Introduction and Importance of the Reservation Department
The term reservation is defined as ‘blocking a particular room type for a guest, for a definite period, for a particular guest’. To ensure a safe and secure place to stay during their visit to another town, guests generally prefer to make reservations in hotels and other types of accommodation units.
All hotels will readily accept reservations and bookings to achieve high occupancy and maximize their room revenue. When a guest makes a reservation for a definite period it is expected that the hotel will accept and honour its commitment by a contract between the hotel and the guest.
A reservation, therefore, is this bilateral contract between a hotel and a guest, according to which the hotel must provide the specified room type to the guest and the guest must agree to pay all relevant charges. This is also known as a contract of booking or a confirmation letter for the reservation.
If either the hotel or the guest wishes to alter or cancel the reservation, this can be done only through a mutual agreement. If a guest fails to inform the hotel about their cancellation the hotel property may decide to retain the advance deposit received from the guest earlier to cover up for any loss of accommodation revenue.
The amount forfeited when a guest does not inform them about their cancellation to the hotel is termed as the Retention Charge. Alternatively, if the hotel is unable to accommodate the guest at the time of their arrival, the hotel has to provide alternative accommodation of similar standard in another hotel and pay for any differences in room rates and any additional expenses the guest may have to incur.
The reservation department handles all reservation requests for accommodation, interacts with the customers, and constantly monitors the room status and the reservation status.
The Hierarchy Chart or Organisation Chart of the Reservation Department:
Depending upon the size and classification of the hotel, the hierarchy of the reservation department may be changed. Now in recent times, an added functionality has also come under the reservation that is managing the rates and inventory of the hotel in all online channels.
Typically, in a large hotel, this function is done by the Revenue Management department, but in the case of a small hotel, such a task is also done by the reservation team. Additionally, depending upon the operation size the reservation team might either report to the sales & marketing director or the front office manager. In a large hotel or full-service hotel, the reservation and revenue team will directly report to the hotel’s, general manager.
The Importance of the Reservation Department
The role of the reservation department is not limited to making a reservation. It maintains records of the hotel occupancy, which helps in planning sales and marketing strategies etc. The reservation department plays an important function for both the guest and the hotel. Below are some of the important functions of the reservation department in the hotels day to day operations.
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 can budget his holiday or tour, taking into account the amount he spends on his stay, food, entertainment, etc.
3. Plan Holiday or Rooms – He can plan his holiday or tour without worrying about the basic needs of accommodation and food. Any business trip, sightseeing tour, or excursion may be planned separately after fixing the accommodation.
4. Other facilities – The guest is assured of certain facilities offered by the hotel which can be confirmed by making the reservation e.g. sightseeing tours, a business center offering secretarial services, entertainment, etc. He is also able to give the hotel address to his associates for any meetings, and correspondence transfers to and from the hotel.
Importance of the reservation department 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 makes sure that the hotel’s rates are available on online and offline channels without any rate parity.
3. Availablity – The reservation department is also responsible for maintaining the hotels available on all online and offline channels.
4. Guest satisfaction – The hotel can plan its activities and be prepared to receive an expected guest. They can 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.
5. Planning – The front office manager can make the necessary decision regarding the no of walk-instant that can be accommodated on a particular day. Rooms requiring 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.