Key Performance Indicators In Front Office Operations

Key Performance Indicators in Front Office Operations

Discuss about the Critical and Simplest Measure of Performance.

Front office can be defined as the reception area or the front desk that manages the core operations of any hotel. The front office involves reservations, housekeeping, concierge, sales and marketing and various other departments. The front office is the first place where the customers arrive at the hotel. The front office attends to the customer queries, complaints and confirmations. Moreover, the cashier, mailing service, concierge also form a part of the front office at hotel as they deal with the customers directly. The key performance indicators used in the front office are discussed. Performance goals can be defined as short-term objectives which help the employees in making aware what is expected of them (Abbott and Lewry 1999).

Occupancy is the most critical and simplest measure of performance in hotel which indicates the percentage of rooms available. This indicator is important as it provides proper calculation to confirm booking. If the front office does not provide a correct figure for occupancy, it may lose a customer. Another performance indicator is Average daily rate (ADR) which measures the average price paid for a single room. This performance metric helps in assessing the total guest room revenue for a particular period in comparison with occupied rooms within the same period. The ADR is important for the front office as it helps in measuring the financial performance and compares the hotel performance against the competitors (Baker, Bradley and Huyton 2000).

The third performance indicator is customer satisfaction rate. The front office staffs play a supporting factor to determine the customer satisfaction which helps in analyzing the decision to return, demonstrate loyalty and recommend the hotel to others. The key indicator depends upon the responsiveness and service quality provided by the front office managers for addressing the requirements of customers. Greater the responsiveness and problem-solving capabilities of the front office employees, higher shall be the satisfaction rate (Bardi 2010). With a higher rate of customer satisfaction, the visitors of hotel shall visit again. The fourth performance indicator is strong communication standards and relationships. The front office workers in the hospitality industry directly communicate with the customers. Their professionalism and conduct helps in building a good rapport with the colleagues and guests through strong communication. The front office employees must ensure that the issues listed by the guests are passed on to the relevant department so that the tasks and duties can be accomplished in a timely fashion. Strong customer relationships can be enhanced by going above and beyond every guest. The front office employees escorting guests to their rooms or site such as tours or explaining the facilities help in building strong relationships (Hayes and Miller 2011).

Housekeeping and Role of Revenue Managers

Another performance indicator is possessing adequate knowledge. Every employee in the hospitality industry is expected to know the products, services and packages so that they can address customer grievances. If the customers see that the staffs are knowledgeable and are well acquainted with the overall structure of the hotel, it shall leave a positive impact on them. The ability to multi-task is another key performance indicator. When the front office employees greet and interact with the guests who are checking in and out through emails and phone calls, it has a positive impact on the customers (Robinson et al. 2016).

The room rate of a hotel holds greater significance than the occupancy. If the room rates are higher than the average, it gives an indication about well-run property. Every hotel has a primary objective of 100 percent occupancy so that no room is empty.  Other very important performance goals of a hotel are excellent customer service, high quality product packages. Every hotel aims to provide excellent hospitality services after which the customers shall be surveyed for measuring hotel performance (Walker 2010). The room rate also acts as an element for the customers to compare the performance standards between different hotels for the product package offered at a particular price. Therefore, the customers can measure consistency and satisfaction level. The room rate also gives an idea about the quality of services that shall be offered to the customers for the price paid by them. Occupancy is usually not considered as a performance goal as it may lead to low profits. Greater the occupancy, higher shall be the staffs engrossed in providing services to the customers. However, the rental units have no effect in loss of average rate thereby acting as performance indicator (Madanoglu and Ozdemir 2016).

Conclusively, it is critical for the hotels to find a balance between rate and occupancy. The productivity level may be based on either one or combining both figures. There are hotels that consider occupancy as operational target while there are some hotels which consider rate as the operational target.

Housekeeping can be defined as the management of cores and duties such as cleaning, re-ordering room and various other tasks. A revenue manager focuses on multiple tasks in a hotel such as review of reservations, competitive review, inventory control, reporting and overall business development. The revenue manager uses certain tools for maximizing revenue and occupancy rates (Bragg 2015).

Room Types for Maximizing Revenue and Occupancy

Room types are the different categories of rooms classified on the basis of beds and amenities. The rate differs according to these classifications. The three basic categories of a hotel room are standard room, family room and suite. The standard room has the basic amenities such as telephone, television, coffee maker and others. The offering varies according to different hotel for a two-star to five-star hotel. The family rooms are meant for occupancy of more than one person and a suite is a deluxe room which are best suited for businesspeople. The room type may be used as a revenue manager as a tool for maximizing revenue and occupancy as the categories of room can suit the needs of different people (Sloan, Legrand and Chen 2009). Every individual has different needs, preferences and level of expenditure when it comes to choosing a room. A wide variety of room types can be offered as choices so that the customer can choose a room based on his preference and affordability. The different room types can be used by the revenue manager for addressing the customized needs of the customer which attracts the customers for booking room in a particular room thereby increasing revenue and occupancy (Raghubalan 2007).

