Importance of reservation department

For the guests:

1. Ensures room on arrival – A guest who makes a prior reservation is ensured of the
required type of room, no of rooms for his entire stay in the city. This saves him from the
difficulty of finding accommodation on arrival especially during peak seasons when most
of the hotels are full.

2. Budgeting – As he is informed of the tariff at the time of reservation, he is able to

budget his holiday or tour, taking in account the amount he spends on his stay, food,
entertainment etc.

3. Plan Holiday or Rooms – He is able to plan his holiday or tour without worrying
about the basic needs of accommodation and food. Any business trip, sightseeing tour or
excursions may be planned separately after fixing the accommodation.

4. Other facilities – The guest is ensured of certain facilities offered by the hotel which
can be confirmed by making the reservation e.g. sightseeing tours, a business centre
offering secretarial services, entertainment etc. He is also able to give the hotel address to
his associates for any meetings, correspondence transfers to and from the hotel.

For the hotel:

1. Forecasting - Prior reservation gives the hotel an indication of the level of business
likely to be encountered during any particular period. The reservations manager knows
the amount of business ensured during that period from the confirmed reservations. It
enables him to forecast future revenue generation and take necessary action to improve
the amount of revenue expected.

2. Rate Floating - The reservation department make sure that the hotel's rates are
available on online and offline channels without any rate parity.

3. Availability - The reservation department is also responsible to maintain the hotels

available on all online and offline channels.

4. Guest satisfaction - The hotel is able to plan its activities and be prepared to receive an
expected guest. They are able to provide the necessary services and facilities like security,
transfers, preference of rooms to known guests, providing complimentary and any particular
service asked by the guest at the time of making the reservation.

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5. Planning - The front office manager is able to make the necessary decision regarding
the no of walk-instant that can be accommodated on a particular day. Rooms requiring be
repairing or taking off for redecoration can be blocked during the slack period as shown
by the reservations. The no of rooms to be blocked for such purposes will also be
determined according to the expected guest arrivals.

6. Scheduling of staff - Hotel staff may be scheduled more accurately

to void understaffing or overstaffing problems.

MODES OF RESERVATION

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 Modes of Reservation in Hotel

The mode of reservations tells the hotel management how the reservation has reached the
hotel. For example, a reservation request may reach the hotel through traditional methods like
a written mode such as letter, fax, telex or e-mail or through a verbal mode like telephone or
in-person etc. In this modern era, the majority of the reservation is via online modes like
website, OTA (over the air), mobile apps, social media etc.

1. Written Mode:

Letter - This mode is commonly used by travel agents, tour operators, companies and
corporate houses that send in their reservation request to the hotel on their company
letterheads. The hotel will make the reservation as per the details are given in the letter.

Fax - Fax or facsimile transmission uses electronic scanning technique to send copies of
a document over an ordinary telephone line over a special machine that prints identical
copies of the document. This makes it possible to send a reservation request
instantaneously. Hotels process the request as per details and send the confirmation letter
to the guest.

Telex - or Tele Printer Exchange involves the use of specialized telephone lines, where
the message is communicated in a written form.

E-mail - The most common method of communication E-mail is an electronic mail that
makes it possible to contact the hotel instantaneously. The hotel will process the
reservation request on the basis of the details given. This mode of reservation is fast and
very convenient.

2. Verbal Mode:

Reservation requests may also reach the hotel through verbal mode or oral
communication i.e. in person or over the telephone. The advantage of oral
communication is that it generates immediate response and feedback and is very fast and
convenient. Additionally, the guest can get complete information and clear any doubts
through oral communication.

The disadvantage of the Verbal mode is that it does not provide a permanent record or
correspondence of the agreed booking terms and conditions.

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In-Person- If an individual or a representative goes to the hotel to book rooms for future
it is termed as an In-Person reservation. When an individual comes to the hotel and
requests a room for the day it is termed as a Walk-In Reservation. The hotel processes the
rooms according to the details given by the guest and issues a confirmation number and a
letter if the reservation is made for future and assigns a room if the guest requests for one
for the same day.

Telephone- The most common method of direct reservation communications, a

prospective guest may telephone the hotel directly. The reservation assistant takes the
information sequentially as per the script. Most of the hotels these days have high-end
systems that record a call which can be used later on for training purpose.

3. Online Mode:

The online mode is the preferred mode of booking in this era of internet, web and mobile.
The main advantage of the online mode is that the hotels are always available for
reservations and generate an instant confirmation voucher as per the real-time
availability.

Other advantages with the online mode are that the hotel can also ask the guests to make
a prepayment for the reservations well in advance and reduce the chance of no-shows.

Web: Guest making a booking via a web browser like hotels website or booking engine,
different online travel agent - OTA's, review sites like Trip Advisor etc.

