ADVANCED FRONT OFFICE OPERATIONSSEMESTER III

UNIT-IGUEST REGISTRATION CYCLE

1. PRE-REGISTRATION ACTIVITIES1.1. IMPORTANCE & PURPOSE OF PRE-REGISTRATION 2. REGISTRATION2.1 REGISTRATION OF ALL GUEST (Indians, foreigners, individuals, groups, crews and VIPs etc)2.2 OBJECTIVES OF REGISTRATION SYSTEM2.3 CONCEPTS OF A REGISTRATION SYSTEM 2.4 FLOW OF THE REGISTRATION PROCESS 2.5 DOCUMENTS GENERATED IN REGISTRATION PROCESS 2.6 ANALYSIS OF REGISTRATION 2.7 VARIOUS TYPES OF REGISTRATION RECORDS 3. HOTEL STAY

1. PRE-REGISTRATION ACTIVITIES

Pre-registration is an important activity followed in some hotels to speed up the check in procedure for regular guests, VIP’S, celebrities, famous people, groups. In many hotels regular guests with reservation are pre-registered as this process normally simplifies the check in formalities, the hotel normally collects the G.R.C. fills it up according to the details on the reservation form for any particular guest. Generally both the room type and the rates are assigned on the G.R.C. Similarly; groups are pre-registered as a part of their reservation process. This is done because the most time consuming portion of check in routine is the compilation of a G.R.C. and the selection of room so the hotels which pre-register the guest are able to provide efficient service to their guest at the time of arrival.

The pre-registration is particularly useful in case of group arrivals. All the members of the group should be eager that their luggage is sorted out as early as possible and they go to their rooms and relax at the same time the hotel management could also be interested in speedy installation of all the group members so that the lobby area does not remain crowded for a long time, for this the front office staff should organize themselves in such a manner that they extend the best of services to the arriving guest first step is that on the morning of a arrival date. The required rooms are blocked as the room rack and keys are sorted out. The next step is to prepare the individual or GRC. On arrival a separate counter should be setup so as to avoid any disturbance to the regular business in the lobby area but away from the main counter. Keep all the cards ready for signature and keys of rooms should be collected together and given to the bell boys according to the rooming list who will ensure smooth check-in in co-ordination with the tour leader.

Pre-registration is useful for guest as they get sufficient time and also to the hotel as it reduces the check in procedure time to the hotel as it reduces the check-in procedure time to the minimum and ensures efficient service their by helping in

strengthening the relationship between the guest and the hotel providing repeat customer generation.

Through the reservations process, a guest provides nearly all the information needed to complete registration. In other words, guests who make reservations will likely experience a more rapid check-in. Pre-registration activities – or registration activities that occur before the guest arrives at the property – help accelerate the registration process at the front desk. Guests can be pre-registered when reservations agents obtain information about the guest during the reservations process. Typically, pre-registered guests only need to certify information already entered onto a registration card, and provide a valid signature in the appropriate place on the card.

1.1 IMPORTANCE & PURPOSE OF PRE-REGISTRATION

Departur

e

Pre Arrival

Arriv

al

Occupancy

Check-out

Bill settlement

Transportation

Baggage Handling

Reservation

Pre-registration

Room Blocking

Room Check

Amenities

Key Card/Welcome letter

Doorman/Porter

Registration

Room Assignment

Issuing of room Keys

Rooming

Currency Exchange

Safe Deposits

Mail & Information

Maintaining Guest AccountTelephone

CallsTransportation

THE GUEST CYCLE

Pre-registration normally involves more than producing a registration card. Room and rate assignment, creation of a guest folio, and other functions may also be part of pre-registration. However, some front office managers are reluctant to assign a specific room to a guest in advance of check-in since reservations are sometimes cancelled or modified. Specific room assignments sometimes get jumbled when last-minute changes are made. In addition, assigning too many rooms in advance may limit the number of rooms available to guests who are not pre-registered. This can slow down the registration process for those guests and create a negative impression of the hotel. Hotels tend to develop their own pre-registration policies based on experience. Pre-registration tasks are performed manually in non-automated and semi-automated front office systems. Consequently, pre-registration services may be limited to specially designated guests or groups. With a computerized system, pre-registration activities can be conducted for all expected arrivals. Since data recorded during the reservation process serves as the basis for pre-registration, computer systems can reformat a reservation record into a registration record. Although a hotel may have to void some pre-arrival room assignments because of last minute changes, the registration time saved for guests who register without complications usually compensates for the cancellations. Pre-registration lends itself to innovative registration options. For instance, a hotel courtesy van might pick up a guest arriving at the airport who has a hotel reservation. The driver of the van, equipped with appropriate information and forms, could request the guest’s signature on a prepared registration card, imprint the guest’s card, and give the guest a pre-assigned room key – all before the guest arrives at the hotel. Another variation on pre-registration for air travelers involves actual services at the airport. Some luxury hotels have arrangements with a nearby airport to provide guests with convenient check-in services. The guest may leave an impression of a major credit card with an agent at an appropriate desk – frequently the airport transportation desk. Credit information is then transmitted through a specially interfaced communication device to the hotel’s front desk. This allows the front office to approve the guest’s credit, prepare and print guest registration records, package room keys, and print any waiting messages. When the guest arrives at the front desk, he or she will enjoy the convenience of an abbreviated check-in process. A less sophisticated approach to pre-registration involves registering guests designated for VIP service at some place other than the front desk – for example, at a concierge desk. Some hotels arrange for VIP guests to be taken directly to their rooms, thereby bypassing possible delays at the front desk.

Pre-registration Activities

Cross check with Reservation correspondence before taking the final print out of Arrival Sheet.

Pre-registration for VVIPS,VIPS,Regular guest.

Check Room Status and availability.

Expected departure.

Arrival with special request.

VVIPs, VIPs, SPATT, Regular guest.

Blocking of rooms.

Preparing the Amenities voucher.

2. REGISTRATION

Registration begins when the front desk agent extends a sincere welcome to the guest. A warm greeting sets the tone for everything that follows. The front desk agent moves into the registration process after determining the guest’s reservation status. To a great degree, registration relies on the information contained in a reservation record. Front office personnel will find registration simpler and smoother when they have accurate and complete information at their fingertips. From a front desk agent’s perspective, the registration process can be divided into six steps.

• Pre-registration activity • Creating the registration record • Assigning the room and rate • Establishing the method of payment • Issuing the room key • Fulfilling special requests.

In addition to examining these steps, this chapter discusses creative registration options, the sales role of the front office staff, and procedures for turning away guests that the property cannot accommodate.

2.1 REGISTRATION OF ALL GUEST (Indians, foreigners, individuals, groups, crews and VIPs etc.

Usually the registration procedure differs from different categories of guests like guest with Reservations, without reservations for foreigners (information about their passport details, cert. of reg. details etc. are taken), Indians, etc. – Registration process is different for groups. The guests with reservations simplify the Registration procedure. Similarly a VIP/D.G. may be pre-registered. Groups are also usually pre-registered. The registration process takes maximum time for a walk in guest because hotel is not able to pre-register him and the receptionist will have to find out his requirement before assigning and allotting a room to match his needs. In case of a walk in the registration records are created at the Frond desk and not by the Reservation Officer as in case of a guest with Reservation.

2.2 OBJECTIVES OF REGISTRATION SYSTEM. The objective of Registration system is to provide guest information to the hotel, and at the same time to fulfill the legal requirement of making a contract between the hotel and guest. It also provides the date of departure to the hotel, which is very important in case hotel has other previous commitments. It helps the hotel in finding out and then meeting the special

1Heritage Institute of Hotel & Tourism

Guest Registration ProcessGuest Registration Process

Walk In Guest Guest with Reservation

Ascertainment ofAccommodation Requirement

Analysis of availability

Registration

Pre Registration

Confirmation of Requirement

Analysis of Availability

Room Assignment

requirements of a guest. It also gives information to the hotel about the mode of payment. The expected date or exact date of departure is critical to the hotels ability to accurately plan its future room availability. This provides the hotel with a sound basis for maximizing room sales.

2.3 CONCEPTS OF A REGISTRATION SYSTEM

A registration system usually comprises of the following concepts: 1. Collection : It helps the hotel in capturing information pertaining to the guests needs,

expected / actual date of departure, billing instructions like cash or credit, mode payment, and personal data like his occupation, date of birth (in some cases), purpose of visit, his office and residential address etc.

2. Assignment and Allocation of room: The assignment of a room matching the guest requirement both in terms of type of room and the rate of room.

3. Credibility of the guest : Based on the policies like advance payment, a credit limits etc. of the hotel and also on the basis of the information provide by the billing instructions the hotels decides upon fixing the credit limits for the guest.

4. Future planning of Rooms sales: Based on the information obtained from the hotel in maximizing its occupancy through knowledge of room availability.

2.4 FLOW OF THE REGISTRATION PROCESS

The flow of transactions in the registration process can be divided into following phases: 1) Identification of guests’ transient status; 2) Formulation of Registration Record; 3) Room and rate assignment; 4) Establishment of credit; 5) Completion of Check-In procedure; and 6) Creation of supporting documents.

Identification: The identification of guest transient status is very important. As already said the hotel process Registration of a guest with Reservation and a guest without reservation in different ways. In the initial phase the receptionist either refers to Reservation Rack for pre-registration transaction information or requests the transient guest to complete a registration form. The guests with reservation generally are of two types F.I.T.’s (i.e.) those who are not coming directly and second group members.

Formulation: Once the guest has signed the Registration card the process of formulation of registration record is complete. The hotel on the basis of this card develops the related hotel documents. This is a permanent record and is used for check-in process. Further this card is used to create a guest history record for future planning and sales promotion. The completion of this form is a legal requirement and this should be stored for a period of 3 years as a legal requirement.

Assignment: The details regarding the type of room and rate etc. help the receptionist in deciding what room to be assigned and the guest. Once the room type is decided (although the reservation record will indicate as to what type of room the guest requires yet there may be various rooms in the hotels of the same type for example single room facing swimming pool, away from stair, with studio bed, near to public areas etc. and also with different room tariffs) the receptionist would try to pick a room accordingly particularly as far as rate is concerned.

Credit: Determination of guest creditability and how he will settle his bill is the next important aspect. This can be done as follows.

1. The use of Credit Card by the guest. The receptionist would ask the guest to produce his credit card at the time of arrival, would pass it through a small computerized machine which would establish the credit limit of the guest. After this credit privileges will be extended to guest. (Many times the credit card companies indicate the credit limit of their credit card). Sometimes the hotels may have their own credit limitations.

2. Another way is to accept the credit is to agree to a guest’s request of “Bill to such and such company”. Generally hotels have a lot of companies on their list who can send their guests/ representatives to the hotel for stay and their bills are paid by these companies. The guest who stayed has simply to sign the billing statement. The hotel usually fixes a house limit or floor limit for such guests account balances.

3. Some hotels extend credit privilege to those guests who pay advance money to hotel. The hotel in such cases accepts credit charges only upto a total equivalent to the amount of deposit and no more.

Completion: After the guest has registered, a rate for room decided, a room matching to his requirement assigned, his creditability established, the room key is given to him (and he goes to the room). Further the receptionist would update the Room Status (i.e.) this room is now sold, and these documents will be prepared which will establish that the guest is now in the hotel (arrival notification slips are prepared and distributed and guest folio is made), and of required any legal documents prepared (like `C’ form for foreigners).

`C’ FORM: The Registration of Foreigners Act 1939 Section 3(e) Rule 14 makes it obligatory on the part of hotel to send information about foreigners registered at the hotel. In this connection any person who is not an Indian national and who hold a foreign passport is termed as foreigner. The form is used for notifying F.R.R.O. (Bombay, Calcutta, Madras, & Delhi) is called as `C’ Form within 24 hrs. of the registration of the foreigner (within 12 hrs. in case of Pakistanis, Bangladeshi ,Sri Lankan & Chinese nationals). This information should reach F.R.R.O. In cities other than Delhi, Bombay, Calcutta and Madras (where there are no F.R.R.O.) this information should reach the office of the Supdtt. of Police of that area or town. `C’ form notification is exempted for nationals of Nepal & Bhutan. `C’ forms are made in duplicate (triplicate in case it is sent to S.P. Office and the original (or two copies in case it

is sent to S.P. Office) is sent to F.R.R.O./S.P.. office as the case may be. A bell boy is deputed to do this work every day and it is his duty to bring the acknowledgement of their receipt from the F.R.R.O.

The `C’ forms are serially numbered and contain 10 columns (as explained in the transparency). These details are taken from the G.R. card, which the guest fills at the time of registration in the hotel.

2.5 DOCUMENTS GENERATED IN REGISTRATION PROCESS During the registration the following documents are generated. 1. Registration card : Card is used to collect guest personal data, and is the source document

that initializes the occupancy phase of the guest stay. 2. Room Rack Slip: A document on which the information is transferred from the

Registration card in the form of a summary and this slip is adjusted into the room rack. The slip contains information like, Name of the guest, Room number, No. of persons, rate, dates of arrival and departure etc.

3. Information Rack Slip: used to provide guests name and room no. A copy of the slip goes to the telephone department, room service and related personnel like Housekeeper etc. who use guest information rack.

4. Bell Captains slip: It is to communicate guest’s room assignment to the Bell Desk (Bell Captain) staff for luggage handling.

