Front Office Management and Revenue Management Future

When someone says hotel, the first thing that comes to my mind is Front Desk and Front Office staff. It is so essential to the hotel industry. Even in the age of technology like mobile applications, mobile check-in / -out, etc., they are still the core of a hotel.

Why so? Some people may not even realize but they have far more important role than just giving out keys to their respective rooms. There are tons of things they need to take care of, and their knowledge about the hotel must be perfect. Why so again?

Every time guest has a request, the first person he or she is likely to direct it on is Front Office staff, contacting them either by phone or in person. It does not matter if the request is for Food & Beverage, Event or Housekeeping department. Every time it is first processed by Front Office staff, and then being handed over to the specific department.

Sounds like a lot of work, does not it? There is even more. They also take care of guest’s complaints, usually with Front Office Manager involved, they also need to keep an eye on the occupancy, hotel’s schedule in case there is an event, they need to know how to set prices for those who just walk in without reservation, and several other actions depending on the stage of guest’s stay. [1]

And there is still more. Not only that guests rely on Front Office without questions, the same goes for the other departments of the hotel. The Front Office Manager (FOM) need to have a great overview of what is happening in the hotel, and therefore there is a system called Property Management System (PMS).

The PMS provides the management with in-depth information regarding the hotel performance like revenue, RevPar, ADR or hotel occupancy ratio. Therefore, reporting plays very important role in the daily hotel operations. And guess what – these reports are mainly coming from Front Office Department. They are the one who needs to record everything in order for a report to be created. In addition, it is not only management who is relying on those reports, but also different departments are taking it into account.

As an example, let us talk about revenue management / Yield Management, a powerful tool used in every hotel, which has its roots in Airline industry. It helps to predict what trend are going to be, and based on such information, the prices of rooms are adjusted to maximize revenue growth.

Revenue Management means not selling a room today at a low price to sell it tomorrow at a higher price. [1]

Selling the Right Room to the Right Client at the Right Moment at the Right Price on the Right Distribution Channel with the best commission efficiency.

Landman, 2011 [2]

However, due to the rise of the internet during last years, especially due to the rise in popularity of sites like booking.com, hotel.com, etc., the revenue management has become far more complex than ever.

principles-of-revenue-management-6-638.jpg

In the old times, Marriott International was one of the first major players that applied Revenue management into practice. Ever since then it has become a standard for every hotel.

A hotel can choose to either to buy a license for already developed Revenue Management System or to build their own system fitting all the requirements the hotel may have. Either way, though you need to implement the hotel’s strategy into the system, and make sure system has enough data to work with. But as had been said, today’s market has changed a lot due to the internet, social media and technological development.

As such, there is an interesting study dealing with nowadays issues, or at least describing them – SAS’s “Hotel Pricing in a Social World“. Overall, it only confirmed how reviews on sites like TripAdvisor are key factors deciding whether or not to book a room there.

Thus, it seems that online reputation may, from my point of view, even be a part of Revenue management worth of new era. Together with pricing, it might be the key to success.

RevenueManagement_1.png


List of other sources:

http://ihmbbs.org/upload/Front%20Office%20Operation(2).pdf

http://setupmyhotel.com/formats/reports-used-in-hotels.html

https://www.google.dk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjtnLjih8rSAhUDP5oKHXWIDjMQFggcMAA&url=http%3A%2F%2Ffiles.gu.edu.ge%3A8008%2FBook%2Feleqtronuli%2520wignebi%2Fturizmis_%2520maspindzlobis%2520da%2520sastumros%2520%2520menejmenti%2520_%2520marketingi_%2520agricxva%2520da%2520ekonomika%2FHotel_Front_Office_Management.pdf&usg=AFQjCNFcsi0djODq3FazmMHJLPK-A05A5A&sig2=BtdkXJYq8JJEdJff3VaXXg&bvm=bv.149093890,d.bGs

http://www.csshotelsystems.com/FrontOffice/PMS_Daily_Report.aspx

https://www.xotels.com/images/Revenue-Management-Manual-Xotels.pdf

https://image.slidesharecdn.com/webinar-getting-started-with-hotel-revenue-management-150319002638-conversion-gate01/95/getting-started-with-hotel-revenue-management-16-638.jpg?cb=1426724868

http://www.customer-alliance.com/en/whitepapers/hotel-revenue-management/

http://blogs.sas.com/content/sascom/2014/09/02/businesstravelersocialworld/
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