FINAL RESEARCH PROJECT REPORT

ON
“Role of Information Technology in Hotel’’
SUBMITTED FOR THE PARTIAL FULFILLMENT OF
THE DEGREE OF

B.Sc. H&HA
OF
NATIONAL COUNCIL FOR HOTEL
MANAGEMENT&CATERING TECHNOLGY
BY
RAJDEEP GREWAL (115003)
SALONI SIDHRA (115010)
RAJINDER GHUMAN (115005)
RAHUL GOYAL (115002)
BSCH&HA VI SEMESTER

UNDER THE SUPERVISION OF

MR. TARUN TIWARI
Assistant Professor

CHANDIGARH COLLEGE OF HOTEL MANAGEMENT

&
CATERING TECHNOLOGY
2011-2014

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 CONTENT
TOPIC PAGE NO.

Project guide certificate 2

Declaration 3

Information 5

Acknowledgement 6

Objective 7

Methodology 9

CRM 10

Wireless technologies 12

Fidelio 14

The way forward (suggestions) 18

Result and analysis 95

Going back (conclusion) 103

Limitations 105

Bibliography 106

Questionnaire 107

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 Project guide certificate

This is to certify that Ms.Rajdeep Grewal, Ms. Saloni Sidhra ,Mr.Rajinder

Ghuman and Mr. Rahul Goyal has completed the research project titled
“ROLE OF INFORMATION TECHNOLOGY IN HOTEL” under my
supervision in completion of the Bachelor of Science in Hospitality and
Hotel Administration of National Council for Hotel Management and
Catering Technology.

Mr. Tarun Tiwari

Assistant Professor

Date ………….

Place …………………

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 Declaration

I hereby declare that the research project report titled

“ROLE OF INFORMATION TECHNOLOGY IN HOTEL” is my

own original

Research work and this report has not been submitted to any

University/Institute for the award of any professional degree or diploma.

RAJDEEP GREWAL
SALONI SIDHRA
RAJINDER GHUMAN
RAHUL GOYAL
B.Sc H&H.A (VI Sem)

Chandigarh College of Hotel Management

and Catering Technology

Date …….……………

Place …………………

4
 INTRODUCTION

The hotel industry is fast adopting the latest technologies in a big way,
thanks to increasing competition.

The hospitality industry in India is increasingly taking the help of

technology to not only cut costs but also lure customers. Today, guests in
most five star hotels can access the Internet through their laptops at the
poolside or in conference rooms, with equal ease, thanks to wireless LAN
(WLAN). Innovations like these that seem like technological marvels today
will be commonplace tomorrow as almost all leading hospitality chains will
provide wireless connectivity.

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 ACKNOWLEDGEMENT

The study was conducted by the assistant of several individuals. I really

appreciate their help and hereby thank them. I would like to give special
thanks to the following people:

1 Firstly, I would like to thank who had supervised the study and
was in charge of the entire project. His presence and assistant was
remarkable and so I am grateful to him.

2 Secondly, I would like to thank the hotel officials who were

interviewed. They took out time from their busy schedules to help
me proceed with my study. Their assistance was very significant
and so I am grateful to them as well.

3 Thirdly, I would like to thank all other people who provided me

with the resources to conduct my study. Their help and assistance
was very valuable and so I would like to acknowledge them as
well.

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 OBJECTIVE

This research work has pointed out some of the likely benefits and
difficulties, which might be encountered while using computers to
automate the industry. These are:

1. Increase in revenue: The most productive way to justify a new

procedure is in terms of the extra business that it will support. This is
particularly important in the hotel business which has to meet several
high fixed costs such as rents, rates, capital charges and wages more or
less regardless of the level of business which it enjoys. Increases in
revenue might be associated with better management information or
better standards of service.

2. Decrease Manpower.: for a greater output more manpower is reqired

but machines and computers helps it to get rid of manual work hence
less labour

3. Facilitates the use of technique: Some management techniques are so

time-consuming without a machine that they are to all intents and
purposes impractical. These would include many management science
techniques such as multiple regression, queuing simulations, liner
programming and even network analysis

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4. Better use of time: Freed from the necessity to spend a lot of time
collecting and organizing sets of numbers, managers can devote their
attention tasks for which human beings are best suited, namely the
analysis of data and interpretation of results. Management time is thus
being used more profitably.

5. Better customer service: Since staff will spend less time on the boring
tasks of data collection and recording, they can spend more time and
attention on that aspect of the hotel business that is important – service.
Better information will allow for more detailed analysis of customer
needs and possibly the provision of more facilities. Such factors provide
a useful competitive edge.

6.Low chances of error: Today most hospitality business in hotels , motels,

food service & beverage operation are using computers to record , report ,
& analyze the effectiveness of internal operation .

7.Interdepartmental coordination: it is very important to have a

interdepartmental coordination in hotels in order to run the operations in
standards and proper way.

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 METHODOLOGY

To get firsthand information about how the hotels felt about this, it was
essential to design a questionnaire and to conduct a survey research. The
following methods were employed to undergo the above process:
(a) Telephone interview
(b) Mail interview
(c) Personal interview
For data collection, mix of the following was employed in a questionnaire:

1. Open ended question

2. Close ended question
Besides this, the secondary sources of data were also tapped. A general
survey and feedback of what the latest packages consist of as offered in the
market today by some of the computer programmers and what they feel
the future might offer. I have restricted my study on the increased
automation of work in hotel to the four major departments, i.e. front office,
housekeeping, food and beverage service and the kitchen of which the
front office and the food and beverage service departments have been
covered extensively and a general overview has been presented for the
other departments.

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 CRM

While IT initiatives like centralized management and automating daily

operations are important, the key part of retaining a customer is critical to
the hospitality industry, which explains why every chain is taking the help of
technology to improve efficiency. Take a look at Le Royal Meridien. The
hotel has deployed a check-in system on each floor depending on the guest’s
profile. This has solved the problem of long queues of customers at the
counter, waiting to fill in details of their preferences.

CRM is also being adopted in a big way by almost all the big hotel chains in
India. At present, every major hotel chain in India is investing in
comprehensive systems that store complete profiles of their customers. The
moment a guest checks in, he fills a form indicating his various preferences.
If he is a regular client, the hotel immediately knows of his preferences and
serves him accordingly.

Says Prakash Shukla, senior vice president, technology, and CIO, Taj Group
of Hotels, “Every hotel has a major chunk of its revenue coming from its
regular clientele. We too recognise this and have deployed customer
information systems (CIS) to service the customer in a better way.” The
same CIS can be accessed through any of the group’s properties. A CIS
enables the hotel to keep a record of the exact profile of the customer and
keep a tab on his preferences during his subsequent visits. CIS creates guest-
centric processes that are essential for CRM. And since it focuses on
preferences, requests and problems of different customers, it is a boon to the
hotel management.

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The same database is used to offer loyalty programmes to the customer.
Most hotels today offer a customer different schemes based on his profile. In
the traditional method, this was done manually with no clear understanding
of a customer’s preferences. But now, with knowledge of the customer’s
history, a hotel can service a customer more efficiently. Some hotels have
even given their regular customers unique IDs to enable them to check their
loyalty points on the Web itself.

Says Zahid Memon, systems manager, J W Marriott Hotel (Mumbai), “Most

hotels know their customer preferences because relevant data can now be
procured from the systems as and when needed. Earlier, data management
systems contained only static information, which was used only to enhance
efficiency of the hotel staff. But today, with the help of analytical tools, we
can provide consistent service quality. CRM and software tools for front line
staff have enhanced successful one-to-one relationships.”

In addition, most hotels have also embraced newer technologies with gusto.
The Taj group, for instance, extensively uses VoIP and video conferencing
tools on its internal network to cut communication costs.

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 WIRELESS TECHNOLOGIES

One of the best examples of the use of wireless technologies is the hotel
industry. Major hotels are betting on wireless services as a new lure for
business travellers who rely on high-speed Internet connectivity and wireless
services to conduct day-to-day business.

“Initially, wireless technology in big hotels was traditionally confined to the

guest room, the business centre or conference rooms,” says Ashish Kale,
systems manager, Renaissance Mumbai Hotel and Convention Centre. But
as this hampered mobility of a business executive, hotels started looking at
using wireless Internet services throughout the hotel.

Adds Khetwal of Le Royal Meridien, “Wireless technologies deployed in

selected areas of the restaurant hampered mobility, and it was impossible to
access the Net in any of the restaurants and near the poolside.”

The Taj Group has already introduced wireless Internet access for its
customers at Taj Coromandel in Chennai, and is all set to launch this in
Mumbai. Shukla puts forward a very valid point: “As in any industry, one
has to realise that though different technologies are available, all of them are
not beneficial to the end-customer. One has to realise that as customers
change their preferences and the way they want to interact, we too have to
change with them. Going forward, a hotel which understands a customer’s
needs and fulfils it satisfactorily with the help of technology would
obviously be a preferred one.”

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Another significant use of this technology is seen in wireless-equipped
handheld phones called digitally enhanced cordless phones, which serve the
purpose of tracking a person anywhere in the hotel premises. This phone is
especially useful for mobile staff who can attend to a complaint
immediately.

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FIDELIO
Fidelio Hotel Management System

 Fidelio hotel management system is a completely integrated system

package designed to maximize the efficiency of the hotel.
 It is a highly flexible system.
 Its uniform & friendly interface means that hotel employees can learn
this system quickly.
 It has a special training module which enables the user to work & learn
in a real like environment.

Fidelio is a highly user friendly software with pull down menus which helps
& assist the user at every step & only a short term training is required.

Fidelio software's one of the most advanced hotel management software. It is

MUNICH based Software Company.
In addition red alert software for extra protection is used. Total hardware i.e.
Net server, vectra modes, & printer are provided by Hewlett Packard. Servers
are pentium based.

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Advantages Of Fidelio Management
Software Package
Fidelio is an eco-friendly as it makes the paper work reduced, eliminates filing
& storage cost. Fidelio has integrated, cognisable, context sensitive help
system & is in the form of pull down menus with windows & function keys.
It has a set of undeniable & friendly screen with colour coding by using a set
of 12 colour code to indicate the status of each room by a 12 colour code. It is
a highly flexible program unlike other software. Management system has
facilities like screen printer, report generator.
User-definable report menus & night audit, etc It has the ability to cerate
extensive guest history which can record guest stay, behavior, preference for
unlimited years. Complete geographical plan, illustration of each floor allows
the front office staff to operate & control the occupancy of ever room in the
hotel.

Disadvantages & Problems

 Its maintenance is also very expensive as compared to other systems
& if proper looking isn't done, anybody can access the guest profile in
front office & hence guest information can be easily obtained or
erased.

 User id should be kept since, it's not possible to block anyone from
reading valuable information; hence, such provision should be made.

 Locater information of the guest gets deleted automatically after, a

particular time.

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  During night auditing, for 2 hours the terminals are shut down check-
in & check-out can not be taken through computer.

 The colour coding on floor plan is not prominent enough as shading

causes confusion.

Importance of Fidelio in Inter-Departmental

Coordination & Communication
 It promotes smooth functioning of all departments wherever it is installed.
 Reduces paperwork & helps in saving extra money.
 Eliminates communication gap between departments & helps in providing
quality service to the guest.
 It helps in up-keeping of the hotels goodwill with the guest.
 The inter-departmental coordination leads to an attitude development in
the staff. The lax attitude is replaced with more courteous behavior as
they realize that they are equally responsible for their own action.
 It helps save time & increases productivity. Accommodation operation
includes two basics & important department in front office & house
keeping. Fidelio helps in inter-departmental coordination &
communication in both i.e. Front office & house keeping.
 Fidelio as a package is an enhancement to inter-departmental coordination.
 The underutilization of fidelio shall not give maximum benefit which can
be derived from the software. Features
Every aspect of the fidelio express fdm system is designed to allow you to
customize the program to fit your specific needs. The feature capabilities are

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virtually endless. The following list highlights just a few of its many valuable
features:

ONLINE RESERVATION SYSTEM

In the dot-com phase, hotels were attracted to the Web and were expecting
major revenues to come from online reservations. But just like other
industries, hotels too have been disappointed. Today, websites of most hotels
serve only as information outlets, and almost no bookings take place through
the Web.

One obvious reason is security, which makes customers reluctant to reveal

their credit card details on the Web. Says Shailesh Bhagwat, EDP executive
of Orchid, “Proper security systems are a must to avoid fraud in non face-to-
face transactions. Though most hotel chains offer customers a secure way of
transmitting data, it will be a long time before customers accept this.”

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 THE WAY FORWARD

Wireless communications and mobile computing technologies are changing

the way hotels manage information. In addition to this, strategic decision
making coupled with an ability to access information, analyzing it and
distributing it would be the key to increasing productivity and reducing
costs. Going forward, hotel chains could increase the number of value added
services without major investments in IT budgets.

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THE CHANGING ROLE OF COMPUTERS AND INFORMATION
SYSTEMS IN HOTELS :-
Almost everyone has a sense of the changes that have taken place in the cost
and availability of computers over the last two decades. It is hard to avoid.
Advertisements for electronic toys on television and in newspapers and the
appearance of small computers on sale in ordinary high street shops act as a
reminder at every turn. A small child at ending school is exposed to a very
different learning environment from that of his or her parents and is almost
certain to have some contact with the school’s computer. It is therefore,
interesting to speculate about the way in which computers might make an
impact on the operation of a hotel and restaurant. It is also useful to consider
how the role of computers and the design of information systems might
change in response to the Trent way from expensive, centrally operated
machines to the provision of local, directly accessible. Computing power
based on a number of inexpensive computers.