HIHT Hotel C-Form

Name of the guest: ______________________________________________________ Permanent Residential Address: ____________________________________________ ___________________________________________ Address in India: _______________________________________________________ Date of Arrival: ______________________ Time of Arrival: _______________ Date of Departure: ____________________ Time of Departure: _____________ Date of arrival in India: ________________ Date of departure from India: ___________ Purpose of visit: ______________________ Nationality: __________________ Passport No. _________________________ Date of issue: _________________ Place of issue: ________________________ Arriving from: __________________ Proceeding to: ________________ Visa Number to: ________________ Valid till: ____________________ _______________________________ Signature of Front Office Manager

2.6 ANALYSIS OF REGISTRATION

The analysis of the registration process provides an important feed-back on the function operations of the establishment and at the same time helps the hotel management in understanding the profile of the hotel business. An analysis of registration process and its evaluation tells the hotel management about the following critical measurements: • Through Rate analysis the hotel can know the effectiveness of the sales department and its

personnel whether they are selling high or low. • The number of rooms sold gives fairly good idea about the efficiency and productivity of

the Front Desk staff. • The way the guests shall settle their bill will help in a fairly good cash flow forecast. • The number of reliable understays and overstays will help and act as a basis for future

planning.

2.7 VARIOUS TYPES OF REGISTRATION RECORDS 1. Bound Book Register: are normally used by small hotels. All the pages are bound into a thick book. It can be used for a long time. The results are:

• All records are available in one book. • No filing is required. • Wastage is minimum.

Bound book register have the following demerits: • Only one guest can register at a time. • It is bulky and difficult to carry to other department. • Being very bulky and used for a long period it will look shabby on the counter. • Privacy can’t be maintained. • Pre-registration can’t be done. • From the guest point of view no privacy is maintained. • If the book is misplaced all the record is lost.

2 Loose Leaf Register : This is the same as the bound book register in its contents and its difference is in fact that the pages are not bound. One page is used for each day. The merits are:

• To some extend the privacy is maintained. • It is easy to hand over to the customer to write down the details. • If one sheet is lost only one day’s record is lost.

The demerits are: • It is very easily misplaced • If the sheet is not completed the rest goes waste • Only one guest can register at a time • Filing becomes additional job.

3 Individual Guest Registration Card

Individual Registration Cards are used by various hotels these days. They may be used in duplicate or triplicate depending from hotel to Hotel. These are given to guest at the time of arrival for completion of registration. Following are its merits and demerits: Merits:

• Many guests may be registered at the same time • Privacy can be maintained • Storage is easy • No wastage • Guests can be pre-registered • More mobile.

Demerits: • Expensive

• If not properly stored they may be lost.

Post Registration Activity

Inform House Keeping, Room Service & Telephone Operator. Show check-in in the computer & AD Register. Prepare the ‘C’ form for the foreigner Guest. , Summary sheet of C-form. Open the Guest folio/account

3. HOTEL STAY

The manner in which the front office staff represents the hotel is important throughout the guest cycle, particularly during the occupancy stage. The front office should respond to requests in a timely and accurate way to maximize guest satisfaction. The front office staff must encourage repeat visits. Front desk agents should carefully attend to complaints and try to find satisfactory solutions. Front desk accounting records must be periodically reviewed for accuracy and completeness.

Activities during the stay

Safe deposit Mail & Information Telephone calls Arranging Transportation Currency Exchange Maintaining Guest accounts Business Center services Room Change

Long Answer type questions1 What are the various registration records?2 What are the pre arrival activities ?Explain the process.3 Draw the format of D-Form,C-Form.4 What are the arrival activities? Explain the process.5 What are the various documents generated in the Front office during registration?6 Explain the registration process in the case of Walk-In..

UNIT-II

FRONT OFFICE MARKETING AND SALES

1. THE ROLE OF FRONT OFFICE IN HOTEL SALES AND MARKETING- NEED FOR SALES2. IDENTIFICATION OF MARKETS2.1 STRATEGY FORMULATION FOR VARIOUS MARKET SEGMENTS2.2 MAXIMIZING REVENUE AND ACHIEVING CUSTOMER SATISFACTION3. SALES TECHNIQUES- 3.1 PERSONAL SELLING3.2 CREATIVE SELLING3.3 USP IDENTIFICATION4. TELEMARKETING- TOOLS AND TECHNIQUES

1. THE ROLE OF FRONT OFFICE IN HOTEL SALES AND MARKETING- NEED FOR SALES

Sell rooms to guests who have not made prior reservation Upsell (encourage a customer to consider buying a higher- priced product or service

than originally anticipated) to guest with prior reservation Maintain the inventory of the products- that is, the rooms Convey information to guests about other products available for sale at the property-

for example food and beverages. The objective of front office is to sell all available facilities at the hotel to the guest. Front office staff is probably the most important means of letting the guest know what services are available

Ensure that maximum revenue is generated from the sale of rooms by striking a balance between overbooking and a full house.

Obtain feedback

ELEMENTS OF MARKETING

Product Pricing Promotion

2. IDENTIFICATION OF MARKETS

Prior to attempting to sell a product it is important to identify the market. This can be done in a number of ways but many organizations have a section on the registration/ reservation card which will assist the management in identifying the sector of the market to which the majority of customers belong.Hotels frequently have a mixed market which is drawn from both business users and holiday- makers, and each of the market segments may contribute an important part towards the revenue of the hotel.

The most frequently defined market segments are as follows:

1. conference2. business house3. independent traveler4. local travelers5. overseas holidays6. domestic travelers7. government

2.1 STRATEGY FORMULATION FOR VARIOUS MARKET SEGMENTS

Once the market has been established, it is then necessary to identify the needs of individual customers. Obviously, those clients who are staying in the hotel for business purposes will be interested in the service which the hotel provides, may make frequent use of the telephone system, may require the use of a fax machine, or may wish to entertain clients, either in the restaurant or in the suite. Tourists, on the other hand may be

far more concerned with friendly and willing service, since they may be on a limited budget, and use the additional hotel services less frequently.

Organizational buying behavior

CGR (Company Guaranteed Rate) CVGR (Company Volume Guaranteed Rate Client Behavior & the Buying Decision

Complex buying decision Need Arousal (Realization of needs) Information Processing:

A) SpecificationB) Information gatheringC) Comprehension

Evaluation Selection Outcome

Low InvolvementRepetitive

Pricing Strategies Monitory Cost Location Cost Time Cost Sensory Cost Psychic Cost

Pricing Influences Cost (Total) Competition Influences:

1. Direct Position Competition2. Direct Non-position Competition3. Indirect Competition

Market Demand More the demand Higher can be the price Less the demand Lower can be the price

The following are some guidelines for good salesmanship techniques:1. Product Knowledge: Receptionist clerks must be able to describe and suggest the

services and facilities of the hotel. The front desk staff needs to have a thorough knowledge of the hotel and the products, including room types, rates, and all of the facilities or services available.

2. Willingness to sell: Be willing to give guests his/her attention and to offer assistance and knowledgeable advice whenever it is needed.

3. Communication skills: Be able to communicate well. The receptionist must be able to listen, observe, and establish the needs of a guest. Additionally, he/ she must be able to ask appropriate questions and discuss with guests the type of services that best suit their needs.

4. Selling techniques: Possess good selling techniques so that guests are persuaded to purchase the hotel products without feeling that they are being pressurized.

2.2 MAXIMIZING REVENUE AND ACHIEVING CUSTOMER SATISFACTION

The hotel rooms, as a saleable commodity, are strictly limited by factors of time and quantity. When selling accommodation, hotels are selling one thing that has two separate parts: accommodation consists of the room itself and a time factor. The customer buys Room 210 on 23rd June, but Room 210 on 24th June is a totally different commodity as far as sales are concerned.

3. SALES TECHNIQUES-

PERSONAL SELLING – Selling face to face is a key task for the front office. This means actively promoting the facilities of the hotel rather than being passive and merely responding to guest’s queries and requests. A personal sells campaign can increase sales of a hotel dramatically, even if it is already trading at a high occupancy.

Sales Preparation Knowledge of market & personality involved Establishing Rapport Determining clients needs:

- Presented needs- Underlying needs- Expendable needs- Educating Clients

CREATIVE SELLING

USP IDENTIFICATION- The first step in personal selling is for the receptionist to develop a unique sales proposition (USP) for the hotel. This is something that occurs only in that particular unit. The product analysis will provide some useful leads which can be compared against the competition in the area. Typical USPs may include any of the following:

1. we have a covered garage2. our night porter will serve food at any time3. our pool contains fresh water4. the restaurant is in the Good Food Guide5. all our telephones are direct- dial6. there is no extra charge for children under the age of twelve

These USPs should be introduced as a benefit in sales presentation by the front desk.

Qualities of a sales person

Recognize customers motive for buying. Product Knowledge (Know what you are selling and what are the USP ). Direct conversation for the sales leads. Understand to whom you are selling.

Ten commandments of a good salesman

Speak to people Smile at people Call people by name (Remembering) Be friendly and helpful Be cordial Be genuinely interested in people Praise Considerate with others’ feelings Be thoughtful of others’ opinion Be alert to give service

YIELD MANAGEMENT

Yield Management presents a more precise measure of performance because it combines occupancy percentage and ADR into a single statistic yield. Simply stated, yield management is a technique used to maximize room revenues. Yield management takes into account as many of the factors influencing business trends as possible. It is also an evaluative tool that allows the front office manager to use potential revenue as the standard against which actual revenue can be compared.

THE CONCEPT OF YIELD MANAGEMENT The concept of yield management originated in the airline industry. Most travelers know that passengers on the same flight often pay different fares. Super-saver discounts, three-day advance-purchase plans, stay-over-Saturday-night packages, and so forth have become the norm for airline pricing. What is not as widely known is the potential application of yield management to other service industries. Yield management has proven successful in the lodging car rental, cruise line, railroad, and touring industries – basically, in situations where reservations are taken for a perishable commodity. The key to success implementation appears to be an ability to monitor reservations and to develop reliable forecasts.

Yield management is based on supply and demand. Prices tend to rise when demand exceeds supply; prices tend to fall when supply exceeds demand. Pricing is key to profitability. To increase revenue, the hospitality industry is attempting to develop new forecasting techniques that will enable it to respond to changes in supply and demand with optimal room rates. The hospitality industry’s focus is shifting from high – volume bookings to high – profit bookings. By increasing bookings on low – demand days and by selling rooms at higher prices on high – demand days, the industry improves its profitability. In general, room rates

should be higher when demand exceeds supply. They should be lower (in order to increase occupancy) when supply exceeds demand.

Capacity Management Capacity Management involves a number of methods of controlling and limiting room supply. For example, hotels will typically accept a statistically supported number of reservations in excess of actual room availability in an attempt to offset the effects of early check-outs, cancellations, and no-shows. Capacity management (also called selective overbooking) balances the risk of overselling against the potential loss of revenue arising from spoilage r(rooms going unoccupied after reservations were closed out). Other forms of capacity management include determining how many walk-ins to accept on the day of arrival based on expected cancellations and no-shows. Capacity management usually varies with room type. That is, it might be economically advantageous to overbook more in lower-priced rooms, because upgrading to higher-priced rooms is an acceptable solution to an oversell problem. The amount of such overbooking depends, on course, on the demand for the higher-priced rooms. In sophisticated computerized yield management systems, capacity management may also be influenced by the availability of rooms at neighboring hotels or competing properties.

Discount Allocation

Discounting involves restricting the time period and product mix (rooms available at reduced prices, prices below rack rate).For each discounted room type, reservations are requested at various available rates, each set below rack rate. The theory is that the sale of a perishable item (the guestroom) at a reduced price is often better than no sale at all. The primary objective of discount allocation is to protect enough remaining rooms at a higher rate to satisfy the projected demand for rooms at that rate; while at the same time filling rooms that would otherwise have remained unsold. This process is repeated for each rate level from rack rate on down. Implementing such a scheme requires a reliable mechanism for demand forecasting. A second objective of limiting discounts by room type is to encourage upselling. This technique requires a sound estimate of price elasticity and / or the probability of upgrading. (Elasticity refers to the relationship between price and demand.)

Duration Control

Duration control places time constraints on accepting reservations in order to protect sufficient space for multi-day requests (representing higher levels of revenue). This means that, under yield management, a reservation for a one night stay may be rejected, even though space is available. For example, if Wednesday is close to selling out but other nights are not, a hotel may want to optimize the revenue potential of the last few rooms on Wednesday by requiring multi-day stays, even at a discounted rate, rather than accepting reservations for Wednesday only. similarly, of the hotel will be close to capacity Tuesday, Wednesday and Thursday, then accepting a one-night stay during any of those days may be detrimental to the hotel’s overall room revenue. Hotels facing such dilemmas often require all reservations for projected full-occupancy periods to be for more than one evening.

4. TELEMARKETING- TOOLS AND TECHNIQUES

Telemarketing is selling the product over phone, e-mail, fax or advertising. CRO plays an important role in making a guest aware of the benefits and features of the product over large distances. They are cost effective and through this hotel has a large reach.

