Reservation in a Hotel
Reservation is the activity of booking the room in advance for a prospective guest on his request for the future, which may be from a few days to months in advance. Below is the detailed process of reservation:
- Conduct the reservation inquiry
- Determine room and rate availability
- Create the reservation record
- Confirm the reservation record
- Maintain the reservation record
- Produce reservation reports.
Table of Content
Functions of the Reservation Section
- The main function of the reservation section is to help the hotel in generating revenue from future and prospective room sales.
- The reservation section should receive the reservation request from the prospective guest, check the availability of rooms, process the request, and either accept it, wait to list it, or deny it and communicate the decision.
- Prior to Computerization Era, the main function of the Reservation Process is only to determine basic room availability. That is, the reservation clerk can only tell the potential guest whether a room is reserved for him/her or not. However, the reservation clerk can not tell the type of room, rate honored, etc.
But nowadays, with the wide use of computer reservation (online reservation) with software package programs, it is now possible to reserve a room by room type, and rate, and to accommodate all the possible special requests of the guest. Therefore, the selling function has largely shifted from the front office to the reservation department. Hence, projections of Room Revenues and Profitability Analysis became one of the main functions of the Reservation Department. - As a consequence, the reservation department and reservation agents should have sales goals to achieve which might focus on the number of room nights, average room rate, and/or booked room revenue.
Types of Reservations
Guaranteed Reservation
Ensures that the hotel will hold a room for the guest until a specific time following the guest’s scheduled arrival date [i.e. check-in time or the start of the hotel’s day shift or any time the lodging property chooses]. On return, the guest shall guarantee his / her reservation of room unless the reservation is properly canceled. To guarantee a reservation, guests might opt for one of the following methods:
- Prepayment Guaranteed Reservation: the hotel request the prospective guest to either send the complete deposit or a partial deposit and upon receiving it, makes the booking for the prospective guest.
- Credit Card Guaranteed Reservation: in this case, the prospective guest gives his credit card number and details to the hotel. The hotel confirms the room from the credit card guarantee and then claims from the credit card company if the guest does not occupy the room on the said date.
- Travel Agent Guaranteed Reservation: some travel agents have arrangements with hotel chains to book rooms for their clients and executives traveling to various destinations. The travel agents are solely responsible for the reservation; they are billed after the guest’s stay is completed.
- Voucher or Miscellaneous Charge Order [MCO]: this is a special arrangement designed to attract return guests or new business. This is usually provided by the hotels themselves for their prospective guests.
- Corporate Guaranteed Reservation: in this case, the corporation or company takes the responsibility for booking for their executives, visitors, etc.
Non-Guaranteed Reservation
Ensures that the hotel agrees to hold a room for the guest until a stated reservation cancellation hour (usually 6 p.m.) on the day of arrival. In case the guest who has made the reservation arrives after 6.00 p.m., the hotel is not bound to provide him accommodation. Non-guaranteed reservation usually occurs when the prospective guest does not provide any payment guarantee but simply confirms through a letter. Reservation agents shall make sure to encourage their guests to guarantee their reservations, especially in the high season.
Tentative / Provisional Reservation
Provisional reservation is done when a request from a prospective guest is received for some future day arrival and the hotel blocks the room for this guest, provisionally in the hotel records such as charts and diaries and racks or computer, and sends a letter of offer to the prospective guest.
The offer has a cut-off date by which the guest should send his confirmation which may be in the form of a letter, guarantee by the company, credit card, or deposit whichever the hotel may request. Once the confirmation from the guest is received by the hotel within the cut-off date, the hotel makes the tentative booking into a confirmed booking. Otherwise, the tentative booking is canceled and the records are updated.
Reservation Enquiry
Guests can communicate their reservation inquiries in any one of the methods; in person, over the telephone, via mail, through facsimile, telex, or e-mail. Moreover, reservation inquiries can also be made through Central Reservation System or Intersell Agency.
While getting a reservation inquiry, the reservation agent shall obtain the following guest-related information:
- Guest’s name, address, and telephone number
- Company or travel agency name, where possible
- Date of arrival and departure
- Type and number of rooms requested
- Desired room rate and type of room
- Number of people in the group, if applicable
- Method of payment and/or guarantee
- Any other special requests
Most of the above-mentioned information is used to create a reservation record.
Sources of Reservations
Central Reservation Systems
The majority of Lodging Properties belong to one or more Central Reservation Systems. A central reservation system is composed of a central reservation office, member hotels connected via communication devices, and potential guests. Central Reservation Office [CRO] offers its services via a 24-hours toll-free telephone number(s).
Member hotels of the central reservation system shall provide and exchange accurate room availability data with central reservation offices. To illustrate, central reservation offices and member hotels shall communicate (in real-time) any reservation transaction. This is possible, nowadays, with the sophisticated communication equipment available. This equipment shall be provided by central reservation offices to its member hotels. Such equipment may range from teletype, telex, and facsimile machines, to personal computers or Internet connections.
In return for the services, central reservation offices charge a fee for the utilization of its services which might take the form of a flat fee and a variable fee, or a flat percentage of potential room revenue, actual room revenue, and/or Rooms Division gross profit.
Central Reservation Offices are divided into two:
Affiliate Reservation Network
This network is referred to as the hotel chain’s reservation system. It is composed of a CRO and hotels, which are members of the same chain. The main advantages of an affiliate reservation network are:
- Streamline the process of reservation
- Reduce overall system costs
- Attract business for or refer business to another chain property
- Affiliate reservation networks might serve, in addition to their main function, other duties like:
- Serve as an inter-property communication network
- Serve as an accounting transfer tool
- Serve as a destination information center
- Serve as a connection with Global Distribution Systems [GDS] System including several Central Reservation Offices connected
- Serve as an inter-property communication network
Non-affiliate Reservation Network
A non-affiliate reservation network is composed of a central reservation office, potential guests, and member independent hotels.
