BASICS OF HOTEL ADMINISTRATION

UNIT-I

INTRODUCTION TO HOTEL ADMINISTRATION

Hospitality is treating people like you would want to be treated when you are traveling. In
other words, it means making a tourist feel totally welcome not only as your guest but
also as the guest of the complete family of the Hotel. Hospitality is a genuine smiling
face.

Hospitality can be termed as a deliberate, planned and sustained effort to establish and
maintain mutual understanding between an organization and the public i.e., the business
of making and keeping friends, and promoting an atmosphere of better understanding.
The Oxford English Dictionary defines it as “the act or practice of being hospitable; the
reception and entertainment of guests, visitors or strangers”. The word hospitality is
derived from the Latin word “Hospitalitias”
Very frequently we hear phrases like “He is always hospitable to his visitors”, “We are
grateful to friends for their hospitality in putting us up while we were on holiday”, “She is
so inhospitable that she grudges giving us anything to eat or drink when we visit her”,
etc. All such statements are suggesting a positive or negative attitude of welcome
towards visitors; friends or strangers. Hospitality activity covers everything, providing
attentive and courteous services, facilities and amenities to a traveller, meeting and
greeting him at the door, providing efficient and caring service of food and beverage to
him in his room i.e., providing “A Home away from Home”, and making his visit a
memorable and pleasant experience.
Reception, welcome and, the treatment of a guest or a stranger in the most friendly
manner is Hospitality. In most of the countries all over the world, a guest is received with
a great amount of courtesy and warmth and is provided with entertainment. The basic
concept of Hospitality is to make the guest feel that he has come amongst friends and
that Guests Are Always Welcome. Although the basic concept of hospitality has
remained the same, yet with the passage of time and development of technology and
science, the needs and wants of travellers have changed greatly thus providing
numerous services and facilities in terms of accommodation and other basic needs such
as food and beverages. In olden days kings, lords, maharajas, landlords, and sometimes
the panchayats used to provide food and shelter to travellers and their animals free of
charge and it used to be a benevolent activity. But with the passage of time, it has not
only remained a benevolent activity but has also become a flourishing business.
A part of hospitality activity is being attentive, alert, and cordial with the guest without
forcing yourself and your ideas on him, and at the same time being very polite and
cooperative. All those working in the hospitality industry have one common objective
‘Creating an image of friendly reception and treatment‘ for guests and visitors.
As front office personnel, the hotel staff, in order to provide hospitality, should make his
guests feel at home and use a pleasant tone of voice smilingly, and offer his assistance
wherever possible. Don’t ignore the guest, and don’t be abrupt no matter how busy you
are, anticipate his needs and wants and provide the same without him asking them-this
should be the motto.
As a hotelier, keep on checking the hospitality attitude of your organization. Make a
checklist and be sure that you and your staff are fulfilling each and every point of the
checklist. The checklist may include areas such as front desk and lobby, etc. Make sure
that the front desk is always kept clean, orderly, and well lighted. Even the stationery
used should be so designed that it does not create confusion and clearly indicates how it
is to be filled in. and should be inviting. The lobby should be kept clean and furniture
kept at the proper place. The lighting system should be soft and appealing. The welcome
spirit that the guest is looking for should be there. Floor covering, pictures, furnishing,
etc. should be appealing, attractive, and aesthetically designed.
Further, the checklist should include intangibles such as training of the staff and
willingness and positive attitude of the staff. The arriving guest is always greeted with a
smile and proper salutation to show interest in his trip and his well being. Hospitality
means anticipating and satisfying a guest’s needs.

Origins Of Hospitality Industry

Early travelers were either warriors or traders or people in search of knowledge and
there were no hotels. Warriors and conquerors pitched their tents for accommodation
while traders and persons traveling for knowledge placed a high value on hospitality and
sometimes traded their merchandise for lodging.
Inn keeping can be said to be the first commercial enterprise for hospitality and one of
the first services for which money was exchanged. Inns of the Biblical times offered only
a cot or a bench in the comer. Guests stayed in large communal rooms with no
sanitation and privacy. The rates were, of course, reasonable. The company was rough.
Travellers shared the same quarters with their horses and animals.
King James Version of the Bible mentions that Mary and Joseph were turned away by a
Bethlehem innkeeper because there was “no room at the inn”. According to Biblical
scholars the innkeeper may have meant that the room was unsuitable for a woman
about to give birth to a child. At that time, and probably for several centuries after that,
men and women shared ‘ the same accommodation accompanied by their horses and
livestock. The stable where Mary and Joseph spent the night was probably almost as
comfortable as an inn and at the same time certainly more private than the inn itself.
 In the 3rd century AD, the Roman Empire developed an extensive network of brick-
paved roads throughout Europe and Asia Minor, and a chain of roadside lodges was
constructed along the major thoroughfare from Spain to Turkey. Till the Industrial
Revolution of the 1700s, no significant improvement was made in the inns and taverns
and they were not very suitable for aristocrats. To accommodate wealthy travelers,
luxurious structures were constructed with private rooms, individual sanitation, and
comforts of a European castle. These elegant new establishments adopted the French
word for mansion-‘Hotel’. Their rates were beyond the reach of an ordinary person.
In America, early inns were modeled after European taverns with sleeping quarters
shared by two or more guests.
Herman Melville in his novel Moby Dick has mentioned a seaman who checked into a
room of a nineteenth-century inn and the next morning woke up to find out that he was
sharing the bed with a cannibal. Sharing beds was a very common practice in early
American and European inns. Throughout the 1800s American innkeepers improved
their services and continued to build larger and more amply equipped properties and
most of these properties were located near seaport towns.
The tendency of Americans to travel more provided inspiration to lodging operators. The
nation’ s democratic spirit also led to the development of comfortable and sanitary
lodging within the reach of an ordinary person.
Hospitality Industry can be broadly defined as the collection of businesses providing
accommodation and/or food and beverages to people who are away from home.
Hotels
As per the Hotel Proprietors Act, 1956, a hotel is an “Establishment held out by the
proprietor as offering food, drink and if so required, sleeping accommodation, without a
special contract to any traveller presenting himself who appears able and willing to pay a
reasonable sum for the services and facilities provided and who is in a fit state to be
received.” As a result of this definition establishments such as Hospitals, Hostels,
Apartments and Prisons, although provide accommodation to people yet do not come
under Hotels.
Various definitions of Hotel
1. Common-Law states that a “Hotel is a place where all who conduct themselves
properly, and who being able to pay and ready to pay for their entertainment, are
received if there be accommodation for them, and who without any stipulated
engagement as to the duration of their stay or as to the rate of compensation, are while
there, supplied at a reasonable cost with their meals, lodging and other services and
attention as are necessarily incident to the use as a temporary home.”
2. A hotel may be called as an establishment where the primary business is to
provide to the general public lodging facilities and which may also furnish one or more of
the various services such as food, beverage, laundry, uniformed services etc. Hence, a
hotel can also be called as home multiplied by commercial activities.