Tools:- Hotel directory- Consumer Hotel reference, Travel Industry Reference, Chain Directory- Telephone directory- Business publications- News paper- Magazine- Cooperative advertising- Point of sale advertising- Direct mail/Mail shots- Electronic advertising

UNIT- IIIFRONT OFFICE ACCOUNTING

1. INTRODUCTION2. VARIOUS FRONT OFFICE RATIOS AND CALCULATIONS- OCCUPANCY PERCENT, NO SHOW RATIO, ARR, ADR3. CREDIT ARRANGEMENTS4. FOREIGN CURRENCY HANDLING4.1 FOREIGN EXCHANGE ENCAHMENT PROCEDURE4.2 LICENCES USED 4.3 PROCEDURE FOR ACCEPTING AND PROCESING FOREIGN EXCHANGE –4.4 ACCEPTING 4.5 PROCESSING5. CASHIERING- INTRODUCTION6. SETTLEMENT OF BILLS7. THE GUEST FOLIO8. GUEST LEDGER9. CITY LEDGER10. TRACKING TRANSACTIONS11. INTERNAL CONTROLS- TRANSCRIPT, CASH SHEET, CASH BANKS

1. INTRODUCTION

A FO accounting system monitors and charts the transactions of guests and businesses, agencies and other non-guests using the hotel’s services and facilities. An effective accounting system consists of tasks performed during each stage of the guest cycle. During the pre-arrival stage, a guest accounting system captures data related to the type of reservation guarantee and tracks payments made earlier and advance deposits. When a guest

arrives at the front desk, the guest accounting system documents the application of room rate and tax at registration. During occupancy, the accounting system tracks authorized guest purchases. Finally, a guest accounting system ensures payment for outstanding goods and services at the time of check-out. In brief, a FO accounting system • creates and maintains an accurate accounting record for each guest or non-guest account • tracks financial transactions through the guest cycle • ensures internal control over cash and non-cash transactions • records settlement for all goods and services provided

2. VARIOUS FRONT OFFICE RATIOS AND CALCULATIONS- OCCUPANCY PERCENT, NO SHOW RATIO, ARR, ADR

Occupancy Percentage Occupancy percentage shows the proportion of rooms sold to rooms available for sale during a specific period of time. Out-of Order rooms are usually but not always included in the number of rooms available for sale. Inclusion or not of Out-of-Order rooms in the number of available rooms provides with different pictures. With inclusion, the front office manager is compelled to ensure that the rooms are fixed quickly so as to have a better occupancy percentage, while not including gives a occupancy percentage which is not as per total availability of rooms within the hotel.

After

DeparturePre Arrival & Arrival

During

Stay

On Departur

e

Creation of accounts

Maintenance of accounts

Settlements ofaccounts

Assigning rate & tariffs

Checking methodsOf payments

EstablishingCredit limit

VerifyingAccounts

To co

Creatingfolio

Posting ofCr/charges

Audit

MonitoringCredits

Settlement of Guest folio

Settlement of Master folios by

Company

1

Follow-up on Bad Debts, Late charges

Occupancy Percentage = Number of rooms Sold Number of rooms available

Multiple Occupancy Ratio Multiple occupancy ratios (Double occupancy ratios) are used to forecast the food and beverage revenue, to indicate rooms provision requirements and to analyze daily room rates. Multiple occupancy can be calculated by determining the multiple occupancy percentage or by determining the average number of guests per room sold.Either of these ratios may be used provided it is used consistently.

Multiple Occupancy Percentage = No. of rooms occupied by more than one guest Number of rooms occupied Average guests per room sold = Number of Guests

Number of Rooms sold

No Show Ratio

It is the percentage of those guests who did not arrive in spite of confirmed reservation.

The formula = Number of (DNA) Did- not Arrive Guests X 100 Number of Confirmed Reservation Guests

ARR (Average Room Revenue)The average room revenue is the revenue earned by the hotel for each room sold irrespective of the various rates applied to individual guests, groups, etc. The average room revenue is calculated by dividing the Total rooms revenue by the total number of rooms sold for the particular period.

Average Room Revenue = Rooms Revenue Total number of rooms sold

ADR (Average Daily Rate) An average daily rate is the average of all the rates the various occupied rooms

have been sold for, to different market segments. Average Daily Rate = Rooms revenue

Number of rooms sold

3. CREDIT ARRANGEMENTS

In order to monitor and control charge privileges, the front office clerk should check whether the total net purchases are less than the minimum of floor Limit (i.e.: credit card company's limit) and house limit (i.e. hotel's limit). At least, each day, lists of guests with high risk or high balance accounts shall be communicated to all point of sale outlets. This is vital since, failing to do so, will let point of sales outlets continue giving charge privileges to a point that eventually the credit card company refuses to pay the amount of money exceeding its limit. This will cause very serious financial losses to the hotel.

4. FOREIGN CURRENCY HANDLING

4.1 FOREIGN EXCHANGE ENCASHMENT PROCEDURE

Foreign exchange means foreign currency. This foreign currency includes all coins, currency notes bank drafts, travelers cheque etc of foreign countries. The foreign exchange regulation act, 1973 provides the statutory basis for exchange control, which is operated by R.B.I. through banks, Travel Agencies, Hotels etc, which are allowed t deal in for ex. There are no restrictions on the amount of foreign exchange currency or traveler cheques a tourist may bring into India provided he make a declaration in the currency form given to him on arrival. Cash, Bank cheques and Travelers Cheques upto US $ 20,000 or equivalent need not be entered in the currency declaration form at the time of entry in India.

Any Bank or Travel Agency or Hotel, whosoever, likes to deal in for ex. Has to obtain a license from the R.B.I.

4.2 LICENCES USED – The Reserve Bank Of India under section -7 of foreign exchange regulation Act, 1973 issues license to the applicant to purchase the for ex.The license is of two types –

1) Authorized Dealers in Foreign Exchange (Buy and Sell)2) Restricted Money Changers (X Change)

‘Banks’ are issued the first category license. They are the authorized dealer in for ex. They can buy and sell the for ex. Currency the current date.‘Hotels’ are issued ‘Restricted Money Changers’ License. It is known as R.L.M. The hotels which obtain R.L.M. can purchase for ex. From the customers and sell it to only those who are authorized dealers in foreign exchange i.e. banks. Such approved hotels are entitled to use certain percentage of the for ex. Earned by them for the purpose of their publicity abroad, promotional tours, import of goods subject to approval of the department of tourism.

As said above hotels get R.L.M. and receive payment of their bills in foreign exchange from foreign guests. The hotels, which are license holders, have to fulfill the following conditions -1. All Payments due from foreigners as well as Indian residents abroad (NRI) should be

received in foreign exchange.2. When the foreigner pay their bills in foreign currency, the balance, if any can be

returned to them in Indian Currency. In case, the foreigner request that the balance be refunded to him in foreign currency on account of some special circumstances then the hotel may advise the guest that he can use this refunded Indian currency for meeting his petty expenses like taxi etc. and the balance of Indian currency can be converted back to for ex. The time of leaving India at airport.

3. The rates of purchase of for example notes, coins, traveler’s cheque etc. should be displayed at a prominent place near the cash counter at which money-changing procedure is conducted.

4. The foreign currency has to be sold to authorized dealers in for ex. (Banks) on the next working day.

5. Foreign exchange should be accepted at rate not lower than the rates offered by their bank.

6. All purchase or sale of for ex. Will be at the risk of the hotel.7. Monthly statements of foreign currency, purchased from the guests and sold to bank

should be submitted to R.B.I. not later than 10 th of the following month in a prescribed proforma.

4.3 PROCEDURE FOR ACCEPTING AND PROCESING FOREIGN EXCHANGE – The tourism industry in any country is a prime source for the generation of foreign currency exchange. Government would thus like to keep a close tab on all foreign currency realized. This they do through strict system of checks and records / documents which extends to each hotel as well. Firstly, each hotel has to get an authorization to deal in for ex. In a hotel the cashier is the authorized person on behalf of management t receive foreign exchange.

When the guest wants to exchange foreign currency for local currency the following steps would have to be taken – 4.4 ACCEPTING –1. Request the guest to produce his / her passport and determine the credential.2. Ask the guest for his room numbers.3. In case of non-residents, request him to contact the lobby manager for an

authorization of transaction.4. Find out the type of currency to be exchanged and determine whether it is

exchangeable as per government banking regulations.5. Fill up the details in Foreign Exchange Encashment Certificate.6. Request the guest to sign the certificate or T.C (if any).7. Compare the signatures.8. Receive the amount a for ex. In cash or traveler cheque.9. Calculate the total amount to be paid in local currency by multiplying the for ex.

Amount by rate of exchange.10. Give the original copy of the certificate and the total amount in local currency to the

guest.

4.5 PROCESSING –11. Attach the second copy of the encashment certificate to the notes / traveler cheques.12. Leave the 3rd copy in the book.13. Fill up the detail in the reception cashiers report.14. Fill up the details in the foreign currency transaction.

FOREIGN CURRENCY ENCASHMENTS CERTIFICATE

Serial No. ______________ Date _____________

We hereby certify that we have purchased today foreign currency from _________ holder of passport no. _____________ nationality _________ and paid net amount in rupees after adjusting the amount towards settlement of bill for goods supplied /services rendered as per details given below:

A. Details of foreign currency purchased (notes/ coins/ traveler cheque)

Cheque No. / Currency Note No.State name of the bank in case of Traveler Cheque. (1)

Amount

(2)

Rate

(3)

Rupee equivalent

(4)

Total __________

B. Details of adjustment made towards settlement of bill for service given.

Bill No. Dates Amount

Total ____________C. Net amount paid in Rupees ______ amount in words __________ Total (A-B)

(Stamp and Sign of Authorized Money Changer)

Note: This certificate should be presented by the holder to facilitate re-conversion of the rupee balance if any, into foreign currency at the time of departure from India and/ or for payment of passage / freight cost in rupee, if necessary.

5. CASHIERING- INTRODUCTION

The front office must maintain the level of costs approved by the management and safeguard the revenues generated. The front office department, specially the cashering and accounting unit, is charged with the responsibility for cash, cheques, credit cards and other credit relationships. Although these duties require extreme care and diligence, the skills necessary for stewardship of hotel assets are fairly simple. The main financial transactions handled by front office staff are making change, receiving cash payment, verifying cheques according to policy, imprinting accepted credit cards and handling due bills. Efficiency and accuracy in the cashering and accounting areas is demanded by guests. Guests are displeased if they have to wait an unreasonable length of time for their credit cards to be imprinted or their travelers cheques cashed. Hence correct and efficiency handling is of utmost importance. Compiling the initial summary of hotel

financial data is the responsibility of the night auditor. These personnel accumulate and prepare reports informing the management of the hotel’s performance for the previous day. Revenues and percentages of occupancy are computed and summaries of cash, cheques and credit card activities are prepared. Using the data prepared by the night audit staff and other sales outlets, the accounting department determines the hotel’s daily revenue and reports its findings to management for action and follow-up.

6. SETTLEMENT OF BILLS

One of the responsibilities of front office clerks is to settle guest accounts, which means the eventual collection of payment for outstanding account balances (i.e.: bringing account balances to 0]. This is usually ensured either by full cash payment, transfer to an approved credit card, personal check, special program, or direct billing account.

7. THE GUEST FOLIO

FO transactions are typically charted on account statements called folios. A folio is a statement of all transactions (debits and credits) affecting the balance of a single account. When an account is created, it is assigned a folio with a starting balance of zero. All debits and credits are recorded on the folio, and at settlement, a guest folio should be returned to zero balance by cash payment or by transfer to an approved credit card or direct billing account. There are basically five types of folios used in FO accounting:

1. Guest Folios : accounts assigned to individual persons or guest rooms 2. Master Folios : accounts assigned to more than one person or guest room, usually

applicable for group accounts. 3. Non-Guest Or Semi-Permanent Folios : accounts assigned to non-guest business or

agencies with hotel charge purchase privileges. 4. Employee Folios : accounts assigned to employees with charge purchase privileges. 5. Split Folios : accounts assigned to a guest on his/her request to split his/her charges and

payments between two personal folios -- one to record expenses to be paid by the sponsoring business company, and the other to record personal expenses to be paid by the guest. In this case, two folios are created for the same guest.

The bill is the record of all the business transaction that takes place between the guest and hotel. A guest folio is the ‘master bill’ in which all cash and credit transactions are recorded for each resident guest. All credit bills from various revenue outlets such as restaurant, bars, laundry, telephones etc are received centrally at the cashiers cabin either by hand or though ‘pneumatic tubes’. It is a guest system necessitated by the jack that a guest could check out at any time and bills pertaining to him / her must be presented up to the minute for recovery. These bill are then posted into the VTL / Guest folio / NCR machines.

A guest folio contains seven columns for seven days record. In addition to the record of charges and deposits the bill also contains other important information regarding the great, like date and time of arrival, room no. where he is staying. Plan, room rates and guest register no. etc. A continuation bill is required when a seven-day bill is completed and a guest stays for a longer period. This is often called ‘Follow’. New

bill should also be headed and attached in front of the first bill, the total bill is carried forward onto the continuous bill.

A guest folio is opened immediately upon a guest’s arrival. A cashier opens it when receptionist hands the GRC to him. The GRC is clipped on to the folio. The card must be filled fully. The folio is placed in pigeon holes located numerically at the cashiers cabin.

