a similar the technology that is used to support the ap- relationship with its customers. range of demographic.1 CRM Model Loyal customers • Better responsiveness to • Increased ARPU* customer needs Relationship • Stronger brand attitude CRM program • Increased customer • Less price sensitivity satisfaction • Reduced customer churning Customer database Cross-selling • Increased ARPU* • Cost reductions Data mining Better target marketing • More-targeted communications Market research • New customer insights • Early warning system *ARPU=average revenue per user outcomes have stimulated many companies which organizations can deploy computer to invest in creating a database-driven CRM power. and people. 3–11). 1990. success. proach. the world has seen ing activities are recorded and tracked. new markets without high incremental entry But because of the significant increase in the costs. lected. In a small or niche key success factors for CRM implementation business. cific sense of database marketing. Many use the term in the highly spe- formation technology (IT)—used appropri. ful CRM requires significant investments in The role of IT in CRM efforts is so im- technology. and facilitates specifically tailored cus- amount of information that must be managed tomer marketing and increased responsive- as the firm’s scale and scope increase. consolidated. process redesign. manipulated. 2001). lifestyle. and Woodcock. and many practicing must manage substantially larger amounts of managers and vendors. in. and purchas- Between 1990 and today. ness (Gamble. 16–20). Section 1. where a ately—can help mitigate the problem. and ana- Some authors warn that substantial in. 1990. IT allows increased reach into keep in touch with customers’ preferences. An portant that some writers (such as Copulshy airline or a major international hotel chain and Wolf. IT allows customer data to be col- system (Dowling. Stone. lyzed on an unprecedented scale. 1999). However.

organization must understand and support from marketing to accounting to operations the shared values required for CRM. This base of individual customer knowledge definition highlights several key CRM con. essence. tact (Newell. and it must be CRM is likely to result in problems. 2001. and interactive relationship be- tomer by starting and maintaining a two-way tween customer and supplier. (Marsan. mutu. their response to each mar. to know each guest better. For ex. and enrich its data- tually beneficial” (Gamble et al. CRM prise-wide commitment to identify your requires the firm to keep track of the infor- named. ingly competitive market (Vialle. ally beneficial relationship with each cus. same way as new friends or good friends in This approach to CRM demands more the same way as casual acquaintances (Gam- than computer systems and information tech. profile them accu- rately. 38–45). Such consistent personalized nology. ble et al. mation produced through each interaction so lationship between your company and these that it can “learn” on a continuous basis. 2000. and information systems. In turn. 91–94). individual customers and create a re. Godin has likened cepts—that the company will actively seek CRM to “dating a customer. dition. CRM is dialogue. Failure to under- losophy must encompass not just marketing stand the scope. lationship in a coordinated way. will develop a long-term. The result is an active. The customer must become the focal interaction requires integration and synchro- point of the organization. and magnitude of but the entire organization. All members of the nization of many organizational functions. CRM is a and be able to consistently anticipate and re- broader concept than just technology. The objective is to keting contact is tracked and used to further achieve a comprehensive view of customers. We do not treat old friends in the Spalding. the basis of competition is changing. will strive to satisfy customers’ about customization. and resources by both with them). . 1999). Although limited research about the ef- fectiveness of CRM has been published to  THE POTENTIAL OF CRM date. get customers so long as that relationship is mu. 2000).” in that it is a out the right customers (and.40 Chapter 1  Overview differentiated products to selected customer tributed for ad-hoc use at each point of con- groups. Relationships differ as they their interactions with the firm (Piccoli. information. IN THE LODGING tively capture exhaustive data about existing INDUSTRY and potential customers. and will tently treat different customers differently support customers throughout the life cycle of (Newell. rather used to manage all aspects of the customer re. parties (Godin. Lastly. refine the approach.. or the ability to consis- needs and solve customer problems. most observers agree that successful CRM is predicated on the ability to effec. identify their individual needs and Lodging-industry participants face an increas- idiosyncratic expectations. activities at every customer touch point. by implication. 1995). However. and generate ac. long-term process that requires an investment will not target those that will not do business of time. 2000).. than its promised benefits. 1999). In ad- tionable customer knowledge that can be dis. its phi. act to their needs with targeted and effective ample. 1999). participatory. and Ives. develop. CRM has been defined as “an enter.

hotel chains hotel guests divulge when making a reserva. with another 50 tion and during their hotel stay. By the targeting of marketing and sales efforts. Analysis of the lodging sector shows that. Price formation and communications technologies competition is unattractive. individ. eas that characterizes a CRM initiative. a key driver of business. In few other industries do customers Arthur Andersen and New York University provide the significant amount of information found that over one-third of U. 1999). As a consequence consumers edge about each customer to be shared on a are increasingly displaying less brand loyalty global basis. driven in most cases by pressure from the mar- The lodging sector is ideally suited to ap. and allowing comprehensive knowl- 2002. such initiatives do not imply that the company ually tailor the customer experience. tions to deliver a comprehensive view of the sive manual guest-history systems recording customer and to support consistent. highly guest preferences in an effort to better serve personalized service at every customer touch their best customers. clients at individual properties (Main and cult as they have become increasingly stan. hotel chains have the potential to propensity to respond to various offers. In few other in. opments focus solely on marketing objectives Providing outstanding personal service is cer. O’Connor. Only Companies such as Ritz-Carlton and the where the company reconfigures its opera- Savoy group historically maintained exten. value of each customer as well as their tional data. these processes. substantially improved service levels. many companies are (Gamble et al. and CRM is becoming turning to technology to improve customer increasingly attractive as a way for hotel com. and lack the integration among functional ar- tainly not a new concept in the hotel sector. and attracting maintain. percent planning to install one in the near fu- action between the guest and the customer is ture (Hospitality 2000. when oper.. reducing costs. 7–15).S. while important. 285–293). had a data warehouse in 2000. and Such systems can help the firm to assess the analyzing both guest preferences and transac. A recent study by client. many of the dominant hotel plying the principles of CRM. and can and retaining customers based on facilities only be used to track a limited number of and amenities is becoming increasingly diffi. even more so as have enabled automation and efficiencies in consumers are able to easily find and com. provide As discussed earlier. tomer’s needs and preferences. and to develop a deep understanding of each cus. 1990. increasing ac- pare prices over the Internet (O’Connor. 60–63). keting function. methodically collecting. 1998. 8). As a result. consolidating. such devel- erally offer more personalized service. Developments in in- dardized across competing brands. service by implementing large-scale CRM panies to differentiate themselves from their programs. curacy. are frequently inaccurate. Many chains have an opportunity to refine knowledge about her introduced information systems to improve or him and to further build a relationship. competitors (Francese and Renaghan. However. Few . In most cases. is fixed in ated manually. market to them individually. Section 1. and gen. such systems are expensive to the short and medium term. chains are in the process of deploying (or have dustries is there such potential to build up a already deployed) the technological infra- comprehensive and accurate picture of the structure to support CRM.6  Customer Relationship Management—A Driver for Change 41 Location. has adopted CRM. Every inter. point could it truly be regarded as CRM.

North America (22 percent). Rather. and hotel focuses on these challenges. with chain-affili- the fact that at any one time there may be up ated properties being more common in North to three parties holding a stake in the opera. 1992. As a result. 51–77) ally reactive attitude toward IT has been exac. showing that the major- and subsequently disseminated to each prop. Thus. number of mergers and acquisitions resulting yond the scope of this article. Note. chain properties tions are delivered using an ASP model. lenges. 35). however. to achieve this. including the In addition to generally having higher oc- emergence of the application service provider cupancy and average daily rate (Worldwide (ASP) model. nating the marketplace (Corporate 300. profit per room seven times more than their erty. lodging sector (Corporate 300. consis. breakfast properties in rural locations to large tent and comprehensive information must be hotels with several thousand rooms in major captured from all properties within the brand cities. ity of the world’s hotel properties are erty in time to influence the next customer concentrated in Europe (55 percent) and interaction. they tend to be more profitable. manage. ranging from small bed-and- touch point. analyzed. 1998. large-scale CRM initia. they are accessed by remote users independent counterparts (Slattery. in a small number of large companies domi- that.9 provides an overview of geo- and then consolidated. of room stock (approximately 30 percent of ment company. hotel branding. interpreted. Hotel Industry Study. to continue to consolidate. Given the geographic dispersion of hotel INDUSTRY’S STRUCTURE properties and the role of brands in market- ing and distribution. we believe that the structure of the 1998). The ence on industry operations and performance technical challenge is subsiding due to recent (Cline and Rach. Table 1. Historical developments with . the industry is expected model are not bought but acquired as a ser. However. with an increasing vice. operations. developments in technology. providing accommodation Implementing CRM at this level would help (and associated ancillary services) to travelers to increase consistency and personal service while away from home. delivering trading are not installed on the computers at the prop. lodging industry creates severe obstacles to A differentiation must be made between successful CRM. in North America is larger than that in Eu- system integration within each franchise.42 Chapter 1  Overview companies in the lodging sector appear to  THE LODGING have progressed to such an advanced stage. The two issues are total room supply) hotel chains dominate the largely interconnected as the industry’s gener. America. Despite controlling only a minority tions of a particular property (owner. IT resources under the ASP 90–102). The exhibit also Two barriers currently prevent that from demonstrates that the average property size happening—a lack of standardization and IT. even assuming away technological chal.) A discussion of these technologies is be. (Note: When software applica. and brand). 1998). Lodging is an important component of the tives seem most justifiable at the brand level. 1997. Lodging operations throughout the chain and at each customer are diverse. and rope (56 versus 28 rooms). via the Web. tourism industry. The remainder of the paper hotel ownership. graphical dispersion. and tend to exert a disproportionate influ- erbated by its structural characteristics.

253 29 Central America 1.193 28 Other Europe 22. at times competing. as Table 1.2 4. The situation companies own less than one-third of their is further complicated by the widespread use branded properties. brand portfolio is quite mixed.2* 229.631 35 Total 247.5 19. Furthermore.3* 41.7 10.738.2* 676.2 1. who holds data lend support to our claim that in the U.663 1.7* 487. 1. marketing. is responsible for mortgage lodging industry there are multiple stakehold- payments and provides the capital for the ers with. In the remainder of . 89–107).9 The International Hotel Industry Total Percentage Total Average Revenue Number of Total Number Size of (109) US$ of Hotels Hotels of Rooms Hotel (Rooms) Africa 6. Real Estate Investment Trusts (REITs) in the property and provides standards.3 10. resulting in a split between hotel Wyndham International.333.290 1. tels. with various management of both franchises and marketing agreements companies operating the remainder on behalf that provide a consumer brand and require of their owners. services.221 35 North America 62.211 4.8 307.576 4.1 3.417 44 Australia and Pacific Islands 6.657 34 South Asia 3.10 demonstrates how.3* 719. which provides management talent and oper- agement company to oversee day-to-day ates the property on a day-to-day basis.5* 162. distribution United States gave rise to a situation where services. 85). technology.735 1.347 32 Caribbean 7. title to the assets.319 23 Middle East 9.769 3.1 66.5* 343. shows.192 3.8 13.480 71 Southeast Asia 12. within each management company the 1997. (2) the brand. with the exception of 2001.8 14.178 34 European Economic Area 87.9 5.160 0. Section 1. with each com- At any one time there may be up to three pany operating under a variety of competing parties holding a stake in the operations of a flags in different geographical markets.11 compliance with brand standards (Singh.242.787 33 Northeast Asia 23. the major brand ownership and hotel operations.977 56 South America 9.5 151.683 100* 11.3* 453.943 21.7* 155.7* 3. which brands the erations of the property.082 3.4* 4.199 37 Source: World Travel and Tourism Council 1995 *Total does not add up to 100 due to rounding. The particular property: (1) the owner.6 10.945 49.S. and (3) the management company. Table operations (The International Hotel Industry.1* 159. and other many owners could not operate their own ho. interest in the op- operation. Instead they must use a separate man.178 6.6  Customer Relationship Management—A Driver for Change 43 Table 1.

004 47 Holiday Inn Express 1. Management Company Brands Properties Owned Licensed Contract Cendant Corp.3% 9.8% 38.8% 16. and a precise classification of ownership is not available.9% 58. 44 .S.10 Portfolio Composition of Major U.721 71 1.6% 1 Adapted from: The Brand Report.943 0 1.005 0 Super 8 1.8% Marriott International Marriott Hotels 277 4 39 234 Courtyard 493 1 236 256 Fairfield Inn 464 0 412 52 Residence Inn 362 0 242 116 Renaissance 53 0 22 31 Total 1.943 0 Ramada 1.2% 15.933 0 Howard Johnson 425 0 425 0 Travelodge 475 0 475 0 Knights Inn 226 0 226 0 Villager Lodge 118 0 118 0 Total 6. Days Inns 1. is privately owned. Brands1 Parent U.7% Hyatt Hotels Corp. August 2000.083 0 1.216 11 2. Total Company Franchised.125 0 6.094 1 1.S.Table 1.081 27 Hilton Inns/Hotels 230 40 171 15 Doubletree 153 10 49 59 Embassy Suites 155 6 75 57 Homewood Suites 89 14 59 16 Total 1.649 5 951 689 .056 5 1.933 0 1.125 0 Six Continents Holiday Inn Hotels 1. Hampton Inns 1.435 174 4.005 0 1.2% 14.2% Hilton Hotels Corp.6% 1.078 5 Crowne Plaza 77 6 51 20 Total 2.5% Starwood Hotels and Sheraton 189 40 105 44 Resorts Worldwide Westin 57 22 10 25 Four Points 105 6 84 15 Total 351 68 199 84 18.5% 60. Lodging Hospitality.4% 81. Range estimates were provided directly by company representatives.2 Hyatt Hotels and Resorts 120 18–36 4 80–98 Total 15–30% 3% 67–82% Wyndham Wyndham Hotels and Resorts 114 81 13 20 International Wyndham Luxury Resorts 6 3 0 3 Summerfield Suites by Wyndham 38 27 11 0 Total 158 111 24 23 70. 2 Hyatt Hotels Corp.133 72 3% 98.

Tharaldson Property Management. Brands Properties Six Continents Holiday Inn and 8 Six Continents Holiday Inn and 16 Crowne Plaza Crowne Plaza Hilton Embassy Suites 1 Hilton Hampton Inns 7 Hilton Inns/Hotels 4 Homewood Suites 36 Hampton Inns 38 Marriott Courtyard 18 Doubletree 0 Fairfield Inn 113 Homewood Suites 5 Residence Inn 32 Marriott Courtyard 10 Others Multiple Brands 112 Fairfield Inn 6 Marriott Hotels 14 Total 334 Residence Inn 13 Renaissance 2 Starwood Sheraton 2 Westin 1 Total 138 Source: The Brand Report. Number of Number of Parent U. Number of Number of Parent U.S.Table 1. Management Companies Management Company Management Company Meristar Hospitality Corp.S.S. Inc. and Felcor Lodging Trust Lodgian.11 Portfolio Composition of Major U.S. Inc. Lodging Hospitality. Brands Properties Six Continents Holiday Inn and 21 Six Continents Holiday Inn and 62 Crowne Plaza Crowne Plaza Hilton Embassy Suites 6 Hilton Hilton Inns/Hotels 4 Hilton Inns/Hotels 35 Hampton Inns 2 Hampton Inns 6 Doubletree 1 Doubletree 9 Marriott Courtyard 8 Homewood Suites 6 Fairfield Inn 5 Marriott Courtyard 9 Marriott Hotels 1 Fairfield Inn 2 Residence Inn 2 Marriott Hotels 5 Starwood Four Points 3 Residence Inn 2 Others Multiple Brands 21 Renaissance 0 Starwood Sheraton 16 Total 109 Westin 3 Wyndham Wyndham 4 Others Multiple Brands 59 Total 183 Management Company Management Company Interstate Hotels Corp. . and the authors’ independent research. Brands Properties Parent U. Brands Properties Parent U. August 2000.S.

company might be tempted to steer high- ficult to realize in the lodging industry due to value customers toward its Brand B hotels in an inherent data-ownership conflict between markets where it does not operate Brand A the major industry stakeholders. CRM’s success is of recent technology improvements. Such data CRM initiative cannot be successful without sharing presents the first dilemma. if use it to poach high-value customers and di- not all. and own portfolios. Thus. cases. For example. the brand must be willing to share the and disseminate large amounts of timely and customer knowledge generated by the consol- relevant information for customer-service op. In some commitment among a critical mass of proper. Brand A is faced with a deci- lowing sections we present the main issues sion—either share the data it collects compa- facing the brand. analyze. terests of multi-flag owners and operators. organized vert them to competing brands within their and synthesized in one central location. standardized information systems must be implemented throughout the fran-  THE DATA-OWNERSHIP chise network to allow data to be obtained DILEMMA from all branded properties—a problem in the past. a competing flag (Brand B) in others. a each point of customer contact. nywide to reap the benefits of large-scale and the owner. thus forgoing the full benefits of CRM. nate customer knowledge back to the prop- tently high level of personal service unless erty for fear that owners or operators might customer data can be garnered from most. we propose one flag (Brand A) in a particular market.46 Chapter 1  Overview the article we demonstrate how the structure ated properties. more. or important competitive move as it would facil. the management company. hotels. CRM and risk the poaching of high-value cus- The Brand. ment companies do not appear to have els across the brand as a whole. Further- predicated on the ability to collect. the brand may be reticent to dissemi- ties. thus increasing the value of the industry can provide significant obsta. for themselves. imagine a man- subsequently redistributed to each property agement company that operates a hotel flying on an as-needed basis. becoming less important as a result As was discussed earlier. thus helping to improve service lev. proposition for owners and operators through cles to the success of CRM initiatives. protect its customer knowledge from the in- itate the development of a deep understand. For brands. However. This parently simple theoretical proposition is dif. improvements in financial performance. such companies tend to operate a varied .11. ing of customer needs and preferences. and that (technological constraints aside) this ap. Manage- alization. Hotel chains cannot provide a consis. idation of customer data chain-wide with the eratives to act on to improve the experience individuals that can take action based on it at at each point of customer contact. Thus. main loyal to the brand and patronize affili. For the promised benefits of CRM to ma- terialize. potentially resulting in a high level of person. In the fol. The Management Company. As a result strong incentives to develop a CRM initiative guests would have a strong incentive to re. the development tomers by some of its partner management of an effective CRM initiative is deemed an companies operating individual properties. of the affiliated properties. As was shown in Table 1.

Consequently. Section 1. and own- hotel ownership as a real-estate investment. by doing so. In this paper we have drawn attention to what Moreover. eration of both the operator and the owner of The Owner. The owners may also have in- initiatives. particularly with respect nized. ers to a lesser extent. where their properties fly flags is unlikely to generate brand loyalty and competing flags. comply. agement companies have little incentive to support brand-level CRM initiatives by con- tributing data about customers that stay at its properties. each property. man. In fact. on behalf of different owners. strictly for operational purposes. each flying different fly the flag of a successful CRM initiative. it certainly finds lodging industry face as they embrace CRM. terests that go beyond the use of the data ied portfolio of flags. they may be at a disadvan- thus is of limited interest to most manage. they would in  CONCLUSIONS AND effect be undermining their own operations in IMPLICATIONS markets where the brand operating the CRM initiative is a competitor rather than an ally. counter to the owner’s own interests (e. yet often unrecog- high-value prospects. value in customer data that allows it to create We propose that the data-ownership dilemma customer-value models and better target represents a significant. CRM strategies ment companies have in effect an incentive to appear most applicable at the brand level. tives. Customer pany participates in a brand-based CRM data may be used by the other entities (the initiative. challenge to the success of CRM initia- to group business. however. like operators. As most companies operate a var. but limit data disclosure and not cooperate with their success is dependent on the active coop- brand-level CRM initiatives. tage. As was discussed.6  Customer Relationship Management—A Driver for Change 47 portfolio of properties. ate with the collection and consolidation of tional guest data by brand-level CRM customer data. if the management com. marketing purposes and analyses that run Conversely.g. As a result. For CRM to succeed at the typically have many flags in their portfolio of brand level. petitive disadvantage in markets where it studying the feasibility of building new prop- competes against the brand. flags. erties in the same geographical area). while the management company we term the “data-ownership dilemma”—the may not be interested in detailed customer inherent conflict that various entities in the data for branding purposes. they have a different focus in with in-depth customer data—a requirement terms of profitability. have little incentive to and have a marginal interest in the question. Thus. operators must supply the brand properties. as to owners—whether to participate in brand- whether management companies should ac. they may have an advantage over other com- nition a CRM initiative developed across peting properties. agement company seems to affect the The question arises. level CRM initiatives.. or to refuse to cooper- tively cooperate with the collection of opera. By defi. While owners. Brands also face challenges in terms “Who owns the data?” Where their properties of maintaining control over the resulting . the same dilemma facing the man- ment companies. it will stand to gain only in those brand and the management company) for properties that carry that particular brand. Many primarily view with which operators in particular. manage. participation will result in a com.

should other data collected about the guest. Obviously. capabilities. Only if significant change their hotels can fly. Thus. may instead structure of the lodging sector. or there will be more cooperation be no conflicts of interest and no danger of among brands to take advantage of CRM’s high-value customers being poached. We see mandate the collection and consolidation of three possible scenarios: there will be a fun. Since all operations would effec- of franchise agreements and management tively be managed by the brand. chain-wide. and should be able to of the guest’s needs and behavior. taking over operational con- The first scenario is that the need for trol of their unit properties would be a dra- adoption of a CRM approach will induce matic and high-risk strategy. branded properties. few specifically mention any advantage of these initiatives quickly. Such restructured contracts could spec- . plementation of CRM initiatives. If CRM truly concentrate on restructuring their manage- provides compelling benefits. While ful CRM operations. we believe that their effort and are able to attract and retain CRM in the lodging industry may never high-value customers. If these pioneers are successful in Because of this conflict. Integrating down implies occurs in the structure or methods of opera. Such companies would have to keting techniques will continue to be used. sidebar). While database-mar. article. tracts to force greater compliance with data strates that highly integrated lodging brands needs. freeing promised benefits. this over- easily reap the benefits of CRM. is dependent on building up a holistic picture ownership dilemma. brands. Such integrated compa- In closing. eas—data collection and data use. development should focus on two main ar- work to provide the data needed for success. ber of flags that the companies operating CRM initiatives. Re- companies and franchisees within their net. a change in the nature repository. relatively limited. we speculate as to what nies should be able to standardize the IT in- changes will have to occur for successful im. there would contracts. frastructure needed to support CRM. that brands would move aggressively to take tion of the sector are the full benefits of a over the operational management of their CRM approach likely to be realized. competing brands will progress beyond its current. As CRM face little resistance as a result of the data. we resolve the data-ownership dilemma either by propose that few hotel companies will suc. the large brands ment and franchise agreements to minimize should begin to pressure the management the barriers to success discussed earlier. and provide each property damental change in the way in which hotel with dynamic access to the central knowledge brands are organized. changes in the ownership and management particularly in the short term. Wyndham sight may force brands to restructure con- International’s ByRequest initiative demon. “integrating down” or by restricting the num- cessfully implement large-scale. These three scenarios are the brand to take full advantage of the CRM further developed in the remainder of this initiative.48 Chapter 1  Overview customer knowledge and preventing its are moving quickly to embrace CRM (see spread outside the brand network. have to follow suit and develop similar CRM level of sophistication. Those brands that many franchise agreements require proper- manage a relatively large number of their ties to feed its customer-folio data back to the own hotels will be in a good position to take central level. customer data.

Wyndham ByRequest. desired and fitted with the required ameni- tus to a C corporation in 1999. hensive profile including general and contact 2 For complete information about Wyndham information. reading material. airline frequent-flyer prefer.g. Wyndham International.. mu- the CRM initiatives of large hotel chains. # 9-803-092. the website. Wyndham’s senior vice ization that. PMS)— sonalized service.S. ByRequest manager—who has responsibility ber them. he or she can expect five largest U.g. Wyndham ties. made CRM a cornerstone of its brand strat..”2 over property-level execution. property in the Wyndham chain the guest Wyndham International is one of the travels to in the future. “Wyndham International: Fostering High- credit card and express check-in/check-out Touch with High-Tech. has mentary beverages and snacks (e. This includes a room that is located where ter converting from paired-share REIT sta. he or she completes a compre- tional 2000 Annual Report. soft drinks. we know you have staff members to support ByRequest and cre- specific needs. in- ating company. snacks).–based hotel chains. we investigated ences. readings.. needed extra items.” Harvard Business preferences. We briefly describe the key characteris. Af.g. see G.As a result. and compli- such chain. preferred wine. 2003. We are going to say: We does not in and of itself deliver the ByRequest are the brand who really recognizes that promise. we underlying Wyndham ByRequest—including are going to reinvent the Wyndham brand. while important. made to the guest that. When a guest joins 1 “Letter to Shareholders. the preferences databases. One sic. and We are going to say: We are all about per. 2001. and information that suits the become a “world-class branded hotel oper. room lo. egy. the technology president of marketing: “We said.”1 Wyndham’s differentiation formation about shows or sporting events). cation. quirks—you tell us about ated a property-level position—the Wyndham them one time and we are going to remem. irrespective of which teristics of large-scale CRM initiatives. activities.” Wyndham Interna- ByRequest. Applegate. and Wyndham The cornerstone of Wyndham’s strategy has developed integrated processes for deliv- is its membership-based CRM initiative: ering the ByRequest promise. strategy is nicely captured in the words of Key to the initiative’s success is the real- Andrew Jordan. personal interests (e. traveler’s interests (e. School Case Study. newspaper). room preferences (e.Wyndham has designated guests are individuals. okay. ByRequest. spectator sports).g.. portfolio of over 160 branded properties. Section 1.. integrated operational systems (e. The above information is compiled at tics of Wyndham’s CRM approach to aid the Wyndham’s headquarters and a pledge is reader in understanding the principal charac.g. juice. Piccoli and L.6  Customer Relationship Management—A Driver for Change 49 A CRM EXEMPLAR: WYNDHAM INTERNATIONAL As part of our research. with a a consistent level of personalized service. . a welcome snack and drink that’s of the revised its corporate strategy in an effort to guest’s liking.

erator would effectively become aligned with We believe the latter scenario to be the one brand and fly only one flag.  OVERVIEW revenues related to spas ranked number four Spas are becoming such a significant compo. and service hotels that their absence. store. even though it may optimize The final potential scenario we envision is industry-wide performance.7 million). For ex- tween brands and operators would be ample. especially in health club revenues ($14. customer data would be shared and com- tomer knowledge back to the property level. behind golf fees and dues ($19. as well as a culture that precludes trust ing Company). As it has happened try’s belief in the proprietary value of cus- historically with hotel e-commerce systems tomer data. the industry as a whole is small. contracts also need to be rewritten to offer rather than being used as a basis of competi- protection to the brand as it disseminates cus. At $11. cruise line revenues ($14. spa revenues outpaced amusement . given the poten- structure necessary to capture. Both of these measures mean that ties be. and distribute customer information. organize. Anderson obvious. HDS (Hotel Distribution Sys. In any case.7 S PA S A N D T H E L O D G I N G I N D U S T R Y Peter C. panies would compete on the analysis. and use of such data. The likelihood of the emergence of an industry consortium that an industry consortium developing and man- both develops and maintains the CRM infra. Management cost of proprietary initiatives. 1. is glaringly million. We see a change in contractual marketplace). ber of flags. least likely. as the indus- lection and distribution. and build a relationship with each individual.50 Chapter 1  Overview ify that all customer data generated at the would mean that the infrastructure could be property level be extracted and loaded to the delivered and operated at a fraction of the brand’s central data repository. nent of the service menu for resorts and full. Such a careful consideration must be given to the scenario is attractive as joint development data-ownership dilemma to avoid failure. each op. which may ultimately result in data to market to their chosen customer bases. tion. tial proposed for lodging-industry companies. competing brands could use the same strengthened. competing brands could coop. target. In an extreme scenario. further industry consolidation as owners and Competitive advantage would come from how operators feel pressure to fly a limited num. interpretation. in this domain makes the cooperation neces- tems) and Avendra (an e-procurement sary unlikely.7 million). privacy such as THISCo (The Hotel Industry Switch. issues. agreements and in industry structure as far erate to develop the standards and the infra. aging customer information for the benefit of structure and standardizes customer-data col. the industry’s structure.1 million). Thereafter. Within the leisure industries in 2003. well they could use the data to identify.2 amenity-rich resort environments. more probable.

Nontraditional tic shows that one in ten Americans visited a players are also adding product supply. usage. with a primary focus on cosmetic surgery. 2004. followed siderations. spas such as Canyon Ranch are opening in the cent of the national population over the age day spa market. The International Hotel Resort Spa Asso- According to the International SPA Associa. Audi and Most spa customers believe they received Wright. As the day and destination spa markets Spa selection criteria are determined by a become saturated. spas being opened worldwide. The necessity for mar- established resort. as does atmo. sales ($5. Another component of staff. spa environments. as a part of an from the competition. out of ten respondents report they would re- ceipts ($9. On a 10-point trends that support a sea change in North scale. we first examine good value for their spa dollar. by appointments after work on weekdays. and over 50 percent are in the 25 to 44 age center. or destination spa— ket segmentation to ensure clear communica- often influences the decision.8 on the evaluating spa demand demographics. Audi and Wright. 11 per. between 2002 and 2003. club. 2004). rationale in this market is that time-crunched ber of male visits to spas. trending toward special health club operator also uses the spa as an gender-oriented treatments and male-only enticement to join the fitness center. of these. example.7  Spas and the Lodging Industry 51 park revenues ($10. and vacation ownership turn for a similar experience. sure on the independents. with massage generating 8. services were given an average of 8 for Americans’ attitude toward spa use. Additionally. This statis. nine of success will be a branding strategy that the . often visit spas during regular business hours  SPA DEMAND (Thacker. patrons can benefit from the one-stop-shop- cent of spa visits and 29 percent of spa goers ping approach to fitness and wellness. among spa goers. Women. development and operational con. In this section. quality of treatment.3 million). are cent of clients are between the ages of 16 and adding spa business as an additional profit 24. hospitals are adding well- indicating a larger population embracing spa ness as part of their repertoire. ciation (IHRSA) reports that branded resort tion research. the components of a spa experi. For spa during that period. ence. tion with consumers will be a key to success in sphere. corporations are creating in-house 41 percent were visiting spas for the first time. Section 1. 2004). but the were men in 2003. cuss the types of spas currently popular in the Spa services demonstrated the highest industry. and medi-spas. a piece of the pie by adding spa practices. Additionally. ular weekly visits after business hours or while traveling on business. box office re. After value. Age demographics show that 14 per. and trends in the Gender demographics also play a role in spa demand. value-for-service scale. The An emerging national statistic is the num. Twenty-three per. as men are more likely to go for reg- spa industry.5 million) (Thacker. adding new competitive pres- of 16 made one or more spa visits.5 million). and friendliness the maturing spa market. we dis. 2004. compensation issues. An established and known for survival that each operator differentiate environment—for instance. and heaviest demand on weekends. it will become imperative number of factors. Health clubs are also trying to capture bracket. however.

Further. philosophy. • Exceptional food can be tailored to virtu- vironments) supports guest needs by creating ally any dietary restriction or request. racketball and tennis. or resort en. Because of this trend. and water spots—is still a basic Increasingly. East- ical affiliations are sometimes available to ern and Western lifestyle issues related to provide information and to check blood medicine. and spirituality are be- pressure. facilities. coming a mainstay of many spa/wellness ex- and so on. and teenagers. Mind bilities. mind. destination. the wellness spa (located at day. and spirit. aging. and bike paths.  HEALTH ISSUES AND squash. hikes. prolonged wellness that integrates and re- • As part of the wellness experience. perience with add-ons such as eye-firming cused primarily on treatments related to body therapies and mineral-enhanced hydro- wellness. These items are a mainstay in couples. To best deliver this. note that salt glows and exfo- and programs must be seamlessly integrated liant treatments are approximately four into a personally tailored guest experience. In the early 1990s. Body. not just a series of treatments. periences. • When examining which body treatments All the guest amenities. therapy soaks. times more popular than any other body These experiences should be targeted toward treatment. free and SPA DEMAND fixed weights. mind. These programs personally empower the guest. sell services in several time blocks so sumer focus. Health and wellness • Traditional Western medical and Eastern issues encompass cardiovascular health. Body spect to spa performance and the consumer’s • Action spas are attracting a greater per- personal comfort level. an aggressive array of activi- ties—including cardio-circuit courses. successful spa services. heart conditions. inti- . med- news body. guests can select services that fit their first century. spa goers are looking to create spa/wellness requirement. the integration of • A proactive approach to overall health Eastern and Western medical practices. lifestyle/wellness practices holistic childrearing. In the beginning of the twenty. addressing body. treatments. spas and marketers are overtly schedule and financial budget. spas were considered a nat. bone density. centage of men who are looking for a way to unwind and keep active. an experience. in- and the quality of one’s life digenous spiritual practices.52 Chapter 1  Overview consumer can immediately identify with re. • Guests must be able to upgrade their ex- ural outgrowth of fitness facilities and fo. jogging. Among the components one might • Educational programs at many levels in- find in a modern spa are services related to: clude classes and clinics. To that end. expand the • Complementary and alternative medicine wellness center’s demand base. it is important to the body-mind connection attracted con. As market sophistication evolved. and spirit connections in order to respond to emerging market sensi. and en- in mainstream lifestyles courage repeat visits. parents with children. to include.

The fastest-growing therapies were should be cross-trained in the areas of herbal medicine. A muscle relaxation and biofeedback.1 billion. women’s all patients had visited a practitioner of alter- issues. Spirit ber of visits to traditional primary care • Comprehensive touch/alternative manual physicians in the same year. yoga for breath work. In accelerate market acceptance. strength As far back as 1993. vegetarian.3 percent. native health care in the past year. This indicated to the medical marily on personal health issues. great number of people were taking the issues labyrinth walking. cooking programs (macrobiotic. self- subtle energy work such as reiki. Iyengar yoga for native medical providers at 600 million. it can be in many day spas. The probability of users vis- tive touch/energy therapy as a component iting an alternative medicine practitioner in- of traditional massage has the potential to creased from 36. myofas. folk remedies. and so on. watsu. • Extensive yoga programs should include In 1997. and chi gung. indigenous).3 percent to 46. He Hatha yoga for body control. the growth of this trend. Ashtanga estimated the total number of visits to alter- yoga for cardio workout. message. sweat lodges. a well-known study training. progressive dissatisfaction with mainstream medicine. both 1990 and 1997. balancing. trol. alternative therapies • Ayurvedic treatments are popular and were used most frequently for chronic condi- provide an additional link between the tions. expenses implied not only lost revenues to tra- tual and cultural instruction. from 33. de- East-meets-West philosophy showcased pression. In general. and Kundalini resenting an expenditure of over $27. Mind. 1997. ditional (allopathic) doctors but also a broad clude tai chi. Offering alterna.7  Spas and the Lodging Industry 53 macy. thus setting the stage for the popularity of proactive wellness programs. Examples in. wellness clinic. acu.8 percent in 1990 to 42. The use of at least 1 of 16 (alternative) sion of the basic massage offered at all therapies during the previous year increased spas and wellness/healing centers. by David Eisenberg revealed that one-third of vegan. and deep tissue massage (rolfing. Eisenberg updated his study. Practi.7 billion. the aging of the population. This modality is an exten. transition/death. The increasing therapies including chiropractic treatment popularity of alternative wellness modalities. As of this writing. Elements of ayurvedic concluded that alternative medicine expendi- treatments can be incorporated into most ture increased substantially between 1990 and touch therapies. Traditionally. especially back problems. $13. Section 1. meditating and chant. The number of visits to alternative care physi- cians in 1997 was greater than the total num- Body. and headaches. anxiety. of the economy are all factors that support pressure/shiatsu. Trager massage. and this can be attributed primarily to . community that the significant out-of-pocket • Mind-body techniques may include spiri.1 percent in tioners who provide manual therapies 1997. visualization. and the strength cial release. it etc. of health and well-being into their own con- ing. rep- balance and alignment. chakra help groups.) are a necessary component of any appears to continue to grow. and storytelling. at a cost of tional programs at spas have focused pri. educa. and homeopathy. vitality. megavitamins. nueromuscular massage. energy healing.

include. At one end of the spa is the amenity spa.54 Chapter 1  Overview Table 1. the term now is used to describe demand generator. custom di- therapies were sought are summarized in etary plans. lodging industry. unique treatments. The term spa cause of their facilities and reputation.S. lated activities. draw demand be- tial for the hospitality industry. many types of facilities and amenities in the Closely related to a destination resort spa U. an array of ac- tivities ranging from nonsurgical facelifts to helicopter skiing. sort spa is to enjoy the spa itself and its re- ters” and restore a healthy and balanced life. and adventures that can Table 1. cialized combination regime of health. but are not limited to. fitness. with lo- Spa development and its attendant popular. Modalities and treatments in- medical conditions for which alternative clude massages. lectures. The most frequently reported principal and pampering. and the Arizona desert. cations in the Berkshires in Massachusetts ity have deep historical roots and vast poten. such as Miraval’s Life-in-Balance and Canyon Ranch. The was once reserved for European destination primary reason for going to a destination re- resorts where guests went to “take the wa.12.  SPA CLASSIFICATION Destination resorts. spectrum are dedicated destination resort tion seeking alternative therapies rather than spas aimed primarily at those seeking a spe- increased visits per patient.12 Most Frequently Reported Principal Medical Conditions Alternative Therapy Ailment Primary Secondary Back problems Chiropractic Massage Allergies Herbal Relaxation Fatigue Relaxation Massage Arthritis Relaxation Chiropractic Headaches Relaxation Chiropractic Neck problems Chiropractic Massage High blood pressure Megavitamins Relaxation Sprains or strains Chiropractic Relaxation Insomnia Relaxation Herbal Lung problems Relaxation Spiritual healing/herbal Skin problems Imagery Energy healing Digestive problems Relaxation Herbal Depression Relaxation Spiritual healing Anxiety Relaxation Spiritual healing an increase in the proportion of the popula. Amenity spas provide . The destination itself is a However.

in the development and use of destination dustry is making it harder and harder for the spas reflects the market’s trend toward well- “. whereas destination spas are the focus • Resort hotel spas of the resort environment. As ucation. however. to provide programs and facilities that sup- Middle-market hotel properties now feel port lifestyle improvements and enhance obliged to add a spa as an amenity. the sophistication of the in. we study the case of the Westin Los Angeles Century City’s 35. and spa” at the end of the business name. each with its own character- and a destination spa is the scope and depth of istics and operational opportunities: spa services.7  Spas and the Lodging Industry 55 services to resorts and full-service hotels. Because of their poorly conceived and executed spa additions healthful orientation. 2004). However. The The spa industry is made up of the fol- primary difference between an amenity spa lowing segments. Spas are no longer consid.000-square-foot  Destination Spas Spa Mystique. while sometimes • Destination spas quite extensive. destination spas often that provide the owner the opportunity to add provide programs that support postoperative “. and spas” to succeed. prolonged subcontracting a massage therapist and con. These spas only 1. hospitality. the spa can operate as both an amenity spa (to the hotel) and a day • Club spas spa (to the local community). Resort spas are located on the grounds of va- ered a niche industry but rather an entity unto cation resorts where treatments for mind. and lectures on lifestyle. . Later in this chapter. . certain de. address various addictions. Section 1. In 2005. guest health. nutrition. the growth all. . and spirit are offered to complement . illness. This spa supports the needs of the hotel’s convention and individual travelers A destination spa is one whose sole purpose is while experiencing heavy local day spa use. velopment trends are emerging. verting the guest room closest to the swim. menus. and  Resort Spas/Amenity Spas leisure market.6 percent of the total spa industry. themselves. high-end hotel is located in an • Medical spas urban environment and has a significantly • Mineral springs large spa component. ness and health as a major component in spa As the spa industry matures. the spa industry was considered the fastest-grow- ing segment of the travel. showing 26 percent growth from 2002 to 2004. conditions. body. . The destination spa industry constitutes ming pool into an exercise room. Amenity spas. In situations where • Day spas a full-service. support the resort environ- ment. a result. and These are often no more than the result of provide tools to cope with serious. ed- they cannot provide a full-service location. The services offered are profes- due to capital and real estate restraints. often sionally administered and include fitness. this sector has seen an explosion in and disease prevention. Fortunately. Study (Thacker. per seldom surprise and delight their guests and the International Spa Association’s Industry often reflect poorly on the spa industry over.

day treatments. The remaining configurations short period. Botox and mi- package of treatments that take up to a whole crodermabrasion are the two most popular day. show that industry growth is still robust. Found throughout North America. destination. tennis. and inclusiveness of numerous sorts commonly have world-class golf courses spas. Day. 27 percent of all spa visits. These numbers reflect 25 percent growth in Healthful spa cuisine is on the menu as an op. and water sports. In exclusively in this market. per the International ten incorporate Eastern-based treatments. scope. Set in beautiful surroundings. and 26 per. growth pattern reflect spa goers’ time crunch. and part is attributed to health affiliated. of which 8. hotels. horseback riding. complementing traditional offerings. period. and 26 percent have a beautifying.2 percent of the to.56 Chapter 1  Overview other resort activities such as golf. The total number the evenings. the industry in general and 20 percent growth tion. these re. measurable changes in the client/patient. like dancing and live entertainment. The day In North America. and resort/amenity spas are The large percentage of day spas and their adding medical treatments to their spa menus. spa locations in North America but accounts for almost 41 percent of the total industry rev- enue. According to the ISPA 2004 survey. the resort spa represents 14 percent of large growth potential. with a medical doctor. indicating that the industry still has 2004). As of medical spas are the fastest-growing spa seg- midyear 2004. Part of this trend is directly attributed to mar- Day spas can be owner-operated or chain.000 spas ment with respect to number of locations. skiing. only 13 percent of the general pop- dren’s programs are also offered. A luxury resort spa has the ambience of a Medical treatments in various spa environ- secluded retreat on the grounds of a first-class ments represent a significant trend in the resort. ments of Eastern philosophy that draw on the body-mind-spirit connection to create posi- tive. The . depth. ket demand. However.2 million. medical procedures found in medical spas of- tal industry revenues. sive Eastern modalities incorporating ele- pies are not only expected but demanded.  Medical Spas cent of the industry’s employees. According ulation had used a spa in the prior three-year to the ISPA Spa Industry Study (Thacker. Chil. there was a total of 12. reconstructive surgery to noninva- Gourmet dining and exceptional spa thera.  Day Spas Slightly over half (51 percent) of the medical spas in North America have a partnership Day spas are designed to provide a healing. insurance plans that reimburse for some pro- Preliminary data from ISPA’s 2004 survey cedures. guests can enjoy resort pastimes of day spa visits in 2003 was 81.700 were day spas. allopathic or Western spa industry constitutes 72. and department stores. followed by chemical peels and spas are freestanding or located in health laser hair removal. elective. nationally. Spa Association’s 2004 Spa Industry Study. clubs. Guests may book individual include being located in a doctor’s office or treatments that last as little as an hour or a having licensed staff members. Medical spa treatments can range from and other excellent recreational facilities. or pampering experience in a doctor on staff.

7 percent of the in- percent and from 2002 to 2004. from 1998 to 1999.3 percent of the total industry revenues. Between 2002 and 2004. and by number of locations an amenity needed to attract guests to the ho- represent 2.7  Spas and the Lodging Industry 57 average annual growth in medical spas by lo. ever. or or 1. Growth from 2002 to 2004 repre. by partments. Section 1. This trend is strong and continues today. 1999. 109 percent. ters.39 per. and their included in the analysis due to an insufficient primary objective is to facilitate daily fitness sample. like catering and restaurants. representing 1. cumu- cent of the total spa visits. club spas represent 5. Growth in the club spa Medical spas generated an estimated portion of the spa industry is the lowest of all 1. Dedicated destination spa resorts were not Club spas lack a lodging component. in the popularity of mineral springs spas is reflected late 1990s. In chiropractic services. While spas were a relatively small source ment the primary fitness component of the of revenues for the sample properties.1 percent of the total industry revenues. flexibility. How- management. spa operations were treated by be the original spa prototype. and re. The fication for their existence.900.000 visits in 2003. total spa industry in North America and ac- Cumulative growth from 1999 to 2004 is 205 count for approximately 3. activities. dustry’s revenues. and mobility. centage of visits accounts for approximately 2. tel. cation. spa segments. ber of sites available directly affects the In 1999. spa revenues grew . crease occupancy was deemed sufficient justi- producing segments of the spa industry. However. formed from support facilities to profit cen- sents only 15 percent.” Mineral springs spas. this per.8 percent of the total spa industry. are located at naturally occurring These departments were simply perceived as mineral springs. definition. thousands that report data to the PKF. spa revenues for the subject sample rep- lated treatments that address issues of pain resented just 3. As long as the department broke even. spa club by offering sports massage (deep tissue).  SPA OPERATIONS  Spas as an Operating  Mineral Springs Spas Department Many mineral springs spas are considered to Historically. revenues grew at a relatively strong pace. lative club spa growth was only 3 percent. PKF Consulting identified only growth in this segment. 30 hotels in the United States. extensive spa facilities and analyzed the financial performance of  Club Spas those properties and their spa departments. physiotherapy.3 percent of total sales. hotel spas followed the path of in a cumulative growth from 1999 to 2004 of other operating departments and trans- 143 percent. Many club spas’ services comple. By lo. However. where guests go management similarly to other revenue de- to “take the waters. re- flecting the lucrative nature of this segment of the industry. their ability to in- making this one of the more modest income. didn’t lose too much money. implying that the num.8 percent of the cation since 1999 is approximately 45 percent.

ho. destination spas and capture new market segments. pursuing market niches spa not because they require the services of a well outside the traditional ladies-who-lunch spa but rather because its absence may imply demographic. spas have been redirecting their the lodging brand is already established. spa They are being reevaluated and repackaged department profits did grow a strong 51. Conversely. By focusing on the social they must materially enhance the property’s benefits of hanging out in a safe. During 1999.and labor-intensive. the spa departments in the Spas are no longer solely about frivolous sample of hotels averaged a departmental self-indulgence and luxurious pampering. spa modalities. the exclusion of a spa tage facility may disqualify a property from con- sideration. Spas now attract a much wider de. incorporate one into their prop- mographic that includes men. children. Drawing heavily from resi. sometimes also referred to as enues for the beverage department.2 have both the infrastructure and the percent for food. teenagers. Adventure spas. spa treatments. a spa facility needs but also support the development of also must extend length of stay. dismiss a property out of hand for lacking a ing more segmented. ho- experience that: tels and resorts have acknowledged and em- braced the need for full-service spas as part of • Complements the lodging experience their amenities and facilities.6 percent. . drive room spa programs that can be incorporated into rates. Be- menus to include stress relief and results. economies of scale to support cutting-edge munications. augment food and beverage revenues. 12.7 percent. especially in chain environments where century. stress percent from 1998 to 1999.2 percent for rooms. other areas of the hotel are also deficient in children spas. most importantly. fitness spas. are part of a new generation of spa facilities. women. This compares to revenue and full-service resorts provide platforms that growth rates of 5. cause spas are capital. relief. Because of this trend in health care. and families. Is it logical. profit margin of 30. enhance shoulder and low-season de- virtually any leisure-oriented environment or mand. In ad- place. relaxing revenue stream to be considered viable. Numerous factors must be couples. considered in developing or repositioning a Since the early part of the twenty-first spa.3 percent decline in rev. many hotel guests may North American spas are rapidly becom. nities. emotional balancing. lodging industry. level of lodging. spa afi. and even pet spas meeting current market expectations. without cionados. erty? Clearly not. However.58 Chapter 1  Overview 16. boomers as an adjunct to traditional health tel designers and operators create a spa care. and a 0. they not only address current market dition to creating spa revenue.2 percent for telecom. and 3. tels and resorts without a spa should. family spas. hesitation. The inclusion of • Drives occupancy levels a well-integrated spa can provide additional • Enhances average daily rate (and lucrative) sales and marketing opportu- • Provides a distinctive marketing advan. Ironically. then.3 with a broader emphasis on self-care. This trend is being embraced by aging baby dential design and the use of technology. oriented therapies. and preventative Spas mirror and enhance trends in the (as opposed to reactive) wellness modalities. that all full-service ho- spa programs—and. In particular.

Section 1.7  Spas and the Lodging Industry 59

Successful spa operations start with a that guests’ expectations are exceeded. In a
standardized level of procedures and a prior- spa environment, expectations are usually
itized sensitivity to guest needs. As it is for all very high, and a trusting bond can be quickly
departments in a lodging environment (or established if the spa employees are sensitive
business models in the freestanding day and to guest needs.
medical spa world), profitability is essential. The guest’s arrival sequence, starting at
Especially in a spa environment, a dynamic the front desk, initiates the spa ritual that
balance is essential to meet the fiscal require- brings the spa guest to a place of trust, relax-
ments of the owners and the physical needs of ation, and rejuvenation. CST is proactive and
the guest. provides employees with the tools they need
A savvy spa manager continually moni- to meet or exceed guest expectations. Guest
tors the spa and hotel operations to ensure CST is a never-ending, all-inclusive process
that everything possible is being done to en- that bridges textbook training scenarios with
hance the synergy of the two entities. Con- operational realities. The traditionally high
stant monitoring also provides an early turnover of spa employees in the hospitality
warning system to the spa operator if rev- industry requires that CST be introduced as a
enues are falling or if expenses are not in line part of the orientation process and reinforced
with anticipated revenues or budgeted regularly.
amounts. Spotting these trends early enables Nonproductive training time (time that
the manager to take efficient, proactive steps does not directly produce revenue for the
to ensure that positive trends are enhanced spa) is actually a minor expense when com-
and negative ones controlled. Constant moni- pared to the expenses related to employee
toring sets a standard of operations, which is turnover, poor service, dissatisfied customers,
an excellent way to train and motivate em- and, ultimately, loss of business and reputa-
ployees. It also puts employees on notice that tion. Budgets must include CST as a non-
the spa is a well-run business with extensive optional employee expense. For long-term
attention to detail, which should discourage success, CST is vital when margins are tight,
any actions that might not be in the best in- business is slow, and turnover is high. There is
terest of the spa’s reputation and profitability. a strong correlation between high employee
turnover and low CST. Employees should
know that the training program is an invest- 
Customer Service Training ment in them.
CST gives the employee the means to un-
A spa’s reputation is easily made or destroyed derstand what is expected of them as a repre-
by its level of customer service. Guests can sentative of the establishment and identifies
forgive an occasional shortcoming if the level what guests expect from their visit. Seeing the
of service is exceptional. For this reason, it is process from the guest’s point of view helps
essential that all spas have an integrated qual- employees meet or exceed expectations. This
ity management program that provides ongo- minimizes the need to provide discounts or
ing training to assist its employees in compensation in cases of service delivery
addressing customers’ expectations. Cus- problems. Discounting or “comping” goods
tomer service training (CST) helps ensure and services is a knee-jerk response to poor

60 Chapter 1  Overview

service and should be reserved for the last ef- becomes comfortable with an employee’s per-
fort in service recovery; CST should stress formance), levels of empowerment should be
this. increased proportionately. Empowerment is a
An inclusive training program is the en- vote of confidence in an employee and a way
gine behind stellar customer service and guest to quickly resolve problems as they arise. This
loyalty. CST should be seamless; while it pre- situation is said by spa managers to increase
dominately addresses the needs of the guest, job satisfaction, and the employee’s owner-
the program also includes instruction on prof- ship of his or her position.
itability and yield management, thus address- CST also requires a strong foundation in
ing the needs of the owner as well. In order to the technical skills of how a department runs.
meet or exceed profitability goals, customer Routine procedures, appropriate lines of oral
service must be delivered in a fiscally respon- and written communication, and what is ex-
sible manner. Employees must understand pected of each employee in the normal course
customer service in the operational context of of his or her shift help minimize problems.
the property in which they are employed. When problems do occur, a strong foundation
Minimizing the expense of a CST pro- in technical skills makes it easier for the em-
gram starts with the proper selection of em- ployee to create alternative solutions for the
ployees. While there is no steadfast guarantee guest.
that a potential employee will work out over Training draws on employees’ EQ (emo-
the long haul, first impressions, prior work ex- tional quotient) as well as their IQ (intelli-
perience, references, and, above all, attitude gence quotient). CST requires that employees
and enthusiasm are indications of whether or draw on their ability to empathize with the
not it is appropriate to hire and invest the guest. This starts by training employees to
time and money in an applicant. suspend judgment of a situation, become at-
Management’s expectations of guest ser- tentive listeners, and know the right questions
vice delivery should be clearly articulated and to ask. This allows them to understand what
integrated into the corporate culture and re- the actual problem is. Training employees in
inforced daily at all levels and in all depart- this type of customer service delivery assists
ments. Employees, no matter what their them in focusing on the salient issues and cre-
responsibility, position, or tenure, must be ating ways to address them.
treated with the same level of respect and dig- Because CST is ongoing, employees can
nity that management requires for their benefit from their peers’ experiences. Vehicles
guests. Reinforcing the tenets of customer to exchange this type of information can be as
service within the corporate culture provides informal as role-playing and round-table dis-
the employee with the tools to do the right cussions, or as structured as an employee
thing—that is, to ask, “What do I need to do newsletter. Incentives, acknowledgments, and
to make a spa guest happy? How do I exceed rewards for excellent customer service deliv-
their expectations?” Sometimes the little de- ery are an integral part of the training pro-
tails reap the greatest rewards. gram. Successful CST supports a skilled and
Employee empowerment is a key compo- unified staff, which translates into profitable
nent in CST. As an employee’s experience operations. CST is an investment in property
and skill base develops (and as management that owners can’t afford not to make.

Section 1.7  Spas and the Lodging Industry 61 

Provide Value, Create the spa, and the competition. In a destination
resort, where the reason for the spa facilities
Value is the reason for the trip, there should be an
average of 1 treatment room for every 4 to 5
Spa aficionados are savvy. They are looking to guest rooms. At the other end of the spec-
be indulged, pampered, and nurtured, not trum, such as a casino hotel, the spa is defi-
fleeced. Setting price points with market sen- nitely an amenity, and 1 treatment room
sitivity can create tremendous customer loy- should be built for every 50 to 100 guest
alty. Because spas are no longer a one-time rooms.
indulgence but rather a lifestyle choice, it is The spas at lower-end hotel properties
important to price services competitively and normally are limited in scope and are often
provide incentives for customers to return between 3,000 and 6,000 square feet, whereas
regularly. luxury spas at full-service, high-end resorts
Numerous variables are involved in the average between 10,000 and 35,000 square
development and operation of a spa as part of feet. These ranges vary based on each hotel’s
a hotel or resort. Doing one’s homework is es- specific circumstances, including seasonality,
sential to success. When a spa is developed or accessibility, meeting space, fill patterns, and
repositioned correctly, it can be a lucrative local demand. Each market and each lodging
and rewarding experience. When it is not de- product must be individually evaluated to as-
veloped correctly, it can be a financial liability sess the appropriate ratio of treatment rooms
that haunts the spa director and jeopardizes to guest rooms.
the hotel’s market position. Another matrix that measures the viabil-
If spas and their programming are not an ity of a resort or hotel spa is the cost to build
integrated part of the hotel’s future develop- the facility. Once again, a number of factors
ment, the property may lose a significant support various outcomes in this process, in-
competitive opportunity. Spa-less hotels or cluding the amount of available land, the fin-
poorly run properties have an inherent com- ishes of the spa, the finishes of the hotel
petitive market disadvantage. Not only do (these should be compatible), and the need to
they find it more difficult to penetrate the develop a spa either vertically or horizontally.
market but they also often lose market share. Vertical spas are most often built in environ-
ments where land is scarce or the allocated
footprint for the spa is too small for one floor.
Vertical construction always raises the price 
HOW BIG SHOULD per square foot, as load distribution, drainage,
IT BE? and the weight of equipment and water must
be factored into the construction design and 
Resort Spas budget. The cost to construct a resort or des-
tination spa can range from as low as $200 per
The ratio of guest rooms to treatment rooms square foot to over $450 per square foot. High
is based on many factors, including the antici- land-value areas and plumbing-rich design
pated return on investment to the owners, the schemes will send cost dramatically above
topography of the site, the scope and theme of this range.