3. According to the Encyclopaedia Britannica, the word ‘Hotel’ is of ancient origin,

but its use in English for a house offering lodging and food for travellers is recent. The
Hostlers of London took the name of Innkeeping in 1473. The word ‘Hostler’ or ‘Ostler’
has come to mean an inn servant.
4. The term ‘Hotel’ was used in England in about 1760. Hotel or inn is defined by
British law as a “place where a bonafide traveller can receive food and shelter, provided
he is in a position to pay for and is in a fit condition to be received”.

5. A hotel or an inn may also be defined as an establishment whose primary

business is providing lodging facilities for the general public and which furnishes one or
more of the following services

 Food and Beverage service

 Room service

 Uniformed service

 Laundry service and

 Use of furniture and fixture etc.

In legal terminology, a hotel is an inn and is required under common law to offer to its
visitor’s lodging, food and protection to their baggage. Hotel service is generally based
on these three fundamental necessities of life. In addition to these, a modern hotel
provides its visitors with many luxuries of modern urban city living, all under one roof.
History Of Hotels And Accommodation Industry And Their
Development
The early history of accommodation for travellers can be traced back to the Greek word
‘Xenia’, which not only meant hospitality but also the protection given to a traveller from
discomforts. The city was bound to offer hospitality. In Sparta city, although due to
rigorous customs visitors were not encouraged, yet goddess Athena was considered as
the protector of strangers and hence her name was ‘Xenia Athena’.
In this period travellers were mainly diplomats, philosophers, intellectuals and
researchers. Guests were invited to stay with noblemen. In ancient Olympia, buildings
constructed with the aim to accommodate strangers can be seen. They were called
‘Leonidio’ and were built in 4th century BC. The concept of hospitality can also be drawn
back to ancient times. Mention of it is found in ‘Iliad’ and ‘The Odyssey’ by Homer.
During the seventh and eighth centuries, it was the monasteries that supplied hospitality
to strangers and, as no charge was made for the accommodation, all travellers were
expected to contribute according to their means to the Abbey funds. As more people
began to travel they grouped themselves together, not only for the company but for
mutual protection from highwaymen and robbers. Consequently, travellers arrived in
groups at a monastery and it was often difficult to accommodate them all. In the early
19th century the concept of a hotel room was a sitting room in the front, a bedroom
behind it and a storeroom to keep trunks behind the bedroom and this century is known
as “Golden Age of Hotel of Hotels in Great Britain and the World”, To overcome this,
separate lodging houses called ‘Inns’ (a Saxon word) were built. The word ‘lnn’ came to
mean a ‘Lodging House’ and until the passing of the Hotel Proprietors Act in 1956, it was
the legal term for ‘Hotel’ and hotel proprietors were legally referred to as ‘Common
Innkeepers’. ‘Common’ in this sense referred to Common Law.
In the thirteenth and fourteenth centuries, manor houses, being hospitable places.
willingly gave accommodation to travellers. As no payment was expected, travellers
tipped the servants as a ‘thank you’ for the generous hospitality received-thus the
practice of tipping was born.
When high taxes crippled the generosity and hospitality of the owners of the manor
houses, many became commercial inns. During Elizabeth the First’s reign, posting
houses were established and travellers, in addition to getting refreshment were able to
change horses before continuing their Journey.
The turn of the century saw an era that was called the ‘Belle Epoch’ when the grand and
luxurious hotels flourished. A few hotels are still operating today. In London and some
other cities attempts have been made to recapture some of the grandeur of the past era
in the making of modern hotels, and bring back the memories the grand hotels of olden
days.
The next stage in the cycle of evolution of the hotel industry was the coming of the motor
car. It enabled people to visit those parts of the country which could not be reached by
railways. This gave birth to inland resorts and the hotel industry began to flourish.
International air travel has helped create the modern ‘stop-over’ hotel. With the increase
in this form of travel, the number of hotels built close to airports has multiplied.
Another trend in hotelkeeping is the motel which is the twentieth-century version of the
old ‘Coach Inn’. People travelling the country by car, stopping overnight here and there,
require not only refreshment for themselves but also safe parking for their cars. Post
Houses developed by the Trust Houses Forte Group are in fact the modern version of
the old coaching inns. Great Britain is considered as “Motherland of the Hotel Industry.”
The journey of hotel chains
Indian
1) Pallanjee Pestonjee (1840): Started 1st luxurious hotel in Bombay. It was famous for
its excellent cuisine, beers and wines and its excellent management. Later he opened
another hotel at Fort in Bombay.
2) Auckland Hotel (1843) was established in Calcutta. Later it was renamed as Great
Eastern Hotel in 1858 and later renovated for a sum of Rs 10 lacks.
3) Esplanade Hotel (1871): Was built in Calcutta by John Wakson (Britisher) a silk
drapery merchant. The hotel has 130 rooms.
4) Taj Group of hotels: In 1903 JRD Tata constructed the Taj Mahal Hotel in Bombay
the flagship hotel of Indian hotels company. It was the 1st hotel of international standard
and repute, built by an Indian for Indians.