HOTEL MAYA INC

TELEPHONE - __________________ BILL NO. - ______________TELEGRAM - ___________________ DATE - _________________

G.R. No. - _______________MR. DAVID

ROOM No. - __________ PLAN - _____________ RATE - _____ FAX - _____DT OF ARRIV______ TIME OF ARRIV_____ DT OF DEP.___ TIME OF DEP._____

Jan 1 Jan 2 Jan 3 Jan 4 Jan 5 Jan 6 Jan 7ApartmentBoardBreakfastLunchDinnerTea / CoffeeFood SundriesSoft drinkService chargeTobaccoVPOMiscellaneousLaundry

Daily Total

Bal. B/F Dr. Cr.Grand Total Dr Cr.Deposit / CashAllowancesTransferBalance C/F Dr. Cr

Checked and found correct Amount Rs.______________________Please forward the bill to Cash receipt No. __________________

________________ Allowance Voucher No.____________

Bill are payable on presentation Transfer______________ _____________ Cheques are not accepted Sign

(Bill Clerk)

8. GUEST LEDGER

A ledger is a summary grouping of accounts. A FO ledger is a collection of FO account folios. The folios represented in the FO are a part of the FO accounts receivable ledger. An accounts receivable represents money owed to the hotel. FO accounting uses two ledgers :

Guest Ledger : refers to the set of guest accounts that correspond to registered hotel guests. Guests’ financial transactions are recorded onto guest ledger accounts to assist in tracking guest account balances. The guest ledger is also known as Transient ledger, or Front Office Ledger or Rooms Ledger.

City Ledger : also called the non-guest ledger, is the collection of non-guest accounts. If a guest account is not settled in full by cash payment at check-out, the guest’s folio balance is transferred from the guest ledger in the FO to the city ledger in the accounting division for collection. The city ledger can contain credit card payment accounts, direct billing accounts, and accounts of past guests due for collection by the hotel.

9. CITY LEDGER

City ledger is a ledger in which debtors accounts or accounts receivable other than those maintained in V.T.L., are opened. The hotel will have customers who do not settle their bills and checks out with the permission from the manager with an understanding that the payment will be done within specified time.Some guests are –

Guests who check out without settling their bills. Credit card holders. Airlines who are allowed credit facilities. Travel agencies who are allowed credit facilities. Government department who are allowed credit facilities. Executives of the companies.

The banqueting account which includes parties, wedding reception, conference are to be settles and posted in the outstanding account ledger / city ledger. The total amount is posted into outstanding ledger city ledger.

In small hotels, only city ledger is maintained for the above types of debtors, but in large hotels for the different categories of debtors, individual ledger is maintained.

HOTEL MAYA INTERNATIONALPatel Nagar, Mumbai

CITY LEDGER

A/C No.___________ Folio No.____________A/C of M/S________ Authorized Signatory ____________

(Finance Manager)Address_____________ Paying Authority – M/S___________

DATE BILL NO.

ROOM # AUTORITY REF.

PARTICUL-ARS

FOLIO

DEBIT CREDIT DR. BALANCE

REMARKS

CHEQUE

DATE BANK AMT COMMISSION OR

DISCOUNTS

PAYMENT

CR.

10. TRACKING TRANSACTIONS

Under the manual and semi-automated systems, tracking transactions is ensured through an intensive use of vouchers. On the other hand, Under fully automated systems,

tracking transactions is ensured through on-line electronic transfer of transactional information from remote points of sale to the front office main frame terminal. In accounting, a transaction is an exchange of goods and services for cash or a promise to pay. Under this very assumption, "nothing happens until a transaction occurs". This means that front office clerks shall first of all have a transaction, its supporting documents (i.e. vouchers, invoices…) to be able later to debit or credit certain accounts! In hotels transactions might have the form of:

a) Cash paymentb) Charge purchasec) Account correctiond) Account allowancee) Current transferf) Cash Advance

1- Cash payment: In this very transaction, front office clerks shall post cash payment as a credit in the guest folio. Moreover, cash vouchers shall be used as a transaction-supporting document.

2- Charge purchase: Charge purchases represent deferred payment transactions that increase the outstanding balance of a folio account. In this transaction type, front office clerks shall use charge vouchers as a transaction-supporting document.

3- Account correction: Account correction is used to resolve a posting error in a folio detected at the day the error is made (i.e. before the closing of the business day). In this transaction, front office clerks shall use correction vouchers as a transaction-supporting document.

4- Account allowance:

Account allowances occur because of two reasons:a) Either as compensation of poor service, or as rebates for coupon discounts. That way,

guest outstanding balance decreases.b) As to correct a posting error detected after the closing of the business day. For both reasons, front office clerks shall prepare an allowance voucher as a transaction supporting document.

11. INTERNAL CONTROLS- TRANSCRIPT, CASH SHEET, CASH BANKS

In the hotel industry, the main purpose of internal control is to track transaction documentation, verify account entries and account balances, and to identify vulnerabilities in the accounting system. The keyword to internal control is auditing, which is the process of verifying front office accounting records for accuracy and completeness.

Below are some forms that are of extreme importance to internally control, one of the most vital assets in the hotel (i.e. cash):

1- TranscriptA transcript is often referred to as daily sales recapitulation or tabular ledger. It is a record of all previous day’s transactions transcripted from various sales documents into a single sales report. A “revenue day” for hotel extends from midnight to midnight and so the transcript is prepared at midnight for the previous day where all sales summaries have been turned in from all revenue outlets.The further process in the preparation of final report is totaling the cash and credit sales of each revenue outlet and those recorded in the front office cashier summary sheet. If they do not tally, it is the job of the night auditor to locate errors, which is a tedious job and must rectify the record accordingly.A daily transcript is a detailed report of all guest account. A daily transcript indicates those guest accounts that had transactional activity on that particular day. A supplement transcript is often used to record the day’s transactional activities for non-guest account. Together the daily transcript and the supplement transcript detail all transactions occurring on a single day. Revenue center, transaction type and transactional total typically detail a daily transcript. The detail transcript and supplement transcript from the basis for a consolidated report of front office accounting data against which departmental total can be matched.

2- Front office cash sheet: The FO is responsible for a variety of cash transactions affecting both guest and non-guest accounts, and FO cashiers may be required to complete a FO Cash Sheet that lists each receipt or disbursement of cash. The information contained on a FO Cash Sheet is used to reconcile cash on hand at the end of a cashier shift with the documented transactions, which occurred during the shift.

3- Cash, house banks or petty cash: Petty cash is the amount of cash assigned to a cashier so that he/she can handle the

various transactions that occur in a particular work shift. At the beginning of each shift, all cashiers must sign their cash banks and at the end of the shift, shall deposit all cash, checks, and other negotiable instruments in the general cashier's safe deposit box. Moreover, at the end of each shift, cashiers should watch out for cash discrepancies (i.e. any difference between front office cash sheet and the actual amounts in their cash drawers). Cash discrepancies might have the form of cash overages, shortages, or due backsLastly, cashiers might come up with the net cash receipt, which is:

Amount of all cash, checks, and other negotiable instruments in cashier’s drawer – amount of the initial cash bank + all paid outs

The cashier is required to account for this money at the end of the shift when he/ she return the balance. There are three types of situations at the end of shift:

1. Overage- when cash, cheques, negotiable instruments and paid- outs from the cash bank are greater than receipts into the cash bank.

2. Shortage- when the amount paid out from the bank is less than receipts into the cash bank; and

3. Par- when the amount requisitioned is equal to the amount deposited. Amounts not accounted for is treated as a negligence of the cashier and can be debited to his personal salary. Many hotels have now insured such transactions but any unaccounted for money certainly goes negatively in the cashier’s performance report.

3- Audit control:

Along with the fact that hotels might employ internal control auditors, at least once in a year, (especially for hotels traded in the stock market) to get use of external certified public accountants responsible for approving hotel's accounts.

UNIT- IV

FRONT OFFICE CASH/ CHECK OUT AND SETTLEMENT

1. FUNCTIONS OF CHECKOUT AND SETTLEMENT. 2. DEPARTURE PROCEDURE. 3. METHOD OF SETTLEMENT3.1. Cash Payment In Full3.2. Credit Card Transfer3.3. Direct Billing Transfer. 3.4. Combine Settlement Method. 4. LATE CHECKOUT 5. EXPRESS CHECKOUT 6. SELF-CHECKOUT 7. UNPAID ACCOUNT BALANCES

1. FUNCTIONS OF CHECKOUT AND SETTLEMENT. The function of checkout and settlement process accomplishes three very important functions:

1. Settle guest account balance. 2. Update room status information. 3. Create guest history record.

Guest account settlement depends on an affective front office accounting system that maintains accurate guest folio, verifies and authorizes a method of settlement and resolves discrepancies in account balance. Generally the front office finds it most affective to settle a guest account while the guest is still in the hotel. A guest can settle an account by paying cash, charging the balance to a credit card, differing payment to an approved direct billing or using a combination of the payment methods. Most front office requires a guest to specify an eventual method of settlement and registration. This means that the front office will know that the guest credit card or direct billing information before he or she arrives at the desk to checkout. Such notification allows the front office to verify and authorize a credit card account or confirm a direct billing in

advance of the settlement. Pre-settlement verification activity reduces the guest’s checkout time and improves the front office ability to conduct outstanding account balance. Effective front office operation depends on accurate room rate status information. When guest checks out and settles his account, the front desk performs several important tasks. First, the agent changes the guest room status from occupied to an ‘on-change’ on the room status report. On change is a housekeeping term that means that the guest has left the hotel and that the room he occupied needs to be cleaned and readied for the next guest. After making the room status change the front desk notifies the housekeeping department that the guest has departed. In hotels with manual or semi automated systems the front desk communicates information to the housekeeping by telephone or through an electronic room status board. In hotels with fully automated property management system information is relayed automatically when the front desk agent changes the room status from occupied to ‘on-change’.A housekeeper then cleans and readies the room for inspection and resale. To maximize room sale the front office must maintain a current occupancy and housekeeping status of all rooms. The hotel can better understand it’s clientele and determine guest trends when it maintains a guest history file. A guest history file is a collection of personal and financial data about guests who have stayed in the hotel. An individual guest history record within the file normally contains personal and transactional information relevant to the guest stay. The front office may create guest history file from expired registration card or through sophisticated computer based system, which automatically directs guest checkout information in to a guest history database. Guest history file provides a powerful database for strategic marketing.

2. DEPARTURE PROCEDURE. Checkout and settlement can be a pleasant experience when the front office is well prepared and organized. This final phase of guest cycle involves several steps designed to accomplish checkout and settlement in a systematic manner.

1. Checking for mail and messages. 2. Posting outstanding charges. 3. Verifying account information. 4. Inquiring about addition recent charges. 5. Presenting guest folio. 6. Verifying the method of payment. 7. Processing the account payment. 8. Securing the room key. 9. Updating the room status.

Checkout and settlement procedures vary from property to property based on the level of service and degree of automation. The amount of face-to-face contact between the guest and front desk personnel may also vary since some hotel offer special automated or express checkout service. Despite such variations checkout and settlement represents an essential front office responsibility. Like check-in, checkout gives the hotel an opportunity to make a positive impression on the guest. The guest approaching the front desk should be greeted promptly. To prevent any messages or mail going unclaimed the front desk agent should check for any messages or mail awaiting guest pick-up. To ensure the guest folio is accurate and complete the front desk agent should process any outstanding charges that need posting. In addition the agent should ask the guest if he or she incurred any recent charges and make necessary adjustments to the guest folio. The guest receives a final copy of his or her account

folio at checkout. At this time the front desk agent should verify exactly how the guest intends to settle his or her account regardless of which settlement method the guest specified at registration. This is necessary because many hotels require guest to establish credit at check-in, no matter how they plan to settle at the checkout. A guest may establish credit by presenting a credit card and then decide to settle his or her account by cash. After determining how the guest will pay the front desk agent should then bring the guest account balance to zero. This is typically called “Zeroing out the account”. The guest account balance must be settled in full for an account to be considered zeroed out. Guest account, which are zeroed out at the time of the departure are transferred to the city ledger for billing and collection by the accounting department.

3. METHOD OF SETTLEMENT

A guest account can be zeroed out in several ways:

3.1. Cash Payment In Full.

A cash payment in full at checkout will bring a guest account balance to zero. A front desk agent should mark the folio as paid. A guest may have had a credit card imprinted at registration even though he or she intends to settle his or her account by cash. The front desk agent should destroy any credit card vouchers imprinted at registration when the guest pays in full with cash.

3.2. Credit Card Transfer.

Credit card settlement creates a transfer credit on the guest folio and moves the account balance from the guest ledger to the credit card account in the city ledger.

3.3. Direct Billing Transfer.

Like credit card settlement direct billing transfers the account balance from the guest ledger to the city ledger. Unlike credit card settlement, responsibility for billing and collecting the direct billing is the hotels, rather then an outside agency. Direct billings are not normally an acceptable method of settlement unless the billing has been arranged and approved by the hotel before or during guest registration. To complete a direct billing settlement a front desk agent should have the guest sign the folio to verify that the postings are correct and that he or she accepts all charges listed on the folio for collection.

3.4. Combine Settlement Method.

A guest may use more than one settlement method to zero out a folio balance. For example, the guest may make partial cash payment and charge the remainder of his or her account balance to a credit card. Front desk agent must accurately record the combined settlement method and ensure that all required paperwork is properly completed.

