Chapter 3 Hotel Structures Learning Objectives Understand the

Chapter 3 Hotel Structures

Learning Objectives § Understand the various decisions facing a reservations manager with regard to forecasting the number of rooms available for sale. § Understand discuss the overbooking dilemma. § Define and utilize basic vocabulary terms and industry jargon specific to forecasting availability and overbooking reservations. § The ability to develop a practical working model of both a simple, unadjusted room count and an adjusted room count. § Understand deterrents for cancellations and early departures.

Forecasting Available Rooms (1 of 8) Automated Inventory Tracking Systems ◦ Computer updates reservations in real time ◦ Shows projections a week at a time ◦ Shows today's arrivals by name, room type, group affiliation, other codes ◦ Shows reservations by quality ◦ Shows room availability by room type and status

Automated Inventory Tracking Systems Example of A One-Day Rooms Inventory

Forecasting Available Rooms (2 of 8) Room counts are done for each day in advance. ◦ Less accurate as we look further ahead ◦ Tables next slides ◦ Done many times a day for today. ◦ 6 AM, 11 AM, before and after 4/6 PM

Forecasting Available Rooms (3 of 8)

Forecasting Available Rooms (4 of 8) Committed Rooms = (Yesterdays stayovers + today's reserved arrivals) ◦ Out of Order (OOO) Rooms = Rooms temporarily unavailable due to fixable problems ◦ Can be fixed quickly if absolutely essential ◦ Can be sold at a discount un-fixed, with disclosure ◦ Out of Inventory (OOI) Rooms = Rooms unavailable long-term due to non-fixable problems ◦ Cannot be sold today due to unacceptable condition ◦ Exhibit 4 -5 for inventory calculation issues

Forecasting Available Rooms (5 a of 8)

Forecasting Available Rooms (5 b of 8)

Forecasting Available Rooms (6 of 8) ◦ ◦ Stayover - Continuing guest, as per booking ◦ ◦ ◦ Cancellations - provides the opportunity to resell Understay – Guest who leave earlier than expected Overstay - Guest who stays longer than booked No show - Guest with confirmed/guaranteed booking who does not arrive, but has not cancelled Early Arrivals - Guest who arrive day/s before booking Adjusting Toda’s Reservations The Adjusted Result Periodic Recounts Adjusting by Reservation Quality

Forecasting Available Rooms (7 of 8) – Simple & Unadjusted Room Count

Forecasting Available Rooms (8 of 8) – Adjusted Room Count

Overbooking (1 of 8) Overbooking - More bookings than rooms! ◦ Done deliberately for number of reasons ◦ Some guests will be no-shows ◦ Last minute change of plans ◦ Some guests deliberately make multiple bookings ◦ Some guests will be early departures ◦ Some guests will be last minute cancellations ◦ Too late to fill these last-minute empty rooms ◦ So hotels overbook to protect itself from revenue loss ◦ Done with historical statistics as guide ◦ The Perfect Fill?

Overbooking (2 of 8)

Overbooking (3 of 8) Reservations as legal contracts. ◦ Courts say that reservations are legal contracts. ◦ However, not worthwhile for individuals to sue. ◦ Meeting planners have sued and won! ◦ Threat of Legislation. ◦ State Legislation ◦ Whose Fault?

Overbooking (4 of 8) Overbooking Policies ◦ Hotel overbooking solutions. ◦ Check nearby hotels for room availability. ◦ “Walk” overbooked guest to another property. ◦ Chains do it within chain ◦ Watch for unethical FO Clerks who do it for money! ◦ Pay for taxi, phone call, comparable room. ◦ Air-taxi in the Bahamas! ◦ Apologize with gift, etc.

Overbooking (5 of 8)

Overbooking (6 of 8) ◦ Overbooking and antiservice syndrome ◦ Industry should police itself, or congress will pass laws! ◦ Airlines are regulated by law - ask for volunteers and give them money and free tickets ◦ Problem is due to few hotels with poor service ◦ No-Show Policies ◦ Cancellation Policies

Overbooking (7 of 8) – Sample Cancellation Policy of OTAs

Overbooking (8 of 8) Minimizing the Overbooking Problem. ◦ Increasingly Restrictive Policies. ◦ Early Departure Fees ◦ Third Party Guarantees. ◦ Trip Insurance ◦ Credit Card Disputes ◦ Travel Agent Guarantees ◦ Advance Deposit Reservations.