Taj Mahal Hotel, Mumbai

5) Welcome Group: It is the hotel division of I.T.C ltd. ITC entered into the hotel
business in 1975 with the opening of Hotel Chola Madras. The logo represents a
traditional Indians welcome in the form of ‘Namaste’ in an open doorway with the slogan
“Nobody gives you India like we do” The motto of welcome Group is “We enjoy people”.
6) Oberoi Hotels: Rai Bahadur M.S. Oberoi started his hotel career as a clerk in 1922 at
Faletti’s Cecil Hotel in Shimla. Later Mr. Ernest Clarke sold his share to Mr. M.S Oberoi
who under the deed of dissolution dated August 14, 1943, became the sole, absolute
and exclusive owner of Clarke’s Hotel, Shimla and Delhi. Mr. Oberoi later took over the
Grand Hotel at Calcutta on lease and by the end of World War 2 the Grand Hotel
became a byword for good service and elegant comfort in hotels.
International
1) Accor: It is a French hotel group, which operates in 92 countries Headquartered in
Paris, France, the group owns, operates and franchises 3,600 hotels on 5 continents
representing several diverse brands, from budget and economy lodgings to luxurious
accommodations in exotic locales.

Accor property in Australia, sharing a beautiful message during COVID 19 lockdown

2) Best Western International: Operator of the Best Western Hotel brand is the world’s
largest hotel chain, with about 4,200 hotels in over 110 countries. The chain, with its
corporate headquarters in Phoenix, Arizona operates 2,163 hotels in North America
alone.
3) Carlson Rezidor Hotel Group: Is an international hotel company, with headquarters
in Minneapolis, USA and Brussels, Belgium. The Carlson Rezidor Hotel Group includes
more than 1,300 hotels in operation and under development in over 100 countries,
employing over 88,000 staff. The hotel brands include Radisson Hotels, Radisson Blu,
Country Inns & Suites, Park Inns, Park Plaza Hotels & Resorts, Hotel Missoni and newly
announced brands
Radisson Red.
4) Four Seasons Hotels: Is a Canadian international luxury, five-star hotel Management
Company. Travel + Leisure magazine and Zagat Survey rank the hotel chain’s 98
properties among the top luxury hotels worldwide
5) Hilton Hotels: It an American global hospitality company. It is owned by the
Blackstone Group, a private equity firm. The company owns, manages, and/or
franchises a portfolio of brands which includes Waldorf Astoria Hotels and Resorts,
Conrad Hotels & Resorts, Hilton Hotels & Resorts, Doubletree (DoubleTree by Hilton),
Embassy Suites Hotels, Hilton Garden Inn, Hampton Inn and Hampton Inn & Suites,
Homewood Suites by Hilton, Home2 Suites by Hilton and Hilton Grand Vacations. It was
founded by Conrad Hilton in Cisco, Texas and was headquartered in Beverly Hills,
California.
6) Hyatt Hotels: It an American international company and operator of hotels.
The Hyatt Corporation was born upon purchase of the Hyatt House, at Los Angeles
International Airport on September 27, 1957. In 2014, Hyatt was named one of the best
100 companies to work for (placing 95th), according to Fortune.
7) InterContinental Hotels: It a British multinational hotels company headquartered in
Denham, UK. It is the largest hotel company in the world measured by rooms (with
687,000 as of February 2014) and has over 4,600 hotels across over 100 countries. Its
brands include Candlewood Suites, Crowne Plaza, Even, Holiday Inn, Holiday
Inn Express, Hotel
Indigo, Hualuxe, InterContinental and Stay bridge Suites.
8) Marriott International: It is an American diversified hospitality company that
manages and franchises a broad portfolio of hotels and related lodging facilities.
Founded by J. Willard Marriott, the company is now led by President and Chief
Executive Officer Arne Sorenson. Today, Marriott International is the largest hotel
company with more than 4,000 properties in over 80 countries and territories around the
world, with additional 195,000 rooms in the development pipeline. In June 2014 Marriott
International opened its 4,000th hotel, the Marriott Marquis in Washington, D.C.

Marriott Marquis, Washington DC

9) Shangri-La Hotels and Resorts: It is a Hong Kong based company that runs the
“Shangri- La”, “Kerry” and “Traders” brands of hotels. The five-star lodgings of the chain
can be found across Asia, the Middle East, North America, Oceania and Europe. The
first hotel of the group was the Shangri-La Hotel Singapore, opened in 1971.
10) Starwood Hotels and Resorts Worldwide, Inc. is an American hotel and leisure
company headquartered in Stamford, Connecticut. One of the world’s largest hotel
companies, it owns, operates, franchises and manages hotels, resorts, spas,
residences, and vacation ownership properties under its nine owned brands.
UNIT-II

ORGANIZATIONAL STRUCTURE AND DEPARTMENTAL

FUNCTIONS

Hierarchy is essential in an organisation because it provides structure, clarity, and

direction. It defines degrees of authority and reporting relationships and develops a clear
chain of command. The value of hierarchy stems from its ability to improve decision
making, encourage accountability, facilitate coordination and communication, cultivate
specialisation and expertise, and assist growth and development. Hierarchy ensures that
decisions are made efficiently and in accordance with the company’s goals by identifying
decision-making authority. It also encourages responsibility by clearly defining roles and
duties, allowing for better tracking of performance and outcomes. Hierarchy helps
coordination and communication by creating routes for information to flow through,
promoting successful collaboration and alignment across multiple levels and
departments. Furthermore, it enables specialisation, allowing individuals to build
competence in specialised areas.
Hierarchy in small, medium, large and chain hotels