THE CLERICAL HOTEL COMPUTERS:-

When computers are first introduced into a business they are often relegated
to doing to kind of jobs that clerk do. The only differences being that they
work of electronic speeds. This is very typical of the way that computers are
first used in hotels. They are mainly introduced in back of house areas to
perform tasks like payroll processing or accounting. Sometimes they are used
in front house areas like reservations. The design and function of the systems
into which they are incorporated, however, remains substantially unchanged.
If the value of the computer is assessed at all it is often measured in terms of

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labour displacement; the investment being justified by the number of jobs that
can be removed. The people most at risk from such an approach are clerks,
particularly cashiers and account clerks. Fortunately the threat potential of
using computers in this way is defused by the fact that the machine is used
largely to prop up a creaking manual procedure which cannot cope with
existing volumes of work.
At this level of application, managers often talk about improvements in
control because records are organized more reliably and neatly. In practice,
while they are better able to understand historical events, the computer does
not, in fact, provide for more control over future events.

THE ADMINISTRATIVE HOTEL COMPUTER:-

Using a computer as an electronic clerk is not very imaginative, nor does it

really improve productivity in the hotel by very much. Productivity can also
be improved if the ratio between resources inputs and outputs is changed. For
example, if more information is available for the same level of costs or better
still, for a lower cost. A clerical computer does not generally achieve such a
result. For a greater investment a similar amount of information is produced,
albeit more quickly and neatly.
If sometime is given to think about the differences between the way in which
a computer works and the way in which a person works it will be realized that
computer based procedures can and should be different to manual procedures.
Since a computer will not get tired or bored and since it will maintain large
sets of records without complaint, it becomes possible to solve one of hotel’s
main problems. That problem is the sheer volume of data which is available.

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A modern small computer, able to run a big filing system, could allow the
hotel to undertake procedures which are either very expensive or even
impossible to provide manually.
A guest history system supplies a good example. Traditionally, large luxury
hotels in big cities have kept records of their guests. Usually such records have
needed the services of two or three people to maintain them. As guest departs
these people will bring record cards up to date. Before guests arrive they will
extract cards from the files and enter pertinent details of previous visits and
personal preferences on each day’s arrival list. Smaller hotels, which would
have liked to offer this service, have shrunk from the difficulty and expense.
The use of a small computer for guest histories not only makes it possible for
a much wider range of hotels to support them but brings other benefits as well.
The guest history can also be analyzed by the computer to produce valuable
market information.
The administrative computer is beginning to change the very way in which
the hotels operate. Time consuming tasks such as Food and Beverage control
can be undertaken cheaply and efficiently by machine. The computer not only
records movements of cash through the business but allows management of
cash flows. Procedures will depend on keeping good records like maintenance
procedures, guest record or personnel procedures are transformed. Primitive
bin card systems in store rooms vanish and computer is used to manage the
level of stocks according to business demand. Managers may have more time
and information for guest contracts and personalized computer printed letters
improves the quality of correspondence. Already measurement of computer
performance by means of cost displacement is terms of better personal
relationships – with staff, owing to the removal of boring, repetitive jobs with

21
customers through better service. The financial position of the hotel improves
with better cash flow management, increased revenues and smaller amounts
of capital tied up in unproductive ways.

THE TACTICAL HOTEL COMPUTER :-

From the mid 1980s to 1990 we may expect to see the emergence of networks
of small computers in hotels. One or computer work stations will be available
to each department of the hotel, providing middle managers with a tool to
assess the nature of decisions as they are encountered. At this point the
computer will have moved beyond the stage of simply facilitating the ordinary
business functions of the hotel. It will be using some data which is external to
the hotel to influence tactical decisions. At this point certain functions such as
purchasing and stock control will have become completely automatic. Since
most hotel businesses will be using powerful small computers by now,
competition based on the possession of differential information will become
less important. There will be few effective barriers to obtaining and
maintaining sets of data pertinent to the business. As a result competitive
advantage will be obtained by using information more effectively. Corporate
success is beginning to depend on the design and application of the hotel’s
computer based information systems.
By the mid 1980s it is unlikely that managers will be required to justify the
application of the computer from the rather defensive position that has to be
adopted today. There will no longer be a question of why a computer-based
procedure as opposed to manual one, should be used in the same way that
nobody questions that letters should be typed rather than handwritten.
Computers will still be selected in terms of the best machine for the job but

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evaluations of the performance will focus on the information systems of which
they form a part. Corporate success will be determined by how successfully
the hotel or restaurant is able to deploy computers in all areas of business
activity. The basis of management skill will need to be changed if this is to be
accomplished successfully. Managers will need to know which data to use for
problem solving and which techniques to apply to those data sets. The
availability of cheap, powerful machines will have removed any constraints,
which may previously have limited what is possible owing to the complexity
of processing of the volume of data.

THE STRATEGIC HOTEL COMPUTER:

It is perhaps fanciful to stretch the imagination further. The pace of change is
such that the future will not resemble the past that has ever been encountered
before. As computers are used to design new computers and as the technology
diffuses through society, the turn of the century might well see the emergence
of a totally new kind of business structure. This will affect hotels as it will
affect other types of commercial and non-commercial organization.
At this point the functioning of the information system will be the primary
concern of the business. In effect, all organizations will center on their
information processing systems and these systems will use data both internal
and external to the organization. All levels of management will be involved
in this system and will depend on it as the basis of most decision making. The
direction which the hotel will take in competitive sense will be selected on the
basis of the output from the information system. Thus the markets from which
it chooses to complete. The kind of product that it offers and the way in which
goods and services are provided with all change according to the interpretation

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of the environment that is currently accepted. Flexibility of the extent will
only be possible by the application of many automatic functions, most of
which will be supported by computers.
The computer will be serving top management more directly and it will
therefore be used to formulate strategic decisions. The differences between
the strategic and totally levels will be noticed in many ways. Firstly external
data sources. An outer circle of activities might be added to describe the
network of information processing facilities that will underpin society and
business as a whole. Second, there will be much more integration between
these and between the information services of the hotel itself. Finally, most of
these procedures will be completely automatic, using many self-regulating
control functions. Take for e.g., a hotel negotiating with a tour operator to sell
blocks of rooms/nights. The hotel management would be able to draw not only
on the hotel’s own data, so as to consider the marketing position in relation to
their intentions and those of their competitors, but would also be able to
consider a wide range of external data. Factors such as exchange rates,
commodity supply conditions, the likely attitude of labor unions, proposed
government legislation affecting disposable income, probable fare
instructions on transport systems and even the predisposition of consumers
based to use hotels, could all be assessed by the computer-based information
system.
The sheer scope of possibilities is difficult to encompass. The computer will
be used to identify markets, plan products. Schedule capital requirements,
recommend manpower needs, allocate resources optimally to different
business activities and suggest what kind of production processes should be
used in the highly automated kitchens. Whether the organization survives or

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cease will all depend on this information processing activity. Since the system
is controlling what the organization does, as well as how it does it, evaluations
will probably have to take place in social as well as economic terms.
Of course, the prospect of a hotel as a highly automated information
processing facility does not appeal to everyone. It may indeed cause many
managers to wonder what on earth they will do, or to ask whether a hotel run
along these lines will actually be a friendly and welcoming place to stay. The
impacts of computers on society will be discussed more fully later, but it is
worth remembering that a lot of these concern are related to the pact of
change. If air travel had displaced, sea travel at the same rate, society would
now have to cope with a lot of suddenly unemployed sailors. Simply turning
away from the problem does not help.

DESIGNING INTELLIGENT MANAGEMENT INFORMATION

SYSTEMS:-

So far it has been suggested that hotels will make increasing use of small
computers and that technical and social advance will lead to increasingly
sophisticated information systems. These changes will alter the role of the
computer within organization and will affect the type and nature of the
decisions that managers have to make. The question of how a hotel might
progress along this line of development then presents itself quite naturally.
Many hotel and restaurant managers may feel that this evolution is a long way
removed from the situations in which they find themselves at present. Related
to the activities which take place in hotel, it will be seen that the design of

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intelligent information systems is neither beyond the capabilities of existing
technology, nor beyond the abilities of a hotel manager to learn.
1. THE STORAGE OF RAW DATA :- This is the most elementary stage.
Indeed, it is so primitive that it can hardly be dignified with the name
information system. A set of rules is established to select and limit the data
that are stored. Many hotel guest history systems have reached only this
level. Registration cards are filed and from time to time some are thrown
away as the file becomes full. Many auditing procedures also work on this
basis. Thus duplicate bills or order checks are kept for a time, often just
grouped together with a rubber band, until someone is sure that they will
no longer be wanted.

2. A SYSTEM TO CLASSIFY AND AGGREGATE DATA :- At this level,

the design of the information system is still simple but a method of
classification is introduced so that data may be retrieved other than by
processing the entire file. Data may be stored by date, type of guest or even
by status of guest. It is now possible to recover data about all the people
that the hotel has designated as VIPs or to pull out all the restaurant orders
for 24 September. Naturally, even such a small improvement greatly
increases the utility of the data to the hotel’s managers.

3. AUTOMATIC COMPARISONS: - The system of classification is now put

to work in a routine way so that the data are compared. Very often the
comparison takes the form of relating this year’s performance to last year’s
or estimated with actual sales and costs. In practice, of course, such
comparisons are not very helpful to decision-makers because no allowance

26
 is made for changer in conditions which may have taken place between the
two periods. Most hotel accounting systems have reached this level.

4. SIMPLE MANIPULATION: - The fourth stage of development represents

a significant advance over stage 3. At this point attempts are made to
actually use the data so as to present to management an indication of the
appropriate response to problems. Thus the data are manipulated to form
indices and percentages. Furthermore, the system incorporates national
models of behavior which are based upon the basis of planning and control.
The best example of such a model would be a standard costing system. In
a standard costing system a calculation may be made to identify the levels
of cost that would have been incurred if all procedures are properly
followed. If a variance is identified, let us say between the actual and
potential food cost, this can be analyzed to show which proportion of the
variance is due to differences in volume and which proportion is due to
differences in operation. In other words, the managers will know how
much of the error is due to poor planning and how much is due to a failure
to follow the standard recipes or to purchase the right ingredients. Thus the
information systems is making assumptions about causes and effects and
associating them in a planned way to provide a guide for solving problems.
An information system cannot really be described as intelligent until it has
reached this stage.
Such systems are often associated with crude control procedures to which
a response is made in an automatic way. The best example is that of a
manual stock control procedure. Here records are kept on bin cards which
show the minimum and maximum stock levels along with the recorder

27
 point, an order is placed to bring the stocks up to maximum level and this
should be delivered before the minimum position is reached. If the reorder
point for tinned peas is set at ten tins and the maximum stock at sixty, then
an order for fifty tins is placed as soon as the number on the shelf falls to
ten. A control procedure of this type is described as reflexive because no
attempt is made to question the suitability of the response to current
conditions.

5. MANAGEMENT BY EXCEPTION :- At this stage the systems still uses

a reflexive control system but it extends its involvement with decision-
making. Hence only deviations, which do not require management action,
are not drawn to attention. At the same time an attempt is made to record
and examine the assumptions that were made when plans were being
formulated. Report are then produced which compare not only actual with
possible results. Economists and accountants refer to such possible
outcomes as opportunity costs.
In order to evaluate opportunity costs an attempt is made to assess possible
outcomes from choices which were rejected at the decision point. For a
hotel front office, a rooms report might show not only the occupancy that
was achieved but the occupancy that might have been achieved if all the
business from the tour operators had been accepted. Of course, the main
difficulty in comparisons like this is that the effect of unforeseen events,
to which the actual choice has been subject, are difficult to assess for
rejected choices. The level of cancellations from existing business is
known but it is difficult to estimate that the level of cancellations would
have been for enquiries that were refused.

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6. EXAMINATION AND CHANGE OF THE DECISION MODEL :- If
decisions are to be made effectively, the information system must be
capable of responding to degrees of incompleteness and of representing
the data differently according to the nature of current problems. Thus it
should aim to exploit even incomplete data to the full, to identify elements
where increased precision would be valuable to suggest areas where
additional data might be collected.
A small computer could also be used to improve the intelligence of the
control procedures. At this stage, the control procedure would use a
parametrically adaptive approach. In other words, the response that the
system made would depend on the conditions that were encountered. The
control system would be adapting decisions to the values (Parameters)
used in calculations. If the example of stock control is taken again, the idea
of a fixed reorder point is how abandoned. The computer is used to monitor
the stage of every ingredient and to calculate both time to reorder and the
size of the new order, according to the level of demand.

7. A CAPACITY TO DERIVE ABSTRACT FUNCTIONAL

RELATIONSHIPS :- At stage 7 an attempt is made to extend even further
the abilities of the system of associate causes and effects and to operate on
the basis of incomplete information. As the information system senses a
change in the environment it begins a predetermined search pattern for
causes. Using the last known similar problem as its starting point, which is

29
 a form of learning. On this basis, the system is able to represent
information differently, according to the nature of the current problems.

8. THE DEVELOPMENT OF METASYSTEMS :- A met system probably

corresponds to the level of ability required for a strategic hotel computer
and is still a little way beyond present capabilities. If at stage 7 the system
is able to establish functional relationships between alternative models,
such as the relationship between the pattern of the customers and the
demand for the certain food. Stage 8 assumes that it is able to generalize
from relationship so as to solve other similar classes of problems. Thus the
information system may be able to recognize a problem as belonging to a
particular class and begin a search for cause on that basis. The information
system may then be able to identify telephone demand as a function of the
proportion of business guest using the hotel.

