OPERATIONAL ISSUES IN THE

ACCOMMODATION BUSINESS AND

ORGANIZATIONAL STRUCTURE IN THE
HOTEL AND LODGING INDUSTRY
AOAM 311 WEEK 2-3
Operational Issues in the
Accommodation Business
◦ Employee Turnover
◦ The first common operational issue in the hotel business is
employee turnover.
◦ The around-the-clock means staff are around the clock too. It
is not your typical Monday through Friday office hours job.
◦ Therefore, finding long-term employees to work these hours
can be difficult, not to mention ones that will work weekends
and holidays.
◦ The hotel business provides more than just a bed to sleep in,
it’s a service industry. The employees have to have the right
personality to serve the type of customers that the hotel
business attracts.
◦ Dealing with high volume customers can be trying, and may
be a big reason hotels are known to have the highest
employee turnover rate.
Operational Issues in the
Accommodation Business
Operating Costs
◦ There are a few reasons that operating costs are
becoming a problem for hotels.
◦ First, hotels are trying to keep up with the technology
trends and each change adds expenses; for
example, increasing WI-FI networks adds costs. Hotels
have to change out equipment and make sure their
systems are compatible. Some hotel companies
require their hotels to renovate every two to four
years to stay up to date.
◦ Renovating hotels can mean millions of dollars.
◦ All of these costs are increasing, while revenue may
not, at least not at the same rate.
Operational Issues in the
Accommodation Business
◦ Natural Disasters
◦ Natural disasters can have a big detrimental impact
on the hotel industry.
◦ These natural disasters often times occur in tourism
areas, like sea sides or islands. Dealing with a disaster
like an earthquake or hurricane involves taking care
of travelers and the immense clean-up time.
◦ Hotels that are affected by natural disasters can take
years to rebuild.
◦ The employees are out of work, and the hotel being
closed, does not make any money.
Operational Issues in the
Accommodation Business
◦ Sharing Economy
◦ The sharing economy is a relatively new economic model
in which people rent beds, cars, boats and other
underutilized assets directly from each other, all
coordinated via the internet.
◦ Airbnb is the most prominent example of this model. It
provides a platform for travelers and manages all aspects
of the relationship without requiring any paperwork.
◦ At Airbnb, the host who rents out the space controls the
price, the description of the space, and the guest
experience. The host also makes the house rules and has
full control over who books the space.
◦ This and other innovations have changed the
accommodation landscape as never before.
Operational Issues in the
Accommodation Business
◦ Distribution and Online Travel Agents and Online Bookings
◦ Online travel agents are a valuable marketing and third-
party distribution resource for hotels and play a significant
role in online distribution.
◦ Online travel agents offer global distribution so that each
hotel and chain can be available to anyone at the click of
a button.
◦ Smaller independent hotels that do not have the global
marketing and sales resources of a larger chain are able to
gain exposure, sell rooms, and build their reputation through
online guest ratings and reviews.
◦ Online travel agents also help hotels offer combined value
and packaging options that are attractive to many
consumers.
◦ Customized searches, travel guidance, and rewards points
are also available when booking through an online travel
agent.
Overview of Distribution Channels Available to Hoteliers
DISTRIBUTION CHANNEL BENEFITS
 Consumers prefer to book directly with the property
 Instills consumers with the trust to book
Hotel website or brand website  Reduces or eliminates booking fees
 Generates a billboard effect
Online Travel Agent  Works well when online travel agents are the most
relevant channel to the hotel’s target market
Mobile  Necessary to capture last-minute bookings

