Dawn Henlee, manager of the Hotel California, is considering how to restructure the front desk to reach an optimum level of staff efficiency and guest service. At present, the hotel has six clerks on duty, each with a separate waiting line. Observation of arrivals during this time show that an average of 90 guests arrived each hour (although there is no upward limit on the number that could arrive at any given time). It takes an average of 3 minutes for the front-desk clerk to register each guest. Dawn is considering three plans for improving guest service by reducing the length of time guests spend waiting in line. The first proposal would designate one employee as a quick-service clerk for guests registering under corporate accounts, a market segment that fills about 30% of all occupied rooms. Because corporate guests are preregistered, their registration takes just 2 minutes. With these guests separated from the rest of the clientele, the average time for registering a typical guest would climb to 3.4 minutes. Under plan 1, non-corporate guests would choose any of the remaining five lines. The second plan is to implement a single-line system. All guests could form a single waiting line to be served by whichever of six clerks became available. This option would require sufficient lobby space for what could be a substantial queue. The third proposal involves using an automatic teller machine (ATM) for check-ins. This ATM would provide approximately the same service rate as a clerk would. Given that initial use of this technology might be minimal, Dawn estimated that 20% of customers, primarily frequent guests, would be willing to use the machines. (This might be a conservative estimate if the guests perceive direct benefits from using the ATM, as bank customers do. Citibank reports that some 95% of its Manhattan customers use its ATMs.) Dawn would set up a single queue for customers who prefer human check-in clerks. This would be served by the six clerks, although Dawn is hopeful that the machine will allow a reduction to five.
Discussion Questions Determine the average amount guest spends checking in. How would this change under each of the stated options? Which option do you recommend?