USING COMPUTERS IN HOTELS AND

RESTAURANTS:-

It is normal business to refer to the users of a hotel not as customers or

clients but as guests, the implication being that the manager of the hotel is

30
the host and the staff of the hotel is his or her helpers in providing as
comfortable and as relaxed a stay as possible. The guest is an important
person and it is everyone’s job to make sure that the visit is an enjoyable
one. At the turn of the century when the labor was plentiful and the wages
were low a good hotel would employ a lot of people to make sure that a
high level of personal service was available. As a coach pulled up by the
front door the doorman and the porter would be there to welcome the guest
and to take the luggage. The guest would be escorted to the reception desk
where he or she would be greeted by name. Jobs were not easy to find and
staff would be escorted to his or her room where a maid and a valet would
help with the unpacking. There would be no private bathroom adjoining
the bedroom for the simple reason that where a bath needed it would be
carried into the bedroom itself. Someone would always be available within
earshot of a bell-pull to light the fire, wind the clock, top up the decanters,
take dictation for a letter or rush out to buy some theatre tickets. A large
kitchen brigade with many cooks and commis would prepare elaborate and
time consuming dishes. The food would be served by attentive waiters. At
the end of the stay a carefully prepared handwritten bill would be
presented, detailing in full all the charges that has been incurred. This
would be signed and the guest would leave the hotel in the same splendid
style. In the 1980s we used the term guest and most hotels have the same
intentions to provide for a hospitable visit but conditions are not the same
as they were. The large, cheap labour force has vanished. Changing social
conditions have altered attitudes to personal services making it difficult to
recruit people for some kinds of service industries even where other kinds
of work are not available. The business traveler from both the domestic

31
 and the international market now forms a substantial portion of hotel users,
especially in the upper-middle and luxury market segments and these
travelers need access to the communications and business services
essential to their trade. The hotels are larger, the staff more transient and
the technology more complex and expensive than it used to be. Yet
everybody talks about service in the same way and perhaps even with the
same expectations as they might have done 75 years ago. Fortunately we
have today a winning slave who is prepared to work endlessly at very little
cost on the most mundane, tedious and repetitive tasks. This slave is called
a computer and it can be used in many situations to support the staff of a
hotel, carrying out the tasks which are no longer attractive to people. In a
way, we could explain the use of computers in hotels as a means of
providing a more complete personal service.

Introducing computer-based services

To some extent the social aspects of working with others is often an
element which often influences people to take a particular job. This is
fortunate since the hotel industry is not noted for its generous wages or its
excellent conditions of employment. In one study half of the people
interviewed with experience in the hotel industry made reference to the
long and difficult hours. A substantial proportion thought that many jobs
were dirty, badly paid and involved dealing with awkward, rude customers.
Labour turnover, which would in any case be high in seasonal industry of
this sort, is increased even further by poor conditions and this presents
continuous problems of recruitment and training. In a social environment
where some kinds of service jobs are perceived as being unattractive and
where people are able to choose whether or not to take employment

32
without fear of destitution if they refuse, then it is clear that managers must
consider alternative ways of providing some services. It is also apparent
that even if these service jobs can be filled they are often taken by a semi
or unskilled labour force with little commitment to their employer. Many
such jobs are undertaken on a part-time basis and sometimes for reasons
in which the work itself is of secondary importance. Increasingly managers
must turn to other ways of providing hotel services in a consistent and
reliable way. The range of tasks that is possible to support by means of a
computer-assisted or a computer-controlled service is growing all the time.
Ideally, the use of computers in a hotel should be considered at the design
stage of the project. If this happens a number of advantages can be gained:
The physical design can take the nature of the computer-based services
into account when layouts are planned. Thus the size and shape of the space
provided in each work area will relate more precisely to the way in which
the work is to be performed. This means more than just providing a place
to put the computer equipment itself. It implies that enough space is
allocated to allow for siting of video displays and other terminals, that
major operating plants such as telephone or television systems which may
need to link in to the computer system are selected so as to be compatible
with it and that provision is made for trucking and cabling to permit easy
installation and maintenance of this equipment. Computer based
procedures are not identical to their manual equivalents. This is to say that
it is not sufficient to imagine that a computer can just be ‘plugged in’ to a
procedure so as to perform one part of it more quickly. The approach to
the job is often quite different. The flow of work may change, the kind of
tasks that have to be carried out may vary, the way in which decisions are

33
taken may alter and the number of people needed may differ. More
important still the interaction between people in the work place may
change. If the computer system is conceived as part of the operating
procedures of the hotel ten it is more likely that these differences will be
taken into account.
Once the operating procedures are agreed it is possible to develop the
manpower plan for the hotel. This means that job designs and personnel
specifications can be related to the systems that will be in use. The type
and the number of people and the range of skills that are needed can be
tailored closely to circumstances. This has special implications in a new
hotel project for pre-opening recruiting and training. Specialists and
department heads need to be brought on board in time to refine procedures
and familiarize themselves with equipment before they can train others.
An important part of the design of procedures is the flow of information
and the design and layout of forms. This will be dealt with more carefully
in a later chapter. At this stage it is useful to note that the kind of records
that are to be kept in terms of size and content, will have a major impact
on the effectiveness or otherwise of the decisions that might be taken.
Finally, the furniture, fittings and equipment (FF and E) budget can
make provision for workstations, desks, tables, chairs, filing cabinets for
computer printout, library boxes for magnetic media and security cabinets
for back-up copies of programs and data. Of course, many hoteliers wish
to introduce computers into a hotel that is already in operation. In order to
obtain the same benefits they must recognize that two steps are needed
instead of just one. The first step is to identify the areas of application and
design the new procedures to be used (just as if the hotel were being built

34
 from scratch). The second step is to design a set of procedures for
transferring from the old system to the new one. This is some times known
as the cut-over plan.

Marketing Considerations
Before examining the applications of computers in hotels in more detail it
is worth thinking about their role I relation to guests. What should the
hotelier be using them for and to what extent guests need to know that a
computer is being used? Back in the mid-1960s when computers were
large and expensive devices rarely used in the hotel business, a certain
hotel in New York installed a very comprehensive computer system and
began to promote itself as one of the world’s first electronic hotels. The
manager clearly had the idea that people would choose to stay in the hotel
because it had a computer system that could do some jobs very quickly.
Unfortunately, owing to problems of design and communication this early
experiment went badly wrong and the computer system was eventually
removed and replaced by manual procedures. This was to have a lasting
effect on both the hotel industry and the computer industry as the memory
of the failure lingered for many years. Even if the computer system had
worked well would it have made the hotel more successful? To answer that
it is helpful to be reminded of the purpose of a business.
Peter Drucker has some interesting ideas on this topic:
There is only one valid definition of business purpose: to create a
customer……..What the business thinks it produces is not of first
importance – especially not to the future of the business and to its
success…….What the customer thinks he or she is buying, what he or she
considers value, is decisive – it determines what a business is, what it

35
produces and whether it will prosper. The objectives of most hotels include
statements about profits and their policies explain how they intend to make
those profits through the provision of a particular range of goods and
services at a standard that they believe will attract their customers. A hotel
can survive only so long as people want to stay in it and they will do that
only if they expect to be able to satisfy their needs for hotel services in that
place. It is the task of the marketing function to identify those needs and
the task of management to design organizations to meet them. The better
the match between the market and the product the greater the likelihood
that the hotel will be successful. Effective decisions are those that change
the posture of the organization so as to make the product/market match
closer.
An example of an effective decision would be a change in the hours that
room service is available so as to provide an early morning breakfast for
guests who have to get up early to catch a flight. This decision changes the
availability of the product. A decision to introduce a computer-based
procedure into a hotel will probably not change the effectiveness of the
operation since it does not alter the marketing posture of the organization.
In general, a computer will change the efficiency of a procedure but will
not fundamentally affect its value to the guest. A decision to provide a
rapid checkout at an airport hotel is likely to be effective because it is what
most guests need. The value of the service is that it enables them to leave
the hotel quickly and comfortably with a minimum of stress. A rapid check
out can be supported by a number of different procedures, some of which
may be based on computers. The value of the guest lies in the speed of the
checkout, not the method by which that speed is maintained. It is very

36
important to try and identify which satisfactions the guest is seeking from
his or her stay in the hotel. A computer can affect the efficiency of a
procedure by a tremendous amount. It can make it faster, more reliable and
cheaper. To the extent that these elements are of value of the guest then the
computer makes the product more effective. However, it is important to
remember that it is the speed, reliability and cheapness that the guest seeks
and that the mechanism by which those things are provided is largely
incidental – For the most part computer-based procedures operate very
much at the tactical level of operations by changing efficiency. Although
they may be used to support limited strategic and strategic decision taking
they do not change effectiveness of themselves. An ‘electronic hotel’ is of
little interest to the hotel market because it has no value in terms of the
satisfactions that a guest is trying to meet.

ILLUSTRATION – I
The second aspect of the hotel industry that distinguishes it particularly
from manufacturing and retail business is the way in which the goods and
services it provides are manufactured and consumed. A hotel often carries
a high proportion of fixed costs. That is to say that regardless of whether
it is full or empty, a large proportion of costs which it has to meet still have
to be paid. Most of these costs related to capital which was borrowed to
pay for the construction or lease of the buildings and fixed plant but some
costs are incurred for maintenance, heating and a part of the staffing costs
(current labour laws do not make it easy to regulate payroll in accordance
with the level of business). Inventories of sales (called reservations in
hotels) are therefore especially important. In most businesses if a customer

37
places an order for a product, he or she will be probably accept delivery at
some point and then pay for it. If he or she does not pay for the order then
that product can be sold to somebody else. In a hotel the main item for sale
– bedroom accommodation – is highly perishable in the sense that a lost
sale can rarely be recovered and although it is sometimes possible to
mitigate cancellations, some hotels find this especially difficult. The
problem varies in intensity depending on the market which the hotel is
seeking to attract. A resort hotel will tend to accept reservation and enclose
a deposit so as to make sure of their holiday. Cancellations are fairly
uncommon and usually occur owing to changes in family circumstances.
When guests arrive they will stay for long predictable periods such as one
or two weeks. A hotel located in a city center or at an airport which builds
up most of its trade from business travelers is in a very different position.
In this case, most reservations are made by telephone very close to the time
of arrival. Perhaps as much as 50 or 60 percent bookings might arise within
seven to five days of arrival. There is not time for a written confirmation
and no deposits are sent. Many of these reservations will not be taken up
owing to change in business plans or because the executive has made
simultaneous reservations at hotels in more than on town so as to allow
himself or herself some flexibility. No formal notice of this cancellation
can be given. This is known simply as no-show. Guests who do arrive stay
for quite short periods such as one or two days but are quite likely to vary
their expected departure date one way or the other. It is therefore much
more difficult for this kind of hotel to regulate its occupancy and
subsequently difficult for it to regulate its revenue. Business hotels and city
center hotels tend to make for greater use of overbooking in consequence

38
so as to be sure of filling as many rooms as possible. A fourth characteristic
is that most types of hotels also include credit facilities as part of their
product and this will affect their style of operation. Except for hotels in the
very lowest market sectors, any guest checking into a hotel is usually
extended credit implicitly for the duration of their stay. Although all hotels
will try to regulate credit by fixing deposits and by managing credit limits,
this often leads to difficulties. The status of the customer as ‘guest’ implies
a degree a trust that cannot be avoided. In addition, the number of
transactions can be large even though each amount may be quite small and
spending may take place in a variety of operating departments. This alters
the cash flow of a hotel since the direct costs of items such as payroll and
food and beverage have to be met before revenue is forthcoming from the
guest. To summarize we can say that most hotels are small independently
owned business. They are trying to market a transient product in market
conditions which are highly seasonal and difficult to predict. Their existing
cost structure and the credit conditions with which they must operate make
rapid returns on investment an important priority. Most profits are
associated with sales of bedrooms accommodation and it is not difficult
for a resort hotel with long booking lead times and long average length of
stays to devise manual procedures able to cope with these conditions.
Business hotels on the other hand often have great difficulty in regulating
their occupancies. Their guests are also more likely to demand fast
efficient service and it is business hotels which were the first to take
advantage of the growing power of microcomputer based systems. A
further analysis, this time including all types of computer system and not
simply those based on microcomputers, suggests that market penetration

39
continued mainly in larger up-market hotels. Although most luxury hotels
have installed computer systems to cope with the volume of business, it is
suggested that they feel less able to justify or obtain the high staffing levels
needed to maintain high service standards and to charge the sort of high
room rates necessary to pay them. Middle market hotels forced to consider
other approaches are turning to computers to maintain service levels. The
application of computers to accommodation management is of great
interest because this is generally the area that offers the greatest potential
for profit improvements. This is not to say that profit improvements may
not be gained in other operated departments through the use of a computer
or indeed that other possible benefits are not attractive. The advantages of
cost reduction, better management information, de-skilling and reduced
training or the prospect of more interesting and worthwhile work all have
their attractions. Such advantages are recognized and exploited when
computers are used in other areas such as food and beverage management,
sales planning and control and profit planning. Additional tasks of this sort
may be supported by computers in hotels where managers have some
experience in the use of front office systems and where they are confident
to extend these techniques to other types of work. In this situation these
extra functions may be linked into the front office system. Equally well,
they may be introduced separately into hotels that do not use computers
for front office work. The extent of computerization in the hospitality
industry spreads by a mixture of these two approaches.
Integrated data processing
In a computer system it is possible to take advantage of these constant
references to the same sets of data by means of a technique called

40
integrated data processing. In integrated data processing the attempt is
made to record each piece of data once, to record it correctly and then to
utilize it in that same form in every possible way to elicit information for
the planning and control purposes of the operation. This approach turns a
necessary requirement to a positive advantage. Each time that data are
copied from one form to another, errors may creep in and this can lead to
wasted effort and lost revenue. If such entries are only made once the
possibility of error is reduced, the more the process is simplified and the
easier it is to handle the procedure by machine.