Hierarchy is important in a hotel because it provides structure, organisation, and

effective management. A well-defined hierarchy establishes roles, responsibilities, and
reporting lines, allowing for smooth operations and effective decision-making inside the
hotel. Each hotel’s hierarchy is determined by criteria such as the size of the facility, the
number of employees, and the complexity of operations. To enable effective
communication, coordination, and responsibility, the right hierarchy must be
determined.The formation of a hierarchy allows for a clear chain of command, with
managers and supervisors managing various departments and functions. This division of
responsibilities aids in streamlining operations, properly allocating resources, and
ensuring that tasks are completed efficiently. It helps to have a defined hierarchy.

Small hotel
To improve the visitor experience, a small hotel can provide a variety of amenities and
services. It usually has a lobby room or front desk where visitors can check in, check out
and ask for assistance from hotel staff. Small hotels feature a limited number of guest
rooms in various sizes and configurations, with facilities such as comfortable beds,
private bathrooms, minimal furniture, and televisions, telephones, and Wi-Fi connectivity.
Housekeeping services ensure that guest rooms are cleaned and maintained on a
regular basis. Smaller hotels may not have complex dining options, but they frequently
include a breakfast area or a small restaurant where guests can enjoy meals or snacks.
Guests can rest and socialise in common areas such as the foyer, lounge, or seating
areas.

Medium Hotel
In comparison to a small hotel, a medium-sized hotel provides a broader selection of
amenities and services, catering to the needs and preferences of a bigger number of
guests. Medium-sized hotels offer a choice of guest rooms with varying configurations
and amenities such as seating areas, work stations, minibars, and in-room safes, in
addition to a lobby area or front desk for check-in and help. Dining options are more
diverse, with many hotels offering a restaurant that serves meals throughout the day, as
well as cafes, bars, and room service. Meeting and event areas in medium-sized hotels
are frequently outfitted with audiovisual technology and food services. Fitness centres,
spas, saunas, and swimming pools are frequently accessible to guests for their well-
being and relaxation. They may also include business centres to meet the needs of their
customers.
Large Hotel
A large hotel provides a wide range of amenities and services to accommodate a large
number of guests while catering to their diverse needs and tastes. Large hotels offer a
broad choice of guest rooms, which might include magnificent suites, interconnecting
rooms, and themed accommodations, in addition to a vast and well-equipped reception
area or front desk. These rooms frequently have premium furniture, high-end facilities,
and breathtaking views. There are numerous restaurants serving a range of cuisines, as
well as cafes, bars, and speciality dining experiences. Large hotels often have large
meeting and event areas that can accommodate conventions, conferences, and large
festivities. These venues have cutting-edge technology, a dedicated event crew, and
banquet services. Fitness centres with cutting-edge equipment, as well as beautiful
spas.
 Interdepartmental coordination
Refers to the process of facilitating communication, collaboration, and
synergy between different departments within an organization. It plays a
crucial role in the efficient functioning and overall success of an
organization. Here are some key reasons why interdepartmental
coordination is important:
1. Enhanced Communication: Effective coordination ensures that information
flows smoothly between departments. It enables departments to share their goals,
progress, challenges, and ideas, leading to better understanding and alignment across
the organization. This improved communication helps prevent misunderstandings,
reduces duplication of efforts, and promotes a cohesive work environment.
2. Increased Efficiency: When departments work in isolation, they often operate in
silos, focusing solely on their own objectives without considering the bigger picture.
Interdepartmental coordination breaks down these barriers and encourages
collaboration. It allows departments to identify interdependencies, streamline processes,
and eliminate redundancies. This synergy leads to increased efficiency, reduced costs,
and optimized resource allocation.
3. Holistic Problem Solving: Many organizational challenges require input from
multiple departments to find effective solutions. Interdepartmental coordination brings
together diverse perspectives and expertise from different departments. By pooling their
knowledge and skills, departments can tackle complex problems holistically and develop
more comprehensive and innovative solutions.
4. Improved Decision-Making: In organizations where departments operate
independently, decision-making can become fragmented and inconsistent.
 Interdepartmental coordination fosters a culture of collective decision-making, where
relevant stakeholders from different departments are involved in the decision-making
process. This approach leads to well-rounded decisions that consider various
perspectives and take into account the potential impact on different departments.
5. Enhanced Customer Service: Customers interact with multiple departments
within an organization, and their experience depends on how well these departments
coordinate with each other. Interdepartmental coordination ensures a seamless
customer journey by enabling departments to share customer information, coordinate
service delivery, and address customer needs efficiently. This integrated approach leads
to improved customer satisfaction and loyalty.
6. Organizational Agility: In today’s rapidly changing business landscape,
organizations need to be agile and adaptable to stay competitive. Interdepartmental
coordination facilitates a more agile organization by breaking down communication
barriers, fostering collaboration, and enabling faster decision-making. It allows
organizations to respond quickly to market changes, emerging opportunities, and
potential threats.
7. Employee Engagement and Satisfaction: Interdepartmental coordination
promotes a sense of unity and shared purpose among employees. When departments
work together towards common goals, employees feel a greater sense of belonging and
teamwork. This can lead to increased employee engagement, job satisfaction, and
overall morale.
Overall, interdepartmental coordination is vital for organizations to operate smoothly,
achieve their objectives, and stay ahead in a dynamic business environment. It fosters
effective communication, collaboration, and synergy among departments, resulting in
increased efficiency, improved decision-making, and better customer service.
UNIT-III

