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Chapter 4. The Hotel Business. Types of Lodging Businesses. Hotel Operations. Chapter Objectives. Identify the types of hotel classifications. Differentiate between business and leisure guests. Explain the importance of yield management.

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Chapter 4

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Chapter 4

The Hotel Business

Types of Lodging Businesses

Hotel Operations

chapter objectives
Chapter Objectives
  • Identify the types of hotel classifications.
  • Differentiate between business and leisure guests.
  • Explain the importance of yield management.
  • Identify the front-office positions in the rooms division of a hotel.
  • Describe the guest services in the hotel industry.
  • Identify the support-staff positions in the back house of a hotel.
lodging businesses
Lodging Businesses

According to the American Hotel and Lodging Association, the United States has more than 47,040 properties, generating 2 million jobs and $102.6 billion in sales.

Section 4.1

classification of facility
Classification of Facility

Lodging classification is based on four factors:




Style andfunction

Section 4.1





All suite




Extended stay









Retreat centers

Classification of Facility




Style andFunction

Section 4.1


classification of facility7
Classification of Facility

The four categories of guest travel type or stay are:

transient guestan individual traveler with a reservation, staying in a hospitality property for a maximum of 30 consecutive days

  • Walk-in guest
  • Transient guest
  • Corporate guest
  • Group guest

Section 4.1

classification of facility8
Classification of Facility

The price of a room is based on a number of factors:

  • Location of property
  • Location of room
  • Amenities
  • Length of stay
  • Season
  • Types of guest
  • Meals

Section 4.1

classification of facility9
Classification of Facility

Meal plan types include:

meal plana room rate that includes meals

  • European Plan (EP)
  • Continental Plan (CP)
  • Bermuda Plan (BP)
  • Modified American Plan (MAP)
  • American Plan (AP)

Section 4.1

classification of facility10
Classification of Facility

Hotels use yield management to help maximize revenue.

yield managementa system of maximizing revenue through adjusting room rates according to demand

Section 4.1

classification of facility11
Classification of Facility

Calculation tools used in yield management are:

average daily rate (ADR)a rate based on total sales for the day divided by the total number of sold rooms

  • Average daily rate (ADR)

Section 4.1

classification of facility12
Classification of Facility

Calculation tools used in yield management are:

occupancy percentage (OCC%)a percentage calculated daily and based on the number of rooms sold as a percentage of the total number of rooms available

  • Occupancy percentage (OCC%)

Section 4.1

classification of facility13
Classification of Facility

Calculation tools used in yield management are:

revenue per available room (revPAR)a rate that reflects a hotel’s revenue per available room

  • Revenue per available room (revPAR)

Section 4.1

for all types of travelers
For All Types of Travelers

Lodging accommodations come in all types and sizes to suit the needs of many kinds of guests.

Travelers consider price, location, and style of a property when making reservations.

Section 4.1



What are three different types of hotel properties?

What are the two categories of hotel guests?

What are three factors that can determine the price of a room?




Section 4.1

hotel organization
Hotel Organization

The general manager of a hotel is responsible for both front-of-the-house and back-of-the-house operations.

front of the house (lodging) the area in a lodging facility that guests view, such as the lobby

back of the house (lodging) the area in a lodging facility where support services take place that guests usually do not view

Section 4.2

the rooms division
The Rooms Division

The largest revenue center of a lodging facility is the rooms division.

The rooms division includes the front desk, reservations, housekeeping, guest or uniformed services, and communications.

Section 4.2

the front office
The Front Office

From a guest perspective, the front office is considered the heart and soul of any property.

The primary functions of the front-desk staff are:



Providingguest services

Section 4.2

the front office19
The Front Office

The sales division or the reservations staff sells rooms during the day.

In the evening the front-desk staff assumes this responsibility.

Section 4.2

the front office20
The Front Office

Many lodging facilities have property management systems (PMS).

Sophisticated information technology allows the front desk to provide better service while also reducing costs for the property.

Section 4.2

the front office21
The Front Office

The most important task of the front-desk staff is providing exemplary guest service.

During check-in, guests contact the front desk with questions, requests, and special needs.

Section 4.2

the front office22
The Front Office

The night auditor is a front-of-the-house accounting position.

night auditor the hotel staff member who does the night audit and balances the guests’ accounts each evening

Some properties may employ a guest service agent (GSA).

guest service agent (GSA) a hotel staff member who performs all the functions of a desk clerk/agent, concierge, and valet

Section 4.2

the front office23
The Front Office

Guests can often make reservations directly with a property through a centralized reservation system (CRS).