ILLUSTRATION 2
Illustrates some of the flows of data in a hotel. Although some of the
exchanges of information have been missed out to take the drawing easier
to follow, it is interesting to consider how a totally integrated hotel system
might work in practice. In this imaginary example the computer the
computer has been envisaged as being completely central to all aspects of
the hotel’s operation so that it is linked into the management information
system, the engineering service and the internal communication system.

Forward reservations
When an enquiry is received the computer would be used to check the
guest history. This would provide an indication of the status of the guest.
At the same time the system would help the reservations supervisor to
make the accept/refuse decision. Using the statistics package and the data
available on file the computer could predict the likely level of demand over

41
 the planned period of stay, probably presenting the information in the form
of a graph. It would also be able to compare the present level of
reservations with the marketing plan and predict the effect of the
reservation on future occupancies and room rates. From these pieces of
information the supervisor would be in a position to decide whether to
accept the reservation or to refuse it in the expectation of a better booking.
If the reservation were accepted, details on the guest history system would
be verified so that unchanged data did not have to be re-entered. Once the
new reservation was recorded the computer would bring some of its other
files up to date so as to produce accurate status reports for management.

Current status
Prior to each day’s arrivals the computer would be busy providing
managers with information to help them maximize revenue in the hotel. If
expected occupancies were low, it could generate lists of potential
customers with short booking lead times (the time between making a
reservation and actually arriving at the hotel) so as to support sales
promotions. It would use a model of the hotel’s market in its market
information system to calculate the net effect of cancellations, no-shows,
extra departures (guests who leave before their planned date of departure)
stay-ons and chance arrivals. The computer could also print arrival lists
and pre-register all guests will reservations on a particular date. On arrival
the guest would merely have to sign in if the data on the form were correct.
Existing room status would be known to the computer since the
housekeeping department would be returning rooms to reception by
entering room numbers on one of the system’s remote terminals. The
computer would be programmed to handle room allocations in a way that

42
 maximized efficient operation of the hotel. Blocks of empty rooms would
be grouped together so that engineering services to sections of the hotel
could be closed down. At the same time the computer would schedule
arrivals and departures so as to make best use of the available work force
in the housekeeping department.
Billing
Once registered on the system, details of the guest are now available to all
operating departments. The computer would have automatically checked
the guest’s credit rating and this would be monitored continuously. Each
time charges were entered into a remote terminal from any of the
departments of the hotel the current bill would be brought up to date.

Operations control
During the guests stay the computer would be responsible for making sure
that the standard of service and comfort were maintained. It would regulate
the environmental control services such as air conditioning, check the state
of operating equipment and advise maintenance of any failures, handle
alarm calls to wake the guest in the morning, automatically route telephone
calls around the hotel if the guest were not in his or her room and, of course,
provide any local computer services that the guest might need. This might
include business computing such as word processing services or personal
computing such as the purchase of theatre tickets. Naturally, the computer
would be in charge of guest’s security. It would regulate access to different
parts of the hotel by members of staff and keep a constant check on the
atmosphere for traces of smoke or fire. The computer’s role would not only
be confined to guest contact areas. At the back of the house the machine

43
 would be busy planning production schedules for the kitchens and keeping
track of inventory control and purchasing.

Accounts receivable and accounts payable

On the guest’s departure the computer would transfer all charges to the city
ledger. It would also bring its market information files up to date so that
management could compare current performance with planned
performance or use the latest information for making new plans. Since one
of management’s main concerns is cash flow, the computer would be
programmed to ensure that cash inflows were always adequate to meet
necessary outflows. It would therefore control the dunning cycle
(collection of debts), adjusting credit ratings as necessary and schedule
payments to suppliers quite automatically. Commission payments and
foreign exchange transactions would be incorporated into these
procedures.

Financial and management accounts

The computer could also be used to maintain all the ledgers of the business
and to produce financial reports in different formats according to needs.
Thus to meet the requirements of the law the computer would produce
financial statements of profits and losses. To meet the requirements of the
management group the computer group combine financial information
with other data drawn from both the internal market (previous guests) and
external market (potential guests) so as to assist with the identification of
trends and the preparation of future profit plans. Part of this planning
would include scheduling for the implementation of plans and would
include plans for future manpower requirements.

44
Applications oriented hotel systems
An application oriented system, sometimes called a stand alone or
dedicated system, is only designed to handle one part of procedure. It
therefore provides for more limited integration. Thus there could be a
system to deal exclusively with the city ledger or with payroll.
Alternatively, perhaps the system might deal with all front office work,
reservations, registration and billing, but not link into an accounting
system. A stand-alone system is much easier to design and much cheaper
to buy. In some ways it may also be more efficient in operation. Since it is
only intended to control a lesser range of functions the computer can be
programmed to carry them out as precisely as possible, without so much
regard to the computer needs of other operations. Many stand alone
systems in a hotel also make for an increase in the overall reliability of the
data processing operation. If one system breaks down then the hardware
from other systems is available to replace it. Completely dedicated stand-
alone systems however can be rather wasteful. For example, it would
obviously be inefficient to separate reservations, registration and billing.
These three functions hold far too much data in common to be tackled
independently in a sensible way. Owing to their smaller capacity and lower
speed of operation, macro-computers tend to be used more often in a stand-
alone mode. Increasingly, as the power and performance of this type of
machine is improved, the level of integration with which it can cope is
being extended.
Early macro-computer systems were often limited in capacity owing to a
lack of efficient backing store (filing capacity). It is difficult to compress
big guest history files on a floppy disk or to handle big files of future

45
 reservations for large number of rooms. In the early 1980s many
companies selling micro-computer systems to the hotel industry used to try
and minimize the importance of these features to draw attention away from
the limitations of their equipment. There are also limits on the number of
simultaneous users that an 8-bit computer can support in an online system
without very slow response times. The arrival of large capacity mini-
Winchester type disks and the advent of 16 bit microcomputers have
changed all that. In terms of limited integration for tasks such as front
office management or integrated billing and accounting systems, macro-
computers can now offer features to rival those found on some
minicomputer-based systems.

The case for stand alone systems and distributed processing

The term front office system is used to describe the computer-based
procedures capable of supporting those departments of a hotel responsible
for selling rooms, receiving guests and keeping bills up to date during their
stay. As such, they are usually concerned with the three functions of
reservations, registration and billing. Although, these procedures can be
supported quite well by stand alone systems they tend to hold a tremendous
amount of data in common and this is treated more efficiently if the three
procedures are linked. Indeed, as the features required by a front office
systems are examined, the problems of treating some administrative
functions of the hotel as separate procedures will emerge. It is very difficult
to decide which tasks should be linked together and which can be kept to
themselves. The hotel itself is a system and as such is better considered as
a whole. Any attempt to organize information flows in some parts of the
hotel which do not allow access to that information by other parts, is bound

46
to be less efficient than one would wish. Any choices that are made to
select parts of the hotel for separate treatment are bound to be based on
artificial criteria to some extent. It is obvious that a billing function needs
to be linked into all departments of the hotel and that it should also be
connected to the main accounting system. So what justification can be used
for cutting these links?
Integrated systems are very hard to design and write and are
usually produced by teams of highly skilled programmers. The speed of
performance of the system is crucial and every feature of the hardware and
the software is carefully evaluated. This means that they take a long time
to develop and even longer to test under load. They require very good,
continuously available support since if one part of the system becomes
faulty, it may well lead to difficulties in more than one area of the hotel.
For these reasons totally integrated systems are very expensive to buy,
install and run. Smaller hotel businesses often find them difficult to justify
in financial terms. Integrated systems also incur more training costs since
they are often more complicated to use. If the computer system is available
to many people in different parts of the hotel, it is quite important that
everybody knows how to use it properly. After all, if a restaurant bill is
entered onto the system incorrectly, it will affect records in the front office,
the night audit and the accounting department. In other words, the impact
of each entry in an integrated system if far greater than in stand alone
systems. In addition, integrated systems usually have far more problems in
maintaining the security of the data which they hold. This must be
considered from two points of view. The first is that sine the computer is
in charge of so many jobs in the hotel, a breakdown can be very serious

47
indeed. To overcome this, most integrated systems usually duplicate
important parts of the hardware. Two computers and two disk systems are
often used so that in the case of a failure the hotel can switch from one to
the other. Integrated systems also tend to keep extensive ‘transaction logs’
by printing summaries of all the main entries on their systems at regular
intervals. The second security problem is that of restricting access to the
data on the system to those people who are authorized to use it. Each
computer program has to check that the user is authorized to read to read
a particular file and this may be done by means of passwords or by
identifying each user to the system in some way. Stand alone systems are
not completely free of these problems. Good training is still needed and
the security of the data is still important. However, they are considerably
cheaper to buy and install, costing perhaps one-tenth as much as integrated
systems. The financial justification is therefore easier. Being concerned
only with a part of the hotel’s procedures, they are less central to its
organization and the risks and difficulties in the case of a failure are often
smaller. They can therefore be introduced into the hotel on a piecemeal
basis and each system can be evaluated precisely in terms of the limited
jobs which it aims to carry out.
Since each stand alone system comes with its own hardware, the failure of
one does not affect any of the others and this improves the overall
continuity of the computer systems in the business. Finally, the gradual
introduction of computers into the hotel may reduce the sense of threat to
staff and reduce anxiety about the effect of the computers on jobs. Ideally,
the hotel would aim to move from a number of stand alone systems to an
integrated system. This implies that the designers of each set of procedures

48
had thought about the total functioning of the hotel at the design stage and
had developed their hardware and software in the form of modules so that
each part was compatible with the others. Computerization of the hotel
would then be based on a set of modules which the manager could
introduce in states. The final result would be a network of computer
systems each capable of operating by itself but also able to pass data to and
receive data from the other machines in the network. In the case of a failure
any machine could be switched to take over another job, providing for
almost complete continuity. It is likely that most commercial data
processing both within the hotel industry and in other industries will be
based on distributed processing networks of this sort in the future.
Managing accommodation sales with a computer
The main purpose of a front office system is to maximize the revenue that
accrues to the hotel through sales of bedroom accommodation in
accordance with the marketing plan of the hotel. This revenue is based on
two elements:
1. The average room rate which is achieved. This is the actual price which
is obtained for room sales. It differs from the published price of rack
rate because it takes into account all the concessions and discounts that
have to be made to maintain revenue. A twin room which is let as a
single room will reduce the revenue potential. A sale made via a
commissionable source such as a travel agent or an airline will also
reduce potential revenue by the amount of the commission. Even a sale
made on credit reduces revenue potential either directly by means of
credit card commissions or indirectly because future sums of money are
worth less than present sums owing to the effects of inflation.

49
2. The average room occupancy which can be achieved. This is the
number of rooms which are let expressed as a percentage of the
maximum possible number of lets.
These two elements have to be considered as opposite sides of the same
coin. A high occupancy at the expense of a low room rate will not
necessarily maximize revenue, nor will a low occupancy at a high room
rate. The final outcome is the result of a difficult juggling act on the part
of the front office manager. Each enquiry has to be assessed to determine
its likely impact on the overall performance of the hotel. It is not sufficient
to accept every reservation as it arises. It may be that the reservation would
be heavily discounted thus producing a low rate and that the room could
be sold to someone else later on at a better rate. It may be that the
probability of the guest’s actual arrival is low. It may be that to accept this
enquiry would displace regular guests who provide the hotel with valuable
business in the off-season. In addition to all this, a front office is also
required to provide some guest services as part of the hotel’s product. Each
aspect of a front office system, in common with other operating systems,
must therefore serve three functions, and these are listed below:
1. Custodial
The day to day entries that maintain the records of the department.
These entries may form the basis of other procedures and they represent
the bulk of their daily business routine. Examples would include
recording a guest’s name and address as part of a reservation, listing
arrivals on a particular day or entering details of charges on a bill.
2. Service

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 Guest services will vary from hotel to hotel but in a front office are
usually concerned with providing information about hotel services and
about external events and locations.
3. Decision-taking
The system must be capable of organizing data and presenting it to
managers in a way that will support decision taking. The most
important decisions are those to do with accepting or refusing
reservations but there are also a large number of subsidiary decisions
that can affect performance at an operational level. The method by
which rooms are allocated would be an example.
When examining the features needed in a front office system these three
functions will be considered together since they are closely related. There
are not many computer based front office systems on the market and it is
useful to consider some of the key elements that may influence choice.