Mobile App: Bookings delivered via hotels own or third-party mobile apps.

Social Media: Bookings made via different social media like facebook, twitter,
Instagram etc.

TYPES OF RESERVATION
A) Guaranteed Reservation:

In the guaranteed reservation, the hotel assumes that guest that the required rooms shall
be blocked after confirmation. Under this the hotel agrees a hotel rooms until a specific
time of reservation following variation in the advance payment for guaranteed reservation
are:

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i) Advance deposit: An advance deposit guaranteed reservation requires that the guest
pay the hotel the anticipated amount of money before arrival.

ii) Pre-payment: This requires full payment prior to the guest arrival. This is normally
the most desirable form of a guaranteed reservation.

iii) Credit card: Guaranteeing reservations through credit card are most popular method
of payment in the business hotel. Depending upon the financial status and money in bank,
the credit card is issued to the buyers/clients.

iv) Travel agents: Guest pays the travel agent in advance for their tour packages and the
travel agent guarantees the clients reservation. In case of no show the hotel generally bills
the travel agency for payment and according to agreement.

v) Corporate guarantee: This is a contractual agreement between Corporation Company

and hotel which state that the corporation will accept financial responsibility for any no-
show guest.

B) Non-Guaranteed Reservation:

It is a provisional reservation. In this reservation, neither there is any legal process of

confirming the room nor is any payment for the advanced deposit made. Non-guaranteed
is a provisional reservation in which room revenue is not secured.

Group Reservations:
Group reservations might involve a variety of contacts: guests, meeting planners,
convention and visitors bureaus, tour operators, and travel agents. Moreover, they
typically involve intermediary agents and require special handling. Therefore, conducting
a reservation request for a group shall be treated differently than accommodating a
reservation of individual guests (i.e. Frequent Independent Traveler). The main reason is
that individual reservation requests are treated by the reservation department, while group
reservations are initiated by the sales & marketing division, and finalized through a
careful coordination of the reservation from one hand and the marketing from the other.
Here are some other differences between handling individual and group reservations:

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 Individual Reservation (FIT) Group Reservation

-Reservation department. - Sales department.

- Usually one person calls to reserve - Usually one person reserves for the whole
for himself / herself. members of the group (Group representative, group
leader, member of the travel agency/tour
operator…).

- One Reservation record for each - One Reservation records for the whole group.
potential guest.

- One guest folio for each potential - One master folio for the whole group opened as
guest opened as part of the pre- part of the pre-registration process.
registration process.

- Higher price assigned for room. - Lower price assigned for room.

- Upon matching room inquiry with -Upon signature of allotment contract, first block
room availability, reservation agent rooms needed. Later, upon receipt of final list by
reserves a room. cut-off date, deblock the block, reserve for those
rooms conveyed in the list and release the
remaining for sale.

- Reservations can be either - Reservations are usually on a Guaranteed basis.

guaranteed or non-guaranteed.

In order to clarify better, below is a detailed procedure of how group reservation, in a

typical hotel, is conducted:

 A group representative, a member of the travel agency or the tour operator, not
individuals, shall communicate group reservations' request to the hotel's marketing
department.

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 Upon availability, the hotel's reservation department shall block the requested number
of rooms for this very group.
 The Hotel shall give a deadline for the group, in order to receive their final list.
 That deadline is called cut-off Date.
 After receiving the final list, the reservation department shall change the desired
number of rooms' status from blocked to booked (or reserved) rooms, and release the
remaining rooms (if any left) as vacant.
 If the hotel did not receive the final list by the cut-off date, then the reservation
department has the right to cancel the group reservation and release all the initially
booked rooms into vacant rooms. However, management shall use this right with
extreme precautions especially when it comes to groups reserving from travel
agencies and tour operators of which the hotel is frequently operating.

RESERVATION CONFIRMATION:

Reservation confirmation is an acknowledgement given by the hotel to the guest for their

room request and also the personal details given at the time of booking.
A written confirmation states the intent of both parties and confirms important points of
agreement like name, arrival departure date, number of guest staying, room rate, type of
room booked, number of rooms, pick up details, details of deposit made, package details
etc. A confirmed reservation may be either guaranteed or non-guaranteed.
Details on the confirmation letter are retrieved from the reservation record and manually
updated or entered automatically with the help of PMS used by the hotel on to a specially
designed reservation confirmation form.
Confirmation letter may also include the cancellation and no-show polices of the hotel.
And also about the retention charges, hotel standard check-in and check-out time, early
morning / early arrival charges and also about late departure charges.

AMENDING OR MODIFYING RESERVATIONS:

 When guest / bookers call the hotel for amending existing reservation take down
the original booking details on reservation form. ( Guest Last name, Reservation
no, Mobile etc.)
 Try to address the guest by name as and when possible.
 Take permission from the guest to keep the call on hold.
 Locate the original reservation record from the Property Management software.