Intercell Agencies
Intercell Agencies are special types of central reservation offices contracting to handle reservations for more than one Product Line for example handling same-time Airline Tickets, Car Rental, Hotel Reservation, etc. (“One Call Does it All Approach!”).
Direct Reservation System
Even though many of the five-star hotels rely heavily on central reservation offices and intercell agencies, some potential guests might still find it convenient, and personal to call directly the hotel to communicate a reservation inquiry.
Group Reservations
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 careful coordination of the reservation on one hand and the marketing on the other.
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
- 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, 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 are left) as vacant for sale.
- If the hotel did not receive the final list by the cut-off date, then the reservation department has all the right to cancel the group reservation and release all the initially booked rooms into vacant rooms. However, management shall use this right with precautions especially when it comes to groups reserving from travel agencies and tour operators the hotel is frequently servicing.
Reservation Availability
After receiving a reservation request, the hotel might accept it, as it is, if there is room availability. If not, the reservation department should suggest alternative room types, dates, and/or rates, to the potential guest. If, however, the potential guest insists on his / her previous request, the hotel should suggest an alternative hotel. That’s one of the main reasons why we need to maintain good relationships with nearby competing hotels.
The reservation department should always compare historical reservation volumes against actual arrivals. The main reason is to cope with overbooking, which is a situation occurring when the total number of rooms reserved for a certain period exceeds the total number of rooms available for sale, for the same period.
To cope with the overbooking problem, some statistical and historical data should be stored and processed by the hotel and should be continuously updated. Such data should include:
- Several rooms reserved for a specific date o Number of rooms occupied by stayovers (for a certain specific date) o Forecasted no-show-ups percentage o Forecasted understand percentage o Forecasted overstays percentage o Forecasted cancellation percentage o Number of out-of-order rooms for a specific date.
Devices Used for Tracking Room Availability
To function properly, the reservation department shall maintain control books, wall charts, and/or a computerized system. Whatsoever system is chosen, the reservation department shall maintain and update that system to include any reservation transaction (i.e. whether a reservation, cancellation, or modification). Below is a description of the three commonly used sets of equipment to track room availability under the manual, semi-automated and fully-automated systems:
Control Books
Control books are standard three-ring, loose-leaf binders with a tally page assigned to each day of the year. Under this very system, when a potential guest calls to have a reservation, the reservation clerk shall check the cells corresponding to rooms. If there is an empty cell for all the length of stay of the guest then the reservation clerk marks it as X (i.e. reserved). If the guest is expected to continue staying the next day, then the reservation clerk shall mark the next day’s respective room cell as O (i.e. Stayover). Lastly, the reservation clerk is encouraged to use colors while updating information or the cells on the control book.
Wall Charts
These are charts stapled on the wall depicting days of the month versus hotel rooms. Moreover, upon need and convenience, these charts might be customized to track appropriate room numbers, rates, and codes, hence, is advantageous to control books. Moreover, in this system, different colors are used to differentiate between different reservation transactions and types of guest reserving. Wall charts eliminate the erasures and rewriting associated with the control book, hence fewer errors might occur.
Computerized Systems
Computerized systems are by far the best systems that track room availability. These systems control room availability data and automatically generate many reservation-related reports accurately. Moreover, computerized systems can itemize room availability for future periods by open dates, closed dates, versus special event dates. This system can also forecast room availability for any reservation horizon needed in the future.
In the case of non-availability of room type, the system can further suggest alternative room types, rates, or even other hotels.
Reservation Record
Each reservation department shall prepare a reservation record, which depicts the various personal and financial data of guests, for each reservation transaction. The aim is to identify guests and their occupancy needs before guests’ arrival. Moreover, the hotel can personalize or customize guest services and better schedule staff accordingly.
To create a reservation record, the following details are needed:
- Guest name (and group name, if applicable)
- Guest’s home or billing address
- Guest’s telephone number, including area code
- Name, address, and telephone number of guest’s company, if appropriate v) Name and other pertinent information about the person making the reservation, if not the guest
- Several people in the group, and perhaps the ages of children, if any.
- Arrival date and time
- Several nights required or expected departure date,
- Reservation type [Guaranteed versus Non-guaranteed]
- Special requirements [i.e. infant, disabled guest, or no-smoking accommodation]
- Additional information, if needed [i.e. late arrival, method of transportation, flight number, room preferences, etc.]
During the reservation process, reservation agents shall keep in mind that a rate quoted and confirmed must be honored. Moreover, reservation clerks should be aware of the following:
- Supplementary charges for extra services or amenities
- Minimum stay requirements, if any, for dates requested o Special promotions in effect for dates requested, if any
- Applicable currency exchange rates, if quoting rates to an international tourist
- Applicable room tax percentages
- Applicable service charges or gratuities
Reservation Confirmation
The hotel should communicate with guests by telephone, telex, mail, or e-mail a Letter of Confirmation, which confirms the important points of the reservation agreement. This letter might be shown during the registration process to accelerate the pace of registration and to prove that the guest has the right to have a room at the hotel.
The Hotel shall send a confirmation letter to all reserved potential guests, whether their reservations are guaranteed or non-guaranteed. Below are the main points that should be communicated in a confirmation letter:
- Name and address of the guest
- Date and time of arrival
- Room type and rate
- Length of stay
- Number of persons in a group, if any
- Reservation type [guaranteed or not]
- Reservation confirmation number
- Special requests, if any.