Key elements of the reservations module

Receive enquiry
The computer should assist in collecting guest data quickly and accurately.
Data is normally entered directly into the system by means of a V. D. U.
keyboard. This is termed as keying in the data. In order to make the job
easy the computer will display a standardized form on the screen and will
automatically jump from one position to another as the form is completed.
This form layout should be attractive to look at and present the data in a
logical sequence. Remember that the operator may be dealing with an
enquiry on the telephone or with a walk-in guest at the front desk. There
will be time to look up complicated codes and it will not always be

51
convenient to refer to a manual. Some ‘obvious’ checks may be carried out
as the data is entered. The arrival date must always be less than the
departure date and the computer should query and lengths of stay that
appear unusual by forcing the operator to confirm the data.
Guest history
If the guest history is online (available to the computer all the time) then it
should be possible for the computer to check whether the enquirer has
stayed at the hotel previously, after the first few data items have been
collected. This will speed up the reservation and may impress the potential
guest with the efficiency of the hotel. In practice, this facility is quite hard
to provide mainly due to the problem of identifying each previous guest in
a unique way. A person who has previously registered in the hotel as Mr.
J.T. Smith and who is recorded on the guest history in that way may be
referred to by his secretary on a future occasion simply as Mr. J. Smith.
Using parts of the address or when the company affiliation may not solve
the problem since either of these can change from stay to stay. In addition
to personal details the computer can be programmed to collect other data
that is already on file. If the guest belongs to an organization that has a
regular arrangement with the hotel, data such as the company name and
address along with details of any special terms can be attached to the
reservation automatically. A similar facility is possible for reservation
from sales agents like reservation services or travel agents. In this case, the
extra data is useful for recording commission payments.
Check room availability

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The number and types of rooms which may be sold over the data being
considered must be given to the reservations clerk as quickly as possible
and in an easy-to-understand form.
If no rooms are available then the computer should be able to present
alternative dates so as to maximize selling opportunity. As a final option,
in order to support the service of the hotel the computer might be
programmed to help with referrals (guests with whom reservations are
made in another hotel owing to a lack of space). In a big hotel company,
the central reservation system would be programmed to identify other
nearby hotels in the chain that could offer accommodation. In that way the
sale is not ‘lost’. A small hotel cannot do this but it is equally anxious not
to lose sales. Thus it may wish to keep a record of referrals so that they are
included in future sales promotions.
Make the accept/refuse decision
This is a very complicated decisions in some hotels and may need to take
all or some of the following into account.
Guest status
Even if the hotel is ‘full’, it may choose to displace an existing reservation
should the enquirer be regarded as a regular visitor or a VIP of some sort.
Credit status
The credit status of each enquirer should be checked before an acceptance
is made. This is particularly important where the account is held in the
name of an organization such as a company. There is not much point in
accepting business from people who do not pay their bills. In an integrated
system, such information would be available online. In a stand alone
system, it is the responsibility of the accounts department to keep the credit

53
status of guests on the guest history up to date and this would have to be
keyed in (typed in) at regular intervals.
Occupancy
All the reservation systems are designed to provide an up to the minute
picture of room occupancy on a particular date. This may appear to be a
simple thing to do but in some business hotels the number of rooms sold
can be changed form moment to moment.
Factors which INCREASE occupancy
Walk – ins (chance arrivals)
Stay – ons (people who extend their expected departure date)
Factors which DECREASE occupancy
Cancellations
No – shows (guests who do not give notice of their non-arrival)
Extra – departures (people who advance their expected
departure date)
The conversion ratio between provisional and confirmed business will be
an important part of this analysis. In practice, reservations from some
market segments are less reliable than others. Group reservations tend to
have a high fall off as they move from a provisional to a confirmed status
and may have no-shows rates as high as 60 percent. Individual reservations
made by letter well in advance tend to be highly reliable. A computer
based system might be expected to do more than a manual system in
analyzing these trends. The computer can be programmed to examine
previous sales to different market segments and offer a prediction on the
likely level of business for a given date.
Pressure of business

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Any prediction of likely occupancies must take into account the current
level of enquiries in comparison with previous similar periods (including
those that were refused). This is difficult to do even for a computer since a
lot of data and many variable have to be considered. The computer can at
least compare the present cumulative demand curve for a particular date
with that in previous years and this could be shown as a graph. If the graphs
shows that enquiries are running well ahead of the average of the previous
years, this can be a useful guide in dealing with heavily discounted
business such as group reservations.
Effect on the room rate
This is often overlooked in reservation systems. A hotel will have made
statements about both occupancy and rates when it prepared its profit plan.
It is very difficult to provide front office managers with a continuous
monitor of average room rate each time a booking is made but this may be
brought up to date periodically by the computer and presented to the
manager along with predictions of room revenue.
Policy
It is not always good policy to simply accept all bookings as they arise.
Room sales should be designed to fit in with the marketing and sales
promotion activities of the hotel and these in turn will have chosen so as
to protect the long-term interests of the business. The market segmentation
of the guests may also be a factor in filling up the hotel and the front office
may be asked to hold rooms for particular type of sales. Thus a busy
conference hotel may refuse a block booking so as to keep rooms for guests
who also visit in the off-season. Alternatively, business from new market

55
segments that the hotel is interested in cultivating may be given higher
priority.
Blocked rooms
Blocked rooms are an aspect of policy. Rooms may be blocked so as to
hold them available for some expected future reservations or for some
other purpose such as maintenance or redecoration. The system should
make provision for blocking out rooms and provide reports on blocked
rooms as required.
Room allocations
Room allocations are really an aspect of blocking. Room allocations may
be given directly to organizations or sales agencies such as reservation
services or airlines. These allocations may be treated by the recipient as if
they were reserved rooms thus avoiding the need for a sales agent to
confirm with the hotel each time it receives an enquiry. The number of
rooms actually sold has to be notified to the hotel usually within 24 or 48
hours of arrival. The notification period is known as the release date. The
hotel has to estimate what proportion of allocations will be taken up on any
particular date. The problem is complicated by what are known as free
sale agreements in which the agent can sell as many rooms as he or she
likes.
It is easily demonstrated that accept/refuse decisions are not easy to make
and this is why a good front office manager is worth a lot of money! The
computer system should therefore support decisions as fully as possible by
organizing data and presenting it in a ready to use form when needed. If
formal procedures to do it are not designed into the system then the front

56
office manager will have to balance all these elements intuitively, which
takes a great deal of experience.
Confirmation letters
The hotel may not wish to confirm all reservations and the computer may
be programmed to print a letter only under certain circumstances. For
example, the hotel may not wish to confirm provisional reservations or
those which are received less than three days in advance of the planned
arrival date. Note too that on occasions the confirmation letter will have to
be sent to an address which is different from the billing address and a
procedure for dealing with this should be considered. Automatic
production of confirmation letters can be a major time-saver in a
reservation department. Printing may slow the overall systems down and
fast printers are disproportionately expensive for a small business. The
system should be deigned to allow for the use of inexpensive printers
without holding up everything else. This may be achieved in several ways.
Letters could be written on to a disk file (a relatively fast operation) for
printing at any later convenient moment or the printing itself could be
handled by the computer as a background join. A section of the computer’s
memory is set aside to deal with this task while the main part of the
memory is still available for other work.
Amendments
Amendments to reservations may take a number of forms and arise in a
variety of ways. There may be amendments to the dates of the visit, the
number of guests or the type of rooms required and the exact procedure
followed by the computer will therefore vary. If the change does not affect
room availability such as a change in the time rather than the date of

57
arrival, the system merely has to retrieve and allow the operator to make
entries on part of it. Other changes may be handled in procedural terms as
if a cancellation and new reservations were being made.
The key point of interest is the way in which the reservation system allows
the operator to retrieve the guest details. A well-designed system should
allow access to any record by means of multiple keys. That is to say that
the computer should maintain several types of index to the same file so
that any reservation can be found from:
The guest’s name (or even part of the name)
The date of arrival
The organization affiliation
The reservation code (if used)
Many computer systems allocate reservation codes when the reservation is
made and ask guests to quote this code in all communications with the
hotel. That may work very well for some types of professional buyer like
travel agents but is most inconvenient for amateur hotel users like holiday
madders! The retrieval system distinguishes good designs from the bad
ones. It is clearly bad marketing to make the point of contact between the
guest and the hotel more difficult and this is what will result from a lack
of design effort on the part of the computer company. Almost all guests
will be able to remember their own names and that of their company, but
they may not remember if they are arriving on the 15th or the 16th. They
might refer to arrival date as the second week in June or in some other
vague way. They certainly will not remember a reference code invented by
the hotel’s computer and there is no reason why they should.
Deposits

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Where deposits are required by the hotel from some or all guests the
computer can carry out two useful tasks. The first is simply to record the
deposit details on the reservation. It is also important to provide easy
facilities for transferring this to the correct sales ledger. The second task is
to provide a means of ensuring that deposits are actually paid. Thus the
computer can sort through the reservations file from time to time and print
reminder letter for guests who have not yet paid their deposit.
Immediate check in
The reservations module is a convenient point at which to design the
procedures for collecting guest data. Even if the guest has no reservation
and in fact a chance arrival, the computer system will probably be designed
to initiate the registration process as if a reservation were being made. It is
important that this module is well designed is well designed to retrieve
automatically data that might already be on file, such as previous guest
history data, organization details, special terms associated with particular
promotions or the address and commissions owing to reservations. Some
of the lists required by a reservations department in hotel services. It is
probably convenient to assume that today’s date is the arrival date unless
the clerk resets it. Features of this kind will greatly speed up data
collection. There should then be a facility for linking with the registration
module furtively.
Lists
A reservation system should be able to produce the lists shown below:
Room availability
Summary forecast occupancy and revenue by market segment.
Special events

59
Hotel promotions, festivals and holidays.
Expected arrivals
Special requirements will be noted. May include a summary of early and
late arrivals.
Extra bed report
Lists room needing extra beds or cots.
Expected departures
Noting especially time of departure. It is sometimes useful to have this list
sorted by early/late departures.
Non-arrivals
From previous day, noting cancellation charges.
Pre-allocation report
Indicating rooms that are blocked for some reason such as by special
request of the guest.
Other lists may be needed by the hotel according to circumstances. For
example, the hotel may feel that a summary of release times for each
reservation would be of value. Once again, the ease with which these may
be incorporated into the system is a function of design. It is much easier to
develop computer systems which only generate reports of a known format.
If ad hoc reports and lists are to be allowed, this usually means that
computer has to be able to sort its data files in ways chosen by the user.
The development cost of the system and therefore its selling prices will be
higher which must be weighed against the additional value of the
information it might provide.
Key elements of the registration module
Room allocation

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The process of allocating rooms begins early in the day in reception. It is
repeated in essentially the same form several times during the day as the
front office manager seeks to ‘fine tune’ the hotel’s occupancy. Once again
the objective is to maximize the room’s revenue but at the point of arrival,
it is also important to ensure that enough rooms of the right type are
available to provide for the next batch of arrivals. At the same time, a series
of decisions can be made based on the actual rate of non-arrivals and the
level of chance enquiries, whether to release booked or allocated rooms for
chance sales or, indeed, whether to undertake some last minute selling. On
a bad a day, some decisions will also have to be made to walk guest. This
occurs when no rooms are available for someone who arrives with a
confirmed reservation. It happens even in the best-regulated hotels! No
forecast can be made with complete certainty with or without a computer
and there will be occasions when the rate of non-arrivals is much lower
than what was predicted. To allocate rooms, three pieces of data are
required:
1. The correspondence file
This is checked against the arrivals list to make sure that all reservations
have been recorded properly and that all special have been noticed.
2. The arrivals list
In a manual (Whitney) front office system, slips of paper summarizing
reservation details are filed in date order on a frame. This is called the
reservations rack. Usually, the slips of paper are also colour coded to
denote the type of reservation. A very small hotel might simply use a
loose-leaf diary. At the beginning of each day, the reservations rack is
moved into reception so that guests can be checked off as they arrive.

61
 In this way, the number of expected arrivals can be seen at a glance
anytime.
A computer-based must be designed to provide the same information
and should in fact be able to improve on the process by means of a
series of sorted lists. The first of these would be an arrivals list sorted
by type of reservation. The computer should also be able to produce
lists sorted by room’s type. This list should begin with reservations that
included specific requests for particular rooms and proceed to
classifications by room type. For example, all the singles, all the twins
and so on. Summaries of this list showing numbers of rooms by type
still required (expected arrivals) are compared with the number of
available rooms by type, actual and expected. Expected available rooms
are those currently occupied by guests who are expected to depart. This
summary should be available from the system either on a VDU or from
a printer at any time.
3. List of available rooms
The first list of available rooms is based on those that were unoccupied
overnight and reception should check that these are listed correctly by
the computer. The list is brought up to date by the housekeeper as rooms
are serviced after the departure of each guest. With a small computer
system, this can be done via a terminal in the housekeeper’s office.
With an integrated hotel system, it may be handled by means of a room
status system which can be operated via the telephone network
computer, the electronic locking system, the hotel Videotext system on
each room’s television, or by a specially installed room status system.

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The process of room allocation itself can be quite difficult where many
room types are in use. If the hotel is full, the problem is making sure that
rooms are allocated in an optimal way given that the pattern of arrivals and
departures may be irregular. For example, the first set of departures from
the hotel may all be from guests in single rooms and the first set of arrivals
may all be of parties requiring twins. It is not always possible to keep large
number of guests waiting for rooms. On the other hand, if the hotel has
spare capacity, it is better to keep blocks of rooms unoccupied rather than
to have odd vacant rooms scattered throughout the hotel. This cuts the cost
of servicing and allows engineering services to parts of the hotel to be
reduced.
Special attention must be paid to the facilities which are available on the
computer system for linking rooms. In practice, this means that the
computer must be able to cope with reconfiguring the available rooms in
the hotel on a flexible basis so that if two adjacent twins are turned into a
family suite by unlocking a connecting door, or if a suite is turned into a
twin by locking off the lounge, the room status is reported accurately. It is
very difficult to develop a room allocation algorithm that will deal with all
these elements of the problem. This has nothing to do with the size of the
computer but is concerned with organizing a logical approach to the
procedure (an algorithm) that will produce acceptable results under any
circumstances. Many aspects of the problem are difficult to quantify in a
machine making it hard to compute priorities.
When beginning the first pass through the arrivals list, the reception
manager will try to allocate those arrivals with special needs. This would
include any requests for a specific room or any regulars who like the same

63
room each time. The next pass might take care of early arrivals. The next
might consider group arrivals. Rooms are then blocked to allow for these
pre-allocations and the remaining arrivals are assigned the next suitable
room on the available rooms list. This works well if there are no conflicting
requirements. But supposing, the only available single room near the lift is
wanted by both an invalid and a repeat guest. Who gets the room? If some
means of assessing the relative value of the two claims. In making the
decision, the reception manager will use many cues. These would include
the nature and the extent of the invalidity and the importance and even,
possibly the temperament for the regular guest. Such things are difficult to
encode objectively. A room allocation algorithm is therefore likely to cope
with only part of the problem and at its best should be designed to help
rather than take over room allocation. Any decision rules that are built into
the algorithm should be made quite explicit to the reception manager. This
is to say, the way in which the computer has been told to tackle this
procedure should be explained clearly in the manual. The computer might
present to the reception manager a suggested room allocation which is then
modified interactively at the terminal.
Registration
Pre-registration
One of the most convenient guest services that the computer can afford is
that of pre-registration for guests with confirmed reservations. A computer
can retrieve much of the necessary data from the existing files. The
reservations files itself, along with files about organizations and agencies
with files about organizations and agencies which use or sell space in the
hotel, can provide most of the routine information. This means that very