62 Chapter 1  Overview 

Day Spas most spas dictates how the space is allocated
and where the income is generated. Spas
Day spas often lack the grand infrastructure should aim to have at least 50 percent of their
associated with resort spas, and for this reason total space—their prime real estate—produce
the ratio of spa revenue to treatment room direct revenue. Secondary real estate is the
space is much closer. In terms of number of support and public areas necessary for atmo-
square feet, day spa revenues account for 43 sphere and supporting functions that assist in
percent of the total spa space and provide ap- delivering the spa services. Secondary spa real
proximately 52 percent of the total day spa estate includes areas where people can pre-
revenues. The remaining 57 percent of the day pare for or relax from their spa treatments.
spa environment is allocated to guest flow, These secondary areas are an important com-
check-in desk, retail, back-of-the-house sup- ponent in the spa development plan, as they
port, and, on some occasions, food and bever- allow guests to prolong their experience,
age areas. which enhances the perceived value. If guests
are hurried from their massage or facial out of
the spa and back onto the street, the magic 
Medical Spas that is created can be abruptly snapped and
the overall spa experience is compromised.
Historically, medical spas have placed less Conversely, if a guest is allowed to soak and
emphasis on the aesthetics of the spa experi- relax for hours after a body wrap is com-
ence and more on the treatment provided. pleted, emotionally speaking, the cost of the
Therefore, it is not surprising that 45 percent body wrap is amortized over the entire spa
of the medical spa space provides 63 percent experience and not just for the time the client
of all medical spa revenue. Retail sales are was enjoying the body wrap in the spa’s prime
limited in medical spas, as outside of cosmet- real estate.
ics and prescriptions there are limited brand- Combination rooms account for about 36
ing opportunities. While resort spa goers are percent of North American spa spaces, but
anxious to wear a sweatshirt or ball cap that because of the various treatments offered in
announces to the world where they last vaca- them, a revenue percentage generated from
tioned, most medical spa clients do not share these spaces is hard to predict. Combination
the same need or enthusiasm about their re- spaces allow the spa to address surges in de-
cent microderm abrasion or rhinoplasty. Med- mand for specific treatments and at the same
ical spas may require the use of pharmacies to time be flexible and respond to global market
fill patient’s prescriptions, which from a busi- changes. Massage rooms account for approxi-
ness model could be considered part of their mately 27 percent of the total space in North
treatment-related retail sales. American spas but 47 percent of the spa rev-
enue. Given these factors, an operator would
need a compelling reason to not include mas- 
Treatment Type Versus sage on the spa menu. Facial treatment areas
Revenue reflect 19 percent of the total spa space and
result in about 33 percent of the spa’s overall
To this point, we have evaluated the econom- revenue. Wet rooms, often the most underuti-
ics and use patterns of spa types. The focus of lized portions of the spa, account for 7 per-

Section 1.7  Spas and the Lodging Industry 63

cent of the space and revenue. Because many Increased stress management. It is impor-
spa modalities involve water therapies, many tant to position services for stress relief, espe-
spa developers and owners believe that wet cially to the male business traveler. Spa
rooms are essential, even if they seem under- programming that requires a limited amount
utilized. Because wet rooms are one of the of special equipment and minimal changes to
most expensive components of a spa, it is es- a property’s infrastructure can do this.
sential that they be utilized to their fullest ex- Impulse appointments. “Life is uncertain,
tent. Packaging wet room treatments with but I want a massage (reflexology appoint-
other spa services is one way to better utilize ment, yoga class, etc.) now!” This trend may
the space and create value for the spa. result in developing adjunct programs for on-
call staff resources. The as-needed portion of
the program limits a hotel’s payroll burden
and other related fixed costs. Of course, this 
SPA TRENDS implies existing core programs and facilities
where these programs can be developed and 
On-Site Industry Trends supported.
Shift in perspective. Self-indulgence, pam-
Anti-aging treatments and products are driv- pering, and luxury are being reevaluated and
ing much of spa menu and retail develop- repackaged with a new, broader emphasis on
ment. This calls for devoting a treatment self-care, stress relief, and emotional balanc-
room to outpatient medical procedures. Pro- ing. This is reflected in spa programming, the
gramming and spa menu items include sun menu of services, food and beverage outlets,
damage treatments, chemical peels for skin and spa-related retail. The retail positioning
renewal, and other rejuvenation techniques and spa programming components represent
that build on repeat procedures. Commensu- huge untapped revenue opportunities.
rately, spas are developing retail product lines Changes in demographic use profile. His-
that can take the spa experience home and torically, the greatest segment of spa goers was
continue the wellness regime. women between the ages of 35 and 55. More
Gift card sales are driving new users to couples and families are expected to visit
spas. In the friends and family sector as well the spa together as an alternative social/
as the corporate gift-giving world, day spa recreational activity. This trend has the poten-
certificates are creating demand that is not di- tial to extend business-related stays, fill busi-
rectly user driven. Third-party purchasing ness hotels on the weekend, and create
brings to spas clients who may not normally demand for destinations. It is important to un-
have chosen the location or treatment, creat- derstand this trend when evaluating ways to in-
ing a large but undefinable market demand. crease market penetration in a down market.
Regional specialties that relate to indige- Medical affiliations. For some markets, an
nous and climatic influences continue to cre- affiliation with a medical center or group in
ate unique spa experiences based on the area can be established to provide treat-
site-specific supply. This has excellent lever- ments such as acupuncture, nutritional assess-
age potential for spa operators working to dif- ment, laser therapies (hair removal and
ferentiate their product matrices in densely wrinkle reduction), Botox injections, collagen
operated areas. treatments, chemical peels, laser resurfacing,

64 Chapter 1  Overview

body contouring, microderm abrasion, and technicians travel with appropriate equip-
vascular procedures. When creating these ment and personnel to a client’s home, of-
types of relationships, it is essential that spa fice, or hotel room.
owners thoroughly investigate the legal dis- • Destination spas and resorts will develop
closure and liability implications of being an market segments focused on personal
affiliated medical service provider. goals—everything from spiritual aware-
Green environments. A spa can be ecolog- ness to sexual health to detoxification.
ically sensitive by incorporating environmen-
• The spa travel segment will grow, with
tally friendly features into the operation. By
more clientele booking through online
proactively supporting programs and prod-
portals.
ucts that are earth friendly, the spa does
something good for the environment, pro- • Medical spas will continue to be popular
vides a service to the community, and creates and will add alternative therapies and
a competitive advantage and a unique selling couple traditional medical treatment with
point that may provide significant returns, es- spa luxury and innovation.
pecially in a highly competitive market. • Day spas will not grow their exotic menus
much more but rather focus on the tradi-
tional; destination/resort spas will be the 
Global Industry Trends businesses that experiment with more ex-
otic services and products.
Trends in day, destination, and amenity spas
• Specialized cuisine developed for spa
influence each other. According to Susan El-
guest consumption will find its way into
lis (2004), president of Spa Finder, a spa mar-
mainstream grocery/specialty food offer-
keting company, after the rise of the medical
ings. Restaurants may also add lines of
spa and broadening spa participation by men
healthy spa cuisine to their menus.
and teens, spa use is expected to become
more popular in 2005 and beyond. Spa • Eco spas—those designed and operated
Finder’s trends to watch for are abstracted around green principles of manage-
below: ment—will become a growing segment of
the industry.
• Those personal elements that make the
spa experience special will find their way
into the design of personal living spaces in
private homes.  CONCLUSION
• Private, gated living communities will de-
velop around central spa facilities, much
The foregoing discussion and explanation of
the service and amenity potential of spas of
like golf and fly-in communities.
varying types strongly suggests that they will
• Some spas will compete on the far outer continue to maintain a position of importance
reaches of luxury, with ever-increasing in the inventory of hotel services. Even the
rare and proprietary products and ser- most modest of spa offerings can enhance a
vices. hotel guest’s lodging experience. Someday ba-
• Spas will make house calls. Legitimate sic spa services may be arranged for at even
spas will offer out-call services where spa moderately priced lodging properties.

Section 1.7  Spas and the Lodging Industry 65

Facilities of Spa Mystique of the Westin 
BUSINESS PROBLEM Century Plaza
ANALYSIS • 35,000 square feet
Mitch Jucha (2004), spa director, Westin Cen- • Café Mystique, state-of-the-art fitness
tury Plaza, Los Angeles, California center, Yamaguchi Salon, boutique
• Designed by Silvia Cipieli
• 28 treatment rooms
• 4 outdoor massage cabanas 
PROBLEM • Separate entrance for members and local
Spa Mystique, a 35,000-square-foot spa, is not guests with valet
turning a profit. It is a newly built, state-of- • Tranquility lounge
the-art spa facility located adjacent to a 728- • Separate locker rooms for men and
room full-service conference center hotel. women
The property is located in an affluent com- • Signature massage, facial, and body
mercial and residential area of West Los An- treatments
geles with direct access to major surface
• Spa membership available
arterials and freeways.
Guest Utilization Data
• 22 percent hotel guests 
BACKGROUND/STATUS • 77 percent local guests
• 6 percent group guests
QUO • 1 percent hotel employees
The Westin Century Plaza, a Commercial • Based on the guest type distribution, mar-
and Convention Property keting budget was redirected to local day
• 728 rooms spa guests.
• Occupancy level: 55–58 percent average • Additional internal marketing completed
(weekends 30–40 percent average) to increase in-house usage.
• Primarily business hotel catering to large
The Problem
groups and transient business travelers
• Many of the decisions herein were based
• The largest hotel ballroom in Los
on an analysis of the profit and loss state-
Angeles
ment and the general ledger.
• Breeze Restaurant
• Allowed comparisons to industry av-
• Where U.S. presidents stay in Los Ange- erages.
les since President Ford began using the
• Examination results:
hotel during his term
Retail sales were below average.
• Was once called the West Coast White
House due to President Reagan’s Cost of sales was too high.
patronage Payroll was too high.

66 Chapter 1  Overview

Breakeven was roughly $150,000. • Created treatment enhancements, which
Industry average profit would not be met allowed price increases without treatment
unless $330,000 in revenue was produced. time increases.
• Added corporate spa memberships.
• Create a limited spa membership that uti-
lized spa during low demand. 
SOLUTIONS
Evaluation of Competitors’ Price Structure
After a Sales and Marketing Evaluation
• Performed competitive price survey.
• Redirected marketing efforts to local day
• Survey determined that spa prices were
spa guests.
below competition.
• Created departmental marketing budget.
• Consequently, increased all spa prices by
• Placed advertisements in local papers and 20–25 percent.
magazines.
• Implemented discounted pricing and pro-
• Completed renewed efforts on in-house motions during low demand periods.
guests.
• Restructured package pricing.
• Increased hours.
Increased hours of operation of Sundays Modified Staffing
to include two additional bookable hours • Rectified overstaffing of the locker room
to increase revenue and meet demand. attendants and fitness attendants.
More recently, extended treatment hours • Added spa group coordinator or spa sales
to 8:00 each night of the week, resulting in coordinator position.
50 additional services per week.
• Realigned technicians’ schedules to elim-
The increased hours are expected to yield inate overlapping shifts.
$260,000 annually.
Overlapping shifts created an inefficiency
• Pursued corporate business. in utilization of treatment rooms.
Marketed to local corporate offices by Without overlapping, treatment rooms
offering midweek discounts to their are able to be fully utilized.
employees.
Prior to this change, maximum utilization
Entered into a corporate membership topped out at 70 percent.
agreement with MGM building em-
ployees.
Performed Wage Audit
• Modified spa menu.
• Restructured spa technicians’ wages be-
Created 25-minute services. cause paying the technicians an hourly
Filled 30-minutes gaps and maximized rate created an inverse payroll burden
utilization. during low demand.
Catered to transient business travelers • Removed hourly pay and created a flat-
and group guests of hotel. rate commissionable salary structure.

Section 1.7  Spas and the Lodging Industry 67

• Brought pay structure in line with spa in- After implementation of the above tactics
dustry standards. and strategies, Spa Mystique more than dou-
• Instituted system at the top of the com- bled revenues from the previous reporting
petitive set. period. The changes were considered a suc-
cess, and the spa is now profitable.
• Provided an opportunity to issue annual
wage increase based on performance.

R E F E R E N C E S

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Ellis, Susan. 2004. “Top 10 Spa Trends to Watch in file of the Spa Industry in the United States and
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Stephen. and Page. Administration Quarterly May:36–86.” Cornell Hotel Remarkable Hotels.” Cornell Hotel and Restaurant from 1939 to 1989. 1. Articles pp. “Customer Relationship Manage- John Dew. Kenneth R. “The Art and Science of Opening a 2003 issue of Cornell Hotel and Restaurant Hotel. Gary S. Albert J. ment—A Driver for Change in the Structure Chapter 1. 1984.S. Daniel R. is reprinted from the August Chapter 1. © Cornell University. “Pioneers and Leaders of the John Tarras. Lefever. Peter C. Vol. “The Hotel Development Process.” by Peter O’Con. Brymer (ed. Terrence E. No. 1991.” by of Cornell Hotel and Restaurant Administra. 1985. “On-line Pricing: An Analysis of sity. Vol. and Restaurant Management. Robert A. Row. amine the Industry. Dubuque. 2000. Dana Michael Ciraldo.6. 1990. NJ: Prentice Hall. nor.. “How Well Does the Branded Distri. Jarman. Peter O’Connor. is reprinted from the February 2003 issue Chapter 1. and Glenn Withiam. . 1952. 1957. New York: West Group.68 Chapter 1  Overview S U G G E S T E D R E A D I N G S Books Greger. Used by permission.2. A Bed for the Night: The Story Lee. TX: Pannell Kerr Forster.” by Chapter 1. 1985.” Cornell Hotel Hilton.7.5. and to Compete with the Chains?” by Peter Cass. No. Anderson. Hospitality Industry. Staff article. Hotel Investment Hand. Claudio Capaccioli.). Englewood and Restaurant Administration Quarterly 32(3): Cliffs. Administration Quarterly.. Rushmore. Roy Alvarez. Lodging Industry. “Spas and the Lodging Industry. reserved. 21–29. All rights reserved. “How They Started: The of the Wheeling Bell Boy: E. and Michael M. Gomes. 18–35.” In Introduction to Hotel book. of the U. 1985. Used by permission. Hospitality in Transition. Conrad.M. “The View from the Helm: Hotel Execs Ex- Houston. “The Evolution of the Hospital- “A 50-Year Renaissance: The Hotel Industry ity Industry. 1. Rufus. All rights Hotel-company Practices. New York: Harper and and Restaurant Administration Quarterly May.3. Brown. Be My Guest. tion Quarterly.” Cornell Hotel and Restau. S O U R C E N O T E S Chapter 1. Statler and His Growth of Four Hotel Giants.” by Tom Dupar. rant Administration Quarterly 31(1):18–38. © Cornell Univer- Chapter 1.” by Gabriele Pic- bution Company Allow Independent Hotels coli. IA: Kendall/Hung. 26.4. 26.

hotel organization struc- that food and its preparation played in the ho. are still in use today attests to a continuing in- This structure was built around two major ho. translated from the French as In hotels in the United States at the beginning “chief” and “master of the hotel. c h a p t e r t w o O R G A N I Z AT I O N 2. the classic European strong European influence. specialization ter of all service in the hotel. but the roles have changed and tel managerial personalities: the chef and the evolved. Even the titles chef and  CLASSIC ORGANIZATION maître d’hôtel. within the hotel organizational structure in- sponsibility to manage the interaction of the creased the effectiveness with which the or- hotel’s staff and guests such that guests were ganization managed and delivered its always served promptly. That these terms hotel organization model was predominant. In many ways. Introduction as to why the management of ture recognized the importance of the role hotels has changed. grew and became more precise. 69 . tures have also changed. the maître d’hôtel was the mas. and in line services. In several places in this book. It was his re. organiza- of the kitchen. fluence. everything that had to do with selection and For many of the same reasons cited in the preparation of food in the hotel. This struc. and jobs have changed in the hotel a feudal lord on his estate who held sway over industry. The chef was the chief or king consider the ways in which people. As our knowledge of tels of the time.” suggest a of the twentieth century. our guests and the markets they represent Similarly.1 I N T R O D U C T I O N with the hotel’s policy. properly. he represented tions. we maître d’hôtel.

Down. Some hotels elim. However the restructuring looks. In the typical functional chart. (1967): such as that depicted in Figure 2.70 Chapter 2  Organization Hotel organization structures are not im. inated separate managers at the division mune to the influences of the economy and level. the execu- tive assistant manager was often eliminated. business in general during economic down. involves balancing a company’s need for In the early 1990s. They said that the organizing process undergone. with all department managers reporting business cycles.1 Typical Hotel Organization Chart General Manager Executive Assistant Manager Personnel Accounting Marketing Engineering Purchasing & Sales Rooms Convention Food & Reservations Division Services Beverage Front Uniformed Housekeeping Security Telephone Office Service Food Production Banquet & Room Restaurants Bars (Chef) Catering Service . so the difficulties that befall directly to the GM. some hotels eliminated both stability and change. Figure 2. zations are still formed around principles sizing and reengineering are terms used to such as those outlined by Stoner and Wankel describe the changes hotel companies have (1986).1. organi- turns also affect hotel organizations. process based on that proposed by Dale ganization. • Organizing details all of the work that making division heads directly responsible to must be done to attain the organization’s the general manager (GM). goals. They go on to entire levels of management or combined comment on “organizing” as a multi-step managerial responsibilities to flatten the or.

ganization’s members in some logical and efficient manner. function rather than For instance. Note that. However. but basically. the line and • Organizing combines the work of an or. for the services a front office staff has the vast majority of hotel delivers remain the same even through highly visible face-to-face contact with the financial emergencies. a tremendous amount of face-to-face guest vidual functions may find homes in various di. that most line employees are hands-on par- Figure 2. that bring them into regular or semi-regular • Organizing sets up a mechanism to moni. guest. Note also that in this chart the two major Similarly. under most circumstances. in the Rooms Division. the hotel chef interact with guests. how- visions. housekeeping from company to company. may staff may have somewhat more guest contact. The departments on this rubric. as noted. Because of What may differ in a given hotel com. . bars.1 depicts a typical organization ticipants in the assembly and delivery of the chart for a large hotel. staff functions are defined as follows. in the Food and Beverage Divi- operating divisions are identified as Rooms sion. on a company-by-company basis. members of the hotel’s security staff do not cate that job titles and associated duties vary have regular guest contact. employees in organizational components harmonious whole. The underlying commonalty is ganizing process. hotel’s services. Looking at an organizational chart ipants in the production of the hotel’s ser- by function rather than by job title allows an vices. with the ex. than others. line division have more or less guest contact ture has emerged to reflect this theoretical or. indi. contact with guests.1  Introduction 71 • Organizing divides the total work to be organization chart should be considered typi- performed into groups of activities that cal and illustrative of a generic hotel organi- can be performed by one person or one zation chart. only under special and irregular circum- set up to deliver these two basic services to stances does the food production staff under their guests: rooms and food and beverage. ception of top managers. a linear line and staff struc. and. In the modern hotel organization. Obviously. interaction. even a some departmental functions within each reengineered one. their importance in the service production pany’s organization is the placement of the process. Division and Food and Beverage Division. hotel organizations are ever. the industrywide perspective. group of people. room service. This is to indi. Section 2. the employees of the restaurants. For purposes of illustration. Like the housekeeping staff. title identifies the departments. they still clearly fall under the line other departments. be combined or eliminated to reflect current and housekeepers are obviously major partic- conditions. The line operations in a tor the effectiveness of the organization’s hotel organization are the Rooms Division efforts to achieve its goals. and banquet departments have Again. and Food and Beverage Division.  Line Functions • Organizing sets up a mechanism to coor- dinate the work of the organization mem- Line functions are the tasks assigned to hotel bers such that it forms a unified.

at the same time. The success of the engineering function heav. The most modern business have little or no guest contact. boxes and charts. gained critical insight into how hotel organi- Other hotel organization charts place zations function. Managing Hotels Effectively: Lessons Division. uli—can be seen by analyzing several of the cial to all of the hotel’s line functions. fluence a hotel’s effective organization. Another view of the peculiar dynamics of ample. Nebel weaves the insights gained from the zation. and the carts Smith Professor of Hotel Management at the bellhops use to transport guest luggage. the military. the engineering department they respond to external and internal stim- maintains and repairs equipment that is cru. housekeeping hotel organizations is provided by Mark Con- has been changed to a staff function rather klin in his essay on how the leadership can in- than strictly rooms. or perhaps this placement is only GMs with organizational theory and then in- tradition. Church first designed the pyramidal structure In this chart. of course. much in their pictorial view but in the way For instance. Profes- repair the tables and chairs in the dining sor Eddystone C. THE MODERN ERA the-scenes activities that support the line Organizations. and nearly all busi- and. “keeps” the entire house. although major organization structures have not changed components of the work are to influence the much in form since the Roman Catholic quality of a guest’s stay. under most circumstances. Security is one ex. govern- ily influences the quality of the guest’s stay ment. In some organizations. corporates the increasingly important role This situation may also be true for other that committees can play in the successful departments traditionally thought of as organization. Nebel the other departments in the hotel. position as vice president of market manage- . Engineering staff can be called on to At the time of his untimely death. school systems. Nebel III was the C. for instance. In several chapters of his the engineering department in the Rooms book. by def. This may be because that is where from Outstanding General Managers (1991). for housekeeping. Rooms Division functions. engineering is as a visual depiction of organizational rela- included as a staff function for those reasons. engineering works best in the hotel’s organi.72 Chapter 2  Organization  Staff Functions  ORGANIZATIONS FOR Staff functions are generally those behind. the furniture in the lobby. If you think about it. room. ment supports the activities of almost every What does affect organizations—not so other department in the hotel. the engineering depart. readings included here and those that are sug- ing the food production equipment in the gested at the end for further study. are more than just functions and.B. includ. During this research. kitchen. nesses follow the same model. Purdue University. tionships with which we are so familiar today. He had recently spent a The engineering department thus can be con. In his inition. sabbatical leave researching and observing 10 sidered a true staff department that serves outstanding general managers and 53 key and supports at any given time any or all of subordinates.

At one extreme is the case of little or no specialization. On the other hand. As a general rule. however. be channeled toward productive ends. patterns of authority should be specialized.2 O R G A N I Z AT I O N A L D E S I G N Eddystone C. activities of numerous workers. 1. he is commentary on hotel organizations. interdepartmental might be comfortable with. he or she usually must crease the need for coordinating the take these five elements into account. The problem. work specialization One of management’s tasks is to deter- 2. Section 2. appear well suited to hospitality. It’s rewarding to have total con- trol over a project and motivating to see the If the efforts of people in organizations are to results of one’s efforts. struc. is that as demand for products or services in- ture must be given to their activities. In this search and opinion presented here highlight instance. connections. divide tasks among workers. 2. Aldag creases. he proposes a radical new view—one current thinking about the relationship of or- neither the Catholic Church nor the military ganizational structure. If there is more than one principles of organizational design. spans of control cialization holds out the possibility of greater worker productivity and managerial control 5. however. An ex- ample is the chef in a small country restaurant ORGANIZATIONAL who singlehandedly prepares an entire meal STRUCTURE for 20 guests. where an individual worker is responsible for all of  THE ELEMENTS OF the tasks required to complete a job. the re- positioned to comment knowledgeably. including way to accomplish something. management the important but often neglected topic of a must make a conscious decision about how to hotel’s committee and meetings structure. Additional insights can be gained from sug- While there is no lack of literature and gested readings. methods of coordination over tasks. departmentalization mine the extent to which work and jobs 3. and the organization’s people. dividing com- Whenever a manager decides to make an plete jobs into smaller subunits tends to in- organizational change. each involved . Nebel III This section reviews general management Specialization.2  Organizational Design 73 ment for Marriott Hotels and Resorts. it becomes more and more difficult and Stearns (1987) list five ways by which for individuals or small groups to increase managers give structure to organizations: their output without changing the way they are organized. spe- 4. It does.

top executives Authority. and the man. Preparing and serving food granted authority over line executives. scholars advocated an “ideal” span of control tralized or decentralized with regard to of exactly seven subordinates. or depart. managers are faced with the sometimes cause organizational problems. The ideal span of con- direction or the other. error tional design. staff de. motivation drops. predictable work tasks are. could be practical solution. like GMs must arbitrate line-staff disputes ture a job or group into different depart. both the process and the function of are required to consult with staff specialists the two activities are different. tasks of subordinates. Managers must take into considera. departments of a hotel are examples of staff Departmentalization. supervisor. for most revenue. and quality suffers. As organizations units. Every time managers restruc. before making a decision. cisions. Two is achieved through distinctly different kinds intermediate examples: (1) Line executives of work. with one extreme. some management ments. In the past. the rooms require frequent interaction. span of control can be. Also. Most restaurants departmentalize. in their specialty areas. A number of factors trol is dependent on: must be taken into account when deciding • Task similarity—The more similar the what pattern of authority is best for an orga. ments. of control can be. the supervision required and the greater the business strategy to be followed. tion the experience and personality of • Training and professionalism—The more subordinates. staff executives have over line executives? At ties. overspe. however. This is a logical and ecutives. The personnel and engineering rates increase. • Frequency of interaction—If relationships enues of the business. and (2) line and partments along functional lines is the most staff executives are required to make joint de- common method of organizing a business. • Task integration—The more a supervisor partments are set up because the principles of must integrate and coordinate the tasks of . That simplistic decision making. need to group certain jobs in order to ensure How much authority should functional efficient coordination and control of activi. they are faced with the question of Span of Control. agement style with which they feel most • Task certainty—The more routine and comfortable. business units that provide products or ser- vices to customers and account for the rev. Once set up. the greater the Line executives have responsibility for span of control can be. the span of and food and beverage departments account control must be narrow. the environment in which they trained and skilled a subordinate. rather. In a hotel. line executives could be given food preparation and food service as separate total authority. On the other hand. they tend toward one view is no longer held. specialized tasks. work specialization and departmentalization cialization can result in jobs so narrow that suggest efficiencies from such an organiza- workers lose interest. Organizations are never totally cen. when they develop. the less work (Is it stable or rapidly changing?).74 Chapter 2  Organization in separate. staff ex- functional departments. Whatever the situation. At the other extreme. Forming de. Span of control relates how much decision-making authority to grant to the number of subordinates reporting to a individual workers. staff departments grow in size. managers. the wider the span nization.

they are said to and groups toward common goals. scheduling. accounting. and accounting. While standardized plans and proce- ordination of their activities is best dures are helpful. For example. Proper coordination is en- nate their activities. A hotel rants are operationally quite similar to each example is the guest check-in process. Unit A. mutual ad- pendently—that is. without any interaction justments are required. This Some of these factors may work in oppo.2  Organizational Design 75 subordinates. fect numerous other departments. by in. work specialization and Still greater coordination is required in departmentalization are organizational re. housekeeping. Problems develop. Because these work. the narrower the span of pervision. food and beverage. sure that each independently performed task • Physical dispersion—The more widely is carried out at the same level of efficiency dispersed subordinates are. and by direct su. they cannot possibly solve accomplished by prescribing standardized all of the problems resulting from such a high rules and procedures for each to follow. A well-planned control. volved. ously discussed. Whenever there is a high level of in- tant to coordinate the activities of individuals teraction between work units. One ex- coordination required depends on how tasks ample is the coordination needed to host a and activities are linked. cases where the output of Unit A is input for sponses to the growth of a business. and reserva- Pooled interdependence refers to activities tions. coordination is usually not and standardization. system linking the rooms department and the Coordination of Activities. In simple organizations of sured through detailed planning. output of a front desk becomes an input to However. The role of coordination is to en- control must be. communication and group meetings are . it becomes increasingly impor. Direct tensive individual training. is typical of production line operations where site directions. degree of departmental interaction. The other. As duties Unit B and the output of Unit B is input for are subdivided. Each can any one department’s output and activity af- usually perform the required duties inde. function room usage requires interac- that can be performed with little interaction tions among convention services. only a few people. The kind of exhibit reciprocal interdependence. Sequential interdependence occurs when one task’s output is a second task’s input. As previ. These linkages result major convention. manager can properly supervise. Rooming decisions made in different kinds of interdependence between by the front desk must be coordinated with individuals and groups. between individuals or groups. to go smoothly. Section 2. Close coordination is with the others—as can room maids and only possible through direct communication cashiers at food outlets. Suppose a ho. Coordination also re- a major concern. and joint decision making by the units in- ers need not interact among themselves. engineering. between activities. the fewer a and quality. their physical dispersion works in the accounting department in the form of a the (opposite) direction of limiting span of guest billing record or folio. quires identification of the linkages that exist as organizations grow in complexity. fast food restau. co. suggesting a broad span of control. Problems arise accounting department is vital for this activity when organizations do not properly coordi. sales. Because tel has three telephone operators. however. products are progressively assembled.

problems in hotels sometimes requires hotel and. she does. who in turn will speak to the director of staff positions but rather to ensure. This does little appropriate. fect. If a GM wants to make a to them through the chain of command. whose boss is the chain of command and the span of control restaurant manager. Experienced hotel GMs often about how to organize institutions such as break this principle. The traditional chain-of- activities involve reciprocal interdependence. counting. chain-of-command lems can develop because of conflicting or- considerations mean he or she should com. A safety way to the GM. This principle holds pening and the organizational climate is oth- that everyone in an organization should have erwise healthy and trusting. This experience is nates two or more levels down in the organi- distilled in a number of principles that have zation. It provides struc. large executives to issue orders directly to subordi- manufacturing concerns. This principle states hotel’s organizational chart depicts the chain that each employee is responsible to one and of command. DESIGN Too strict an adherence to this principle. GMs may also want to maintain been identified. Prob- change in housekeeping. reli. The typical pyramid shape of officer who reports to the personnel director an organization chart is a consequence of the might correct a food server. This common problem occurs ture in an organization by setting forth a as organizations grow in size and task special- system of subordinate-superior accountability ization takes place. and so The chain of command affects communi. Ac-  STATIC PRINCIPLES OF cordingly. Chain of com. in their specialty cation within organizations for both subordi. While these principles do not personal control over some project or aspect hold in all circumstances. personnel. however. a superior to whom he or she is responsible. not necessarily to eliminate specialization and ager. command structure in a hotel has the baker responsible to the chef and the chef responsi- ble to the food and beverage director. server feels as if she has two bosses and. The concept discussed previously. by closely . they are important of the hotel and choose to bypass immediate and should be understood and applied where subordinates in order to do so. only one boss. for a safety violation.76 Chapter 2  Organization needed to ensure proper coordination when housekeeping. large commercial trading companies. data processing. Specialists in safety (or ac- for everyone. since the industrial revolution. in ef- mand is a powerful concept. area. Unity of command is violated ganization chart’s chain of command all the quite regularly in most organizations. ders from more than one boss. can take away the spontaneity in an Experience has accumulated for centuries organization. harm as long as everyone knows what is hap- Chain of Command. the military. over workers who do not report directly nates and superiors. harmful to the hotel. The solution is municate with the rooms department man. A Unity of Command. on) often do have authority. but in a way that is not government bureaucracies. The immediacy of some gions. It should be possible for any only one superior—that is. each person has employee to trace his or her way up the or. the baker should communicate with the chef and not directly with the food ORGANIZATIONAL and beverage director.

The amount of au. dinate’s ability to successfully carry out an as- signment depends in part on the clarity of his or her superior’s delegation instructions. zational units. Young. with departments grouped thority that accompanies a delegated task. The hotel is divided along functional lines delegation: into five administrative departments: rooms. Section 2. The rooms de- proceeding. each choose. and the amount of au. stances. cook food. pied rooms must be kept current. of the important functions of the rooms de- thority delegated usually increases as trust partment. department is subdivided into smaller organi- • Make a recommendation for my ap. sonnel.2 shows. sales. Figure 2. Here are examples of typical organization chart for a 500-room ho- orders that result in different degrees of tel. The GM plays a key role in beds. These are some have proven themselves. In many in- a manager. which they are engaged. These subdivisions represent proval. it’s not neces. Del. guests. receive mail and phone messages promptly. and per- • Gather information for my decision. Individual hotels are usually organized along the freedom of action. Reservations must be accepted. but inform me of it be. As Figure 2. that order rather than est living. It’s important DESIGN for both superior and subordinate to under- stand and agree on the level of responsibility. The five department heads report di- • Set out two or three alternatives. he or she gives up earning an hon. but inform me of it before The Rooms Department. each of which per- It’s been said that when a person becomes forms rather specialized tasks. Young managers often find organization they manage provides proper delegation a difficult task to master. or provide service directly to coordination throughout the hotel. into a number of subunits. these subunits are also referred to as . I’ll then rectly to the GM. subunit. accounting. and guest can expect only limited delegation until they questions must be answered. refinements of the work performed and the • Make a decision. • Take action. security must be maintained. food and beverage. pends in part on the experience of the subor. public spaces dinate. Rather. guests • Take action on your own. knowledge and skills of the people in each fore proceeding. The rooms department is divided between superior and subordinate is built. inexperienced subordinates such as lobbies must be kept clean. Hotel managers don’t usually make confusion reigns. their job is to see to it that the Delegation. ORGANIZATIONAL sibility for a major undertaking. must be hospitably received and assigned sary to communicate with me regarding clean rooms.2 depicts a ferent circumstances. partment performs the lodging function of a hotel. guest services. guests must The extent to which authority is delegated de. A subor.2  Organizational Design 77 coordinating activities. according to the particular work activity in Each level of delegation is useful in dif. the status of available and occu- this matter. functional lines.  THE HOTEL FUNCTIONAL egation can range from assigning a minor task to a subordinate to granting complete respon.

ation are transferable to other areas of hotel Reservations takes and tracks hotel’s future operations. and where they’re assigned all the hotel’s linens and employee uniforms to a room. where large.2 Typical Hotel Organization Chart General Manager Food and Sales and Rooms Beverage Marketing Department Accounting Personnel Director Director Manager Food Sales Front Assistant Employee Production Manager Office Controller Recruitment Finance Food Sales Assistant Benefits Laundry Controller Manager Service Manager Operations Room Sales Reservations Purchasing Training Service Manager Beverage Sales Storeroom Housekeeping Manager Manager Convention F&B and Sales Security Controller Catering Manager Credit Stewarding Engineering Systems departments. The hotel’s and skills required to manage a laundry oper. bell staff is also part of this department. Little of the knowledge under the front office department. Its function is ex. guest communications functions usually fall tremely specialized. which in a 500-room hotel is quite greeted when they arrive at the hotel. The front office is where guests are partment. For example. Telephone operators and other as well as guest laundry. is responsible for cleaning and pressing they’re registered. the laundry de. The housekeeping department is . bookings.78 Chapter 2  Organization Figure 2.

heating. These are both examples of reciprocal inter. thus calling for close coordination of drink to a hotel’s guests. a and housekeeping. Effective management responsible for the operation and mainte. which occurs when number of functional subunits where tasks the output of one unit becomes the input of are specialized. excluding room guest checks out. room service. renovations. engi. Section 2. this was a fice and the reservations department. Linkages exist between the front of. Often. . In earlier times. The Food and Beverage Department. the front office must inform service! On a busy day (or night). and frequent direct communications between plumbing. and deadlines. Reser. Information regarding nightclub. It Linkages also exist between the front office might also have a piano bar and lounge. structure. when activities. of course. however. providing vations must inform the front office of the food and drink is much more complicated. two ban- reservations know whenever walk-in guests quet halls. quired. The service of food in a ho- switch in a guest room if housekeeping does tel’s restaurants and food outlets is usually not report the problem. air Coordination between units also requires conditioning and ventilation. it’s likely housekeeping so the room may be cleaned. schedules. always available. For example. The front office must let a poolside snack bar. Once it is cleaned.2  Organizational Design 79 responsible for cleaning guest rooms and trate the reciprocal and sequential interde- public spaces. cluding electrical. The A great deal of interdependence exists primary function of the food and beverage between the subunits of the rooms depart. an inn had only one dining room. so the department comprised a quential interdependence. Today. a gourmet restaurant. the engineering department is rooms department. under these conditions calls for standardized nance of the hotel’s entire physical plant. To begin with. A less obvious example thority in a first-class hotel. that each of these outlets will be used. An example is housekeeping’s in. during a 24-hour period. food production. or kitchen. department. This adds up to 19 room status must flow both ways: When a food and beverage outlets. there is the another. number of presold rooms each day to ensure The 500-room hotel in this discussion might that a current inventory of rentable rooms is well have a coffee shop. There is great diversity in the activities dependence in which individual units provide performed by a food and beverage depart- each other with inputs. in. Under the deals with the output of information from one executive chef are a variety of culinary spe- department to another. and ten separate function rooms (those without reservations) are registered. to provide food and ment. mechanical. a person of great stature and au- towels or bedsheets. In a ability to properly provision a guest room if 500-room hotel. the responsibility of a separate department. cialists responsible for different aspects of neering cannot replace a defective light food preparation. plans. department is. It also performs minor repairs and executives. housekeeping must inform more than one event takes place in an outlet the front office so the room may be sold. this unit is headed by the ex- the laundry does not supply enough clean ecutive chef. procedures. Security is responsible for guest pendence that exists between subunits of the safety. These examples illus. much simpler task. where food and beverage may be served. Finally. Other linkages within ment and considerable variety in the skills re- the rooms department are illustrative of se. and a lobby bar.

interview. Still. wedding receptions. These functions are the responsibil- subdivided along geographical lines such as ity of the assistant controller for finance. is headed by an assis. personnel department’s input is advisory only. maître d’s.2. Catered events include local par. ation. and accounts kets. and even larger facilities for managers in other departments. Still. preparing and interpreting fi- agers. Thus. regional or national accounts. sales managers often specialize in corporate Responsibilities also include payroll prepara- accounts. with other departments. is subdivided into three subfunctions: em- tels do considerable convention and catering ployee recruitment. the personnel department’s major vide for the unique needs of these customers. but final hiring authority resides in the spaces of the food and beverage depart. Individual ment with timely reports of operating results. This department is ability to form effective working relationships quite small. lounges. Finally. Sales service department contains the individual managers work more or less independently in restaurant and outlet managers. and screen prospective em- kind of business. Because of lems of intradepartmental interdependence the special problems associated with room are usually not severe (Pelletier 1988). challenge occurs as it attempts to interact hotels often organize separate catering and with other hotel departments. even for a 1. It serves no customers. and general motion and disciplinary decisions. Sales managers are sometimes further payable. and other alco. present many problems of interdependence. To pro. their particular market segments. transactions.80 Chapter 2  Organization which. making intradepartmental coor. where the food and beverage expediting is often as. In Figure 2. ness is largely dependent on its manager’s Sales and Marketing. they do not ties. dish. and bus help. usually based on the type of customers nancial statements. signed to a separate subunit known as the As a staff department. prob- waiters. the department is Accounting. in a large hotel. Also. the personnel department holic beverage outlets. personnel’s effective- stewarding department. problems faced by other departments. another dimension to the . service. A hotel’s personnel depart- subunit responsible only for room service. While these banquets. larger rooms for an expert on labor law and able to advise general sessions. with alcoholic beverages cause hotels to form books no business. Personnel may convention departments that specialize in this recruit. and other affairs held by local groups. many large hotels have a separate Personnel.000-room hotel. business meetings. usually tant food and beverage director. benefits administration. the line departments. Instead. three subfunctions are related. waitresses. the job of cleaning ployees. and prepares no meals. business. yet a separate department with responsibility for it plays a vital role in a hotel’s efficient oper- the bars. Its traditional role is recording financial there is a division of work among sales man. or tour and travel mar. The personnel director must be rooms for separate meetings. however. Most full-service ho. The food does not exceed a dozen or so members. ment is a staff organization set up to handle a The high value and profit margins associated specialized function. conventions. service bars. the sales There is. The same is true of pro- ment. dination fairly easy. A convention uses small function and training. accounts receivable. staff.and warewashing. tion. The accounting department removed from most day-to-day operational often combines both staff and line functions. and providing manage- a hotel is attempting to attract.

charges from the various hotel departments. but the ac- counting department is responsible for col. It partment rather than the accounting depart. who work in the accounting department. dependent verification of the accuracy of the tact. which increases overall pro- is also responsible for purchasing and store. cost accounting.  STRENGTHS AND port to the assistant controller for operations. The strength of a hotel’s functional organiza- The accounting department is responsible for tional design is the resulting efficiency within tracking and preparing daily reports on the individual departments or subunits. and cost control counting department. In many cases. and behavioral patterns that lead to success. This ment’s direct involvement in day-to-day helps new employees quickly learn the skills operational aspects of the hotel. the accounting accounting department’s front office cashier department head is responsible not only to tracks all charges to guest accounts. This often results in the sponsible for collecting and reporting most of department being called the controllers’ de. Thus. ductivity. of command is routinely violated in the case The food and beverage controller. . accounting is re- throughout the hotel. ableness of all food and beverage revenues. Because functional departments room operations. keep track of the rev- enues and expenses of the food and beverage department. unity controller for operations. independent from the GM. Section 2. The reason for this dual reporting relation- Although these employees work at the front ship is to provide the hotel corporation an in- desk and sometimes have direct guest con. therefore plays an important hotelwide staff ment. financial and operating results of the hotel— partment and report to the assistant that is. Food and beverage cashiers re. WEAKNESSES OF A and the food and beverage controller reports directly to the hotel controller. mance of common tasks allows for work tel. The food and FUNCTIONAL beverage department may be responsible for ORGANIZATION food preparation and service. Train- accounting and management information ing is easier because of task similarity and the systems used throughout the hotel. This dis. Perfor- costs of the food and beverage used in the ho. perform similar tasks. and the of hotel controllers. ers to learn from experienced workers. perform similar tasks or have similar skills. food and beverage cashiers. the accounting department specialization. many opportunities for inexperienced work- cussion demonstrates the accounting depart. We make two final points about the ac- ations. Second. The budget preparation. First. they are members of the accounting de. a hotel’s operational and financial statistics. the director of sys. The reason for organizing a business along lecting revenues! The food and beverage functional lines is to group employees who controller verifies the accuracy and reason.2  Organizational Design 81 accounting department that connects to oper. The night the hotel’s GM but also to the hotel chain’s fi- auditor reconciles all guest bills with the nancial vice president or to the hotel’s owner. The two central concerns of accounting role as data provider for decision-making and control are rooms and food and beverage. Finally. workers rapidly de- tems is responsible for designing the velop specialized skills and knowledge.

mistrust.82 Chapter 2  Organization A functional organization is a logical way are likely so different that either would be at to organize work because it fosters efficiency. he or she may be the activities of individual departments and to unprepared to address problems that require set hotelwide strategies and goals. tion are capable of filling most department All departments must keep hotelwide goals head slots. putes. performance of one department. A hotel’s functional organization demands strong leadership at the top. backgrounds among rooms managers. Their education and work experience standard operating procedures and systems . because of the need for close interdepartmen- ments. the functional design’s most general business degree and spend a career in important strength is also the source of its sales-related work. department. office. they do not develop executives with broad hotel COORDINATE THE exposure. Although ten finds accountants running the controller’s this is surely important for departmental effi. One of- cus on its own tasks and activities. lationship between their performance and the Managers educated in hotel administra- overall performance and goals of the hotel. ence. The food and beverage di- greatest shortcoming. director of sales might have a marketing or ments. However. and a variety of educational tional departments to fully appreciate the re. Left to a hotelwide knowledge and perspective. and friction between departments unless up- Specialization at the department and subde. Someone narrow interests rather than broader overall above the departments must set the overall goals and objectives (Dann and Hornsey strategic course of the hotel. A functional extensive food production and service experi- department’s strength lies in its ability to fo. on the other hand. it does not necessarily ensure the over. and little or no sales experience. A well-thought-out set of cialty. While a manager may perform cerns. coordinate activities between depart. the more narrowly specialized rather than focus narrowly on their own con. it is unlikely that individual de. and coordination within depart. downs in hotels. not the nary diploma and a hospitality degree. Nar- themselves. row specialization can result in bias. partments would be capable of doing this. maintenance. These two executives might only have There is plenty of potential for service break- superficial knowledge of each other’s spe. set hotelwide 1986). per management takes steps to counter this. it is sometimes difficult for func. This is a particular problem for hotels goals. and arbitrate interdepartmental dis. Consider the heads of a hotel’s ACTIVITIES OF A HOTEL marketing and food and beverage depart- ments. individuals with degrees in per- all effectiveness of a hotel. tal cooperation in providing guest services. A method must be found to coordinate well within one department. Individual departments may pursue their own ship at the top of an organization. could have a culi- measured by its overall performance. Because they are sonnel administration heading the personnel specialized. The longer managers stay in one of customer service and profitability in mind department. partment levels results in the need for leader. a loss if placed in the other’s department. While functional departments produce  HOW MEETINGS HELP specialists within a narrow skill category. they become. The teamwork. The success of a hotel is rector. engineers in charge of engineering and ciency.

There’s no magic for. EOCs mistakes. the question GMs must answer is the amount of EOC can play an important role. Section 2. sales and marketing direc. the more likely the EOC is occupancy. factors. food and beverage director.2  Organizational Design 83 can decrease the chances of many routine Quite apart from decision making. Authoritar- each year. close cooperation is a must. The more participative the GM’s troller—usually produce the hotel’s management style. subgroup of these executives—the GM. experienced managers. An important Under the influence of a skilled GM. The vehicle often communication: used to foster cooperation between function. 4. serve as a learning and training vehicle for in- biguous. A place during meetings. tured or highly structured. for overall hotel performance . and meet. To afford individuals the opportunity to ior members of a hotel’s management staff: express their feelings and emotions the heads of the functional departments who It is important to note that all four of report directly to the GM and are responsi. and profit forecasts for engaged in joint decision making. • To foster group problem solving and deci- cisions. To motivate by fostering a commitment The EOC is made up of the GM and other to organizational objectives hotel senior executives. the more likely it is that EOC meet- tive bonuses. a second to play a strong though con. hotel’s department heads. Thus. because of the amount of re. that EOC members meet regularly to discuss Nowhere is this more important than at the hotel business. one EOC might be structured to make certain group de. the EOC consists of the most sen. play an important communications role ciprocal interdependence that exists between within hotels. and con. delegated to an EOC depend on a variety of tor. To provide information that helps execu- ally specialized departments is the executive tives in their decision making operating committee (EOC). sion making sultative role to the GM. 2. This occurs by virtue of the fact departments. Any time meetings are held. 1. where differences in communication takes place. ways it may be useful are: Depending on the circumstances. The less experienced the The exact duties of an EOC vary from ho. responsibilities. and duties of execu- those executives who report directly to the tives GM. the more helpful tel to hotel. 1986). and the amount of decision making rooms manager. The duties and responsibilities of frequent EOC meetings are because they can groups can be spelled out in detail or left am. a hotel. but usually it’s role. Some of the authority they wish to delegate to the EOC. Scott and functional specialties are most extreme Mitchell (1976) identify four functions of (Dann and Hornsey. The Executive Operating Committee. 3. Meeting frequency. Still. These forecasts form the basis for ian GMs find little need to foster a strong the hotel’s overall annual budget. EOC. The greater the need for change within ing annual budget goals determines execu. these functions of communication may take ble for the hotel’s major budgetary units. ings are frequent. department-head level. and a third to have a • To build a feeling of joint responsibility weak or nonexistent decision-making role. revenue. To control by resolving ambiguities in the mula for EOC membership. agenda. A hotel’s EOC can be loosely struc.

meeting structure. and con- the effective management of hotels requires trol activities frequent meetings. changes. it all levels to provide answers to these ques- could be. Hotels are subject to frequent. time-consuming and sometimes unproduc- ordination of activities through an elaborate tive. • To foster top-down. tional structure. Still. There is no denying that meetings are Well-managed hotels address the need for co. intradepartmental People need to know what is important to the and interdepartmental issues. there doesn’t seem to be a better structure of committees and meetings. the GM • To ensure acceptance of priorities and de. coach. well-thought-out part of its formal organiza. and minutes are often taken and can have disastrous consequences for the atti- distributed to participants and to higher-level tude and morale of a hotel’s staff. One often finds frustrated. Just way to effectively manage a hotel (Conlin like a hotel’s organization chart. hotel. The GM meetings. including the GM. 1989). and hori.1 shows an average of • To teach. What does it value most? What does it cerns. Too few meetings results in of the hotel. These executives complain about usually prescribes a hotel’s committee and not being kept informed of what is going on. They are part of the work • To build interdepartmental cooperation of the hotel. • To assign duties. regular meeting schedules are pro. dissatisfied mittees and meetings constitute a formal part executives in hotels where there are too few of a hotel’s organizational structure. and marketing stand for? What constitutes good perfor- issues.1 lists the regularly scheduled mance? Because hotels provide many intangi- meetings of a typical large hotel. . there would be little time left over to do any work! In fact. Surely. Meetings must be scheduled fre- The purposes of the committees and quently in such an environment. The committee complaint relates to service breakdowns that and meeting structure of a hotel should be a occur as a consequence of too few meetings. As elementary as it may seem. Meetings are an effective means of ac- list carefully. While not ble services. usually daily. Table 2. One of the first things to note is the liefs among top executives sheer number and diversity of meetings. and financial. including daily operations. one might say that if a hotel were to zontal communication hold all of these meetings. In many hotels. attends 295 regularly scheduled meetings cisions by senior management each year. Each group’s responsibili. The meetings a hotel holds pro. bottom-up. (Hosansky. Table 2. this is the actual case. It will pay dividends to review this tions. a constant effort must be made at the meeting schedule for an actual hotel.84 Chapter 2  Organization • To help instill common attitudes and be. or their ef- meetings in a hotel vary with the complexity fectiveness is lost. A second executives. assess progress. complishing this vital management function vide clues about what it takes to manage it. Other Hotel Committees and Meetings. 1989). personnel. hotelwide con. and build a responsive 249 scheduled meetings each year dealing senior executive team with interdepartmental issues. it is easy for a ties are spelled out (sometimes in great hotel to fail to keep its managers and employ- detail). This shortcoming mulgated. Also. ees adequately informed. these com. They address a range of concerns confusion over a hotel’s goals and objectives.

department 1 hour subdepartment head. times per managers.2  Organizational Design 85 Table 2. resident manager. 1 to 2 Committee times per policy. all members. and engineering safety record Energy Chief engineer. security. present performance awards Executive GM. times per for upcoming 90 days. Section 2. manager on duty. start new Meeting programs Annual All hotel management Annually Year-end review of 1 hour Meeting and employees performance and awards Employee GM and selected employees from Monthly Informal communication 1 hour Meetings throughout the hotel and discussion Supervisor/ GM and selected first-line Monthly Informal communication 1 hour Junior supervisors and junion and discussion Manager managers . front 1 to 5 Review upcoming day’s activities 15 to 30 office. 1 to 2 Review department issues 1 hour and all subdepartment heads. food and beverage.1 Typical Meetings Structure for a Major Hotel Meeting Meeting Attendance Frequency Purpose Length Operations GM. sales. catering and credit manager Safety Personnel. Monthly Subdepartment. Weekly Review last week’s performance. and housekeeping Supervisory All management and supervisory Semi. front Monthly Review accounts receivable 1 hour office. strategy hours month formulation Sales GM. resident manager. department head. department heads 1 to 4 Performance review. hours and sales. and staff Credit GM. week engineering. executive chef Staff GM. times per and previous day’s results minutes housekeeping. Monthly Review safety program and 1 hour housekeeping. controller. 1 to 4 Review room demand 1 to 2 Forecast front office. and supervisors month Subdepartment Department head as needed. reservations. 1 hour Staff personnel annually present awards. issues management. rooms. department heads. department heads. or both Department GM as needed. Monthly Control of energy costs 1 hour Conservation food and beverage. reservations month devise strategies to Marketing increase room-nights average rates. next week’s hours reporting to department heads plans and special projects. personnel. Review hotel performance. 1 to 2 all subdepartment managers this week’s activities.

3). This focus on our of the supervisors. I don’t use the term employee but have re- kindness. 2. meeting structure designed to foster interde- operation in order to provide high-quality partmental communication and cooperation. ship team is to: tel. • Support the front line and remove the suring customer loyalty. managers. Customers are cause he or she serves the customer. is the most important person in the hotel. ployed to overcome this problem is a formal traordinary degree of interdepartmental co. and the leader- guests creates alignment throughout the ho. Quite simply. an important part of management’s or- design used in most hotels fosters efficiencies ganizing function is to design an effective within each department of a hotel but is weak meeting structure that compensates for and with respect to coordination between depart. The differ- ence is that employees work for you and To accomplish this. Our mission is to ensure that every guest leaves satisfied and wants to return. The job the reason we are here. thus en. guest service. The functional organizational Thus. complements a hotel’s functionally depart- ments. nal customers. placed it with the word associate. as you can It is my belief that the front line associate see. One of Marriott’s barriers to doing good work. • Solving their problems quickly and fairly. an organizational pyramid—and. and respect. it is my . • Above all.86 Chapter 2  Organization Hotels are businesses that require an ex. gests a class structure wherein someone is al- tion class (see Figure 2. who are the hotel’s associates.” This belief is at line by: the core of who we are and what we believe in as a company. leaders must develop associates work with you. of your employees. the employees will take This means managers support the front good care of your customers. I call this a reverse ways organizationally inferior to someone organizational chart. Associate implies working relationships with associates that are partnership and working together. mentalized organization. the GM is on the bottom of the hierarchy. fundamental beliefs is: “If you take good care • Lead and help people do their jobs better. external customers—our guests—and inter. it is also referred to as else. be- At the top is the customer.3 A S I S E E I T : H O T E L O R G A N I Z AT I O N S T R U C T U R E Mark Conklin One way to represent the environment in our subtle but powerful message. One of the organizing strategies em. which is a based on mutual trust. • Demonstrating concern for associates I say that we have two types of customers: (and it must be sincere). treating associates with dignity. Employee sug- hotel is a chart I use at our new-hire orienta.

One of the greatest ways to for people whose talents predispose them show appreciation is by promotion. and confidence to do their jobs. and the challenge is to keep this idea ates who have the authority. Create Empowered Associates fundamental belief that our associates will not treat our customers any better than we • The foregoing combination of training treat them. We look environment. To create this environment. and standards creates empowered associ- ture. business. We set plish this and to improve customer ser- the tone for outstanding service. we were challenged to operate our the direction and to create the environment hotels with fewer managers. GM We also provide them with an operational framework (standard operating proce- dures) that represents the foundation for our training. ing principles: Recognize and Promote Select the Right People • Recognition in our organization takes • We work hard to select the right people place in many forms to create a positive using predictive screening tools. our brand name. gives customers confidence and trust in I’ve tried to capture the following key operat. vice. To accom- where people focus on our customers. as hourly associates. then. empowered. therefore. which keep customers. More to provide great service and who have the than 50 percent of our managers started highest potential to fit in with our culture. to establish ago. they have to Chart work with the new people. which re. and involved associates running the Putting the GM at the bottom of the pyra. Associates Invest in Training • Our emphasis on training is a reflection of Management Marriott’s corporate culture. Section 2. we had to have trained. We invest in building the skills and knowledge of asso- ciates to give them the tools to succeed. Years As leaders. it is our job. This is the cornerstone of our cul. mid shows that the leader actually works for • These systems and standards and this at- the people who work with the leader. line associates and managers take collective Guests responsibility for the success of a newly hired associate. accountabil- alive as the company grows. . quires a lot of coaching and leadership.3 Reverse Organizational • We involve our hourly associates in the selection process—after all. I view tention to detail help us deliver a consis- my role as doing whatever it takes to gain and tent product and reliable service. ity.3  As I See It: Hotel Organization Structure 87 Figure 2.