FINANCIAL MANAGEMENT IN HOTELS

Financial Planning is a vital part of Financial Management. In fact, planning is the first
function of management. Before embarking on any venture, the company must have a
plan.
Financial planning is the plan needed for estimating the fund requirements of a business
and determining the sources for the same. It essentially includes generating a financial
blueprint for company’s future activities. It is typically done for 3-5 years-broad in scope
and generally includes long-term investment, growth and financing decisions.
Financial Planning
 Before initiating a new business, the organization puts an immense focus on the topic of
Financial Planning. Financial planning is the plan needed for estimating the fund
requirements of a business and determining the sources for the same. It essentially
includes generating a financial blueprint for company’s future activities. It is typically
done for 3-5 years-broad in scope and generally includes long-term investment, growth
and financing decisions.
Objectives of Financial Planning
 Ensuring availability of funds: Financial planning majorly excels in the area of
generating funds as well as making them available whenever they are required. This
also includes estimation of the funds required for different purposes, which are, long-
term assets and working capital requirements.
 Estimating the time and source of funds: Time is a game-changing factor in
any business venture. Delivering the funds at the right time at the right place is very
much crucial. It is as vital as the generation of the amount itself. While time is an
important factor, the sources of these funds are necessary as well.
 Generating capital structure: The capital structure is the composition of the
capital of a company, that is, the kind and proportion of capital required in the business.
This includes planning of debt-equity ratio both short-term and long-term.
 Avoiding unnecessary funds: It is an important objective of the company to
make sure that the firm does not raise unnecessary resources. Shortage of funds and
the firm cannot meet its payment obligations. Whereas with a surplus of funds, the firm
does not earn returns but adds to costs.
Process of Financial Planning
 Preparation of sales conjecture.

 Decide the number of funds – fixed and working capital.

 Conclude the expected benefits and profile ts to decide the number of funds that
can be provided through internal sources.

 This causes us to evaluate the requirement from external sources.

 Recognize the conceivable sources and set up the money spending plans
consolidating these variables.

Importance of Financial Planning

Financial Planning is the procedure of confining company’s targets, policies, techniques,
projects and budget plans with respect to the financial activities lasting for a longer
duration. This guarantees viable and satisfactory financial investment policies. The
importance is as follows-
 Guarantees sufficient funds.

 Planning helps in guaranteeing a harmony between outgoing and incoming of

assets with the goal that stability is kept up.

 Guarantees providers of funds to effortlessly put resources into organizations

which provokes financial planning.

 Financial Planning supports development and expansion programmes which

support in the long-run sustenance of the organization.

 Diminishes vulnerabilities with respect to changing business sector patterns

which can be confronted effortlessly through enough funds.

 Financial Planning helps in diminishing the vulnerabilities which can be a

deterrent to the development of the organization. This aids in guaranteeing security and
benefits of the organization.