64
little additional paper work is needed when the guest checks in. All that
remains to be done is to verify the entries on the registration form and
collect a signature. Note that the act of entering the arrival on to the
computer will automatically bring a number of other files up to date. The
room status will deduct the room allocated from the available total, the
computer will open a bill folio for the guest and the arrival will be removed
from the expected arrivals list. Some small computer systems tend to
encounter a rather unique difficulty at this point. In a manual procedure,
the guest bill folio heading usually comprises a number of slips of paper
(rack slips) which are filed on the room rack in reception. They are sent to
one or two other departments such as the telephones, porters and enquiries
shortly after an arrival. In a large integrated computer system, guest data
is made available throughout the hotel from terminals.
A small computer-based system may be unable to use either of these
approaches and so it must be able to print in alphabetical guest index fairly
quickly, showing especially names and room numbers. The alphabetical
guest index might be circulated three or four times each day in a busy hotel.
Key cards and electronic keys
Some hotels issues small identification cards called key cards, on
registration. As well as acting as a security measure the card contains
printed information of interest to a guest about the hotel. A computer can
be programmed to issue these cards automatically. In some hotels, the
computer issues not only key cards but also keys. A computer controlled
electronic locking system can be operated by small cards made of stiffened
paper or plastic. Each card is magnetically imprinted with a unique code

65
when it is issued. The code is communicated to the lock on the guest’s door
by the computer.
Group registration
The speed at which group registration can be carried out must be carefully
considered when a computer system is selected. If registration is to be done
at all quickly, the system must allow for groups to be pre-registered and
pre-allocated, taking advantage of any data held in common. It should be
noted that the billing procedure for a group might differ from party to party.
The billing method will have been recorded on the computer when the
reservation was made.
Chance arrivals
Chance arrivals or walk-ins are usually processed via the reservations
module. The reason for this is that this module is usually the one that is
designed to pick up the bulk of the guest’s data. Since the guest makes a
reservation and arrives at almost the same time as it were, the reservations
module should provide a facility for immediate registration and allocation.
Room status
Small computer systems do not usually include sophisticated room status
control and indeed, this is only really essential for large hotels with a
predominantly transient type of business. If the computer is to control
room status, it needs to be linked into five areas, as illustrated in Figure 39.
A sophisticated room status system will not only give up to the minute
information about the availability of rooms but will help with the control
of a dispersed work force such as housekeeping staff and maintenance
staff. It will also help to schedule the redecoration programme for the hotel.
It might work as follows:

66
 When the bill is paid the computer automatically disconnects the
room telephone and possibly other services as well.
The computer sends a message to housekeeping to advise that the
room needs servicing.
When the room maid arrives at the room, she identifies herself to the
computer. This tells the housekeeper’s office where she is.
When the room maid next contacts the system form a new room the
computer moves the status of the previous room form ‘being
serviced’ to ‘awaiting check’.
The floor housekeeper obtains a list of rooms awaiting inspection
from the computer. As she arrives in each one to check its conditions
she notifies her location to the room status system.
On leaving the room, the floor housekeeper switches the status
either to ‘ready for sale’ or back to ‘awaiting service’ if further
servicing is required.
When the room is switched back to ‘ready for sale’, it will be listed
once again at terminals in reception.
The most expensive part of a room status system is the cabling to connect
it all together. Such cabling has to reach into every part of the hotel and is
difficult to justify in financial terms for this purpose alone. Room status
systems are therefore often designed to take advantage of other systems for
which cabling may already exist. These include the telephone system and
the television system. A less sophisticated room status will not attempt to
deal with all of these functions. It will simply connect reservations and
registration with a possible link into housekeeping and billing, mainly to
provide fast communications between departments. As an aspect of room

67
status and maid control, a linen system might be controlled by the
computer. Based on the occupancy, frequency of linen changes and the
size of maid sections, the machine can produce lists summarizing the linen
requirements.
Room moves
A fairly simple procedure physically, room moves must be entered on to
the computer in such a way as to allow transfer of all charges as well as
bringing all associated lists up to date. In particular, it is important to
reissue the alphabetical guest index.
Key element of the billing schedule
Billing
The production of well laid out, clearly legible bills with full descriptions
of charges is often claimed to be one of the main benefits that managers
are seeking from a hotel computer system. Format (appearance) must
therefore be carefully evaluated.
Audit trail
The billing module represents a major entry point of data for the
accounting system. The procedures which the system allows for entering
and modifying data should confirm to good accounting practice. In
particular, this implies that the system is reasonably secure.
Every entry on the system should be identifiable to a particular person.
This means that each time a posting run takes place (each time charges are
entered on to bills), the operator should be required to identify him or
herself, probably by means of a security code. This would of course
include entries made from remote terminals.

68
It is particularly important to ensure that charges are levied to the correct
guest’s account. This may be done by requiring both a room number and
part or all of the guest’s name before charges are accepted. Where credit is
allowed to non-resident guests, an account number reference may be used.
Each entry should be verified in the same way by both the operator and the
machine. Thus the computer should be programmed to check that the entry
falls within some expected range of values and it should present every set
of entries back to the operator to await a Yes/No verification before
entering them on to the guest folio.
Each set of transactions should be summarized and printed. This
transaction log can be used if necessary to reconstruct the day’s activities.
It is particularly important that corrections and adjustments are logged.
Bills splits and the classification of charges
Probably, the simplest kind of bill occurs when an individual guest pays
for everything on departure at the full rate.
There are a number of ways in which the billing procedure can vary from
this however. The tariff structure may vary in complex ways as illustrated
in some of the variations with which it might need to cope.
Elements affecting a tariff structure

Taxes: Inclusive or exclusive of service and sales tax or V A T

Food and beverage: Exclusive of all meals (European plan), breakfast and
dinner inclusive (modified American plan or demi-pension) or inclusive of
all meals (American plan or en pension).
Group terms: When group or convention business is sold, special terms
may be quoted. Typically, this involves setting up a master account which

69
arises some types of charges. The master account is checked and signed by
the group leaser at the end of the stay. This account is then submitted to
the company or organization to which the group belongs.
Other charges are made against individual guest accounts. Such
arrangements can be very difficult to administer. Usually, accommodation
(at a special room rate) and some meals are carried on the master account
with other charges to guests. However, some organizers will not pay for
alcohol or tobacco or may set limits on the amount that may be spent on
certain meals.
Promotions: The hotel may set up special terms of its own for promotional
purposes. An example might be as a special inclusive price for weekend
breaks.
As an aspect of this computer system must allow the hotel full control over
the classification of charges in departments throughout the hotel.
Variations in billing
It must be possible to vary the bill split at any time during the stay of a
guest or group. Attention should also be paid to the way in which the
system has been programmed to deal with unused amounts. If an amount,
of say Rs. 5 has been charged, what happens if a group member incurs a
bill for only Rs. 3.50? Similarly, a procedure for billing the person who
spends Rs. 6.50 should be available.
Multiple bills
Multiple bills differ from split bills in that all charges may accrue to a
single account but there may be more than one account attached to a
particular room. Business delegates at a conference may share a room with

70
a colleague yet require an individual account. It is important that the
computer system is able to differentiate between such bills clearly.

Joint bills
Joint bills are exactly opposite of split bills and arise when charges for
more than one room are joined on to one account. A family bill would be
an example where parents and children occupy two different rooms but all
charges for both bills are automatically added to one account. This feature
tends to be a less important element of a system than control over split
bills. The added convenience is minimal (the totals of two or three bills are
quickly added), yet the additional cost of programming may be quite high.
Terming
The posting of room accommodation charges in a transient hotel can be
one of the most onerous and time-consuming duties that the cashier has to
perform with a manual system. The problem is less severe in resort hotels
which use a lot of inclusive pricing and which may therefore need to post
accommodation only once a week. In a busy transient hotel, this task is
often carried out in the early evening or in larger hotels, by the might audit
team at about 2.00 a.m. For a manual system, it involves selecting the bill
folios for each occupied room one after the other, checking the rate on the
bill head to make sure that any discounts are noted, putting the bill in the
billing machine, picking up the old balance, posting the charge and re-
filing the bill folio. With a computer based system, the whole process
simply requires the cashier to invoke the appropriate program and the
computer will then go through all the bill folios, posting the correct charges
for apartments quite automatically. The bigger the hotel, the more time this

71
saves not only in physical handling but also in proving the posting run.
Proving a posting run has to be carried out in all systems whenever charges
are posted on to bills. It involves calculating a total of the charges to be
posted and comparing this to the total of the charges actually posted,
summed independently. Another source of error which avoided by the
computer is that of ‘continuation folios’. In a busy bill office, cashiers
often fail to copy all the information at the top of the guest’s bill on to
continuation copies. If these copies then become separated in the file or are
processed separately. Computer system do not separate records in the same
way.
Lists
It may be convenient to initiate the production of some of the additional
lists shown below:
Some lists may be generated from a cashier’s office in a hotel.
1. Alphabetical guest index: Produced either by reception or cashier.
2. Watch list: Guests who have exceeded or who are close to exceeding
their credit limit.
3. Chance guests: Guests who made no advance registration. Unless paid
cash on arrival, may be considered less credit worthy.
4. Breakfast list: Used in larger hotels accommodating groups.
5. Skippers: Guests who left without paying their bill (skipped).
6. Commissions: Produced at the end of each day, this summarizes the
commission payments due on each departed guest. These commissions
are often not paid immediately as this cash outflow may occur before
the cash inflow from the guest but it does allow the hotel to verify
agency claims easily and settle promptly.

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Reports
The main report produced by the bill office is the summary of daily
showing an analyzed breakdown of the day’s business.
Departure and payment
Once again, the simplest condition that may occur, full payment in cash, is
not the condition that happens in every case. There are a number of
considerations for the hotelier in a checkout.
Bill inspection
The first is that the guest’s departure must be as smoothly organized as
possible. All the effort that has gone into the making the stay comfortable
can be wasted if a guest is left with some last minute memory of a mix up
on checking out. Since all the bills are printed at this point and printing is
one of the slowest operations under the computer’s control this means that
the system design and the number of printers must be sufficient to cope
with the planned level of demand. In operational terms, it is also likely that
each guest will want to check his or her bill before settling. If this is done
at the cashier’s window, it is bound to lead to some congestion. It is
possible to site VDUs in positions away from the checkout window where
the guest can see a bill, or simply to swivel the screen on to one side. Most
computer systems have facilities to print bill copies for this purpose,
though it should be noted that extra printed copies of bills represent a
potential control weakness.
Foreign exchange

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Payment on departure may be made in foreign currency and it is fairly
straight forward task to control exchange rates via the computer. Exchange
rates are usually checked daily by the front office manager.
Receipts
Some guests require their bills to be over printed to indicate proof of
payment. The cheapest way to cope with this is to use rubber stamp though
it does introduce a control weakness. The extra cost for the hotel if not so
much in programming for the computer but in purchasing printers with a
front feed device. This allows folios is taken back into the printer and
realigned for over printing.
Payment method
When bills are receipted, the payment method should be recorded.
Occasions will arise when a guest may settle more than one account in a
single payment. The computer must be able to allocate payments correctly
between charges for control purposes.
City (sales) ledger interface
If an integrated system is not installed, there will be no direct link between
the bill office and the accounts office in system terms.

Credit control
The discrete procedure for credit control must be identified, as the
computer may not be able to interrogate the sales ledger directly. Floor
limits (upper limits) for various credit cards can be filed of the computer
and this will fix an initial credit limit when the guest identifies a proposed
method of payment on arrival. It also allows the bill office to check the

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ownership of the credit card and to obtain authorizations if the floor limit
is exceeded. The computer must be able to file credit and authorization
codes on the guest folio. An additional approach is to enter credit limits on
to the guest history file and for previous guests, this will facilitate future
stays.
Transferred charges
Guests who signs bills on departure instead settling them are people to
whom the hotel is extending some credit. These guests become debtors on
the sales ledger. A guest may transfer all or part of a bill to the sales ledger.
An example of a difficult situation would be that of a guest with a bill for
Rs.50 of which he or she proposes to settle half. He or she pays the hotel
with a cheque for Rs.30 and expects to receive Rs.5 in change, which is to
be used for a taxi. The computer system must allow the cashier to note
those items that have been paid, to transfer to ledger those items
outstanding and to note the reduction in the cash balance of Rs.5.
Non-residential accounts
The billing system may have to cope with credit accounts for people who
are not staying in the hotel. Local residents in the town may be given such
a facility for example.

