Front_Office_Operations

Chapter 2 – Reservation procedure

Understanding rooms and rates

Price display

Regardless of which rate or package has been negotiated with individual guests, the Tourism (Sleeping Accommodation Price List Display) Order 1977 requires all hotels and guest houses to clearly display, at the reception desk, the standard reception desk, the standard together with taxes (such as VAT), service charges and inclusions. This presents a hotel from opportunistically charging more than its rack rate for a room, taking advantage of chance guests.

Value added tax (VAT)

Accommodation, along with other goods and services, is subject to Value Added Tax (VAT) in the UK - and a goods and services tax (GST) in many other countries - collected by business on behalf of the government (in the UK, HM Customs and Excise). Room and package rates will be quoted inclusive of VAT - and many other goods and services (with some exceptions, such as newspapers) will also have VAT added to them.

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Chapter 2 – Reservation procedure

Confirmations and guarantees

5.Confirmations and guarantees

5.1Confirming reservations

5.2Guaranteed reservations

5.3Non-guaranteed reservations

5.4Cancellation procedures

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Chapter 2 – Reservation procedure

Confirmations and guarantees

5.1 Confirming reservations

In order to make a booking 'firm', it is usual for:

●The hotel to send a Booking Confirmation letter or e-mail to the prospective guest, confirming the details of a booking made online or by phone. This gives the prospective guest a written copy of the details discussed and agreed, both as an itinerary (a reminder of where they have to be and when) and as a confirmation record (which can be produced if there is any problem on check-in or billing). This confirmation may also include a request for deposit, or a receipt for any deposit paid, or an

invoice showing any deposit paid and the balance of the amount payable (e.g.. payments in advance). It is an opportunity to give the guest information on the terms and conditions of booking, such as:

–Cancellation periods (within which the guest must cancel the booking, in order to avoid being liable for a cancellation fee)

–Release times (the time, on the target day of arrival, at which the room will be made available for re-Iet if the guest has not arrived, unless late arrival has been notified or a deposit or guarantee has been paid).

●The prospective guest to send some kind of confirmation letter or form to the hotel, in order to confirm their intention to stay at the hotel; to ensure that the hotel has the details right;

and perhaps also to 'secure' the booking by paying a deposit

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Chapter 2 – Reservation procedure

Confirmations and guarantees

5.2 Guaranteed reservations

Guaranteed (or guaranteed arrival) bookings are desirable for the hotel, because it does not lose out in the event of a 'no show', and therefore need not worry about late arrivals, or having to re-Iet a no show's room (perhaps at a reduced rate).

Guarantees also protect guests, because the room is held for them, regardless of what time they arrive for the night. They can arrive late - or even early in the morning - if their transport plans require it, or if they are subject to unforeseen delays, without fearing that the room will have been given away to someone else.

There are various ways in which a booking can be guaranteed by a prospective guest:

●Pre-payment: the guest pays for the room charges in advance, whether direct to the hotel by cheque or credit card at the time of booking, or to a travel agent (often as part of a package of travel and

accommodation bookings). In the latter case, the travel agent will guarantee payment to the hotel and supply the traveller with a voucher (or confirmation letter) indicating that this is the case. Pre-payment is also advantageous for the hotel, because it eliminates the risk of guests‘

'skipping our without paying, or having insufficient funds or credit to pay the bill.

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Confirmations and guarantees

5.2 Guaranteed reservations continued…

There are various ways in which a booking can be guaranteed by a prospective guest: continued…

●Partial pre-payment or deposit. A hotel might typically ask for a deposit of one night’s payment for each room reserved, so that the room can be held all night - in the event of a late arrival or no-show – without losing revenue. This deposit will be credited to the guest’s account against their stay. If the guest fails to show or cancels the booking on the day of arrival, the hotel may retain the deposit as compensation (or return it to the guest, if the hotel is able to re-Iet the room, depending on hotel policy). If a guest booking is cancelled within an acceptable cancellation period, any deposit will usually be fully refunded.

●Credit card bookings: these are generally guaranteed, under the terms of sale (and prospective guests are often warned that this is the case). If the guest has given a credit card number at the time of booking, and does not cancel the booking within the allowed period before the scheduled arrival date, the hotel is entitled to process the credit card payment, up to an agreed amount.

●Special agreements: a company client or airline, for example, may pay for rooms to be 'held'

for its use, regardless of whether or not the rooms are actually taken up.

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Chapter 2 – Reservation procedure

Confirmations and guarantees

5.3 Non-guaranteed reservations

There are two basic types of non-guaranteed reservation, with different degrees of certainty for guests about whether they will have a room when they arrive.

A 6 pm release reservation means that the room is held for the guest until 6 pm on the evening of their arrival. If (s)he arrives after this time, she will have to take a chance on a room still being available: from 6 pm onwards, the hotel has the option of re-Ietting the room. This arrangement absolves a late-arriving or no-show guest from cancellation fees, while allowing the hotel to re-Iet the accommodation to maintain occupancy

A take or place (T or P) booking IS a kind of waiting fist' facility offered by chain hotels, especially to regular customers if they reserve at short notice and the hotel is full. The hotel is assuring the guest that it will either take them ( f there has been a cancellation or no-show) or find a place for them in a comparable hotel, Ideally a sister hotel in the same chain, which has vacancies. This helps to satisfy loyal customers, while maximizing occupancy for individual hotels (e.g.. through planned overbooking) and 'smoothing out' over bookings and vacancies within hotel chains or groups.

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Chapter 2 – Reservation procedure

Confirmations and guarantees

5.4 Cancellation procedures

When a reservation is cancelled the whole reservation procedure will have to be 'reversed': the diary entry will be deleted; various chart entries erased; and the notice of cancellation appended to the guest reservation record (in case the guest actually turns up!). Cancellations will also be entered in the guest history card (if any). If a pattern of persistent cancellations occurs by an individual or company, the hotel may wish to pursue compensation or black-list the guest. Over time, cancellation statistics will also be kept, to support the calculations for planned overbooking.

In a computerised system, the 'reversal' of the reservation procedure will be automatic by marking the reservation as cancelled: all related records and charts will be amended. The reservation can also be retained in the system, marked as cancelled, in case of query.

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Confirmations and guarantees

5.4 Cancellation procedures continued…

Most hotels set a cancellation period (e.g.. 36 hours of the reserved arrival date) before which reservations must be cancelled: beyond this point, the prospective guest will incur a specified short notice cancellation penalty (which may be deducted from any deposit paid). Some reasons for cancellation are genuinely unavoidable, however, and hotels will often use their discretion to waive penalties - especially for repeat or potentially profitable guests, and especially if (as in the case of city centre hotels) there is a reasonable chance of re-Ietting the room, even so, the stated penalty may act as a disincentive to 'frivolous' bookings and no-shows.

If a tour group cancels at very short notice, however, the hotel may suffer substantial losses and this eventuality is normally covered by the terms of the contract between the hotel and tour operators, in which the tour company 'indemnifies' the hotel against any such losses, i.e. guarantees to make them good.

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5.4 Cancellation procedures continued…

The hotel will in any case strive to re-Iet cancelled accommodation, and can only claim against guests (if it chooses to do so) for losses actually incurred. If a guest cancels a five-day booking at short notice and the hotel manages to re-Iet the accommodation for three of those days, it can only claim compensation for two days. (It is not allowed to let the same room twice, which is what it would effectively be doing if it got paid by the new guest and by the guest who cancelled.)

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Chapter 2 – Reservation procedure

Group and conference reservation

6.Group and conference reservation

6.1Group reservations

6.2Conference accommodation bookings

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