D.” HSMAI Marketing Review Dale. Seattle. Managers. New York: 7(1):16–20. manager is one who stays close to the cus- cate that 95 percent of our associates tomer and close to the associate—and hands- rated Marriott as an average or above.R. Theory of Interdepartmental Conflict in Ho.G.” International Journal of Hospitality Man. and Success in the Lodging Indus- Nebel. Jeffrey D. NJ: Prentice-Hall. on managers never forget who is making average place to work. L. “As I See It: Hotel Organization tone C. This is 15 points them successful. and T.” Administrative Science CHRIE Conference. Organization Books Structure. 1985. Mitchell. and Timothy Hornsey. Ernest. and Charles Wankel. they trust us. S U G G E S T E D R E A D I N G S Schaffer. Ray. Up the Corporate Ladder. Homewood. “Organizational Conflict: Con- and Organization Structure. 1991. 1987. Man- agement 5:23. 9. W. 168–173. American Management Association. Jeffrey D. The hands-on panywide associate opinion surveys indi. Schaffer. 233–234. ings 38(5):51–52.” Proceedings. Chapter 2. Quarterly 12:296–320. Scott. pp. Eddystone C.” by Eddys. 1976. Mel. IL: Richard D. Joseph. Organization.. Stearns.” International Journal of Hospitality Man- Effectively: Lessons from Outstanding General agement 3(4):159–165. 1988.. 1986. and Timothy M. Recent com. New York: Van Nostrand Reinhold. 1989..” by Mark Conklin.. “Organizational Design. Hosansky. Structure. Ramon J. and Finally. . Cincinnati: South-Western. “Overnight Success Takes Control!” Successful Meetings 38(7):37–42. 1984. 1967. “Towards a Theory: A Structural and Behavioral Analysis.R.88 Chapter 2  Organization • Our associates like us.” Successful Meet- Management. Englewood Cliffs. cepts and Models. Nebel III. Stoner. above the service industry norm. James A. Some Time. p. Managing Hotels try. “A Dynamic Model of Organizational Performance in the Lodging Articles Industry: The Role of Competitive Strategy Pondy. tels. R E F E R E N C E S Aldag. Organization Dann. “Meetings Give You a Leg pp. managers should be hands-on. WA.. 1989. “Strategy. 1986. Conlin. agement. it is my strong opinion that our they act in our best interests. 1967. Irwin. III. “Management Strategy: Get Pelletier.3.2. S O U R C E N O T E S Chapter 2.

I noted liaison. source allocator. with six others (figurehead. comparison can be made by reading Ar- A 1981 article by Arnaldo presented a naldo’s work with that of David Ley (1980). and negotiator) assuming ten about hotel general managers. the job serves as the springboard to roles ranked by the GMs were (in descending corporate jobs or larger and more prestigious importance): leader. based on a small sample of seven Arnaldo drew a demographic picture of his GMs in comparable properties in one hotel sample (n  194) and commented that al. This work. c h a p t e r t h r e e GENERAL MANAGERS: A V I E W AT T H E T O P 3. ported a high degree of job satisfaction. someone who has at. Little less importance (see also Mintzberg.1 I N T R O D U C T I O N In most companies. Strangely. In previous editions of this book. roles. The most important of the managerial panies. recorded how much time the GMs though GMs changed jobs frequently. company. re- how surprising it is that so little has been writ. In many hotel com. statistical profile of hotel general managers. porting how these GMs allocated time and Most of us in the hotel field consider this job importance to a number of classic managerial the acme of one’s career. properties. entrepreneur. disturbance handler. 1973). they re. and Ghei’s contribution here. and disseminator. structured attention was paid to the develop. Another useful this is still the case. Readers of Arnaldo’s article may be ment of their careers and the skills and struck by the similarities that echo in Nebel strengths they bring to their jobs. allocated to the same managerial work roles 89 . spokesman. monitor. He tained the title of general manager (GM) or also provided an analytical framework for re- something similar heads the organization.

because the literature on ho. Pavesic and Brymer (1990). we sought an- This makes the Nebel and Ghei piece all swers to questions regarding the importance the more interesting. but among GMs is explored by Rutherford and many of the conclusions are still viable. values. organizations. Rutherford and Wigenstein conclude previous edition. from which to view the job of GM. and me. The employment circum- cluded in this section. operational data in that article are out of date. als who contribute their thoughts on the job tel GMs is so sparse. and can be useful to hotel organizations. Beth Chung- time at the role of mentoring as it could be Herrera and her colleagues study the specific measured to affect the success and satisfac. Speaking of success. predict. cessful hotel leaders. A central aspect of career development Much of the financial data are out of date. those who aspire to the top job in a hotel or. for while still a small of various operational measures. or control the po. their GMs were studied intensely. The model they develop Although the demographic. Sciarini. fectiveness ratings (highly effective. and professionals crafting the structure of the focus of the research can still be useful to successful careers. they have looked at this small group. and same time asked GMs for suggestions about the authors propose a structural framework the structure of a hotel-related education. the authors interpret the behav- naldo’s much larger group of GMs devoted ioral dimensions of the GM’s career. the more effective managers the roles job satisfaction and stress play in spent more time on entrepreneurial activities managerial careers. In contrast. In the mentoring re. Also. Wigenstein (1985). Ley concluded that in studies in recent years. In a review of this techni- than leadership activities. skills and competencies demonstrated by suc- tion of a modern hotel GM’s career. In a number of preneurial activities. but as these researchers point some interesting questions about what sorts out. aspects of the GM’s job is discussed by cations of the GMs to leadership and entre. 1973). Ar. as the sample for be used to explain. for that role. The difference here was and developing mentoring relationships can that Ley asked for a corporate office rating of have a positive effect on several aspects of a each GM’s effectiveness. salary. luxury hotels with more than 500 rooms. effective. and at the group. of activities might best prepare future GMs In the research reported by Woods. which looked for the first In an interesting new article. cal research. If you will. Schmidgall. the insights gained from of GM have attained that level in separate ar- the managers studied in this case add flesh eas of the country and for different types of and tone to the work of the other authors in. the three profession- ganization. Hotel careers neurship. He compared the ef. Another view of the career and personal and less effective) to the observed time allo. that there is ample evidence that seeking out Previously the GM of the Rosen Centre . Students reading this article find solid sugges- it is a hotel general manager theory that can tions from successful GMs. This should suggest to the reader are challenging.90 Chapter 3  General Managers: A View at the Top (Mintzberg. and personal challenges. they do not have to be arduous. work much more time to leadership than entrepre. stances of each have also changed since the search. schools. GM’s career. the study was drawn from mostly upscale and sition of GM.

also in Orlando.2 A C O N C E P T U A L F R A M E W O R K O F T H E HOTEL GENERAL MANAGER’S JOB Eddystone C. Speaking through top-quality resort differ from his previous ex- his writing like he was a guest in your class. Section 3. the overarching theory guiding the hotel DoubleTree is part of the Hilton family of ho. tribute to his success. Rob and Ghei contribution. ney World Resort complex. These two elements give rise to specific job functions and concomitantly sug- gest various managerial work roles that must be performed in each job function. can be considered DoubleTree Club Hotel in Las Vegas.. ment in this fascinating industry. Peckenpaugh. actually works in practice. relationship issues. this edition of this book: to provide the reader moving up in complexity and responsibility. Finally. GM’s job. be a connection between the book learning of Another contributor from the last edition the classroom and what happens in the real is Bob Peckenpaugh. Nebel III and Ajay Ghei Abstract. . This is my goal for bank Airport and Convention Center Hotel. presents the viewpoint that the job of a hotel general manager can be better understood by analyzing the influences that shape it. From an academic standpoint. Fabico. provide us with the insights and views of in- other DoubleTree in California and was siders and with clear evidence that the theory recently promoted to GM of the Hilton Bur. coupled with the piece Balmer shared his experiences as the GM of a by Chung-Herrera et al. the importance of the communications requirement for being effective in the job is em- phasized. and Balmer tel products. They differ depending on the time frame (short-run. who when we last read world. He is now GM of the Rancho His perspectives from the standpoint of the Bernardo Inn near San Diego. The two major contextual el- ements that influence the job are deemed to be job demands and relationship issues. mana- gerial work roles. the Nebel In the third edition of this book. job functions. Florida. Fabico shares his insights about manage. 3. based on the research of one of the authors into hotel general man- agers’ effectiveness. communications requirement. His observa- GM and as a member of a management team tions about managing a relatively small but do not necessarily change. Florida. perience. time frame. Since then. but both work together to con- Mr. Emilio Fabico is about him was operations manager at the now in the management structure of the Dis. Key Words: Job demands. Westin Innisbrook Resort near Tampa. This article. intermediate-run.2  A Conceptual Framework of the Hotel General Manager’s Job 91 Hotel in Orlando. with the opportunity to see that there should His view from the top is instructional. or long-run) under con- sideration. he has managed an.

experienced. 333). were conducted with at least 100 other execu- plexities of the GM’s job. Koepper. and implementer of the business strategy for the analysis of organizational and operational in- property and the behavioral role model for formation from each hotel. field research was conducted while the author text in which GMs of major hotels work and was on sabbatical leave and resulted in over how this context affects the nature of their job. . The personal in- the entire management team” (Eder and Um. 1989. GM for three days as he proceeded through pendent business entity. Ley. The demands and challenges vision heads. and about one hour with each of their di- hotel business. A hotel. and fast-paced businesses engaged in a participating hotel was an internationally wide variety of operational activities. As Dann 1989. Thus. fluences that shape the job. terviews extended over a number of days and breit. observed each chain. and recorded his every hotel can.” porates ideas found in the research of Kotter Ten extremely successful GMs of some of (1982) and Mintzberg (1973). Kotter (1982. velop a conceptual framework of it. and managerial complexity. The author whether it is an independent or part of a stayed as a guest at each hotel. America’s finest hotels agreed to participate 10–33) showed how job demands and rela- in the study. The model incor- rial work in the hospitality industry. Thus. 700 pages of field notes. inde. Their renowned luxury property of about 400 organizational and operational complexity in. multifac. background surveys. “The general manager is the key key division heads. 1986) there has emerged a (1990) has stated. In addition. extensive personal for this business is the general manager (GM) interviews with both the GMs and 53 of their of the hotel. . top-rated hotel executive with Mintzberg (1973. rate work roles that managers perform. 55–99) described ten sepa- an average of ten years’ experience in the po. The purpose of the research was. can be managed as a separate. tives and employees of the ten hotels. review of the literature on managerial work in in part. the ex. and the largest was a great convention creases with size. Shortt. irrespective of hotel of nearly 2. the smallest eted. Guerrier and Lock- GM’s job.1. which were subjected It is based on the research of one of the authors to extensive qualitative data analysis. and through this understanding de. (Nebel. 1988. It can thus be argued that the took between four and six hours with each GM is the central management figure in the GM. informal interviews of managing hotels are reflected in the com. ployed a combination of participant observa- ecutive with overall operational responsibility tion of GMs at work. One research goal was to study hotels ure 3.1 reflects how the hotel context that exhibited the fullest range of operational influences the various job functions and man- . to better understand the nature of the hotels (Guerrier. 1978. Each of the GMs studied was an tionship demands affect executive behavior. rooms. wood. be treated as a unique activity. While it takes more than one closely that employed by Kotter (1982). each individual his normal workday.000 rooms. in effect. “[T]here is now a need to . 1987. It em- person to effectively manage a hotel. The research methodology followed profit center. which presents a model of the in- understanding of the actual nature of manage.92 Chapter 3  General Managers: A View at the Top Major hotels of today are diverse. Umbreit. 1991. The This article takes a close look at the con. 1991) into the managerial effectiveness From this analysis and from an exhaustive of hotel GMs. Fig- sition. view of the hotel GM’s job that is given in develop a conceptual framework for the better Figure 3.

ongoing operational issues of various managerial work roles GMs are re- providing high-quality guest service.1 Influences That Shape the General Manager’s Job Specific Job Functions The Hotel Context: —Job Demands The GM’s Job —Relationship Issues Generic Managerial Work Roles agerial work roles GMs must perform in or. 1982. tionship issues according to whether they re. 10–33). in general. the around the daily. are under of the elements described in Figure 3.1. and the generic managerial work roles are job demands and relationship issues. control- quired to perform. These. tremendous pressure to produce short-run re- sults. We now proceed to discuss each charge of profit centers anywhere. or the long-run  THE SHORT RUN time frame. They also suggest. intermediate-run. late to a hotel’s short-run. the intermediate-run. give rise to certain specific job The short-run demands on hotel GMs revolve functions. der to be effective. de- pending on whether they relate to the short- run. It is the symbiosis of these ling costs. They must therefore devote a substantial amount of their time and efforts toward exer-  JOB DEMANDS AND cising effective operational control. most service-centered problems in hotels must . or long-run time frame. That is to say.1 lists key GM job demands and rela. Hotel specific GM job functions and the generic GMs bear direct responsibility for their prop- managerial work roles that actually defines erties and thus. have extremely short lead times. Section 3.2  A Conceptual Framework of the Hotel General Manager’s Job 93 Figure 3. The structure for this The two major contextual elements of the table is adapted from Kotter’s study of mana- GM’s job that affect the specific job functions gerial behavior (Kotter. and maximizing revenues. An impor- RELATIONSHIP ISSUES tant functional characteristic of hotels is that many of their day-to-day business problems Table 3. like operational managers in the GM’s job.

tional controller. Long Run Capital expenditure Downward internal decisions in line with hotel’s communication to further strategic service vision. environment. a hotel GM can be said prove their operational control over the ho- to be performing the job function of opera. Lateral hotel’s service strategy to communication with the changing external external environment. load of short-run operational demands must ationally complex businesses in which not take up all the time of GMs. as they must numerous.94 Chapter 3  General Managers: A View at the Top Table 3. Intense upward communication with corporate office or owners. internal verbal revenues. ma.1 Key Job Demands and Relationship Issues of Hotel GMs Time Frame Key Job Demands Key Relationship Issues Short Run Day-to-day operational Intense and frequent control of service. subordinates. the heavy work- jor hotels are both organizationally and oper. Moreover. and downward. As changes take place in the external . costs. However. In discharging plans and programs that systematically im- these responsibilities. Develop and Upward communication with refine the organization corporate superiors and staff structure. be solved quickly or not at all. Intense pressure communication and to earn profits and render interaction with hotel high-quality service. Fine-tune communication. GMs must engage erational issues. vitality. highly diverse activities take place also concentrate on intermediate-run and constantly as well as concomitantly. Intermediate Run Train and develop Downward internal subordinates. tel. specialists or owners. effective GMs must train and in intense verbal communication and interact develop subordinates as well as formulate frequently with subordinates. To be able to do so effectively and in a proactive manner so as to retain the In addition to their involvement in daily op- ability to influence events. To stay on top of this complicated short lead-time business is unquestionably the sin- gle most challenging and demanding aspect of  THE INTERMEDIATE RUN the GM’s job. stability and vitality. Lateral Develop and sustain communication with the organizational stability and external environment. long-run demands and issues as well.

Section 3.2  A Conceptual Framework of the Hotel General Manager’s Job 95

environment, GMs must adapt and fine-tune zational stability of the hotel. Capital expen-
the hotel’s service strategy and organizational diture decisions are required in order to en-
structure on an ongoing basis to keep abreast sure the long-run viability of the hotel, and
of these changes. These initiatives represent a they therefore must be consistent with the ho-
proactive response to the operational de- tel’s strategic service vision. The other impor-
mands of the business; they take time to im- tant long-run demand on GMs is the need to
plement and constitute the bulk of develop a degree of organizational stability
intermediate-run demands faced by a hotel and vitality that is in tune with the hotel’s
GM. These intermediate-run demands, then, carefully planned and clearly defined strate-
involve putting into place a hotel’s organiza- gic service vision.
tional structure, systems, and people who are The key relationship issues for long-run
capable of quick and effective response to ex- capital expenditure decisions are communica-
ternal stimuli and who can simultaneously tions upward with corporate executives or
help the hotel meet its demanding daily oper- owners and laterally with an assortment of in-
ational commitments. Thus, in effect, the GM dustry and community contacts as sources for
is fine-tuning the hotel’s service strategy and intelligence concerning the hotel’s competi-
refining and realigning its operating systems tive operating environment. Developing orga-
to ensure a smoothly functioning business. nizational stability depends on ongoing
All these efforts require intense, down- programs of human resources training and
ward internal communication and a high de- development and of sequential career pro-
gree of interaction with subordinates. In gression. Many of the human resource pro-
addition, intermediate-run job demands re- grams that foster intermediate-run goals
quire the GM to develop communication ultimately benefit long-run organizational
channels and to nurture relationships that ex- stability and vitality.
tend beyond the specific domain of the hotel. Organizational stability enables a hotel
These relationships include, first, a wide-rang- to consistently deliver high-quality service
ing network of hospitality industry and com- and effectively control day-to-day opera-
munity contacts who can help the GM better tions. Organizational stability and vitality
understand the hotel’s external environment; also gives the hotel the maturity and experi-
and, second, the GM’s corporate superiors and ence required for it to rethink its basic mar-
staff specialists, whose cooperation is needed keting and service strategies in the event of
for the successful implementation of the for- altered market or environmental conditions.
mulated specific plans and programs for the Finally, stability permits the hotel to make
hotel. In carrying out these responsibilities, the any required transition with minimal disrup-
job function of a hotel GM can be referred to tion to its regular operational practices. Key
as that of organizational developer. relationship issues associated with organiza-
tional stability include continual monitoring
of the external environment and intensive 
THE LONG RUN downward communication within the hotel.
In fulfilling these responsibilities, the GM’s
Two important long-run demands of a GM’s job function can be described as that of busi-
job relate to the capital needs and the organi- ness maintainer.

96 Chapter 3  General Managers: A View at the Top

tor, and negotiator. A brief description of 
ROLES PLAYED BY A these generic managerial work roles is given
GENERAL MANAGER in Table 3.2.
The influence of Mintzberg’s work is re-
This section is organized around Mintzberg’s flected in the studies of hotel GMs by Ar-
study (1973), in which he suggested ten naldo (1981) and Ley (1978) and that of
generic work roles for managers. Mintzberg restaurant managers by Ferguson and Berger
grouped these ten work roles into three broad (1984). The previous section explained how
categories: interpersonal, informational, and job demands and relationship issues had an
decisional. Interpersonal work roles included impact on the job functions of GMs. It was
those of figurehead, leader, and liaison; infor- from that discussion that we proposed the
mational work roles covered those of moni- three specific GM job functions of opera-
tor, disseminator, and spokesperson; and tional controller, organizational developer,
decisional work roles were those of distur- and business maintainer. Each of these three
bance handler, entrepreneur, resource alloca- job functions requires GMs to perform vari-

Table 3.2 General Managerial Work Roles

Work Role Description

Interpersonal
Figurehead Symbolic head of the organization. Required to perform certain legal activities
and attend to social activities.
Leader Responsible for staffing, training, direction, and motivation of subordinates.
Liaison Develops a network outside the organization to gather information.
Informational
Monitor Seeks and analyzes a wide variety of outside information (from liaison role)
and inside information (from leader role).
Disseminator Transmits information received both from outside and inside the organization
to other members of the organization.
Spokesperson Transmits information about the organization to outsiders.
Decisional
Disturbance Handler Takes corrective action whenever organization faces unexpected, nonroutine
disturbances.
Entrepreneur Looks for ways to change the organization for the better. Seeks information
externally and internally for improvement ideas. Initiates and supervises
improvement projects.
Resource Allocator Responsible for allocating all important resources of the organization, both
financial and human, including how the manager schedules own time,
programs work, and authorizes actions.
Negotiator Responsible for the organization’s major outside negotiations.

Section 3.2  A Conceptual Framework of the Hotel General Manager’s Job 97

Table 3.3 Combining Managerial Work Roles and Job Functions in Defining the
GM’s Job

Time Horizon GM Job Function GM Managerial Roles

Short Run Operational Controller • Monitor and Disseminator (of internal information)
• Disturbance Handler
• Resource Allocator (of own time)
• Leader
Intermediate Run Organizational Developer • Liaison
• Monitor and Disseminator (of both external and internal
• information)
• Entrepreneur
• Resource Allocator (of own time, programs, and funds)
• Leader
Long Run Business Maintainer • Liaison
• Monitor and Disseminator (of external and internal
• information)
• Resource Allocator (of programs and funds)
• Entrepreneur
• Leader

ous managerial work roles in order to be suc-
 MANAGERIAL WORK
cessful. Combining the various managerial
work roles with the specific job functions ROLES AS OPERATIONAL
helps provide a clearer understanding of the
GM’s job. These relationships are shown in
CONTROLLER
Table 3.3. The GM’s work as operational controller is
Although the GMs studied were ob- characterized by a high degree of involve-
served performing each of Mintzberg’s ten ment in the daily operations of the hotel. Be-
managerial work roles, the interpersonal roles cause the activities of a hotel are both
of leader and liaison, the informational roles numerous and diverse, GMs must be con-
of monitor and disseminator, and the deci- stantly monitoring and disseminating detailed
sional roles of disturbance handler, entrepre- information pertaining to daily operational
neur, and resource allocator were found to be matters. Time and again throughout the
of particular significance. These roles were course of the working day, GMs interact with
performed regularly as GMs carried out their subordinates to stay on top of the numerous
various job functions. We now proceed to de- operational problems that occur. GMs must
scribe the managerial work roles most often also be available to effectively and quickly
performed by GMs while discharging their handle disturbances that are not covered by
three primary job functions. a hotel’s routine procedures or those that

98 Chapter 3  General Managers: A View at the Top

subordinates perceive as being beyond their diate confines of the hotel. GMs must moni-
scope of authority or experience. In order to tor information about both the community
effectively play this managerial work role of and the competitive environment, and this
disturbance handler, GMs must have rapid requires them to become a liaison between
access to reliable internal information and, in the hotel and the outside world. Further, the
turn, be able to quickly process and dissemi- information GMs gather from the external
nate this information downward in the organ- environment must be analyzed and dissemi-
ization. While functioning as operational nated to subordinates within the hotel. GMs
controller, the GM’s work role as resource al- must process both externally and internally
locator revolves mostly around the allocation obtained information in order to effectively
of his or her own time to the numerous short- play the work role of entrepreneur, the im-
run demands of the job. GMs can, of course, portance of which has been stressed by Ley
allocate a proportion of their hotel’s financial (1978). As entrepreneurs, GMs are the devel-
and human resources to help solve short-run opers of specific plans and programs geared
operational problems, but it is the manner in to improving the operating efficiency and
which they allocate their own scarce time that service strategy of the hotel. Any new plan or
is of paramount importance when referring to program imposes additional time obligations
the short-run operational problems of the job. on both the GM and on subordinates. New
GMs perform the leader role in every con- plans and programs often involve the alloca-
tact with subordinates. Every action of a GM tion of financial and human resources as well.
is analyzed and interpreted by subordinates; Therefore, in the course of developing and
thus, every interaction with subordinates pro- implementing these specific plans and pro-
vides GMs with an opportunity to exercise grams for the hotel, GMs play the decisional
leadership (Hales and Nightingale, 1986). That work role of resource allocator.
is why outstanding GMs realize they are con- Finally, GMs continue in the leader work
stantly in the limelight throughout the work- role by virtue of, first, continuing relation-
ing day. GMs also exercise leadership by ships with subordinates as an integral compo-
deciding the operational issues on which to nent of the job, and, second, by choosing
concentrate. Subordinates automatically look specific plans and programs to implement. As
for clues regarding what GMs deem impor- leaders, GMs must contend with the challenge
tant; thus, by deciding which operational issues of ensuring that subordinates fully accept the
to focus on, GMs send an unequivocal mes- plans and programs outlined for the hotel and
sage downward in the organization regarding are committed to working toward their suc-
what they consider important. cessful implementation. This requires that
GMs pay careful attention to their work roles
of monitor and disseminator of information. 
MANAGERIAL WORK
ROLES AS  MANAGERIAL WORK
ORGANIZATIONAL ROLES AS BUSINESS
DEVELOPER MAINTAINER
The managerial work roles of GMs as organi- The final job function of business maintainer
zational developers extend beyond the imme- requires the GM to see to the long-run capital

Section 3.2  A Conceptual Framework of the Hotel General Manager’s Job 99

requirements and organizational stability and monitoring and evaluating the effectiveness
vitality of the hotel. In seeking capital and of a front-desk clerk training program—that
planning a strategy for organizational stabil- is, functioning as organizational developer.
ity and vitality, the GM’s work roles of liaison, The GM may also be formulating a long-run
monitor, and disseminator of external and in- plan to purchase an advanced front-office
ternal information upward to corporate exec- computer system—that is, functioning as busi-
utives or owners are critical, as is the work ness maintainer. The actual manner in which
role of allocator of scarce financial resources. effective GMs perform this delicate balancing
The resource allocator role, more often than act is covered later in the text.
not, requires detailed presentation of formal
budget proposals that include careful finan-
cial justification. This is especially true if the  CONCLUSION
GM is proposing a major directional shift in
the service strategy of the hotel. As main- A hotel GM’s job can be better understood
tainer of organizational stability, the GM also by examining the contextual variables that in-
plays the work role of disseminator of impor- fluence and help shape it. A hotel’s context
tant information downward to subordinates. presents GMs with a series of job demands
The GM must act as entrepreneur with re- and relationship issues with which they must
spect to important human resource develop- deal effectively in order to be successful. As
ment plans and programs, and, as with all seen, these job demands and relationship is-
activities, continue as leader in the ongoing sues differ depending on the time frame un-
role of nurturing and developing managerial der consideration. These considerations give
talent. rise to specific job functions that GMs per-
While GMs perform three job functions form through a variety of work roles.
with different time horizons, it is not neces- In the short run, the GM job function was
sarily the case that these job functions are described as that of operational controller.
performed independently of each other. That Here, GMs are involved with the day-to-day
is to say, it is altogether possible for GMs to internal operational control of their business,
perform two or even all three job functions si- requiring intense and frequent downward
multaneously. It is clear from Table 3.3 that verbal communication within the hotel. They
many of the Mintzbergian managerial work must be adept at the managerial work roles of
roles are common to more than one job func- monitoring and disseminating a wide variety
tion. In fact, the work roles of monitor, dis- of internal information, handling nonroutine
seminator, resource allocator, and leader are disturbances, and allocating their own scarce
common to all three, while those of liaison time to important operational issues.
and entrepreneur are common to two of the In the intermediate run, the GM job func-
job functions. Thus, when GMs are engaged tion was described as that of organizational
with short-run operational concerns, they of- developer. Here, GMs face the challenges of
ten do so in the context of longer-run consid- developing subordinates, formulating specific
erations. For example, while responding to a plans and programs to improve their opera-
short-run operational problem of slow guest tional control of the hotel, and fine-tuning the
check-ins—that is, functioning as operational hotel’s service strategy in the context of ex-
controller—a GM may simultaneously be ternal environmental conditions. In addition

100 Chapter 3  General Managers: A View at the Top

to internal downward communication, these and of entrepreneur when seeing to the orga-
challenges require intense lateral communi- nizational stability of the business. All three
cation with both the hotel industry and local job functions require GMs to be leaders, a
community sources. This helps the GM stay work role they play through every contact
abreast of market and environmental trends. with subordinates. Finally, these job functions
The GM also maintains upward communica- need not and often are not performed inde-
tion with corporate superiors and staff spe- pendently of each other.
cialists to ensure their cooperation in the Three important conclusions about the
successful implementation of operational GM’s job can be drawn from this analysis:
plans and programs. Here, GMs’ work roles
1. By their nature, major hotels of today
require them to monitor and disseminate ex-
provide GMs with a variety of challenges
ternal as well as internal information, so they
that require careful attention be paid to
act as liaison between the hotel and the out-
short-run, intermediate-run, and long-run
side world.
time frame issues. Thus, GMs must be
They also may initiate, as entrepreneurs
able to successfully carry out three sepa-
would, plans and programs designed to im-
rate and different job functions. They
prove the hotel’s operational and organiza-
must be effective as operational con-
tional efficiency. This requires the allocation
trollers, organizational developers, and
of their own time, as well as the financial and
business maintainers if they are to enjoy
human resources of the hotel, to these plans
long-term success as effective GMs.
and programs.
In the long run, the GM’s job function 2. To be effective at all three job functions
was described as that of business maintainer. requires that GMs perform a large variety
Here, GMs must ensure the long-term viabil- of managerial work roles. While GMs per-
ity of the hotel through capital expenditure form all ten of Mintzberg’s managerial
decisions that are consistent with the hotel’s work roles, they must be particularly ef-
strategic service vision, and by developing a fective at seven of them to be successful
degree of organizational stability that allows operational controllers, organizational
the hotel to carry out its strategic plan. In- developers, and business maintainers.
tense upward communication to corporate They must develop the wide variety of
superiors, staff specialists, and owners, as well skills necessary to play the work roles of
as lateral communication with a wide variety leader, liaison, monitor, disseminator, dis-
of industry and community contacts, highlight turbance handler, entrepreneur, and re-
the relationship issues of this job function. source allocator.
GMs are required to play the work role of li- 3. The importance of communications in the
aison between the hotel and corporate office hotel GM’s job becomes apparent from
or owners as well as industry and community this analysis. Every job function and every
sources. This involves monitoring the widest managerial work role carries with it a
variety of external and internal information communications requirement. GMs must
and disseminating it laterally, downward, and be adept at gathering, analyzing, and dis-
upward. In addition, GMs play both the work seminating external and internal informa-
roles of resource allocator of capital funds tion, and they must be able to effectively

Section 3.3  Grooming Future Hospitality Leaders: A Competencies Model 101

communicate laterally, downward, and stand the key job demands and relationship
upward. Without good communication issues hotels thrust upon them. They must
skills, GMs cannot possibly be effective in perform three separate job functions that re-
any of their three job functions (Wors- late to different time frames. To do this, they
fold, 1989). must become adept at a number of manage-
rial work roles, depending on the job function
Today’s major hotels are complex busi- they are performing. Finally, hotel GMs must
nesses engaged in a wide variety of activities. become accomplished communicators if they
The demands of managing these businesses are to effectively meet the variety of chal-
are reflected in the complexities of the GM’s lenges they face.
job. To be effective, hotel GMs must under-

3.3 G R O O M I N G F U T U R E H O S P I TA L I T Y
LEADERS: A COMPETENCIES MODEL
Beth G. Chung-Herrera, Cathy A. Enz, and Melenie J. Lankau

The ability to identify the skills and compe- and use of competency models and then de-
tencies required for tomorrow’s industry lead- scribe our study. We examine the critical com-
ers is essential for companies that hope to petencies that we found to be important (and
remain competitive. Some firms, such as Mar- those that, surprisingly, are not as important).
riott International and Choice (Enz and Last, we consider the possible uses for the in-
Siguaw, 2000) have made identifying leader- dustry-wide model that we have developed.
ship competencies a priority. Identifying ap-
propriate competencies helps senior managers
in selecting, developing, and coaching future  COMPETENCY MODELS
leaders, as well as mapping career paths and
planning management succession. In this arti- A competency model is a descriptive tool that
cle we present a leadership-competency identifies the knowledge, skills, abilities, and
model that is industry specific and future behavior needed to perform effectively in an
based. Our goal in creating this model was to organization (Lucia and Lepsinger, 1999).
provide the hospitality industry with a func- Designed to help an organization meet its
tional-competency model that: 1) organiza- strategic objectives through building human-
tions can use to develop their own model for resources capability, competency modeling
leadership development, 2) employees can use has been in existence since the 1970s, starting
to understand the competencies they need for with the first models created by David Mc-
advancement, 3) hospitality schools can use to Clelland (Mirabile, 1997, 73–77). Such models
design curriculum, and 4) students can use to gained popularity in the late 1980s and re-
craft career paths. We first describe the nature main in use today.

102 Chapter 3  General Managers: A View at the Top

Competency models focus on behavior practices are consistent. Specifically, compe-
rather than on personality traits, because per- tency models can be used as a foundation
sonality traits are usually hard to measure ac- from which to establish criteria for a broad
curately (Lucia and Lepsinger, 1999, and array of HR systems (McLagan, 1996, 60–65
ACA’s Competencies Research Team, 1996, and Lucia and Lepsinger, 1999). For instance,
6–21). Expressing desirable traits in behav- listed below are eight HR activities that can
ioral terms is essential for a competency be guided or enhanced with the use of a well-
model to be useful as a human-resources tool, developed competency model.
because the model must not only define the
competencies necessary for effective per- 1. Recruitment and selection. Looking be-
formance but also indicate how to tell when a yond skills to performance dimensions
particular competency is being demonstrated. such as teamwork, competency models
Most competency models express traits and can help to establish what it takes to do
characteristics in behavioral terms on the well on the job. Armed with this informa-
grounds that behavior is the observable man- tion, companies can focus recruitment
ifestation of personality traits and character- dollars on finding the greatest number of
istics. Competencies are deemed critical for prospective employees who have the
inclusion in a model when they distinguish su- right mix of competencies for the job in
perior performers from poor performers. question. The content of appropriate se-
Competency models are less specific than lection instruments (e.g., structured inter-
is the job analysis typically performed for views, role plays) can target the key
specific positions, and models can encompass competencies—and, hence, the whole
a whole family of jobs. Choice Hotels Inter- package of needed skills and abilities. Be-
national, for example, developed competency yond their usefulness in improving selec-
models for each of the top four levels of its or- tion tools, competency models also
ganization (i.e., senior vice president, vice provide candidates with a clear and real-
president, senior director, and director). In so istic picture of expected behavior.
doing, the company found that the competen- 2. Training and development. Assessing
cies for success of a senior vice president were gaps between existing employee skills
similar to those needed for the other three and those identified by a competency
positions. model can be extremely useful in
devising a long-term strategic plan for
leadership training and development.
Identification of the skills needed to per- 
USING COMPETENCY form effectively makes it easier to ensure
MODELS that the design and delivery of training
are aligned with the organization’s objec-
Competency models provide a common lan- tives. When a competency model is used
guage for discussing capabilities and perfor- as the foundation for training objectives,
mance. The development of a competency individual leadership gaps can be as-
model can help provide guidance for a host of sessed and a training plan devised to ad-
different HR practices and ensure that those dress deficiencies.

Section 3.3  Grooming Future Hospitality Leaders: A Competencies Model 103

3. Performance appraisals. Performance- 7. Succession planning. Competency models
management systems can be enhanced by can be used to identify possible successors
a competency model that provides a for critical jobs by clarifying the require-
shared set of expectations regarding what ments for the job and providing a method
is important and what will be monitored for assessing a particular candidate’s
and measured. Competency models help readiness. Without a clear understanding
managers to focus performance-appraisal of the competencies needed by future
discussions on critical aspects of behavior, leaders, it is difficult for a firm to measure
thus providing a strategic tool for consis- its “bench strength”—that is, to deter-
tent and meaningful evaluation. mine whether the organization has peo-
4. Coaching, counseling, and mentoring. ple with those capabilities and, if it does,
Competency models are often used as the who they are.
basis for 360-degree feedback, in which a 8. Change management. Organizations can
manager receives performance informa- work toward an uncertain future by creat-
tion from all relevant sources (including ing models that are based on competen-
supervisor, subordinates, self, peers, and cies that may be necessary for future
customers, if applicable). Coaches and ad- leaders, as well as competencies needed
visers can use the information so gathered for current operations.
to guide the employee in designing a de-
velopment plan and making critical-skill Competency models confer several ad-
improvements. The clarity and specificity vantages on a company. First, a competency
of competency models enable coaches model is useful for building an integrated
and mentors to reinforce desired behav- framework for developing a company’s
ior and tie performance-management sys- human-resources system. Used consistently,
tems to necessary competencies. such a model should lead to improved and
5. Reward systems. A tremendous percent- consistent performance standards. More im-
age of a hospitality organization’s operat- portant, the model can be a critical guide dur-
ing expenses is devoted to employee ing periods of instability and change.
compensation. To attract, retain, and mo- Moreover, making HR decisions on the basis
tivate employees, reward systems must be of carefully developed competency models
equitable and linked to desired behavior. reduces legal challenges to those decisions.
Competency models can be extremely (Note: Include specific competencies in the
useful for defining the behavior that will job description to reduce legal liability, espe-
be rewarded. cially if the competencies will be used for per-
6. Career development. For employees who formance appraisals.) Finally, well-developed
aspire to reach the next level on a career competency models enhance a company’s
path, a competency model serves as a ability to communicate with its employees re-
map. Competency models make employ- garding the behavior connected with success,
ees aware of the behavior and skills thereby increasing the firm’s ability to
needed to advance and achieve success, achieve its business objectives (ACA’s Com-
allowing them to prepare accordingly. petencies Research Team, 1996).

and competing own failures and • Works • Treats people with priorities. an industry-wide model helps to paint a compre- INDUSTRY hensive picture of the critical skills needed by With point number eight in mind. vise and implement their recruitment. absence of an industry-focused model that Looking ahead. dustry executives anticipated would be ity leadership. • Views problems as implications prior • Pursues continual opportunities and to taking action. and development systems. managers in hotel organizations as they de- tency model for the lodging industry.4 Self-Management: Dimensions of a Competency Factor Factor Self-Management Dimensions Ethics and Time Self. We focused our compe- works across many organizations. selec- sider this endeavor to be important given the tion. • Treats people fairly. (Our re. tency model on managerial behavior that in- search found no current models for hospital. . experience. thereby assisting senior to devise a future-oriented leadership-compe. consistency • Spends time on the • Adjusts behavior in • Works effectively between words and most important response to in ambiguous actions. Flexibility and Integrity Management Development Adaptability Characteristics • Acts in an ethical • Effectively handles • Deals • Adapts to changing manner. issues. not just the feedback and situations. learning and self. mistakes as • Protects development. confidential • Demonstrates information. Furthermore.) Having an industry-wide needed ten years from now. setbacks. constructively respect. from others. pressure. We wanted a model is important because it can inform stu. multiple demands constructively with circumstances. awareness of own strengths and weaknesses. • Manages time to • Seeks feedback under stress and • Displays ensure productivity.104 Chapter 3  General Managers: A View at the Top dents and employees alike about the expec-  LEADER COMPETENCIES tations for future leaders as identified by FOR THE LODGING senior-level managers. progress. model that could be used as a prototype to Table 3. We con. • Considers ethical most urgent ones. we sought the entire industry.

leadership. dimensions. present. and teamwork orientation. fostering motivation. tive-level employees are notoriously low. and 99 specific behavioral com- tify all necessary competencies (given that petencies.3  Grooming Future Hospitality Leaders: A Competencies Model 105 guide people’s aspirations in the coming study. We used the feedback. We listed the 99 hospitality competencies Ledford. Response rates for execu- tencies that they felt were becoming increas. The factors and dimensions were one cannot see the future). (Note: Firms in. In our pilot to CEO or chair of international hotel chains survey. 1993). Each of those factors petencies is that they may be unable or un. Evarts. see tation. and Son- Based on the feedback from the pilot nenfeld. Blancero. However. derived from the literature on competency cluding PDI. critical thinking. of each of the 99 competencies or skills for a tency model by means of the customized senior-level manager ten years from now (see generic model method (Dubois. Participants’ positions ranged from director grams at Cornell University. we re. yielding a response rate of 18.5) in a survey that was faxed world- and Dyer. for this population (Agle. studies (Mirabile. and corporations. The eight overarching factors are linkage systems method. many thoughtful exec- mensions: developing others. comprised up to six dimensions that captured various aspects of that factor. Boroski. we modified the competency model to years and to create future leaders. Zingheim. 1996. We the accompanying list). we con- wide to 735 senior-level industry executives at structed a provisional behavioral-competency various hotel companies. respondents could add other compe.6 percent. fax. havioral items and dimensions for the self- Using a number of different competency management factor. asking participants communication.4 shows the be- as increasingly important. developing the compe. 1988. highlighting behavior that they see As another example. we arrived at a final competency approach when building competency models. is composed of the following six di- the present. Mitchell. and Shuster. Using this preliminary model. industry knowledge. 1996) as a starting point. and ingly important and eliminate those items that our response rate for this sample was typical they deemed inappropriate. implemen- to forecast future important behaviors. 1999). ipated in senior-level executive-education pro. 28 although the resulting model may not iden. re- fined the components through hospitality spondents were asked to rate the importance managers’ feedback. DDI. for willing to define the future differently from example. Using a five-point model that captured the most important di- mensions of leaders’ behavior across several Likert-type scale ranging from 1 (not at all industries. strategic positioning. interpersonal Linkage. Leadership. model consisting of 8 overarching factors. important) to 5 (extremely important). embracing utives are able to envision and plan for a fu- change. and asking current leaders to project future com. self-management. lead- ture that is not simply a reflection of the ership versatility. . fortitude.) The essential limitation in skills. A total of 137 industry collected managers’ comments by surveying leaders responded either online or via return individuals from around the globe who partic. In this leaders to focus on the future is a common fashion. 1997. (Table 3. and Hay Management models and through hospitality managers’ employ forecasting techniques. 1985. Table 3. Section 3. Asking reflect hospitality-specific behavior.

(40) Understands and harnesses individual differences (16) Acts in an ethical manner. others. owners. (14) Identifies measurable action steps that support the (39) Works to establish strong relationships with hotel’s strategy and mission. progress. (21) Translates business strategies into clear objectives (46) Considers alternatives before making decisions. (52) Spends time on the most important issues. (45) Models the changes expected of others. issues. (12) Integrates planning efforts across work groups or (37) Interacts with people in a direct and open manner. making decisions. (33) Provides challenging assignments to facilitate (8) Works toward win-win solutions with others development. (15) Works constructively under stress and pressure. (54) Considers pros and cons of proposed solutions to (28) Stays informed about industry practices and new problems. (17) Presents ideas in a convincing manner.106 Chapter 3  General Managers: A View at the Top Table 3. (7) Seeks feedback from others. instead of forcing others to accept change. staff members. (32) Selects leadership style most appropriate for the (6) Prepares people to understand changes. and responsibilities. (43) Gives specific. (20) Considers a broad range of factors (internal. (35) Expresses confidence in people’s competence to do (10) Provides employees access to information. . functional units. and other parties. (34) Applies cross-functional knowledge to understand (9) Steers conflicts away from personalities and toward and solve problems. whenever possible. understanding. hotel. approaches and combines them in creative (49) Encourages employees to use their initiative to ways. to create a competitive advantage. (47) Listens to people without interrupting. (38) Views problems as opportunities and mistakes as (13) Displays consistency between words and actions. (30) Understands the agendas and perspectives of (3) Manages time to ensure productivity. roles. and constructive feedback. situation. managers. (22) Brings together different perspectives and (48) Protects confidential information. not just (26) Works to understand why others resist change the most urgent. business. and tactics. (53) Commits organizational resources for community (27) Accurately identifies strengths and weaknesses in events. (19) Treats people with respect. their jobs. (11) Takes a stand when resolving important issues. and trends) when solving problems and experience. (4) Monitors progress of others and redirects efforts (31) Clarifies expectations to staff members about when necessary. (41) Develops action plans to meet customer needs. (2) Adapts to changing circumstances. (25) Challenges others to make tough choices. (23) Summarizes and clarifies what people say to ensure (50) Takes calculated risks when appropriate. (36) Addresses and works through conflict. (44) Adjusts behavior in response to feedback and external. timely. (51) Builds networks with people inside and outside the (24) Coaches others in skill development. remedy problems when they first occur. (5) Works effectively in ambiguous situations.5 99 Lodging Competencies (1) Anticipates obstacles and develops contingency (29) Examines and monitors trends in the hotel plans. developments. owners. assignments. procedures. (18) Expresses disagreement in a tactful and sensitive (42) Reduces redundancies in processes and manner.

(75) Keeps others updated with information. . Section 3. (63) Adjusts leadership approach to fit other (87) Pursues continual learning and self-development. (62) Gives others the authority necessary to accomplish (86) Allows others to lead under the appropriate their objectives. (96) Inspires and motivates others. (67) Identifies and defines problems. contrary ones. organizations. priorities. (81) Understands owners’ and stakeholders’ values and (58) Deals constructively with own failures and how they perceive issues. (88) Promotes quality initiatives. (93) Actively and frequently listens directly to (70) Confronts problems early before they become customers.5 (Continued ) (55) Develops new systems or processes for increased (78) Champions new ideas and initiatives. (95) Promotes teamwork among groups. (77) Considers the effects of decisions on community well-being. individuals. (64) Involves others in critical decisions that affect (89) Deliberately allows direct reports to use their own them. (84) Promotes respect and appreciation for diversity (61) Defines and sets up quality standards for and individual differences.3  Grooming Future Hospitality Leaders: A Competencies Model 107 Table 3. (99) Builds partnerships and alliances with community (76) Considers customer needs when making decisions. (82) Influences and shapes owners’ and stakeholders’ (59) Handles multiple demands and competing decisions. (71) Works as a member of a team. by others. even distracted by unnecessary details. (90) Demonstrates awareness of own strengths and (66) Delegates enough of own work to others. action. with limited resources. (65) Understands complex concepts and relationships. employees. (85) Treats people fairly. (74) Creates needed systems and procedures to support (98) Speaks clearly and articulately in a variety of changes. (91) Understands organizational strengths and (68) Determines which of many problems may become weaknesses. (80) Employs a team approach to solve problems when (57) Listens carefully to input and concerns expressed appropriate. (94) Sees how things fit in the big picture. situations. efficiency. (92) Writes in an effective manner. (83) Recognizes and seizes strategic opportunities in the (60) Knows the strengths and weaknesses of environment. mistakes. unmanageable. methods for completing tasks. circumstances. weaknesses. crises. (79) Focuses on important information without being (56) Encourages others to express their views. discourages us- (72) Considers ethical implications prior to taking versus-them thinking. (69) Defines priorities for the staff. (73) Gets others interested and involved in the change (97) Makes sound decisions under time pressure and process. competitors.

namely: (1) ethics and integrity. such as Implementation.” and tremely important” by senior managers. Leaders of the future will need to possess ing action” (see Table 3. This factor consists of four behavioral di.” This competency factor. This strategic positioning.6 summarizes sions: (1) awareness of customer needs. while im- the self-management factor are “Works con. including owners. in their commitment to both quality and the sion of self-management was rated signifi. In addi- agers outside the lodging industry. petency research reports by consulting firms and enabling others will be essential skills for such as Personnel Decisions International managers hoping to reach senior leadership (www. critical thinking. employees. The overriding im.” “Pro- adaptability.) The Industry knowledge. Look. factor clearly captures the hospitality indus- ior of acting ethically or with integrity was the try’s service orientation. communication skills were also deemed “ex- sistency between words and actions.” and “Considers ing at the behavioral dimensions within each customer needs when making decisions. (2) the ratings.ccl. “Considers ethical implications prior to tak.com) and Center for positions. tion.) The self-management factor commitment to quality. specific behavioral competencies. (See com. a strategic orientation and approach to portance of ethical behavior is consistent with decision-making that permits them to both previous competency models devised by man. Competency in self-management is the over.108 Chapter 3  General Managers: A View at the Top urgent. and (4) concern for community. and The ethics-integrity dimension contains six customers. self-management skills en-  KEY COMPETENCIES compass actions related to the personal char- IDENTIFIED acteristics of the leader and how she or he handles himself or herself. Creative Leadership (www.” and “Spends time on industry knowledge seems to suggest that the the most important issues. (3) managing stake- achieved a mean importance score of 4.” “Displays con. we found that the behav. implementation skill.” Overall.personaldecisions. amples of behaviors that fall under these mensions. listening. and (4) self-development. Post-hoc Scheffe tests from an analysis of lodging-industry leaders need to be vigilant variance revealed that this behavioral dimen. Competency in strategic positioning was arching factor that was rated highest by our the overarching factor considered to be sec- respondents.org). communicating persuasively. portant. dimensions include “Influences and shapes (2) time management. not just the most importance for leaders of industry-specific . leadership. needs of a variety of different stakeholders. followed by knowledge of ond in importance for future leaders. and “Treats people with respect. cantly higher than the other three dimensions. plan and redesign their organizations. (Table 3. and in- other specific competencies that fall under terpersonal skill were factors that. The relatively low score for feedback from others. factor comprises the following four dimen- and critical thinking. The senior managers most important to the responding senior lead. Wall Street.” “Seeks our respondents.4). were ranked lower than the others by structively under stress and pressure. Ex- of 5. motes quality initiatives. whom we surveyed suggested that future ers. (3) flexibility and owners’ and stakeholders’ decisions.32 out holders.

15 Reengineering 4.05).24d Decision making 4.32 Ethics and integrity 4. “Teamwork orientation” scored significantly higher than did “Developing others” ( p  .02 Embracing change 3.17 Risk taking and innovation 4. “Ethics and integrity” scored significantly higher than the other three dimensions in this factor ( p  .07 Embracing diversity 4.28 Flexibility and adaptability 4.02 Critical thinking 4.05).05).14 Active listening 4.17 Awareness of customer needs 4.23c Directing others 4.12 Strategic positioning 4.05). Section 3.58a Time management 4.01).19 Fortitude 4.25f Fostering motivation 4.09 Teamwork orientation 4.6 Leadership Competency Model for the Lodging Industry Factor Mean Dimension Mean Self-management 4.16 Planning 4.15 Strategic orientation 4. “Embracing change” ( p  .3  Grooming Future Hospitality Leaders: A Competencies Model 109 Table 3.01 Leadership 4.26 Managing stakeholders 4.98 Leadership versatility 3. f. b. . “Planning” scored significantly higher than “Re-engineering” ( p  . “Building networks” is significantly higher than “Embracing diversity” ( p  .01).06 Written communication 4.18 Analysis 4.09 Business and industry expertise 4.03 Communication 4.12 Speaking with impact 4. “Strategic orientation” scored significantly higher than “Risk taking and innovation” ( p  .21 Concern for community 3.01). d.14 Developing others 4.20e Managing conflict 4. e.67b Implementation 4.97 Industry knowledge 4.01).09 Building networks 4.27 Facilitating open communication 4. c.39 Commitment to quality 4.06 Interpersonal 4. and “Leadership versatility” ( p  . “Concern for community” scored significantly lower than the other three dimensions in this factor ( p  .09 a.22 Self-development 4.

” and “Builds partner. Although this dimension is not typ. as well as after each subsequent organizational resources for community semester. a Industry-specific competency models can concern for and relationship with the local also help students seek out employment and community in which the company operates career tracks that will give them ample op- does not seem to be a core competency portunity to develop needed skills. An increas- versity and change. One  USING INDUSTRY-WIDE reason for this is that industry expertise can be acquired by an adept leader. . If they have weaknesses in any of the events. On the presented here provides a comprehensive other hand. the students must make community well-being. might be important to hospitality leaders be.” Contrary to our thinking. and leadership versatility ing number of university programs are focus- were viewed as some of the least essential ing on competency building in an effort to skills for the future. example. serves as both a roadmap and a prototype for ment to quality. competencies that are deemed necessary for mensions.110 Chapter 3  General Managers: A View at the Top expertise is decreasing as time goes on. tency development is further supported by tions. the master of management in hospi- tioning. graduation. Scheffe post-hoc tests revealed that tality (MMH) program at Cornell University this dimension was rated significantly lower assesses entering students against three core than the other three strategic-positioning di. the results special modules offered by faculty members to revealed that those three were among the enhance key skill areas. When compared to other activities. teamwork and group-process skills. Students are evaluated through an assessment cause of their extensive connections with lo. This are given feedback at the end of the assess- dimension consisted of three items: “Commits ment center. commit.” “Considers the impact of decisions on three competencies. These competencies are leader- ically included in competency-modeling ship skills. We cating future generations of leaders by guiding found it particularly interesting that the di. plans to improve their skills. embracing di. meet the industry’s future needs. center as they enter the MMH program and cal community events and activities. A good competency model management. time ture lodging firms. For larly low-rated dimension of strategic posi. speaking with impact. competencies that appear to be framework to inform future managers about the likely core attributes of future leaders are what will be needed or expected to lead fu- ethics. university faculties in designing curricula to mensions of developing others. awareness of customer needs. The model needed for future hospitality leaders. survey. achieving success. and team orientation. while the ca. Interpersonal and leadership skills resources system. research. we (incorrectly) thought that it and written and oral communication skills. COMPETENCY MODELS pacity for flexibility in a changing business en- vironment can be hard to learn and often is We believe that competency models can be inherent in an individual’s personality and important in building an effective human- skill set. prepare students for a specific industry (see Concern for community was a particu. They can also help in edu- also scored lower than did other factors. Students’ compe- ships and alliances with community organiza.These modules contain lowest-rated of all 99 items presented on the both lecture and experiential components. Journal of Management Education 25(2)).

That other stuff is leader- these tasks are completed is typically inflexi. Marriott employs a system-wide find this model useful as a general guide for leadership-development initiative. who have written books on this subject. What I can share with you is what the ties successfully. ship. Choice Hotels International now are “stretch” assignments for high-potential uses its competency database to perform an. managers are responsible for identifying po- Last. swers. Benchstrength Management System. System provides Marriott with a consistent ap- agers’ leadership capability.4  As I See It: What I Do 111 Employees in lodging organizations may planning. it’s clear that there are the tasks that I must complete. These processes sure is good and differentiates it from the oth- are typically mandated by operational need. so I likely that one’s professional success will certainly don’t profess to have any of the an- come from one’s ability to perform these du.4 A S I S E E I T : W H AT I D O Emilio Fabico In reflecting upon what it is I do as a manager  THE OTHER STUFF in the hospitality industry. it’s the fluffy stuff inside that makes it we’re responsible for completing and that are unique. that geted development plans are created to assist firm can use the model in a variety of ways. managers. That’s what I spend fiduciary responsibility. Throughout our ca. zigs and zags of my career path have taught me. a competency model can be used by ership capacity. It’s un. Section 3. most of my time focusing on and constantly ment. 3. The competencies proach to evaluating its leadership potential in Choice’s model are the basis for the com. The manner in which virtually all of working to improve. We’re not sure exactly what it is. there are always plenty of duties that bar. and succession capabilities that are key to future success. Using the tools and measure- an individual to design and plan her or his ments from this system. For senior managers in filling critical positions that example. ers. called the self-development. chocolaty surface of a 3 Muske- there is all the other stuff.There’s a world of people smarter than me ble and requires little or no creativity. In the absence of an insti. That’s the other stuff. Once an organization has needed to carry the company forward. but it important to our business. teers bar is not unlike that of any other candy reers. . promotion. Tar- tailored the model to its specific needs. Marriott’s senior own career choices. individual lodging organizations can tential leaders and ensuring that those individ- use this industry-wide model to build their uals develop the skills and competencies own specific model. which is tutional program to help develop a promising used by current senior managers to build lead- manager. The Benchstrength Management nual readiness assessments to determine man. and ensures that the company focuses on core pany’s selection. or regulatory require. and then The swirled.

so needs. this interaction and away-from-home experience. As a leader. It’s one’s career. it’s DO IT possible to be a great leader and still have bal- ance. It’s about wanting to be and working toward being the best. Being skilled at listening is must respect that our guests have choices just as important as leading. They have decided swer without knowing the questions? In a to entrust us with their money. tive rather than reactive. I to each of them. In more senior leadership roles. varying opinions. I must not micromanage them. Here’s the part where I  IF IT WEREN’T HARD. and different spect that people enjoyed feeling fulfilled. and 24/7 industry like ours. I must respect the fact that I continuing to improvement? What might be work for a public company and must ensure around the corner that we’re not aware of that growth and the success of the business re- yet? What’s important to our guests? What main at the forefront of the decisions I make can we do. the answer generally cen- age of the Blackberry. How can one an. As I walk the  SIX DEGREES OF resort and interact with our employees and guests. This is important not only to the leader. as they often Leadership is about leading. We have an ob- these questions never stop. I what should always be factored into the an. make a pitch for balance. Especially in the their employment. influence. It’s being proac. too. I must lead knowing that all of us I went our separate ways until I was back for want to be treated fairly and respectfully. the hotel and ter time. It’s being out ahead This should remain a priority throughout of challenges. ligation to provide them with an experience Early in my career. a clear line divided work time and memory and influence them to return time af- off time. Without question. but also to those he or she leads. I must work to in- can we meet our employees’ developmental spire. not maintainership. for our guests and employees. as opposed to chasing them. time. feel compelled to follow the leader’s example. and support them toward needs? Woven into all of these questions and their goals. that line can com. That. my next shift. .112 Chapter 3  General Managers: A View at the Top pletely disappear. After my ten-hour day. What are they proud of that they should be recognized I have found that many of the successes or failures I face every day can be traced to one for? What barriers are preventing them from source: respect. must also strive to identify their accomplish- swers are people—individuals with diverse ments and celebrate their successes. when selecting their hotel. I must respect the tal- make us better than our competition? How ents of my direct reports. ters on lack of respect or being valued. It’s called leadership. when I was a shift that will leave them with a lasting positive manager. to and the actions I take. I attempt to be aware of the challenges SEPARATION that each of the operations is facing. is a valu- EVERYONE WOULD able leadership skill. When employees are asked why they leave this line is no longer as clear. I must re- backgrounds. about truly being engaged in and passionate about your work. I must be able to recognize I must work to provide the tools and environ- those differences and respond appropriately ment that will allow them to be successful.

