The Paradise Hotel is an independent, medium-sized hotel catering to the middle-class market.Because the hotel lacks the prestigious image of a national chain hotel, it is necessary to depend on satisfied customers to return on their future trips and to tell their friends about the hotel.Mr. Williams, the general manager- of the hotel, claims that Paradise Hotel has a consistent above-average occupancy rate compared with other independent hotels.This is primarily because all employees are trained to provide good service and the management spends so much effort in follow-up work such as sending thank-you letters and promotional materials to previous guests.

Being confident of the capability of a very experienced front-desk staff, the general manager has become increasingly concerned over the front-desk staff's complaints regarding the difficulty in organizing their work.There are two front-desk clerks in the day shift, two clerks in the swing shift, and one clerk in the "graveyard" shift.The responsibilities of front-desk clerks include reservations, check-in and checkout procedures, cashiering, switchboard operation, providing information for hotel guests, safekeeping keys and valuables for hotel guests, and various other chores when guests seek service or help from the front desk.

Front1111 Desk Operational Problems

Several problems plagued the front-desk operations.One such problem involved the housekeeping operations.At the close of each shift, the housekeeping department would send a list of checked-out rooms that were cleaned by the maids.The clerk responsible would then update the room inventory sheet so that the next shift would start with complete inventory information.However, the front-desk clerks had no idea what rooms were cleaned during the shift.

A second problem concerned the restaurant, gift shop, and laundry department.The supervisors of these operations would forward signed guest bills to the front office twice during a shift listing the different charges to the hotel guests.There were cases when a guest checked out before the front-desk clerk received the billing information that would list the charges for services.In such cases, the hotel would have to send a bill to the guest's residence.It turned out that few people who received such bills bothered to send any payment or response.The uncollected sales plus extra clerical and mailing costs involved in the collection process amounted to an average of $64,000 per year, or approximately 1.5% of total hotel revenues.

In view of these problems, Mr. Williams ordered a change in operations 2 months ago.These changes required the maids to call the front office every half hour to inform the front office of rooms cleaned, and required the different departments (such as food service) to call the front office as soon as a charge to a hotel guest was made.Since the change, the front-desk staff has been complaining that they are kept so busy manually posting the room inventory sheet and the hotel guests accounts that they cannot perform their other tasks.

Paradise Hotel has recently automated its accounting operations by installing an IBM computer system.The new accounting system works extremely satisfactorily in preparing the hotel payroll and in preparing the hotel's financial statements.Mr. Williams suspects that the front-office operations could also be improved through computerization.He contacted Mr. Parks, the systems analyst who had designed the computerized accounting system for Paradise Hotel, and Mr. Parks agreed to do a systems study of the front-office operations.

Mr. Parks spent 2 weeks observing the front-desk clerks performing their tasks.He noted that as a customer comes in and asks for a room with certain facilities, the front-desk clerk checks the room inventory sheet to see whether such a room is available.If it is not, the clerk suggests an alternate room listed on the room inventory sheet as available. If the alternate room is satisfactory, the customer completes a registration card that requires information on name, address, number of persons in the room, hotel room number, room rate, check-in date, and check-out date. (See Exhibit l.)

The customer is given the room key and the check-in procedure is completed.The front-desk clerk then prepares a guest ledger card for the customer who has just checked in.The purpose of the guest ledger card is to record all the charge transactions pertaining to the guest's account.Every time a front-desk clerk receives a call from a revenue producing department informing him or her of a charge incurred by a guest, the clerk takes the guest's ledger card out from the card file and records the amount on the ledger card. (See Exhibit 2).

Charges are also entered in the cash register in the front office. The tape from the cash register is transferred to the accounting department at the end of a day for auditing and account posting.Because a guest may decide to leave at any moment, the hotel guests' accounts must be complete, accurate, and up-to-the-minute.The front-desk clerk is also responsible for entering on the Front Desk Cash Sheet all transactions that occurred. (See Exhibit 3). At the end of their shift, the clerks rule off their sections of the cash sheet, summarize their own transactions, and count their cash on hand.When a guest checks out, the front-desk clerk totals the amount on the guest ledger card and collects the balance due from the guest.The check-out date is entered on the guest registration card, which is then transferred from the active file in the front office to the history file in the sales department.

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The Recommended System

After his 2-week study, Mr. Parks concluded that efficient information flow and efficient transaction recording procedures were the most important requirements of a good front-office system.He recommended that the hotel install a terminal at the front desk and a computerized data-processing system to handle the paperwork.This system is described below.

After a guest fills out the registration card, the clerk inputs the data through a terminal, thereby establishing a new computer record.All records are arranged and stored according to room numbers.No ledger cards are prepared because all business transactions between the guest and the hotel are keyed in through computer terminals located at the hotel's restaurant, gift shop, and laundry.At the end of a shift, the computer calculates the total amount of cash receipts and disbursements and the cash balance so that the clerks can reconcile their on-hand cash to the computer records.At the end of the day, the computer calculates the total sales, total accounts receivable, total cash receipts, and total cash disbursements. The computer, automatically updates the various hotel guest accounts within the accounting information system as each transaction occurs.When a guest checks out, the computer calculates the total balance due from the guest after the clerk has keyed in the room number and depressed the "Total" key on the terminal.When a clerk depresses a 'Paid in-Full,' key, the computer prints out a receipt for the guest and the record is removed from the file.The registration card is then transferred to the history file in the sales department.

The computer also stores all room inventory information, which is available to the front-desk clerk through the terminal.When a clerk receives information from the housekeeping department on the rooms cleaned, he or she inputs the information through the front-desk terminal instead of the room inventory sheet.

Mr. Parks estimates that the system will cost $22,000 to install, including training costs.Maintenance will be under $5,000 per year.The system is expected to be adequate for the present volume of business at Paradise Hotel, and for all foreseeable future volumes of business.

a) Draw an Entity Relationship Diagram for Paradise Hotel, including cardinalities.