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  Reconfirm the booking details e.g.: guest name, arrival departure date, reservation
number etc. with the guest again to make sure that you have retrieve the correct
reservation record.
 Enquire with the booker / guest on what amended to be made on the reservation.
E.g. guest might like to extend the number of days of stay or want to shift his stay
to another period.
 Check the availability of both hotel and room type in the hotel software before
confirming the amendment to the guest.
 If the guest had booked the original reservation on a Best available rate or
special packages, reservation agent should check the availability of these special
rate and packages on this new date as well.
 Any changes on rate or packages should be communicated to the guest.
 If the guest is shifting the arrival date to a different date then take down the new
pickup / flight details. In case the guest requires a pick up form the hotel.
 All details have to be reconfirmed to the Guest.
 Make the required amendments on the reservation record in system.
 Valid payment method has to be taken for the new stay details.
 Apply the Rate changes if any due to the amendment.
 Generate a new confirmation letter to the guest which clearly shows the amended
booking details.
 Send the amended reservation confirmation letter to the guest email / fax.
 Wish the guest a nice day ahead.

RESERVATION CANCELLATION:

A guest actually does a service to the hotel when they take time to cancel a reservation
instead of not informing and then the reservation becomes a no-show.
A reservation cancellation informs the hotel that a previously reserved room is once again
available, and helps the front desk more effectively manage its room inventory.
Hotels should make processing cancellation easy and efficient. Reservation Cancellation,
like any guest service, requires the hotel staff to be polite, courteous and effective as
possible.
Following points to be taken with care while cancelling a non-
guaranteed reservation:
 Obtain the guest's name and address

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  Number of reserved rooms
 Arrival and departure date
 and the reservation confirmation number if available
 Name  and contact number of the Person calling for cancelling the booking
 Reason of cancellation
These information will ensure that the correct reservation record is accessed by the
reservation agent and then cancelled. After recording the cancellation, if available the
agent can give the cancellation number to the guest / caller who had cancelled the
booking. 
Reservation agent must ensure that the correct reservation has been cancelled and also
may ask the guest whether they would like to make a alternate reservation for any other
dates.
Cancelling a Guaranteed or Credit Card Guaranteed reservations:
 While cancelling a Guaranteed reservation, along with the points mentioned above
the reservation agent should also take care of the following points:-
 Communicate to the caller that according to the hotel cancellation policy their
credit card would be charged along with the total amount which is going to be
charged.
 After processing the cancellation the reservation agent should give the cancellation
number to the guest, this would be retained by the guest as proof of cancellation in
the event of erroneous credit card billing.
 Make the reservation record as cancelled, properly initiated and documented and
add the cancellation number to the reservation record.
 Most credit card companies support no-show billing only if the hotel issues a
cancellation number.
 If a non-automated property then update the room availability, returning the
reserved room back to availability status.
File cancelled reservation documentation for future references as per the hotel policy. In a
non- automated hotel the reservation record is kept until the expected date of arrival just
in case the reservation was cancelled by mistake.

Advance Deposit Policy: Polices related to cancellation of reservations with advance

deposits may always very among hotels. The reservation agent should treat cancellation
of reservations with advance deposit with much care as they do with other types of
reservation cancellations. According to the hotel policy of some hotels the advance
deposit charges are refunded back to the guest after deducting the applicable cancellation
charges.
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 OVERBOOKING
Overbooking is a situation when the total number of rooms reserved for a certain period
of time exceeds the total number of rooms available for sale for the same period.

In other words, it is the number of additional reservations needs to achieve 100%

occupancy. Overbooking for hotels is a revenue management strategy that helps to
maximize the total capacity and increase the Room revenue.

But on the other hand overbooking for guests means waiting and inconvenience that
result in their dissatisfaction with the services.

Below statistical and historical data should be stored and processed by the reservation
manager or revenue manager to calculate optimum overbooking levels.

1. The total number of rooms available.

2. Confirmed reservations vs no-shows based on historical data.
3. Credit Card / Guaranteed reservations vs no-shows based on historical data.
4. Expected cancellations.
5. Predicted stay over and predicted under stays.
6. Predicted Walk-in guests.
7. Room type wise overbooking levels.

Advantages of Overbooking:
 Helps the hotel to achieve 100% occupancy by hedging against guests who do not
arrive or cancel their reservations.
 Maximize expected revenue.
 Optimizes the operations efficiency by increasing profitability.
 Long-term revenue and profit increases
 Overbooking is a Low risk and the oldest most commonly used method to increase
profitability.
 Widely used strategy in hotel revenue management.

 When overbooking done based on past statistics then chances of miscalculation

decreases.
 Compensation is normally cheaper than keeping a room empty.
 Rules of refusing are predetermined and also acceptable.
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  Because hotel rooms are considered as non perishable products, overbooking
yields considerable impact on hotels revenue.