Cost control is the practice of identifying and reducing business expenses to increase
profits, and it starts with the budgeting process. A business owner compares actual
results to the budget expectations, and if actual costs are higher than planned,
management takes action.
Phases of Control Procedure:-
The control procedure consists of 3 broad phases:
1. Planning
2. Operational
3. Control after the event
Planning
Policies are nothing but predetermined guidelines laid down by the management of the
organization. It outlines such matters as the market that is being aimed at, how it is to be
catered at the level of profitability, which is to be achieved. The policy should be clearly
defined before the business is commenced. It can be charged but whenever a major
change takes place a new policy should be written down. Three basic policies, which
need to be considered, are:
1. Financial:- It will determine profitability and the contribution to the total profit.
Setting of the target that has to be achieved, the financial policy is prepared for every
single unit as well as for the whole organization. A budget is prepared at the beginning of
the year for the whole organization. The budget contains the target of sales and total
expenditure required to achieve the target sales and it will also contain all source of
income and the total expenditure of organization/ units.
2. Marketing policy:- It will identify the broad market that has to be served. It will
also identify the immediate and future consumer requirement in order to maintain the
broad market. A large city hotel could be broken down into a segment of the various
types of users i.e. in a coffee shop, Chinese restaurant, Indian restaurant, etc. each unit
having a specific customer. Marketing policy also defines customer, market share,
turnover, profitability, the average spending power of customer, product and customer
satisfaction.
3. Catering policy:- It is normally evolved from the marketing and financial policy. It
will also define the many objectives of operating f & b facilities and will also describe the
method by which the objectives are to be achieved. It will usually include the following:
 The type of customer
 The type of menu
 Beverage provision necessary for operation
 Food quality standard
 Method of pricing
 Type and quality of service
 Degree and décor and comfort
 Type and style of table and chairs
Operational
After defining the policies it is important to outline that how they are to be interpreted
onto the day control activities of the catering operation. The operational control consists
of:
 Purchasing
 Receiving
 Storing
 Issuing
 Production control
 Sales control
Management control after the event
It consists of three main stages:
1. F & B cost reporting:- The cycle of production is often perishable so it is
compulsory to update your f & b cost reporting weekly or monthly.
2. Assessment:- In case of a large unit it is necessary that someone from the f & b
department analyses the f & b reports and confirm them with the budget & with potential
food cost.
3. Correction:- Control system does not cure or prevent problems occurring when
the analysis of a performance of a department states that there is a problem. A
corrective measure has to be taken to set aside any problem.
Objectives of Cost Control
To analyze income and expenditure:- In financial accounts, stress is usually placed on
the ascertainments of total cost and profit i.e. cost of sales, gross profit. In food cost
control, on the other hand, much stress is placed on the various departments or a
section of a business.
Gross profit = sales – food cost
Net profit = sales – (food cost + labour cost + overheads)
Pricing of food:- Another major objective of food cost control is to provide a sound
basis for menu pricing. It will also help in costing price for various types of banquets and
functions. It also helps in giving quotations.
Sale = food cost + labour cost + overheads + profit
Prevention of inefficiencies:- We know that purpose of control is to ensure the current
result are in accordance with the predetermined objectives which were expressed in
terms of targets, costs, selling and profit margins. If such objectives are to be reached all
possible forms of wastage and inefficiency should be prevented. In order to be effective
in preventing waste inefficiencies, a system of food cost control must cover the whole
field of catering operation right from the purchase of foodstuff to the sale of a prepared
meal.
Data for the management:- The system of food cost control has an important function
to fulfil in providing data for individual reports on food operations.
UNIT-IV
HUMAN RESOURCE MANAGEMENT IN HOTELS
Selection and recruitment is a critical process in HR Planning that involves attracting and
selecting the best-qualified candidates for a job. The goal of selection and recruitment is
to ensure that organizations have the right number of employees, with the right skills and
knowledge, at the right time and at the right place. This article will guide you through the
process of selection and recruitment and the steps involved in attracting and selecting
the best-qualified candidates.
Steps in the Selection and Recruitment Process
The following are the steps involved in the selection and recruitment process:
 Determine the job requirements: The first step in the selection and recruitment
process is to determine the requirements of the job. This includes defining the duties,
tasks, and responsibilities of the job and identifying the skills, knowledge, and abilities
required to perform the job effectively.
 Attract candidates: The next step is to attract a sufficient number of qualified
candidates. This can be done through various methods such as advertising the job,
using recruitment agencies, or reaching out to potential candidates through social media
or professional networks.
 Review resumes and applications: The third step is to review the resumes and
applications of candidates who have expressed an interest in the job. This involves
evaluating the qualifications and experience of each candidate to determine which
candidates are best suited for the job.
 Conduct interviews: The fourth step is to conduct interviews with the most
qualified candidates. Interviews provide an opportunity to assess the skills and abilities
of candidates and to determine if they are a good fit for the job and the organization.
 Assess skills and abilities: The final step is to assess the skills and abilities of
candidates. This can be done through various methods such as skills tests, aptitude
tests, or work samples.
Challenges in the Selection and Recruitment Process
Organizations may face a variety of challenges in the selection and recruitment process,
including attracting a sufficient number of qualified candidates, ensuring fairness and
objectivity in the selection process, and complying with legal and ethical standards. To
overcome these challenges, organizations should have a clear understanding of the job
requirements, use a variety of recruitment methods to attract candidates, and have a
structured and objective selection process.
Overcoming challenges in the Selection and Recruitment
Process
The selection and recruitment process can present various challenges, but with proper
planning and implementation, these can be overcome. Here are some strategies to help
overcome these challenges:
1. Define clear job requirements: Start by defining the key responsibilities,
qualifications, and experience required for the role. This will help you attract the right
candidates and eliminate those who are not a good fit.
2. Use a variety of recruitment methods: Utilize a mix of methods such as online
job postings, employee referrals, and campus recruiting to reach a larger pool of
candidates.
3. Be proactive in diversity and inclusion: Make an effort to build a diverse pool
of applicants by reaching out to underrepresented groups, and ensure that your
selection process is fair and non-discriminatory.
4. Streamline the application process: Simplify the application process to reduce
the amount of time and effort required from candidates. This will increase the number of
applicants and make it easier for you to find the right fit.
5. Use technology to automate repetitive tasks: Automation can help with tasks
such as screening resumes, scheduling interviews, and sending follow-up
communications, freeing up time for more important tasks.
6. Foster a positive candidate experience: Provide clear and timely
communication, and be respectful and professional throughout the recruitment process.
A positive candidate experience can help you attract top talent and build a strong
employer brand.
7. Involve multiple stakeholders in the selection process: Involve managers,
HR personnel, and other relevant stakeholders in the recruitment process to ensure that
decisions are made based on a broad range of perspectives.
By addressing these challenges and implementing effective strategies, you can improve
the efficiency and effectiveness of your selection and recruitment process.
