ROOM DIVISION

AREA 2
THE RESERVATION SECTION
LEARNING OBJECTIVES
1. Discuss the overview of the reservation
section
2. Enumerate the functions of a reservation
manager.
3. Enumerate, discuss and give examples on
how control management systems are
implemented in the reservations area; and
4. Discuss how reservation dales
management is done.
 RESERVATION SECTION
 ALSO CALLED AS TRANSIENT ROOM SALES
TO MAXIMIZE ROOM REVENUE, THIS AREA STRIVES TO
BOOK INDIVIDUAL RESERVATION IN CONJUNCTION WITH
GROUP SALES,
HELPS AND ASSIST THE GUEST IN ACCOMODATING
ROOM INQUIRIES AND RESERVATIONS.
THE MOST WELL KNOWN HOTEL DEPARTMENT
MAIN FUNCTION OF
RESERVATION DEPARTMENT
1. Manage and maintain reservations.
2. Sell rooms
3. Manage room yield
4. Prepare sales forecast
5. Control commissions
6. Plan promotional activities
RESERVATION MANAGER
◦RESPONSIBLE IN MANAGING THE
RESERVATIONS DAILY
OPERATIONS AND SUPERVISING
THE PEOPLE UNDER HIS/HER
BASIC RESPONSIBILITIES OF
RESERVATION MANAGER
1. Ensure all types of reservation are recorded and
followed-up as necessary.
2. Supervise staffs in all aspects like using phone etiquette
and giving the right information to potential guest.
3. Monitor sales technique if utilized effectively by the
staffs.
4. Provide updates and trainings to concerned staff
5. Works closely to the Front Office Manager as well as the
Rooms Division Manager as may be required.
6. Prepares and provides updated
weekly and monthly reports to
concerned departments including
revenue forecast.
7. Monitors, manages and controls
the daily operations of the
reservation department.
RESERVATIONS MANAGEMENT
AND CONTROL SYSTEM
1. USE OF FORECASTING TECHNIQUE
◦ A technique used to provide information on what
occupancy levels are forth coming, this means that
forecasting, in essence is giving information on how busy
the hotel will be.
◦ This forecast of the reservations department incorporates
groups and transient data important in the provision of
overall picture of sleeping room activity.
Forecasting technique may impact on following which are
very important in management decision making process.
A. ALLOCATION OF ASSETS
with the use of forecasting technique, hotels can predict from the
forecast the demands they will need to place in their infrastructure.
One of the example of this is how the depreciation of high occupancy
will affect the renovation cycle of sleeping rooms. Other concerned
department can also benefit on this since they have the information
that they could use as benchmark for future renovations and the likes.
B. Levels of staffing
 with the demand of the industry, forecasting allow
proper staffing.
It aids in anticipating required staffing levels in order
for the demand to be met .
Without forecasting, problem may be arise like
shortage of manpower or the other way around, which
the rooms division manager would not allow to happen
as one of its duties is to manage and control the
operations.
C. Availability of Inventory
Forecasting also helps in reminding every concern
department on the type of inventory each of the
departments needs to keep on hand.
This in turns creates awareness on the task that each
group should undertake to ensure smooth flow of
hotel operations.
2. Use of key operating ratios
Since the task of front office is responsible for selling
rooms , it its also their task to determine what room to be
sold, how much it would be sold, how much is the revenue
and other aspects with regards to hotel occupancy issues.
This means that a hotel rooms cannot be offered in a fixed
price when there is no guest who would want to avail it
during lean seasons. The hotel should need to adjust so
that there will be revenue instead of holding it especially
when the season suggest that it is impossible to fully book
the rooms
 The following are the key operating
ratios used in the hotel.
OCCUPANCY STATISTIC
◦refer to the number of rooms occupied
within the day of operation obtained by the
following formula:
OCCUPANCY PERCANTAGE = ROOMS SOLD x 100
TOTAL ROOMS AVAILABLE
LETS ASSUME THAT A HOTEL HAS 500 ROOMS AVAILABLE. WITH THOSE 500
ROOMS 467 WERE OCCUPIED. TO DETERMINE THE OCCUPANCY
PERCENTAGE, WE WILL JUST SUBSTITUTE THE FIGURES AS FOLLOWS:

OCCUPANCY PERCENTAGE = 467 TOTAL ROOMS SOLD X 100

500 TOTAL AVAILABLE ROOMS
=0.934 X 100
= 93.4%

Based on data 93.4% is the total occupancy rate of the hotel. This information
can be used in forecasting occupancy which look at the core of the hotel
business,. filling sleeping rooms
Revenue Statistics
 use to calculate the hotels total rooms revenue as reflected in the
hotel daily room rate.
Issues like room are not being popular can be sold at a higher price
especially during peak seasons and produce high revenue of the hotel.
A popular room can be sold at lower price during lean season and
provide the hotel lesser revenue than what is expected.
This management of revenue is very important for the hotel success.
Here’s the formula 

AVERAGE DAILY SALES (ADS) = TOTAL ROOMS REVENUE

◦ TOTAL NUMBER OF ROOMS SOLD
LETS ASSUME THAT A HOTEL TOTAL REVENUE PER YEAR IS 5,000,000.00
LETS SUBSTITUTE THE DATE AND FIND OUT HOW MUCH WOULD BE THE AVERAGE DAILY RATE
THAT RESERVATIONS CAN BE USED TO ENSURES HOTEL PROFITABILITY.