The directors of sales. timely. but someone else now has it). my role requires me to have it. I. I can recall in school knowing exactly what 3. I was thinking in terms of what I constructive feedback to my direct reports could do to get more of it. CHA I often have heard that professionals in the Every morning at 8:30 we have our daily hotel business enjoy it because every day is operations meeting. Although courage is not always easy to where it is. enjoy this business for operations. ascertaining which guests are new to the . the same reason. never planned to learn. I find. and property operations are My day begins with a large cup of coffee. Don’t be speak up when what I have to say may not be afraid of the zigzagging career path.5 A D AY I N T H E L I F E O F A H I LT O N HOTEL GENERAL MANAGER Robert O. if the calculated out. we have the capability of functions. by our top lieutenants who run the day-to-day derstatement. MUSKRAT GUARD HIS As the years passed. I must be true to myself. I found myself sep- arating from my beliefs. there. Balmer. and like a drug. housekeeping. too. I had lost sight of and my peers. At I like to arrive at work early so I can walk the this meeting. I must have the courage to how fun and exciting our industry is. And that’s as I see it: what I do. front office.5  A Day in the Life of a Hilton Hotel General Manager 113 my professional values were and never doubt-  “WHAT MAKES THE ing that I would always remain true to them. While I find this to be a huge un. I must have that it often leads where you never planned to the courage to take risks.  JUST SAY NO On a personal level. After losing a job a Well said by the Wizard of Oz’s Cowardly few years ago (I didn’t truly lose it. I know Lion. along with my executive assistant. the titles got fancier and MUSK? COURAGE!” the paychecks got bigger. I found popular or may cause others pain. go and teaches you what you could have come will benefit our operation. we cover in detail our daily ar- property and greet the early-morning team rivals. I must came to the realization that my paycheck was have the courage to give honest. With Hilton Hotel Corporation’s ad- members and check on the daily banquet vanced technology. Section 3. This meeting is attended different.

increase customer loyalty. local dig. It cuss our banquet events. same as being the CEO of a small company. nitaries. arriving VIPs. and team members. was filming a movie. my day would be much cus. Before I knew it. exciting. . Success ing. It is a great way to jump-start the morn. this job would not be different every After lunch. didn’t want the VPs to be alarmed and leave tions coming from any direction. As I was returning to my meeting. he ran through the hotel waving a our director of sales and marketing and direc. vice presidents. or of course team members in I often giggle at the old hotel industry our four-star team dining room! Increasingly. phrase. The safety of our pacity. them. I was interrupted by our di- By this time.114 Chapter 3  General Managers: A View at the Top hotel. Revenue is our hotel to witness the guest face down on the lifeblood and of course cures most woes! ground being handcuffed while the authori- Between meetings with department or di. day and are sent off with their marching or. The team members briefly describe their breeds success. “If it weren’t for those darn guests the job of general manager has an outward fo. “Welcome calcitrant team member. We also know spend a great deal of the afternoon reviewing if guests have special preferences or requests. I perienced problems in the past. and is essential to have a strong executive com- any and all comment cards from the night mittee so each department can run indepen- prior. my email box is reaching ca. guest approached me and asked if someone sources needs to brief me on a new hire or re. which are dence. if it weren’t for surrounding community. guests. think this is what keeps each day fresh and I usually have lunch with clients. rector of safety and security. I’ve got a corporate report new to any Hilton brand. I responded. The director of human re. I team members and guests was in jeopardy. Funny things happen every day. forecasts and working on and updating action Our focus is to exceed guest expectations and plans. and which have ex. I Mayor’s State of the City luncheon. The authorities had arrived at the hotel re- tize the messages. I vision heads. due and phone calls to make and return. The majority of my day is spent at various When the authorities attempted to apprehend times strategizing and communicating with the guest. projecting the image of the hotel to the more productive!” However. Typically. garding a guest involved with drug trafficking. I arrived at the front entrance of the tor of revenue management. ties surrounded him with their guns drawn. I do enjoy helping every team member during a staff meeting attended by corporate be their best. One day ders. a ownership group. dently. Running a large hotel is essentially the During this morning briefing. wonder? I attempt to sift through and priori. The director the meeting room. This is the key to success. I can expect numerous interrup. weapon. What did we ever do before email. we also dis. which are returning guests and how emails and to catch up on daily correspon- many times they have been here.” There are days I feel the banquet event order for the upcoming like the ringmaster of a three-ring circus. the guest of finance requests assistance in reviewing a had been arrested and business was back to report that must be submitted quickly to our usual. The executive chef to the media capital of the world! I’m glad and director of catering would like to review you enjoyed the show. it is time to check more day.

We will treat all of our guests the next level up. Sounds simple right? Here is where your 4. honesty. Utilize these skills by communicating your 3. and concern. This were your peers yesterday. or Give direction. statement: “To be the finest family-owned sires of the ownership. and we are all go- dent or a corporation. Whether you work for an indepen. port the mission statement? Get the team in- mance are most important to the company? volved. someone is going to ing to be friends in a world that’s the way we want answers. How are you going to sup- a happy medium? What elements of perfor. the title of general create an atmosphere that will support your manager. it is all yours now. communications. a good starting point. A mission statement is for this goal. Treat each guest and employee as a mem- goals and ask your team to outline their goals ber of our family. This is your opportunity to lead the Inn. destination resort. who each love specific talents and knowledge. The way Results are what your game plan is built the world is supposed to be. about bottom-line profits. How are you is what you have worked for your entire ca. Remember.” The mood is set. five-star services. the outline for show how we want to operate and what our your future success. the golden carrot. and each other as lifetime friends. with respect. you are now the general est standards through continuous training manager with a supporting cast of managers and development. Maintain a professional staff at the high- sults. appreciation. . Total respon. document them. the management com. You are now setting the tone elegance and service of unmatched warmth for the operation and providing the results to and sincerity. Ask these questions and you are well on your We have developed a set of core values to way to developing your goals. Anticipate and exceed guest expectations are guest and employee satisfaction. going to set the tone for your team and reer. you will be amazed at how easy this is. and begin measuring your results.6 A D AY I N T H E G E N E R A L MANAGER’S LIFE Bob Peckenpaugh You’ve made it! It is officially your turn. roadmap looks like: Set your goals. What do they expect? Is it all want it to be. exemplifying comfortable pany. the expectation is laid out. You are now leading those who being. great with genuine sincerity.6  A Day in the General Manager’s Life 115 3. around. Section 3. the one we are creating. Obvious categories 1. to support what you have set forth. and positive financial re- 2. So what is so different? expectations? No matter what position(s) prepared you Create the image. we developed the following mission senior management team in achieving the de. What were the expecta- sibility for the profit and loss statement and tions given to you? How do you want the the success of the entire operation is in your team to function? At the Rancho Bernardo hands. Protect and further our financial well- day begins. or both.

We create the atmosphere you want by following do this through a set of service expectations: your example. Ensure that guests are escorted to their guests to intrigue. the word out. staff meetings for man- owns it. resolve the issue. Seek to identify the guest’s name and use notes from the individuals involved. rector of human resources is on the line be- and ceasing personal conversations when cause a manager just overstepped his bounds a guest approaches. Always use appropriate professional lan- ence. departmental meetings for more inti- graciously. 8. It is like a campaign. dent. and how do you expect your staff to treat the guests? Each time you come on Remember. Ensure that uniforms and personal ap- 7. owns it. new managers to greeting within 5 feet. and follow up mate settings. you set the tone.” Ask permission before putting cally. Acknowledge every guest within 10 feet tion is and hold everyone equally accountable. part of the uniform. calls. and ethi. How will you conduct yourself with guage. it’s the golf course superinten- or on the phone. The di- opening doors. Anyone who receives a guest problem for all staff members. legally. Always acknowledge guest needs first by your guests of the chiller going down. and prevent damage. terruptions are commonplace. Pick up litter. In- destination. this is [employee property flood the course and the neighbors’ . repetition. your staff. name]. Get up with the guest. forecasting to accomplish. Answer phones within three rings. negotiate with. Show genuine concern. and duty. Always be the first guide. Don’t underestimate the value 1. reposi- tion furniture. ness of the facility. Take responsibility for order and cleanli- on and off property. infuse it into every communication: general meetings 2. and follow Now take your creation on the road. with eye contact. Provide a positive and friendly will have contracts to sign. Always offer voicemail as an option. 9. ment. 4. and controls to monitor. and they performance everyone is expected to give. saying watching the river that runs through your “[Department name]. offering the right of way. apologize agers. and daily line-up meetings for with the guest. whether in person phone rings. 8. you are stepping on stage. Anyone who receives a guest request of each team member watching your actions. Communicate positively about the resort. with an employee. good posture. and a In a typical day as a general manager you smile. Make it known what the expecta- 3. senior managers to focus. Avoid using slang and hotel jargon.116 Chapter 3  General Managers: A View at the Top 5. The chief engi- neer may call you to discuss the effects on 5. vendors to person to speak. Nametags are aesthetic image. who is on the twelfth hole in the rain 7. Continuously strive for product improve. Describe the they need it daily. As you are comparing 6. the team needs direction. your cell it at every opportunity. Accommodate all special needs in Treat others as you want to be treated! a positive and timely fashion. Perform all duties safely. the caller on hold and announce transfer 6. Set the stage. Now focus on the experi- 10. Respect and care for the property and its pearance are immaculate.

Keep focused and works in the movies. The Its ultimate success will be your success. share of accolades in the places your target your influence and support for right candi- guests will see them. Keep up with the economic indicators in your Educate yourself.6  A Day in the General Manager’s Life 117 houses. and involved. will develop a reputation that will be your rect mail. Section 3. Employ a public rela. di. Be available. The general man. The team must be ener. just trans- talent that can help free your time. Let your pas. nity involvement benefit your hotel or com- sion show through. Remember your vision. and Internet options. not your brawn. Will commu- mean free press for your hotel. site inspection can make a profound differ. out the community in everything you do at ager’s influence during a decision-maker’s your hotel. Now it is lunchtime. As you can see. ence. tone for many decisions that will affect the tions company to ensure you get your fair hospitality business in the next four years. Take pride late the skills you learned from guest interac- in helping others learn to handle situations so tions. or you can find and nurture prepare an answer. Remember that you represent your hotel. your sell the idea to community planning leaders to day can consume you. You must be involved with Is your room product better than the compe. pany? The current mayoral race may set the Get the word out. and rection and vision as much as you do. Visitor Bureau. Special assignments can be rewarding. gized to sell. Surround ensure the permitting process is successful. Seek the latest trends in food and drink. have fun. Use your marketing date may be needed. You can spend lenged in a town hall forum. geologists. Lodging Association or the Convention and sues. Keep up with community is. yourself with the best talent possible and set Your speaking skills may be further chal- the level of expectation high. They need to believe in your di- nate the insurance adjusters. Now you have to find time to coordi. Read trade journals region. You will be setting a tone through- available to the sales team. with tough ques- the day involving yourself with every detail tions coming directly at you with no time to you can dig up. Make yourself signature. The property you run team to research advertising opportunities. and potential problem solving You may be called on to determine the direc- for the future. set. flow patterns. you have time to focus the direction you have Community involvement can be vital. Have you tion of the development of the property. politicians when transient occupancy taxes tition? Being on the front end of a trend could are a topic of city fund-raising. You may be called on to brain. You have earned it! . You can do it. canal clearing teams to determine liabilities. Don’t let it. Serve on a board for the Hotel and and newspapers. Your kept your head about you? Are you following analytical skills may be tested in explaining to the philosophies noted above? the ownership how a new ballroom will make General management is about using your them more money. active. so phrase “Build it and they will come” only don’t get too distracted.

Unwilling to risk losing ing to not move. Mitchell. 1996. These Suites. Johnson was contem. departments.R.K. with all of the corporate offi. tions the GMs get. organization. Inc. at the same time mak. but some Bay area were the most recent acquisitions. as John- plating how to help these men and women son prefers to run a fairly flat corporate manage their careers. . Similar company’s stock. Sunset Hotels and Suites is a growing housekeeping management. grumbled about the valuable stock op- and although fewer in number than the south. all department managers from Sunset to be cers and hotel GMs holding shares of the his guests for a two-day conference. these young managers. R E F E R E N C E S ACA’s Competencies Research Team. and five in • They were not particularly unhappy with the Seattle-Portland region. Role of Competencies in an Integrated HR 1999. B. in their northern California were unhappy with their thirties and forties. and front of- West Coast chain with nine properties in fice) without clear prospects for cross- southern California. “The Agle. “Who Matters to CEOs? An Investiga- Strategy. largely based on the ern California region. Sunset is a managers at the Mark Hopkins Hotel in San privately owned company.. tion of Stakeholder Attributes and Salience.” ACA Journal Summer:6–21. They also included the youngest management staff.118 Chapter 3  General Managers: A View at the Top 3. Mr.7 M I N I C A S E : S U N S E T H O T E L S AND SUITES Shortly before the end of 2001. Andre talked with their GMs and human resource Johnson. successful. R. (convention services. President of Sunset Hotels and officers about their frustrations.A. Sonnenfeld. ing staying with Sunset attractive and • Several felt locked into narrow specialties challenging. Bay area (northern California). The hotels in the salaries and the usual benefits. • There are no regional managers. heard through the company included: grapevine that several department and opera- tional managers at the company’s hotels in • Many of the GMs were young. many of who were retained from the Johnson called a meeting of the Bay area staffs of the acquired hotels. boasted 20 percent performance of the operating managers’ more rooms and were more recently built. catering sales. six in the San Francisco training to add breadth to their career. and J. meetings were announced and planned in the Several of the unhappy managers had Pacific Northwest and southern California. and tend- promotion prospects.. operated as an Francisco (not a Sunset property) and invited S-corporation.

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1991. and Melenie J. of Cornell Hotel and Restaurant Administra- tion Quarterly. Ju-Soon Lee. Nebel. Managing Hotels Effectively: 36(3):30–35.C.A. and B. 1995.120 Chapter 3  General Managers: A View at the Top S U G G E S T E D R E A D I N G S Books and Restaurant Administration Quarterly Nebel. New York: Journal of Hospitality Management 14(34): John Wiley and Sons.” Cornell Hotel rant Administration Quarterly 39(6).” Cornell Hotel and Restau- Case Study in Benchmarking. Denney G.. Robert H. “Getting Ahead in the Hospitality In- lished Ph... Used by permission.5.D.4. III. Michigan. Woods.” by Beth G. Effectiveness in the Hotel Industry Using a Sparrowe.” Ley. Restaurant Administration Quarterly 25(4): lected Work Activity Correlates of Managerial 16–23. Introduction to Management in Paths in the United States. 1985.. “As I See It: What I Do. Brymer. “Grooming Future Hospitality Lead.” by Bob Peckenpaugh. 1978. Rutherford. “Hotel General Manager Career Powers. 1990. is reprinted from the June 2003 issue Life.. CHA. © Cornell University. 252–256.” Cornell ity Industry.6. “Why Young Managers Are Quitting.3. Quality Pavesic. “The Effective GM: Leader or Hospitality Research Journal 19(3):99–117. Raymond T. Among Hotel and Restaurant Employees. “A Day in the Life of a Hilton Hotel Chapter 3. East Lansing. 1995.. Schmidgall. Denney G. Balmer. 1980. and Jane Wiegenstein. Eddystone C. Enz. D.” by Emilio tel General Manager’s Job. 1998.” Unpub. . 1999. 6th ed. Michigan State Uni. dustry: An Event Analysis of Promotions versity. dissertation. Entrepreneur?” Cornell Hotel and Restaurant Woods.2. “A Day in the General Manager’s Lankau. and Michael Sciarini. and Robert A. All rights reserved. mond A. Structured Observation Approach. Chapter 3.” by Eddystone C. Nebel III and Ajay Ghei. 1995.” Cornell Hotel and Ley. David.” by Robert O. Chapter 3. Vuda- New York: Van Nostrand Reinhold. “The Mentoring Process in Hotel Gen- Articles eral Managers’ Careers. General Manager. MI: Educational In. Popielarz. Tom. King. jivuc. Hotel and Restaurant Administration Quar- stitute of the American Hotel and Motel terly 30(4):90–96. “An Empirical Examination of Se. Chung-Herrera. Association. Robert H. “Hotel General Managers: Focused on “Evaluating a Hotel GM’s Performance: A the Core Business. Leadership and Management in the Hospital. Chapter 3. and David A. S O U R C E N O T E S Chapter 3. “A Conceptual Framework of the Ho. Lessons from Outstanding Hotel Managers. ers: A Competencies Model.” International the Hospitality Industry. David V. and Pamela A. Richard C.. Rutherford. Ray- Administration Quarterly 22(3):53–56.. Fabico. Morey. East Lansing. 1996. Dittman. and Judy Z. Cathy A. E.

and concluded that communication had tion—can mean a competitive edge and.and computer- hub. has increased troduction). there- the modern hotel.1 I N T R O D U C T I O N The student of hospitality management will us the Internet. and evalua. electronic find the hotel’s front office referred to as the mail (e-mail). and instantaneous communication and. As H. and personal brand stated in his classic 1944 book Front data assistants (PDAs). by logical the unseen head will be judged favorably or extension. Technology has given the predictable role of department manager 121 . the nerve center. dissemination. The observations. nications. opinions. communications. It has. Helden. that described by Heldenbrand. telephone. In 1985. information—its sample of front office managers (FOMs) storage. fore. E. in turn. significantly changed the role of the A theme that recurs throughout many of front office and the front office manager from the readings in this section is that of commu. power. retrieval. overnight de- name suggesting centrality. the manager generate an expectation of clear and nearly is largely represented by the front office. livery of letters and packages. c h a p t e r f o u r O P E R AT I O N S : R O O M S 4. This. These all combine to Office Psychology. cellular phones. to a emerged as a central issue. or some other transmitted facsimiles (faxes). Rutherford studied a national oriented society and world. the brain. fast and efficient services based on otherwise by the guest treatment there” (In. FOMs had added to certain extent. In an increasingly communications. and the complexity of the hotel’s front office and research presented in this section are chosen at the same time delivered increased opportu- to illustrate the centrality of the front office in nities to serve the hotel’s guests. “To the guest.

rion in considering candidates for the position Texas. the hotel depart. Mario Arnaldo of Hawaii Pa- tor in yet another way—that of teacher and cific University acknowledges Withiam’s trainer. Concierges have a profes- strated competencies in both oral and written sional society. is concierges who are members and so certified not only a manager and a communicator are said to be keyed. was the FOM of two hotels: Marriott’s River sider communication skills an important crite. The “keys” references the One of the negative aspects is that the front practice in European hotels of hotel guests office serves as a lightning rod for guest com. The FOM. Arnaldo presents an overview of re- James Bardi. For this fourth-edition article on ments. The ties and challenges. as a metaphor for the processes of gatekeep- plaints and expectations. To see how this all fits together. search he did on the post–9/11 American ho- providing insights about the complexities of tel concierge and guest service staff. behalf of the guest. Courtyard Convention Center in Las Vegas. concierges. The the most difficult tasks for the front office concierge therefore “kept the keys” for the staff to learn. The job today has evolved to use keys and sometimes the intensity of guest com. Les Clefs d’Or. it is easy to see why the front office In 1993.122 Chapter 4  Operations: Rooms responsibilities as facilitator and broker of the job relative not only to communication communication in its various forms among the but also to elements of an FOM job analysis. among the front office staff. Being the hub or nerve center of a Standards. The strict . The model that emerged from popular concept of employee empowerment. Center and Riverwalk Hotels in San Antonio. ing access to hotel and community services on Successful FOMs ideally possess demon. this analysis carries with it the powerful mes. other hotel departments. and data. therefore. can Hotels” (1983). Bardi discusses the job of FOM. which uses communications to deal with these complexi. and intrahotel relations. When communication is coupled with the Dickover invites you to see the inside of the aforementioned complexity and guest expec. Dr. crossed keys as an identifying device. the front office. FOM’s job and how he practices the theory of tations of instant availability of information managing the front office. Dickover of this study was that hotel firms should con. and the emerging and the hotel guests. At the time this was written. Dealing with complaints can be one of upon leaving the floor of their room. A major conclusion over. and the guests but also a communica. aware of what is happening at virtually every “Keepers of the Keys: Concierges in Ameri- level of the hotel’s organizational structure.” an essay used in the second and modern hotel has as one of its positive aspects third editions of Hotel Management and Op- the fact that front office staff can be keenly erations. is carried forward in the essay contributed by Herein. which led to this chapter. leaving their room keys with the concierge plaints. work as the heritage and underpinning of his This contextual theme of communications current research. Glenn Withiam researched and and its staff operate under considerable wrote “American Concierges Set Service stress. Withiam also wrote an earlier piece. Currently general manager of the of FOM. walk a sage that the FOM’s job clearly revolves few miles in the shoes of FOM Garry Dick- around communications. especially given the frequency guest.

or through a as specific as possible to functional aspects of travel agent. To accu. In- of successful yield management. other contexts once the reader has a good Yes. rately assess the contributions of these hotel Yield and revenue management are also professionals. Section 4. tions. refusing business is a central component functional grasp of front office activities. of the potential range of issues attendant on partments they work in? What kind of any modern hotel front office. Chappelle. ing and entertaining way. and responsibilities of front office partments? What is their greatest wish? personnel change from hotel company to ho- The theme of active communications is tel company based on such variables as mar- carried through the piece contributed by Bill ket segmentation. The au. Quain and Steve LeBruto. conversational contributions by that author. ship. who generously provided ex. ob- interactions do they have with other hotel de. management decisions. The reader who wants additional amples of their concierge experiences. in some ways contrasting. learn to make these designated desk in a hotel property. sirable booking requests into desirable ones. views by staff members. cal of those currently facing FOMs. A large amount of management litera- then there must be good communications ture exists that is not specific to the front channels among all the organizational com. and individual leader- to actively find the best pieces of business. office but nonetheless pertains to the various ponents that guide the guest to a purchase de. ligations. cluded in the suggested readings are text- ways. If hotels are going corporate philosophy. The duties. it is important to recognize the front office management. The ar- cision. Whether this is at the front desk.” . in an interest- a hotel employee working at a concierge. In their words: “Yield management is books that treat in great depth the functional usually thought of in the context of turning and technical aspects of front office opera- away undesirable business during excess de.1  Introduction 123 application of the title concierge indicates Their article helps the reader. issues and challenges that face FOMs. What has been attempted here is an mand periods. However. Arnaldo contacted dozens of treated in the marketing section of this book contemporary concierges and guest service with other. manner the following questions: What’s up The articles and essays presented here for with concierges these days? Who does the of. organizational structure. Other pertinent most attractive pieces of business and what managerial insights may be applied from potential bookings may be logically refused. insights into these concepts is directed to the thor reviews in an accessible. ticles chosen for inclusion in this section are through the reservations system. the real art of yield overview of pervasive managerial issues typi- management is in learning how to turn unde. but not al. your consideration represent only a fraction fice work? What are the organizational de.

security ical emergencies. and in developing procedures for the front of- meeting times. bellperson. This is a tall order for the FOM whelming at times. tion. corporate management concepts. “[T]he front greet family and friends on special occasions. house count. to make quick decisions based on sound and paid-outs . office manager must take an active role in attend conferences to debate issues. fice to use in disbursing this information. accu- the director of marketing. or This information is also needed by various de- whereabouts of the management staff and partments to assist in delivering and organiz- guests create a commotion that seems over. Is someone in charge here? to fulfill. and requests procedures. facilitation. and or. especially considering the total The preprofessional who sets as his or her ca. realm of potential information guests may re- reer objective being the general manager of a quire and from what departments. world cross paths to discuss and share ideas. transportation services. pre- person to prioritize and to resolve many is. potential with guests and employees. 345–349) stated.2 T H E E L E C T R I F Y I N G J O B O F T H E FRONT OFFICE MANAGER James A. If you begin your career in hotel management as a front desk Interdepartmental Communication clerk. selling up. and design of computer systems for the supplies front office.124 Chapter 4  Operations: Rooms 4. and organizational interface with Food and Relaying messages. in. Those ho- hotel and hopes the required tenure as a front tel departmental areas and their sources of office manager (FOM) proceeds with haste guest information are included below: will find the role challenging. facilitating med. rates. relay ganizational interface and technical minutia. controller. and to refine exemplary commu- People from all walks of life and corners of the nication techniques. Department Information Needed from In a 1985 study. employees. and catering manager. ing hospitality. dicted house counts. food and beverage ser. walking guests due to overbook. or discuss gathering information of interest to guests business deals. Marketing and Guest history. Bardi The exciting atmosphere of a hotel lobby of. you have a vast opportunity to explore just who is in charge. for amenities and ing. power failure concerns. sues. or cashier. directions. Questions concerning arrivals. messages. function information search findings included communications Housekeeping Room status. reservations. cluding communications. Rutherford discussed the Front Office important dimensions of the FOM’s job. food and Beverage rate voucher informa- beverage manager. Sales first impressions. and guest Selected job functions reported in the re. to empower ten intrigues students of hotel management. posting of charges These job skills and interactions require a to guest accounts. Bardi (1990.” vices.

of guest security concerns • Maintains front office equipment. engineering. banquets. sub- ments of a job analysis of this position. plant for scheduled events. Section 4. updating reservation sys- nance service tem. confirmations. • Reviews incoming reservations for the he or she can move toward understanding day. marquee. ees. and • Conducts business meetings to promote credit card ledgers room sales. Controller Daily summary of financial transactions. This hotel executive must analyze of hospitality to the guest—a major function and seek the pieces of information guests will of a hotel’s financial success. and security. and room inventory. emergency com. preparation of daily • Resolves guest billing discrepancies and function board and other complaints. eration? How does the front office and. marketing and ment of guest charges sales. the FOM fit in? An answer to this (1990. probably need and figure out which depart. 1985). Bardi sequently. Security Fire safety. The on all shifts concerning reservations. tion.2  The Electrifying Job of the Front Office Manager 125 Banquet Information on scheduled • Communicates information to other de- events. guest service cycle in a hotel (adapted from Albrecht and Zemke. process of pay. reservation requests for mainte. major responsibility of the FOM. lyzes the various guest-departmental contacts. are: . The FOM must stay in of becoming a proactive communicator and control of all activities that affect the delivery facilitator. potential departmental contacts in the cycle room assignments. data for billing. what are the Further inquiry into the role of the FOM components of this subsystem of the hotel op- can be accomplished by reviewing the ele. food and beverage. check-out. and a public • Prepares budget with general manager communication post and controller. Human Initial point of contact and Although this list shows only a few of the Resources screening for potential many duties performed in any one day in the employees life of an FOM. 49–50) presents a job analysis of an question can be derived from reviewing the FOM’s duties on a typical day. how the front office fits into the efficient de- • Communicates information to employees livery of the hotel’s hospitality services. • Interviews potential front office employ- munication informa. If the FOM ana- • Reviews night audit report. Maintenance Room status and guest • Assists in check-in. and investigation • Communicates with night auditor. If delivering hospitality to the guest is a ments must interact to fulfill these needs. it provides the aspiring hospi- tality professional with an idea of the range of Thus the FOM must embrace the charge managerial activities. financial • Prepares forecasting sheet. partments—housekeeping.

and is most obvious—at the front desk. The ing a registration system with respect to cashier is only doing what he or she was concern for managing a guest transpor- trained to do. centralizes all communication between Charges within a specified dollar amount the guest and the hotel about housekeep- that are debated can be credited or adjusted ing. However. maintaining a room communicated. ensuring a first- what the training was. maintenance. and without the supervisor’s approval. op- to do. Here is the manager’s chance to provide erating a guest information system that that first electrifying jolt of empowerment. telephone system. main- Waldorf-Astoria. However. lounges. many guests of a ho- reservations. that will reveal the extent of the credit nications with all departments in the granted per cashier. Registration . employees to make everyday decisions within phone manner of personnel handling guidelines. housekeeping services. advertising methods. their account folio. and tele. gift ment opportunities for front office staff is shops. to coordinating flexible check-out times. desire to improve guest service where its impact monitoring guest wait-time in line. accommoda. the guest doesn’t care tation shuttle system. he just knows the contact greeting. empowerment as a granting of authority to national reservation system. sponding control system can be implemented • Guest stay—Coordinating guest commu. security. and many aspects were considered at the providing assistance with luggage. “Step aside and I’ll call my supervisor” is too often the response to a • Registration—Developing and monitor- guest’s inquiry about a charge adjustment. providing assistance system isn’t user-friendly. if guidelines are established and check-in procedure. tel feel they are in the middle of a bureaucracy tion availability. one piece of “electri- satisfaction. cancellations. A corre- other hotel departments. Cross- providing folio accuracy and printout. ing a reservation system with respect to Sternberg (1992) discusses the concept of ease of access to toll-free numbers. fax. food and beverage. As Sternberg em- with luggage. organizing an efficient phasizes. the cashier should know what status system. fying magic” is still required to make front centive promotions. For example. Waldorf-Astoria: • Check-out—Developing and providing While there can be many reasons to combine an efficient check-out system with respect the positions of registration clerk and cashier. trained employees speed the check-in and This list of components in a guest service checkout process by performing both functions. hotel to ensure guest satisfaction in Another example of providing empower- restaurants. and general information. complimentary services when they want to have a charge adjusted on and products. office hospitality relevant to modern service • Reservations—Developing and monitor. and in. provided by Allin and Halpine (1988) in de- wake-up calls. room service. processing credit cards.126 Chapter 4  Operations: Rooms • Marketing—Preparing and administering encounters in managing the delivery of hospi- customer surveys with concern for guest tality services. and scribing quality assurance training at the guest folio availability. cycle suggests the vast array of duties the FOM as the traffic at the desk dictates. the decision was driven by a taining in-room video check-out option. delivery realities: employee empowerment.

to the day. beep. housekeepers. The drive to work is an easy one together. There is a 9:00 A. but to train people ager. and thank the guest for his or her busi- Time to start another day as front office man. of these potential contacts.3  A Day in the Life of the Front Office Manager 127 clerks can cash checks and cashiers can issue office clerks. It is a challenge staff—guest service staff.M. add a value statement about the hotel beep. and others—that’s 144 million duplicate room keys. If 12 million guests pass through a new hospitality professional to try various hotel company’s entire system in a year and ways to apply interpersonal skills that will each has an average of 12 contacts with hotel yield a profit for the hotel. Empowerment is another powerful tool ful analysis by the FOM of the progress of the in the FOM’s managerial arsenal.M. There is the regular morning the day. empowerment. beep. Section 4. It is going to be a busy day featuring 800 to do those four things can be a challenge. The alarm people smile and greet the guest. but it can be a hassle getting every- It’s 7:00 A. chance to think about one thing in particular but attendance is important to the success of that is on tap for today. front that will last a lifetime. ence. operational details.3 A D AY I N T H E L I F E O F T H E F R O N T OFFICE MANAGER Garry Dickover It’s 6:00 on a Saturday morning. It gives me a an associate can’t make a pre-shift meeting. and. apply them to the customer. Today I also have to review the standards we have set and how they can hospitality standards with the front desk staff. The challenging viewed in the context of guests times service and attractive nature of this role allows the contacts. arrivals and 750 departures.” The sun is peering through the window. Plus. in many cases eliminating chances for the chain to give a good or bad the necessity of having the guest wait in two impression (Bardi. At 1:00 P. use a guest’s clock is blaring its normal “beep. 4. keeper of many. and at . ness. today You would think that it would be easy to have I have a Safety Committee meeting. let them know what is going on for arriving today. As the gate- lines. guest through the guest service cycle. the FOM is in a unique position to Other opportunities to provide employee help his or her staff enhance the guest experi- empowerment can be identified through care. if not most. 1990. or city. my department. name. There are a lot of reasons why one this Saturday morning. It is going to be a fun one. the hotel is Pre-shift meetings are an important start 50 rooms oversold. 233). and get a chance to share with them pre-shift meeting. It is the time I have everyone pre-convention meeting for the group that is together.M. mis-serve the guest can be appreciated when increasingly. I don’t ask for much. The role of the FOM demands a mastery The potential opportunities to serve or of communication.

30 minutes to view the hospitality standards.128 Chapter 4  Operations: Rooms 4:00 I have my weekly rap session with the sion on the staff’s faces. I think to my. we forget. They also know you have to over- valet parking staff is hustling to retrieve guest sell the hotel. cup of coffee. (As simple as this sounds. Today. and out to the desk they go! Now for a important it is to give each and every associ. (This is some. which is our profile of the group that includes. It is nice to knows how important it is to sell out the ho- see the bellmen taking care of our guests. This is also the time I people feel good. And you know. check the recognizes his or her associates. to build loyalty. all looks pected variation from stated arrival and good. It is where trust is established— ing. I look at the windows of the entryway to them that the revenue department has calcu- the hotel to check for cleanliness.M. The first stayover requests and no-show percentages. sold. I can see that the see any stress I may feel on my face. rooms pick-up percentages the group’s meet- It is better for me to spot-check the area ing planner promised. It is important that I don’t let the team As I arrive to work.) I check my watch. We do a little and wish them a good morning. As the FOM. with how to repair printers and copy ma. things look good. It sets the stage I review the plans with the desk managers for the day. so group checking in. I notice some ten. The front lated all of the slip percentages for the big drive is the first and last thing a guest sees. A slip percentage is the ex- it has to be looking good. . As I tel. The front office team takes the like they have it under control. I know how cheer.) This morning. It is important for me before the general manager comes by and to develop a good relationship with the rev- sees any problems. it’s us trying to max- of the front office. the pre-con. I learned the enue department.” meaning overcommit- thing they did not teach me in college. As I walk through the area. Relationship building is an important job chines—some things you gotta learn by do. and we are set. Better pull out the group resume. I make sure there is no trash overnight. They know they are in telephone department. along ted by the sales staff. The lunch. and the room again. It’s 7:50 A. trust between you and the other departments. ate a cheerful good morning. for a tough day—remember. This is the time to reassure shift meeting. for the FOM. They know that once a room is empty scan the grounds. 50 rooms over- self. all will be fine. Yeah. It looks pleasant. it really does make for the sold-out night. I re. A good department head check availability at other hotels. The team check-outs have already started. it is going to be a full day. I al. My desk managers are imize revenue and occupancy and to continue busy getting information ready for the pre. words that come out of your mouth should be and check for duplicated reservations. I make my way to the back It is not me versus them. I double- brunt of all the complaints. As we are about to finish. so I the forecast meetings to ensure the hotel is make sure the area is clean. The FOM must be active in GM’s route when he arrives at work. the bell carts are clean. They don’t need check the staffing during the peak periods me to harp on them. you never get a chance to sell that on the ground. sometimes desk managers prep the team for the day. and remind the managers to get everyone to The pre-shift meeting goes smoothly. This is the time I can reassure cars. the team that if we do our jobs as we have ways make it a point to greet people as I pass been trained. not “sold up the river.

and time for lunch. could be for a variety of reasons. Your team sets the stage for a guest’s this information with the RM. and I stop by percent of the time there is an alternative. a historical profile team. the water had a small sheet of ice tions. The best thing to and food and beverage revenues. toilet seat. you smoothly. this is the time I get a of minutes with the group convention man. relationship we will have with the group. this helps build loyalty. Bosses are all different. We are now wanted some specific days off and. usually the meeting planner and mem. always emphasizing By now it is 12:15 P. Some- night and how our hotel is for tonight. She thanks me plain.M. do is to listen to what your associates say and At 8:45 A. As an times they have a right to be upset. We each know how much you care. You have to own hos- so you know what is going on and can share pitality. This The next couple of hours I spend review- is our time to sell them on how well we will do ing the previous day’s information and getting for their group. One FOM. Most complaints are caused by fice.M. They the desk and the house count. I grab the information I need for the 1:00 P. Generally.3  A Day in the Life of the Front Office Manager 129 among many other things. You want to be fair to the tures. uation. but tant to listen to customers when they com- we should be in good shape. couple of phone calls from upset guests. the telephone system. By concierge desk. If we have to walk guests. At the pre-con. It is a successful pre-con. and we also had 18 early depar- delicate situation. All seems to be going spending time with your associates. This is a reservations. occupancies. ing after lunch. . vice processes. Things are looking good. giving an update on the oversold situa. managers did what they did. a breakdown in the process. and other com- the parties seem happy. being so cold that when the guest lifted the but they always seem to ask the same ques. He asks me how things went last ple get upset over the smallest things. I have a safety meeting. bellstand. I gave the RM entire stay. It is important to review the daily sales on it. deficiencies you may have in the hotel’s ser- As I make my way back to the front of. memos. I will go directly to that meet- couple of associates wanting to talk to me. We have had some canceled the business. we all do our formal demonstrate to them you care about their sit- introductions and meet the group’s represen. As I make my way. I check on They are bothered by the new schedule. I end up walking with the resident man. This ager. they did not get them. Remember that tatives. it is important to know what your boss example from past experience was the room is going to ask you. It is a great way to find out what for the update. Today I said we might. Ensuring customer satisfaction is a large and occupancy report from the previous day part of the FOM’s job. it is important check-out. I spend just a couple munications.. I’m off to the pre-con. Before tion. because of only 29 oversold. It is impor- about the situation. Section 4. some people always want to let the to let the group convention manager know manager know how things went. When I get back to my office. Sometimes peo- ager (RM). but you also have to respect why your of the group’s room pick-ups. and the You want to create win-win solutions. they don’t care how much you know until they bers of the group’s leadership. I head then review the situation. It better be good! the information he wants.M. all caught up on email. I have found that 80 by the desk to wave to the staff. Another situation discuss our individual departments and the solved. the positives.

good shape. become a bitch session.. The meeting wraps up at 2:30 P. Some days have dif- ask leading questions so the session does not ferent meetings.M. On a busy day like today. This is never an exciting meeting. my pager goes off. This rooms oversold and 352 arrivals expected. hour. It is important for all of the managers to be in This is important to avoid lawsuits and pro.M. I discover always important. the loop. Of course. It is a re. safety and security interests for our guests. believe 90 minutes passed while I was in the It’s 7:00 P. We have At 3:50 P. He tells me know it. This helps our friends The MOD is a little nervous. Sometimes that is could have been prevented. We usually work the lobby together gets a smile from the desk clerks. I go back out to the lobby to see how check-ins are starting to arrive. you have helped move the line. but I have about the most current accidents. done this plenty of times. I make one Meeting with associates allows me to take more trip around to the departments in the the pulse of their work situation. Another good day! build a relationship within the team and also The day described above is a typical day helps identify challenges I was unaware of. our peak check-in As I come down the escalator. This helps you make being in the lobby. Because lines are forming. We review the sold-out lobby is just answering questions and giving night so we don’t miss anything.M. some days have more upset . I always keep the raps to about an vide guests with a safe and secure environ. I see the time. Every guest I help means one he already has the walk letters (expressing guest who did not have to go to the front desk our regret and outlining our promises to a and one more guest who did not have to stand guest who is walked to another hotel) out on in line. I always like this part of the job.) A big part of the job in the worry. Today we talk great to buy them all new uniforms. This is the fun part of the job! the desk. I bellstand to see if the bell captain is caught typically spend the next couple of hours help- up. I do it in front office to see how they are doing and small groups or as a one-on-one rap. I as a front office manager. We is a great way to watch what is happening. we will be fine. During this meeting. Be. He tells me directions.M. cleanliness of the area. (You can also ensure the better decisions to maximize your revenue. rap sessions. how they to stay within my budget. I head to the things are going. I walk into the safety meet. Time to go home. the first cause the desk is staying busy. but it is the meeting. about the previous night.M.. need more uniforms for the team.. This brings a good laugh. the night behind the front desk to handle a few check. and the next hard to do. are in good shape. It is a good day. manager on duty (MOD) comes out to meet ins. It is important to track the You can view your whole front office team by number of no-shows. Before you while I tell him about the day.130 Chapter 4  Operations: Rooms At 1:00 P. All is well. We also discuss the implications of and will pass them on to the other managers. I tell him not to in housekeeping. ment.. It helps wish them a good evening. Accidents are costly to the some equipment that is needed and that we hotel. I go ing out in the lobby. and things seem to be in lobby. It also with me. so I trust that the minder about my 4:00 P. I can’t hotel is in good hands.M. It is important to keep accident preven. At 5:30 P. It would be tion a priority for all associates. I take notes on their comments steps.M. By now it is 5:00 P. this helps me control ing. it is time for me thing he shows me is the house count: 24 to move out and manage from the lobby.

As part of the yield management plan. The best customer is the one who can An important part of analyzing the po- spend the most money at your property pur. buy more frequently. are the ones who receive the greatest benefit Every establishment has a wide variety of from your services. the associates. who take care of the customers. and tories. Section 4. They are willing to pay revenue outlets. sell more and to sell more profitable items. and the records of strategically allied number of channels the guest can use to business partners contain most of the infor. In order to properly im. cialty drinks. ideal customer base. They can range from the sale more. It’s the same The thing I have learned over the years is that job. One of the techniques of yield manage- citing. This means services you provide are the best fit for their analyzing both the revenue-producing out- needs. some days have more upset associates. just different players. spend money in the profit centers of the mation any property needs to determine the enterprise. it means that a busi. Yield management. cigars. mation necessary to truly enjoy the experi- ness can make more money. The keys are to ence. The best customers for the property lets and the people who spend the money. couponing. and remain more of rooms to valet service. LeBruto profit centers. the results of a well-run yield ment is to let the guest in on the secrets of the management program are certainly exciting! establishment. the job of the FOM is the same. The products and the possible sources of revenue. of the guests by sharing information on how gram is to determine who is the best cus. cies. and . spe- loyal because you are satisfying their needs. best customers are.4  Yield Management: Choosing the Most Profitable Reservations 131 guests. is not very ex. management must be willing to make experts The first step in a yield management pro. cash register packaging of all sorts will vastly change the receipts. A profit center is a place where  INTRODUCTION value is created and exchanged. However. Take care of 4. tential of each profit center is to identify all chasing profitable items. who take care of the business. adjusting the menu mix. tomer. and I love it. Quain and Stephen M. as a term. the serving take-out food. flower delivery. Restaurants can increase revenues by plement a yield management project. and some days are just better than others are. Give him or her all the infor- Properly implemented. catering private parties property must be viewed as a collection of off-premises. However. they can utilize all of the profit centers. the answer is in Strategic alliances with car rental agen- a property’s data collection system. and creative take-out Many operations do not know who the services.4 Y I E L D M A N A G E M E N T : C H O O S I N G T H E M O S T P R O F I TA B L E R E S E R VAT I O N S William J. food and beverage checks. cooperative advertising. Guest his.

the sale may not re- efforts to implement a yield management sys- flect the best interests of the property. These impediments are: Yield management is designed to increase 1. select the most tions do not stress the creative side of cus- profitable reservations and use incentives to tomer satisfaction. tem. Why accept any reser. dependable growth. Monitoring the wrong signals—We tend from enhanced profits: to monitor the easy things to measure. restau. great experience they had. Restaurants. paying attention. money to spend to give you a reasonable These systems reflect their need for in. . ness success. Look for the customers with the tems are necessary for management. employees must be involved together for the common cause of serving in the profit making and the profit taking. We beneficiaries of increased revenues and should be looking for opportunities. to encourage occupancy and average and the investors will relish the long-term daily rate. not profits. Money attracts money. Guests—They are one of the primary such as food cost and inventory. not just gross sales. areas. do things the way they have always been cially during hours of peak demand. Use the marketing mix variables come and achievement and further the of product price. chase the most of your products and ser- 3. Shareholders and investors—Return on customers. and distri- profits of the property. vices. Lack of attention—It is difficult to stay in shoulder times. 1. If revenues are on the rise. Front-of-the-house and 2. move the other reservations to non-peak or 2. Employees—In order to achieve long. profit. investment. share 6. things go wrong. bution to attract and hold the right 4. it can statistics. and satisfying guests. more When profits depend on a mutual deliv- loyal. Conflict between sales and service— guest better. and so on are all outcomes of in. tomers to reward the waitstaff. how- that offer incentives to customers to change ever. Management—Structured reward sys. and eager to tell others about the ery of both the sale and the service. Targeting the wrong customers—The possibly can by making more money for right customers are those who will pur- the property. focus all the time. this sometimes spills over into other their demand patterns. back-of-the-house employees must work term success. sales management policies are designed creased revenue. promotions.132 Chapter 4  Operations: Rooms developing reward systems for servers. In either case. The minute you stop Profits are the only true measure of busi. Let them earn as much money as they 5. may en- courage promotion of higher-priced Managers face six major obstacles in their items. Guests are happier. done? There is a need for standardization rants can design product/price combinations in recipes and operating procedures. Espe. Lack of creativity—Does your company profit. conflict can arise. mean only one thing: You are serving the 4. Training sessions in most organiza- vation at any time? Instead. The following groups all benefit 3. Rewarding the wrong behavior—Many prices. by allowing cus- growth potential of their investments.

the following gives tran- for many years.  BASIC CONCEPTS OF Bill recalls leaning out the drive-up window YIELD MANAGEMENT to assess the cars waiting in line. the Twin Bridges in Washington. yield management management concepts allow hotels to pick up mechanisms have become complicated—so relatively easy money. For this reason. and it probably does. the property sold rooms from a drive-up Level 5 greater than a 50 percent discount window. As Bill tells the story. Worse. the property had a flat single rate and charged extra for Each level or bucket in the above hypo- each additional person staying in the room. is a special case. complicated that some managers whom we The three concepts are simplifying the yield have met seem to think they cannot improve management system to make it manageable. Three main revenue From that simple start. That technique demonstrates the core to a hotel—but it does not necessarily require concept of yield management. is to think in terms of which the first suggestion for a straightforward ap- business is best for the property on a given proach to yield management is to cluster rates date. the property should see revenue gains in then work on controlling these clusters or rate the next several months. needed.4  Yield Management: Choosing the Most Profitable Reservations 133 When availability got tight on some nights. As an example. Level 2 10 to 20 percent discount “Bill” Marriott was working at the family’s Level 3 25 to 35 percent discount first hotel. The goal of yield management is to select which business to accept and which business  AN OLD PROFESSION to turn away (when demand exceeds supply). By implementing the concepts discussed into a few groupings of similar programs and here. In one early instance. categories. age individually. One may think of yield management as a rel. high-power computers. If some of the cars were filled with passengers. W. but the lodging indus. to six rate buckets for their transient book- try has applied yield management principles ings. If the manager length-of-stay controls to shift demand from then insists on managing every rate or pack- sold-out periods to slack periods. Mar. sient rate categories that combine programs riott Corporation used yield management of similar value: principles long before it installed its current Level 1 Rack (no discount) sophisticated system. Back when young J. The change control. revenue unless they have access to the most examining the rate controls to make certain sophisticated tools. or low-hanging fruit. Level 4 40 to 50 percent discount D. Section 4. based on the relative value of each booking. and using of discounts and packages. gle passenger to sell his last rooms to fuller standing of which business is most beneficial cars. the hotel manager they allow acceptance of the business that may have created an overly complex system yields the strongest revenue return. Bill Yield management requires knowledge of would turn away the vehicles with just a sin- guests’ expected behavior. Most properties do not need more than four atively recent practice.C. if any. as it relates to the above property has too many programs to track and three points. thetical structure might comprise several . plus an under.. the result is a sense that the Group business.

While it is given that that limit is that yield management re- those $5 bills would pile up. The three rate buckets could be that one of the categories is rarely used. because customer’s business. Limit the total number of transient rate stay) business. the greater is the likelihood . categories are collected. are created. discounts from rack rate of 10 to 15 percent. are for each. For in. In addi- The following principles apply to setting tion. the complexity is quires forecasting demand for each rate not worth it. with virtually no business able volume of activity to allow monitor- in Level 3. Given such a structure. Not only is it time-consuming to working so hard on the $5 difference that one forecast numerous categories (with di- overlooks the opportunity to earn. risking $150 in certain revenue in hopes of achieving a $155 booking seems The point of yield management is to use de- mand forecasts to determine how much to to make little sense if the latter is not a charge for rooms on a given day. a manager categories to no more than six or so. the most valuable guest for a out the hotel as close to the arrival date as casino-hotel—the high-stakes gambler— possible. the ability to determine which 2. Each rate category should have a reason- Level 1 and Level 2. take into account all requests for the sold-out date (including both the cost of opening rooms and the those for multiple-night stays that involve the offsetting ancillary spending that occurs sold-out date) must be rejected. In deciding whether to accept a particular reservations to accept or deny is lost. consider redistributing the rate hierarchy. How. hotel is sold out with discounted (or short- 3. stance. but the more categories If a given set of discounts isn’t working. say. especially when one might be category. To take an extreme yield management objective should be to sell example. if a hotel’s business fell entirely in 4. CONTROLS ever. The chief reason for getting a rate of $155. If it is found rate buckets. Yield management requires risk and re- ward management. $50 minishing returns as the number of cate- more by selling at rack rate. and greater than 40 per- 5. A property’s when a room is sold. the less accurate the forecasts the hotel should change the categories. because the further in advance the might be paying the lowest room rate. par- need not agonize over whether to restrict ticularly if there is no automated yield rooms offered at a rate of $150 in hopes of management system. a manager should rearrange the ing of traffic in that category. gories increases). 20 to 40 percent.134 Chapter 4  Operations: Rooms room rates. to track pick-ups of room blocks. When the sure thing. hotel sells out. Segment programs based on clusters of formation as you trend data by which rate discounts representing similar values. Group business should have a separate cent—or any other arrangement that makes a hierarchy of buckets to allow the operator meaningful division among rate categories. Rate categories are designed to enable turning down one  RATE CATEGORY booking request in favor of a higher-value booking projected to come later. mixing group activity with individual up categories to manage rates at a hotel: booking activity clouds the historical in- 1.

but their de. ties are too slow in closing out discounts to re- ject that they can sell 380 (or more) rooms at strict room availability to expected high-rate rack rate. all it succeeds in doing sell all 120 in that rate category. there are two basic in- process of comparing remaining demand for dicators: (1) On dates the property is selling high-rate stays (and multiple-night stays) out. The table assumes a 500-room hotel block. selling out. refuse reser- (or a hotel with 500 rooms remaining to be vations from transient guests? sold). it should be observed how far in advance against remaining available inventory. While this ap- mand forecast projects they will not be able to proach is well meant. The managers would like is to set threshold levels at which discounts to sell the remaining 120 rooms in the next are closed at a predetermined level (90 per- rate category down (Bucket 1). the hotel’s managers pro. rates. A common practice high-rate demand. Section 4. they won’t be sell. as a result. when a proac- total of 500 rooms to sell. of discount controls or because the property Table 4. al. is preserving the last 10 percent of the hotel’s rent trends. Rate that sellout occurs.1 Hypothetical Room Rate Structure Discount Off Available Rooms Demand Rate Buckets Rack Rate (estimated) Forecast Rack (General) None 500 380 Bucket 1 10%–20% 120 63 Bucket 2 25%–35% 57 75 Bucket 3 40%–50% 0 140 . but maintain room availability for this forecasted not always soon enough. Their inventory plan is set up to business. did the hotel. given the revenue potential though the hotel would prefer to sell all 500 of a sellout. even though they have a inventory for high-value guests. however. cent occupancy. had committed too many rooms to groups— gories are controlled to increase total room that is. When evaluating how well a property is This forecasting regime requires a continual managing its inventory. Based on cur. if a group does not pick up its room revenue. tive approach might shut down discounts ear- ing any rooms in the deep-discount category lier and gain the hotel even more high-paying because there is sufficient demand at higher guests (and revenue). (2) if the property is not category controls help ensure available inven.1 demonstrates how rate cate. One reason is that some proper- rooms at rack rate. it must be determined whether the tory to accommodate the projected high-rate property ever turned away business as a result demand. In this example. The objective is to hold rooms open for Full-occupancy dates frequently receive high-rate demand without leaving a large less attention from property managers than number of rooms unsold. one might expect. for example). Hotels do close the discounts.4  Yield Management: Choosing the Most Profitable Reservations 135 that high-value bookings will be turned away. Another reason hotels often don’t focus Table 4.

The on a given date for one night. essence of length-of-stay controls. To illustrate the difference between $150 and deciding whether to sell it for one those two statistics. occupancy is important. and nected to length of stay can be achieved market comparisons. the hotel can net an addi- ble for managing the hotel’s inventory are tional $50. two nights. a revenue. As date.  LENGTH-OF-STAY The most common length-of-stay statis- CONTROLS tic used in the hospitality industry is average length of stay. agement controls requests down to granular pancy date. Managing stay lengths is complex. with the prospect of selling it was determining whether to apply minimum- to another guest for four nights. the above example. how- For all the time spent in month-end analy. What the revenue manager sell it to one guest for $100 today or to wait needs to know is the total number of arrivals and sell it to another guest for $150. on the three nights. imagine that a manager night or to wait. as dence found that properties perform as well long as the application of controls is kept as they could. The most sophisticated inventory man- cess demand on a projected l00 percent occu. The process of forecasting a date’s levels of detail: by program or rate category. This level of con- how to gain the most revenue from a sold-out trol really requires an automated system. tions. To make the call in what you expect. of dates. five nights. but termining whether a particular date will run mastering length-of-stay patterns may be the an occupancy of 65 percent or 75 percent than most rewarding of yield management func- determining how to make the most out of ex. the manager needs to know the level of demand for four-night stays before he or she turns away (or accepts) the request for a one-night stay. while the length-of-stay decision also usually responsible for high-profile tasks. the more employees work to category. One needs more effective statistics The essence of rate category control is having than simple average length of stay to manage one room left to sell and deciding whether to stay patterns. without sophisticated automated systems. two questions are asked (i. Moreover.136 Chapter 4  Operations: Rooms on sold-out dates is that the persons responsi. measurable revenue improvements con- sis of occupancy levels.. is having one room left to sell at forth. In the rate stay restrictions on a peak night. the more often those fairly simple. or by day. As occurs in an understanding of demand by various many cases. Thus. four nights. rarely is conclusive evi. can generate as much as $450 in additional including forecasting daily occupancy. The man- . category decision.e. average rates. did we fill too Just as setting rate control categories re- early? and did we turn away business on days quires an understanding of demand by rate we didn’t fill?). you get what you inspect. is the case with managing rate discounts. and so other hand. length-of-stay management requires give the desired revenue results. but so is determining by length of stay. revenue manager may spend more time de. not length-of-stay intervals. which describes the average Implementing length-of-stay controls takes duration of a guest’s hotel stay over a range the rate management decision a step further. ever.