Human resource planning is a crucial aspect of any organization as it helps in ensuring
that the organization has the right number of employees with the necessary skills to
achieve its goals. One of the key components of human resource planning is
measurement. Measurements in human resource planning help organizations to
evaluate the effectiveness of their HR policies and procedures and make necessary
changes to improve overall HR performance.
Human Resource Information System (HRIS)
HRIS is a computerized system that manages and stores HR data. It helps in automating
HR processes and reduces the manual workload. HRIS also helps in tracking employee
information, performance and compensation. The information stored in HRIS can be
used for various purposes, including HR planning and measurement.
Human Resource Audit
A human resource audit is a systematic review of HR policies, procedures and
processes. It helps organizations to identify areas of improvement and take corrective
action. An HR audit can be conducted internally by HR professionals or by an external
consultant. The audit covers various aspects of HR, including recruitment and selection,
training and development, performance management, and compensation.
Human Resource Accounting
Human resource accounting is the process of measuring and reporting the value of an
organization’s human resources. It helps organizations to understand the financial
impact of HR decisions and policies. Human resource accounting includes measuring
the cost of recruitment, training, and employee benefits, as well as the value of
employee skills, knowledge and experience.
Career Planning
Career planning is a process that helps employees to identify their career goals and the
steps they need to take to achieve them. It also helps organizations to plan for future
talent needs and ensure that they have the right mix of skills and experience to meet
business goals. Career planning includes activities such as job analysis, job description,
and performance appraisal.
Employee Counselling
Employee counselling is a process that provides support and guidance to employees in
their personal and work-related problems. It helps employees to resolve their issues and
improve their performance. Employee counselling can be done by HR professionals, line
managers or by external consultants.
Discipline, Suspension, Retrenchment and Dismissal
Discipline, suspension, retrenchment, and dismissal are the consequences of employee
misconduct or poor performance. The procedures for handling such cases are included
in the employee handbook or the company’s HR policy. It is important to follow a fair and
consistent approach in dealing with such cases to avoid any legal implications.
Employee Grievance Handling
Employee grievance handling is a process for resolving disputes between employees
and the organization. It provides a formal channel for employees to raise their concerns
and seek a resolution. The grievance handling process should be impartial, fair and
transparent to ensure that employees feel confident in raising their concerns.
Compensation & Salary Administration
Compensation and salary administration refers to the processes and policies for setting
and administering employee salaries and benefits. It includes determining the value of
jobs, setting pay structures, and determining employee benefits. A well-designed
compensation and salary administration system helps to attract, retain and motivate
employees.
Laws & Rules Governing Employee Benefits and Welfare
Laws and rules governing employee benefits and welfare are the legal requirements that
organizations must comply with to provide fair and equal treatment to employees. The
laws and rules include minimum wage laws, social security regulations, and laws relating
to employee benefits such as leave, insurance, and pensions.
UNIT-V
MARKETING AND SALES FOR HOTELS
The hospitality industry is a highly competitive industry, with hotels, restaurants, and
other businesses vying for the attention and loyalty of customers. Marketing is a critical
aspect of the hospitality industry, as it helps businesses to differentiate themselves from
the competition and reach their target market.
Unique Challenges and Opportunities of Marketing in the
Hospitality Industry
Marketing in the hospitality industry poses unique challenges and opportunities. Here
are some of the key challenges and opportunities:
1. Seasonality
The hospitality industry is often seasonal, with peak periods during certain times of the
year, such as holidays or tourist seasons. This can make it challenging to develop a
marketing strategy that reaches and engages customers year-round.
2. Competition
The hospitality industry is highly competitive, with many businesses vying for the
attention of customers. This makes it important to develop a marketing strategy that sets
your business apart from the competition.
3. Customer Loyalty
Customer loyalty is key in the hospitality industry, as repeat business is essential for the
success of many businesses. This makes it important to develop a marketing strategy
that not only attracts new customers, but also retains existing ones.
4. Online Presence
In today’s digital age, having a strong online presence is essential for businesses in the
hospitality industry. This includes having a mobile-friendly website, engaging in social
media, and utilizing online review sites.
Tips for Developing a Winning Marketing Strategy
Here are some tips for developing a winning marketing strategy for the hospitality
industry:
1. Know Your Target Market
The first step in developing a winning marketing strategy is to know your target market.
This involves understanding their needs, wants, and preferences, as well as their
demographics and psychographics.
2. Develop a Unique Value Proposition
The next step is to develop a unique value proposition. This is a statement that outlines
the unique benefits that your hotel, restaurant, or other business provides to the target
market.
3. Create a Compelling Message
Once the unique value proposition has been developed, the next step is to create a
compelling message. This is a message that resonates with the target market and
communicates the benefits of the hotel, restaurant, or other business.
4. Utilize Social Media
Social media is a powerful tool for reaching and engaging customers in the hospitality
industry. Businesses should create social media profiles, engage with customers, and
post engaging content.
5. Utilize Online Review Sites
Online review sites, such as TripAdvisor and Yelp, are also important for the hospitality
industry. Businesses should encourage customers to leave reviews, respond to reviews,
and use feedback to improve their business.
6. Offer Loyalty Programs
Loyalty programs are a great way to retain existing customers in the hospitality industry.
Businesses should consider offering loyalty programs that reward customers for repeat
business.
Concept of Yield Management
The concept of yield management originated in the airline industry. Most travellers know
that passengers on the same flight often pay different fares. Super-saver discounts,
three-day advance-purchase plans, stay-over-Saturday-night packages, and so forth
have become the norm for airline pricing. What is not as widely known is the potential
application of yield management to other service industries. Yield management has
proven successful in the lodging car rental, cruise line, railroad, and touring industries –
basically, in situations where reservations are taken for a perishable commodity. The key
to successful implementation appears to be an ability to monitor reservations and to
develop reliable forecasts.
Yield management is based on supply and demand. Prices tend to rise when demand
exceeds supply; prices tend to fall when supply exceeds demand. Pricing is the key to
profitability. To increase revenue, the hospitality industry is attempting to develop new
forecasting techniques that will enable it to respond to changes in supply and demand
with optimal room rates. The hospitality industry’s focus is shifting from high – volume
bookings to high – profit bookings. By increasing bookings on low – demand days and
by selling rooms at higher prices on high – demand days, the industry improves its
profitability. In general, room rates should be higher when demand exceeds supply.
They should be lower (in order to increase occupancy) when supply exceeds demand.
Application of Yield Management in Hospitality Sector
In the hospitality industry, yield management – sometimes called revenue management
– is a set demand – forecasting techniques used to determine whether prices should be
raised or lowered and whether a reservation request should be accepted or rejected in
order to maximize revenue. Hospitality industry managers have successfully applied
such demand – forecasting strategies to room reservation systems, management
information system, room and package pricing, rooms and revenue management,
 seasonal rate determination, pre-theatre dinner specials, and special, group, tour
operator, and travel agent rates.
Benefits or Importance of Yield Management
1. Improved forecasting

