Task:

1st - Differentiate the three types of hotel management in terms of ownership and operations. Explain and discuss it.

2nd - In your opinion, what is the best type of management? Explain and discuss your answer. Make sure to discuss it long.

Lesson about hotel management ownership and operations:

f. Saies and Marketing The main functions of the sales and marketing department involve generating new businesses for the hotel, coordinating advertising, as well as sales promotions and public relations activities aiming at enhancing the hotel's image g. Rooms Division The rooms division comprises departments and personnel essential to providing the services guests expect during a hotel stay. In most hotels, the rooms division generates more revenue than other divisions. Introduction to Rooms Division 'Rooms' as the core products of a hotel business are managed by the department of'rooms division\". However, not all hotels, particularly some small-scaled ones have rooms division due to their limited room numbers and human resources. The organization of the rooms division Ems Division usually comprises two major departments front office and housekeeping. But a typical structure of the rooms division also comprises other sub-units as shown below: Sometimes, the three departments (reservations, telephone, and uniformed service) are grouped under the front office for simplicity reasons. In general, the rooms division comprises two major departments, the front office, and housekeeping, which are involved in the sales or services of rooms to guests. On the other hand, there are some _ . _ reasons why hotels 1103\" 13mm\" I would prefer to I combine the front office and Front Oice Department Housekeeping Department housekeeping departments into one single division. As the front office depends heavily on housekeeping for their cleaning of rooms before they can be sold to the guests, there are always conflicts and pressure among the staff of the two departments. Director of Rooms The position of director of rooms division helps solve this problem as heishe is the only one who manages both departments. The position requires the manager to have solid experience in both front office and housekeeping and has a better understanding of the operations and strategies in handling the conflicts between the two departments. The director of rooms is responsible to the general manager for the effective leadership and smooth operation of all the departments and staff that make up the rooms division. Functions of Major Hotel Departments A hotel's different departments all play a crucial role in ensuring the success of the business. While each department has its functions, they must all work together to provide a positive experience to the hotel guests. Two major hotel departments are engineering, responsible for all hotel mechanical systems and security, and responsible for protecting the safety and security of the hotel, the guests, visitors, and employees. a. Security The security department is responsible for implementing procedures that aim at protecting the safety and security of hotel guests, visitors, hotel employees, and the hotel itself. Examples include monitoring surveillance equipment, patrolling the hotel premises, and maintaining alarm systems. b. Engineering The engineering department is responsible for maintaining the physical plant machinery of the hotel such as electricity, plumbing, air conditioning, heating, and elevator systems. Engineering also oversees all the mechanical and technical conditions of the hotel. 0. Human Resources The human resources (personnel and training) department is responsible for hiring, orientation, training, wages and benefits administration, labor relations, employee relations, and staff development. 0'. Food and Beverage The food and beverage (F&B) department provide food and beverage services to the hotel guests and visitors through a variety of outlets and facilitiesiservices. Examples include a lounge, bar, coffee shop, restaurants, banquet service, room service (also called in-room dining), and cake shop. e. ACCOUHFS The accounts department is headed by the financial controller who, as a key member of the management team, can guide the hotel to increasing profitability through better control and asset management. In addition, this department is responsible for monitoring all of the financial activities of a hotel. Examples include overseeing accounts receivable, accounts payable, payroll, and cost control systems of the hotel; keeping records of assets, liabilities, and financial transactions of the hotel; preparing the monthly profit-and-loss statement, coordinating with purchasing department and information technology department, and handling guests s' inquiries about billing. Organization and Function of Hotel Departments The day-to-day operations of a hotel are the key factors determining the success or failure of its service. It is necessary to understand the structure of hotels to get an overview of how the organization fits together. Regardless of the size of a hotel, the organizational structure will be the same. It is usually divided into several distinct departments, each responsible for a particular area of work. The larger the hotel is and the more facilities that are offered, the more Gewhmsu specialized the departments become. I For example, the front office and Mammamg, housekeeping department are under the control of the director of rooms. Food .5: Szie: 5; 39'.ng Marketing Room; Human | Account Ew| Security [human RE'ZUIJJL'EE One effective way to examine how a hotel can be operated is by studying the organizational structure and the functions performed by the different departments. Hotel executives should have knowledge and experience in developing and managing hotels throughout the hospitality industry. The Duties of Key Executives 1. The head executive in a hotel would be the General Manager (GM). The main responsibilities of the general manager would include the following: 0 Providing leadership to the management team. 0 Coordinating the work of all departments. 0 Participating in the formulation of hotel policies and strategies. 0 Leading hotel staff in a meeting, financial, environmental, and community responsibilities. 0 Assuming full responsibilities for the overall performance of the hotel. 2. Another key hotel executive is the Resident Manager. He is on call any time of day or night and their purpose is to assist the General Manager with the smooth and profitable running of the hotel. Resident Managers sometimes live on-site. The main responsibilities of the resident manager include the following: 0 Responsibility for developing and executing plans developed by the owner, general manager, and other members of the management team. 0 Checking on operations, providing feedback, and offering assistance when needed. Completing, reviewing, and summarizing statistical reports and sharing them with the general manager. 0 Assuming responsibilities for the daily operations and management of the hotel. required. As the property has already been physically developed, the owner may want assistance only with marketing, advertising, management, or reservation referrals. In addition, guests may find more variation among the referral properties as size and appearance standards are less stringent than those in a franchise agreement. However, every hotel is assessed and checked regularly to ensure that it maintains the highest standards. Classifications of Hotel Departments Instead of segmenting a hotel structure into departments according to their functions, some hotels would also group their departments or units into different categories: These types of classification are known as: 0 Revenue centered and cost centered Departments o Front-ofthe-house and Back-ofthe-house Departments. 