Section 4.2

the front office24
The Front Office

The housekeeping department directly affects a guest’s perception of cleanliness, safety, and security at a property.

Section 4.2

the front office25
The Front Office

Guest or uniformed services staff members wear the official uniform of the hotel and are the first people whom guests approach upon arrival at the property.

guests or uniformed services staff members in uniforms, including the bell staff, valet, security officers, concierge, and door or garage attendants

Section 4.2

the front office26
The Front Office

The concierge position is found at larger properties, often in city or resort locations.

concierge a hotel staff member who helps guests make arrangements for transportation, restaurant reservations, event reservations, and entertainment tickets, and advises guests about activities in the area

Section 4.2

the front office27
The Front Office

The communications department of a hotel is another revenue center.

In-house communications can include voice mail, fax service, e-mail, message centers, and pagers.

Section 4.2

systemwide departments
Systemwide Departments

Larger hotels maintain centralized systems for groups of units.

Employees are classified as line employees and staff employees.

Line employees are in daily contact with guests.

Staff employees support the front of the house; they do not interact much with guests.

Section 4.2

support staff
Support Staff

Support staff in the back of the house include:

  • Engineers
  • Groundskeepers
  • Attendants
  • Sales and marketing staff
  • Human resources staff

Section 4.2


Support Staff


Oversee the hotel’s physical plant, buildings, and grounds


Maintain and upgrades the exterior of the facility by landscaping the property


Oversee recreational facilities such as pools, tennis courts, and golf courses

Sales andMarketing

Persuades guests to stay at a particular property or chain


Oversees recruiting, selecting, training, and compensating hotel employees

Section 4.2


support staff31
Support Staff

The sales force of a lodging business may include different types of sales personnel:

  • Sales representatives
  • Technical-support staff
  • Sales assistants
  • Telemarketers

Section 4.2


Hotel Staffing


Food & Beverage

Food & Beverage




Room Service


Section 4.2



Hotel Staffing


Front Office

Front Office



Front Desk





FD Manager


Door Attendants

Asst. FD Mgr.


Bell Captain

FD Clerk

Room Attendants


Guest ServiceAgent


PBX Operator

Night Auditor

Section 4.2



Hotel Staffing


Support Staff

Support Staff







Section 4.2


hotels online
Hotels Online books rooms at over 4,500 hotels throughout the world. Similar hotel booking services have made it easier and cheaper for travelers to find accommodations. These Web sites feature photos and descriptions of rooms and amenities. Rating systems help guests know the level of quality they can expect in a particular destination.

Operating an e-tail business on an electronic channel—the Web—can be costly, due to design, delivery, returns, and operating expenses.

Though Many larger dot-com companies crashed in the 1990’s, small stores like Harris Cyclery of West Newton, Massachusetts, actually increase sales using a basic Web site. Today, a third of Harris’s bicycle business rides in on the Web to get hard-to-find parts and personal service.

Describe an e-business’s home page to your class after viewing one through

Online reservation services also save travelers the hassle of calling and booking overseas rooms in different languages and time zones.

For more information, go to

Section 4.2




What are three functions of the front office?

What are examples of three uniformed services positions?

What is the difference between line and staff employees?




Section 4.2

checking concepts




The factors used to categorize lodging facilities are guest type, price, location, and style of service, and function.

Categories used to describe guests by type of stay are business and leisure guests.

Business guests are those traveling for business purposes.

Checking Concepts
  • Name the factors used to classify lodging facilities.
  • List the categories used to describe types of guests by type of stay.
  • Describe a business guest.


checking concepts38




Rates used for yield management are average daily rate (ADR), occupancy percentage (OCC%), and revenue per available room (RevPAR).

Properties identified by style and function are all-suite facilities, extended-stay facilities, bed-and-breakfasts, spas, boutique hotels, vacation properties, and retreat centers.

The positions in the rooms division are front-office jobs at the front desk, in reservations, housekeeping, guest and uniformed services, and communications.

Checking Concepts
  • Identify three rates hotels use for yield management.
  • Identify properties by type of style and function.
  • List three positions in the rooms division.


checking concepts39



Staff in uniformed services includes bell staff, valet staff, concierge, and security staff.

The importance of the sales and marketing staff is that they persuade guests to stay at a particular property or chain. Accept all reasonable answers that demonstrate an understanding of sales and marketing.

Critical Thinking

  • Discuss the importance of the sales and marketing staff in the back-of-the-house lodging operations.
Checking Concepts
  • Name the staff in uniformed services.