6 nights. problem. one-night stays. some form of minimum or other discrete five-. seven. Table 4. the manager through stays arriving before the given date— wants to know how much of the demand will that is.and three-night stay-throughs information. Table 4. while rejecting multiple-night stays by guests Most central reservation and property proposing to arrive on the closed night. Most new systems at least striction should reconsider in light of this allow minimum-stay controls by rate category.g. length-of-stay controls is appropriate. and three-night stays with the ex. but rejects all requests to arrive on that date.2 using this approach is that they end up saving shows an example of a chart with this type of space for two.. three. two-. The staying for just the closed night. and eight-night stays. six. or nine property still using a flat closed-to-arrival re- nights (or longer). Section 4. or the manager could have systems’ stay controls can become overused. pectation that the hotel can be filled with The problem hotels create for themselves by people staying four or more nights. multiple-night stays for which the be affected if he or she were to reject all closed date is a second or subsequent night— one-. four-. Any low stays of two. revenue from stay-through guests to those though at varying levels of sophistication. Such a system enables the worse than having no controls at all.4  Yield Management: Choosing the Most Profitable Reservations 137 ager could know that the average length of Caution: One aspect of yield management stay is 3. for instance. specific length-of-stay information (e. the hotel does not want to lose few years facilitate stay pattern controls. In such a property to close availability to one-. but having ideal system enables a property’s managers to the system forbid a multiple-night stay that set controls for each arrival date by discrete begins on the peak night may actually be lengths of stay. case. but al.2 Hypothetical Stay-Length Forecast Arrivals per Day Length of Stay (Days) Day Occupancy Arrivals 1 2 3 4 5 Wednesday 76% 117 7 9 21 41 39 Thursday 82% 103 8 17 21 24 33 Friday 90% 118 10 24 12 26 46 Saturday 100% 138 28 23 22 28 37 Sunday 83% 111 19 13 16 22 41 Monday 78% 86 12 13 18 21 22 . 10 Most systems allow managers to place a percent of the arrivals on a given date are for closed-to-arrival restriction on selected dates. al. 25 percent are for two-night This restriction enables a property to sell stays. management systems developed in the last Obviously. Naturally. and so on).

however. the better response is to give the group Any good sales director is going to feel the rate it requests but to change the dates of good about the $16.000 in displacement) leaves the opportunity to sell unanticipated room revenue from which the to a second group interested in your property.138 Chapter 4  Operations: Rooms acceptable into a contract that represents a  GROUPS: RATES. dates are when the group for that date would have been $29. moving this to acceptable. The forecast dates. adjusting the group’s proposed room rate to (Assume per-room ancillary spending offsets make the request appealing to the hotel. Even if someone tel’s forecast is for empty rooms. cellent piece of business might work as in the ployees the art of saying yes. Another way to look at this overall revenue) or fewer rooms (reducing group. Say that one group re- The art of saying yes is particularly im. that was really not expected. into desirable ones.000 piece of business generally involves decisions about rates. in this case. the hotel can extract maximum . following example. quests 200 rooms at a 350-room hotel for $80 portant in negotiating group business. helped bring to the hotel. That’s why the most common response to an the real art of yield management is learning unacceptable proposal is to ask for a higher how to turn undesirable booking requests price.) times.000 in Applying revenue management princi. DATES. hoteliers either more than enough incentive to accept this deny a group’s request outright or focus on group. Rates are how much the shows that the total revenue without the group is going to pay. However. there still is reason to feel good about this Committing to more rooms (and thus more arrangement. which is a $16. Thus. with a $2. which per room. The group’s business will bring the hotel undesirable proposal into a desirable contract to 100 percent occupancy and generate a total involves varying these components until both of $31. and space. Turning an $100. Even less ob. great piece of business. At the variable costs on the extra rooms. that space to others at a better profit margin. is that it represents $16. Perhaps even more important group to a date that will displace little other is the ability to make a proposal that is merely business.000 group is going to be staying.000 in business he or she the proposed business to a time when the ho. an important ele.000 in additional revenue to the hotel. Turning a mediocre proposal into an ex- ment of yield management is teaching all em. By manipulating the changing a group’s proposal from undesirable other variables and. hotel is extracting only an additional $2. ness during excess demand periods. one thing that typically makes a proposed piece of busi- Yield management is usually thought of in ness undesirable is the hotel’s ability to sell the context of turning away undesirable busi. revenue because the group has displaced ples to group business involves more than higher-rate business. The rev- planners have what they consider a worth. the number of rooms it proposes to block. and space is how with 290 rooms booked at an average rate of many rooms the group will use. enue on the 60 extra rooms gives the hotel while package.000 in revenue (having displaced some the hotel’s sales associate and the meeting of the forecasted transient arrivals).000 increase in total revenue. Working within a ho- AND SPACE tel’s normal acceptable boundaries. points out that the business really brought vious is the option to ask the group to change only $2. Too often.

as in the case of a hotel that needed to reduce the room rate to $60 to en. sys.000 instead of meeting planners who inflate their numbers. thus amplifying both discussed here. terns to increase revenues at their Orlando resort hotels (Quain et al. forces may work against only one night. actually nets the hotel another $2. Cut- ting the group’s room block in half. is near to selling out. always apply in an environment where the But the first week in January has been a . 1998). because the group would be displacing assuming this will make their business more less (anticipated) higher-rate business. This is done by encouraging the group. as in sold to transients at $100 each.000  CASE STUDY: THE in revenue. but it still increases the value of the the hotel. tice the group to move to other dates. that the calculations for this example are for Unfortunately. Because the forecast is that the group salesperson to book business that may not de- would displace 140 rooms that would have velop the highest revenue for the hotel. $2. the hotel INFORMATION could insist that the group block fewer rooms if the group’s original offer did not make up This case study explains how Disney uses sim- for revenues the hotel would have obtained ple information about hotel guests’ stay pat- from transients. the This is a particularly important message for added value would be $12. Sometimes less is more. Current sales-incentive group’s room block be smaller—for example. One is the tendency to accept the benefit of moving the group and the the first option that clears the hotel’s mini- penalty for accepting the proposal as offered. the hotel gains the example of the group that proposed to back $20 in displaced revenue for every room book 200 rooms..000. One of the highest-demand weeks of the entire year in  CONCLUSION Central Florida is the holiday week between Christmas and New Year’s Day. sold to transients instead of to the group. for in- stance. Section 4. Even if the hotel supply is limited. plans are possibly another hindrance to these in a situation where the group is attending a opportunities. Disney’s Orlando resorts tems are available to support its efforts. week of January. or to accept the business but The hotel could also propose that the negotiate on the rate. While the group has little incen- tive to reduce its request for rooms (unless POWER OF the market is otherwise sold out). Ironically. if not sooner. Even the more progressive in- convention for which the dates are already centive plans that reward sales activities fixed. This proposal is less effective from both based on revenues rather than just room- the hotel’s point of view and that of the nights can discourage behavior that benefits group. the first more sophisticated inventory controls. but a group would typically taking the types of revenue-enhancing actions stay for multiple nights. mum standards.4  Yield Management: Choosing the Most Profitable Reservations 139 value from this group. typically sell out the Christmas to New Year’s The concept of volume discount does not dates by the end of September. Note appealing to the hotel. this Whether a hotel is just getting started or is strong week is followed by one of the lowest- ready to take the next logical step toward occupancy weeks of the entire year.

the revenue management de- holidays of the year. Despite the marathon’s success. cannot develop enough demand to fill their In another demonstration of how knowl- rooms one week following one of the biggest edge is power. moreover. with the forecasted ex- and a new corporate culture had to be devel. For concept discussed by Cross. Disney’s revenue lies. fill the void caused by the exit of the holiday Senior managers had to be reassured that this crowd. end up causing them to carry empty rooms cupancy for the month of January. Although Florida residents can be new form of controlling inventory would not tempted with deep discounts to boost the oc. oped. holiday weekend the holiday week and staying through several to help ensure the race’s success. they did in- which was originally held during the three. the holiday might not fill. demonstrated two things: First. Walt ary while presenting minimal risk to the Disney World’s marketers knew this was not normal strong revenues during the preceding the complete answer. deed have demand for guests arriving late in day Martin Luther King Jr. over 35 percent of to the first weekend of January. Such a seemingly extreme concept drew who have developed programs and events to skepticism and concern within the company. longer had to compete with vacationers for This calculated decision was intended to im- limited rooms over the King holiday week. Because of the to preserve rooms for guests who wanted to limitation. Disney was turning away shorter- stay beyond New Year’s Day. of unconstrained demand over the holidays tained its strong occupancy levels without the indicated it could easily afford to accept stays marathon. and the end of the first week of of four nights or longer only and still sell out January received a much-needed occupancy its peak nights. and they continued to holiday week. pectation that the resorts could book longer . The experiment attracted at- look for ways to increase hotel occupancy im. This was in the stay requests that in previous years would early days of yield management. second. tention throughout the company. have been accepted (and sold out the holiday of-stay controls were relatively uncommon week by September). When late mediately following the holidays. some people were concerned the pancy during the first week of January.140 Chapter 4  Operations: Rooms challenge for Walt Disney World’s marketers. The good news for racers. Disney’s estimates Martin Luther King holiday weekend main. the resorts during their busy season. partment had recently developed a report Disney took many creative measures to that summarized arrivals by length of stay (a boost the resorts’ occupancy that week. prove revenue during the first week of Janu- end. was managers set a minimum-stay restriction for that more of them could find a room at the arrivals during the holiday week accepting Walt Disney World resorts because they no reservations for four nights or longer only. Taking a deep breath. was moved days into January. the forecast revenue management department at Disney predicted the resorts would not be sold out by began studying ways to use minimum-stay the usual late September date under the four- controls in conjunction with New Year’s Eve night minimum stay restraint. The move was arrivals during the holidays were guests stay- a win for both the race and the hotels. This report example. The ing three or fewer nights. September came and the resorts were not As part of the effort to increase occu. However. sold out. when length. boost from the marathoners and their fami. the Walt Disney World Marathon. 1997).

Disney was not paralyzed by the fact out. The hotels filled to capac- ity over the holidays. participants decide whether nights. on the chart with the room rate written in lights a simple principle that many hotels each date block (Table 4. November.  • No.net/gotconcierge/gotconcierge.) Maximize room revenue for a five-room The final results were well worth the ef. par- that it was not in a position to maximize rev. Trend reports how capacity controls can affect a hotel’s rev- helped affirm the resorts were still on a pace enues and to develop an appreciation for the that would sell out the hotels. The room revenue contribution alone they wish to accept the request at the time it was worth over $1. pdf). is made. The hotel’s next revenue manager will not . subsequent requests that include that day that it did not have perfect information or must be rejected. it is intended to demonstrate and even early December. this is not a game of skill. At the end of the game. developed by Dennis Quinn. (It is worth noting that guests de- siring a short stay could be offered almost  Objective their pick of rooms the week after New Year’s Day. ticipants add up the total revenue they gener- enue with optimal inventory controls. Occupancy for the first week of Jan. which eased process throughout the organization. Disney’s revenue managers made use of the information available to them to achieve a Hints measured improvement in revenue while • Participants cannot go back and add a minimizing their risk. if you want School of Hospitality Administration to initi. THE REVENUE • The host should fill in a booking grid on a MANAGEMENT GAME first-come. ated for that week. will serve as the no-control method. to help out. Rather. has been • You can let the audience know they will used by guest speakers at Cornell University’s receive a maximum of 18 calls. This The following game (accessible at www. It is not an exercise in identifying a game for demonstration and discussion. almost en- tirely driven by guests arriving prior to New As each reservation request is announced Year’s Day and staying the minimum four (use Table 4. prior reservation once the next call is an- nounced. sions. ate discussions on the objectives of yield man.3).5 million. some minds in the revenue management de- partment. The prior guest has hung up and booked with the competitor. first-served basis. hotel. Instead. denying re- quests only when days are sold out. fort and nail-biting. Once a day is sold miss.  Rules uary rose 10 percentage points. It is agement. • Remember.4  Yield Management: Choosing the Most Profitable Reservations 141 stays to guests calling in October. overbooking is not an option. who is proficient at yield management deci.4). goconcierge. Section 4. having sold out in late October. Accepted reservations are recorded Disney’s success in this example high.

and recreation. Point out the value of tracking rates versus source of business when managing inventory.142 Chapter 4  Operations: Rooms Table 4. (Optimal revenue in the How much revenue might management be above game is $2. the potential for im- provement is 18 percent—that is.000.) Divide the difference leaving on the table at the hotel? For exam- .000)  2. if a par- ticipant earned $2. For example. ment in annual room revenue worth to the ence between optimal revenue and the actual hotel? How about half that improvement? revenue achieved. How much is that percentage improve- Each participant should compare the differ. 10 $ 40 Tues 5 11 $ 80 Tues 5 12 $120 Sat 1 13 $100 Mon 2 14 $ 60 Fri 2 15 $100 Fri 2 16 $100 Sun 7 What does it cost for you to lose this business? 17 $ 40 Sun 3 18 $ 60 Sun 4 be selected based on the results of this into actual revenue to show the percentage of game! potential improvement. (2.000  18. Should you take it anyway if Monday is going to run vacant? We’ve seen incremental groups turned away because management warned sales to meet the monthly average rate goal. not just room rate. Assign programs to rate buckets based on total value.3 Reservation Requests Call Room Arrival Stay Number Rate Day Length Comments 1 $ 80 Thurs 3 2 $ 80 Tues 2 3 $120 Fri 2 4 $ 40 Mon 1 $40 is below your average rate goal for the week. tell audience this is AAA discount (instead of telling them the rate). 5 $120 Tues 1 6 $ 60 Thurs 3 First. which adds $110 in value to the hotel each night. Discussion: room revenue goals versus total profitability. 7 $120 Sat 1 8 $ 60 Tues 5 9 $ 60 Thurs 3 This is a package that includes dinner shows. meals. Be careful of what you ask for.360   Game Discussion Points 2.360.

East Africa. so it was easy to get im- just moved to France after enjoying a year in pressed. Fri. First contact. a stick of Gauloises . He was un- different countries and continents every two shaven and less than tidy. We had only 14 years old. I would simply have called him “the name is Monsieur Guy de Roquefort? I was Supe. what would be the hotel’s annual room Did anyone score below the no-control revenue multiplied by 118 percent? How level? What does this tell you about the need about by 109 percent? to make responsible decisions when accepting What is the percentage occupancy of the reservations? hotel in the no-control environment? How does that make participants feel about low- occupancy months? 4. so we literally moved to the cheese with his namesake. Total Room 1 Room 2 Room 3 Room 4 Room 5 Total ple.S E E .5  Concierge 143 Table 4. Well.J ) Mario Arnaldo I vividly remember my first and last contacts apartment on the seventh floor of a well-used with a concierge. Thurs. building in the immediate outskirts of Paris.4 Booking Grid for Five-Room Hotel Fill in the room rate for each accepted reservation for the appropriate number of days. Tues. Section 4. My dad used to work for Roquefort’s scent certainly reminded me of the United Nations. Sat. Mon. His uniform du jour or three years. Not knowing the correct We have our own concierge? Wow! And his term. or disappointed.A I R .5 C O N C I E R G E ( C O N E . Monsieur de Somalia. Wed. Sun. This time our home was an was an undershirt.” or building superintendent.

?” It was as if my engagement and weekly class discussions. we would still go to Annie’s ternational airline jobs. One of these games honeymoon to come were made in heaven. someone who has a ileged opportunity to meet and work with a preference for fresh oysters! My wife is not multitude of professionals. but one. Forty years later is a long stretch of time been promoted to executive liaison at the after my first contact with a concierge. always fixed the toi. I’ve filled up my last property and pay for our rooms. handwritten. was the Concierge Game. Know what? If my wife and I were to my dad’s international assignments. Polite. scoured dozens of generated labels. On two occasions. emailed and . He probably would not get within permission to study his hotel as a class proj- 50 feet of an employment agency. She has never asked questions like. met Annie. and delighted in an. personal So I reviewed the Withiam concierge arti- notes. engaged me in titillating conver. to Pike Place Market to select just the right dearing. or ideas she lessons I had in school). in Seattle stays in my memory. “Where can was designing interactive games for my inter- we get great fresh oysters? Where is . Never forgot the slightest detail. . Annie Delucchi’s soul is in socks roll up and down with legendary ser. Charming. She always hopes we will concierge-related websites. my fiancée and I had never tact with a concierge. “the Mrs. former concierge hire him in a heartbeat. . . lets that wouldn’t flush. I still tel in Seattle. However. a great boutique ho- Roquefort’s soul was in the right place. “Can good heart. Went way beyond the call of duty in an. if ect. dred pages of articles. I’m passport with immigration stamps from 32 not just a reservation record on the IATM cities in five continents. Thanks IATM. Place Market. too. spend the whole day walking back and forth She was punctual.144 Chapter 4  Operations: Rooms (French cigarettes) in one hand and a glass of come back to visit her again and enjoy Seat- cheap beaujolais in the other. En. But Guy had a tle. short. This game is the ba- This was in 1997. Robert Thurston.? How national students to enjoy as part of our do we . we book a room for you?” We correspond sations about “cherchez les femmes” (much regularly about hospitality concepts to bring more rewarding than the four-hour French reality to my hospitality students.” She. she has faithfully sis for the research I did on concierges for this written us every year during the holiday sea. I’ve given complimentary reservations at another used up seven passports. Made my elry accessories. rival at the IATM. I have enjoyed a priv. in partic. the right place. article. Since then. I would That’s Annie Delucchi. literally a shout away from Pike remember him. see? That was in 1964. man- nouncing every single piece of mail we aging general partner. vice. This article was written in email. I can be me. All our interactions were via Last contact. Annie has since 2004. She can ular. son with neat. database. used Google to point me to a few hun- She does not use insensitive. Not even a phone call. long-distance from Honolulu! I could give him a shower and a shirt. You see. can be herself. . computer. Thanks to my two in. cles. Mr. Monsieur Guy de at the Inn at The Market. Seattle property. bouquet of fresh flowers or just the right jew- Never overbearing or invasive. I swering the simplest of requests. Eight months prior to our ar- I fondly remember my most recent con. Wassup? During the fall 2003 semester. can bring to her in-house training programs. enthusiastically gave us received. Her envelopes are also written by hand.

afternoon. to impossible din- and the more recent compcierge and tech- ner reservations at some of the world’s most ex- nocierge. after check-out rush help students and other stakeholders access time. . In and utilize the services of the university. from sor. Hawaii visited some Honolulu hotels. my own university. keyed or not. the front desk Pacific University. gala balls. Guess what it was? Yep! A concierge desk to ing midmorning hours. However. chef concierge. the moment chartered yachts. contrast. the concierge area appeared to be and finally interviewed concierges in Hon. shopping bil Travel Guide) or four-diamond and five- evenings.K. guest service staff I met are part of front desk operations. tessentially. Hawaii. will sive Quintessentially ‘Beyond Black’ credit tell you. or early evening. advertised its latest service. Quintessentially. featured one of the guest service staff I talked to.5  Concierge 145 talked to dozens of hospitality professionals. worldwide. noon. with a designated area close to— In the middle of finalizing this article in but distinct from—the check-in area. as well as in- comes to four-star and five-star ratings (Mo- vitations to charity affairs. an al. of- that will keep guests coming back. is a plus when it and cultural events of the moment. services the lobby-based concierge would pectations with minor regard for themselves without the restrictions of being in a facility. hassle and money. with Robin Leach. to highlight six significant find. or the time clock.php): tles I compiled included concierge.com/home. whether or not properties enjoy email assistance our experts are always on hand a keyed concierge. titles. seasoned the Quintessentially magazine and the exclu- concierges. areas appeared to have lulls in operation dur. Quin- had their keys or not. When I December 2003. Kahn. stars. lobby concierge. ings about the modern concierge. concierge supervi- last-minute whim our members may have. The concierges and ury. film premieres and exclusive after- diamond ratings (AAA). tially. no matter what they are titled. a membership passionate about what they do. They all have organization affiliated with luxury facilities what some have called gotta-wanna. essentially provides the same most insatiable desire to exceed customer ex. Fantastic recognize and support the need to provide offshoots of the Quintessentially brand include concierge services. activity agent.” Presence fering indispensable advice on the essential art of a concierge. head Quintessentially aims to satisfy practically any concierge. ing “Yes!” to the question “Got concierge?” Les Clefs d’Or. and Peterson card. and before afternoon check-in times. for those who assist road warriors clusive restaurants and last-minute theatre with laptops and other electronic parapherna- tickets. olulu.quintessen- Finding #2: Titles. technology. as do Nargil. The six More and more organizations are answer- findings concern passion. Section 4. are. whether they more exclusive U. Got concierge? Job ti. The concierges and event parties. continuously busy whether midmorning. Anecdotally. and with 24/7 member telephone and lia. management must openly to save you time. Life of Lux- Finding #1: Passion. Quintessentially members are also contin- (2003) that “one doesn’t have to be at an up- uously kept up to date with what’s hot and scale property to provide the kind of service what’s not through our weekly newsletter. concierge services. According to their website (www. guest service agent. and Aloha! A fall 2003 television series. without exception. guest front row seats at a fashion show and spur of services manager or supervisor.

You don’t have to look far. to conduct a one-hour videoconference Sally Yates agree it would be wonderful for between Anna Morris and my hotel and re- their properties to enjoy state-of-the-art tech- sort management students. provided me a username and ways prefer to deal with the guests face to password and gave me an opportunity to val. a software program concierge at the Halekulani Hotel for over 10 similar to GoConcierge. At one end of the technol. this is a perfect example of the space. more computers. Mike also shifts from After some weeks of emailing. on the mission from the Westin Santa Clara general phone and with walk-ins who step up to his manager and support from Clifford Planning. experience. computer monitor at his desk. prefers not to use it while inter- hotel lobby’s monitor. and uniform will include a wireless PDA. phone numbers Sony’s Contact-ME for remote video confer. a she has enjoyed her position as senior camera-video cell phone. guest services manager at (GC) [http://www. lobby on Waikiki Beach. who many years of information technology (IT) designed and developed this interactive web. think you are too far off! rent technology has to offer. the Westin Santa Clara uses memory for names. From my conversations with them. a guest ser- PDAs in last fall’s TV series Las Vegas and vices coordinator. the Ohana Maile Sky Court. I think you appropriately summarize the com- cierge. Isrow said in an interview: guests on a personal one-on-one basis at the . “I al- based program. I predict that no amount of technology monality of the concierge position with passion! will ever replace the concierge or guest ser.net/home/] al. Sometimes you just can’t trust your com- idate and confirm for myself how user. a premier Hawaii-based architectural Others exemplified by Dave Nishi and firm. found that both Dave and Sally are equally tional service rather than replace it. However. love people. there is room tion—video cell phone and a PDA—I don’t to enjoy and take advantage of what the cur. “We enjoy working with our gadgetry. He does have a encing from the concierge’s home (a three. says. but like many hour round-trip commute) directly to the concierges. more staff. We had a terrific nology. can’t even spell lows a user to manage and provide guests Les Clefs d’Or.goconcierge. Adam Isrow. and are therefore great concierges I interviewed or emailed agreed people to be around. customer service under his belt. but he has over 25 years of with information and services in a consis. and more experience. interac. These people (generally speaking) love what vice staff. Dave also has tently impressive manner. puter or PDA.146 Chapter 4  Operations: Rooms Finding #3: Technology and the Comp. Inger Boudouris and the other they do. tive software programs such as GoConcierge Know what? Dave. adamant about not letting the gadgetry come At another level of technology. and his reliable Rolodex. face. Check out the extensive usage of And then there’s Mike Doi. but given the choice. and other electronic years. some 80 miles away. places. I obtained per. sitting in the Outrigger The Threat Matrix. I application of technology to enhance a tradi. speaking English to Japanese to pidgin and back without blinking an eyelash. LLC. with his uncanny ogy spectrum. between the guest and the service provider. desk. I enjoyed your predic- with this prediction. acting with a guest.” Sally is one of only a handful friendly GC was. I predict the concierge’s of Les Clefs d’Or concierges in Hawaii. She says.

Les Clefs d’Or with the guest.000 rooms in 250 four. Concierge associations are found “concierge for all seasons. being a concierge is being a they work. art galleries. and it makes one’s guides. restaurants. This could also en- star properties. or avoiding interactions that Foundation of the Americas (United States. many travelers didn’t know me: whether a concierge was Mozart’s second movement in D flat or the alternate entrée.S. and the savvy traveler the same: to positively enhance the guest expe- started looking for the concierge. and (c) Dave and icant others affected by catastrophic or life- Sally have never met. be able to turn around on a dime. Mexico. and was founded to respond to the suffering (b) Dave works in a three-star property and of concierges and/or their families and signif- Sally in a four-star property. Oregon.5  Concierge 147 desk. mentor- tion.and five. 53 times. Charles Holzer. tions.” because you must in many cities throughout the United States.” One concern have community-based organizations. Back then. we spoke and corresponded many nantly male in Europe and other countries. Union International des Concierges d’Hôtels. tail bringing in members from the hospitality Over 3. 007 (James Bond) had his hotel con. In general. concierge members in LCD USA represent. In one of our discussions. and at the same time making important deci- bers (LCD as well as non-LCD concierges). there were about 40 members in LCD Place Hotel in Portland. for example. whether that is speakers from local organiza- ing over 100. and friendship. vendors. threatening illnesses. Inger told me about concierges: Concierges continuously network with one another and the communities in which You know. or attractions. tour unpredictable challenges. Canada. Even in fic. local tacts—concierges! In 2003. and sometimes the computer work Many concierge country sections also takes us away from that service. desk. director of media for In the original Withiam article on concierges LCD USA and chef concierge at the River- (1983). sions while talking on the phone. After I interviewed Inger Boudouris by Although the concierge position is predomi. yet each association’s purpose is LCD membership. no hour. concierges are female. education. take your eyes away from the guest. this is what percent of U. . In the we discussed was maximizing eye contact United States. In Each [LCD local chapter] is different in its 1993. concierges in the composition. There is no time for stress because knows?).S. cial support and in-kind donations of goods vealing because (a) they were self-initiated. Section 4. there were 200 U. Finding #4: Les Clefs d’Or (LCD) USA. and Brazil) provides finan- I found these statements enjoyably re. ing. tour companies. multitasking Some only admit hotel concierges as mem. enhancing revenue. networking. et cetera! I others include local vendors and employees love being a concierge because of what I call the from car rental agencies. no minute is (maybe even university concierges! Who the same. explained to USA.400 international members from industry to discuss strengthening the concierge 37 countries make up the LCD worldwide. or working in a more The LCD headquarters in Paris is called the supportive manner with management. phone. you are always in the midst of happenings. rience through knowledge. there were 450 meetings consist of an educational element. and so on life very exciting—no day.

mobiltravelguide. fellow concierges.” It • How much do you really love people? also refers to a spirit that encompasses wel- The professional in you needs to come coming. property has two stars or five. Afternoon lishes the travel guide and other travel publi- tea will be served in the pub today. whether or not they work in guest services.C. thousands of hotels and restaurants and pub- mony in our lobby this afternoon. Coincidentally.com/). 1993) hit the nail on overdemanding VIP. Whatever ways a major business revenue generator. namic environment enabling all employees. (In Hawaii. man- • How do you fix the dissatisfied? The agement must continuously maintain a dy- process usually ends up being more im. cations. confi. vice president concierge and concierge services. as he is the senior vice president nificant other). —Editor) lenged with the unruly customer.. I predict that hotel management will A brief but supremely informative phone pay increasingly more attention to their interview with Shujaat Khan. The reader should have that particular desired resource (the din- know that Massagli brings an uncommon ner reservation. concierges routinely answer. regardless of tremely important when you have only whether the hotel has a concierge desk. the “Land of Aloha. it’s snowing. revealed these (Withiam. there was no .” Finding #5: Got stars? Not? Don Mas. guests will be checking in and out—I to me that concierges add a touch of distinc- love it! tion to any property. and customer relations packaged in through Aloha. especially when you’re being chal- ies giving the gift of friendship. I had an opportunity ceptions everywhere. The Mobil Travel Guide inspects and rates At the time of this writing. Illinois-based Mobil Travel network out the solution through Aloha with Guide (http://www. sible?” Probably not all the time. D. Houdini-like concierges? My interaction with concierges in Hawaii. Jameson tol Hilton in Washington. So what is the en- concierge: exercising the best balance of ergy source of all the legendary stories of ethics and the highest code of conduct. makes it happen by practicing “service dence. whether the of LCD USA and chef concierge at the Capi. tells me that concierges are loyal and have a sagli (2002) wrote an article that at first built-in desire to please and satisfy within le- glance appears to be a straightforward com. friendly accommodation that embod- out. the number of stars the property has. We have a wedding cere. or the jealous signif- the head: “Does management create the envi- icant other! ronment to make exceeding expectations pos- • The successful concierge operation is al. he repeated all this. 1993) sums it up best: “[G]uests weathered and tested beliefs: are going to ask the kind of questions that • Time management of your skills is ex. a hard-to-find gift for the sig- perspective. he or she knows how to of Park Ridge. wedding re. The concierge in Hawaii mentary applauding the assurance. to • Of paramount importance to the future exceed guest expectations. Aloha means more than just “hello” or “goodbye.148 Chapter 4  Operations: Rooms Today. gal and moral limits. and in the middle of to interview Massagli in person. portant than the end product. the Silverman (Withiam. regardless of its star sta- tus.” And when he or she doesn’t your hotel concierge.” limited resources! Finding #6: Aloha.

I urge students. tion. I would argue by extrapolation. keeping them one of the quotes from her website: informed on recent changes and improvements at places they might very well recommend. and efficient inter- clude those from the outer islands. but there one else anywhere in the English-speaking are several Les Clefs d’Or concierges on and -writing world. I was reminded of cusing on the latest happenings. we the service provider.6  As I See It: Management of the Front Office 149 Les Clefs d’Or section in Hawaii. sive research but rather on my experience the front desk. Kapolei. this by holding regular gatherings where industry responsibility falls specifically to guest ser- professionals can mingle and share informa- vices employees such as the concierge. Oahu. [hotel] entrance telling customers how to be- tions. I provide some ideas about the physical an associate or a manager. but unfortunately they are not monthly. The modern concierge serves as the and they rarely (due to travel complications) in- knowledgeable. setup as well as ideas about hiring the right eration from my point of view. During tion to the hospitality industry as a whole. Any one topic she writes about could be a cus- Our goal is to disseminate pertinent informa- tomer service seminar or workshop. namely the bell stand. educators. .6 A S I S E E I T : M A N A G E M E N T O F T H E FRONT OFFICE Oliver Meinzer The following article is not based on exten. My research revealed Holly Stiel has proba- bly written more about concierges than any- 4. sensitive. It is this exciting profession I have attempted  LAST THOUGHTS to overview in this article. front office operation. So the on Oahu located in one of the few cities without responsibility for appropriate behavior falls on an official [Les Clefs d’Or] organization. and the other popular resort and professionals in all service industries to areas of the state. as The reality is that there is no sign above the well as including industry changes and promo. have an additional burden to try to fill that void And. As we are the only industry publication have. browse through her website (http://www. According to Pam Davis.com/index. Section 4. and the guest relations depart- working in front office operations. I also pro- I write about the setup of key areas of the vide insights into the daily tasks in all areas. fo- an interview with Holly. associates and the training tools. publisher of the Oahu Concierge newsletter: thankyouverymuchinc. It looks at the op.html). In this article. face between the guest and the array of hotel and community services available to travelers. and sometimes they behave badly. either as ment.

ties.150 Chapter 4  Operations: Rooms what I look for as a manager. their significance and the influence they have ered concierge as well. The information can be used by the tive if the associates are trained properly and reader to understand processes better and get have the necessary knowledge about the ho- a good idea if working in this area is some. and so on. accompanying him or her to the room printed driving directions to popular destina- . The basic duties of a bell per. easily accessible by both or relative working there as well to get the guests and staff. invaluable for the hotel. hours of operations. I provide a timetable of a experience. If proper reporting channels are in place. end of the chapter. the bell staff was consid. best insider knowledge about the location The bell stand is usually located in the and attractions. This kind of information is manager. This is still the case in ho. as the bell staff has a lot of influence This article should give the reader an idea on the guest. and about the regular workday in the life of a front office guests themselves. with access to the Internet and the property coming and outgoing guest luggage. and encounters. the ambassadors encounter the guest has with the hotel and its for the property. inquire about of connection. and they always had a friend main entrance area. room where luggage and other guest items tels where the bell staff has been with the can be stored. as they usually had the on the hotel and front office operation. spend a significant amount of time with the If no printer is attached to the computer. Specific tasks differ and informational material about attractions from property to property. the bell staff may ing recommendations about leisure activities. A computer son include but are not limited to handling in. storage of luggage for formation but also access guest information guests. in the surrounding area help the bell staff Depending on a property’s check-in and point guests in the right direction after mak- check-out procedures. guest toward the hotel’s outlets and ameni- porates and what it takes to run such a de. It is usually close to a storage guest a special deal. This. pre- guest. and being present in the lobby area to like room numbers and contact information answer questions or assist the guests with any or to leave messages on guest accounts. telephone with an outside line to enable the it is primarily the concierge who has this kind staff to make reservations. and the reasons and explaining the features of the hotel and behind certain processes and actions in the its surroundings. enabling the staff to steer the about what the front office operation incor. At the mation from guests about their stay. It is important to understand staff. like birthdays and anniversaries. The bell staff tant because they are usually the first and last is the hotel’s eyes and ears. the hotel. the hotel can be proac- tive in addressing an incident before the guest  BELL STAND considers it a problem. Traditionally. This information also helps the hotel recognize special occasions The bell stand and its associates are impor. is only possible and effec- partment. In newer properties. of course. The bell stand should have a property for many years. greeting management system (PMS) allows the bell arriving and departing guests as they enter or staff not only to provide the latest online in- leave the hotel lobby. This is a key encounter for day-to-day operation. tel offerings. The bell staff gets a lot of infor- thing he or she might be interested in. Maps requests they might have.

guest contact all guest requests and questions. There are usually two parts tails for the day are being discussed.6  As I See It: Management of the Front Office 151 tions (e. Helpful quired training and is working regular shifts. It is always functionality. train station. better to interview more candidates to make Another important item for the bell stand sure you find the right person for the job than is a so-called trip log. The bell menu. This includes polishing the metal or working in public. The shift. later. but the trip log helps the staff and locations). The bell staff a front office manager. (you probably do not want to use a wooden it is important to hire the right candidates. the different room types. landmarks) tools that ensure daily information is commu- can be handed out to guests. late. However. one for the bag/item and the sec. In order for the staff to attend to the phones—and. board with information on it. The storage room should be big enough it is the front office manager’s responsibility to handle the storage demands for the prop. The shelving should be arranged and la. well groomed.. loss prevention staff must ensure that they are wearing the (first aid. plenty of luggage carts. As dolly in a five-star property).g. where the important de- gage for storage. a simple spreadsheet to go with the first decent applicant. wrong room. a pre-shift meeting. A possible training rotation tool to communicate which room is next. spa offerings. Once the staff member completes the re- edge before they start their shift. and articu- brass parts as well as maintaining the car. front desk (basic check-in and rectify the situation immediately. should include housekeeping (great insight Sometimes luggage gets delivered to the into the room setup. comfortable with condition. airport. and it keeps fice manager. it is impera. you look for appli- must ensure that the carts are kept in good cants who are outgoing. nicated to the front-of-the-house staff include Luggage tags are used to label guest lug. of course. Never where the staff marks the room numbers of compromise when it comes to hiring great check-ins and check-outs they performed. It is important that outlets (knowledge about the restaurant this area is kept clean and organized. and therefore the property’s attendance bell stand should also be equipped with policy applies). or a daily ond for the guest to claim the stored items newsletter in everybody’s mailbox. as well as basic training to cover condition. that the associate either attend the pre-shift erty. the with direct guest contact. you can make this part of the the storage room organized and clean. staff! This log is a great help if you have to retrace Once a new bell person is hired. a white to the ticket. . First of all. check-out procedures and basic knowledge The bell stand is a front-of-the-house area about the property management system). etiquette. and emergency pro- proper uniform and that the uniform is in top cedures).). Those carts should The bell staff itself should be trained like match the decor and category of the hotel any other front-of-the-house staff. security. and who have a good understanding of peted area and wheels to ensure proper service and a positive attitude. proper a luggage delivery or pickup or simply as a training is key. etc. This makes it easier for the bell sary information for their shift (as a front of- staff to store and retrieve items. Section 4. meeting or read the information provided on beled to reflect the numbers or letters on the the whiteboard or newsletter to get the neces- luggage tags. tive for them to have all the necessary knowl.

lobby area much more quickly to greet or as- ins come in waves. Other necessities for each worksta- tense. easily accessible from the main en- workplace to cross-train other associates at trance door and the guest room elevators. important to stop everything. In the bell stand as well. emergency pro-  FRONT DESK cedures. the ties. exchange. technical support information. the front desk. Associates in loss pre. who The primary tasks for a front desk associ- . in high-rise proper- front office operation and. The number in a timely manner. staff person. key ventory as well as the check-in and check-out cards. It is tion. other department are then able to help out at The advantage is that the agent can access the the bell stand if necessary. it is important to keep worksta- guest in house. Having the flexibility of of workstations depends on the size of the ho- calling associates from other departments to tel. area maps. and use The front desk is usually located in the their information to adjust and improve the lobby area (sometimes. and requests at the hotel. room service. check. A good rule of thumb is 1 workstation per help out ensures guest satisfaction and is a 100 guest rooms. regular meetings are necessary to conflicts. They have to be collect feedback from the staff. It is vital that this folder—an important The front desk or reception area is where front-desk tool—is in order and up to date at staff-guest interaction is probably most in. communicate any changes or additions and to and perform guest services. outlet location.152 Chapter 4  Operations: Rooms regular performance checks should be imple. The desk is divided into several might not be able to get bags to guest rooms equally equipped workstations. and scissors. The agents deal with the check- tools and information to perform their duties. the front desk is located on a higher guest experience. some properties. the most important access point for informa- valuable for the front office operation. The front desk manages the room in. reference guide with information must make sure that the guest’s first and last about room location. called the rooms controller. dividual guests and groups). all times. The front desk assigns rooms tions clean and organized at all times. As with the process and the account activities for each bell stand. This is the de- It is the front office manager’s responsibility partment with the most traffic in the front to supply the bell staff with the appropriate office area. market codes. or any individual islands instead of a long counter. The bell staff jacks-of-all-trades because the front desk is is at the front of the line. Each workstation has (this nice change for the other associates. Sometimes. is in charge of assigning rooms to incoming in- mented to ensure knowledge stays up to date. listen. currency impressions are positive. It has proven helpful in my floor). and other property-related informa- tion. key sleeves. are all in direct view for the guest and reflect erences and requests (many properties have a on the hotel’s operation. again varies from property to property) a Because in many cases the bell stand is lo. credit card and check handling instructions. complaints. rate codes. address reservation/billing inquiries. Their input is in. handle cash. tion include paper and pens. resolve Therefore. ultimately. room key encoder. the hotel phone. and the current bell staff sist the guest. tele- the guest sees and interacts with. as they to the arriving guests according to their pref. front desks take the form of vention. cash. in/check-out procedures. computer or PMS terminal with a credit card cated in a high-traffic area and is the first area swiper and printer.

as With competition fiercer than ever. the frequent-stay program that offers various hotel may find itself in an oversold situation. according to the property frequent-stay program membership level: management system. problems and costs. the room as long as he or she gets a good fects the room revenue figures negatively. It is important to the guest who pays the higher rate. verify the room rate during the check-in process (especially if a guest’s room rate • Length of stay: A guest who checks in late changes during the stay). the hotel might have During the check-in process. Section 4. The correct room type and location can AAA or AARP]. much self-explanatory. • Loyalty to the hotel and company/ posed to check out. which takes extra time and af. the agent should lost an opportunity to sell the room. otherwise. the hotel depends on all guests who are sup. method of payment.6  As I See It: Management of the Front Office 153 ate are the check-in and check-out of guests. However. Almost every hotel chain has a rect and he or she needs to be extended. be time-consuming and therefore a significant you may want to assign the nicer room to inconvenience to the guest. night’s sleep. The rooms to reservations. The order of impor- verification of this information is important tance of the criteria may depend on local or to avoid discrepancies in the billing process corporate standard operating procedures.g. earlier than expected. here). to actually check out. Selection is a credit cards). where guests depart before the confirmed de- quested room type or room preference. rates by checking membership cards [e. It is up to the individual prop- rate (it is important for the front desk agent erty or chain if an early departure fee (usually to verify the guest’s eligibility for discounted one night-room and tax) is charged. On the other hand. a guest Billing discrepancies are the most common staying with family or a spouse for several reason for guest complaints. and adjustments during check-out. membership levels based in number of This causes a chain reaction of additional room-nights spent with the company. as there are ments. the front and stays only one night might not be too desk must adjust revenue during the check. there will be occasions but is not limited to duration of stay. special requests or arrange. room parture date. several aspects to consider when allocating stay membership/airline affiliation. Accuracy verify specific information related to the is thus very important to maximizing hotel guest’s reservation. re. pact on room allocation. portant. ensure the most loyal customers to the fied during check-in) and the guest checks out brand or chain are recognized for their . company IDs. If a guest’s actual length These membership levels have a great im- of stay is shorter than the property manage. loy- their rooms have been sold to other guests for alty is becoming more and more im- the night. government be essential to guest satisfaction. matter of training and experience.. The information includes revenue. and any frequent. days will certainly have expectations re- The verification of length of stay helps garding view and room location (the con- the front desk manage room inventory more cept of proper segmentation applies accurately. If there are two Discrepancies in the billing process can guests with the same room type request. and to en- • Rate: This selection criterion is pretty sure accuracy in room availability. The hotel must ment system shows (because it was not veri. Especially in a sold-out situation. concerned about the view or location of out process. If a guest’s departure date is incor.

This helps when printing reports and checks out of the hotel and the hold is re- . the amount authorized will cessible room.. In most cases. Usually. Each prop- or connecting rooms. credit limit exceed report. Examples include an equivalent amount should be collected and room type. These guests are not necessarily phone calls. The VIP spond to any of the messages. verifies that the requests inum or gold level) include room type and and guarantees are met. This requires the guest to stop by the manager on duty or general manager the front desk to get a new key issued—a escorting the guest to the room) or the good time to inquire about an alternative type of amenity for the guest. if the guest does not re- tive. movies. Local standard operating • VIP levels: Hotels have individual VIP procedures determine the next steps the front levels indicating the importance of the desk associate takes. However.g.154 Chapter 4  Operations: Rooms repeating business. The incidental amount varies from property • Reservation guarantees: Many corpora. cash deposit. etc. check-in process. either elec- grams to acknowledge and reward guests tronically or manually. program. deposited on the guest account. Payment can be made in cash or by valid quent guests and the money they spend credit card or check. Some programs even A method of payment must be secured ei- penalize the individual property if those ther prior to check-in (e. if so. method of payment or to ask for an additional In addition. reservation guarantees. The total amount of who frequently stay with one specific room and tax and an incidental amount (for property. celebrity. high to know that when guests use a debit card floor/low floor. not be available for the guest to withdraw ment systems have codes that identify such from the checking account until he or she requests. Many companies offer mone. to property. as mentioned above) if without sufficient authorization appears on a the guarantees are not met at check-in. many hotels cept money orders. meeting planner. guaranteed when erty management system checks regularly to the reservation is made and based on see if the authorized amount has been ex- availability. upgrade guarantees. In addition. during the membership level benefits (usually plat. room service. request for a universally ac. on the guest’s credit card. Benefits of higher when the front desk associate. a group tries to contact the guest via phone or text VIP. bed type. depending on guest room ameni- tions have introduced the concept of ties and services. authorizes additional funds tary compensation to their guests (penal. some properties also ac- with the chain. during check-in. and so on. the front desk levels might include specific room assign- might go as far as locking the guest out of his ments and check-in procedures (such as or her room. Any guest account ties for the hotel. rollaway and baby crib requests.) are au- members of the hotel company’s reward thorized on the credit card to secure payment. vation might include information about aller. a credit card have developed local repeat guest pro. importance companies place on these fre. It is important for the front desk associate gies. which the front desk runs regularly. political figure. If a guest wishes to use cash. smoking preference. This shows the reservation) or during the check-in process. the front desk guest checking in—for example. for a prepaid guarantees are not met. Property manage. corporate execu- message. imprint is made during check-in. ceeded and. special requests on the reser.

If a guest decides is delivered to the guest room the morning of to pay by check. as the associate course. the credit. Training is definitely an on. In addition. The number for movies are currently showing on the hotel the institution can be found on the back of channel. If the a guest room once in a while to get refamil. going process. systems also feature a video check-out option. the associate should also verify ing staff does. front desk associate can handle the majority the front desk associate should offer assis- of guest requests and questions. It should be part of the check-in pro. Section 4. and the tance with luggage and transportation and. amenity offering. Working with the concierge that the guest has a frequent-stay member- helps the front desk associate learn about the ship number on file. check-out. the front desk associ. there is still signif- (housekeeping. cover the balance on the account. the front desk associ- mode of operation. the front desk associate can check-out. The guest may use this as the re- get immediate clearance to secure payment ceipt and need not have to stop by the front and avoid bounced checks. the hotel may lose the chance to rectify learn about any changes made to the setup or the situation and compensate the guest. location. ceive detailed training in these areas.6  As I See It: Management of the Front Office 155 leased. ate verifies that all charges are correct and Working in housekeeping gives the front confirms the method of payment on the ac- desk associate great knowledge about room count. Most front desks are Most hotels these days provide an express equipped with a check verification system check-out option. cludes knowing how to connect to the Inter- counts immediately by contacting the net and how to order a movie but also what appropriate bank directly. and views. It is helpful for the associate to visit desk to get feedback from the guest. movie systems. of course). the credit/debit card. amenities. It is though. concierge. of check-in process is faster. it is sufficient funds are secured in advance to important that all front desk associates re. like high-speed Internet access and However. the associate cedure to inform the guest about this before should be familiar with the in-room technol- taking an electronic imprint of a debit card. This. viding guest services including directions. the front desk can re. Therefore. Many in-room entertainment ate spends a significant amount of time pro. restaurant) to learn about them and their During this process. rate. Therefore. inquire about area and its attractions and activity options the guest’s membership to ensure proper for the guests. Therefore. of course. With all this knowledge. it is useful to inquire about the . At the end of the check-out process. desk to check out (only if the billing is accu- Throughout the day. A copy of the guest’s folio (similar to grocery stores). ogy. not only in- lease holds on credit card and checking ac. maybe even the icant check-out traffic at the front desk. The guest still has the option of chang- setup. if necessary. but also ing to a different method at this point. However. which allows the guest to check out through restaurant and activity recommendation. During an appreciation for the work the housekeep. the TV screen. many companies require their associ- helpful for all new front desk associates to ates to present a zero balance receipt for their spend a few days in other departments expense report. and if not. thank the guest for staying at the ho- knows everything about the room type and tel. and rate inquiries. guest experienced any problems during the iarized with the room types and locations and stay. This is the last opportunity for the front location. To this day. this works only if reservations.

many companies to develop new guest rela- However. and its offerings. where Service Express. lecting and training these associates is one of The initial training of newly hired front the main responsibilities of the front office desk associates is crucial to guest and associ. and Westin’s future). It can tion models focusing on the one-stop-shop be in the form of on-the-job training (new guest experience—for example. dialing a single extension. and problems during their stay. Many com- ing. see how de. the associate who tion. tools from the beginning. purpose gives them a fun night out and pro. Most systems allow the hotel to nerve center of the hotel. a daily 15 minutes of learning. Candidates should be very com- fortable with working in the public arena. about each guest. answers takes care of everything. Providing them with the right tools ate satisfaction. its features. training should be ongoing. panies have also implemented a customer re- organized by the front office manager. This attention helped the property. the staff can place certain items the guests and fellow associates. revisiting associate Whenever Department at Starwood’s W Ho- actions to discuss alternative solutions for the tels. Marriott’s At Your Service. logged to better learn about guests’ habits. provement. candidates If all requests are logged properly. These data can be used in process. or specific make any request or order room service by job-related training classes (problem resolu. Initial training  GUEST RELATIONS should include a rotation so the associate can experience other departments. Preferences flict situation without losing their cool. service recovery models. Secret shoppers. With reference to this infor- ity—the willingness to go the extra mile for mation. guest usually requests in the room when he or The front desk is the front-of-the-house she returns. Guests can conveniently a new topic is discussed every day. public speak. can be tention database where every request is helpful in identifying opportunities for im. Guest relations are getting more and more partments interact. You want to be sure print repeat guest reports for each day that . You should look for certain charac. manager. clear idea about trends that might lead to po- Again. Unless the front office man. As with all front-of-the-house jobs. success starts with a good hiring tential problems. front desk.156 Chapter 4  Operations: Rooms guest’s experience while processing the the best associates are represented here. This is invaluable information for hotels that vides the department with valuable informa. many ways and should be shared with every teristics when interviewing applicants for the department. the hotel should be well polished and groomed and has an enormous amount of information should possess a service-oriented personal. to do their job well is key to success and guest ager provides the associates with the right satisfaction. the service en- counter can become a frustrating experience for the associate and guest. and become familiar with attention these days. Se- check-out request. want to anticipate guest needs and develop a tion about the team’s performance. the Whatever processes and procedures. interpersonal skills). Using friends and family for this preferences. They must be able to multitask in a fast-paced  Specific Customer environment and able to handle stressful con.

It is important that all re. it guests experience during their stay (only. Similarly.e. or mechanical equip- guest’s requests. Incidents: Reports show any problems cess. and thus free up time to take sets the hotel apart from the competition. is the key to suc. it is essential that every basic room amenities and should always be staff member is behind it and reports every is- there. This son for those increased requests (i. Re. This information can be If a hotel has such a reporting and track- helpful in several ways. case of service issues) as well as engineering- related opportunities. On the other hand. Otherwise it course. Anticipating the from the guests. towels. the data may show that a pool. if the requests way to make these systems produce accurate do not show a clear pattern. if the guests report them). .. Again. people take towels to the For example. items is the only way to convince everybody else to are not replenished when the room is work with the system as well. an increased amount of calls for a more specifically. This is the only cleaned). though. An increase in the number of these re. be an indicator for a broken—or dangerous— tion from the system and learn from it. quests and issues are logged in order to make hot water pump. several calls from a room indi- Requests: Reports show the requests cating that the HVAC system is not working (e. in-room coffee) made from might signal a clogged filter. It is up to the hotel—or. For example. If you tell room. (The concept of “garbage in. as to consider other reasons. The care of other guest requests faster. the front office manager or burned-out light bulb in a specific room might guest relations manager—to extract informa. or electrical appliances. of must ensure consistent delivery. database.. with the reports  Requests and Incidents these systems allow the hotel to produce. This will reduce the number of calls won a customer for life. you can narrow the problem to specific associates The other important use for such a system is (in cross-referencing with department sched- the analysis of the data logged through the ules). company that manages to set up a centralized an increased number of requests for mouth- database of this data for the entire chain wash might cause the hotel to add mouthwash has a significant advantage over competing to the basic bathroom amenity set. general manager must give full support. dur- well as incidents and requests from prior stays. ports can be narrowed by floor or even by garbage out” is relevant here.6  As I See It: Management of the Front Office 157 show the preferences of repeat customers. These data might lose its credibility and no longer stand help the hotel identify topics for retraining (in out in the mind of the guest. sue or problem so it can be entered into the quests should catch the manager’s eye. specific rooms.) The support housekeeping section to see if the perfor. for this initiative must start at the top: The mance of a particular housekeeper is the rea.g. For this process work. Once a hotel has started this process. ment such as a malfunctioning plumbing riser. which guest rooms. This finding might lead the hotel to in- the guest at check-in that extra pillows have crease the number of towels in the rooms in already been placed in her room. ing the summer. one might want results that could save hotels a lot of money. example. you have summer. Consistency. Towels and coffee are ing system in place. light fixture. brands. so you might experience requests for specific guest called for extra pillows during clean towels when guests get back to the her previous two stays at the hotel. reduce the time spent deliv- needs of the guests before they have to ask ering towels. Section 4.

stressful and challenging situ. while you are on property covery and problem resolution training is key (or even if you are off as well and should be a constant part in the property). I would not want to evening and night you work in any other industry. Working with the different sys. It is important the staff ties. The associates must be familiar with literally everything. The hiring 7:00– I walk all my areas and wel- process should be similar to that at the front 8:00 A. After the conversation. as they must respond to 7:00 A.158 Chapter 4  Operations: Rooms To reiterate. However. Computer training is ing with your staff helps important too. X is at the desk com- plaining about his room FRONT OFFICE service breakfast and MANAGER wants to talk to a man- ager. the rewards will come.M. As a de- should likewise include a rotation through partment manager. the faster they will be able to willing to do what you ex- work with them. it is the need to follow up with. Service re. and information about prob- so on. and the more comfortable they are with sees that you are always the systems. For me. requires passion. with feedback. every request and complaint. Of course. lives and you value their Working in the hospitality industry. Training powerful tool. I meet with Mr. Mr. come my staff. build team spirit and trust.M. training the associates in the this business. as the characteristics of a potential guest by walking around is a relations associate are the same. This is also a its crazy hours. Arrive in the office. Communicat- associate development.M. mails and trying to return them in a timely manner (very challenging). greatest reward when a guest or associate 8:00– Checking emails and voice thanks me for what I do. and take care of the issue. The associates in the guest pect them to do. I ager. enced it during my time as front office man. X This is a typical schedule as I have experi. this timetable should guest relations department is critical and give the reader a sense of the challenging job probably more intense than other depart. to your staff shows them but all staff and management must be aware you are interested in their of the importance of this area. of a front office manager: ments. Talking relations area are the hotel’s eyes and ears. weekend and holiday obligations. Managing desk. If you love what you lems from the previous do. days are never the same in follow up with the room . tems is a big part of associates’ responsibili.  A DAY IN MY LIFE AS A 8:20 A. you every department to develop the insight and want to be visible and ac- product knowledge that will help the staff cessible to your associates member make the right decision. 9:00 A. good opportunity to get ations.M.