4. LATE CHECKOUT

Guest do not always checkout by the hotels posted checkouts, hotel should post checkout time notices in places, such as on the back of the guestroom door and at the front desk. A reminder of checkout time can also be included in any pre departure material distributed to the guest. Some hotels authorize a front desk to charge late checkout fees. A guest will probably be surprised to see such a fee on the folio if he or she is not familiar with the hotel’s policy. Whenever guest calls a front desk and requests a late checkout, the front desk employee should inform the guest about any additional charges.

5. EXPRESS CHECKOUT Guest sometimes encounter long lines at front desk before 7:30 am and 12 noon, a prime checkout period for many guests. To ease front office pressure some properties initiate checkout activity before the guest is actually ready to leave. A common pre-departure activity involves producing and distributing guest folio to guest expected to checkout in the morning. Front office staff may quickly slip printed folios under the guestroom door before 6 am making sure that the guest folio cannot be seen or reached from the outside. Normally the front office will distribute an express checkout form with the pre-departure folio. Express checkout may include a note requesting the guest to notify the front desk if departure plans change. Otherwise the front office will assume the guest is leaving by the hotel posted checkout time. This procedure usually encourages guest to quickly notify the front office of any changes in departure before the hotels checkout time. By completing such a form the guest transfers his or her outstanding folio balance to the credit card voucher that was created at registration. The guest then deposits the express checkout form at the front desk at the time of departure. After the guest leaves the front office must complete the guest checkout by transferring the outstanding guest folio balance to a previously authorized method of settlement. Any additional charges the guest makes before leaving the hotel (For example, telephone calls) will be added to his or her folio before the front desk agent zeros out the account. Because of this the amount due on the guests copy of the express checkout folio may not match the charges posted to his or her credit card. This possibility should be clearly stated on the express checkout form to avoid confusion later on.

6. SELF-CHECKOUT In some properties guest can check themselves out by accessing self-checkout terminal in the lobby or by using in room system. Self-checkout terminal and in room system are interfaced with the front office computer and are intended to reduce checkout time and front office traffic. Self-checkout terminal vary in design. Some resemble an automatic bank teller machine, while the other possesses video and audio capabilities. To use a self-checkout terminal the guest accesses the proper folio and reviews its contents. Guest may require to enter a credit card number by using a keypad or by inserting the credit card in the machine. Settlement can be automatically assigned to a credit card as long as the guest presents a valid card at registration. Checkout is complete when the guest balance is posted to a credit card account and an itemized account statement is printed and dispensed to the guest. The self-checkout system then automatically communicates the updated room status to the front office computer. The system also relays information and instructions for updating or creating a guest history record.

7. UNPAID ACCOUNT BALANCES

Unpaid account balances occur because of the following reasons, most of which are because hotels do not operate fully automated systems:a. A departing guest honestly forgetting to settle his/her accountb. Late charges (being one of the most important reasons)c. Skippers

In order to minimize late charges, front office clerks shall:a. Post transactional vouchers as soon as they arrive at the front deskb. Survey front office equipment, voucher and folio racks for non-posted charges before the front office clerk checks a guest outc. Ask departing guests whether they have incurred any charge purchase or placed long distance telephone calls, which do not appear on their final folio

Account CollectionAll unpaid account balances shall be transferred to city ledger accounts, which might have the form of:a. Credit card billingb. Direct billingc. Travel agency accountsd. Bad check accountse. Skipper accountsf. Disputed bills accountsg. Guaranteed reservation accountsh. Late charge accountsi. House accounts

In order to receive all their city ledger accounts, hotels shall devise effective and efficient account receivables billing procedures.To do so, every property shall try to find answers to the following questions:a. When are outstanding accounts balances payable?b. How many days shall separate each two consecutive invoices?c. How to contact the departed guests whose accounts is not yet paid?After coming with answers to the above mentioned questions, hotels, then, shall depending on the amount of money to be collected, and the geographical distance that separates the hotel from the guest billing address, opt for one of the following collection schedules:a. Aggressive (short cycle) collection scheduleb. Lenient (long cycle) collection schedule

1. Account AgingAccount aging refers to the method(s) of tracking past due accounts based on the dates the charges were incurred. To illustrate, credit card payment accounts usually have ages of maximum one month. However, some other non-guest accounts (ex. late charges, disputed bills, bad checks and skippers accounts) might have ages measured in months, and even years. Below, is the terminology associated with each account age:Less than 30 days accounts Current AccountsMore than 30 days accounts Overdue Accounts

Older than 90 days accounts Delinquent Accounts

UNIT- IV

FRONT OFFICE CASH/ CHECK-OUT AND SETTLEMENT

1. FRONT DESK CASHIER- ROLE AND RESPONSIBILITIES2. FRONT OFFICE CASH- IMPORTANCE3. TAKE- OVER AND HANDOVER4. CHECK-OUT AND BILL STATEMENT- INDIVIDUAL AND GROUPS5. RECEIVING PAYMENTSa) Cash b) Credit / Debit Cards (Plastic Money)c) Bill to Companyd) Travelers chequee) Travel Agents Voucher

1. FRONT DESK CASHIER- ROLE AND RESPONSIBILITIES

He is to receive payments from the guest in settlement of their bills and issue receipt. Posting the vouchers into the individual bills. Looking after the safe deposit vault. Checking the petty cash float. Maintaining the cash register, reports and billing machines. Preparation of cash summary reports. Rendering exact change to the customers. Knowledge of for ex. Rules and regulations. Knowledge of procedures to encash for ex. For customers. Knowledge of accepting non-cash payments (Travelers cheque, Bills to Company,

Credit Card etc.). Passing on information to the next shift through Log Book.Front office cash is a very responsible department and also one of the most sensitive areas to be managed where all international and un-international mistakes can take place. Hotels have their own fixed rules and regulation that has to be followed by the cashier while accepting or dealing in cash to avoid any confusion or ambiguity.Since front office generates maximum cash by sale of rooms it is very essential to keep a detailed record of all transactions in the hotel.No body will like to take responsibilities for any mistakes as far as cash is concerned, so hotel adopt certain rules to end or start a shift. A normal process can be – The day starts at 12 midnights.1) Take the charge of all bills that are there. 2) Check the room status and ensure that all the guest folios are made for all the room

occupied.3) Check the correctness of entries like arrival date and time, name, billing instructions

etc in the folios.

4) If the hotel is following VTL system then ensure that all entries are made properly in their respective columns.

5) Ensure that the ending shift staff completes all the work if not then it should be properly communicated.

6) Do all the crosschecking i.e. Front Office Room status and bills opened.7) Ensure that no account is pending.8) A Front Office cashiers report has to be made which has to be taken over by the next

shift. This report provides all the money (cash / credit) transactions by the front office cash department.

9) A cash summary report has to be made by counting all the cash in the cashbook. Both the cashiers of the ending shift and starting shift must do this.

10) Cash must tally with the accounts i.e. all cash must be accounted for.11) If there are any paid outs, bills received, payments received the final cash balance

should tally. If not, then proper and authentic reason for the difference.12) All communications is made through logbook, which one has to go through at the

start of the shift.13) In some cases, each shift when ending will have to deposit the money in accounts

department and collect an IMPREST / FLOAT amount which may range from 2000 to 3000 or may be more. The reason, just not to keep the cash box empty. In these cases the new shift do not have to tally all the cash and accounts. Only he has to take charge of the float amount, go through Logbook. Check status etc.

14) Keep on informing the next shift as you handover the shift to the next cashier, both oral and written information must be courage.

15) VIP arrivals must be informed to the cashier, also about some special requests like magazines, flower arrangement, bell service etc.

Generally, as soon as one shift ends, the other starts, so one has to hand over all information likely to be important to the starting shift so that one can ensure smooth operation throughout the day.

2. FRONT OFFICE CASH- IMPORTANCE

3. TAKE- OVER AND HANDOVER

In the front office department, the shifts are normally overlapping, so the new shift comes and assist the previous shift in their work. Also, this is important because it enables the new shift to get properly briefed up by the previous shift staff.

Some points that must be considered while ending and handling the shift.

All the major events and activities in the hotel are recorded by the receptionist, so one must get a short overview of the days work from the receptionist.

All the major activities that have been carried out in a shift and that have to be carried out in the next shift has to be properly written in a LOG BOOK.

Before taking over the shift, read the logbook carefully. Inspect the area physically with the previous staff. Observe carefully, like, key rack with any abnormal thing. Check the guest, master folios and records. Go through the expected arrival list. Check for any VIP arrivals etc.

Get acquainted with the room status either through traditional board system or compulsory.

If a cashier, check cash, float situation. Take a verbal briefing form the shift (previous). Never ‘rush-out’ communicate and convey any vital information to the next shift.

Make sure that he has understood everything. Complete all the documents, records and formalities of a shift before handing over. One must ensure that everything is in its place before ending the shift.

4. CHECK-OUT AND BILL STATEMENT- INDIVIDUAL AND GROUPS

The preparation of final bill for the departing guest is due until he intimates his wish. As soon as the guest calls up the reception and informs about his departure, the receptionist informs the bell desk and telephone department from where the information is broadcasted to all the departments (Revenue Producing Outlets) as well as NRPD like house keeping. The porter on his way to the guest room informs the cashier about the departure-taking place.1) As soon as the cashier is informed about a particular guest checkout, he pulls out

his/her guest folio from the pigeonhole. 2) He checks if any vouchers remains un-posted.

3) He calls up room service and coffee shop for any last minute billing. If pneumatic tube system, then post them into the folio.

4) Notes down the reading of the telephone meter applicable to the room number of checking out guest.

5) Calculate the call charge as laid down by the management and prepare. The telephone charge voucher and post the amount to the folio.

6) Update the bill and checks guest billing instructions.7) Takes out all supporting vouchers and checks, against bill entries and arrange them

date wise.8) When the guest comes to the cash counter he presents the bill to the guest for him to

check and rectify the charges and also reconfirms the billing instructions with him.9) If the guest wishes to see supporting vouchers then they are also presented to the

guest.10) In no case, the bill can be taken to guest rooms or elsewhere.11) After the guest has approved the charges, the cashier finalizes the bill after passing

any allowable discount or allowances as per instruction or authorization of F.O.M. or L.M.

12) Collect the total amount of charges from the guest. 13) On cash payment, mark the folio with ‘PAID’ stamp and put down the cashier’s

initials.14) Return correct amount of change to the guest.15) Generate a ‘receipt’ for the payment and staple it on the original copy of the main bill

and fold them both nearly and put in an envelope written with “YOUR RECEIPT”. The supporting vouchers are nearly put into another envelope “SUPPORTING VOUCHER”.

16) These are presented to the guest.17) The copies of the folios are kept carefully for the further processing by the night

auditor. There are various modes of payments, which require relevant processing and are studied in the next chapter.

Cash receipt voucher

CASH RECEIPT VOUCHER

SR. NO. _____________ DATE _________________

Received from __________________________________________________________Address________________________________________________________________The sum of Rs. __________________________________________________________Cash / Cheque No. _______________________________________________________Shri _________________ on Account of ______________ Date _________ Bank _____

Rs. A/C Code ___________Cashier

LECTURE (11-13)5. RECEIVING PAYMENTS

Upon departures, a guest can settle his account in any one of the ways mentioned below – f) Cash g) Credit / Debit Cards (Plastic Money)h) Bill to Companyi) Travelers chequej) Travel Agents Voucher

a) CASH PAYMENT – Round off the bill to the nearest denomination of Rs. 10. The cash is countered in front of the guest to avoid any discrepancies. Separate the notes according to their denominations. Segregate them and count the larger currency first. Enter the currency configuration in the ‘SLIP’. This makes tallying easier. After receiving the money and counting it, the balance if any is returned back. Receipt is generated in case of bill. In case of Cash / Credit memo, it is stamped

with ‘PAID’. Keep all the different denomination currency notes in their respective ‘currency

slots’. For easier counting ‘bundle’ each currency note as it reaches 100 in number.

HOTEL KARA

CURRENCY SLIP

Room No. ________________Name ____________________

Notes ________1000s * ______500s * _______100s * _______50s *________10s * ________

Rs. P COINS5s * ______2s * ______1s*_______0.50s * ____

Rs. P.

TOTAL ___________________________________RECEIVED ________________________________BALANCE PAID ___________________________

_____________ Cashier

PRECAUTION WHILE HANDLING CASH –

The cash drawer has to be kept locked always by ‘cashier’. One has to be very careful while counting cash. Handle one guest at one time while accepting payment in cash. Work swiftly as well as carefully. Never keep all the denominations notes together it may cause mistakes while giving

balances. Handover the cash at the shifted to the A/C departure along with the ‘Cash Handover

sheet’, which includes the details of cash, received and balance paid. Also handover the currency slip to A/C department for tallying the amount received

with bill. Get the sign of the guest for all cash received at the back of the bill / guest folio.

b) CREDIT / DEBIT CARD PAYMENT –

Presents the bill to the guest and receive the credit card from the guest. Present the charge slip to the guest and receive his sign on it. To check the validity of the credit card, check the following – -Whether the establishment accepts credit card. - Expiry date of card. The card should be within the expiry date.