The night audit

Auditing a computer-based procedure produces some rather special
problems and is in many ways more difficult than auditing a conventional
billing system. It is the auditor’s job to review the work of the cashiers.
This involves ensuring that all bills have been posted through departmental
billing machines and that the totals of cash and credit recorded on each

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machine are correct. The same process is followed in the front office and
a comparison is made to ensure that all transfers from operating
departments have gone through the front office machine. In a conventional
system, one of the night auditor’s jobs is to finish any postings of
departmental charges left undone by the evening reception brigade.
Another job is to post all apartment charges. The final job is usually to
ensure that all charges have been correctly transferred from the front office
to the sales ledger. This is known as ledgering off. Billing machine totals
are then noted and the machines reset to zero.
Many of these functions are not needed in a computer-based system. If the
departmental billing machines are not connected directly to the front office
computer, there still remains the job of ‘proving’ the departmental charges,
but it can be seen that the more integrated the system, the more accuracy
will depend on the way in which the computer has been programmed. The
night auditor’s job therefore, tends to take a different emphasis, making
sure that charges have been accurately posted and spending more time in
analyzing the performance of the business for management. This not only
has the effect of giving managers more insight into the business but results
in a much more interesting job for night auditors.
Security for front office system
One of the most important considerations in the use of computer-based
front office procedures is that of continuity. If the computer system breaks
down at an inconvenient time or if, as a result of equipment failure,
accident or operator error, data is lost or corrupted, the hotel has to be sure
of being able to maintain its guest services and keep an accurate record of
its sales. When selecting the system, therefore, one of the most important

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features to investigate is the procedure that has been designed to ensure
procedures that have been designed to ensure security of data. Normally,
in a small system, this involves maintaining a series of copies of both
program and data disks. Usually, three or four copies of each important
data disk are kept and these are brought up to date at different times of the
day or night on a cyclical basis. The hotel might have a procedure by which
copies are made every three hours and each back-up disk is used in turn.
In this way, if the latest data is corrupted, the most that will be lost is three
hour’s work. It is important that the computer keeps a record of the back-
ups that have been taken, reminds the operator when it is time to make
another back-up and guides the operator as to which disk is the next one to
use in the back-ups cycle. In a busy hotel, it is far too important to make
sure that proper security is maintained than to leave such things to the
memory of different staff on different shifts. The computer must take
complete control of this process. Beginning with a message such as ‘It is
now time to make a back-up copy, please insert back-up disk number three
in the left-hand drive, it should check to make sure that the correct disk is
inserted, make the copy and should then ensure that the copy has been
successful. The design of this procedure should be such as to prevent the
operator from making these copies the wrong way round, that is, from the
back-up disk to the main disk, as this would overwrite last three hour’s
work. The system should be able to print a short summary of the back up
situation on demand, reporting on the number of back-up disks of each
type with a note of the time and date on which they were last written. The
biggest worry for a hotel when using a front office computer is that the
system might fail just before the busy morning checkout. The hotel would

77
then be unable to produce guest bills. In order to minimize the risks of such
losses, some hotels tell their night audit or night reception staff to print out
copies of all the bills of expected departures, at 6.00 a.m. In this way, only
early morning charges need to be added, if it is necessary to reconstruct
the bills by hand. It is important to stress that copies of bills should be
printed in a format that makes it quite clear that this is only a copy. The
same format may be used to print inspection copies of bills if a guest or a
manager wishes to read it during the course of a visit. Headed bill
stationary should not be used and the sequence of bill numbers should not
be affected. In this way, the risk of control weaknesses is reduced and a
proper audit trail is maintained.
Catering information system
Managing food and beverage costs by means of manual procedures
represents a major problem for most hotels and restaurants. Perhaps, the
most interesting development from the caterer’s point of view, therefore,
has been the introduction of catering information systems. The difficulty
with a food and beverage system is not so much complexity but the huge
amount of data that has to be processed virtually everyday. In the past,
caterers who sought to use computers to cope with the problem have been
obliged to depend largely on stock control packages. This has been
unsatisfactory not only because most of these packages, were written for
manufacturing industry which uses different terminology and has different
requirements but also because you cannot control the performance of a
restaurant by simply controlling its stock position. It is quite possible to
requisition ingredients from the main stores and then to steal them. It is
also possible to over or under-requisition ingredients with consequent

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impacts on both costs and quality. Manual food and beverage control
systems are subject not only to these errors but are also victims of the
compromises that are made in order to get any kind of results at all. There
are usually six stages in a conventional food control procedure:
1. The chef or food production manager written a requisition in triplicate
for the ingredients needed to produce a forecasted number of dishes.
Since, there is no time to work out quantity requirements exactly this is
done approximately and results in over and under-orders.
2. The storeroom issues the ingredients, returns one copy of the requisition
to the kitchen and send one copy to the control office. Both the
storeroom and the control office maintain a set of index cards (bin
cards) which record stocks on in/out/balance basis. These index cards
should give the same totals but they are often owing to many clerical
errors. At any time, the actual food cost can be calculated by pricing
out all the requisitions (a very slow job) and adding up the totals. This
gives the actual food cost.
3. To calculate the potential food cost (what should have been spent), the
control office costs all the standard recipes for a given week. This takes
a long time. In order to keep the costing up to date week by week, as
ingredient costs change, an index calculation is used. This is called the
market price index and it measures the changes in the total cost of one
unit of a number of items. This it may record the cost of 1 lb of chicken,
1 lb of cod, 1lb of butter, etc., in week one. Subsequently, the cost of
those same items is recalculated in other weeks. Any percentage
difference is applied to the cost of the standard recipes. The adjustment
actually causes errors because the kitchen does not use ingredients in

79
 such exactly equal proportions but the method represents the best that
can be done manually in the available time.
4. The control office counts the number of dishes that were sold (obtaining
totals from the E C R), multiplies that by the standard cost and obtains
the food cost potential.
5. Finally, the control office then compares actual versus potential cost to
evaluate performance.
It is apparent that conventional food cost control procedures, by focusing
primarily on inventory, do not support a true control procedure. It is
equally apparent that the correct focus of control in a restaurant has to be
the standard recipe. Once the standard recipe is agreed between the
manager and the chef, it becomes the basis on which all issues are made.
Owing to the sheer volume of transaction involved, such control is just not
possible without a computer. The chef does not have the time to calculate
the exact ingredients needed for a particular day’s work and so he or she
makes up (usually several requisitions to approximate what will be used).
The control office cannot possibly adjust the standard cost of all the recipes
each time that an ingredient cost changes and so once again, some sort of
approximation has to be made when calculating the potential food cost. A
computer-based catering information system is based on a series of
modules. Essentially, the system operates from a file of recipes and their
ingredients. As deliveries are made so the changes of ingredient cost are
noted and all the recipe cost are brought up to date. A report may be printed
for the manager to show which dishes are affected. When a requisition has
to be produced, it is necessary only to enter into the computer the name of
the dish and the number of portions and the computer does the rest. It prints

80
out the menu pre-cost, it prints out the recipes with the ingredient list for
that number of portions, if needed and it prints out the summary stores
requisition showing the issues to be made. The kitchen gets exactly what
is needed to produce the food. Where an over issue is made because the
pack size, such as an A10 tin, is not being split in the stores, the computer
keeps a note and takes the excess into account when future requisitions to
that kitchen are made.
Recipe file
A catering information system is designed along the same lines as a
database management system. This is to say, the focal point of the
procedure is a file of records, in this case records of recipes, the computer
is programmed to use those recipes as the basis of all transactions. As with
a front office system, the operator (the food control clerk) will be making
constant reference to recipes and ingredients and it is essential for ease of
use that the computer is able to find these easily. Thus, it should be able to
find an ingredient or a recipe by its name, part of its name or perhaps by
number. Catering information systems that force people to learn codes or,
even worse actually print codes such as MB102 instead of, say, minced
beef are much slower to operate, harder to learn and difficult to interpret.
Ingredients
The ingredients file has to be created before the recipe file and some
thought must be given to the way in which data are entered. The main point
to bear in mind is that if good control is to be provided, then the units of
issue chosen for ingredients should, where possible, use measures of
weight or volume. Thus, the computer should be programmed so that an A
10 tin of peas is issued not by a unit, such as one tin, but by a unit such as

81
5 lb, the weight of the unit of issue corresponding in each case to the
drained weight of the tin. This means that ingredients can be entered into
recipes by weight or volume and this eliminates the need to change recipes,
if pack sizes change.
The cost of ingredients will be changed automatically by the computer
each time a new delivery is received. As the clerk enters details of delivery
notes into the system, the computer is able to make adjustments to the cost
of each ingredient, to later the inventory holding in the main stores and to
recalculate the portion costs of each recipe. Two approaches to ingredient
costing may be used. The current cost approach alters the cost of all
ingredients to the level of the latest cost. In times of inflation, when costs
tend to drift upwards this has the effect of giving the caterer a holding gain
on the existing inventory.
Recipes
The recipe records will be inn two parts. The recipe heading will describe
the recipe in various ways and the second part will list in ingredients. The
descriptions in the heading act as the basis for sorting the recipes and
provide additional benefits of a computer-based system. This forms a
valuable aid in menu planning and cost control. Thus, the computer might
be used to find all the main courses for which the main ingredient is beef,
colored red and costing between Rs.7.50 and Rs.1000 per portion. For cost
control, the computer might be used to list all the recipes which contain
butter so as to predict the likely effect of a price change or a commodity
shortage. The system should allow ingredients to be entered into recipes
using any convenient unit of weight or volume, though naturally for some
entries, such as eggs, a measure by item must be used. Ingredients in

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recipes may be other recipes and this facility improves the convenience of
the system quite considerably. Thus, a recipe for 100 portions of
cauliflower cheese might have an ingredient which is 50 portions of cheese
sauce (another recipe). In some cases, these cross-reference recipes will
call other recipes, for example cheese sauce might comprise cheese and
white sauce. A facility for automatically tracing layers of recipes is called
nesting. The first major benefit of this sort of design is that it enables the
standard costs of recipes to be brought up to date as frequently as required.
Each time a delivery is received, the computer can be instructed to reprise
all the recipes and print a report for the manager showing the latest costs
per portion and the new recommended selling price or prices. In practice,
it is poor marketing to change prices everyday and such reports are usually
generated weekly.

Requisitions
The requisition file
On a day-to-day basis, the computer will keep a file of requisitions which
are record of the menu cycle of the restaurant. In order to produce a
requisition, the food control clerk merely has to adjust the number of
portions of each dish on the requisition and then instruct the computer to
print it.
The computer might first be used to check that all necessary ingredients
are held in the stores and it can then generate three lists:

83
1. The menu pre-cost which gives the production cost of the recipes based
on the selected costing method.
2. A description of the recipes using the exact ingredient requirements for
each number of portions.
3. The stores requisition itself.
Stock control
When the requisition is printed, the computer can make an adjustment to
the inventory holding of the main store. With a computer-based system
stock control is much more precise than in a manual system since the
machine can actually keep track of stocks of ingredients left in the kitchen.
To go back to the example of an A 10 tin of peas, it is obvious that the
storeroom will have to issue these in units of weight corresponding to a
whole tin. It may therefore issue, say, three tins, when only two and a half
are needed by the kitchen. This excess of half a tin can be recorded by the
computer as kitchen stock and taken into account (that is, deducted) from
future issues. This essence of a control system and marks a real difference
between manual and computer-based systems. True control depends on
directing performance to a plan and this can only take place before the
event. Once, ingredients are issued and used nothing can call them back.
At best, a conventional system can record errors but with a computer-based
system, almost the exact quantity of ingredient is actually issued. Any
excess going to the kitchen is less than one unit of issue, which is recorded
by the computer. The point underlines the importance of making sure that
recipes are held on the computer in the correct form. Quality control is also
improved by a catering information system since a computer neither omits
nor under-issues ingredients.

84
Daily meal orders
In large scale feeding such as welfare catering, military catering or
employee feeding, sales forecasting may be approached in a different way.
In these situations, it is possible customers in advance to identify meal
preferences. One way of doing this is to link remote entry terminals to the
catering system computer so that meal orders can be keyed in from
different departments. Another method might be to collect the data on a
machine-readable form, such as a sense marked card and to read these at
high speed into the computer. In both cases, it is important that the catering
production system employed is able to respond to difference in the volume
of production required, in time to take advantage of the technique. In
general, this implies a continuous food production system rather than a
batch production system. Some institutions, which adopt the use of sense
marked cards to collate meal orders, actually complete their production
forecast for a meal after the kitchen has started to cook it.
Kitchen inventory and audit trail
Since the computer is taking account of what it believes is held in the
kitchen before issues are made, a computerized catering information
system requires an extra procedure to verify (check) the kitchen stocks on
a daily basis. Interim stock checks of this kind may also be needed in the
main stores. Where a direct adjustment to stock figures is required owing
to wastage, spoilage or loss this entry should be logged by the computer
and reported to management in the form of a report. Transfers between
kitchen and returns to suppliers from the main store should be reported in
the same way.
Inventory control

85
From time to time, a normal stock reconciliation must be performed.
Although, the computer allows for frequent and accurate spot checks since
both the volume and value of stock holding in the main store or in any
kitchen can be displayed at any time, period reconciliation between actual
and competed stock holding will be needed.
Re-order lists
A computer-based system also produces benefits managing the value of
stock holdings. Not only can the computer produce figures of the value of
inventory at any time, which is very difficult to do with a manual system,
but also it can adjust the volume of stocks dynamically according to the
level of business. Thus, instead of keeping a fixed minimum and maximum
level for each item, it can adjust the re-order point and the order quantity
to the actual level of use. Decision rules can be programmed into the
system to include information about the way in which orders are to be
balanced between suppliers, the structure of purchasing discounts and the
size of holding costs. Full advantage can be taken of sophisticated
inventory control techniques to produce and record purchase orders ready
for suppliers. Many systems do not use all of these features owing to the
problem of entering cost data on a daily basis. In particular, smallest
ordering fruits, vegetables and daily production on a daily basis seem to
find this a problem.
Bar control systems
Bar control systems provide for electronic monitoring of beverage sales by
means of sensors which are located in beverage dispensers. The dispensers
are linked to a macro-computer programmed to a record sales and control
inventory. These devices can keep a record of sales of both wines and