Meet and greet is important. Section 4. and he (scheduled site tours. It is the responsibil- to ensure proper staffing ity of the front office at all times. 10:15 A. inquiring about his next 1:30– I am paying my invoices. meeting where we discuss 12:40– Associate X calls off for the the previous day. Associate Y offers to stay nouncements pertaining a little longer. 1:00 P. go over her performance 9:15 A. in addressed. I call the to the overall operation night auditor. and Mr. ing stay.M. are aware of their per- This is what we call being formance. 12:30– Catching up with emails and 9:00– Morning meeting with all the 2:00 P. man. This is the daily other things). and any an. Ensuring your manager to provide such associates take breaks is feedback either in official important—and the law. repeat cus. X Noon– Lunch (this is not a regular does not experience it 12:30 P.M. agrees to come in early. dia appearances. busy evening. It will be a rent day’s events. I negotiate with your responsibility. agers out of the office.). an upgrade for his upcom- tered into our guest rela. I identify areas of opportu- also cover the breaks for nity and makes them the front desk associates grow. The shift is covered. again when he returns. 1:30 P. rate.M. Y. reviews or in-the-moment 10:00– Mr.M. evening shift. Y. so I need to special guests. Accounting and finance available and he does not knowledge is important to want to pay the available department managers.6  As I See It: Management of the Front Office 159 service staff and the food the regular rate (impor- and beverage manager to tant if your company has ensure the issue has been a best rate guarantee). me. voice mails (between 9:15 A. occurrence).M.M. tion database so Mr. managers. find a replacement soon. calls coaching. tomers. VIPs.M. the cur. I double-check addition I guarantee him that the incident is en.– Work in the lobby with the review. Regular feedback noon associates. This helps them the lobby ambassador. 1:00– Meeting with Associate Z to etc. His usual rate is not 2:00 P. a repeat customer. stay.M. You want to our regular guests and make sure your associates help out at the bell stand. and we agree on you have to be able to . which is significantly The department budget is higher.

bility to the guest. helps cover the front desk 4:15 P. for the front desk. critique the events of the manager just want to be past week and discuss de. etc. We ing and want to speak to a 3:00 P. and assist wher- 3:30 P. set. it sociate) early before they is a great learning source become serious problems. room operations to dis- times. make sure everything is . A lot of times bottom line. Y and explain the 7:00 P. meet. check-in time. available for her. listening to make sure everybody is to them gives you a lot of okay and has the tools to information and feedback.M. guests who are complain- 2:00– Operations meeting. I also I cannot stress enough the want to make sure to hear importance of this feed- about issues (guest or as.M. group VIPs and cuss the sports team contacts. I want talking to them. information is crucial to 5:00– I am in the lobby. the evening shift. and greet the associates of cessible to your guests. staff during the peak preparations such as pre. room preferences. I com.M.M. shift takes have an upgraded room their breaks. have the opportunity to ting up remote check-ins. arrival patterns. etc. time before I leave to sold-out situation. helping my scheduling as well as 6:30 P. ever necessary. This is important to show credi- an important way to col. for everybody. to success and a smooth tions. It also 4:00– Mrs. Proper preparation is key ing schedules and loca. Here I also keying guest rooms. I talk to 6:30– I walk all my areas one last Mrs. welcome our repeat cus- 3:00– Interview with an applicant tomers. interact with our guests.M. heard. Y wants to talk to a man. Such operation. She is your budget and secure satisfied and checks into your contribution to the her room. Being in 3:30– I walk all my areas and meet the lobby makes you ac- 4:00 P.M.M. ager because we do not while the P.160 Chapter 4  Operations: Rooms read and interpret finan. Good listening tails about the events for skills and demeanor are the coming week. do their job right.M. back for your operation. lect information regarding 4:30– Meeting with the director of check-in and check-out 5:00 P. pensate her with access to cial statements to control our VIP lounge. check-in for the next day.

occupied. how- greater Miami area. Her relationships. not clean. cruel same chain. either in person or by front office manager and concluded that it is letter. its services. nificant amount of time learning the job of • Guest complaints. and the resort’s ager and the manager on duty during the facilities and amenities. I stop by my office to 4. they are escorted to rooms of these difficulties. after guests have and solutions are likely to result in resolutions checked in. but they lack strained. evening. Many want to become actors and are active in dinner the. mostly tary letters and comments by a ratio of students. Jennifer Waters spent the first and demeaning practical jokes have been five or six months familiarizing herself with played on the front office assistant man- the hotel’s markets. day. strate to top management that the analysis • Several times a week. weather and the social amenities. with other managers in the hotel are are bright and attractive people. I make sure all voice mails one last time. Jennifer believes her relations with her aters and small theater companies in the staff are pretty good. For the most part. the area. they ever. particularly with housekeeping and the professionalism that comes from a solid sales. core of knowledge and training. my associates know how and then I leave for the to contact me if necessary. What items might be on this list? What form could • Several members of a national associa. ous years and are outpacing complimen- The front office staff are young. and its significantly different from that of assistant staff have more than doubled over previ- front office manager in a smaller property. she decides to following: compile a list of their possible causes. Section 4. .7 M I N I C A S E : T H E N E W F O M After being transferred and promoted to that are out of order. their potential solutions take? tion board of directors complained of Be sure to include rationales for the solu- rude treatment while checking out of the tions and a plan that will allow her to demon- hotel. tel in Miami from a smaller property of the • Four times over the last six weeks. about the hotel. who are in South Florida for the two to one.7  Mini Case: The New FOM 161 going well and everybody check for emails and is happy. Among the As Jennifer seeks to understand the com- things that concern Jennifer as FOM are the plexities of these problems. She also spent a sig. or already front office manager of a 600-room resort ho.

M. the room preference of the guest. Since arriving at the from “say around 1:00 P. of the troubled properties that were turned The front desk manager complains that the around under Morgan’s leadership. Morgan has sensed real time and “it seems to work okay for them!” dissatisfaction with the check-in process. that was previously given when making the ence rooms. has an earlier check-in guests at the hotel. What would make Morgan think they After discussing the problems with the would put out the cash now? . Thus. guests arrive. to 7:00 Coug Inn.8 T O C H A N G E O R N O T T O C H A N G E : A C A S E S T U D Y AT T H E F R O N T D E S K Nancy Swanger Morgan Black has been described by the cor. The front desk man- After analyzing several previous months’ ager further states that the new hotel in town. front desk manager. the paperwork mated property management system. guest’s check-in needs. Morgan has made several observa.M. with over 65 percent when classes are not in session being ex. however. with last month’s the hotel advertise its check-in time to be RevPAR at a record low. Occupancy has been declining taken. reservation. difficult at best. P.162 Chapter 4  Operations: Rooms 4. The hotel is at full occupancy guage other than English. with periods the reservations. and room status is often mis- mencement. years. clerks are forced to elers and visitors affiliated with the local leave the guest at the counter while they at- university. the front desk fill out. It seems that front desk clerks more time to work with each most of the problems involve the front desk. The re- at check-in is perceived as lengthy and hard to sponse was not favorable. Many times. communication is only during football weekends and com. The front desk manager suggests that for the last year or so. This results The Coug Inn is a 150-room full-service in the guest having to refurnish information property with several medium-sized confer. or 2:00 P.” and guests have been checked office had not put any money into the place in into rooms that were not clean. the Coug Inn is manner. of the housekeeping staff speaking a first lan- tremely slow. comment cards and informally chatting with the Suite to Sleep Inn. tempt to retrieve missing information from ated between August and May. the front desk clerks always appear to manager mumbled something about “old be running around “like chickens with their dogs and new tricks” and that the corporate heads cut off. The bulk of the revenue is gener.” to reduce the crunch time and allow tions about the hotel’s situation. It is reservations staff does not always submit the hoped the story at the Coug Inn will have the day’s reservations to the front desk in a timely same happy ending. hundreds of miles from clerks have no idea what rate was quoted or any other corporate properties. Morgan asks the front desk manager how the eral common themes have emerged: The staff might respond to moving to a fully auto- process seems to take forever. Sev. Morgan is in a quandary porate office as the Miracle Worker because about how best to move toward a solution. and the desk in a remote location. Further. it caters mostly to business trav.M.

Sternberg. Englewood Cliffs. 1992. Glenn. 1997. and D. 4. “Rev- Allin. Nancy J. 1999. Lawrence E. and Mark Peterson. How should Morgan proceed in resolving Morgan considers changing the check-in time the communication issue? in exchange for the front desk manager’s 3. 1985. “Empowerment: rant Administration Quarterly April:38(2): Trust vs. “Keeper of the Keys: fessional Concierges Offer Tips to Improve Concierges in American Hotels. “Pro.” Hotel plete Handbook to the World of the Concierge. How might Morgan present the case to 1. and Stephen ———. Denney G. Massagle. “Launching the Revenue Florida International University Hospitality Rocket: How Revenue Management Can Work Review 3(2):38–48. 37–38. Ultimate Service: A Com- Provide Added Value to Properties. “American Concierges Set Service LeBruto. Control. and Motel Management (August 1). Section 4. William J. 2003.. 1990. Nargil. NJ: Prentice-Hall. J. “Revenue Enhancement. Quain. What must Morgan take into considera. Bardi.” Cornell Hotel and Restau. Sansbury.” Cross.” Cornell Hotel and Restaurant 6(1):42. . Administration Quarterly (40)2:76–83.” Hotel and Motel Management tel and Restaurant Administration Quarterly (January 13). 2. 1983. New York: Van Nostrand Reinhold. S. B.8  To Change or Not to Change: A Case Study at the Front Desk 163 In an attempt to reach a compromise. “Multitasking Concierges Stiel. Don J. (no date). Hotel Front Office Manage. Khan. Manager: Key to Hotel Communications.” Florida hanging Fruit—A Simple Approach to Yield International University Hospitality Review Management. and Kelly Halpine. Withiam. Holly. James A. Robert G. Part 3: Picking Low- Clerk and Cashier to Guest Agent.” Cornell Hotel and Restau- 32–43. the corporate office? tion before final decisions are made to ad- just check-in time and install a fully automated property management system? R E F E R E N C E S Albrecht. “From enue Enhancement. Michael Sansbury. Quain.” Cornell Ho- Guest Services.. Service More Money.. 1993. 1988. Rutherford.” Cornell Hotel and Restaurant Ad- 1: A Straightforward Approach for Making ministration Quarterly 34(4). Administration Quarterly 39(5):44–45. “The Front Office ment. 24(3):40–48. pp. Carl. for Your Business. Quinn. M. 1998. Who needs to be involved in the final de- support of the conversion to an automated cisions? Why? system.. Part Standards. rant Administration Quarterly 33(1):69–72. 1985.” Cornell Hotel and Restaurant America! New York: Dow Jones–Irwin. 2002. and Ron Zemke.

Van Dyke. adapted John Wiley & Sons. H. “Grab Hold of the Grape.” In VNR’s Encyclopedia of Heldenbrand. Vallen. 1992.” by Garry Dickover. Deveau. Michael L.) Review 3(2):38–48. 1993.). 1985. Portocarrero.” In In Check-Out. Reinhold. “Organizational Climate tration Quarterly 31(2):78–83. Robert C. 2nd ed.V. Myths of Yield Management. New York: John Cornell Hotel and Restaurant Administration Wiley and Sons. New York: Van Nos- Reinhold. Michael Olsen. and Articles Turgut Var (eds. “Debunking the J. Denney G. “A Day in the Life of the Front Office by James A. VNR’s Encyclopedia of Hospitality and Tourism. New (Editor’s note: This little volume is out of print York: Van Nostrand Reinhold. Michael Olsen. “Front Office Opera. Front Office Psychology. Tom.2. 1996. New York: Van Nostrand Brownell.3. and Marcel Escoffier. 1993. Mahmood Kahn. from Hotel Front Office Management. . 1996. 2000. S O U R C E N O T E S Chapter 4.” Cornell Hotel and Restaurant Adminis. 1991. 5(2):31–36..” Cornell ———. 1993. Murthy. “A Comparison of Hospitality Hotel and Restaurant Administration Quar. 1993. Michael Olsen. The Lewis. Warren H. 1990. vine.” Hospitality and Tourism Educator Kasavana. 2nd ed. but generally is carried in hotel school li. “The Front Office braries and some faculty offices. Robert. Quarterly 24(2):23–32. age Daily Rate. Nestor de Lieberman.” In VNR’s Encyclopedia of Hospitality Bardi.. “When Guests Complain. “Guest Registration. Wiley & Sons. New York: Van Nostrand and Turgut Var (eds. Gary K. Chapter 4.). “Employee Empowerment: Administration Quarterly 34(1):54–59. and Restaurant Administration Quarterly Upper Saddle River. tries. A Guest-driven Leadership Strategy. Many of Manager: Key to Hotel Communications. Mahmood Kahn. Chicago: American Hotel Register Company. Rutherford. trand Reinhold. Bryson. Bardi. Judi. Managing the Guest Experi. Robert. Copyright © 1996 by John Manager. 1993b. Irwin. Vallen. and Turgut Var (eds. Adapted by permission of fice Manager. 1983. NJ: Prentice-Hall. Mahmood Kahn. 1944.” Cornell Hotel Front Office Management and Operations. Bardi. Chicago: Richard D. Inc.). Bvsan. Vallen.” Cornell Hotel and Restaurant Brymer. Burnout with Other ‘High-Burnout’ Indus- terly 32(1):58–68. Inc.” Concierge: Key to Hospitality.. Albany. Patricia M. Hospitality and Tourism. “The Electrifying Job of the Front Of. NY: Delmar.” Heldenbrand’s observations are as valid today Florida International University Hospitality as they were in 1944. 34(1):34–41. Hotel Front Office Man. Gary K. “Aver- ence in Hospitality.164 Chapter 4  Operations: Rooms S U G G E S T E D R E A D I N G S Books tions. Check. Ford. and Adele Ziminski. agement.” by James A. and Burnout. James A. and Chekitan S. 1993a. 1996. McDowell. and Tourism. and Jerome J. Dev. Linsley T. Deveau.

.” by Oliver Meinzer. LeBruto.4.. and S. enue Enhancement. Section 4. Administration Quarterly 40(2):76–83.” Cornell Hotel and Restaurant Quain.8  To Change or Not to Change: A Case Study at the Front Desk 165 Chapter 4. B. Sansbury. 1999. M. Quinn. 1998. “As I See It: Management of the Front Quarterly 39(5):42–48. Part 3: Picking Low- Quain and Stephen M. . “Concierge (cone-see-air-j). LeBruto. “Rev- Most Profitable Reservations. is adapted hanging Fruit—A Simple Approach to Yield from the following two articles: Management. Sansbury. Part 1: A Straight.5.” Mario Arnaldo.6. “Revenue Enhancement. M. Office. Chapter 4. “Yield Management: Choosing the Quain. and D. Cornell Hotel and Restaurant Administration Chapter 4. B.” by William J.” by forward Approach to Making More Money.

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and Schneider (1982).1 I N T R O D U C T I O N menting with taking housekeeping out of the  HOUSEKEEPING rooms division and making it a staff function. One of Historically. the hotel’s ton. was none! golf recreation in addition to traditional This points up a major dilemma facing housekeeping. been organized around models set forth in versally understood nor respected by the bulk textbooks that date to the 1951 treatment of of the hotel’s department managers. information on the most important. not surprisingly. to a large extent. plan. Some encouraging signs in. Some hotel companies are experi. and. A while back. initially considered housekeeping as a housekeeping directors are titled Director of managerial role that had any attraction to Services and have responsibility for all non- you? The answer. the structure of the housekeeping functions dicate that this situation is in a state of and responsibilities on the small hotel. c h a p t e r f i v e O P E R AT I O N S : HOUSEKEEPING. as part of your career nance and engineering. AND SECURITY 5. most labor-intensive. however. I was talking with a large group with the director of housekeeping reporting of housekeeping directors representing most directly to the general manager. At one firm’s resorts. and housekeeping administration for hotels has largest cost centers in the hotel is neither uni. hospital housekeeping by LaBelle and Bar- ployees. management functions such as mainte- tion: How many of you. Tucker change. I asked the following ques. modern hotel management structures. ENGINEERING. Brigham (1955) focused her analysis of guests and clients. Schneider and Tucker 167 . Others are of the major metropolitan hotels in a large combining housekeeping and other property northeastern city. their em.

and he feels the many tasks involved in keeping literature. (See the Jones contribution elsewhere in this • Strategic planning section that updates those authors. Specifi- a comprehensive inventory of the theoretical cally highlighted were the following: constructs. Rutherford intensive hotel departments. Regent Beverly Wilshire. as Mintzberg (1975) points In analyzing the differences between the out. be the resort manager at the Four Seasons ditional responsibilities of records. like the housekeep- A survey was sent to a national sample of ers referenced at the start of this section. educational.168 Chapter 5  Operations: Housekeeping. major stop on his career journey.” differences existed between the popular or Since 1985. Management of people. He plies. They addressed this question: theory of housekeeping. Statistical procedures keeping the house for a major asset like a (factor analysis) grouped the housekeepers’ Four Seasons property prepared him well to responses into eight groupings. aspects of housekeeping and other labor- In the last study of its type. Until there is. In this . constructs. responsibilities. however. 38) important. and Schill (1984) studied housekeepers in a there will be little forward movement in the similar fashion. and Security (1989). housekeeping directors themselves deem When he started his career in hotel man- important? agement. Cost control position or streamline the transfer of knowl- edge. how- oretical constructs common to the house. systematic ways to share his privileged Mintzberg (1975) concluded that substantial knowledge. the was previously the director of rooms for the issues central to the management of people luxury hotel. The dissemination of this knowledge in 4. analytic em- academic notion of managers’ jobs and their pirical research has been done on operational actual work. “[T]he manager is challenged to find folklore and fact of the manager’s job. very little. relationships. ever. housekeeping executives asking them to rate never expected that housekeeping would be a on a scale of 1 to 5 the importance of 100 the. It was. or market- and furnishings ing opportunity that improve competitive 3. Kurt Englund. fabrics. While the tra. Inspired practical ex- What is the relationship between what has perimentation on the part of housekeeping been written about housekeeping and what managers. if any. and and tactics such as those explored in their supplies model may present future managers with win- 2. for. these works present • Departmental management information in a traditional structure that • Training says the housekeeper administers four major areas of responsibility: The authors concluded that new arrange- ments of traditional knowledge. Preservation of building finishes. dows of operational. sup. and Martin and Jones (1992) provided were of overwhelming importance. Engineering. and • Leadership techniques important to the modern house- • Communication keeper in a range of operational situations. Recordkeeping the most efficient and effective manner is also (Tucker and Schneider 1982. Resort Costa Rica at Peninsula Papagayo. and furnishings were still important.) • Hotel organizational interactions Generally speaking. costs. equipment. 1. is not lacking.

the chief engineer is province of the lead maid type. as no different than any other hotel depart- partment be well versed in all managerial ment head. computer technology and the use of financial information in the engineer- In a way.C. engineering. Las Vegas. although it is treated with less respect than any other aspect now one of his direct reports. explores some of the issues that complex organizational element. set and the physical comfort of the guest. Professor Tom Jones of the University of Housekeeping. In ficient operation. it is important to note tion) is a visible component that can include that housekeeping is still one of his important concierge.. gineering systems are under the best of cir- He provides an overview and organizational cumstances behind the scenes and neither perspective of the department. in world. They are. that the first of these articles overviews the tures the essence of the job of managing this department. nonetheless. paying partic. John wrote this of management. tell-it-like-it-is narrative. This pled with the large numbers of employees on argues for consideration of the chief engineer its staff mandates that the head of this de. skills and a sophisticated and creative leader. D. responsible for major components of the as- the expense of running the department cou. the chief engineer and his or her de- As John Lagazo states in the introduction partment have been metaphorically relegated to his description of being an executive to roughly the same position in the hotel’s or- housekeeper. uniformed service. and spe- responsibilities. Professor Jones brings and. guests. and outlines typical In most cases. These two articles explore the numerous indi- tor of operations at the luxurious Madison cations that the importance of the engineer- Hotel in Washington. Section 5. successful—guest stay deep knowledge of executive housekeeping at your hotel. cluded here on the engineering function. affect hotel engineering. and the maintenance of the hotel’s en- ing departments are organized and staffed. Now the direc. reer stop for hotel managers. guest services (see previous sec. describes how housekeep. Part of the thrust of this article housekeeping function is no longer the is that unlike in the past. Lagazo still deals ing function can no longer be ignored or with housekeeping every day. Increasingly. cialized recreational and leisure activities. ing department are vital in maintaining an ef- curity can all be considered guest services. the management of the job functions. by extrapolation. This was not widely true most hotels. garage. but it holds up so It is important that the reader recognize well. even ten years ago. The DeFranco and Sheridan article on how chief engineers (CEs) use financial infor- mation illustrates that idea. I am including it here because he cap. management to his writing and structures his As stated in the first of the two articles in- description of the organization with a real. most people are surprised to ganization that they physically occupy—usu- learn that housekeeping is an important ca. noticed nor experienced by guests in any but ular attention to the responsibilities of the an abstract sense. the past. comfortable— keeping department. This research contributes . vices that are critical to a safe. piece for the third edition.1  Introduction 169 view of a day in his life. security for the hotel and its Nevada. housekeeping. and se. As their research  ENGINEERING demonstrates. ser- various personnel within the modern house. ally the basement or otherwise out of sight.

tionships among subordinates and moti- Allowing the engineering staff to work vates by trying to keep people happy autonomously pays tribute to both the nature with fringe benefits. A 1986 study (Fisher) set hotel CEs with one hotel company sought to the ratio for an engineering staff at 3. This inventory instrument judges primary ple on the engineering staff. proprietary study of 49 the size of the hotel.170 Chapter 5  Operations: Housekeeping. partments. Engineering. the CE’s job takes on that is one or a combination of the others. otherwise direct subordinates. control. inventory and fill out a short demographic versity of human-related management for the questionnaire in order to determine what engineering manager are market niche. The most successful supervisory style had as a critical element the talent that • Affiliative: The “people first.9 for determine their managerial styles. be appropriate in engineering departments. managerial style predominates among the sophis-tication of the building’s design and self-described successful chief engineers in a equipment. like that of the execu. security. 68). Managerial Styles When Wasmuth and Davis studied the • Coercive: The “do-it-the-way-I-tell-you” management of employee turnover. this raises their own. and corporate philosophy. motivate. and social of their jobs and concern for the human side activities. the CE still must manage a managerial style that employees may or may diverse collection of talents and skills among not be encouraged and allowed to work on the engineering staff. departments in the majority of the hotels • Authoritative: The “firm but fair” man- studied. of which turnover is a The number of employees for which the prime example. mainly with An unpublished. They were each 100 rooms. with a secondary or backup style skilled technical people. related challenges. They also found that quality of super- ager gives subordinates clear direction vision was a key element in maintaining low and motivates by persuasion and feed- turnover rates among these engineering de- back on task performance. they manager closely controls subordinates found it to be relatively low in engineering and motivates by threats and discipline. It also suggests that while • Democratic: The “participative” manager some supervisory or management styles may encourages subordinate input in decision . fore. aspects of management that strongly suggest a need for refined people-related skills. There. CE is responsible varies widely. tive housekeeper. and who is more manager/leader than technician. Managerial style refers to the modern hotel organization mandates a leader way managers manage. each of them managerial style to be in one of six categories presumably highly trained. The extent to which an atmosphere the question of what type of manager such a is fostered by the manager significantly af- person is. Structured research is still sparse on fects the range with a manager’s human- this topic.000-room hotel has 40 or more peo. In a fashion. qualified. of management. if a 1. and Security to the argument that. and (see below). but a lot has changed since asked to take a standardized managerial-style then. major international hotel corporation. It is through At the same time. task second” “allowed and encouraged (the engineers) to manager emphasizes good personal rela- work autonomously” (1983. the position of CE in the others may not. Other factors that can influence the di.

staff in keeping with the nature and size of the it appears that the affiliative style works best threats to a particular hotel. and is the style to predatory elements of modern society. pro- subordinates to follow his or her example. • Coaching: The “developmental” manager helps and encourages subordinates to im. own. and some utilize multiple about their security and its functions. a trait tions of the Educational Institute of the that flies in the face of their reputation as American Hotel and Motel Association crusty curmudgeons. At the which one normally turns under stress. ience. no date) comfort. of security reporting directly to top manage- Combining the democratic backup style with ment. their departments favor management styles Typically. and personnel. (http://www. The data in this study do.org/). With affiliative as the primary style of this the modern hotel security department is or- group of engineers. with the director ing that the backup style was democratic. most of the managers recently hired to The data developed through application fulfill this function have a security back- of this instrument to this sample of CEs tends ground in the military or a law enforcement to support the theory that successful CEs and career with civil authorities. research has been done on the where the employees would feel encouraged subject. Primary is the home atmosphere are severely affected by managerial behavior one uses most often. expects gestive. fective. a good The comparisons showed that each group overview of security can be found in publica- of CEs is primarily affiliative in style. from loss. Some individuals have more than Hotels are usually fairly close-mouthed one primary style. manager of the hotel security function. high-quality food. is the inventory of problems presented by the most comfortable with. At least at this juncture. by the CE. On an individual basis. though. This was. the director of security has a that put people first. a small study of • Pacesetting: The “do it myself” manager a single company and as such can only be sug- performs many tasks personally. from the editor’s exper- to be independent and autonomous.  SECURITY prove their performance and motivates by providing opportunities for profes- It is an unfortunate fact of modern hotel man- agement that the days of simply providing sional development. beverage and A managerial style profile reflects both lodging services. Typically. however. same time.1  Introduction 171 making and motivates by rewarding team in the milieu with people and tasks managed effort. ganized as a staff function. however. backups. Anecdotally. Section 5. hotel security departments are re- Backup refers to an alternative way of man. (McBer. vide us with a broader view of the facets of and motivates by setting high standards management of the modern hotel engineering and letting subordinates work on their function. We have little data or insight about the the predominant affiliative style would cer. if any. and a home-away-from- primary and backup styles. duties. it was somewhat surpris. the size of the .ei-ahla. as tainly produce an organizational atmosphere little. sponsible for protecting the hotel’s assets aging one uses when the primary style is inef.

robberies. proximity alarms. and closed-circuit TV to must also assist the hotel in formalizing a enhance the hotel’s ability to eliminate structure that links all pertinent parts of the threats hotel’s organization to the concept of total se- Security directors participate in certain curity for the organization. the major families of risk facing hotel man- ployee. functional area that generally is concerned A further responsibility of the security di- with reducing the threat of loss of assets. and levels of administrative or operational activi. the authors explore in some depth one been known to include fires. and. educa. aged hotel. and inspection to meet the inventory building design and location of potential risk. in recent years they have Fried. ern hotel security director is to assist in policy ter of the hotel development. floods. from a security standpoint must External threats are generally those that have contingency plans in place and training present risk for the hotel and its guests due to programs to help its employees deal with the actions of outsiders. ties that deal with policies. this refers to control of highly at. ingly. as the article included here points out. clude the following: Finally. This is due primarily to the increasing agers. of they either knew or should have known about course. its guests. tractive and popular consumer goods such as hotels are being held accountable for what wine. Hotels also must gather data • Utilizing electronics. In the legal analysis contributed to this tion. A director of security administers the func. medical and dental tions of his or her department against two emergencies. its location. and its managerial strategy. legal treatises. the risk environment. expensive foodstuffs. The best way to keep up on The responsibilities of the security man. in rector is liaison with civil authorities. Hotels must have policies that guide the implementation of procedures.172 Chapter 5  Operations: Housekeeping. blackouts. ment of hotels in the modern era. and Security hotel. training. furnishings. This com- Having policies and procedures in place prehensive and detailed article has a to deal with the management of emergencies conversational and engaging style unusual in is also a fundamental aspect of the hotel secu. • Adapting policies and procedures to the training. its employees. Increas- most cases. earthquakes. mo. this is by cultivating a good relationship with ager in contending with the above threats in. It broad and general classifications of threats: is a fact of modern life that the properly man- external and internal. the major responsibility of a mod- • Providing physical security at the perime. to make sure they are aware of all facets of nications devices. She also includes in her analysis current risk hotels and other employers face from examples of how the law affects the manage- negligent hiring. Engineering. Internal security is a these potential threats. rity director’s job. the local police. and some forms of terrorism. the hotel’s cash. of the trickiest risk environments that (liter- . bombs or bomb threats. Melissa Dallas outlines and discusses what has become known as the high-risk em. These emergencies can take In the article included here by Abbott and a number of forms. The security function tion detectors. potential threats. hurricanes. modern telecommu. and human resources to avoid hiring edition.

both guests in hospitality. and security. guests with special dietary guests. A number of books dealing with these de- cide—is a growing problem for hospitality op. house. into professionally managed departments re- As if that were not enough to give one sponding to internal and external stimuli that pause. Workplace violence—including homi. research and the establishment of policies. the other key component and Resorts focuses on people. concierge. bell desk. housekeeping. engineering. obvious functions. Because parking lots can be remote.2  A Day in the Life of a Director of Rooms 173 ally) surround many hospitality operations:  SUMMARY the parking lot. safely. It is important to day is laid out. The entire keeping. they Housekeeping. All of them are and are advised to be aware of this potential have been evolving for the past several years liability. so operators agement of any hotel. and valet. communications. 5. sales door attendants. Courts are in. health spa. erations. poorly lighted. advance. reviewing the expected arrivals be visible with the staff we depend on to pro.2 A D AY I N T H E L I F E O F A D I R E C T O R OF ROOMS Kurt Englund A day in the life with Four Seasons Hotels care of our guests. . partments are listed as suggested readings. the morning is walk around the departments hotel manager. are increasingly sources of risk. all of the planning committee that are my responsibility: front desk. vide a superior level of service to all of our guests with pets. This meeting is attended by a and employees. typically. One of the first things I do in wide range of managers: the general manager. we have an operational catering functions and any other movement meeting to review how we are going to take of individuals en masse. are creasingly finding that landlords have liability nonetheless critically important to the man- for third-party criminal activity. conferences services. while not. managers. We also include in the discussion all Every morning. valet parking. the article by Beattie and Gau serves can critically affect their interactive relation- notice that there is yet another realm of risk ships with other hotel departments and. Section 5. We discuss are facing each day makes a big difference in these to ensure the requirements are met in how they carry out their job. laundry. Knowing who they are and what they requirements or mattress firmness. in the delivery of hotel guest services. ulti- that now affects our ability to manage hotels mately. for the day from the VIPs to return guests. The authors explore telling examples The reader seeking more in-depth informa- and discuss a structural theory to guide further tion can find it in these books. and catering managers. (including the director of human resources). or not patrolled.

The management response is employees requires flexibility. front desk. We have a number of other meetings to Hiring new staff is another crucial role in keep the communication going. we also discuss any glitch or poor ple of the teamwork at our hotel making an experience any of our guests may have expe. rienced. and rooms division. suggestions to improve a work proce- fer a new room if appropriate. I face a new challenge valet parking. impact on the morale of the staff. If the raising concerns about their jobs. There is no typ- incredible. Our interviewing pro- meetings include planning committee. up with maintenance concerns. Our weekly day-to-day activities. We do our best comes through the door. from our general manager on ical day in our business. group cess involves a screening by HR. Issues have been our fault. . bell desk. the division head. and respond with an all-page for assistance to Balancing the needs of our guests and the area in need. Employees develop a comfort level for happening to any of our other guests. questions about pay- up with the guest to explain what we know. We attempt to be as flexible as pos- of our guests. it may not be directly ployees in their work area. If the right candidate business levels suddenly peak. One of the ways we do this is by sible when it comes to making time to inter- being prepared to work alongside them when view these candidates. we make every ef- to staff at appropriate levels. room every day. It is equiva- city decides to jack hammer at 8:30 in the lent to bringing the open-door policy to em- morning on a Saturday. service. Every other with the department head. conflicts with coworkers. and Security In our effort to provide a high-quality ex. and final approval from a As mentioned. and ascertain dure. of. but sometimes fort to free our schedule so we can keep the everything hits at once. an interview with week we hold a department head meeting. checks. which is one of the down. Engineering. an interview resume. and requests for assistance in following their overall happiness with their visit. we hold the care of our meeting with the hotel manager or general employees to be as important as taking care manager. and so on. but it is certainly our guests who brought to my attention in this format such as have been inconvenienced.174 Chapter 5  Operations: Housekeeping.We will do a follow. This is an excellent exam- perience. Our concern is not whose fault the Walking around the hotel and checking in glitch was but rather how can we make the with staff is an important communication stay better for our guest and prevent it from tool. we get the assistance we need to help in reasons I enjoy my job. We call these crunches interview process moving.

Housekeeping departments play a vital Regardless of the reasons people go to a role in today’s lodging industry. “May we be of service?” arms. other service industry workers. They show a people on the move. comfortable room. and. The business of innkeeping has become By definition. Section 5. at one time or were commensurate with the demand of the another. to recognize the value of housekeeping and tions might have been in roadhouses. and a secure surrounding. Structures. travelers value of the people who perform such func- based the decision on where they expected to tions regularly. they understand the worth and that a choice was usually available. Even though the inns were member the statement made proudly by one . operate sleep. hospitality similar to that in their countries of Major hotel companies have been quick origin. The people of housekeeping are also a shops. and they are quick to ini- and board. S T R U C T U R E S .3 H O U S E K E E P I N G O R G A N I Z AT I O N S : T H E I R H I S T O R Y. socialize. maintain and service public and need a clean and comfortable place to rest or special areas. even though these new accommoda. all high-quality hotel operational man- Facilities in all parts of young America agement personnel have. changed weekly. and Students of the service industry should re- clean facilities. and Personnel 175 5. food service. hospitality is the cordial and the hotel industry of today. P U R P O S E . mis. Travelers in the early 1700s found tiate action that will make things right again. they were gathering places where any-  ORIGINS OF HOSPITALITY one could learn the news of the day. of a place where people are cared for. To the con- straw. and cially. find good food. traveling public. overnight protection. cess to food and entertainment facilities. the presumption is volved in housekeeping operations service that they need to be cared for there. Good hotel sions.3  Housekeeping Organizations: Their History. AND PERSONNEL Thomas Jones crude. They guest rooms. access to stores and ties. and early records indicate as a result. or private homes. an area for socializing and laundries and recreational and health facili- meeting other people. and the housekeeping management does not see housekeeping might have included no more than a bed of work as demeaning or menial. performed housekeeping functions. but the main generous reception and entertainment of tenets remain: a clean. People in- home away from home. Even concern and care when something goes wrong as our country expanded. a mobile society. trary. part of the overall team of hosts and hostesses Americans have often been described as who welcome the hotel’s guests. either socially or commer. ac- guests or strangers. AND HOUSEKEEPING learn the business of the area. Purpose. we required bed with the guest’s visit. and rest. in many instances. From this definition we get the feeling a courteous and concerned staff who mean it of the open house and the host with open when they ask.

The manager in charge of the partment. Depending on the size and physical area of the property. The hotel industry is a highly labor- The rooms department is usually a combi. Today. As a result. the person in trolling operations. there are plenty of portation. intensive hospitality business. A few such titles ginia. and con- in some cases. however. of the hotel.176 Chapter 5  Operations: Housekeeping. simply. operating cost center. and complexity of housekeeping ally called the resident manager. banquet reservations. Because of the diversity of F&B front office oversees several subdepartments: operations (restaurants. ning. lounges. cost. ble for the largest staff. ecutive housekeeper. recreation department). subdepartments within the Today’s modern executive housekeeper housekeeping sphere of operations (e. and Security of America’s most prestigious resorts. They were. guest rooms. the size. not executives but people who had worked ment is directly and solely involved with all their way up from a maid’s position. organizing. Engineering. In form of guest reception function. and. More total nation of two principal operating depart. bell staff. possibly concierge. and servicing of or no managerial training. with little aspects of the sale. a single department The manager in charge of housekeeping head (the executive housekeeper) is responsi- functions is most commonly known as the ex. although the operations have put the executive house- title is somewhat misleading in its implication keeper on an equal footing with other depart- that this manager lives on the premises. and. The a number of titles. however. employees may be involved in food and bev- ments: the front office and the housekeeping erage (F&B) operations than in any other de- department.” • Housekeeping manager • Director of services • Director of internal services  THE ROOMS • Director of housekeeping operations DEPARTMENT For the purposes of this article we refer to this manager as the executive housekeeper. most ment managers.g. housekeeping. staffing. Synonymous titles include rooms housekeepers are now seen as sharing equally manager. and kitchen). in fact. This statement appears on a sign that is are: visible as one enters the resort: “Ladies and • Housekeeper Gentlemen Being Served by Ladies and Gentlemen. The rooms department of a lodging establish. all considered synonymous Greenbriar of White Sulfur Springs. and any other managers to control the total operation. . West Vir. front desk. PBX. director of rooms in responsibility under the resident manager operations. must be a trained manager skilled in plan- house laundry. with executive housekeeper.  Front Desk and There was a time when most executive Housekeeping housekeepers worked under the direction of the front office manager. executive do not. services. He or she must also be charge of housekeeping may have any one of skilled in employee and human relations. occupancy. trans. hotel manager (not to for the operation of rooms departments. directing. The department manager is usu. be confused with the general manager). corporate policy. rooms director. in..

with health club facilities. a size that might be considered a model ap. and have a strong technical background outlets for both restaurants and room in purchasing. but size might dictate that one Note the position of the executive house- person perform several functions in a small keeper within the organization. who is a member of the property ex- • Main lounge with nightly entertainment ecutive committee. the trend today is away Prior to investigating the housekeeping de- from the small. Section 5. tical functions. Except for bed-and- breakfast operations. This • In-house laundry for rooms department writer has never yet found the person who and banquet linen could make 3. and renovation. and table and. the housekeepers may occupy greater or lesser greater the need for a large staff with enough positions in any organization. finally. Most hotels would have iden. others even hold corporate execu- tive positions. • Two company-owned gift shops. Structures. • Banquet beverage service and service bar trols. the executive housekeeper • Outdoor pool and winter indoor pool must be an able delegator. housekeepers report directly to the general sider then. the execu- hotel tive housekeeper is a middle manager—a full • 350 rooms department head. and pertise and the inclination to pass tasks to steam room others. however. Without strong ex. sauna. Executive hotel. Purpose. decorating. • Front desk fully computerized with a property management system  ORGANIZATION Housekeeping organizations are as varied as  Hotel Organization types and sizes of hotel. This committee is the top . partment organization. and Personnel 177 have a superior understanding of cost con. Others report to the chief of • A modern suburban corporate transient maintenance. Con. 80-room mom-and-pop hotel. Obviously. described. 200 easily be that of the model hotel just or more rooms. Two junior managers • Banquet area with 15. convey the necessary power to act.3  Housekeeping Organizations: Their History. pool. In this case.000 beds in one day. and the laundry man- ager. hold others accountable for their tennis) actions. • Game room (video games. the meeting space housekeeping manager. Some executive individuals to fill each unique function. Both the executive housekeeper and the • Room service front office manager report to the resident • Kitchen to support all food services manager. equal to the front office • Two restaurants (one 24-hour and one manager and other principal department dinner house) heads within the staff. the executive housekeeper must per- sonally perform all working functions.1 could propriate to the greatest variation—say. it is appropriate to vi- It is therefore appropriate to discuss hotels of sualize an organization for the entire hotel. the larger the facility. The organization diagram in Figure 5. service Last but not least. the following hotel: manager.000 square feet of report to the executive housekeeper.

This part of the or- Organization ganization can be managed in several ways. In this illus- Note the utilization of the two principal tration. This emphasizes the delegation that general manager.2 describes a typical housekeeping uled independently. with the same model hotel. or attendants may be department organization. and is in direct charge of all guest rooms in The laundry is another specific function . team staffing and scheduling are pre- assistants. hours on and the same time off.178 Chapter 5  Operations: Housekeeping.1 Hotel Organization (Through Department Head) HOTEL ORGANIZATION (THROUGH DEPARTMENT HEAD) General Manager Top management— executive committee. Engineering. Each individual room attendant can be sched- Figure 5. Secretary Director Chief Resident Personnel Food and beverages Controller sales and marketing engineer manager director director Front office Executive Catering Executive Restaurant Beverage (Middle management) manager Housekeeper director chef manager manager Reservations Front desk Guest PBX Housekeeping Laundry Sous Banquet Administrative Steward manager manager services manager manager manager chef chef assistant (Bells) (Junior management) policymaking body for the property under the the hotel. has taken place in that the housekeeping manager is not just an assistant to the execu- tive housekeeper but a junior manager with a  The Housekeeping functional responsibility. Executive Hotel policymaking body. suitable for the grouped into schedule teams. The housekeeping manager is the sented because this approach is more efficient first assistant to the executive housekeeper for daily scheduling. and Security Figure 5.

Purpose.) Each supervisor has one or more . ment level. Section 5. (Below the manage- laundry machinery and equipment.) Room attendant Night Night Linen room Lobby Lobby housekeeper housekeeping attendant housekeeper housekeeping Room aide aide attendant Room attendant Room attendant Room attendant to which a junior manager is assigned. the utilization for employees who are paid by the hour at a of chemicals. In this Both junior managers and the executive case. Structures. and their effects on an expensive given wage rate as opposed to being on inventory of linen. and Personnel 179 Figure 5.3  Housekeeping Organizations: Their History. we recognize an hourly structure edge of piecework production. salary. knowl.2 Housekeeping Department Organization HOUSEKEEPING DEPARTMENT ORGANIZATION Executive Housekeeper Housekeeping Laundry manager manager Floor Floor Floor Floor Night Linen room Senior Recreation supervisor supervisor supervisor supervisor supervisor supervisor housekeeping aide supervisor (Indefinite size and scope to be determined at a later time. It includes knowledge of commercial port directly to them. the required technical expertise is more housekeeper have line supervisors who re- specific.

laundry workers. The number of floor supervisors also relieve in the laundry. and such guests are up and out of their and section housekeeping aides. For the model. At 100 percent occupancy on a continu- ment. Hotels occupied primarily by traveling or and relief staff requirement. Placing these room attendants in scheduled to work by team units rather than teams of five. depending on the market establish the entire rooms cleaning. The additional ten employees can be Concerns organized into two special teams identical in composition to the regular teams and the For our model hotel of 350 rooms. they are inclined staffing guide. personnel scheduling. which greatly simplifies supervisor. The following formula can varies from 13 to 20.180 Chapter 5  Operations: Housekeeping. assume an laundry workforce. access to rooms for cleaning is more total staff  five day maximum difficult and cuts into the efficiency of staffing. discussed below. mately 20 room attendants to clean all guest This portion of the organization can now be rooms. regular staff  seven days  cation.) services to room attendants during the day. all limited to a five-day work-  Staffing and Scheduling week. and that persons hired ure 5. concern. tion on scheduling techniques. The balance of the housekeeping organi- and to care for other public areas within the zation is noted in the functions to be per- . Finally. single. mix. and Security hourly workers who round out the depart. For this seg. the reader is keeping aide is assigned to each team to encouraged to read the basic text from which handle corridor cleaning. room attendants are S1  7  S2  5 not able to clean as many rooms in the same S2  S1  7  5 eight-hour period. Also. laundry. come into focus. S2  25  7  5  35 total working staff. On any 100 per. except for one remaining pected to clean in a given eight-hour period. sume that five laundry workers are needed in Note that the organization shown in Fig. These swing teams relieve 18-room workload per day. or team leaders and workers depends on the The complete organization should now number of rooms a room attendant is ex. the laundry regularly. (See the rooms early each day. staff allows for days off for regular room at- cient to clean because occupancy is primarily tendants. floor supervisors. provide certain this article is drawn. increasing the group business transient guests are more effi. In such cases. Also assume that one section house. Engineering. room attendants can clean from 18 to ous basis: 20 rooms per day.) to leave their rooms fairly neat. creates a need for four supervi. each week and have two days off themselves. (For further informa- sors. each working under one floor as individual workers.2 under the housekeeping manager is to relieve room attendants on days off can incomplete. When the mix features more double occupancy with families on va. as- ment organization. Hourly personnel cannot work seven The national standard for rooms cleaned by days a week but are usually confined to a five- one room attendant in one eight-hour period workday schedule. all regular and laundry personnel teams twice cent occupancy day we would need approxi. guest room portion of the hotel.

Section 5. and Personnel 181 Table 5. Title Name Assigned Management Team 1 Executive housekeeper ______________________________ 2 Housekeeping manager ______________________________ 3 Laundry manager ______________________________ Fixed Team 4 Linen room supervisor ______________________________ 5 Linen room attendant ______________________________ 6 Senior housekeeping aide (public area supervisor) ______________________________ 7 Public area housekeeper 1 (male) ______________________________ 8 Public area housekeeper 2 (female) ______________________________ 9 Public area housekeeper (relief) ______________________________ Evening Team 10 Night supervisor ______________________________ 11 Night section housekeeper ______________________________ 12 Night housekeeping ______________________________ 13 Night (public area) housekeeper 1 (male) ______________________________ 14 Night (public area) housekeeper 2 (female) ______________________________ 15 Night (public area) housekeeper (relief) ______________________________ Regular Rooms Cleaning Teams: Red Team 16 Senior housekeeper (supervisor) ______________________________ 17 Section housekeeping aide ______________________________ 18 Section housekeeper 1 ______________________________ 19 Section housekeeper 2 ______________________________ 20 Section housekeeper 3 ______________________________ 21 Section housekeeper 4 ______________________________ 22 Section housekeeper 5 ______________________________ Yellow Team 23 Senior housekeeper (supervisor) ______________________________ 24 Section housekeeping aide ______________________________ 25 Section housekeeper 6 ______________________________ 26 Section housekeeper 7 ______________________________ 27 Section housekeeper 8 ______________________________ 28 Section housekeeper 9 ______________________________ 29 Section housekeeper 10 ______________________________ . Structures.1 Department Staffing Guide Position No. Purpose.3  Housekeeping Organizations: Their History.

Title Name Assigned Brown Team 30 Senior housekeeper (supervisor) ______________________________ 31 Section housekeeping aide ______________________________ 32 Section housekeeper 11 ______________________________ 33 Section housekeeper 12 ______________________________ 34 Section housekeeper 13 ______________________________ 35 Section housekeeper 14 ______________________________ 36 Section housekeeper 15 ______________________________ Green Team 37 Senior housekeeper (supervisor) ______________________________ 38 Section housekeeping aide ______________________________ 39 Section housekeeper 16 ______________________________ 40 Section housekeeper 17 ______________________________ 41 Section housekeeper 18 ______________________________ 42 Section housekeeper 19 ______________________________ 43 Section housekeeper 20 ______________________________ Laundry 44 Laundry supervisor (washman) ______________________________ 45 Laundry helper/sorter ______________________________ 46 Laundry attendant (ironer) ______________________________ 47 Laundry attendant (ironer) ______________________________ 48 Laundry attendant (folder/stacker) ______________________________ 49 Laundry attendant (folder/stacker) ______________________________ 50 Laundry attendant (folder/stacker) ______________________________ Swing Team 1 51 Senior housekeeper (swing supervisor) ______________________________ 52 Section housekeeping aide (ST-A) ______________________________ 53 Section housekeeper A-1 ______________________________ 54 Section housekeeper A-2 ______________________________ 55 Section housekeeper A-3 ______________________________ 56 Section housekeeper A-4 ______________________________ 57 Section housekeeper A-5 ______________________________ Swing Team 2 58 Senior housekeeper (swing supervisor) ______________________________ 59 Section housekeeping aide (ST-B) ______________________________ 60 Section housekeeper B-1 ______________________________ 61 Section housekeeper B-2 ______________________________ 62 Section housekeeper B-3 ______________________________ 63 Section housekeeper B-4 ______________________________ 64 Section housekeeper B-5 ______________________________ .182 Chapter 5  Operations: Housekeeping. and Security Table 5. Engineering.1 (Continued ) Position No.

and can be used to fill vacancies when they occur. . ganized under the senior housekeeping aide each name is noted. operational control. Should occupancies be forecast as a lesser the use of methods described in standard oper- amount. This particular staffing guide The executive housekeeper operates the de- presumes that a 100 percent staff has been partments under his or her control in the most hired to support an occupancy averaging 85 efficient manner possible through effective ap- percent or more for an extended period. and for purposes of illustration must ment. plication and enforcement of company policies.  The Housekeeping  PERSONNEL AND JOBS Manager IN THE HOUSEKEEPING In the model organization. He or she is primarily entire team network. Structures. Fluctuations in daily oc. the one that works in freedom necessary to do the job. swing teams.1. sibility are indicated for managerial positions. He or she accomplishes tasks sis. The staffing guide is created to accurately The executive housekeeper usually assumes document the need for total personnel. but controls must be in place that vision of all personnel assigned to the house- guarantee fairness to all who must be cut out keeping. to the same function in the hourly structure. department. recreation departments. Section 5. ating procedures. The basic function and scope of respon- be scheduled individually. and position within the department is listed and supervision of the housekeeping. laundry. This position the laundry. and Personnel 183 formed. Every complete direction. and the use of sound man- and staff vacancies can be distributed over the agement principles. sonnel required for the second shift. and personnel or. of a day’s work due to low occupancy. titles and responsibilities required to staff the linen room housekeeping are listed. Note teams identified by color. Specifically. per. Purpose. The entire housekeeping department staff  The Executive might then take on the appearance provided Housekeeper in the staffing guide outlined in Table 5. motivation. The scope of responsibility is normally This identification system shows which broad to ensure that the incumbent has the teams are regular teams. for public area cleaning and maintenance round out the total department staff. responsible for the cleanliness of guest rooms cupancy are dealt with by scheduling down and public areas assigned to the housekeeping within each team on a fair and equitable ba. This task can be delegated to the floor su. through proper training. laundry and recreation departments. persons and for hourly jobs.3  Housekeeping Organizations: Their History. the housekeeping DEPARTMENT manager assumes primary responsibility for guest room cleaning and servicing and acts What follows is a listing of the jobs one as the primary assistant to the executive might find in a hotel housekeeping depart. housekeeper. Where several names or titles apply communications central. and which ones are considered is now recognized as a career-enhancing step. and super- pervisor. a 100 percent staff need not be hired.

or section evator cabs and landings. pied. rooms. Through the If so organized. The aide also helps room attendants sponsible for guest room cleaning and servic. servicing. service housekeeper) areas. same functions in each room assigned. the laundry manager is responsible Finally. the room attendant performs the responsible for the efficient and orderly man. floor linen rooms. if necessary.184 Chapter 5  Operations: Housekeeping. operation of the hotel laundry. rooms ready (vacant and ready to rent). but the SOP system guarantees coverage Under direction of the executive house. He or she that must meet a given standard in each guest also acts as second assistant to the executive room. He or she is usually assigned a section of also removes soiled linen and rubbish from rooms each day.  The Section Housekeeping Aide (previously Section  HOURLY EMPLOYEES Houseman)  The Guest Room Attendant The section housekeeping aide works in the guest room portion of the hotel. volved in their work schedules. This is not as daunting as it may sound. the regular and daily cleaning of corridors. and Security Under the direction of the executive designated number of rooms to be cleaned. In housekeeper. (SOPs) that may specify as many as 60 items tel’s in-house commercial laundry. The agement of guest room cleaning. the room attendant is one proper use of assigned personnel. He or she and rooms on change (vacant but not yet must react to occupancy in scheduling to keep serviced. el- maid. room attendant also conducts rooms checks and the reporting of rooms status. costs under control. where necessary. and other public spaces in the vicinity of guest The guest room attendant is primarily re. at set times to assist in determining the re- He or she represents employees directly porting condition of the house: rooms occu- involved in rooms cleaning and is directly in. banquet department according to plans and budgets. the housekeeping manager is general. constituting a workload of a room attendants’ carts on a regular schedule . Most room attendants work in compli- The laundry manager normally assumes pri. also known as check-outs). Engineering. The room attendant also participates in general cleaning of one or more rooms each day as it is serviced in order to keep quality  The Laundry Manager standards high. housekeeper. with general cleaning. ance with standard operating procedures mary responsibility for operation of the ho. attending to (also known as the GRA. vending areas. the room attendant reloads his or for the efficient and orderly management and her own linen cart at the end of each workday. keeper. he or she of several members of a housekeeping team provides clean linen to the house and to the under a floor supervisor. stairwells. He or she ing.

inspectress. and other areas specifically negotiated keeping aide report. as a member of a housekeeping team. Other than as intermittently visited what they observe. They are assigned to spe. the night su- bility to correct identified discrepancies be. when so organized. or project work. but they have no responsi. offices. ularly assigned. in all respects.] Many floor supervisors are in. major public corridors. Structures. They also are responsible for the form tasks such as shampooing carpets. of course. Section 5. pervisor assumes total control of the depart- cause no other staff is assigned to them for ment after the major rooms and hotel work purposes. Most operations now simply call this job inspector.  The Senior Housekeeping Aide (in the past known as  The Floor Supervisor (also Head Houseman) known as Senior The senior housekeeping aide is a major su- Housekeeper or pervisor in the housekeeping department. and Personnel 185 and brings supplies from storerooms to floor rooms. but this may be outdated. ing windows. This situation. They make inspections and re.] floor supervisor and. utility housekeeping aides who might per- signed. housekeeping aide is usually responsible for ports and are. [This writer is of the opinion cleaning evolution for each day is concluded. He or she normally assist in the personnel administration of the works as a supervisory assistant to the execu- people assigned to them. several room attendants and a section house. as part of the overall housekeeping responsi- cific divisions of the rooms section of a bility. can Other inspectresses do nothing but inspect vary with the size and complexity of night op- rooms and report directly to the manager on erations. housekeeping aides and for supervision of tions to which their room attendants are as. The senior housekeeping aide is usually property and are responsible for the quality responsible for basic training of section of work performed in the several rooms sec. that persons who do nothing but inspect guest Overseeing one or two night room attendants. regardless The existence of a night supervisor presumes of gender. tive housekeeper and performs other tasks as The floor supervisor is sometimes called the executive housekeeper directs. They also guest supply inventories. with which to take corrective action. a second shift to which no management is reg- spectresses just because they inspect rooms. [Editor: It is now outdated. wash- public sectors assigned to their section house.3  Housekeeping Organizations: Their History. The section house. supervisors of the storage and accountability of cleaning and the persons assigned to their teams. then have no employees or authority linen rooms when needed. are a su- keeping aide works at the direction of the perfluous use of manpower. for the term was coined to  The Night Supervisor indicate a female inspector. public rest rooms. The senior keeping aides. He “Inspectress”) or she is usually in charge of all public areas not directly associated with guest rooms: lob- Floor supervisors are team leaders to whom bies. Purpose. . by housekeeping management.

like the senior house- load process and production. a swing team supervisor assumes the responsibilities  The Linen Rooms of the laundry supervisor and brings his or her swing team into the laundry. This prevents the guest from abdicating re- pervisor. chemicals. On the second night lobby or public area personnel. sauna. the recreation supervisor. when the laundry supervisor and team department. are properly signed to indicate “No lifeguard tus of each guest room throughout the day is on duty. Swimmers enter at their own risk. Also. functions for items such as bedspreads. Engineering. the linen room supervisor is pool attendants work for the recreation su- sometimes referred to as the chief status op. supervises the activities of with the hotel night manager. and housekeeper. assumes responsibility for all each guest in need of housekeeping attention. and game . bedboards. sponsibilities of the linen room supervisor. as the ti- fulfilled. He or she is the prime guest contact sponsibility for their own and their children’s representative.” another major function of the linen room su. is maintaining and operating the communica. and curtains. (Swimming pools changing as necessary. Because there Supervisor are two swing teams. providing the entire The main linen room. He or she also supervises the work- The night supervisor. a service area of the ho- department with maximum flexibility and tel. ance of services performed by the housekeep- ing department. is the hub of housekeeping communica- training. In our model keeping aide. tion and activity. each works in the laun- dry one day each week. Keeping up with. He or she ensures that all  rooms are left cleaned and ready to rent and The Laundry Supervisor that guest requests for service or equipment Working as a principal assistant to the laun- such as cribs. His or her primary responsibility In our model hotel.) Pool attendants. and several kets. qualified to save a life. The night supervisor works closely tle indicates. It might be better described as housekeeping central. and reporting the sta. is a major supervisor within the hotel. under the executive housekeeper. bed pads. pervisor and are fully Red Cross or water erator for housekeeping. of laundry attendants is scheduled off. recreation areas of the hotel. all pool attendants are fully activities of one or more linen room atten. the shift. also work in the health club. under the direct supervision of the executive tion link to the front desk. the laundry supervisor. Normally the laundry su- beeper. All swimming In addition. is usually on laundry attendants. is  The Recreation Supervisor the supervisor in charge of main linen room operations. and extra linen are dry manager. The linen room su- pervisor. he or she oversees the safety. However. engineering. un- dants who perform supply and distribution der direction of the recreation supervisor. and Security a night section housekeeping aide. and makes routine inspections pervisor works as the head washperson and is throughout the hotel until the department is in charge of all major wash equipment and secured each evening at the designated time. safety instructor qualified.186 Chapter 5  Operations: Housekeeping. the night supervisor assumes the re- night supervisor is accountable for the bal. blan.