-Compare the name and number with the cancellation bulletin circulated periodically and ascertain if the card is black listed or not. -Any alternation on the card. -Compare cardholders sign on the card with that on the ‘Charge Slip’. With the use of an imprinter, imprint the embossed credit card number on the credit

card onto the charge. Slip in the space given. Enter the date, amount (total), bill no. etc. in the charge slip. If the total exceeds the authorized limit, look for further instructions from ‘General

Regulations’. Get the sign on the bill as well as on the charge ship and tally them with those on the

credit card. The original copy of the charge slip is to be given to the guest along with the copy of

bill. Banks copy sent for and merchant copy (establishment’s copy) is kept with the

cashier. (3 copies in all) The total of net more than 100 charge slips are entered in the summary of charge

records in the column. Send this summary of charge records / slips with all the hard copies of the individual

charge slip to the company.

“CREDIT CARD CHARGE SLIP”

AUTH No. DATEMonth Day Year

DEPARTMENT INITIALS TAKE

SEND

Quantity Class Description Unit cost Amount

The issuer of the card identified on this item is authorized to pay the amount shown as total upon proper identification. I promise to pay such

Tips / Misc.

total (together with any charges) due there on subject to and in accordance with agreement governing the use of such card.

Sign hereLocal

CurrencyTotal

Sales SlipU.S. Dollar

Total

BANK OF AMERICA

SUMMARY OF CHARGE SLIP / RECORD

A/C No.______________BILL No. ____________ DATE ____________

DINERS CLUB INDIA PVT. LTD.

SR. NO. CARD NUMBER NAME OF CARD HOLDER

AMOUNT

CHARGE SLIP

DATE SR. NO. BANK’S NAMEADDRESS

DESCRIPTION AMOUNT

IN WORDS _________________________________Credit Card No. ______________________________Name Of Holder _____________________________Signature ___________________________________ _________________ Sign

c) BILL TO THE COMPANY – A lucrative source of booking comes from public and private sector business. As company executives from the directors to the traveling executives have to move from place to place for business promotion, hotels in the cities can offer them several facilities to make business trips joyful. Companies who make regular bookings with the hotel and whose credit worthiness has been established are extended credit by the hotel.

Such guests are accommodated on special rates CVGR(Company Volume Guaranteed Rates) fixed by the hotel and company. The person wanting to pay his charges though the company needs to carry an “Authorization Letter” from the personnel manager or sales manager of the hotel. A guest wishing to settle his bills through his company has to give the authorization

letter to the cashier. The bill is signed by the guest and along with the copy of the authorization letter, all

the bills are forwarded to the company. The entry is made in the ‘City Ledger’The hotel maintains a CVGR Register in which all the terms and condition including the limit amount allowed to guest are mentioned. For Ex. The company will pay only the lodging and boarding charges plus telephone charges. Maximum limit of boarding is 500 /- or 1000 /- per person per day. Alcoholic beverages are not included for employees in the coupons. The company will not pay for laundry, taxi charges etc. they have to be borne by the

guest. If guest exceeds the meal limit, then it has to be borne by the guest.

d) TRAVELLERS CHEQUE – Persons traveling abroad or in their own countries frequently use traveler’s cheques, as they are a convenient method of carrying their financial reserves. They are safer than carrying cash as they are not easily exchanged as money. Hotels in India come across travelers cheque of two types.

Rupee traveler cheque issued by Indian Bank for ex. State Bank Of India, Syndicate Bank, etc.

Foreign Currency Traveler Cheques in various foreign currencies issued by foreign banks agents.

Indian Rupee Traveller Cheque – They can be encashed in most hotels but it is an sfer policy to check with the particular bank about the establishments, which accepts their T.C. For this purpose the bank brings out a booklet, which lists the establishments where their T.C. can be encashed. When they are purchased they have to be ‘signed’ in the presence of the issuing banks cashier who notes the serial numbers of the ‘cheques’. When a visitor wishes to encash his T.C. he must counter sign each cheque in the presence of the encashing agent, (cashier in the hotel) in the space provided and the counter sign must agree with the visitors original sign put on the cheque at the time of purchase.

If the cheque has been counter signed before presentation for payment and the visitor himself presents the cheque for payment he should be asked to counter sign again on the reverse of the cheque which should tally with the sign on the cheque. Should there be a difference in the sign or if there is any doubt, a documentary proof of identify such as a PASSPORT should be requested for. The cheque is valid for six months from the date on which it was issued. Foreign Currency Travelers Cheque – The same procedure should be adopted as when encashing rupee T.C. Except that the formalities laid down by the R.B.I. have to be observed. The rate of exchange for these travelers cheque is slightly higher than that for currencies.In case of foreign currency traveler cheque –

Ask for guest’s passport and check the credentials of the guest. (like Name, Passport No., Issuing Office, Validity, Photo Identity etc.)

Confirm the room no. of the guest. If a person (not in house guest) wants to encash his traveler cheque contacts the

lobby manager. Ask for the type of currency in which he will be settling his bills. Find the current exchange rate of that currency as per the daily rates from R.B.I. Fill in the details is the for ex. Encashment certficate. Calculate the amount and balance and remit it back. Handover the original copy of this certificate to the guest. Second copy of this certificate is attached with the foreign currency traveler cheque

and kept on handed to the A/C department for further processings. Third copy is kept in the records. Details are filled in the ‘cashier report’. Fill up the record of for ex. Transaction.

e) TRAVEL AGENTS VOUCHER – Travel Agents issue vouchers to customers to them to obtain hotel accommodation and boarding facilities and settle their bills in hotel. The hotel has to ensure that the agent issuing vouchers is repeatable. When bookings are made through travel agents, big tour package are sold out at fixed prices. This price will include limited facilities offered to the guest.

Hotels, where a number of these vouchers are to be presented a ‘tourist account book’ is kept. In that, the name of the client, travel agent and other details are posted. One copy of the voucher is sent to the hotel along with the reservation letter. In the expected arrival list against a visitors name. It should be marked “Voucher” so

that the receptionist can request the guest to handover the original voucher on arrival. This voucher will be kept along with the guest folio or bill. Most of the travel agents voucher indicates the services to be offered to the guest. They also indicated that the bill is to be settled directly or whether it is to be sent to

the travel agent for final settlement. If the travel agent has taken an advance the hotel would be informed to collect the

balance directly from the guest. Hence the receptionist should careful to read billing instructions and write down the

proper details on the guest bill. The hotel sends the original voucher along with the bill (signed by guest) and other

department voucher for payment. A T.A. usually settles a bill by cheque within a month after subtracting its

commission of 10% on the accommodation. On receiving the payment the hotel issues a receipt to travel agent.

TRAVEL CORPORATION LTD.Nariman Point, Mumbai

To, Voucher No. _______________The Manager, Date _______________Sea Rock Hotel,

Dear Sir, In exchange for this voucher please provide the following services to our valued client _____________________________________________________________________________

Arrival Date ______________ Time ______________ From _________________

Departure Date ____________ Time ______________ For __________________

NOTE – Your bill for the above services should be Presented to our client for direct settlement Forwarded to our office for settlement

Remarks - _____________________________________________________________________ _____________________________________________________________________

_______________________

Stamp of Sign of Issuing Auth. Issuing Agent

FRONT OFFICE CASHIER’S REPORT

CASHIER ______ SHIFT FROM ____________ TO _________ DATE _______

RECEIVED INDIAN

FOREIGN NATIONAL & NON-RESIDENTS

PAID

ROOM NAMES PAID

BILLNo.

NAME

RESIDENT

RECEI-VED INFORE-IGN CURRENCY

RECEI-VED IN INDIAN CURRENCY

RECEIVE-D IN INDIAN CURRENCY UNDER EXEMPTED CATEGORY

EXEMP-

TIONUNDERCLA-USE No.

RO

OM

No.

CITY LEDG-

ERPAID-OUTS

OT

HE

R

OUT No.DEP

ONACCOUNT

UNIT- V

THE NIGHT AUDIT

1. IMPORTANCE AND FUNCTIONS OF NIGHT AUDIT2. OPERATING MODES2.1. Non-automated. 2.2. Semi-automated 2.3. Fully automated

3. THE NIGHT AUDIT PROCESS 3.1. Complete Outstanding Posting. 3.2. Reconcile Room Status Discrepancies. 3.3. Balance All Departments. 3.4. Verify Room Rates. 3.5. Verify No-Show Reservations. 3.6. Post Room Rate And Taxes. 3.7. Prepare Reports. 3.8. Deposit Cash. 3.9. Clear OR Backup the System. 3.10. Distribute Reports. 4. THE NIGHT AUDIT REPORTS- GENERATING AND UTILITY4.1 EQUIPMENT HANDLED – 5. TRANSCRIPT – 5.1 PREPARATION OF TRANSCRIPT – 5.2 FORECASTING6. COMPILATION OF REPORTS AND STATISTICS – 6.1 IMPORTANCE OF REPORTS AND STATISTICS – 6.2 OCCUPANCY – 6.3 ROOM OCCUPANCY – 6.4 POTENTIAL ROOM OCCUPANCY (PRO)6.5 AVAILABLE ROOM OCCUPANCY (ARO) – 6.6 POTENTIAL BED OCCUPANCY (PBO) – 6.7 AVAILABLE BED OCCUPANCY (ABO) – 6.8 MULTIPLE OCCUPANCY PERCENTAGE – 6.9 GUEST PER ROOM (GPR) – 6.10 AVERAGE ROOM RATE (ARR) – 6.11 AVERAGE GUEST RATE (AGR) – 6.12 PRESENTATION OF STATISTICS – 7. VERIFYING THE NIGHT AUDIT

1. IMPORTANCE AND FUNCTIONS OF NIGHT AUDIT

The chief purpose of the night audit is to verify the accuracy and completeness of guest and non-guest accounts (non-guest accounts is also known as city account) against departmental transactions reports. Specifically the night audit is concerned with the following functions:

1. Verify posted entries to guest and non-guest accounts. 2. Balancing all front office accounts. 3. Resolving room status discrepancies. 4. Monitoring guest credit limits. 5. Producing operational and managerial reports.

2. OPERATING MODESNight audit procedures may be performed manually, mechanically or electronically. There are three modes in relation to night audit routine.

2.1. Non-automated.

In a non-automated (manual) system, four forms are typically used to complete the audit. The system also uses transactional vouchers produced by the hotels revenue center and sent to the front desk. The four common night audit forms are: (a). Daily and supplement transcript. (b). Guest and non-guest folios. (c). Front office cash sheet. (d). Audit recapituation sheet. The night auditor prepares daily and supplement transcript by copying the day’s activity from each guest and non-guest account folio to the appropriate line on the transcript. The transcript columns are then summerised to determine the total charge transaction for each day. Information from these two transcripts along with the data from the cash sheet may be transferred to recapitulation sheet. Few large front office operations rely on manual audit process.

2.2. Semi-automated

One of the most important developments in the history of front office procedures has been the account-posting machine. Posting machine record guest charges on folios and simultaneously perform a number of other activities which simplify the work of the front desk agent and night auditor. Posting machines may be electro mechanical or electronic. The electronic systems are usually enhanced version of the old electro mechanical machines. Posting machines are only capable of producing a limited number of departmental total, do not retail folio balance and do not interface with other systems (such as food and beverages point of sale system). Typically, front desk agent post charges to the account folio based on vouchers received from the hotels revenue outlet. Forms produced in semi-automated audit system include a front office cash report and night auditors summary report also called “D-Card”.

2.3. Fully automated

Of the three operating modes a fully automated audit process is by far the simplest and most reliable. Fully automated system can be interfaced with point of sale equipment, call accounting systems and other revenue center devices for quick accurate and automatic posting to electronic guest and non-guest account folios.

3. THE NIGHT AUDIT PROCESS The discovery and collection of accounting error is what the night audit process is about. A night audit ensures the integrity of accounts through cross-referencing. Ledger accounts are compared to source documents from revenue center to prove individual entries and accounts total. Discrepancies found during a night audit must be corrected. A night audit is conducted on a daily basis due to the transactional nature of the hotel business. The degree of scrutiny required during the night audit process depends on the frequency of errors and volume of transactions to be checked. While the first of these factors related to the quality of front office work, the second co-relates with the size and complexity of the hotel. Large, complex hotels typically require closer accounts scrutiny due to the volume of transaction posted.

The following steps are common to the sequence of night audit.

3.1. Complete Outstanding Posting.

One of the primary functions of the night audit is to ensure that all transactions affecting guest and non-guest accounts are posted to appropriate folios before the end of the day. It is important to accurately post and account for all transactions on the day they occurred. Charges posted to the guest folio with the wrong dates will confuse guest. Generally guest will challenge such charges during checkout. This can cause delay for the guest and for the staff since the charges will have to be researched for an explanation. Traditionally the first step of the night audit is to complete all outstanding postings. While sound front office practice dictates that transactions be posted to the proper accounts as they are received, the night auditor must confirm that all transactions have been posted before starting the audit routine. This actually means waiting until all food and beverages outlets, including the banquets facilities are closed. Incomplete posting will cause error in account balancing and complicate summary reporting. In addition to completing the posting function the night auditor verifies that all vouchers for revenue center transactions are posted.