Global Distribution System (travel agents)
Social Media
 Increase exposure to booking through travel agents
 Helps capture consumers who continue to use
traditional channels
 Provides opportunity to nurture relationships with
consumers by responding to guest concerns and
suggestions
Organizational Structure in the Hotel and
Lodging Industry
◦ Regardless of its size, a hotel must have an organizational structure that services its customers
most effectively.
◦ Although the number of staff may change in a big hotel, typically the structure remains the
same, and the chain-of-command and the roles and responsibilities of each department
are essential to maintaining a well-functioning organization.
◦ A hotel organizational structure is a comprehensive plan by a hotel owner to define
departmental activities and responsibilities.
◦ This structure brings order to every aspect of hotel operation from the front desk and room
service to the human resources department.
◦ Hotel organizational structures are necessary to ensure maximum profitability from each
room, restaurant and bar on a daily basis.
◦ Your hotel can run efficiently if it creates an organizational structure that is easy to
understand.
Organizational Structure in the Hotel
Organizational Objectives
◦ A hotel's organizational structure is useless without
an initial listing of organizational objectives.
◦ These objectives address internal and external
affairs for the hotel so that the goals it sets forth
can be achieved by appropriate personnel.
◦ An internal objective for a hotel may be weekly
meetings between department heads to
communicate operational problems.
◦ External objectives within a hotel organizational
structure may include recruitment goals for
seasonal staff and variable pricing for weekdays
and weekends.
Span of Control
◦ The term "span of control" is used to describe the chain of
authority in a hotel organizational structure.
◦ A hotel using a wide span of control requires every
department to report to the general manager directly.
◦ Hotels using narrow spans of control delegate
management authority to assistant managers,
department heads and supervisors for day-to-day
problems.
◦ A small hotel is likely to use a wide span of control
because the general manager may be on site every day.
◦ National and international chains use narrow spans of
control to address hotel issues immediately as owners or
general managers are not able to cover each hotel.
Department Responsibilities
◦ The five departments that are listed in a hotel
organizational structure are Rooms; Food and
Beverage; Human Resources; Marketing; and
Accounting.
◦ The Rooms department handles customer service
including laundry, housekeeping and reservations.
◦ F&B is responsible for running room service, bar and
restaurant operations.
◦ The Human Resources department is asked to
handle employee recruitment, training and
benefits.
◦ Accounting oversees the hotel ledger.
◦ The Marketing department is given the
responsibility of selling ad space in hotels and
running promotions.
Organizational Flow Chart
◦ The size of your hotel will determine the size and
nature of your organizational flow chart.
◦ A small hotel with a handful of employees may feature
a two-level chart with the owner at the top and lines
connecting to maintenance, reservations and
housekeeping.
◦ A chain hotel must insert additional layers of
management including an executive board and
regional managers, which expands the flow chart to
at least four layers.
◦ An organizational flow chart can be as general as a
simple departmental overview or focused on position-
by-position relationships throughout the hotel.
Job Definition and Responsibilities
◦ The hotel should define each job title carefully
after completing its organizational flow chart.
◦ Each job should be listed alphabetically within
each department and include a brief summary of
job responsibilities.
◦ A comprehensive list of job responsibilities for each
position title should be included in an organization
structure.
◦ This list is used by human resource managers for
recruitment ads and employee evaluations within
your hotel. Y
◦ Our hotel's employees understand what they need
to get done each day if they have access to
narrowly defined job responsibilities.
Job
Description
Organizational Structure of Hotels
◦ Most hotels use a hierarchical organizational structure with pre-
defined roles and departments.
◦ Their employees have clearly-defined responsibilities and everyone
knows their roles.
◦ Usually, a general manager is at the top of the hierarchy, and this
position oversees the various departments within the hotel.
◦ Each specific department is run by medium- and low-level
managers. They coordinate employees' activities, assign tasks,
supervise work operations and monitor the overall performance of
the department they are responsible for.
Organizational Structure of Hotels
◦ The financial director/manager, for example, supervises the work of the hotel's
accountant and the cashier. Logistics managers are in charge of the staff
responsible for purchases and maintenance.
◦ No two hotels are the same. The structure of the hospitality industry depends
on several factors, including the establishment size, its services and amenities,
its budget and its business goals.
◦ Most facilities have several key areas in common, though; these usually
include the executive management, front desk services, housekeeping
staff, kitchen staff, maintainable personnel, accounting and marketing.
◦ A small hotel may assign its marketing activities to the front desk department,
while a luxury resort may have a separate division in charge of advertising, PR
and sales.
Owners and Executive Managers
◦ The executive level of a hotel usually consists of the
hotel owner and the general manager.
◦ In small hotels, the same person sometimes occupies
these positions, but in most cases, two different people
occupy them.
◦ The hotel owner sets the standards and policies of the
hotel and delegates the implementation of these
standards and policies to the general manager.
◦ The general manager’s responsibility is to manage the
hotel’s day-to-day activities and to oversee the
functions of various departments such as food and
beverage, laundry and housekeeping.
Assistant Managers Supporting
the General Manager
◦ In many hotels, the assistant manager is the general manager’s
right hand and provides support for a number of daily tasks.
◦ For example, it’s the assistant manager’s job to communicate
with all department heads and ensure that they are handling
any and all issues that could affect the performance standards
of the hotel.
◦ In bigger hotels, there are typically several assistant managers,
each assigned to oversee a specific division or department of
the hotel.
◦ Responsibilities can include assigning work schedules, handling
customer complaints, and ensuring that hotel events are well
organized.
◦ As assistant manager may also take on the role of a general
manager if the general manager is ill, takes a vacation or is
otherwise unavailable.
Mid-Level or Departmental Managers
◦ Mid-level hotel managers are a tier below assistant
managers, and usually include positions such as
the front desk manager, food and beverage
manager, sales manager, housekeeping manager,
marketing manager, financial manager, and
human resources manager.
◦ The front desk manager’s duties include handling
reservations, handling guest complaints, and ensuring
that the proper department handles guest requests.
◦ The food and beverage manager is responsible for
handling room service, catering, and the daily activities
of a hotel’s bar and restaurant. The housekeeping
manager oversees all aspects of cleaning and
maintaining the appearance of the hotel.
Mid-Level or
Departmental Managers
◦ The marketing manager is responsible for
implementing promotional campaigns to attract
guests, and the financial manager handles hotel
accounting, budget and expenses.
◦ The human resources hotel manager oversees
recruiting, training, development of all hotel staff,
and also ensures that each staff member is
compensated according to the hiring protocols.
◦ Human resources hotel managers must also
ensure that the hotel adheres to legal safety
policies as well as employment practices that
comply with the law.
Operational and Guest-Facing Staff
◦ The operational staff of a hotel
includes all the people that work in the
different hotel departments such as
food and beverage, housekeeping,
the front desk, the bar, and the
restaurant.
◦ Staff positions include chefs, cooks,
dishwashers, guest room attendants,
laundry room attendants, room service
waiters, porters, and customer
representatives that greet guests,
guide them to their rooms, and relay
special requests to the front desk.