Employees such as housekeeping and laundry personnel. department managers must sometimes carried by a room attendant to establish control plans to combat the threat ensure standardization of training) and provide access for employees to read and understand the OSHA compliance stan- dard. When asked how difficult it is for a manager to make the transition in either di. similarity in responsibilities of persons per. “The main function of housekeeping Housekeeping operations is no longer the ex- in both areas is to clean rooms and public ar. the Occupational Safety and Health Adminis- ment. a member in hospital service once re- marked. that is in hospitals. • Housekeeping trainer (a secondary job Specifically. (sharps) discarded by diabetics or drug users. have titles appropriate to either male or fe. new rules issued by Other employees may be found in the depart. providing service to guests and main.3  Housekeeping Organizations: Their History. Structures. come in male employees and are therefore nonsexist. 1991. and vomit and with spent needles The National Executive Housekeeper’s Asso. ment personnel between venues is well docu- mented. however. spu- tum. who as a part of their reg-  NEW HORIZONS IN ular daily assigned duties come in contact HOUSEKEEPING with bodily fluids such as blood. their titles indicating their activities and tration (OSHA) made it mandatory that em- who they might work for. at company expense. we know exactly what we are walking into. they must be trained and forming housekeeping functions in hospitals. and compliance • Utility housekeeping aide with federal precautions designed to maintain • Linen room attendant a safe workplace with regard to bloodborne pathogens (microorganisms that can cause • Lobby housekeeping aide disease in humans). clusive territory of women. Purpose. and they must be offered the opportu- therefore draws its membership not only from nity to be inoculated against the HBV virus hotels. and nursing homes. nor is it consid- eas. Records must be kept ing establishments but also from hospitals and of all training conducted and of all exposures nursing homes. especially the HIV virus • Laundry attendant and the HBV (Hepatitis B) virus. Furthermore. and contract clean. that occur. ciation (NEHA) has long recognized the must be advised of the potential dangers. contact with human blood or other bodily flu- Such titles are as follows: ids.  CONCLUSION rection. and Personnel 187 room. and taining cleanliness and order. training. Section 5. and in hotels.” That was  Other Employees true—until the advent of the AIDS crisis. information. as a result of their job classification. semen. On December 2. we don’t know what we may be dealing with. and to dispose of trash and rubbish. The association occur. tested in how to handle such risks when they hotels. All such positions ployers provide to all employees who might. There ered menial or less important than any other . The movement of manage. is only one major difference. retirement centers.

so until they do. I have had trainees or first- agement training program. When the company thinks they can do outstanding opportunities to develop leader. I don’t think they will. an opportunity not jobs.188 Chapter 5  Operations: Housekeeping. regular staff in the hotel and the budget to pay ing or reservations.” the first response is. keeper. mention the guest rooms themselves. I decided I housekeeping just making sure the room at- wanted to stay in the rooms division—more tendants clean all the rooms every day? It is specifically front office. The general manager said. clean rooms?” Depending on who is asking. house. so you versity classes. so the path was laid actually just a little more than that. overheard commenting to a utility aide who one who thinks otherwise should try to imag. then the time they were done. would be quite easy—go through the man. . from the sidewalks to the staff areas (e. they’ll abolish our ship and supervisory skills. and necessary as what I do every day. then front office It is managing what usually is the largest manager.4 O N B E I N G A N E X E C U T I V E HOUSEKEEPER John Lagazo Ah yes.. time assistant managers who say that house- tant department head for a little while. they had a different presto—general manager! appreciation for the department. It is managing supplies—whatever is in Never did I think I would be the executive the room for the guests to use and whatever is housekeeper in arguably what are some of the used to clean anything and everything in the finest hotels and resorts not only in the hotel. what you are doing is just as vital presidents cleaning rooms. brief exposure in either housekeep. much. I tion and futures would take us. the picture might have general managers and “You know. After going through the management So what is housekeeping? Is managing training in my first company. wondering where our educa. without either one of us. around here as mine is!” eral years ago when a general manager was 5. I thought it either agree or say it is much. offices).M. but by to department and then division head. from meeting Why housekeeping? When my friends ask spaces to food and beverage outlets—not to what I do and I say. do different things and work at different skill keeping operations provide junior managers levels. become an assis. Over the years. them. “I’m an executive house. and Security function in the hospitality organization. cafeteria. always available in other departments.g. at the time. then so on and so on. out: hotel assistant manager. room at 1:00 A. happened to be mopping a men’s ine hotel operations without housekeeping. “Oh. move keeping was never their initial choice. Engineering. Any. don’t forget: Your job is just as important This writer recalls a moment of truth sev. We just Because of the large staffs involved. sitting in our uni. United States but even the world. more. those were the days. locker rooms.

I have eaten foods that I probably Getting away from the technical side of would not have otherwise and have picked up things. with an accompanying guests when they arrive. the challenge was attendants and housepersons ferried over to pull the ethnic groups together to work as from a neighboring island. It is making sure that challenge being the level of English compe- all instructions and requests from sales are tency and overall education. Housekeeping gave me a great chance bad or the boat had a mechanical problem. because room attendants and other house- they represent the hotel. we rarely had problems down. this staff manage that operation as well! Even though should also have high guest contact skills. This means phone calls at home us. Just off-property services are their own business. cleaning). Cantonese. the executive housekeeper must Contrary to popular belief. hotel money.M. The staff is usually the most to make sure the rooms are ready for the ethnically diverse. laundry. The in accommodating him even if we were sold wildest calls I received (not too often. the same room attendant. Be. Tongan. Section 5. Cre- me a lot about managing people. it is managing that too—and if the These people have one of the most detail- hotel utilizes an off-property service (for oriented jobs—a room checklist can have as laundry. which. Accounting must be satisfied that bers are asked to work with hazardous we are in control of dollars. and he always had the same room with goodness) were when I worked in Hawaii. ole. countries). Because shown up or that because the boilers are he was such a regular. this does not mean they should not be skilled Executive housekeepers must be detail. Polish. are exposed to bacteria. and work human resource reporting requirements are with dangerous equipment such as sheet and met. One of my former room at- oriented and organized. thank out. I was “di. These staff mem- carried out. can either . being an executive housekeeper taught smatterings of many languages (Spanish. to learn about different cultures—I probably the phone rang around 4:00 A. saying that your staff has not know if his wife would be with him. I had room In many of the hotels. It is making sure chemicals in an environment with a high acci- the food and beverage outlets are as clean as dent potential. litically correct and one of the new manage- ing with all other departments in the hotel— ment buzzwords. they push and pull heavy the guest rooms. there is no steam for the laundry. Housekeeping is a tendants consistently told me the travel plans 24/7 department. it costs the guests every time they perform their duties.4  On Being an Executive Housekeeper 189 It is managing teamwork and coordinat. cause of the staffing challenges. uniform and guest clothes proper standard. and it can get out of control of one of the regular CEOs that stayed with very quickly. She wrote down his travel dates and let us at 11:00 P. It is making sure all of the weights. overnight cleaning of the kitchens many as 150 items that must be completed to and public areas. if they do not clean keeping staff members do not interact with the linens well or are not efficient. would still not know what a quincinera is (a I then had to figure out Plan B for cleaning Sweet 15 birthday/debut in Latin American rooms and the rest of the hotel that day. If the weather was a team. in guest contact. Filipino)— versity managing” well before it became po. to tell me so. towel folders and garbage and cardboard For the hotels that have a full-service compactors.M. depending on the situation.

the guest and yes. decoration. I may even fluence them. I learned about the ones I have many great memories from house- who avoid eye contact when you speak with keeping over the years: them. and bring it to my dry cleaning store. I learned about the ones that had Old • Using a bullhorn to conduct a morning Country traditions—for instance. • Having a local TV station doing a 60 To me. Get exposure to soning because of food my staff would different environments—work in city and re- give me—I was adventurous enough to mote resort locations—and know and under- eat whatever was placed on my desk and stand that everywhere you go. too—for example. If you are adapt- texture. From the people of different cultures I murder on fabrics. on the outside. room checked with a magnifying glass agement.190 Chapter 5  Operations: Housekeeping. Manage and lead the envi- • Having my rooms director keep checking ronment (department). • Proving a Mobil inspector wrong (I had Housekeeping taught me how to adapt— been in his room during the incident in which. Don’t bother listening to commercials. tons. and white gloves! and now whatever new theories are out there. I shop for clothes not only good laugh. If you buy an item with lots group dynamics. and you will be suc- on me to make sure I did not get food poi- cessful in your endeavors. host hotel for the Mobil five-star winners Managing people continues to change and award ceremony—imagine having every evolve—first there was Total Quality Man. jects as possible. not respect- meeting with 70 room attendants. turn you down and say I won’t clean it unless sonality styles. I have managed through and you will know why I will not buy “window both strikes and decertifications in union ho- cleaner with ammonia. you will also be successful. metallic but- read this to learn as much about these sub. then Generation X management. I know way more than I need get new staff members to go into the room be- to. for style but for materials used and construc- I learned about management styles and tion of the item. how to manage them. I learned about individual per. Minutes–style report on hotel cleanli- you must manage not only yourself but also ness—we passed with flying colors! groups of people. I now know that to get them to work together to get things the dry cleaning and laundry processes are done. The celebrity stories—those alone could . and Security get me in serious trouble or give everyone a laundry operations. the bottom line is that to be a success. what it takes to properly clean it. cause of the strong superstitious beliefs of send me an email or work in housekeeping some attendants. Engineering. I learned about identifying don’t be surprised if I charge you extra for the informal leaders of groups and how to in. beads. have worked with. and how you sign a damage waiver. There are some other interesting things I have encountered other situations too. ing a female or young boss—and how to turn them around. an issue because I was the boss and the staff • Being the executive housekeeper at the should do as I say (traditional management). should not have been question). I could only cleaning items. jellyfish does have an interesting staff makeup is different.” Having managed tels. and I advise all of you who of extra frills. able. when I shop for home After a suicide in a hotel room.

ment were inconvenienced. Rutherford conscious of hotel management and certainly  INTRODUCTION TO of the hotel guests. P E O P L E . but the people skills have been properties) even more valuable. Louis and Florida with tions of hotel assistant manager. front office Adams Mark and an independent four- assistant manager. and manage- the mid-1980s. . Their place in the organi- THE ENGINEERING zation was roughly analogous to their place in DEPARTMENT the building structure: toward the bottom and basically out of sight. places. including laundry/valet of operations of the Madison Hotel in Wash- manager. I have been at: ment styles has prepared me for anything in this great hospitality business. I think I would • Four Seasons Hotels in Boston and have learned the technical aspects one way or Chicago (both five-star. and front office manager star resort at various points in my career. they through housekeeping. D. Boston. Florida. ex- it really is the memories of the people I have cept for Puerto Rico. and Issues in the Modern Era 191 take up a whole book. People. From my current perspective as director ment positions.C. Perhaps I could get • Ritz-Carlton Hotels/Resorts in Califor- rich from writing it! nia. five-diamond the other. The only time the func-  History of Department tions of the engineering department became noticeable was on those unhappy occasions Historically. which was still too met and friends made over the years that new) have made the difference. I did hold the posi- • Short stints in St. Hawaii. were all five-star and/or five-diamond. • Hyatt Hotels in California and Louisiana • A Wyndham Hotel in California 5.5  The Hotel Engineering Function: Organization. the functions and duties of the when something went wrong with one of the chief engineer. can I say my housekeeping ex- Where did I get all of these memories and perience helped me? You bet! The varied experiences? Since leaving my alma mater in experience with people. ington. AND ISSUES IN THE MODERN ERA Denney G. and Puerto I am glad my career path has taken me Rico (when I worked in these hotels. and the engineering building systems and guests and/or manage- department have been relegated to the sub. Section 5. in addition to spending time in all housekeeping manage. his staff.5 T H E H O T E L E N G I N E E R I N G F U N C T I O N : O R G A N I Z AT I O N . At the end of the day.. Yes.

energy ing. (and are) occurring in engineering. and themselves first in features of the physical conservation of energy have added a new and plant. use. none of ventilating and air conditioning (HVAC). Also. most hotels and most modern Sophistication. Prior to that. heating. “out of sight. engineering can provide for deliv- This increased sophistication has mandated ery of hotel services without adverse or nega- more sophisticated and knowledgeable man. singular dimension to the job of the chief en- landscaping. usually managed by one of their number who including (but not necessarily always) the through longevity and perseverance worked management firm that operates the hotel. their investment and subsequently expect the hotel company will not only keep the hotel filled with guests but keep the property in  Evolutionary Stimuli such a state that the guests will continue to want to come there. them making it any cheaper. in the past. The cost. If accomplished and monitored by computerized facilities. most drastic and substantive changes will be neering department. the engineering staff must be consid- organizations seek the business of ever ered a major role player in the financial more carefully segmented markets. As more and more hotel money. with care. engineer. elevators. managed in ergy as one building expense in which signifi- conjunction with other departmental systems. the mechanisms of competition manifest Energy. ments by a wide range of participants. Since the OPEC oil embargo of 1973. and Security Consequently. kitchen equipment. of course. Since then. The reasons for these traditional repair-and-maintenance approach changes are many. prices have undergone many changes. and the other behind-the-scenes parapher. new dimensions of the engineer’s job. and in-room ameni. their way up through the ranks to supervisory These investors expect a certain return on status. agement in all departments. gineer—one that did not exist in pre-1973 op- ties and facilities to the latest in traditional erations. many of health of the organization.192 Chapter 5  Operations: Housekeeping. buildings were neither engineered nor man- nalia that make up the domain of the chief aged to save energy. elevators. management. We want to avoid. are closely of the hotel. simply because energy was so cheap. the Return on Investment. Engineering. These can range from building design. Many building systems in hotel companies have come to recognize en- today’s hotels are interconnected. cant savings can be made. tive importance was diminished. for . This also mandates There is now clear evidence that this depart. Several of them. fixtures and building systems such as plumb. tributing to the investors’ return on their Competition. but four can be highlighted to providing engineering support in all areas here. tive effects on the guest. To keep the hotel positively con- connected. but perhaps the out of mind” treatment evolved for the engi. The ment is changing in many of the same ways combination of increased competition and so- that other departments of a modern hotel phisticated systems makes for more than a have had to change. and as a result its rela. Many modern ho- personnel of the engineering department tel plants are the result of plans and invest- were craftspeople and semiskilled workers.

3). and Issues in the Modern Era 193 instance. when maybe only 20 per. neers typically were people who had worked The first instance presents the managerial their way up through the ranks from either problem of making do for the engineering one of the crafts or as an engineering em- manager. Three-quarters of those degrees were in some cent of them are used for the preparation of area of engineering. In no business system as complex as a ho. kitchen at 6:00 A. In this study. this is the individual responsible for the signed and built after 1973–1974 exhibit in. the year 2005. A classic example is that of kitchen of those responding to this nationwide survey employees who turn on every appliance in the indicated they have a university degree. The residual effects of the embargo are Function twofold. the second presents the dilemma of ployee specializing in one of the building sys- expanding one’s knowledge in a rapidly tems. and upkeep (Figure 5. Hotels built prior to 1973 were not constructed to be particularly energy effi. chief engi- versely affecting guests.5 Clearly. suggests this tel is a mechanical or electronic system the trend may be changing (Rutherford 1987). People. the extreme step of requesting  PERSONNEL guests to take short showers while at the same time asking them to pay $180 a night for their  Manager of Engineering room. and will for the foreseeable manufacturing companies. those whose formal education is more exten- gineer’s control but that he or she is obligated sive than that required in the past. building super- difficult job with respect to managing energy. in the past. They may have been in hotels all of their changing technological environment. As stated earlier. and hospitals. university settings. intendent. A tremendous amount of atten. to point out to other department heads. future. It professional career or may have come to a ho- should be noted that energy remains a signif. This suggests that the so- breakfast and most of the rest are not needed phistication of modern hotel building opera- until close to lunch. hotels that were de.2. the engineer now must have an active years old and had been in the hospitality busi- presence as a full member of the management ness about 11 years. office buildings. only answer. however. This suggests that this staff and must be adept at interacting with “typical engineer” probably had significant other department managers. Chief engineers responding to this survey de- tion must be given to training personnel to scribe themselves collectively according to overcome wasteful habits where energy is the data set forth in Table 5. managing and conserving energy without ad. Engineers in those hotels have a more rector of building operations. Research evidence. repair. Over 25 percent concerned. or some combination of those On the other hand. This is representative of tions may be mandating management by the sort of wasteful habit that is out of the en.5  The Hotel Engineering Function: Organization.M. management of the building’s systems and its creasingly more sophisticated systems for maintenance. Section 5. Variously referred to as the chief engineer. terms. on-the-job experience or training in his field . di- cient. tel company from engineering positions in or- icant management issue for the engineer in ganizations as diverse as shipping lines. the typical engineer was 44.

more and Table 5. Engineering. After entering present position and average years at present the hospitality industry. however.5 Percent male 100.9 Average years at present hotel 6. in his experience.9% Median salary $35. if Applicable) Average age 44.3 Average years in present position 6. they moved rapidly into management and Commenting on these data.0% (5) Average years in hospitality industry 10. one chief en- were fairly stable in their careers. as evi.0% (15) Percent of degrees in hotel/business 25. and Security Figure 5.15 74 respondents .0% (20) Percent of degrees in engineering 75. gineer said that.000 Percent university degree 27.3 Engineering Department Organization ENGINEERING MANAGEMENT ASSISTANT ADMINISTRATION BUILDING SYSTEM FUNCTIONS FUNCTIONS CRAFTS Secretarial HVAC Carpenter Clerical Plumbing Cabinetmaker Purchasing Electricity Upholsterer Inventory Refrigeration Painters Preventive Maintenance Food Protection Equipment Groundskeepers Contracted Services Computer Systems Scheduling Elevators Records in other industries and only recently came denced by the congruence of average years in into the hospitality industry. it appears hotel.0% Percent Caucasian 92.2 Chief Engineer Demographics (Raw Number.194 Chapter 5  Operations: Housekeeping.

ence for academic training over practical • Administering contract services such as experience but rather recognizes the realities pest control. to accomplish the tasks of the department. ranging from overflowing toilets to stuck ele- vators. building equipment. to recognize trends. and so forth. Section 5. He suggested that in his com. of neering department and. Having completed college study keeping. including assistant capital equipment for which the engineer is managers.3. In that comment lies one key to under.5  The Hotel Engineering Function: Organization. recruited from among those people who have • Keeping an inventory of spare parts and had at least some college education. ministrative details of operating an increas. of doing business in today’s competitive envi- swimming pool maintenance. systems. While scheduling may benefit greatly from standing the future of the chief engineer’s job. of the main reasons is that while the engi- Among the most important administra. if not ac. window washing. landscaping. by extrapolation. in a building whose systems are as education prepares them to think strategi. ventive maintenance on all building pany this does not necessarily reflect a prefer. and up-to-date records regarding the various the chief engineer may enjoy the services of a building systems and the installation of staff of administrators. This involves keeping accurate and sophistication of its engineering functions. on the size of the hotel and the extent hotel itself. and construction projects. responsible. These sorts of administrative details ingly complicated hotel department. neering department is responsible for the tive functions of the engineering department maintenance and repair of sophisticated and are: complicated building systems. a major administrative function in- installing and being developed for new hotels volves scheduling equipment and personnel into the next century. A final administrative function is setting  Other Departmental the groundwork and maintaining the basis for Management Staff managerial and administrative decisions that affect the long-term operation of the engi- Refer again to Figure 5. under most . gas leaks. also suggests that the candidate will under- stand and be able to manage the sophisticated As the department grows in size and building systems that the company anticipates scope. Related complicate the job of any manager but may tasks include secretarial support. the course. part of the engineering function must be help the hotel and its owners meet and deal the ability to react to nonscheduled events with the evolutionary issues discussed earlier. Depending. complicated and interrelated as those of a ho- cally. technological advances such as microcomput- The most successful engineers of the future ers or the hotel’s mainframe computer sys- will very likely be those whose training and tem. which may be particularly troubling to the engineer. One be combined with a clerical function. These people help carry out the ad. tually holding a college or university degree • Arranging for the performance of pre- in engineering. People. grounds- ronment. and Issues in the Modern Era 195 more industry engineering managers in the • Helping other department heads make larger or international hotel firms are being purchasing decisions. and do their part to tel.

vide for heating or cooling the air. accurate. public. and Security circumstances these systems. and tastes clean and in providing for the comfort of the guest and fresh. which are the re. filtering or clean. and up-to-date records HVAC to deliver the optimum environment are available to formulate the basis for plan. of complete changes of air in a room per hour. are often operated by (and perhaps that different areas of the hotel have different misused by) non-engineering employees and requirements for air. must be de- Among the complicating factors here that signed and maintained to serve various user . budgeting. bathe. Engineers call this well-developed administrative staff find their job of meeting diverse air needs “providing job in managing the building and its systems the system with balance. and wash in without services to the guests. Each has its own place does not carry odors. to each area of the hotel. like the plumbing systems. restaurants. It is easy to see that guests.196 Chapter 5  Operations: Housekeeping. Engineers who have the luxury of a keeping laundry facilities. challenge the engineering department are nents. and they complications that provide challenges for the also want that water in generous supply. Particularly in the case of guests. expected to deliver production hot and cold controlled. water to the kitchen areas. free from visual defects such as dirt and rust. Engineering. the kitchens and guest rooms place different de- engineer has little or no control over the way mands on the HVAC system. Guests also want water that is hot participating in the delivery of the hotel’s enough to shave. and laundry areas. ventilating. of course. Modern building HVAC systems pro. and comfortable indoor environ. Lobbies have in which they treat guest room equipment different requirements than do other public and fixtures for which the engineer is respon. is the delivery of high-quality water service to guest room ar- Typical building functions. The electrical systems of the that particular area of the hotel. ning.3. of course. who is paying over $200 a night for a room to Heating.” and it is a major and the attendant problems much easier if function of the individuals in charge of the complete. adding or Providing for the delivery of high-quality wa- deleting moisture from the air to adjust for ter service to the various user groups in the optimum relative humidity. First and foremost in the mind of  Technical Specialists management. The plumbing system in a modern hotel must also perform a number of balancing functions. and the food service areas. or their compo. is noticed only place within the hotel to provide for a number when the system is malfunctioning. hotel is a major part of the engineering func- ing the air. eas. are listed in Figure 5. management and staff of the engineering Nothing is more frustrating to a hotel guest department. the housekeeping ment. purchasing. At with supplying the production. and the same time. Guests want high-quality water that is sponsibility of the engineering department. and control. A similar case may be made for the deliv- depending on local codes and activities within ery of electricity. areas such as bars. and house- sible. Each has attendant the danger of scalding themselves. the engineering department is guest room areas of the hotel with a clean. and moving the air from place to tion—one that. and air conditioning find that the hotel has run out of hot water in (collectively known as HVAC) is concerned the middle of a morning shave or shower. hotel.

services may be contracted to outside agen- ments and the needs of guests. as derived from this list. gest the range of functions for which the ment. an engineering department may employ on a full-time basis one or more car-  Departmental penters and cabinetmakers to maintain.5  The Hotel Engineering Function: Organization. neer’s job.3 suggest that is not contracted out. The ten most important facets of an engi- nance agreements for the elevators. the engineering surveyed were asked to judge the relative im- department nonetheless is the first line of de. closely duced in Table 5. It nance chief. providing a safe environment. like plumbing. People. tel engineering managers at this time. and hotels typically have extended mainte. “Knowledge of main- their contracts closely and carefully. they still represent with that service should be quickly and easily important concerns of the modern mainte- identified and reported to the contractors. statements in terms of their rated importance. Communicating lection of furniture in a typical hotel. Again. In modern high-rise hotels with high. . Management pair. and Issues in the Modern Era 197 groups. Section 5. 15 CEs. A statistical and service of elevator systems are generally procedure was applied to rank-order the the province of the elevator manufacturer.  ISSUES aging. Similarly. the slightest problem these data are 20 years old. replacing. An informal telephone survey of is generally the responsibility of the engineer. stitute for electricity. utilizing the same items found little ing department to monitor these services and change in the hierarchy. suggesting the most pressing issues facing ho- tems. with employees.” but they were all bunched most hotel engineering departments. food production equip. other building system functions for which the engineering department may be responsible for repairing. and 8 of Table 5. ments relating to the operation of a modern In most modern hotels. hotels may employ an modern hotel engineers deem activities relat- upholsterer whose major task is to maintain ing to management of their departments of the high-quality appearance of the vast col. 7. if the service Items #4. and build fixtures and furniture for the hotel’s guests and staff. high importance to success. Painting. re. and computer systems are examples of engineering department is responsible. the engineers agencies such as the supplier. While speed elevator service. Most en. the installation hotel engineering department. are repro- gineering departments. upkeep of the hotel’s grounds. These that meets the needs of individual depart. portance of the items on a list of 58 state- fense in keeping them operating efficiently. cies or suppliers but are included here to sug- Refrigeration. The engineering staff and landscaping are additional ongoing func- must provide the hotel with electrical service tions that require constant attention. energy-related items and “relations with top trate the sorts of specialized skills required by mangement. tenance of equipment” became secondary to The crafts represented in Figure 5. closely at the top. there is no sub.3 illus. 6. Depend. While the maintenance of many of these systems may be contracted to outside In the Rutherford study (1987). however. maintaining.3 and serve as the basis for monitor the operation of the elevator sys. or man. ing on the size of the hotel and complexity of its services.

the chief engineers contacted for comment agreed with this ranking with top manage- ment. Of the other personnel in the department. activities. house- facing the chief engineer today call for mana.486 .520 .453 .804 74 3 Energy management 4.760 .791 73 Scale: 1  not at all important Scale: 5  of vital importance being able to organize the tasks. top 50 percent of the 58 survey items.198 Chapter 5  Operations: Housekeeping.680 75 5 Relations with top management 4. neers suggests that the realm of issues relating to energy has not yet been addressed satisfac- torily by the majority of these professionals. ranked within the gerial skills rather than the traditional techni.633 75 2 Energy conservation 4. They said it is becoming an increasingly  Energy important part of their job not only to report to top management but also to educate top The fact that three energy-related items were management about the importance of the en- rated in the top ten by all responding engi. Engineering. It  Equipment also suggests that energy will continue to be an issue in the foreseeable future.589 .726 74 7 Responsibility for safety 4.811 73 6 Responsibility for leadership 4.514 .370 . and Security Table 5. and relations with top management.587 . It should be noted that the technical aspects of the chief engineer’s job are not ignored in the collective rankings assigned to these oper-  Relations with Top ational statements. Many of cal skills.810 75 9 Energy costs 4.3 Importance of This Item to Operation of My Department Rank Item Mean SD N 1 Knowledge of maintenance of equipment 4. keeping and purchasing. only two. gineering function. and providing departments that the engineers were asked to leadership all suggest that the foremost issues rank their relationships with.761 73 4 Responsibility for communication with employees 4.854 72 10 Knowledge of the types of equipment 4.655 . That knowledge of equip- Management ment maintenance ranked clearly first among the statements and that knowledge of types of Another major dimension of the engineer’s equipment made it into the top ten suggests job can be seen by the importance attached to that while the job of the chief engineer may in .904 72 8 Responsibilities of an effective organizational ability 4.444 .

1992). which in and Kluga. the engineering department as modifying staff members’ behavior (Dale can serve its profit centers better. on the gested at the outset of this chapter. in fact. to a great extent. and operat- ing elbow room. A number of studies have been done on . politics. the chief engineer must compete with other department heads for scarce resources CONCLUSION related to personnel. problems involved equipment and systems. chief en- gerial nature. when most issues and vestment for the owners of the property. as sug. its traditional technical aspects gineers are going to have to be more adept at still play a major role in the daily discharge of inter. Energy cost alone runs anywhere collect data from hotel engineers to deter- from 4 to 6 percent of a property’s total oper. both their cycle time and errors. services and maintaining a high return on in- action than in the past.  Data from Empirical Summing up. zations will hinge. a survey was performed to a hotel. It is ation budget. The future of successful hotel organi- chief engineer is. Section 5. to a certain ex- tent. 5. the engineering depart- Research ment. and. an organizational function of the modern ho- vey of a broad cross section of chief engineers tel that is in the process of evolutionary and subsequent follow-up conversations with change. technology. It also appears that in the future. How can financial data be turn will assist these profit centers in reducing used to continuously improve the perfor.6 T H E E N G I N E E R I N G D E PA R T M E N T A N D F I N A N C I A L I N F O R M AT I O N Agnes Lee DeFranco and Susan B. This change is driven by a number of selected engineers suggests that the job of the factors. its staff and technical experts represent Interpretation of the data gathered in a sur. Sheridan The engineering department is a vital part of swer this question. ability of hotel management to recognize the The engineers describe many more inci. importance of the contributions of the engi- dents involving issues and problems related neering department to the delivery of guest to people and departmental action and inter.and intradepartmental organizational an engineer’s responsibility. mine their use of financial information. To provide the hotel and its guests with high-quality services relative to the phys- ical and environmental systems of the build-  FUTURE AND ing. Savings in energy cost can be postulated that if financial information is an- accomplished by instituting simple steps such alyzed correctly. evolving.6  The Engineering Department and Financial Information 199 fact be evolving toward one of a more mana. mance of the engineering department? To an. its management.

was only 15 percent. However. 38 percent of the respondents ated. questionnaire were sent to the general man- erage department. if any. Turkel (1993) also advo. throughout the 50 states. the initial mail-out. Dougan. the methods used to generate the data. 1992. ence with their present company and less than inating errors. Therefore. hotels that perience within the hospitality industry. in profit centers of hotels. 1994). It was believed that food and beverage department of a hotel. and the topic of menu engi. Hotel engineers were also engineering and 7 percent director of property interviewed to see how their use of financial operations. they would be more likely managers with cost containment. questions asked included the ENGINEER types of financial information used. The sample size was maintain a profit. The majority of the respondents information could improve quality in their (52 percent) had less than 6 years of experi- departments by reducing cycle time and elim. most . studies can be quoted for Follow-up letters and questionnaires were the engineering department. sent to the entire sample.  THE SURVEY The purpose of the study was to investigate the use of financial information by hotel engi. The sample hotels all nancial statements and information in the had 200 or more rooms. The sample was ran- performed specifically to collect information domly selected from this index. 400 hotels. 3 years with their specific property (51 per- The population for this study consisted of cent). the fre- quency at which this information was gener. few. improve the response rate. specifically to the director of engineering. reported that chief engineer was their official and the type of hardware and software used title. par. The initial response the customer segment in addition to yield rate. A total of 97 of the 400 questionnaires were eventually returned for a response rate of 24. and Security the use of financial information by managers were listed in the Hotel and Travel Index. however. In order to management. However.S. when asked their years of ex- directors of engineering in U. and the selec- regarding the engineering department. and the sample hotels were located cates the development of profit and loss state. Of the sample. but not many were Spring 1994 edition. a second mail-out was age establishments has also been discussed sent.25 percent. It was felt that if (1994) also investigate the cost percentages in the surveys were addressed to the general the rooms division to help rooms division managers by name. three weeks after neering to improve profits in food and bever.  THE TYPICAL CHIEF neers. while 36 percent held the title director of in the department. The second mail-out was addressed (Bayou and Bennett. rooms in the property. hotels of this size would probably have an en- ticularly in an effort to contain costs and gineering department. Malk and Schmidgall ager of each sample hotel. a cover letter and a ascertain the profitability of a food and bev.200 Chapter 5  Operations: Housekeeping. Engineering. ments and allocating costs properly to For the first mail-out. Malk tion criteria were based on the number of and Schmidgall (1995) discuss the use of fi. Quain to read the surveys and pass them along to the (1992) explores the use of profit analysis by directors of engineering.

1–15 18 19 15 and over 28 29 Number of Years with Engineering Department 0–9 15 16 10–18 37 39 19–27 31 32 28 and over 12 13 Number of Rooms in Property 200–300 29 31 301–400 28 29 401–500 16 17 501 and over 22 23 Average Daily Rate Less than $50 2 2 $51–$100 48 56 $101–$150 26 31 $151 and over 9 11 Number of Employees in Department 3–6 16 17 7–9 31 32 10–12 13 14 13-15 11 11 16 and over 25 26 201 .1–12 12 12 12 and over 9 9 Number of Years in the Industry 0–3 5 5 3.4 Profile of Respondents n % Job Title Chief engineer 33 38 Director of engineering 32 36 Director of property operations 6 7 Facilities manager 3 3 Others: Eleven different titles 14 16 Number of Years with Company 0–3 31 32 3.1–6 17 18 6.1–6 19 20 6.1–15 13 14 15 and over 12 12 Number of Years with Property 0–3 49 51 3.1–6 9 10 6.Table 5.1–12 23 24 12.1–9 10 10 9.1–9 12 13 9.1–9 11 11 9.1–12 11 11 12.

to five was used.55 0.49 0. Overall. and these hotels had an average daily was followed very closely by “evaluate the rate of $95. with 1 being not important stantial experience in engineering and prop.63 0. fectively. and 5 being very important.16 Be more flexible financially 6 4. of these managers were aware that financial information was an essential and integral part of the operations of the department.4 provides a summary of the department staff.” with 80 percent of respondents rat- cent) worked in hotels that had 200–400 ing the criterion at 5 and 14 percent at 4. these ten criteria as perceived by the directors The highest response category was 9 to 18 of engineers.15 Be a better manager 4 4.5 ranks erty operations and maintenance departments.70/5. and Security of them (56 percent) had 6 to 15 years of department.19 Be more innovative 7 3.22 Improve communication with my staff 9 3.99 0.00 0. The largest group of respon. performance of the department” and “plan dents (32 percent) employed 7 to 9 engineer.23 .16 Have information for evaluation purposes 5 4.70 0. A Likert rating scale of one The respondents also reported having sub.19 Staff accordingly 8 3. Table 5.09 Evaluate the performance of my department 2 4.60. ahead more effectively.49 0.00 was “control costs more ef- The majority of the respondents (60 per.55) was “improving communications with contractors.” Therefore. the work performed The criterion that received the lowest rating was primarily done in-house and by outside (3. followed by 18 to 27 years The area that received the highest mean (22 percent) and 0 to 9 years (16 percent).49.5 Usefulness of Financial Information Mean Standard Criterion Ranking Score Deviation Control cost more effectively 1 4.93 0.  HOW IMPORTANT IS FINANCIAL  THE COMPILATION INFORMATION? PROCESS In order to assess how financial information These data show overwhelming agreement can affect the performance of the engineering that financial information can enable man- Table 5. the majority the characteristics of the respondents. ing employees.33 0.” both rated at 4.202 Chapter 5  Operations: Housekeeping.22 Improve motivation of my staff 10 3.47 0. Engineering. rate ten criteria. the respondents were asked to experience. This rooms. score of 4. Table 5.14 Plan ahead more accurately 2 4. years (39 percent).

ods and computers was the second most com- was done by 95 percent of the respondents. The respon- dents were asked to indicate whether the  COMPUTER above-mentioned statements were generated on a daily. they though budgeted income statements and vari- reported using Lotus 1-2-3 and Excel. proximately 60 percent of the respondents All respondents used budgets or cost used computers to compile all of the five tracking in their property. For FINANCIAL the departmental income statements. Half of In addition to completing the surveys. ware used in this endeavor.6  The Engineering Department and Financial Information 203 agers of the engineering department to con. This was INFORMATION also true for the budgeted income statement Because computers were used in compiling (50 percent). the nancial work. and no and 60 percent stated that a departmental in. how they used financial information. depth. in greater analysis the engineering department per. Section 5. 22 percent of the respondents pre- IBM PC configuration was most widely used. Among the direc- In addition to preparing these statements tors of engineering who used a computer. frequency at which they are generated. a num- the respondents reported that cost tracking ber of engineers in a large metropolitan area was done by their own department and by the in the southwestern United States were inter- accounting department. Al- software. TECHNOLOGY AND nual basis. respondents reported that financial informa- come statement was prepared. and to check all that applied. biweekly. monly used method (40 percent). Cost tracking was the viewed in an effort to determine. performed 62 process. The respondents any of the other four analyses. was generally THE FIELD shared between the engineering department itself and the accounting department. A combination of manual meth- comparing the budgeted and actual figures. and computers to prepare these statements. the The majority of the respondents used number of people involved in the process. The number of people involved in prepar- ing these statements ranged from one to ten. monthly reporting was the norm (51 percent). pared daily department income statements. ance analysis were not done daily. cost tracking on individual ac- information. The frequency at which these reports were generated was quite varied.  COMMENTS FROM The responsibility. they were compiled weekly. They were asked to specify the types percent of the engineering department’s fi- of financial reports that are generated. statements. Variance analysis. the monthly. or an. the respondents were also asked counts (40 percent). however. tion was compiled manually only. Overall. . weekly. The accounting were then asked about the compilation department. they reported that they used custom and 31 percent did daily cost tracking. variance analysis (49 per- to describe the types of hardware and soft- cent). on the average. and flexible budget (55 percent). For spreadsheet applications. Ap- the methods used to compile these reports. formed on their own more often than they did trol costs more effectively. monthly.

nancial information. If it is not practical to have tion was also useful because it showed if their more employees share in the compilation costs (particularly repairs. maintenance. Because employees encounter day-to-day problems and situations that man- agers may not be aware of.204 Chapter 5  Operations: Housekeeping. with the accounting department to compile nancial information now more than he used budgets. late to his department with his supervisory However. much as he could. This informa. they may be able to offer comments and suggestions that ad-  CONCLUSIONS AND dress concerns such as staffing. the least an engineering department utilities) were in line with their projections. be in the form of employee meetings where erating as efficiently as possible. eliminate errors. reduce cycle This process was found to help empower em. are involved. ing department. reduce cycle time. In addition. that everyone received a Asking employees to be involved does bonus. ployees because they could see how their per. financial information to help conserve and Rather. and Security One of the engineers stated that he used fi. and they generally felt it was important number of people involved in the preparation to properly allocate their costs. were rated as the bottom two of the ten crite- Budgets were critical to all of these engi. . These discussions can to just make sure their departments were op. He also used his financial can share with other staff members the im- information to be proactive in dealing with portance of cost control and how cost savings costs. When more employees properly accounting for his costs. which were then used to evaluate the years. This process may help the entire department be- It was apparent that managers of engineering come more innovative and further empower departments recognized the importance of fi. and process. “improve motivation of my staff” formance was directly linked to the results of and “improve communication with my staff” these statements. motivation and communication bonuses were given on overall profitability of tend to increase. those who compile the information cut down on waste. employees may make suggestions for im- ducing cycle time. and enhance employee empowerment. provements. and he wanted to make sure. This positive attitude may be the hotel. In his hotel. or formance and bonuses. thereby re. two was the average neers. and he is currently much more of a the performance and success of the engineer- financial planner than he used to be. They worked together and. in the engineering area can affect the bottom mation could help them in eliminating errors line. His role as an engineer has changed over analyses. made to achieve zero defects. engineering employees. cost control. IMPLICATIONS and physical plant improvements. improvements can always be employees in an effort to help contain costs. He re. Another engineer stated that he used not mean they must do the accounting work. can do is to have more employees participate One engineer was particularly adamant about in the analysis process. The engineers believed financial infor. actual statements. Computer technology was views all of the financial statements that re. as passed along to other employees and guests. time. and variance to. ria given. common in their operations. of these reports. Engineering. which may ultimately affect their job per- such as problems in ordering inventories. possibly. As noted.

taurant Industry Operations survey. However.9 percent puters and manual methods. utility ex- mation. (2) the Constitution.  Sources of Law We begin with a discussion of where our laws come from and how they are classified. source for reference. because lodging facilities are ber of detailed references and footnotes. will probably continue to eat away the profits. tain these costs. are subject and regulations that are specific to typical ho- to a large and continually changing body of tel departments. complicated systems. these costs their overall efficiency. This will help you when we turn our minimize the property’s exposure to potential attention to the specifics of the law and how it litigation and to train employees to minimize applies to the lodging industry. penses for restaurants increased 6. it is important that managers be familiar with the  HOW LAW WORKS many legal dangers to which hotels are sub- ject. Then we look at the laws decisis). like other business entities. This does not mean they have to be The following section briefly introduces you lawyers. The rest used a combination of com. This chapter is a brief introduction to the legal environment in which hotels operate. Be. This Law comes from four sources: (1) judge-made should give you a fundamental understanding common law (also called case law and stare of the legal content.7 T H E L E G A L E N V I R O N M E N T O F L O D G I N G O P E R AT I O N S Melissa Dallas Hotels. (3) legislative . while repairs and mainte- departments that do not use a computer may nance increased 5. ing an efficient operation. cause not complying with laws can result in fines. and even imprisonment. to the law—where it comes from and how it is gal knowledge to be aware of strategies that classified. If not watched. lawsuits. Engineering from 1992 to 1993. According to the 5. 1994). Notice the significant num- law. computer tech. As this study has shown. risks in their departments. the laws affecting them These are included to provide further detail are more numerous and complex than those for specific discussion points and to provide a affecting most other types of businesses. It is up to the engineering department to use nology and the use of financial information in restaurant financial information to help con- engineering department are vital in maintain.8 percent in the same pe- find that working with one may help improve riod (Riehle. Section 5. but managers should have enough le.7  The Legal Environment of Lodging Operations 205 The majority of respondents (60 percent) National Restaurant Association’s 1994 Res- used computers to compile financial infor.

When ages in civil suits are awarded only in the case the Supreme Court.  Classifications of Law trative agencies. (which. or fraud. On the volve claims of negligence.S. if the Court refuses to issue a tiffs to be successful. Judges use asks for damages. is derived damages. on the other hand. administrative law consists of reg. Most civil cases filed against hotels in- quently becomes the law of the land. Punitive Constitutional law. classifications: civil. and (4) adminis. malice. of course. Next. then used izes them to make regulations that affect busi.206 Chapter 5  Operations: Housekeeping. Engineering. a they can collect damages. of violence. and the hotel should local laws are called ordinances. office employee did not require identification tional Safety and Health Administration. they must prove four writ. punish the wrongdoer. Because punitive dam- dividuals from government excesses. The theory of negli- new law. Constitution. Third. made up of nine justices. medical costs. they must prove the ho- Statutory law is made by local. can choose to modify or change common law they must have been injured in some way so by enacting statutes that codify. which protects in. case and then renders a decision that subse. or international. then author. This decision becomes binding for satory damages are meant to restore people lower courts in that jurisdiction and can even to their original condition and include mone- be used as persuasive authority for courts in tary judgments for actual damages such as other jurisdictions faced with cases having a back and future wages. A person was is- Congress approves the agencies. incidentally. some decisions made several by another individual or by a corporation hundreds of years ago still influence present. or tel breached that duty. they are rela- grants a writ of certiorari. pain and similar pattern of facts. prevent foreseeable injuries to guests and vis- ulations passed by agencies such as the Food itors. Laws generally fall into one of three major Common law originated in England and. is a legal individual). and curring in the first place. state. the key to enter a guest room and injured a nesses as well as individuals. the breach was the reason for the incident oc- Federal and state laws are called statutes. These damages may be past decisions as a precedent for deciding cur. the hotel would likely be found . guest. The primary purpose of injured party—the plaintiff—files a lawsuit common law is to provide stability and pre. Legislatures have been able to foresee injuries. First. Finally. assume a front and Drug Administration and the Occupa. are awarded to from the U. and Security statutes and ordinances. they must show federal legislatures or other governing bodies. it agrees to hear a tively uncommon. suffering. The day judicial decisions. gence requires a hotel to act reasonably to Finally. although decisions issued by courts in the Most complaints filed against hotels are civil United States have added considerably to this suits in which an individual has been wronged body of law. criminal. compensatory or punitive or both. and breach of contract. Compen- rent cases. Here. sued a room key by this employee. To illustrate this theory. when issuing duplicate keys. or spell out. a duty to them. Each of these is discussed below. they must prove the hotel had court. In order for plain- other hand. that describes the facts of the situation and dictability as judges rule on cases. the law stands as decided by a lower elements.

Battery is the from lawsuits is to practice preventive law. the guard its song and prevent others from using defendant may be charged a fine. increasingly global. assault. The intrusion and resulting injury would other countries. the hotel could safe- the part of the defendant. Most international theory of respondeat superior. An example of Now that you have a basic understanding of an assault is a bouncer in a nightclub wrong. we get more hotel-specific. bouncer picking up the patron and wrongfully This requires management to know the com- throwing him down the steps and out the door mon legal dangers for each department and to of the club. Under society as a whole. Suppose. the own- guests safe by not practicing proper key con. Theft.” Under the hotel company is rare. The Berne ing a duplicate key without requesting identi. it in their advertising campaigns. imprisoned. international law that is Respondeat superior is a Latin term that liter- actually enforceable against an individual or a ally means “let the master answer. can relate to goods.  LAW AND THE LODGING or both. Section 5. fully threatening a patron and running toward The only way to protect a hotel company the patron with his arms raised. The Paris Convention of 1883 af. on the other hand. if found guilty. Under the Paris Convention. services. for example. Convention of 1886 gives its signatories the fication. or both. Assault is defined as the imminent threat of bodily harm. INDUSTRY tual harmful physical contact. he or she must chains from using its unique jingle or song be charged with committing a wrong against that is integral to its marketing efforts. Here. The financial implication of respon- tellectual property such as trademarks and deat superior for a hotel is obvious—the hotel copyrights. The most commonly . pays! fords its signatories (meaning citizens of the countries that signed the treaty) the right to file for trademark protection in any country  Food and Beverage that also signed the treaty. ers could file for trademark protection in trol. thereby globally protecting not have happened but for the employee issu. Crimes require intent on the Berne Convention. the identity of Paradise Lodges. The primary international laws applied the employer at the time of the accident or in- to hotel companies are treaties that govern in. employers are laws are in the form of treaties. Crimes most often affecting hotel op- erations include theft. and battery. sup- In order for someone to be criminally pose a hotel wanted to prevent other hotel prosecuted. original literary or artistic material. of course. and battery is the ac. and this omission resulted in injuries right to file for copyright protection of any to the guest. a hotel chain Potential costly legal situations are present in named Paradise Lodges opened in the United all restaurants and bars. Although the hotel industry is becoming We must first review one other concept. follow the law as closely as possible. how law works. cident. while others liable for acts of their employees if the em- are customary laws followed by nations over ployees are at fault and were doing work for time.7  The Legal Environment of Lodging Operations 207 negligent because it breached its duty to keep States.

Additionally. fever. as glass could easily get into the food. Eggs pose a more difficult prob.7 million in punitive prompted some restaurants to cook all their damages. 135 to 140 degrees. mayonnaise. but they must be safe!10 . food must be properly han. and poultry. was initially believed to have been between spected regularly to ensure that no hazards 180 and 190 degrees Fahrenheit. The temperature of the coffee the food preparation area should be in. and Security litigated areas involve food safety and alcohol tiramisu. vere diarrhea. For the sake If a server breaks a glass in an ice bin. Caesar salad dressing. and $2. so the court reduced the punitive award to ing. is most often found in undercooked eggs. was seriously and beverage sales are controlled by the Uni. employees should make ald’s quality assurance manager testified that certain that no light bulbs or food shields are this was the standard serving temperature broken. Engineering. eat the food or drink the beverage. can be to $160. After form Commercial Code (UCC). and UCC. The practicality of this practice is service. doubtful. but perhaps a general warning on Food Safety.9 juices run clear and training employees to The point here is that hotels need to serve practice good handwashing techniques are safe food and beverages and to serve food imperative. however. requires all food and beverages to stopped so Liebeck could add cream and be merchantable. range for the company’s coffee. $480.000. a tomers should be advised of any known risks restaurant would warn patrons about the pos. and beverages safely. coli. or fit for human consump. and can also be found in ages. he specifically. Many laws governing food the menu would suffice. A McDon- exist. which lays her grandson gave her the coffee he pur- out rules governing the sale of goods and. burned when coffee spilled on her lap. chased from the drive-through window. At the very least.000 in compensatory damages (reduced present in undercooked hamburger. For example.000 as Liebeck was found to be 20 dangerous or even deadly. or over-medium eggs. hollandaise beverage do not need to taste good under the sauce.8 a 79-year- cessing2 and labeling3 to packaging. Food and over-easy. or three times compensatory dam- beef. bacteria often $200. so they can decide for themselves whether to sibility of salmonella before serving poached. E. The jury initially awarded Liebeck dled to ensure its safety. The entire contents of the tion.5 This warranty applies whenever and Styrofoam cup spilled on her lap. In order to be perfectly safe. and abdominal cramp. ture of the coffee was 158 degrees Fahrenheit.208 Chapter 5  Operations: Housekeeping.1 safe temperatures as well. bacteria that can result in se. dict revealed that the actual serving tempera- Salmonella. Stella Liebeck. sugar to her drink. the temperature of most must be emptied and carefully cleaned out home-brewed coffee usually reaches between before it is refilled with fresh ice. cussed case involving McDonald’s. safety are administrative laws established by Food and beverages must be served at the Food and Drug Administration (FDA).7 This threat has percent at fault). of her body. In an often dis- The FDA regulates everything from food pro. An investigation following this ver- hamburgers to 160 degrees to kill the bacteria. the bin of comparison.6 ceived third-degree burns on over 6 percent In order to be protected from lawsuits.4 Food old woman. McDonald’s and Liebeck then agreed to milk and vegetables. Cooking meats until all an undisclosed settlement to close the case. and she re- wherever food or beverages are sold. cus- lem.

falls. children. would lure the child onto the property to in- cated patron lost control of his car and se. Potential privacy problems arise if a hotel snow. company children at all times. . service. let’s holds a property owner liable for any injuries say a bartender at the XYZ Hotel overserved resulting from “a potentially harmful object a patron. type of legal danger. Professionals can be hired to com- gers in both housekeeping and maintenance plete periodic safety audits of hotels. potholes in ing array of items left behind in guest rooms. be- verely injured a bicyclist. The attractive nuisance doctrine fully served the alcohol. Dram shop laws are Probably the most tragic maintenance- state statutes that permit an injured third related cases involve injuries or even death to party to sue the establishment that unlaw. unmarked changes in elevation.”12 It recognizes that children. Section 5. then hold slips and falls are the most common type of them until the guest contacts the hotel. Establishments that hotel knew about a danger and did not ad- serve alcohol open themselves to a different dress it. Both housekeepers and Maintenance maintenance workers should be required to follow a regular preventive maintenance Inspection and Repair. danger. vestigate. Recov. For example. injuries sustained from transfer the items to a secured area. Failure to regularly states have laws that govern the finding of lost inspect rooms and public spaces for dangers property. cannot fully appreciate permit the injured cyclist to sue the XYZ Ho. Dram shop laws cause of their age. servers. The inspection and repair. The patron then got into his car to so inviting or interesting to a child that it drive home.11 Although training does not com. Many lawsuit hotels encounter. The best way to prevent suits in these ar-  Housekeeping and eas is to be attentive. and faulty contacts guests to notify them of articles they electrical cords can easily injure guests and left behind. and all balconies must have railings has caused an increasing number of states to that are close together to prevent accidental require their managers. the property may be ery for a plaintiff is even more likely if the sold in accordance with the state statute. loose housekeeping staff in hotels collects an amaz- carpeting. found in a certain period. parking lots. Generally.7  The Legal Environment of Lodging Operations 209 Alcohol Service. The primary legal dan. On the way home. Children should be entirely banned from Jacuzzis and saunas.and ice-covered walkways. Swimming pools must be maintained tenders to be trained in responsible alcohol properly and accessible only with a room key. not be able to open windows more than a few Increased attention to alcohol problems inches. slippery floor surfaces. are related to negligence and involve lack of Lost and Stolen Guest Property. In fact. Broken furniture. Children should negligence. and clearly written and require adults to ac- related suits. Signage around the pool area should be large pletely protect an establishment from alcohol. it may lower punitive damages. Some states that have not Lodging facilities with more than one enacted dram shop laws permit third-party level and those who have swimming pools suits under their common-law theories of must be especially diligent. tel for damages. schedule. the intoxi. if the owner cannot be may be grounds for a successful suit. and bar. The better way to handle this is to visitors alike.

the would-be guest period. stating the maximum amount for which the • Changing locks when a room key is miss- hotel is liable in case of theft. These statutes vary from state Good key control practices include: to state. eliminated the practice of intentional over- booking. overbooking is likely. Poor key control practices of challenges. • Limiting the number of master keys is-  Front Office sued to employees. and other • Placing key drop boxes behind the costs associated with the inconvenience. In the case of a civil suit • Refusing to give out room information— for breach of contract. if any. property losses. and Security Stolen items pose an entirely different set Key Control. not on top of Due to the potential legal liability and the the counter. room number when a guest checks in. potentially expensive.210 Chapter 5  Operations: Housekeeping. room. and vide safes for guest use. he • Not having room numbers displayed any- or she forms a contract with the hotel for a where on the key. Others continue to take the risk to Although a hotel is not a complete en- ensure their hotel is completely full. the assigned able for a guest with a reservation? Techni. If guests choose not to use the to him by a front office staff member. tected. are dangerous. it must show diligence in . but in all cases. • Regularly inspecting room locks for dam- some large hotel chains have completely age and wear. Jury safe and find some valuables missing from awards have been staggering. Engineering.15 counter on the front desk.13 guest was raped or killed due to employee All states have enacted limiting liability negligence and if the hotel had been put on statues that limit a hotel’s liability for guests’ warning for a similar event. front desk agents should check number by telephone within earshot of a area hotels for availability if they know that non-employee. What if the hotel overbooked or if a guest stayed over and a room was not avail.14 Common requirements include post- ing the availability of the safe as well as • Installing a key card system. not announcing. someone phones a hotel for a reservation. hotel guests have in-room safes that must be programmed have been injured or even killed when a by the guest and are reset when the guest stranger entered their room using a key given checks out. ways phone guests to verify visitors or ing payment for travel to a different hotel. cally. surer of guest safety. The front desk agent should al- could recover compensatory damages includ. • Writing. a hotel must strictly • Requiring identification when issuing a comply with the requirements to be pro- replacement or additional key. Every time activate. damage to their reputation and goodwill. ing (assuming the hotel does not have a key card system in place). additional cost of lodging. Too often. the hotel breached the contract. especially if the their room. All hotels are required to pro. To • Not orally confirming a name and room avoid liability. the hotel is generally not liable. Many hotels now mostly preventable. the inquiries. • Installing elevators that require a key to Reservations and Overbooking.

Another example is firing an em- other party can sue for breach. the lawful. clear and unambiguous. but proper permits an employer to terminate an em- training and reinforcement of acceptable key ployee at any time. supervisors and managers should follow the bers to follow: The more complex the event. The human and disabilities. possible reasons for discharge and discipli- the contract would be interpreted in favor of nary procedures. discrimination. conven. It is important to The wisest strategy for hotels is to de- note that contracts are always interpreted velop a formal policy manual that details the against the drafter. not until 1964 was a federal statute en- acted that addressed discrimination. this type of tragedy and this type of mon. Sexual harassment suits have resource staff handles the resolution of these become commonplace recently. other important federal statutes eral Labor Standards Act claims are becom. age. Finally. Traditional wrongful discharge claims Writing sales contracts is a regular part of any arise when an employee is unlawfully fired. Even in states that ployee negligence has often been the cause of follow an employment-at-will doctrine. Since Wrongful discharge. In  Human Resources fact. Wrongful discharge claims arise when lawsuit. Em. types of claims and many more. if not wrongful discharge suits are relatively com- eliminate. and all A good rule of thumb for sales staff mem. assuming the tions. and many other purposes.16 ough training in contract writing. This vere harassment. ployee for whistle-blowing (reporting a tial that all sales staff receive careful and thor. and document some more! Discrimination. company’s illegal activities to an official). based on gender discrimination. meetings. control practices can drastically reduce. policies as closely and systematically as possi- the more detailed the contract. Section 5. Wrongful Discharge. Employees should be thor- the client rather than the hotel.7  The Legal Environment of Lodging Operations 211 its duty to provide a safe environment. so it is essen. oughly advised of these policies. If state had a statute making this discharge un- one party does not honor the contract. No detail is ble. and Fed. wedding receptions. such as continual or se- client should be written in the contract. an employee is fired for reasons that are not legitimate. so in the case of a breach. and they are. salesperson’s job. workers’ compensation claim. Constructive discharge occurs when an Everything agreed to by the hotel and the employer’s actions. ing more and more commonplace. in effect. the hotel company is found liable. that time. These wrongful discharge cases are one of two types: traditional or  Sales constructive. which violent crimes against guests. force an employee to quit. without cause or reason. All the contract terms must be damages. Contracts are written for An example is firing an employee for filing a catered events. have been passed dealing with pregnancy. Discrimination in the workplace has not always been unlawful. the plaintiff able in court and leaves no doubt as to the can receive both compensatory and punitive agreement. management should document. . too small to put in writing! document. If practice ensures that the contract is enforce.