Disadvantages of Overbooking:
 Do not justify the guest expectations which result to bad experience and reputation.
 The additional financial loss for example guest staying at the hotel might have used
other hotel facilities.
 Guests can be negatively affected by it and therefore it is not a good long-term
strategy for hotels.
 Negative reviews on internet eg. Social media, Trip
advisor, lodginglists.com and OTA's reviews.
 Requires professionally trained and experienced staff to reduce risk of
miscalculation.
 Guests need to be walked to other hotels in case predicted overbooking is more
than actual availability. 
 Sometimes overbooking decisions can be very expensive eg. Walking guest to
alternate arrangement / higher cost.
 All possible service recovery efforts should be followed.
 Reservations must be closely monitored to control overbooking.
 Loss of room and other potential revenue.
 Decreased customer loyalty.
 Loss of hotel reputation.
 The potential risk of denied services.
 Lost future business from the walked guest.
 Negative word-of-mouth publicity.
 If communicating compensation and process is not appropriate there is a risk of
significant financial loss.

Potential Hotel Reservation Problems
Errors in the Hotel Reservation Record: There are many opportunities for a
reservations agent or a guest at a website to make an error when creating a reservation
record. For example:
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The record may be created with an incorrect arrival or departure date, a misspelled guest
name, or first and last names mistakenly reversed.

The name of the person making a reservation for the guest may be accidentally entered as
the guest’s name on the reservation record.

To avoid such problems, the reservations system or agent should verify the information
entered on the Hotel reservation record by displaying or reciting the information back to
the person creating the reservation record. Displaying or quoting the hotel’s cancellation
policy at this time is also appropriate to avoid any problems over no-show billing or non-
return of deposits.

Misunderstandings Due to Industry Jargon: Sometimes Hotel reservations agent or

systems use industry terms that are not widely understood. This can lead to problems
like:

A family with a confirmed reservation may arrive two hours after the cancellation hour
only to find that the hotel has no rooms available; the family thought a confirmed
reservation was the same as guaranteed reservation.

Two business travelers book a double room, anticipating two beds; they are displeased to
learn their room has only one double bed.Parents wishing to have their children stay in a
connecting room mistakenly request an adjacent room. At check-in, the parents find that
the children’s room is across the hall or next door with no direct connection.

To avoid such problems, Hotel reservations systems or agents should make effort to
minimize industry terms and explain what various terms mean at their particular property.
After accepting a reservation, the terms and conditions of reserved accommodations
should be provided in addition to the hotel’s general reservation policies and procedures.

Miscommunication with Central Hotel Reservations Systems: There are some unique

possibilities for miscommunication between guests and reservations agents at central
reservations systems. For example:

A central reservations system serving several hotels in the same city may book the guest
into the wrong hotel, such as a chain’s airport hotel instead of its mid-city property.

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A system that handles hotels in similarly named cities may book the guest into the hotel
in the wrong city or state.
To avoid such problems, the hotel reservations agents or website should furnish the guest
with the full name and address of the property at which a reservation has been made.
When a reservation system serves more than one hotel in the same city, a thorough
description of the hotel’s location can be helpful to the guests.

Online Reservation System Failures: If communication between the hotel and an online
reservation system is not maintained effectively, problems such as the following can
occur:
 The hotel may fail to update the online reservation system database with current
room availabilities and rate changes.
 The online reservation system may be faulty in communicating reservations it has
booked to the property.
 Communications equipment, affecting either the online reservation system or the
hotel, may become inoperable.
 To avoid such problems, hotel management must ensure accurate and timely
communication between the hotel and the online hotel reservations systems. This is
a duty of the hotel reservations manager. When closing the hotel reservations for a
certain date, the hotel must check for any reservations an online hotel reservations
system may have confirmed but not yet communicated.

Room Status Terms

Occupied – A guest is currently registered to the room.

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Complimentary – The room is occupied, but the guest is not charged for its
use.
Stay-Over – A guest who extends stay for a night.
On-change – The guest has departed but the room has not yet been cleaned
and readied for resale.
Do not disturb (DND) – The guest has requested not to be disturbed.
Sleep Out – A guest who has not used the room.
Sleeper – The guest has settled his/her account and left the hotel but the front
office staff did not properly update the room’s status.
Vacant and ready (VR) – The room has been cleaned and inspected and is
ready for an arriving guest.
Out-of-order (OOO) – The room cannot be assigned to a guest because of
repair, renovation or maintenance requirements. Also known as UR (Under
repair) in case of repairs.
Lock-out – The room has been locked so that the guest cannot re-enter until
he or she is cleared by a hotel official.
DNCO (did not check out) – The guest made arrangements to settle his or
her account but has left without informing the front office.

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