3.2. Reconcile Room Status Discrepancies.

Room status discrepancies must be resolved in a timely manner since they can cause confusion in the front office. Errors in room status can lead to loss of room revenue. The front office must maintain current and accurate room status information to effectively determine the number and types of room available for sale. For example, if a guest checksout but the front desk agent fails to properly complete the checkout procedure the guest room may appear occupied when it is actually vacant. This could prevent the room from being rented until the error is discovered. Before the end of the day the night auditor reconciles discrepancies between the daily housekeepers report and front office room status report. To minimize errors housekeeping department typically requires the staff to record the perceived status of all rooms served. The auditor must review front office and housekeeping department reports to reconcile and finalized the occupancy status of all rooms for a given night. If the housekeeping report indicates that a room is vacant, but the front office believes it is occupied, the auditor should search for an active room folio. If the folio exists and has an outstanding balance there are several possibilities:

1. The guest may have departed but forgot to checkout. 2. The guest may be a skipper who left with no intention of checking out. 3. The front desk agent or cashier may not have properly closed the folio at checkout.

After verifying that the guest has left the hotel the night audit should process the checkout and set the folio aside for management review. If the folio has been settled the front office room status system should be corrected to show that the room is vacant. The night auditor should verify the guest folio against the housekeeping and the room status report to ensure that all three are consistent and in balance.

3.3. Balance All Departments

The night audit process can become quite complicated when errors are discovered. It is generally considered more efficient to balance all departments first and then look for

individual posting errors within an out of balance department. The night auditor balances all revenue center departments using source documents. The night auditor seeks to balance all front office accounts against departmental transactional information. Vouchers received at the front desk and other documents are totaled and compared to the revenue center summaries. Even fully automated hotels generally maintain source document because they can help resolve discrepancies should they arise.

3.4. Verify Room Rates.

The night auditor may need to complete a room revenue and account report. This report provides a means for analyzing room revenue since it shows the rack rate for each room and actual at which the room was sold. If the room rack and the actual rate do not match the night auditor should consider the following factors: 1. If a member of a group or a corporate customer occupies the room, is a discounted rate

offered? 2. If there is only one guest in a room and the actual rate is approximately half the rack rate,

is the guest part of the shared reservation? If he or she is, did a second guest registration. 3. If the room is complementary, is the appropriate supporting back up for the rate (for

example, a complementary room authorized form).

3.5. Verify No-Show Reservations.

The night auditor may also be responsible for clearing the reservation rack and posting charges to no show accounts. In posting no show charges the night auditor must be careful to verify that the reservation was guaranteed and the guest never registered with the hotel. Sometimes duplicate reservations may be made for a guest. If the front office or the reservation employees do not identify these, the guest may actually arrive but appear to be a no-show under the second reservation. No-show billing must be handled with great care. A front office that neglects to record cancellations properly and bills clients incorrectly risks having its legal agreement and relationship with the credit card companies re-evaluated. It may also risk losing the guests future business and the business of travel agency, which guarantees the reservation.

3.6. Post Room Rate And Taxes.

Posting room rates and room taxes to all guest folios take place at the end of the day. Once room rate and taxes are posted, a room rate and a tax report may be generated for the front office manager. The ability to electronically is one of the most common advantages of automated system over manual and semi-automated system with manual or semi-automated system this can take hours.

3.7. Prepare Reports.

The night auditor prepares reports, which indicate status of front office activity. Among those prepared for management review are the final departmental details and summary report, the daily operational report, a high balance report and other report specific to the property.

(i). Final Departmental Detail and Summary Report are produced and filed with the source documents for the accounting division. These reports help prove all transactions were properly accounted. (ii). The Daily Operational Report summarizes the days business and provides inside into revenue, receivables, operating statistics and cash transactions related to the front office. (iii). High Balance Report identifies guest approaching an account credit limit.

3.8. Deposit Cash.

The night auditor frequently prepares a cash deposit voucher as part of the night audit process. If front office cash receipt have not yet been deposited. The night auditor compares the posting of cash payments and paid out with actual cash on hand. A copy of the cashier shift report may be included in the cash deposit envelope to support any overage, shortage or due back balances.

3.9. Clear OR Backup the System.

In manual and semi-automated hotels, totals must be cleared from the system after the entire night audit is complete. Manual systems are cleared by simply moving the closing balance from the night audit report to the opening balance of the next report. In semi-automated hotels the total is the posting machine must be brought to zero. The night auditor controls this functioning so that the possibility of fraud is minimized. Since a computer system eliminates the need for a room rack, reservation card and a variety of other traditional front office forms and devices, the front office depends on continuous functioning of the computer system. The back up step in the night audit routine is unique to computerize front office system. Backup reports must be run and various media duplicated in a timely manner so that the front office can run smoothly should the computer system fail. End of day can be developed and automatically generate by a front office computer systems. Normally at least two guest lists are prepared for backup and emergency use; for the front desk and other for the telephone operator. A printed room status report enables front desk agent to identify vacant and ready rooms, should the computer become inaccessible. Computer based information should be recorded (backup) on to a magnetic tape or disk, depending on system configuration. A system backup should be conducted after each night audit and stored in a safe place. Many computer systems have two kinds of system back-ups. The daily backup creates copies of the systems electronic files on magnetic tape or disk in case of computer failure. The second type of system backup is performed once or twice a week. This backup not only backs up the daily information but also eliminates account and transactions information no longer needed.

3.10. Distribute Reports.

Due to the sensitive and confidential nature of front office information the night auditor must promptly deliver appropriate reports to the authorized individually.

4. THE NIGHT AUDIT REPORTS- GENERATING AND UTILITY

The Night Audit Report is a report of all of the transactions of the day. This report is structured specifically for each individual establishment, and is based upon what information is required by that hotel. Some may require only actual figures, while others may also require budget figures and goal percentages. Daily review of the night audit report allows management the opportunity to be flexible in meeting financial goals and in assisting with yield management.The night audit process generates many reports as a result of information recorded on activities, both financial and physical, in the hotel during the day. This information is essential in order to enable management to keep up-to-date on room availability, reservations, average room rates, guest credit levels, restaurant activity, and so on. The reports generated by the night audit process on the property management system are distributed to the relevant departments for their immediate information.

4.1 EQUIPMENT HANDLED –

NCR machines of all revenue outlets and master NCR of front office for posting of charges and auditing. Also, a calculator for simple calculations and resographer is used for processing credit cards and telephone meters for recording individual guest rooms telephone charges.

5. TRANSCRIPT –

A transcript is often referred to as daily sales recapitulation or tabular ledger. It is a record of all previous day’s transactions transcripted from various sales documents into a single sales report. A “revenue day” for hotel extends from midnight to midnight and so the transcript is prepared at midnight for the previous day where all sales summaries have been turned in from all revenue outlets.The further process in the preparation of final report is totaling the cash and credit sales of each revenue outlet and those recorded in the front office cashier summary sheet. If they do not tally, it is the job of the night auditor to locate errors, which is a tedious job and must rectify the record accordingly.

5.1 PREPARATION OF TRANSCRIPT –

The following points show step by step the night auditors task of the preparation of transcript. The basic formula to prove a transcript is BALANCE BROUGHT FORWARD + TODAY’S CHARGES = BALANCE CARRIED FORWARD + TODAY’S CREDIT.

1) Collect all food and beverage, telephone bills etc from the front office cashier.2) Separate the bills into their respective revenue outlets, restaurant, bar, laundry etc.3) Find out the opening bill no. form each other. 4) Arrange all bills in numerical order starting from the opening bill no. Processed in

step 3. If the opening bill no is missing note it down to check with the sales summary to ensure authorization and follow up.

5) Tally all bills with their respective sales summary that there are no arithmetic errors in the total of the bills within the sales summary report. Follow this process for all revenue outlets.

6) Turn over each bill to ascertain that it is validate to indicate that it has been posted in the guest folio either by the front office machine or manually.

7) Enter all details of the bills in the night auditors sales recapitulation, which is a document prepared to ascertain the total F & B sale in all the vertical columns and compare the total cash plus credit with the total of the cashier sales summary sheet.

8) Enter all details of night auditor sales recapitulation into the transcript horizontally.

9) The night room report is tallied with front office cashier summary to ascertain correct accounting of room charges. He also allocates hidden revenue and passes auditor adjustment in the room report, so as to add to revenue in the transcript.

10) Check the foreign currency encashment certificate ensuring the details are complete and correct. Check all entries of vouchers in the encashment book and tally with front office cashier summary.

11) Check all paid out and allowance vouchers for their authorization.12) In case of miscellaneous voucher, check if proper explanation is given.13) Audit the front office cashier summary for ensuring that all entries are supported

by vouchers such as foreign exchange encashment certificate, cash and receipts, application for payment of personal cheque, credit entries and allowances vouchers, paid out vouchers and miscellaneous vouchers for detailed entries.

14) Total the vertical and horizontal column of the night auditor’s sales recaptualation report by using the formula mentioned earlier.

PAID OUT VOUCHER

HOTEL XYZPAID OUT VOUCHERSR. NO. ____________NAME: _______________________ ROOM NO. ______________ DATE: _______

SR. NO. EXPLAINATION AMOUNTRS. PS.

Total (in words): _____________________________ _____________ Guest SignPrepared by: ____________________ Authorized by: ________________________

FRONT OFFICE CASHIER’S SUMMARY SHEET

HOTEL XYZFRONT OFFICE CASHIER’S SIMMARYSR. NO: ____________________ DATE: __________________CASHIER: ________________________ SHIFT: ________________ TO: _______SUMMARY OF CASH REPORT

RECEIPT NO.

NAME OF THE GUEST

ROOM #

FAX AMOUNT (RS.)

REMARKS

5.2 FORECASTING –

Besides documenting reservation and registering guests, front office personnel are required to keep statistics about arriving and departing guests, room occupancy and charges owed to hotel, throughout each shift. Reports prepared from these statistics keep the management informed about the current status of the hotel and enables accurate forecasts of future availability to be made and planning to be done on that basis. Trends are made, which also helps us in getting / forecasting future activities.

6. COMPILATION OF REPORTS AND STATISTICS –

6.1 IMPORTANCE OF REPORTS AND STATISTICS –

In performing their management functions, supervisors are often require to work with reports. Reports serve several purposes. They can be used to review operations, to isolate problematic areas, to indicate where corrective actions may be needed and to point out advantageous and disadvantageous trends. Helps a manager in his daily work to take decisions and know how successfully the business is running.

The main reason for compiling statistics in business is to enable management to be aware of facts and to draw inferences which would not be apparent solely from a consideration of the financial books of accounts. The data, which have been recorded, have then to be manipulated in such way as to be meaningful and useful to the management.

Many businesses require knowing how active they are in terms of numbers of customers or of their volume of transactions as well as their value of inflation and constantly changing prices. The no. of customers spending may also be of interest to management in assessing such matters of staffing requirements and (one customer spending Rs. 50 may not require as much attention as 5 customers spending Rs. 10 each).

The porter of customer spending is also pertinent. The sources of income and their relative magnitudes are also a worthwhile studying.

6.2 OCCUPANCY – The first and simplest statistics to be kept is one those of the number of guests staying at the hotel each night. These figures may be used as a rough guide to the activities of the hotel, the past trend may be examined, comparisons made and most notably future assessed. There may be more than one pattern of business in a hotel, lets say, a weekly pattern and a seasonal pattern. It may be seen that Mondays to Thursday have had high occupancy with a dropping off on Fridays with very few guest staying at weekends and that this pattern has repeated itself every week.

6.3 ROOM OCCUPANCY – It is quite possible to let every bedroom in the hotel and yet not have sold every bed.

6.4 POTENTIAL ROOM OCCUPANCY (PRO) –

Potential Room Occupancy Percentage = No. of Rooms Sold * 100 Total No. of rooms in hotel

6.5 AVAILABLE ROOM OCCUPANCY (ARO) – No. of Rooms SoldAvailable Room Occupancy Percentage = * 100 No. of Rooms available for saleAvailable Rooms = Total Rooms – Blocked Rooms House Count – Room CountDouble Occupancy Percentage = * 100 No. of Rooms AvailableHouse Count: Total guest staying in hotel.Room Count: No. of rooms sold.

6.6 POTENTIAL BED OCCUPANCY (PBO) – Total No. of Beds Sold

Potential Bed Occupancy Percentage = * 100 Total No. of Beds in Hotel

6.7 AVAILABLE BED OCCUPANCY (ABO) – No. of beds sold

Available Bed Occupancy Percentage = * 100 Total No. of Beds Available

Available beds = Total Beds – Beds in blocked rooms

For calculation purposes twin beds or a double bed is counted as two beds as far as availability is concerned and are also included as two beds in the no. of beds sold. However, if they are sold as single beds they are included only as a single sleeper. In

theory, this percentage cannot exceed 100 although in practice, occasions arise when 100% is exceeded (a person may be accommodated in an extra bed or else where, or a bed may be sold twice or more in 24 hrs.). This indicates the utilization of the accommodation and regarded as a figure by which the hotel may judge the efficiency of the reception unit in filling hotel to capacity.Complication may arise when rooms are taken off for any purpose e.g. if rooms are not available for letting and when suites and other rooms are some times let as a bedroom, or sitting room. Suites can cause inaccuracy in the room occupancy percentage if they are not dealt with consistent manner. It is best to divide suites in the no. of saleable bedrooms, and should be considered as in the total no. of beds occupied / available for occupancy calculations. It is thus possible for occupancy calculations. It is thus possible to arrive at a percentage in excess of 100.