AVERAGE DAILY SALES (ADR) = 5,000,000.00

467

= P 10, 706.64
Use of over selling technique
One of the techniques of a reservation manager is
being resourceful and allow the reservation
department to oversell the rooms.
Overselling of rooms means selling more rooms
than are actually in inventory
For example:
The hotel having 500 available rooms may oversell 510 or more
depending on how confident the manager is to allow this to happen.
This is done to offset negative circumstances that the hotel cannot
avoid on the spot such as cancellations, no show and out of order
rooms. Many hotel manager strives to fully sell out the rooms using
this practice although some consider this an undue gamble. The
danger for this practice is when there is no enough room for
confirmed or guaranteed reservations. If this happen the hotel needs
to walk the guest, which means he/she will be staying somewhere
other than where he/she was initially booked to be. This case called
walked reservations.
 To avoid satisfaction (hopefully by all means) some
hotel especially reputable ones, compensate by the
guest by:
 paying the expenses at another facility of the same better
quality
Providing transportation to the new facility
Providing free breakfast or upgrade of room upon in return,
and in room ammenity
Other incentives like type of direct monetary compensation
and an apology from the management.
Use of “Yield Management”
pricing strategy
1. Flexible tool used by reservation manager or director of transient sales in maximizing hotel
revenue.
2. Allows continual adjustments as business factors change in daily basis.
3. A strategy utilized by hotel to increase room revenue by using demand forecasting technique.

In this case the hotel needs to understand the opportunity cost at the simple laws of
supply and demand. The reservation department needs to maximize the room
revenue for the remaining rooms within the day to fill the voids left by the group
sales or base
 Some hotels incorporate 2 main restrictions into their yield
strategy depending on which is applicable to use in particular
situation
1. RATE AVAILABILITY RESTRICTIONS
 Most widely used type of yield strategy where managers actively manage the availability of
each rate.
The transient sales manager/director of transient sales may input rate triggers as availability
changes which when alters what rates are to be alters what rate are to be quoted. These rate
triggers are the signals which is programmed in the hotels reservations system instructs it to
change the rate based on the preset criteria.With this control system, different rate triggers will
become active or in active as rooms cancelled or booked.
2.LENGTH OF STAY RESTRICTIONS
Yield management tool which attempt to limit of
imbalances in occupancy during the week.
This can occur during situations where one night,
for any reason, has a higher demand than others do,
Because of this , an availability “spike” is said
to happen which can be problematic for hotels
because if this occurs ,no new reservation could
be taken for both nights where one night is sold
out but the following night is wide open.
There period of low demands which eventually
results to low occupancy. This also creates problem for
hotel which is the opposite of the spike called a “hole”.
For cases that hotels have both the spikes and the
holes in succession, it is imperative to take another
look at the yield management strategy. This is because
instances like that are very difficult to rectify.
The following restrictions under this yield management strategy
can be helpful to hotel’s to avoid the rectify spikes, based on a
given situation (Ismail, 2005)

The Closed to Arrival Strategy (CTA)

. A restriction used during slowing demand on one
night while increasing the demand on the prior night
In this strategy , the reservation department will not
allow any new booking for that night before it is
needed and encouraged.
For example:
A hotel reservation department will employ a CTA
strategy if in case Wednesday were already spiking for
a particular week while Tuesday resembles as a hole.
The use of CTA will even out the demand.
 The Minimum Length Stay strategy
(MLS)
Another restriction that mandates the reservations
department that all new reservations must stay at
the hotel for a minimum number of nights. When
the demand is known ahead of time and be strong
on particular nights but less on others, this strategy
is effective, especially if used during holidays and
special events.
 For example:
A hotel reservation department will employ an MLS strategy if in
this case an event is to be held on Sunday with the primary
demand Saturday and Sunday. In this case , MLS on Friday
would mandate staying all three nights which then help bring the
occupancy up on a date not otherwise affected by the event itself.
If this happen, the hotel will use the code MLS-3 which indicates
a minimum of three night stay on a particular day.
 The Modified Length Stay Strategy
(Min/Max)
This restriction is hybrid of the two, The CTA
and the MLAS which also called Min/Max
strategy and consider longer stays. The focus of
this is to lengthen a reservation as well as the
limiting the length of stay .
For example;
A hotel is full on Monday , Tuesday and Friday . The use
of Min/ Max strategy will restrict mnday arrivals unless the
guest is staying more than two nights. In this case, the
hotel will have a demand on Wednesday night, which might
be needed. However, this strategy will also restrict a stay of
past Thursday night because Friday night ,is fully-booked
or sold out.
RESERVATION SALES MANAGEMENT
Same as a typical call
center office type
Located also in the front
office section
 Three Sales Strategy of Reservations
Department
1. TOP DOWN STRATEGY
A selling technique that widely used in Hospitality
Industry wherein an agent quotes a rate for a hotel’s
best room type and moving down to a lower rate
should the prospective guest looks for a cheaper one.
This is best used when the reservation need to drive
rate.
2. BOTTOM UP STRATEGY
Opposite of top selling technique wherein an agent will begin
quoting a rate corresponding to the lowest room type or that least
expensive. Along that conversation , agent will also mention that
better rooms and their amenities are also available. This technique
is an agent way to upsell because he or she can inform the guest on
comparison between rooms up to the highest level .
 3. Mid Range Strategy
 a technique where agent can discuss about the hotel
best middle room type going either up or down a tier.
The decision is go up and down will depend on the
acceptance or position of the prospective guest.