1. Revenue Centered and Cost Centered Departments Revenue centers refer to those departments or units which generate direct income for the hotel through the provision of goods and services to guests, e.g. front desk, restaurants, room service, gift shop, and business center. Cost centers, which are also interpreted as support centers, mainly assist the functioning of revenue centers with no generations of any direct income for the hotel, e.g. human resources, purchasing, accounting, and engineering departments. This classification is particularly useful for the accounts department when summarizing the performances of different units under these two main categories. 2. Front-of-the-house and Back-of-the-house Departments Front-of-the-house refers to those departments or areas which are accessible and visible by guests, e.g. front desk counters, restaurants, concierge, and bell services. They are the points of service encounters where service staff usually have direct contact and interaction with guests. Back-of-the-house refers to those departments or areas which rarely have staff-to-guest interactions, e.g. kitchen, human resources, and engineering departments. It should be emphasized that some back-of-house positions would have limited interaction with guests, e.g. housekeeping. Below is a summary of the advantages and disadvantages of franchising for both franchisees and franchisors. Franchisees ADVANTAGES OF FRANCHISING Obtain from the franchisor the expertise in doing business such as site selection, planning, pre-Opening training, Operations manuals, information management, central reservation system, field support, quality control, purchasing, advertising, marketing, new products, and concepts; Acquire a brand name with regional or national recognition; The franchisee has complete control and responsibility for the daily Operation of the property. DISADVANTAGES OF FRANCHISING Need to follow the standard set by franchisors without any tolerance of modifications in Operations; Need tO pay for a joining fee and an ongoing fee which means sacrificing some of the revenues; Risks of termination of contracts or no continuation Of the contract if the franchisor wants to take the rights Of operation back. Franchisors Receive a joining fee and an ongoing fee from the franchisee; Expend the business and market share more rapidly without heavy investment; Lower the risk Of business loss by using franchisees\" investment tO expand the chains in new locations and markets Franchisees may fail to follow the standard set by the franchisors and so may affect the quality Of services provided to customers; The trade name can be spoiled by misfits Of franchisees; The franchisor has tO disclose confidential information to franchisees and this may constitute a risk tO the business. 4. Referrals Referral associations, e.g. Leading Hotels Of the World (LHW), Offer hotels similar benefits as franchising, but at a lower cost. Some hotels choose tO become referral properties. This means that the prOperty is being Operated as an independent hotel in association with a certain chain. These hotels refer guests to one another's properties and share a centralized reservation system, a common lOgO, image, or advertising slogan. Hotels pay an initial fee tO join a referral association and further fees are based on services Below is a summary of the advantages and disadvantages of a management contract for both hotel owners and management enterprises. Hotel owners Advantages of management contract Acquisition Of Operational expertise which can reduce the chance of business failure and enhance the quality Of the services; Gain national or international recognition for the hotel if it is Operated by a reputable management enterprise; The owners are not required to be involved in the hotel's Operations. Disadvantages of management contract Loss Of Operational control; Financially liable for all costs, expenses; and losses Of the hotel; The management enterprise may have less incentive and morale in managing the hotel if only a fixed management fee is paid without any sharing of profits. Management enterprises Receive a management fee during the contract period regardless of the hotel performance; Little or no up-front financing or equity involved; Management contract period can last for five, ten, or twenty years. Over-dependence on the owner for providing necessary funds for Operations; l'v'linimum input in ownership decisions, such as the transfer of hotel ownership from the owner to another buyer; No extra rewards for good business performance if the management contract is run in a fee structure without any incentive schemes. Advantages and Disadvantages of Management Contract to Owners and Management Enterprises 3. Franchising Some investors prefer to use the franchising concept in running the hotel. Franchising in the hospitality industry is a concept that: o Allows interested investors to use an enterprise's (the franchisor) name and business format; o Is made up of properties where the franchisees agree to run the hotel following the strict guidelines set by the franchisor; and o Allows an enterprise to expand more rapidly by using others\" capital. CHAPTER 2 INTRODUCTION TO HOTEL OPERATIONS Learning Outcome At the end of this chapter, students will be able to Describe the modes of hotel management. Explain the classification of hotel departments. Define the organizational structure of hotels. Identify the function of hotel departments. Identify the key functions of the Rooms Division department if '12\" \\E' if \\f The Hotel Industry The role of the hotel industry stems from a long history and development in the field of hospitality provision. In many countries hotels have evolved as extensions of domestic hospitality; though typically they are more often larger establishments (particularly in developed countries) Hotel Ownership Another way to classify hotels is by their ownership, which can be: a. Private An independent hotel owned by a persontpartnershipfprivate enterprise, e.g. Shamrock Hotel. b. Locat Group Several hotels owned by a local enterprise, e.g. Harbour Grand Hong Kong, The Kowloon Hotel, Harbour Plaza Hong Kong, Harbour Plaza Metropolis, Harbour Plaza North Point, and Harbour Plaza Resort City are all owned by Harbour Plaza Hotels 8. Resorts. c. International Group A hotel that is part of an international chain of hotels, e.g. JW Marriott Hotel Hong Kong is part of Marriott International, Inc. Modes of Hotel Management Hotels can be operated in one of the following ways: 1. Independently Owned and Operated These can be independent hotels, with no affiliation, that is being managed by the owners of the properties. 2. Management Contract Management contracts are hotel management enterprises that operate properties owned by other entities. In some cases, the hotel owners may arrange to run their prOperties through a management contract with an enterprise that specializes in managing hotels. The reason for this is that the owner may not: 0 Have the necessary expertise; or o Desire to become involved in the Operation of the hotel