86
spirits via an optic and of beers which are dispensed by any of several types
of metered and dispensed by any of sever. The system may include
electronic cash registers in some cases or it might simply be attached to a
printer which can list exactly what has been sold. The potential value of
sales at the end of each service period is reported in detail. Any
discrepancies between what has been entered into the cash register and
what has passed through the beverage monitor can be highlighted along
with information about sales and trends. At a time when margins in the
brewing industry are under increasing pressure, it may well be that
improved management information of this sort could prove its worth in a
very short time. Stock control in these systems can be supported either by
the ECR or by a beverage monitor computer. Full advantage can be taken
of either of these devices to perform a wider range of tasks. Thus, the spare
capacity of the computer can be used for general purpose computing such
as calculating payrolls, or the ECR may be connected into a wider network,
perhaps including other billing machines or computers. Bar control
systems are fairly modular in design and they can be extended or enhanced
as required.
Telephone monitoring and charging
Telephone monitoring or charging systems are quite expensive and add to
the cost of that already costly hotel installation the private automatic
branch exchange (PABX). In a large hotel, PABX itself will be electronic
and will provide many of the features described below as an integral part
of its function. Smaller hotels or hotels which wish to add telephone
monitoring to an existing PABX may attach a small computer system.
Telephone monitoring systems may enhance guest services in several

87
important ways. The first of these is by enabling the hotel to show that it
is making a fair and equitable change for direct dialed calls. In a
conventional system, meters located in the front office are attached to each
guest extension and these display the number of call units used. When the
guest checks out, the cashier reads the meter and then calculates the charge
to be added to the bill. The meter is then reset to zero before the room is
re-let. Complaints may arise with this system if a guest notices a high
charge and claims that a mistake has been made. The high charge may be
due to the fact that someone forgot to reset the meter before the room was
re-let so that calls of the previous guest, as well as those of the current
guest, are on the bill. It may also be due to the fact that someone such as a
room maid, room service waiter or maintenance man used the guest’s
telephone illegally while the guest was out. Of course, it may be due to the
fact that the guest used the telephone to make many long distance calls. A
hotel has to cover the cost of the PABX and the switchboard operators so
it tends to charge much more per unit of call than is charged by the
telephone company. Typically, a hotel might use three or four charge
bands, starting at a mark-up of 300 percent for the first few units, falling
to perhaps a mark-up of 50 percent alter a certain number of units are used.
To cope with this rather crude system, the front office cashier usually has
a ready reckoner, though even the low charge band makes for a very
expensive visit when business guests use telephone frequently. If a dispute
arises over these charges, neither the hotel nor the guest has any means of
establishing their accuracy and the hotel runs the risk of losing the
goodwill of the guest at the point of departure. An electronic monitoring
system allows the hotel to fix a method of charging appropriate to the use

88
of the telephone. Thus, a local call might be charged at the highest rate but
an international call, which uses a lot of telephone units, will be charged
immediately at a more appropriate level. Furthermore, the computer will
record all the details of calls made so that the hotel can show the details to
the guest in case of a dispute. The monitoring system also provides useful
information to management about the use of telephone services and out of
order lines. This may enable the hotel to improve efficiency and should
certainly reduce the number of ‘illegal’ calls made by staff. Typically, the
telephone call log will report on:
The serial number of the telephone line or guest extension.
The date and time of day when the call was made.
Direction of the call (incoming or outgoing).
The number dialed, if outgoing.
Duration of the call.
The number of charge units used and the cost per unit of charge.
Total cost of the call.
From time to time, the system can provide summary management reports,
analyzing the loading on each line at different times of the day. It may also
report on the average time taken to answer incoming calls at different
periods of the day. This can be used to identify areas where the telephone
service needs to be improved. The front office cashier or bill office would
certainly need a terminal to the telephone computer in order to produce
bills but additional terminals may also be located in reception and by the
switch-board operators. If rooming details are entered into the system on
arrival, the telephonists can then use their VDUs to locate a guest. The
system may even be programmed to display the guest’s name and room

89
number if the operator has been contacted by dialing zero. Once a
computer is linked into the telephone system, the hotel may use its
telephone system to support a variety of other procedures and services.
Telephone services
Alarm and wake-up calls
In a large hotel, it is difficult for the operators to call large numbers of
rooms simultaneously when wake-up calls are requested. If asked to call
fifty rooms at 7.30 a.m., the switchboard might start at 7.20 a.m. and finish
at around 7.40 a.m. Very few guests will be dialed at exactly the time they
requested. A computer can dial several extensions simultaneously and play
a recorded message when the telephone is answered. This facility can also
be used in support of alarm systems to broadcast smoke, fire or bomb
warnings.
Room services
The hotel’s room status may be operated through the telephone. One level
of dialing can be reserved for this purpose. Thus, if level 5 is used, the
maid might dial, say, 51 on entering a room and 52 on leaving. The
hous3ekeeper might then dial 53 after inspection to hand the room back to
reception. Terminals in the cashier’s office and reception would be used to
enter details of arrivals and departures.
Security
To overcome the weaknesses of mechanical locking systems, the telephone
computer can be used to provide an extra level of security. When a guest
registers, he is given a code number which must be dialed within, say, 20
seconds of opening the room door. If this is not dialed, the computer

90
sounds an alarm. Special codes can be allocated for staff and codes can be
generated afresh by the computer for each arrival.
Integrated systems
If the telephone computer is linked to the front office computer, the system
may be enhanced even further. There is no need for reception to enter guest
details separately on arrival since this data is part of the registration
process. There is also no need for the cashier to remember to reset the
meter after a departure. The computer does it automatically when the bill
is paid or ledgered. Room status can be supported more completely, as well
as guest identification. Additional services may be introduced. These
include automatic transfer of charges to different accounts and even
automatic transfer of calls. If the computer knows that the guest is in, say,
the restaurant or the sauna, it can automatically transfer calls destined for
that guest’s room extension. In addition, in room, entertainment can be
controlled via the switchboard. The telephone operator can route in-house
video services such as closed circuit television or video taped films to the
guest’s room in response to a call and can bill the guest directly on the
computer.
The overall approach
The decision to undertake a substantial review of some or all of the
procedures in a department presents the opportunity of introducing change
into the organization. Coping with change is a central part of most
managers’ jobs and has to be approached with a certain amount of
sensitivity. Change when viewed in a positive way can be seen as
stimulating and challenging, offering the chance to expand interests and
activities into new areas. If change is perceived in a negative way, it can

91
be seen as a threat so security; the removal of familiar things, perhaps a
feeling of inadequacy or inability to cope with something new, possibly a
fear that jobs will be lost. For this reason, if for no other, the initial decision
to begin the systems study should be made at a senior level. This is by no
means the only reason why senior management should take the
responsibility for the principle decisions associated with the study. Except
in the most unusual circumstances, it is unlikely that a computer based
procedure will be identical to the manual procedure which it displaces.
Computers make it possible for jobs to be done in a different way. Some
tasks may vanish to be replaced by other and the focus of skill may be
altered. In a reception system, the task of allocating rooms, which drew on
the long memory and many years service of the head receptionist, may now
be handled by a clerk. The computer can be relied on to recall the
preferences of previous guests and work out priorities by which rooms are
assigned. The head receptionist might be retrained to use the computer for
the more difficult task of business forecasting. Whether such things are
desirable or possible is a decision that cannot be taken lightly or at a junior
level. It is apparent that many policy decisions of these sort will have to be
made as the analysis proceeds. Many of these decisions will affect the
structure of the organization itself and many of them will have direct
financial implication. Principally, these will fall within the area of defining
the boundary of the system and in determining the position of the business
over some future period.
The boundary of new system will directly affect its size, scope and
complexity and therefore, its cost. It is in the nature of a business, viewed
as a system, that its various elements are all inter-related.

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Result & Analysis
Q1. Is the package used, a comprehensive one, so as to cover all departments
of the hotel?
 Yes
 No

93
 80

60

40

20

0
Yes No

Q2. What was the reaction of the employees to the introduction of computers
in the hotel/departments?
 Highly accepted
 Accepted but not praised
 Rejected but not retorted
 Highly rejected

90
80
70
60
50
40
30
20
10
0
high accept accept but not reject but not high reject
praised retort
Q3. How has the introduction of computers in the department

affected the time?

 Greatly affected
 Not so much
No effect

94
 100
90
80
70
60
50
40
30
20
10
0
great effect not so much no effect

Q4. If the manpower requirements have been lowered, do you feel that the

better packages in the future will further lower the manpower requirements of
the departments?
 Yes
 No
 May be

60

50

40

30

20

10

0
Yes No May be

Q5. If the manpower requirements are not been affected, will better

packages have the same result?

 Yes
 No
 Can’t say

95
 50

40

30

20

10

0
Yes No Can't Say

Q6. What is the effect on the employees in their performance?

 Performance enhanced
 Not much effect
 No effect

80

60

40

20

0
Performance
not much effect no effect

Q7. How do the guests feel about the hotels/departments data computerized?
 Highly satisfied
 Satisfied
 No effect

96
 70
60
50
40
30
20
10
0
highly satisfied satisfied dissatisfied

Q8. Do you feel that the computer will ever be able to challenge or maintain
the high standards of guest service that exist in most hotels today?
 Highly challenge
 Not to a great extent
 No

80

60

40

20

0
highly not to great No
challenge extent

97
 GOING BACK

In days gone by it was said that in order to succeed, all a hotel needed was a
scenic location and good cuisine. But in today’s competitive environment, a
mistake as trivial as not taking down a customer’s order can prove
disastrous. As the hospitality industry started looking for ways to improve
efficiencies, efforts and investments in the field of information technology
intensified. One of the first deployments of IT began at the front desk when
receptionists began checking the name of the customer and then allotted a
room to him. Big hotels also started putting in place accounting systems and
back office software to improve processes. As hotel chains started expanding
their operations across the country, it was necessary to monitor their assets.
This gave rise to the need for a Property Management System which enabled
hospitality groups to track their assets across different regions.

During the same period, hospitality chains also saw the need for a
centralized system. This phase saw different hotels of a chain being
networked and connected to a central server. The Taj Group of Hotels, for
instance, has implemented a WAN called TajNet, connecting the group’s 55
properties in India, Nepal and Sri Lanka. A centralized system has
tremendous benefits. One, there are greater economies of scale, especially
when the group wants to announce a special scheme for all its member
hotels. Two, the group can monitor the performance of each member hotel
and summaries the sales performance of the whole group.

Today, the IT initiatives of hotel chains in India have matured, and are being
increasingly fine-tuned to serve the needs of the customer. Says Pradeep

98
Khetwal, systems manager, Le Royal Meridien (Mumbai), “Most hospitality
chains now realise that technology in the hospitality industry is critical to
improve the operational efficiency of a hotel. The industry has moved from
the traditional transaction-based processes such as check-in and reservations
to features that are built and designed specifically for the customer. Services
like providing wireless Internet access to guests will only increase in the
future.”

LIMITATIONS

99
My research work was restricted by certain factors:
1. The recession which has hit the industry due to attack on America and
has reduced the so to say investment in computers to automate the
industry.
2. The extent of influence, the availability of cheap labour in India has.
3. It has been very difficult to ascertain what the effect of seeing a
computer has been from the guest point of view.

4. The secondary sources of information were very restricted, as this being

a new entrant in the industry, there are hardly any reflections of the
effects on manpower in any book, in the Indian context.

5. The top management who might have had this information was not
accessible.

6. The Union Leaders were skeptical about giving their views as labour
relation in the industry is of a very delicate nature.

7. The competition for business is not a severe in India as it is abroad,

were the use of computers for automation may decide whether the unit
stays in business or not.

BIBLIOGRAPHY

100
1. Harvard Business Review

2. Small Computers in Hospitality Management

By Gamble F.R.

3. Computers and Manpower Requirements

By John Bill

4. Hotel and Food Service(Edition- 2013, Month –July)

5. Good Housekeeping (Editions 2012-2013)

6. Time Magazine

QUESTIONNAIRE

101
Name of the person _____________________________________
Designation ___________________________________________
Name of the hotel ______________________________________
Date _________________________________________________

1. Does your hotel/department use computers?

a. Yes
b. No

2. Is it handled by a:
a. Specialist
b. Regular staff

3. What cost is being incurred for the training of the regular staff?
a. >1000
b. 1000-2000
c. 2000-3000
d. <3000
4. How much does the specialist charge monthly?
a. >5000
b. 5000-10000
c. 10000-20000
d. <20000

5. How much did the package cost?

102
 a. >50000
b. 50000-60000
c. 60000-70000
d. >70000

6. Has the benefits of computer overshadowed the cost incurred?

a. Yes
b. Not so much
c. No

7. Is the package used, a comprehensive one, so as to cover all

departments of the hotel?
a. Yes
b. No

8. What was the reaction of the employees to the introduction of

computers in the hotel/departments?
a. Highly accepted
b. Accepted but not praised
c. Rejected but not retorted
d. Highly rejected

9. How has the introduction of computers in the department affected the

manpower requirements?
a. Greatly affected

103
 b. Not so much
c. No effect

10.What was the reaction of trade unions?

a. Positive
b. Negative
c. No reaction

11.If the manpower requirements have been lowered, do you feel that
the better packages in the future will further lower the manpower
requirements of the departments?
a. Yes
b. No
c. May be

12.If the manpower requirements are not been affected, will better
packages have the same result?
a. Yes
b. No
c. Can’t say

13.How does the use of computer help in M.I.S.?

a. Greatly helped
b. Helped but not so much

104
 c. No help

14.What is the effect of the package in its performance?

a. Performance enhanced
b. Not much effect
c. No effect

15.How do the guests feel about the hotels/departments data

computerized?
a. Highly satisfied
b. Satisfied
c. No effect
d. Dissatisfied

16.Do you feel that the computer will ever be able to challenge the high
standards of personal service that exist in most hotels today?
a. Highly challenge
b. Not to a great extent
c. No

105