2. Improved seasonal pricing

3. Identification of new market segments

4. Identification of market segment demands

5. Enhanced coordination between the front office and sales divisions

6. Determination of discounting activity

7. Improved development of short-term and long-term business plans

8. Establishment of a value based rate structure.

9. Savings in labour costs and other operating expenses

10. Planned responses to guest inquiries or requests regarding reservations.

Customer Relationship Management

Customer relationship management (CRM) is a combination of organizational strategy,
information systems, and technology that is focused on providing better customer
service. CRM uses emerging technology that allows organizations to provide fast and
effective customer service by developing a relationship with each customer through the
effective use of customer database information systems. The objectives of CRM are to
acquire new customers, retain the right current customers, and grow the relationship
with an organization’s existing customers. An integrated business model that ties
together technology, information systems, and business processes along the entire
value chain of an organization is critical to the success of CRM.
CRM can also be considered a corporate strategy because it is a fundamental approach
to doing business. The goal is to be customer-focused and customer-driven, running all
aspects of the business to satisfy the customers by addressing their requirements for
products and by providing high-quality, responsive customer service. Companies that
adopt this approach are called customer-centric, rather than product-centric.
To be customer-centric, companies need to collect and store meaningful information in a
comprehensive customer database. A customer database is an organized collection of
information about individual customers or prospects. The database must be current,
accessible, and actionable in order to support the generation of leads for new customers
while supporting sales and the maintenance of current customer relationships. Smart
organizations are collecting information every time a customer comes into contact with
the organization. Based on what they know about the individual customer, organizations
can customize market offerings, services, programs, messages, and choice of media. A
customer database ideally would contain the customer’s history of past purchases,
demographics, activities/interests/opinions, preferred media, and other useful
information. Also, this database should be available to any organizational units that have
contact with the customer.
CRM has also grown in scope. CRM initially referred to technological initiatives to make
call centers less expensive and more efficient. Now, a lot of organizations are looking at
more macro organizational changes. Organizations are now asking how they can
change their business processes to use the customer data that they have gathered.
CRM is changing into a business process instead of just a technology process.
How does CRM work?
Although some people think of CRM as just a technology, it is so much more than that.
No technology, no matter how sophisticated – can be successful without a strategy to
guide its implementation and use. Business strategy and technology must work together
in order to bring a customer-centric plan to life.
Let’s take a look at the role CRM plays in customer-centricity, customer data
management, and automation.
1. Supports a customer-centric strategy
A CRM system supports a strategy that says that the customer is at the center of
everything that you do. This customer-centric strategy must be based on clear goals and
a vision of what meaningful customer experience looks like.
Valuable customer experience is an integral part of CRM, according to Gartner’s report,
“Improving the Customer Experience”.
Every time a customer comes in contact with an organization, through any of its
channels, the customer has an opportunity to form an opinion – be it good, bad or
indifferent. Through time, this collective set of customer experiences forms a picture in
the customer’s mind, which in turn, forms the image of the brand its values.
Organizations that are serious about CRM design and maintain a quality customer
experience because they recognize that poor customer experience is a step toward
customer churn, whereas a good experience encourages loyalty.
2. Centralizes all your customer data
CRM software combines all sales, marketing, and customer service information into one
central database.
With 92% of businesses collecting data on prospects and customers, having access to
all data in a database means fewer silos within your organization – thus helping you
achieve customer-centricity.
What kind of customer information is being collected?
Customer information includes, but is not limited to, phone numbers, addresses, and last
contact made. The software also records what was discussed, what the next follow-
up date is and even the status of an open item – all of these play an important part
in being GDPR compliant.
This information can then be used to manage, measure, and keep track of marketing,
sales and customer service activities as they relate to the customer. Overall, it builds
greater customer loyalty and a better customer experience.
Since a CRM system centralizes all customer-facing information, silos and finger-
pointing are significantly reduced. Sales can’t blame Marketing for not communicating
with them. Marketing can’t blame Sales for not implementing their campaigns and
Customer Service can’t blame Sales for disgruntled customers.
Everyone has the same access to the same customer information.
3. Automates customer-facing business processes
Companies have business-facing processes and customer-facing processes.
Business-facing processes are those which make the business run more efficiently
such as budgeting and planning whereas customer-facing processes include sales,
marketing, and customer service.
A CRM strategy focuses primarily on the customer-facing processes and makes them
better in terms of meeting the needs of the customer.
The following chart explains a sample what is included in each process:
The whole CRM process begins with a lead – the name of someone you think you can
sell something to.
Usually, a person has filled out a web form and provided you with their contact
information.
Once the lead is put into the system, the software will then take it through to the sales
process. It’s the CRM system that will remind the salesperson to call at an agreed-upon
time, for example. Each time you interact with the prospect, you will record it into the
CRM system. The same applies if someone else ends up talking to the prospect.
In a nutshell, CRM keeps track of all lead-related actions and what’s been said and
done.
At the same time, CRM is a library of documents, phone calls and emails. When an
interaction with a prospect is initiated, you get an instant, automated trail of
communication. Because the information is in one central place, anyone in the company
can help this person out.
Whether you’re in sales, marketing or customer support, a CRM system can help to
automate a particular business process, as well as to automate the way each process
works together with the other. But, it goes without saying that each business process
must be well defined and efficient in order for a company to achieve good results.
Customer-facing process automation
1. Lead management
There’s an entire process before a lead becomes a customer.
You need to identify a lead, then qualify it and only then convert the lead into a sale.
A lead can come from many channels – a website, cold calling, social selling, an
event/seminar, or it can be purchased (providing the purchase list is in line with GDPR).
With this number of channels, it must be clear which person or department is ultimately
responsible for logging the lead-in, because this determines how the lead should be
routed and how it will be followed upon. Without a clearly defined process (workflow),
leads can end up lost or forgotten, which results in frustration, lost sales productivity and
even bad customer experience.

2. Customer support
There should be clear rules for how customer service requests are managed.
These rules define whether a request goes to the first or second line of support, what
resources will be used to solve a customer’s problem and how status updates will be
shared to ensure that the issue is being addressed. Once the workflow and rules are
defined, the CRM system can automate the whole flow.
At the same time, it keeps a record of all contacts’ history, so that customer service
teams can view the information to get a better understanding of how to help the
customer, which can then be used to improve customer satisfaction.