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Chapter 10, Hotel and Lodging Operations

The organizational structure of large and small hotels differs based on size. Large hotels have distinct departments for functions like food and beverage, while small hotels have a simpler structure. Yield management is a strategy used by hotels to optimize occupancy rates and average daily room rates. It involves adjusting room prices based on demand forecasts. While it aims to maximize profits, yield management can upset guests if not implemented carefully through well-trained employees. It analyzes past sales data to set room rates higher when demand is high and offer discounts when demand is low.

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Tin Kyi Min
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100 views2 pages

Chapter 10, Hotel and Lodging Operations

The organizational structure of large and small hotels differs based on size. Large hotels have distinct departments for functions like food and beverage, while small hotels have a simpler structure. Yield management is a strategy used by hotels to optimize occupancy rates and average daily room rates. It involves adjusting room prices based on demand forecasts. While it aims to maximize profits, yield management can upset guests if not implemented carefully through well-trained employees. It analyzes past sales data to set room rates higher when demand is high and offer discounts when demand is low.

Uploaded by

Tin Kyi Min
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter 10 – Hotel and Lodging Operations

Question 1: How does the organizationl structure differ in large hotels and small ones?

Answer:
The following figure shows the basic functional areas of a typical large hotel. This figure includes elements not found in some
operations, as some hotels lack food and beverage departments and many do not have a gift shop or garage.

Hotel performed essentially the same functions, no matter their size. However, size does influence how certain functions are
carried out. The below figure is functional operational chart for a small hotel.
Question 5: What is the purpose of yield management? What problems does it pose?

Answer:

Traditionally, the hotel industry has looked at occupancy as a measure of success. Another indicator of operational success
that we have always consulted is the average rate per rented room (the average daily rate, or ADR).

Yield management puts these two together and, using forecasting based on the history of past sales, sets out to get the
best combination of occupancy and ADR. Yield management, then, involves varying room rates according to the demand
for rooms in any given time period. The argument is that when the hotel is going to be full, it makes no sense to sell any
rooms at special discount rates. On a night when the hotel is definitely on going to fill, however, selling a room at a
discounted price is better than not selling it at all.

Going beyond maximizing rates, hotels are using yield management to take more multiple-night (instead of single-night)
reservations during busy periods on the theory that a multiple-night reservation offers less risk of having a vacant room
following checkout and thus is worth more to the hotel. A potential guest, therefore, inquiring about room availability for a
large event such as the Super Bowl may find that the hotel requires a minimum stay of two to three nights for this high-
demand weekend. As with so much in hotel operations, careful employee training is essential to secure an effective yield
management system that is operated in a way that will generate maximum revenue but not offend guests.

Yield management has been used in a number of other industries, most widely in the airline industry. It can be used by any
industry that experience fluctuating demand, which includes most segments of the hospitality industry. The extraordinary
growth of individuals using the Internet in booking hotel reservations and other travel arrangements, such as airline
reservations, has had a tremendous impact on the marketing and pricing of hotel rooms in all price and size ranges of
properties.

Student Name : Ms Tin Kyi Min


School : MBA Batch 2, Star Academy
University : Lincoln University Collage

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