6.8 MULTIPLE OCCUPANCY PERCENTAGE – Most hotels are interested in knowing on a daily basis what their percentage of multiple occupancy is because it provides guest count information useful in forecasting F & B sales, indicating clean linen requirement and analyzing the hotels average room rate.

6.9 GUEST PER ROOM (GPR) – Total no. of guests

Guest per room = No. of rooms sold

6.10 AVERAGE ROOM RATE (ARR) – Total room Revenue

Average room rate = No. of rooms sold

Where hotel have a range pf room price there will be a tendency normally for the low priced room to be more popular. Therefore if occupancy is low, it is likely that the average room rate will also be low as a higher proportion of the lower priced rooms occupied. An increase in occupancy will lead to higher priced rooms to be sold and consequent increase in average room rate.

6.11 AVERAGE GUEST RATE (AGR) – Total Room Revenue

Average rate per guest = No. of room sold.

As double occupancy increases, the average rate per room also increases. This is because the rate of room for a double room is greater than when a single room is sold.

6.12 PRESENTATION OF STATISTICS – After the collection of data the next most important thing is its

presentation. Some methods are – Line graph Bar diagram Pie chart

Histogram graph Ogive curve Pictographs

7. VERIFYING THE NIGHT AUDIT

UNIT- VI

GUEST COMPLAINT HANDLING1.INTRODUCTION2. PROCESS- THE FOLLOW UP LOOP 2.1 Identifying complaints2.2 Handling complaints 2.3 Follow-up Procedures 3. THUMB RULES4. COMMON PROBLEMS/ COMPLAINTS- IDENTIFICATION AND SOLVING5.Case Study: 6. ROLE OF EMOTIONS IN SITUATION HANDLING

1.INTRODUCTION

Guest complaints can be divided into four categories of problems; mechanical, attitudinal, service-related, and unusual.

Most guest complaints relate to hotel equipment malfunctions. Mechanical complaints usually concern problems with climate control, lighting, electricity, room furnishings, ice machines, vending machines, door keys, plumbing, television sets, elevator, and so on. Even an excellent preventive maintenance program cannot completely eliminate all potential equipment problems. Effective use of front desk log book and maintenance work orders may help reduce the frequency of mechanical complaints. Guests may make attitudinal complaints when they feel insulted by rude or tactless hotel staff members. Guests who overhear staff arguments or who receive complaints from staff members may also make attitudinal complaints. Guests should not overhear employees arguing or become sounding boars for employee problems. Managers and supervisor should hear and attend to the complaints and problems of staff – not guests. This is especially critical to maintaining sound guest relations. Guests may make service related complaints when they experience a problem with service. These complaints can be wide-ranging and can be made about such things as long waits for service, lack of assistance with luggage, untidy rooms, phone difficulties, missed wake-up calls, cold or ill-prepared food, or ignored requests for additional supplies. A hotel generally receives more service-related complaints when it is operation at or near full occupancy. Guests may also complain about the absence of a swimming pool, lack of public transportation, bad weather, and so on. Hotel generally has little or no control over the circumstances surrounding unusual complaints. Nonetheless, guests sometimes expect the hotel to resolve such situations. Front office mangers should alert front desk agents that some guests will complain about things they can do nothing about. This way, staff will be prepared to handle the situation through appropriate guest relations techniques – and avoid a potentially difficult encounter.

2. PROCESS- THE FOLLOW UP LOOP

2.1 Identifying complaints

All guest complaints deserve attention, even though they differ in nature and importance. An excited guest complaining loudly at the front desk requires immediate attention. A guest making an offhand comment deserves no less attention – although the need for action may be less immediate. Guest relations stand to improve when a hotel systematically identifies its most frequent guest complaints. By reviewing a properly kept front desk long book, management can often identify and address recurring complaints and problems. Another way to identify complaints involves the evaluation of guest comment cards or questionnaires. Guest questionnaires may be distributed at the front desk, placed conspicuously in the guestroom or mailed to guests following departure. Identifying problems is one of the first steps in taking corrective action. By examining the number and type of complaints receive, hotel management may gain insight into common and less common problems. Front office staff members may be better equipped to handle frequent complaints courteously and effectively, especially if they know the problem cannot be immediately corrected.

2.2 Handling complaints

It is usually counterproductive to ignore a guest complaint. In many hotels, front desk agents are instructed to refer complaints to supervisors or managers. But sometimes, front desk agents may not be able to pass the complaint on – especially when the complaint demands immediate attention. Hotels should have a contingency plan in place for such situations. The front desk may receive complaints about food and beverage operations in the hotel, regardless of whether those operations are managed by the hotel. Unless the hotel and the food and beverage operators establish procedures for referring complaints, guests may continue to be upset and the hotel will continue to receive the blame. The hotel and its revenue outlets should maintain close communications and develop procedures designed to satisfactorily resolve guest complaints. Managers and employees should keep these points in mind when handling guest complaints:

• Guests may be quite angry. Staff members should never go along to a guestroom to investigate a problem or otherwise risk potential danger.

• Staff members should never make a promise that exceeds their authority. • If a problem cannot be solved, staff members should admit this early on. Honesty is the best

policy. • Some guests complain as part of their nature, and may never be satisfied. The front office

should develop an approach for dealing with such guests.

Learning to deal effectively with complaints requires experience. Front office staff members can practice by thinking about how they might resolve some of the hotel’s most common complaints. Role-playing can also be an effective method in learning to deal with complaints. By anticipating complaints, planning and practicing responses, and receiving constructive feedback, staff members should be better prepared to deal with guest complaints.

2.3 Follow-up Procedures

Management may use the front desk logbook to initiate corrective action, verify that complaints have been resolved and identify recurring problems. This comprehensive written

record may also enable management to contact guests who are still dissatisfied at checkout. A letter from the front office manager expressing regret about the incident is usually sufficient to promote goodwill and demonstrate concern for guest satisfaction. Some managers may telephone checked-out guests to get a more complete picture of the incident, depending on its significance. Chain hotels may also receive guest complaints channeled through chain headquarters. Cumulative records of complaints about each hotel in the chain may be compiled and sent regularly to managers. This method of feedback allows the chain’s corporate headquarters to evaluate and compare each hotel’s guest relations performance.

3. THUMB RULES Isolate the guest Listen & empathize Stay calm, don’t argue Take the complaint seriously Give undivided attention Take notes Offer guest choices Set a time line for action Monitor progress Follow up

4. COMMON PROBLEMS/ COMPLAINTS- IDENTIFICATION AND SOLVING

Cause of problem ExampleGuest unfamiliar with terminology A guest arrives early in the morning and is told that

the room will not be ready until midday. The guest arrives at the front desk only to find that their room has been re-let because they did not guarantee the booking, and it was on a 6 p.m. release

Guest unfamiliar with terminology A guest books a room and expect a double bed, not two single beds

Hotel is fully booked The guest does not believe the front desk clerk who tells them that the hotel is fully booked.

Impolite front desk staff The guest is ignored when arriving at the front desk.A guest telephones a hotel and is kept on hold for a long period of time

Errors made by the hotel A guest books a twin room and is given a double room. The guest is over charged. A guest receives slow service. A guest does not receive a requested early morning call

External The guest’s luggage is lost by an airline. A guest isexpecting a visitor who has not arrived. A guest hasmislaid their safe deposit key

EXAMPLE- if the guest complains that his room was not cleaned properly the previous day; they should be contacted the following day and asked if he was satisfied with the services.Learning to deal effectively needs experience. This can be helped through training, and role-play situations.

5. Case Study:

The Taj view Hotel is one of the most famous five star properties in the country. It attracts visitors from all over the world and the hotel staff regularly caters for movie stars, royalty, presidents, national and international dignitaries.Mrs. Sharma the executive housekeeper received a copy of a letter that had been sent to the general manager.

Room 4803 – Taj View HotelGeneral ManagerTaj view HotelJune 11th

Dear Sir,We have been staying in your hotel for the last two and a half months and are absolutely appalled and disgusted at the way in which you have totally ignored us.We are attached to a Dutch international company and have traveled the world for the last thirty years, but never have we stayed in a hotel where we have been made to feel so unwelcome.For the last six weeks we have had to put up with a maid who is brusque, excessively rude, never says ‘Good evening’ and always slams the door hard when she is finished. It has left my husband and me speechless. During the whole of our stay, soap has never been put out, but the old ones left until they are impossible to use any more. Three bags are meant to be left for dry-cleaning, laundry and pressing. Rarely does this happen. On the occasions when I have asked for a extra bag for dry cleaning in addition to the laundry, I have been told they were unavailable. For two solid weeks I stared at the same two apples left in the fruit bowl. When I asked if we might have a little more variety I was told that most fruits were out of season. Unbelievable . (However, Private Dining would arrange for extra fruit to be sent yup to us: doubtless at an extra expense to ourselves.)This happened for three days then nothing – the bowl has been empty for two days.We have come to your country to live – it is a difficult enough experience moving to another country but you have made it more so. This is by no means our first visit. On this occasion we particularly selected your hotel, and it has turned out to be a grave mistake.We are certainly not in the habit of complaining but I cannot emphasize strongly enough how utterly offended we feel. That after two and a half months the only courtesy you have shown us in one bottle of wine and two bath robes which we received in the first few weeks of our stay. I could go on but true to form there is no more stationery in the desk – it had never been replenished since we came here.It goes without saying that if you choose to ignore your guests and their welfare we would never recommend your hotel to anyone.Yours faithfully,Rosie Verma

There are four basic steps to handlesuch problematic situations:1. Listen to the problem.

2. Understand the problem.3. Find solutions to the problem.4. Follow-up on the solution.

6. ROLE OF EMOTIONS IN SITUATION HANDLING

UNIT- VII

CREDIT CONTROLS

1. HOTEL CREDIT POLICY2. CONTROL MEASURES

Credit controls refers to the various measures taken by a hotel to ensure that guests settle their accounts in full at an agreed time.Controlling credit is the responsibility of the credit manager or clerk, who is a member of the accounts department. However, the process also necessitates that specific measures be taken by various departments of a hotel at different phases of the guest cycle. A credit manager cannot fulfill his or her role unless all hotel staff cooperate and perform their own credit control duties.

1. HOTEL CREDIT POLICYHotels will normally allow guests to charge their hotel expenses to their room account. To ensure that final settlement is paid, hotels must be certain that the guests are able to pay their bills in full before they are given credit. The credit limit (sometimes called the house limit) refers to the maximum level to which a guest’s bill can amount before some form of settlement is required. Credit limits may vary, and often depend on the guests’ reservation status and the method of payment.In general, hotels tend to allow credit to three types of guest:1. those who have guaranteed bookings with the hotel- These guests are allowed to

enjoy the hotel facilities and services on credit, and to settle their accounts personally at check-out.

2. those whose accounts will be settled by their companies- When a company wishes to have credit to ensure that the company is solvent, i.e. that it is capable of paying its accounts.

3. those who will settle their accounts by credit or charge cards- Credit is also given to guests who settle their accounts by credit or charge cards that are accepted by the hotel. The operational procedures for handling credit and charge cards vary from hotel to hotel. Reason for this may be the popularity charge or credit card Company to settle the account.

2. CONTROL MEASURES

For a hotel to be successful and profitable, it is necessary for it not only to be busy, but to receive all the revenue owed to it by resident guests. To do this requires a series of

stringent credit control systems. The hotels should have these systems to prevent walk-outs (skips), late settlement of accounts and guest upset at check-out.The credit rating of the various guests was looked at, and the difference in rating according to reservation status explained. The guaranteed reservations have a better rating than walk-ins and non- guaranteed, unconfirmed guests. Apart from individual credit ratings, travel agents, tour groups and companies need a rating. The technique and process of credit control is applied during the guest cycle, i.e. at the time of making a reservation, at check-in and during occupancy. One of the most important tasks for a hotel in its efforts to maintain good credit control is the monitoring of high- balance accounts. The reception, night auditor or the credit manager is usually responsible for handling accounts with high balances. The guests will be asked to settle their account to date, and a new account will be started for the rest of their stay. The credit manager will send the bill, together with an accompanying letter, to the guest’s room, asking the guest to settle the account with the reception. If the guest has any queries regarding their account or the credit policy, the reception or the assistant manager should explain them to the guest. If the guest fails to call the reception desk the assistant manager has to contact the guest personally. In serious cases, where the guest cannot be reached and has made no attempt to see the management or the front desk staff, their room will be double- locked. This means that the guest has to contact the assistant manager before they can be let into their room. Credit control is also practiced after the departure of the guest. Corporate accounts or travel agents’ accounts are not settled at check-out. After the check-out these forms of account will be transferred to the city ledger held by the accounts department which holds an individual account for each company. At the end of each month, the accounts department will send statements of these accounts to the companies for settlement. It is expected that payment will be made within 30 days.However, some companies may be late in settling their accounts. In such cases, follow-up measures need to be taken by the accounts department to speed up the payment. Although usually conducted by the accounts department, the chasing of city ledger accounts which have not been paid can sometimes be done by the front desk staff.The legal practice of right of lien states that a guest’s luggage and belongings can be held and eventually sold, if a guest is unable to pay the bill.It always seems easier to sell and fill a hotel than it does to control it. However, it is the control of a hotel that can make it an efficient and profitable establishment.