212 Chapter 5  Operations: Housekeeping. against an employee who is at least 40 years old the behavior must be sufficiently severe or as long as that employee can perform the job pervasive. Although portraying a against another unless he or she agrees to per- youthful and energetic image is important to form a sexual act. bans discrimination in public accommoda- cants or employees based on race. Title III made it illegal to discriminate against appli.30 who are otherwise qualified for the position.19 Note that right to a jury trial as well as possible punitive the courts interpret these exceptions quite damages. Only in the case of business necessity or Finally. or gender. on a case-by-case basis. Courts recognize two types of sexual ha- The Age Discrimination Act of 1967 was rassment. Opportunity Commission (EEOC) as its en. national origin. means “this for that. often resulting in rulings for the plaintiffs has caused more employers to adopt plaintiffs. quickly to save lives. This be able to perform the essential elements of policy should be included in the employee . and the alcohol service. and it created the Equal Employment create no undue burden24 for the business. pro- The Pregnancy Discrimination Act of motion. The ADA requires all plies to employers with 20 or more employ. 197820 made it illegal to discriminate against By now. Here. Title I notes. unwelcome.18 what constitutes an undue burden. tions (lodging facilities. stricter and clearer policies for selection. and not voluntary.” Quid pro quo26 claims inate against an applicant or an employee who occur when one person threatens action is 40 years old or older. cial facilities.29 and promi- of the ADA bans discrimination in employ. and better than a younger employee. The possibility of larger awards for strictly. layoffs. and Security Title VII of the Civil Rights Act of 196417 the job regardless of the disability. religion. quid pro quo. literally amended in 198621 to make it illegal to discrim. The first. The courts. accommodations to be reasonable23 and to ees. the Civil Rights Act of 199125 bona fide occupational qualification (BFOQ) gave plaintiffs claiming discrimination the can a hotel legally discriminate. condition. Workplace behaviors found to (ADA) of 199022 forbids discrimination create a hostile work environment are repeat- against otherwise qualified individuals on the edly sending sexually suggestive letters and basis of a physical or mental disability. for one) and commer- color. Engineering. must affect a term. The best tactic for management to em- This means the applicant or employee must ploy is to adopt a no-tolerance policy. the pri- pregnancy could affect her ability to act vacy of hotel rooms. The Act ap. a hotel could tel industry leaves hotels vulnerable to more probably refuse to hire a woman who is seven claims than business in most other indus- months pregnant as a lifeguard because the tries—the late and long hours of work. or privilege of The American with Disabilities Act employment. Hostile work environ- many hotels. and termination. The nature of the ho- BFOQ for the job. nently displaying nude pictures (when com- ment and applies to applicants or employees bined with other lewd behaviors). it is simply illegal to discriminate ment27 claims are much more common.28 sending risqué emails. For example. most people are familiar with the pregnant women unless the discrimination is plethora of sexual harassment claims that a business necessity or not being pregnant is a have been filed in courts. determine forcement arm.

7  The Legal Environment of Lodging Operations 213 handbook and posted conspicuously through. some areas pro. ular hourly wage rate. 14. the hotel would be re. For example. at these elements when comparing jobs.and 15-year-olds cannot work calities require a minimum wage rate higher more than 18 hours per week and no more than the federal mandate. and equal pay overtime. However. The FLSA re- rate of $3.37 Federal Labor Standards Act. Further.33 ing the second. the hotel must pay 10 hours of The FLSA. tels who pay employees biweekly. Also. For exam- The rate of minimum pay is established ple. This is especially important to ho- for equal work. overtime rates need not be paid to exempt calities can adopt even stricter laws than the employees.00 per hour. overtime pay. the second week of the cycle. work during a one-week period. employees must feel free empt employees.39 Some state laws are . first week of the pay cycle and 50 hours dur- ployers with annual sales of $500. The FLSA defines exempt em- federal statutes. Section 5. if the minimum wage is $6.00 per hours that teenagers under the age of 18 can hour to raise the hourly wages to the mini.5 times the reg- who is doing the harassing. Tip credits permit employers to pay employees at the same rate if they per- pay regularly tipped employees. be. It is important to note that states and lo.31 Others disallow discrimination based functions or work for a seasonal amusement on marital status. as the courts look equal at least the current minimum wage rate. the hotel could pay the employee at a during the summer season.00 required by law.000 more. if an employee works 30 hours during the by Congress and applies to virtually all em. The Fed. the Act restricts the number of quired to pay the server at a rate of $4. old. even though the its. overtime for the extra hours worked during tions such as training wages34 and tip cred.35 Training wages at 85 percent of the total hours worked during the pay period minimum wage may be paid for the first 90 equaled 80. who work over event of a sexual harassment complaint. Some states or lo. and responsibility. especially hour.38 Human the current minimum wage.00 per many of the employees are young. These wages are cause their supervisor might be the person mandated at a rate equal to 1. as and a server receives tips averaging $3. more of their time performing management tion. however.00 per hour in tips. It is important to understand that the eral Labor Standards Act32 (FLSA) mandates FLSA uses a weekly pay period to determine minimum wages. at a rate of pay equal to one-half of equal skill. days to employees who are between the ages The equal-pay-for-equal-work require- of 16 and 19 and entering the workforce for ment of the FLSA requires that employers the first time. If a server made only quires all employees to be at least 14 years $2.00 Child labor laws affect many hotels. meaning those who must be to speak with more than one person in the paid at least minimum wage. such as form substantially similar work that requires servers. or recreational establishment.36 On the other hand. effort. includes certain excep. and restricts child labor. than 3 hours per day. the resources must identify the core or essential combination of tips and actual wages must elements of each position. ployees as those who spend 40 percent or hibit discrimination based on sexual orienta. 40 hours in one week. Overtime wages must be paid to nonex- out the hotel. school days. For example. During mum $6.

through a sliding glass door that was easily stricting work hours for teenagers. sponsible for the security of the hotel’s guests. The best ways room safety.  SUMMARY Courts consider factors such as the frequency and severity of past crimes. every employee is re. or state department of labor and can Crimes can also occur in hotel parking be costly for hotels. cause laws often change and. of the constantly evolving interpretation and While proper key control is vital to guest application of all relevant laws. smaller properties usually ei. guests. Guests. If the hotel is put on to $10.5 million. it should noncompliance. unlocked from the outside. adding a guarded gate. state. it are committed against guests are guest rooms is important for management to keep abreast and immediately outside of the property.214 Chapter 5  Operations: Housekeeping. In a highly publi. and owners. Francis recovered Violations of the FLSA are reported to $2. When deciding what preventive actions are reasonable. Regardless. spicuously placed in guest rooms warning ties exercise reasonable care to protect guests guests to keep their doors locked. singer Connie Francis was raped at larly. Again. and adding more security While larger hotels often hire their own secu. . courts look at certain factors to determine if the hotel was put on notice. too. further re. and Security even stricter than the federal ones. to the front desk. can do their part. not divulge and patrons from reasonably foreseeable their room number. Courts also look bility of management to be well informed of at training and personnel activities and design these laws and to take preventive measures to modifications the hotel has undertaken in the protect its employees. sional associations. These pre- cautions might include hiring additional per- sonnel. installing more lights. Low lighting levels support an ideal envi- to be intentional. Be- effort to keep its guests safe. If the violations are found lots. damage awards can be quite high. Placards should be con- Most jurisdictions require that lodging facili. constructing a  Security fence around the parking lot. in the case of a The most common areas in which crimes jury trial. to keep current are to be active in profes- tel room doors and locks. Employees must report any suspicious problem. activity or person to management. and utilize the resources of legal gunpoint by a man who entered her room counsel. Engineering.000 per offense. so is the regular inspection of ho.40 aware of crimes that occurred on the property Many states have even stricter penalties for or in the immediate neighborhood. rity personnel. monitors. read trade journals regu- cized case. It is the responsi- posed by the facility’s design. A second offense may warning of criminal activity.41 the U. all hotel employees are responsi- ther outsource this function or rely on local ble for keeping the property as safe as possi- law enforcement officials in the case of a ble. employers may be fined up ronment for crimes. a recent increase Many laws at the federal.S. and security problems els affect hotel operations. take further security precautions. and local lev- in the area crime rate. meaning it is result in imprisonment for up to six months. and report any concerns crime risks.

1997. ments. more than 600 people in Washington property stolen from a guest’s room despite a got sick from eating Jack in the Box hamburg. as amended by the Federal http://rrnet.E.Supp. De.. 522 $15. 21 U. the registration area as the statute required. The Seattle Times. The hotel ber 30. The plaintiffs paid less to e/html97/jack_103097. with a Holiday Inn in San Francisco. See. The Educational Foundation of the National U.com/def/a090. 198 N. 2–314. partment of Agriculture. See Vern Wells et al. the parent company of Jack in the Box. Can be found at Sections 1–5. Also widely used is Train- 5.C. bursement for their cab fares to the other Inc.nwsource.htm. coli bacteria. 7–15. Norman & Associates. See.C. ing for Intervention Procedures (TIPS) certi- 6. The Educational Institute of the American establishing HACCP and other controls..App. 1(1).S..C. Wells and Robert Hughes had reservations ing a tainted burger. go to http://www.Rtpr. Octo. In 1993. The largest single-case settlement was 15.E. Section 5. 8 guests’ valuables.. thus. App. fish and should be reasonably expected.lect- chantable because bones are a natural part of law. in which the court held innkeeper was not liable for the theft of a bag that a jury could find that hamburger contain.com/extra/brows was overbooked. in which Vernon who lapsed into a coma for 42 days after eat. 21 U. Chapter III. The court rec- ing a large bone might not be merchantable. 21 10. $500.938. 1994).F. it failed to do so in set aside $100 million to cover lawsuit settle. for example. P. Sections 1451–1461. Dist. 1981). Ltd.2d 876 (Ga. April 3. App. Miller. and HACCP certification.7  The Legal Environment of Lodging Operations 215 C H A P T E R 5  E N D N O T E S 1. in which the court decided that bacteria in 14. Section 301. Day’s Inn.Rptr.2d 323 (1992). The full text of the article is at could not honor the reservations because it http://seattletimes. and Cosmetic Act of 1938. Section 343. La Quinta Motor oysters were “foreign” to oysters and. Hotel and Motel Association offers Control- 3. Suli. ognized that the hotel provided a safe for Finally. for example. Searcy v. Code certification. Superior Court. 13. which the motel was liable for $4.4th 1717. U. of money from a guest’s room.R.C. 11 Cal. For the current laws of individual Room. for example.html. and the guest assumed the Cal.6 million to the family of Brianne Kiner. court held that the fish chowder was mer. the statute in guest rooms. Inns.95 for 7. A number of states have enacted whistle- 9. 535 (1989).S. Drug. Nutrition Labeling and Education Act of ling Alcohol Risks Effectively (CARE) certi- 1990.3d 605. Liebeck v. in made the food unmerchantable. Food. Electronic blowing statutes for both the public and .com/mna/newsltr1. F. at http://www. Restaurant Association offers both ServSafe 2.html.S. Inc. stay at another hotel but were awarded reim- 8. Holiday Inns.C. From ’Lectric Law Library. Pure Food and Drug Act of 1906. No.App. state statute limiting the motel’s liability to ers contaminated with E. hotel.. 1990). 395 See also Evart v. Webster v. in which an Cal. 9 C. Food. Gooden v. in which the states. 1023 (Mo. 211 Cal. Fair Packaging and Labeling Act of 1966. 11. 1996).C. fication. 12.S. S. v.S. see Kilpatrick v. See. The Educational Foundation of the 4. 16. See Food Safety and Inspection Service.gettips. Although the motel posted notices of maker. McDonald’s Restaurants. CV-93-02419. Blue Ship Tea fication. 1995 WL 360309 (N. 676 So.T. 2d 1137 (La.M. 21 National Restaurant Association offers Bar U. Newsletter.com/.2d 309 (1964). risk of theft by failing to lock up the money. 1996.

1991). City of Philadelphia. 27.S. 292 (N. Florida. The court required U. they would not a BFOQ for flight attendants. Costle (D.C.g.S.S. 42 U. Title VII of the Civil Rights Act of 1964. as court tightened the standard and held that em- amended. 29 U. as ing so would not alter the nature of the sport. 201 et seq. 31. as do. Section 6(a)(1) sets the minimum wage. Sections 2000e et seq. doing so would be a reasonable accommoda.S. 524 U.S. 29 U. at least 71 cities or counties have civil Martin v. Gulf Ridge Council Boy Scouts Louisiana. 29 U. Maine. North App. New York.2d 872 (9th Cir. “should have known” was eliminated.C. Section 7(a)(1) and Section tion and would place no undue burden on U. 25.V. 895 F. 20.C. Dallas Div. 34.. Ohio.C. See. for ex. Supreme Court was Mentor Savings Bank v. Engineering. 924 F.C. as Section 3(t). Section 6(d)(1) and 29 U. in fore. the harassing activities were occurring. Section 3(s)(1)(A)(ii). 24. 1988 WL 85195 (Fla. The 19. 29 U. in Faragher 17. 201. Illinois. known that a supervisor was harassing an em- 17.S. 775 (1998) a 18. ployers would be liable only if they knew that Section 705.C. vestigate the claim. e. if employers know of harassing emails which the court held that being female was or jokes being sent to employees. See.C. Currently. New Jersey. There- 517 F. at least 14 states have executive or- 23. 477 U. The first case decided under the quid pro quo 39.S. See Wilson v.C. Section 12112(b)5(A). v.C.. Supp. 42 U. 201.S. 29 U. Inc.A. Sections 2000e-2000e. and at least 41 cities or Cir. 57 (1986). 201. 22.S. Section 6(d)(2)(g) and Section traumatic stress disorder as a result of his 14(b)(1)(A). 1981). who has a congenital disability. 42 U. Section 13(1) and (3). to drive a cart during golf competitions. in which the Court defined a hostile workplace environment. Howard Johnson’s Motor Lodges. 9835309 (9th rights ordinances. Andrews v. The first sexual harassment case to reach the 41. 201. West network technician suffered from post. 7(e).S. service in Vietnam. West. Con.C.C.S..S. 29 U. 105(b). 29 U. be liable if the employer knew or should have and Tennessee. Brady. 33. Tex. Ellison v. North Dakota.C. Minnesota. Sections 2000e et seq. 201.S. Hampshire.C. Ct. 30. 29 U.S.D. 1977). . New of America.. M. for example. and Security private employment sectors: California.216 Chapter 5  Operations: Housekeeping..S. Section 38. Vinson.S. Section 206(d). 1988).S. 42 U. 36. ders. 201. in which a U. necticut.A. 42 U. as ployee and failed to take any action or even in- amended.C.C. amended.C. Cir.C. which holds that an employer can Carolina. 35. Section 3(m)(1) and (2) and West to grant Rascon’s leave for treatment. 32. West. 42 U. 28. 1976). 29 U. 201. Inc. tion in public employment.Y. Michigan. 2000e(k). U. Inc. Sections 12102–12118. Rascon v. Sections 621–634. 1210 (N. See.C. Garzelli v. Supp. (3d Cir.S. 29 U.2d 1469 21. 29 U.S. 2000).S. 201.S. theory was Barnes v.S.S. 1990). 37. Section 3(l). Title VII of the Civil Rights Act of 1964. D.A. 419 F. 42 U. PGA Tour. 40.A. likely still be held liable.C. ample.S. 201. Hawaii. City of Boca Raton. Rhode Island. Fair Labor Standards Act of 1938.C. Section 16(a).S. Southwest Airlines Company. 26. No. in which the court held that it was counties have council or mayoral proclama- reasonable to permit professional golfer tions banning sexual orientation discrimina- Casey Martin. More recently. Iowa. 29. v. Section 12111(8).

Of course. Ensuring public safety the most-frequent location for motor-vehicle within the facility itself is. 1990. clearly are critical to the success of major cility design. managers. over six million simple assaults were reported management solutions for parking facilities is throughout the United States. ing the large number of professional-sports tenants. 200). Fur- Parking lots and adjacent areas. of course. the same report showed 8 percent equally important and should not be over. In terms of sports events. A Crime tion center. there is relatively little or. the term on leased buses (Baim. Security Risk. This article discusses the landowner’s sexual assaults. only seek their own counsel for specific remedies 5 percent of fans attending games use public that might fit their particular circumstances. Consider- “landowner” will include owners. 1994. In 1994 parking lots and garages repre- the risk of any criminal activities must be an sented the second-most-frequent location for important component of any property’s risk. 259). cars chronic-call locations were businesses with are parked fairly close together. while a similar number arrive For the purposes of this article. and a large now a focus of concern. Little in-depth analysis is available concern. thefts (Maguire and Pastore. at Control Institute study in Minneapolis times. essential. Section 5. 7 percent of all rapes and looked. criminal acts. percentage of those incidents occurred in ings of landowner liability for third-party parking facilities (Maguire and Pastore. Parking facilities generally ing criminal acts occurring in parking garages cover large areas and are open to the public. resulting in . Due to courts’ find. parties and describes some crime-abatement Despite the risks. developing risk.  PARKING FACILITIES one can easily imagine that there are several AND CRIME million parking spaces in use by major facili- ties in the United States. Crime statistics. are thermore. transportation. office building. or parking lots. eliminating or at least reducing 249). however. and lessors. and adding to those the number of hotels. landowners should public facilities. or conven- location of much criminal behavior. and similar public-access facilities. of all violent crimes.8  Asphalt Jungle 217 5. 230). attempts to take property without injury and management plan.8 A S P H A LT J U N G L E Je’anna Abbott and Gil Fried Because criminal activity can occur near parking lots (Berlonghi. While there is plenty of activity inside a shop- clearly indicate that parking facilities are the ping mall. stadium. parking lots and garages actions that can be accomplished through fa. 1996. venues (both indoor and out) as well as man- aged college stadiums and arenas. Ad- showed that many of the police departments’ ditionally. In 1993 major public facilities. no activity at all in the parking lot. however. to make the best use of space. 1995. convention centers. and 7 percent of total assaults potential liability for the criminal acts of third in 1994 occurred in parking lots or garages.

In a negli- As we’ve just described. business invitee) is a high duty. property are likely. The scope of those survey results indicate that parking. 13).. Moreover. ward three types of people: “business invi- pery surfaces. gence claim. parking fa. due to the cost and avail. Few of protect that individual while she was using the those surveyed felt that parking-lot security parking facility. when about. Gordon and walking through a parking lot or a parking Brill point out. a that landowners misunderstand and underes. landowner incurs varying degrees of duty to- ets. individuals. Indeed. and slip. quires a landowner to protect this person perceiving crimes perpetrated in parking ar. the fact that such of security” represented the highest-rated areas may be remote does not alleviate a concern by those same survey respondents. 1–6). whether tees. a plaintiff must prove (1) the de- cilities present a significant opportunity for fendant owed the plaintiff a particular criminal activity. and (3) the deviation related facilities near the bottom of their list caused the plaintiff’s injury. many venues rely on multi. (2) the defendant deviated sionals. from any hidden dangers the landowner knew eas to be low risk. of risk-management concerns. The court re- timate the magnitude of potential problems. Premise liability is places or to other individuals in the lot.” licensees. ingly seeking compensation from the owner level parking garages. Parking garages or manager of the property on which the typically have poor sight lines and numerous criminal activity occurred (Gordon and Brill. Engineering. the critical ques- special-event professionals evaluated a variety tion is whether the landowner had a duty to of risk concerns (Berlonghi. “lack spect to parking facilities. Such claims fall under the rules of potential harbor for criminal activity. and trespassers. Hospitality-industry profes. In other words.218 Chapter 5  Operations: Housekeeping.and while using a parking facility. dark corners and stairwells. landowner’s duty to warn a business invitee of . and oth- professionals than were other risk concerns ers who may seek access to the property. Patrons premises liability and. With re- specifically asked about just parking lots. founded on negligence principles. standard of care. A such as weather conditions. this article is limited to the first category of lot-related crimes are simply under-reported. shadowy spaces between parked cars  CIVIL LIABILITY that generally are excellent hiding places for criminals. allege a problem with the garage may be inattentive to such hiding property’s security system. A landowner normally does was a concern. then a landowner has curity was rated lower by these events some duty to warn customers. parking-lot se. making them a 1996. typically. For example. only one in ten felt that not have a duty to protect individuals from “no parking lot security” was a problem at all the criminal acts of third parties unless the (when offered that choice among a list of se. 1996. guests. Outside security firms or police often handle The duty owed to someone who is on the those crimes and may not report specific premises for a business purpose or who is pro- events to facility managers. On the other hand.e. We wonder. then. however. and Security tight. Yet if crimes on the curity issues). or should have known about. one-of-a-kind or first-time events. Victims of criminal misconduct are increas- ability of land. insufficient budg. often rank parking lots and from that standard. It’s also possible viding some benefit to the landowner (i. acts are foreseeable. a In the case of a person’s injury or loss 1991 survey of approximately 600 sports. however.

706 dangerous altercation between the patrons So. 498 S. Even though the arena had no prior sity not only had notice but also owed the problems. The officer also 1986). v. Inc. 1993. continued to serve alcohol to the of inappropriate behavior had officially been harassing group despite their obvious intoxi. 1997). At 2:30 A. 1995. from known potential dangers. Ammon. which he reported Fair Lanes Georgia Bowling. 1993). of course. don’t be in denial about poten- tery. For in- man fell on her. the court nevertheless concluded spectator. drunk. and no tice. problems at other venues. Village of Rosemont. or should have known of the potential for a 1998). the arena. drug-using crowd The management took no action and.2d 1196 a 1980 AC/DC rock concert. and failing to make its premises safe for muggings. The Bishop have information that indicates the possibility court concluded that a jury could reasonably of such conduct (see. Section 5.E. and Maloy. In as a drunk committing an unintentional bat. That is. cause “no unruly behavior had taken place in tential harm and. If a facility’s location is in therefore. cation. Attaching foreseeability to seemingly random Burden of Proof.E. even though apparently no specific incidents over. no fights had broken out. The court in this case considered moters claimed they did not have notice be- whether the university had notice of the po.8  Asphalt Jungle 219 all possible risks and. Notice is the key re- college football game when an intoxicated quirement for proving foreseeability. find that the bowling alley’s managers knew Days Inn of America. breaking her leg [Bearman v. 7). lice officer had investigated prior AC/DC Another pertinent case involving a park. the two parties were the 461 N. stance. liable if they take no steps to protect patrons Thus. be negligent for taking no action an area with a significant history of assaults. the key point of analysis is the exis. for example: McNeal v. 1990. a duty of safe that the promoter was on notice because a po- ingress and egress from the facility. Rockwell. a business invitee. more. once the university had no. Other cases have also last to leave the facility. tracted a rowdy. and Whataburger. The court concluded that the univer. other words. (803 F. for example. before the altercation occurred and would. A group of bowlers complained to the knew that when the band appeared at the bowling alley’s management of harassing be. notice that an assault or accident is foresee- cility well maintained and in good repair (see able (Miller. to the concert promoters. Inc. at which opportunity stressed the need for landowners to act as- the intoxicated group attacked the other sertively to deter criminal conduct when they bowlers in the alley’s parking lot. 3). whether it had a duty to protect its drinking had been observed” (McCarthy. arena the previous year. In one case. tial liability. 453 N. to keep the fa. patrons. the concert pro- (1983)]. the band had at- havior by the bowlers on an adjacent lane. and robberies. van der Smissen.. reported [Comastro v. 2d 616 (1984)]. Premises liability can accidents further expands the specter of lia- arise from such seemingly innocent activities bility should serious criminal acts occur.E. in a suit stemming from a brawl during University of Notre Dame. landowners may be invitees. Mean Streets. a female spec. tour stops and had knowledge of various ing lot and foreseeable conduct is Bishop v.M.. tator was walking across a parking lot after a The Premonition.2d 1548.2d 1226 (Ala. fore- tence of information that puts a landowner on seeability issues can extend even to criminal . 1993.2d 294 (Ga.

His widow making this determination. 1996. ity and whether patrons were warned of im- Back to the Future. Banks was criminal activity levels at the facility. signed patrols. of predicting all dangerous incidents or vio- ity that a certain risk or injury might occur lent behavior). 5. the court consid- and family brought a lawsuit against Hyatt. and Security activity in surrounding neighborhoods (Clery. 2d 214 (5th Circuit. including evidence that Hyatt managers were aware of numerous Therefore. the fre. to protect its guests and could not be expected 4. to protect guests who were off the premises. although Banks was not actually Gordon and Brill. 62). the area and determined that the security pre. When reviewing specific pre- (Nilson and Edington. 1990. 1987. 1990. The experience of the facility manager. doc- “take reasonable care for the safety of its ument. 60). Whether the manager was aware of the Besides. 1982. The jury heard 7. Hyatt employees all reasonably foreseeable criminal actions. where the hotel could effectively maintain To determine liability. 1984)]. The facility’s surrounding locale. pending risks (allowing for the impossibility quency of prior acts represents the probabil. The nature of the facility. 1987. had logged incidents. 1993. the following (Clery. Yet even cautionary measures. in other areas around the hotel.220 Chapter 5  Operations: Housekeeping. The lack of customary security precautions. landowners should ask in the absence of prior criminal activity. many involving weap. it is vital for landowners to robberies and shootings that had previously work on the implementation of a comprehen- occurred in and around the same area where sive crime-prevention program. courts are examining all the circumstances Hotel guest Dr. Whether the facility’s records are ade- gued that it had taken reasonable precautions quately maintained. as. and eliminate potential risks. A classic example of such a case is reasonably foreseeable crimes. While it is cautions provided by the hotel were simply impossible to eliminate all potential suits. bery and shooting. and may guests. 5–6): on the hotel’s property at the time of the rob- 1. 117. Robert Banks was robbed and that together indicate whether a landowner shot to death as he approached the New Or. addressing Banks lost his life. 2.000. testimony from both sides. courts determine control of safety” (Rutherford and Mc. the hotel contended. Engineering. 34–37). reduce the prospect of being sued (van der cent areas where guests [were] likely to go and Smissen. The jury awarded the were sufficient to prevent the criminal activ- Banks family $975. not sufficient. “Dr. and that the duty [extended] to adja. Rather than Banks v. Corporation. To a degree. and the hotel had a duty to do so. Further. Hyatt Corporation [Banks v. Hyatt ar. guilty of contributory negligence or had at 6. 1996. This means that landowners should include ons. 1995. ers the following factors (Berlonghi. Hyatt examining just the frequency of prior acts. 10–11). 3. 3). that the hotel did have a duty to risk-management plans can help identify. should have reasonably foreseen a harm. reasonable precautions had not been taken by the hotel to protect him. whether a property’s security precautions Connell. landowners must take precautions to prevent 1995. 13. 5): . and ford and McConnell. 5). Security personnel’s compliance with as- least assumed the risk by going out” (Ruther. The jury parking-area security as a critical concern in looked at the evidence of prevalent crime in their risk-management plans (Ammon. Berlonghi. In leans Hyatt Hotel’s front entrance. 722 F. serting that.

ment or prevention. many parking facilities that a facility can offer its guests. closed-circuit cameras. could have reduced sonnel understand and use proper secu- criminal activities or. all of which can be used effectively to dis- 7. What is the cost-benefit analysis of courage violence in parking facilities. including crime abate- quency and type of criminal activity oc. re. Litigants claiming negligent facility 2. practical functions. CPTED is a relatively 5.. adding security measures in light of the CPTED involves carefully selecting possible harm or injury sustained by a building features. Have security policies been reviewed. CPTED after the fact. that building or renovating facilities so that their task is generally left to the newest and least physical characteristics serve aesthetic and experienced person on the architectural team. What is being done to prevent criminal supervision are starting to argue that an ap- behavior? proach such as Crime Prevention through Environmental Design (CPTED). little time is devoted to parking-facility design in architecture cur-  ENVIRONMENTAL ricula and the principles of CPTED are thus DESIGN not widely recognized by developers and ar- chitects. alcohol management. or in light of a potential jury award meet established passive-security and active- to a victimized patron or visitor? security requirements. 1–6). although once a year? somewhat more complicated to implement 6. and controlling the environment. First. quarter mile)? 26–28). such as lighting. Are statistics maintained on the fre. Do both security and non-security per- dressed by Jeffery (1971). and systems to guest. materials. For one thing. and in the details to enhance patrons’ security is spread- surrounding neighborhood (within a ing throughout the world (Sheard. . and implemented? ity efforts if incorporated at the time of fa- Does such a review take place at least cility construction. concerns? CPTED principles. easy and economical way to augment secur- vised or updated. since the parking lot’s design Environmental design refers to the process of is often looked at as basic if not routine. Further. 1995.8  Asphalt Jungle 221 1. have been designed with little or no attention to security. patrons and employees about security 1996. It is possible. such as uniformed guards. while yet critical approaches to risk management active security refers to the human element. had a CPTED-like rity measures? system been used. Passive security refers Later in this paper we address common to the physical design. The general principles hancing security and crime-prevention of CPTED include natural surveillance. first ad- 3. it would have uncovered 4. Section 5. tors that are often overlooked and yet can Even though CPTED has been around substantially affect the safety and protection for almost 30 years. Are there any long-range plans for en. intercoms. (e. Is there a program in place to inform foreseeable hazards (Gordon and Brill. and crowd control). ac- initiatives? cess control. There are several reasons for this oversight. we discuss design fac. security patrols.g. The use of architectural curring at the parking facility.

The second most critical well. Concrete staining is the increase patronage). This con. established fact that good lighting deters Where good lighting is not available due criminal activity and increases the public’s to design or expense. many light manufacturers design garages that have numerous sloped parking lights with glare shields.) openness increases natural surveillance. nance.) Glare reduces the contrast of an object security-design issue is natural surveillance. and those lights can areas. with weak or impaired vision. stand the elements. however. able to with- feature in parking facilities. A top-quality concrete stain will last about mination is simply the intensity of light falling ten years. Engineering. 2–9). and beam lighting system reduces the need for active se. Smith architectural team had incorporated CPTED (1996. A good white paint will have the on a surface. Lighting is generally and providing glare-free lighting. The most difficult garages in which to tioning of fixtures in the parking facility. and architects as it is to traffic engineers. which denotes supe- rior design. grade. and Security Lack of planning. making it difficult for or the ability of individuals to observe their the eye to perceive depth accurately. Illu. (For use natural-surveillance concepts are those example. and restrooms. garages. Moreover. lights must considered to be the most important security be: reliable. and vandal proof. Uniformity refers to the ability to same effect but requires constant mainte- achieve a consistent level of lighting through. and this approach should be as familiar to parking-facility owners. (Consistent lighting paint. Natural surveillance is easiest dition is especially dangerous for individuals to achieve in open parking facilities. This cost- curity and reduces or eliminates car break-ins. The  CPTED Concepts highest grade is LOS A. So today’s designers are shying away be located above the parked cars rather than from extensive ramps. (One problem with white stain or out the parking facility. In addition to meeting industry standards The Light Ahead. Installing a parking-lot process of dyeing walls. effective method has been shown in some de- The basic principles of lighting design in. Each level is represented by a principles from the start. means that active One approach to achieving the desired security methods are later needed to correct quality of lighting is the Level of Service problems that could have been avoided if the (LOS) approach developed by Mary S. uniformity. LOS B is above average. as that accommodate easy cleanup. It is a well. because in the driving lanes to further reduce glare. LOS C is With respect to parking facilities. there are anti-graffiti stains to see into the far edges of parking stalls. signs to increase the LOS by an entire grade. stair towers and elevator access standard. clude illumination. surroundings. therefore. controls. CPTED in. Glare can be it is not impossible to achieve in parking minimized by the careful selection and posi. however. Fortunately. soffits white to increase brightness. city officials. average.) compared to seeing only the driving lanes Vision Quest.222 Chapter 5  Operations: Housekeeping. high . easy to maintain. ceilings. and glare. is that it may encourage graf- can allow both patrons and security personnel fiti. and LOS D is the Illuminating Engi- cludes the following areas: lighting. natural neering Society of North America’s minimum surveillance. concrete staining may perception that the facility is safe (which may be an alternative. against its background.

Within the confines of the shop- weather or code constraints. dividual receiving a ticket and interacting by themselves they are not an alternative to with an attendant is given the impression of CPTED. facilities that failed to incorporate CPTED ble. according to CPTED principles. Active design con- access control in the design stage. The more visibility one has the better. and trained guards. Screens and gates phones. Clearly. it is prudent to consider active ones are notable. resulting in minimal traffic and permit. That thinking is backward. an underground CPTED component. as the risk cepts include panic buttons. allowing both protection and ing is a much more appropriate place for visibility. circuit cameras. Section 5. it is best to direct pedestrians to desig. to the primary entrance. intercoms. Landowners should exits makes supervision of those areas easier. and signs. Many patrons recognize the poten- of CPTED is to plan stairways and elevator tial danger and avoid using such facilities lobbies as openly as the building codes will themselves. and vandals. One of the basic precepts criminals. glass may be a ping mall. especially in underground garages. If the facility is in a low-risk Secret Weapons. If possi. Nevertheless. convention center. nated areas where other people are likely to it’s a way for the owner to make a public be walking (and criminals absent). security. Further. a few first. While CPTED generally area.8  Asphalt Jungle 223 ceilings and open exterior facades are now Location of security personnel is a critical preferred as well. rity employees a clear view of the property. Likewise. Parking ple from entering the parking area. public restrooms. measures such as those and some are prone to abuse by pranksters discourage criminal activity. next vehicles within the parking facility. rather than statement about the importance of security to let those guests wander through the parking and guests’ safety. sound surveillance. . Such elevators are high-risk areas for personal in. access control may seem unnecessary at encompasses passive design concepts. Besides giving secu- ple. and therefore locate their security per- that incorporate natural light and ventilation. an in. thereby presenting a potentially dangerous including using exterior and open-air spaces. distress. sonnel and parking-attendant booths to the and that make it easy to hear a person in rear of the facility. Although Even if there is no charge for parking. emergency level may change with time. CPTED addresses such areas with an eye because they make excellent hiding spots for toward open design. Since stairs. facility. not include restrooms in parking-facility de- The Glass Tower. sary to use active techniques later. wish to “advertise” potential security con- Yet there are underground-design schemes cerns. lobbies. or office build- compromise. landowners Natural surveillance also includes the should locate security personnel or attendant manner in which employees direct people and booths at the front of the parking area. concentrating entrances and The Hiding Place. condition for the patron who happens to use Where that option is not available due to the restroom. For exam. Moreover. closed- can be used to discourage unauthorized peo. all of those features have obvious advantages. A Safe Place. restrooms present special security problems jury. Some landowners don’t parking garage cannot allow for open facades. they tend to be expensive. the parking facility’s design should guide during the planning stage often find it neces- vehicular traffic through gated pathways.

gram. 22–29. 3 R. (Ammon. pp. and large .224 Chapter 5  Operations: Housekeeping. agree.” Crowd Management 1. Also. that providing adequate secu- Watch It. 1993. Ammon Jr. such as percent of the stadiums. 1985. after the seventh inning or (1995):16–19. Jan- coholic beverages into the facility. van der Smissen.” Sports Illustrated. section 23. There is no consensus on the number of on- In addition to CPTED methods. 1993. 1 B. Twyman. Gilbert and L. alcohol within the stadium or facility as alcohol-free management is a key component of a risk zones may make events more attractive to management plan.” unpublished doctoral and incidents include controlling tailgate dissertation.2 Finally. According to that study. facility employees. Arrests or evictions at families and other users3 and reduce the sports events often revolve around alcohol likelihood that under-the-influence fans will abuse.1 Alcohol management policies can be disrupt or interfere with sober patrons. orado (Greeley. 117). Christiansen. in uary 31. enforced in several ways. Miller. there are duty security personnel required for given sit- other critical aspects to risk management that uations or even about the best security are well known but sometimes overlooked. 419–437. the sale of alcoholic beverages 2 R. Ross. in the parking lot before and after the game 46–52. 1993. 4 competition (e. “Violence: Out of venting patrons from bringing their own al- Hand in the Stands. only 3 percent of the respondents did not offer One common measure is the use of roving any security protection in parking lots. 1983. requires consistent and detailed monitoring dents “always” had security personnel located (Ammon. Ammon Jr. Private security  OTHER RISK. Risk-management professionals We address a few of those here. however. no. private security. In a recent survey of municipal rity is an ongoing. and law-enforcement STRATEGIES agencies provided the remaining security. “Risk and Game Manage- Additional risk management strategies ment Practices in Selected Municipal Foot- designed to reduce alcohol-related injuries ball Facilities. Engineering. law-enforcement au. schools. 3). 86 percent of the respon. designating certain areas thorities provided protection. 1990. firms.E. 1986. In many parking lots. those of malls. hotels. and Security ALCOHOL MANAGEMENT For certain types of events. evolutionary process that football stadiums. 1989. 62–72.g.. including by pre. 117–120. In 63 security patrols. CO). many venues. at the end of the third quarter). measures. or a blend of em- MANAGEMENT ployees. University of Northern Col- parties and creating a designated driver pro. “Alcohol and Event Manage- is terminated after a certain period in the ment.E...

Today. credibility once in court). The demographic profile of the expected ample was ordered to pay 75 percent of a crowd. Crowd. consideration in a risk-management and dividuals (e. Although in the facility. 1. investment can reduce actual risk and there. Florida. 9. in par.g. . Jr. there is a strong possibility that such an or dangerous conditions. for example. The number of limited. The time and length of the event (and. for ex. the elderly or disabled) as re. 1997. safety plan. The presence and location of electronic crowd-management personnel (Ammon. give the store’s security efforts some 8. robberies prior to its implementing the golf. Traditionally. concert. Another risk-management officers) and the level of supervisory technique used to protect patrons when en. The types of security personnel on duty among customers as a safe place to shop. 16–19). protection devices.. two-way radio. In the parking facility itself. Signs are an important those same workers are as likely to assist in. a football game or a concert). and 1995..g. Wal-Mart. in fore help the store avoid costly lawsuits (or. A Wal-Mart in Tampa. 1997. signs quired and to direct visibly intoxicated should assist patrons in moving quickly individuals to a secure waiting room. 32 burglaries. and 14 armed 2. ful. flashing lights) can cost about $45. at some cases. had been the scene of 226 car thefts. necessary security equipment (e. whether it be a rock or leaving—make easy targets for criminals. a guard with a vehicle of some sort and the 5. through the lot or garage to their destinations. The number of spectators. E1). The number of entrances and exits. some training for the job is desirable. tering and exiting a facility involves the use of 13. $1. crime outside the Tampa store 4. E1).. in a Wal-Mart parking lot (Lee. 13): store. least. Once the golf-cart program was in access areas. however.8  Asphalt Jungle 225 stores. The facility’s capacity. place. the expected weather). With that in mind. ticular.. roving patrols can be effective and use. 3. 7.g. The facility’s history of unruly behavior year. non-shoplifting crimes occurred outside the 1996. some regions. management personnel are now used for all Lost and confused guests—whether arriving sorts of public events. (including municipal law-enforcement The Crowd.and restricted- cart idea. In all formed security personnel on golf carts in cases. The type of facility or event. expertise. reputation within the neighborhood and 12. alcoholic beverages at the entrance to events (e. Section 5. Whether admission was free or paid. Wal-Mart. Whether alcohol consumption is allowed price to pay to achieve better security and a or expected (see box). now employs uni. The number of parking levels (or areas) was reduced to zero (Lee.000 a 6. Wal-Mart conducted a study on The number of security staff needed can vary store crime and discovered that 80 percent of based on the following factors (Berlonghi.5-million award to a man shot in the head 10. $45. 25 purse snatchings. Sign of the Times. an exposition at a conference center.000 a year is a small 11. or a farmers’ market at a shopping mall. Specific requirements imposed by insur- were used to inspect patrons’ belongings for ance carriers. those individuals 14.

the older system will almost certainly be dealing with parking-security personnel re. personnel. 6). building expansions. To avoid liability. picture safely move to and from their vehicles. For example. there should always toxicated persons. from the same vantage point. or hindered. tract should specify the number of security Witness for the Defense. By the same token. vide clear. should it occur. many A facility might exist that originally incorpo. of landowners. or other advertis- procedures are appropriate after an injury or ing or personal effects. 1996. security measures are to be used (e. imagine a convention center that started out standable and memorable so those guests can as a simple rectangular structure. insufficient to meet the current needs of the tained from outside firms. Such ad- by announcing that regular security patrols ditions now make it impossible to view large and electronic-monitoring systems are in sections of the parking lot at the same time place. how security personnel will handle in. 6). reconfigured parking areas. landowners are not waiting for criminal ac- rated CPTED but that has undergone many tivity to occur. reduce potential fiscal identify the security lapses caused by the losses arising from the misconduct of others. and passersby) not be obstructed tions). crime prevention is that the sight lines of po- ers will change shifts. and Security Landowners therefore should strive to pro. Because there is no “one size fits all” solution. the posters would also hinder a potential witness’s view of an  THE SECURITY AUDIT attack on the cashier (Gordon and Brill. Risk-management planning as this should undergo a security audit to should. and what follow-up reporting ered with posters. 1996. level of security to where it once was. If the windows of the cubicle are cov- event occur. Additionally. of course. Contracts with in. but are implementing risk- .g. physical changes over the years. if the facil- Appropriate contractual provisions help to ity has not changed its exterior lighting sys- protect against such losses—in this case. One aspect of personnel to be deployed. A security audit will show what specific risk-management steps are to be what actions need to be taken to return the taken to secure the parking areas. THEN LITIGATE a security audit is a good way to determine exactly what security a particular facility Protecting facility visitors and lowering the needs. what quality-control tential witnesses (patrons. Now. risk of liability exposure is a primary concern The security audit is actually quite simple.. For example.226 Chapter 5  Operations: Housekeeping. how various asymmetrical additions could be thermore. employees. handbills. unlikely to witness a nearby crime. The con. a cashier would be crime. what specific actions to be a clear view into and out of any cashier’s take should a criminal act or personal-injury cubicle. visible signs that are both under. spot inspec. Fur. when those work.  HESITATE. signs can be used to deter criminals built into the parking lots over time. when tem. The design of a parking facility and the level of security needed depend on many factors. A facility such Contract. Engineering. including being dependent security vendors should contain a unable to light some corners at all (Gordon clause promising indemnity and setting forth and Brill.

Read was dangerous. 2002). The es- partment of Labor. Section 5. and con. Using CPTED concepts is another ef- facility operations. alcohol management. Had the record indicated that the Or- shot Larson in the chest (Larson v. of Tacoma (1998. Explicit violence is specifically prevented Read from entering the property. criminal conduct is unforesee- able as a matter of law. landowner can make the parking facility 5.9 W O R K P L A C E V I O L E N C E I N H O T E L S Mark Beattie and Jacinta Gau Violence is the leading cause of workplace fa. a party. tect guests who are within a zone of foreseeable tion ensued. and the aftermath of trau. for breaching its talities in the hospitality industry (U. Consider the following case: on the premises.. The directed at a hospitality employee. and several friends had lish that Orchard Inn recognized—or reason- rented rooms at the Inn during Wenatchee’s ably should have recognized—that Read posed 1998 Apple Blossom Festival. the crime and there is no history of such crimes matic incidents. . Inc. propensities of the individual responsible for crisis management. it seems cise agreements with independent security absolutely mandatory for a landowner to providers are just some of the ways a take all precautions possible. At three o’clock that morning. while im. chard Inn knew or should have known that pitality.. and Read pulled out a gun and danger. should have taken greater two categories of workplace violence: explicit steps to ensure guests’ safety.” The court entered sum- Bruce Larson. Security patrols. Inc. Jr. summary judgment would Larson’s estate subsequently filed suit have been denied.S.9  Workplace Violence in Hotels 227 management plans. Washington. safer. A friend of Larson’s invited a young The linchpin of the Larson decision was man named Jeremy Read to the party at the foreseeability: An innkeeper has a duty to pro- Inn. citing its holding plicit violence occurs in a hospitality estab. and the case would have against MOA Hospitality. Today. Preparation for tate alleged that the Inn should have known that dealing with a crisis situation is vital to man. Washington Court of Appeals. Hospitality because the record failed to estab- Larson. There are Blossom Festival. MOA Hos. legal duty to protect guests from harm. 2003). with litigation so frequent. was fatally shot in his room at mary judgment in favor of respondent MOA the Orchard Inn in Wenatchee. reasoned that “[W]hen there is no evidence Managers and employees need training tools that a business owner knew of the dangerous to effectively manage violence prevention. criminal activity increases during the Apple agement and employee training. an alterca. his brother. The group threw a foreseeable threat to Larson’s safety. Metro Park Dist. and should have and implicit. De. signs. lishment but is not directed at an employee. (the corporation been put before a jury. in Wilbert v. ity. that owned the Orchard Inn). including for their parking. crowd fective method of reducing crime and liabil- control. 10).

ters in the hotel and hospitality businesses. especially when litigation tense face-to-face contact in service encoun. 13). and the United lence is homicide. 63 percent of those are four categories of perpetrator–victim deaths were attributed to violent acts relationships: (NIOSH. tion? How well trained are you to deal with a physical and psychological stressors are often violent situation on your property? Have intertwined in the conditions contributing to your employees been adequately prepared to a violent situation (Hoel and Einarsen. threatened or as. 1997). consequences. 2003). and coping mechanisms of impending situa- saulted in circumstances related to their tions (Pearson and Clair. and Misner. Workplace violence can devastate busi- Due to the constant and sometimes in. The European Commis. crisis situations can be assessed by sion defines workplace violence as “Incidents examining the causes. The hospitality vice sector accounted for 52 percent of all 347 industry is among the top five most dangerous workplace fatalities in that sector in 2002 industries in which to work. the United aftermath of a violent situation. and technical-structural—and abuse or stalkers? pragmatic planning for an emergency situa- Workplace violence exists globally in all tion is important.228 Chapter 5  Operations: Housekeeping. Engineering. involving an explicit or implicit chal. Tools for cri- work. cautions. results from an incident. 2003). Retail trade than police in prevalence of violence (Hoel workers under the age of 18 were the second and Einarsen. 2003). Cox. points. Hewitt. Statistics provided . training programs. Homicide is the leading cause of occupational death for women and • Acts by persons who have no connection occurs predominately in eating and drinking to the workplace establishments (Levin. Homicide within the ser- States Department of Labor. where persons are abused. • Violence committed in the workplace by and the limited empirical research available a nonworker with a connection indicates a lack of effective training tools. 1998). do for employees who are victims of domestic social-political. 2003). and Griffiths. Dept. From each of these view- segments of industry. Vi. well-being or health” provided in the curricula of management (Wynn. nesses financially. deal with such situations? Is your night audi- tor trained to be alert for potentially danger- ous situations? Do your housekeepers have a  MANAGING THE CRISES procedure to follow if they discover weapons or other dangerous items in a room? Does Crisis management theory combines three your human resources manager know what to views of workplace violence—psychological.S. the available data are • Violence against coworkers limited in scope (Hoel and Einarsen. Because statistical tracking is general- customers ized and inconsistent. 2004). sis management planning can then be lenge to their safety. highest grouping of workplace fatalities be- According to Isaacs (2004. and hospitality employees olence is noted in reports from the European will subsequently be prepared to deal with the Agency for Safety and Health. Clarkin. ranking higher (U. • Violence directed at employees by 1996). there tween 1992 and 2000. of Labor. States National Institute of Occupational The most extreme form of workplace vio- Safety and Health (NIOSH). and Security Would you have been ready for this situa.

These guidelines enable interviews and compilation of material cul- the hospitality manager to spot and prevent a ture such as press coverage and police reports situation before it becomes a problem.6. the me.000” then narrowed into “categories of interest” to (Donohue. agement. the researcher and the participants through tim (Donohue. support employees’ tively. The Equal Employment Opportunity studies focus on identifying the training tools Commission (EEOC) enunciated these that exist to enable the hospitality employee guidelines in 1965: Establish company poli. These dian compensation awarded by juries against incidents are coded as explicit or implicit. Taxonomizing workplace violence in this Again. continue to be unforeseeable mately results in what Shank (2002. a single Larson case. These displays are vention of workplace violence. Case study methods are based on de- legal rights. The displays are conceptually ordered to highlight Data collection is central to the success of a the three focus areas: prevention. 55) de- events.6 Categories of Interest by Incident Type Relationship Implicit Explicit Criminal intent (no prior relationship) C-I C-E Customer/Employee CE-I CE-E Coworker CW-I CW-E Nonworker Connection NW-I NW-E . analyzed using a case-ordered effects matrix Table 5. The data pro. training is important. as are the data com- 3. not the vic. and punish the wrongdoer. crisis man- preventive training program and vital to pre. such as those that transpired in the scribes as a “cumulative case study. plied by the Bureau of Labor Statistics. A study by the Liberty facilitate incident analysis (Rossman and Ral- Mutual Research Center for Safety and lis. 1998).000 verdicts rendered since 1993. of category-specific case studies. A single com- plex case is built by ordering of individual cases. 2002). There (Shank. and aftermath. A series of case studies ulti- will. 2003. to identify and manage a crisis situation effec- cies. Section 5. train employees. These case late.9  Workplace Violence in Hotels 229 by Jury Verdict Research show that. implement investigative proce. many violent manner provides the foundation for a series situations are preventable before they esca. 1996 (Hashemi and Webster. topic examined through the perspectives of many different case samplings. 12). These categories of interest re- Health placed the costs of nonfatal workplace flect the four types of perpetrator–victim violence at $84 million between 1993 and relationships described in Table 5. 2000. 321).” Information from these case studies is  RESEARCH FOR coded according to standardized organiza- TRAINING PROGRAM tional schemes for cross-case displays. gram logs incidents occurring within some “[A]ccording to the reviews of more than discrete reporting period. hotels for [sic] assaults [was] $275. however. 2004). veloping a participatory relationship between dures.

“A workplace shooting hospitality curricula. used with po- rampage a “domestic violence situation. A.M. which “draws on supportive ception. 1998). Chicago Tribune: At 2:30 fieldwork procedures. firefighters.” Upon lice officers. Phillips took a hostage.230 Chapter 5  Operations: Housekeeping. clad in a bulletproof vest. “How many people ical technicians—may offer useful templates did I kill?” (Black. whom he ulti- sponder curricula—such as the Assaulted mately released unharmed. as well as problems such as post- fort Suites Hotel in Oak Ridge. Gregg P.” The time has come to develop cur- tions in the new circumstances are sufficiently ricula that enable managers to better prepare similar to the original research conditions for for an incident of violence and more compe- generalization to be appropriate” (Rossman tently address the aftermath and ramifica- and Rallis. 105). customer would be a nightmare for any com- evance to practice. Replication of this re. 2002). 1) asserts. Models used in emergency re- jured.. handling. obligation to provide a safe and healthy envi- gent theme may have (Shank. during. 2004. 2003. ENGINEERING. Police called the Staff Action Program (ASAP). as the following before. tions. Further research focuses on the recogni- used an Uzi 9mm assault rifle to fatally shoot tion of stressors that can catalyze violent his girlfriend. and two other people were in- of an incident.10 C A S E S T U D Y: H O U S E K E E P I N G . Denise Tomes was be-  INTERDISCIPLINARY coming concerned that the hotels for which SECURITY PLAN she was responsible were increasingly vulner- able to threats of physical harm or financial In 2001. Phillips. Trustworthiness is maintained through event. For a retailer dependent on public per- torial” logic. 2004). at the Com- situations. The ronment for its guests and employees. researchers rely on “asser. Phillips asked. Only then will the hospitality industry search model in other settings adds to the be in a better situation to manage a crisis such reliability and generalizability of the find. as a regional manager for a hotel loss to guests from a variety of criminals. and after the ings. A traumatic stress disorder (PTSD) that victims German businessman staying in the next room and witnesses may develop in the aftermath was also killed. Sandra Wisniewski. Engineering. AND SECURITY a large eastern city. Wisconsin. it’s a crisis that demands careful evidence to convince the reader that condi. The hospitality industry has an 5. To explain and justify that claims the lives of an employee and a the identified emergent themes and their rel. She chain that operated three urban core hotels in knew through news and media reports that . pany. and Security to explain different effects that each emer. methodological rigor in the interview and November 10. to develop this curriculum component (Flan- nery. and emergency med- surrender. Hunt- emergent themes point out critical areas for ley (2004.

tels. p. Special Event Security Management. G. ment Manual. Point. housekeeping. North Final Baim. and housekeeping. Section 5. M. muggings. and automobile. additionally. and L. This meant that ments and respective staffs. Risk and Game Manage. Unpublished doctoral dissertation. house- These hotels were built during the late keeping. The rated and remodeled to continue to appeal to second is to produce a range of alternative the upscale market.” Journal of Physical Education. due to the She challenged them to come up with a plan public nature of hotels in general. Dean V. facility upgrades. reation. November 10. Rec- Berlonghi. Hospitals. Ahrens. 1993. nicipal Investment. they still reflected the ar. ity Analysis for Table Service Restaurants. guest services staff training had not.E. L. p.B. markets. Dana CO. combined with guest room door locks were still of the stan. Dana Point. and Security 231 the streets of the city her hotels operate in side hotel entrances and exits. 1996. M. The seeking victims. 1986. 259. Tomes an analysis of the potential risks. fire stairs. Loss Prevention. specific recommendations for equipment and dard keyed variety. juries. Bennett. Greeley. “$1 Million Bail Set for Suspect in agement. “Profitabil. Black. “How to Avoid Negli- Cornell Hotel and Restaurant Administration gence Suits: Reducing Hazards to Prevent In- Quarterly 33(3):49–55. R. suggestions about how those risks might be chitectural and security consciousness of their managed through the efforts of their depart- era in operational terms. and engineering was to set forth for early 1980s and. Engineering. Hotel Killings. . Clubs. E. section C. 200. Jr.. 1992. Schools. Mo- p. corpo. To help her deal with the potential prob- rate. Ammon. 1995. 1990.500 first century.” Chicago Tribune.. A. University of Northern Colorado. CT: Greenwood. 1994.E. out. as yet. Jr. The Sports Stadium as a Mu. ———. tures were relatively obscure and unmoni- gressive panhandling. page 2. and Emergency Services. street crime. 1955. Edition. R. Tomes knew that at any given time a Denise Tomes called a meeting of the heads large number of her guests were on the streets of security. Facilities. and engineering. although regularly redeco. first task of the directors of security. and Dance 57(2):46–52. of the city and that. CA: Event Risk ment Practices in Selected Municipal Football Management. New York: Bayou. engineering. flected the security concerns of the twenty- Because her hotels total in excess of 1. Westport. rooms and cater mainly to convention.” Christiansen. and free independent traveler (FIT) lems presented by the current situation. re- related felonies. it was likely to increase security for the hotels and their that criminals could enter the hotel properties guests without building armed fortresses. elevators.H.10  Case Study: Housekeeping.L. and physical and sexual assaults. Housekeeping for Hotels. 13. CA: Event Risk Management. Brigham. parking struc- were becoming increasingly unsafe due to ag.” Crowd Management 1(4):16–19. R E F E R E N C E S Ammon. “Alcohol and Event Man. 2004. tored. Special Event Risk Manage.

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This diminished too. Motels and motor hotels tition from street restaurants that operated were built on highway and freeway inter- sub rosa as speakeasies. Consequently. many ho- depression years of the 1930s and the war tel companies saw as too great the cost of pro- years of the 1940s. ness district hotels. Movement foodservice establishments where they couldn’t was away from downtown and central busi- “get a drink.1 I N T R O D U C T I O N In discussing the ways that hotel organiza. affected the away-from-home eating role was compounded in many ways by the habits of Americans. we pointed out that in was further delayed by the Depression and earlier times food played a significant role in the uncertainty and reordered national prior- the organizational structure and product/ ities that accompanied World War II. that the preeminent role played by hotel well-documented major shifts in population foodservice in society became significantly di. These restaurants changes to take advantage of the mobility of were not constricted by the visible. public na. ture of hotel dining rooms. Recovery tions have changed. recognition lost during Prohibition.” Prohibition gave rise to compe. Th