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Reservation Department Importance in Hotel Industry, Introduction to the Reservation Department

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 of time, for a particular guest'. To ensure a safe and secure place to stay during their visit to another town, guests generally prefer to make advance reservations in hotels and other types of accommodation units.

All hotels will readily accept advance reservations and booking in order to achieve high occupancy and to maximize their room revenue. When a guest makes an advance reservation for a definite time 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 about their cancellation to the hotel is termed as the Retention Charges. 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

Reservation Department Hierarchy Chart | Hotel Reservation Department Organisation Chart

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 time, 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 case of a small hotel, such 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

Chart For Importance of the Hotel Reservation Department

The role of the reservation department is not limited to making a reservation. It maintains records of the hotel occupancy, which help 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 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.

Importance of 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 make 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 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.

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.

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Authored and managed by Augustine, a hotelier with over 20 years of experience in the industry. He has a 3-year diploma with 'honors' from the American Hotel & Lodging Educational Institute and a Bachelor of Computer Application - BCA Degree.