Management of inventory is crucial for the hotels as it encourages new and returning visitors to stay in the hotel. Every hotel constantly strives to offer best customer services and experience. There are many fixed assets in the hotel such as laundry machines, carts and vacuum machines that need to be maintained. The revenue managers may use managing inventory as a tool to maximize revenue and occupancy by preventing shrinkage. Stolen, lost or misplaced assets can be recovered if taken by the customers (Lashley 2000). This operation can help the hotel to run efficiently at less cost thereby maximizing revenue. The supplies for bathroom, mini-bars and laundry may be used as tool by revenue manager by ensuring constant supply. The hotel shops such as spa or gift shop adds as additional revenue for the hotels. The inventory level needs to be maintained so that the customers are attracted towards optimum occupancy. Therefore, the revenue manager can maximize occupancy and revenue (Casado 2000).

The room rates directly generate revenue that makes it crucial for the revenue managers to set a price which generates maximum profit in context with the services offered. The revenue managers may use dynamic pricing model in which the prices are adjusted based on the products and services offered. The availability of room and function space increases the presence of value transparency. The room rates help in analyzing the uncertainty and increasing demand thereby enhancing occupancy and revenue (Noone and McGuire 2013). The room rate also acts as an element for the customers to compare the performance standards between different hotels for the product package offered at a particular price (Sloan, Legrand and Chen 2009). The room rate also acts as an element for the customers to compare the performance standards between different hotels for the product package offered at a particular price. Therefore, the customers can measure consistency and satisfaction level (Freedman and Kosova 2012).

Management of Inventory

The strength of the distribution channels help in competing with the competitors for revenue management. The revenue managers use online distribution as the main tool for enhancing occupancy and revenue. The direct booking through online portal is pushed as the stay of customers is confirmed. The online booking helps the customers to book rooms from portable devices such as mobiles or tabs (Sloan, Legrand and Chen 2009). Also, other channels such as booking via email or phone calls shall add to the convenience of customers that are well perceived by the customers. A variety of distribution channels for confirmation and booking of rooms shall help in maximizing revenue and occupancy. If the hotel booking facilities are available on multiple channels, the chance of occupancy and revenue shall be greater than usual (Noone and McGuire 2013).

Conclusively, every hotel must adopt housekeeping strategies through operational perspective. The housekeeping industry must conform to strict cleanliness, scheduling and planning. The hotels may maintain compliance where the employees shall be prevented from purchasing stock from outside vendors. The room type may be used as a revenue manager as a tool for maximizing revenue and occupancy as the categories of room can suit the needs of different people. The inventory level needs to be maintained so that the customers are attracted towards optimum occupancy.

References

Abbott, P. and Lewry, S. (1999). Front Office, 2nd edition, Oxford: Butterworth Heinemann.

Baker, S., Bradley, P. and Huyton, J. (2000). Principles of Front Office Operations. London: Cassell.

Bardi,J. (2010). Hotel Front Office Management, 5th edition, Hoboken: Wiley.

Hayes, D.K. and Miller, A.A. (2011). Revenue management for the Hospitality Industry, Hoboken: John Wiley & Sons.

Madanoglu, M. and Ozdemir, O. (2016). Is more better? The relationship between meeting space capacity and hotel operating performance. Tourism Management, 52(1), pp.74-81.

Robinson, R., Kralj, A., Solnet, D., Goh, E. and Callan, V. (2016). Attitudinal similarities and differences of hotel frontline occupations. International Journal of Contemporary Hospitality Management, 28(5), pp.1051-1072.

Walker, J.R. (2010). Introduction to Hospitality Management. 3^rd edition. Upper Saddle River: Pearson Prentice Hall.

Bragg, S.M. (2015). Hospitality accounting: a financial and managerial accounting reference. Centennial: Accounting Tools Inc.

Casado, M.A. (2000). Housekeeping Management, New York: John Wiley & Sons.

Freedman, M. and Kosova, R. (2012). Agency and Compensation: Evidence from the Hotel Industry. Journal of Law, Economics, and Organization, 30(1), pp.72-103.

Lashley, C. (2000). Hospitality Retail Management, 1st edition, Oxford: Butterworth Heinemann.

Noone, B. and McGuire, K. (2013). Pricing in a social world: The influence of non-price information on hotel choice. Journal of Revenue and Pricing Management, 12(5), pp.385-401.

Raghubalan, G. (2007). Hotel Housekeeping: Operations and Management, New Delhi : Oxford University Press.

Sloan, P., Legrand, W., and Chen, J.S. (2009). Sustainability in the Hospitality Industry. Oxford: Butterworth-Heinemann.