Resource And Yield Management Essay

Boutique hotels are small luxurious hotels of high quality where a customer can receive services of the same level as in a large luxurious hotel though this may be not as expensive as in a large one. As such, “the smaller, more intimate boutique hotels are overtaking the major chains in popularity” (Donald, 2007, p. 45).

In this respect, a small five-star hotel is a component of hospitality industry that can be applied to every country and every environment in terms of the price, quality, and demand. Resource management is a part of the day-to-day activities in every hotel which enables managers and employee to do their job effectively without being concerned with a number of other related problems that should be solved by representatives of other departments.

A small five-star hotel can be considered appropriate for hospitality industry as it does not require significant resources. As stated by Medlik and Ingram (2000), “small business faces particular problems in competition with large firms in most industries, and small hotel business is no exception” (p. 48).

As such, resource management is one of the most appropriate ways to solve the problems in a small five-star hotel which may occur due to lack of resources and limits in competency and skills of employees. “Small hotels typically lack resources and advanced management and marketing skills…” (Clarke & Chen, 2007, p. 81)

Purchasing can be considered as a part of resource management because cost-efficient purchasing enables a manager to save costs and control the distribution of costs spent by different departments. The interactions between the departments within a hotel play a crucial role in effective management and performance.

As such, provisions should be made in accordance with an agreed scheme; for instance, Feinstein and Stefanelli (2007) suggest the following purchasing pattern where a purchasing director is in charge of the purchasing department while four individuals are responsible for specific purchasing areas such as food, beverage, equipment and supplies, and a storeroom manager in charge of the storage of different items (p. 127).

Duties of a purchasing department include many issues that concern all other departments and the overall process of management. As such, it is necessary to consider the following procedures in the framework of purchasing management:

• Interviewing salespeople;
• Suggestions for savings;
• Receiving and placing orders from other departments;
• Records of expenditures;
• Check up the received goods;
• Contracts for the purchase;
• Account checks;
• Price and quality ratio (Henkin, 2006, p. 66).

There are other activities that should be considered but those mentioned above are the key procedures. As Singh (2000) claims, “purchasing can influence both the profit side through cost reduction and the asset side through total asset reduction” (p. 207). In other words, the process of purchasing should be well-planned because it affects other areas of hotel management leading to reduction of costs and assets.

At the same time, savings are possible through purchasing department as information about the goods used by different departments within a hotel and consideration of prices and quality may help to find alternative variants with a more appropriate quality and cost ratio. Thefts and frauds can be considered an integral part of the purchasing activity in a hotel because items can be purchased when not required or at a higher cost than a hotel can afford.

According to O’Fallon and Rutherford (2010), ‘financial and operational control’ (p. 372) in a hotel is carried out with the help of purchasing as many operations cannot be performed without the information about necessary purchases and spent costs; in addition, financial control is based on what was purchased and why it is necessary.

In this respect, most part of the purchasing management is concerned with the issues of importance of purchases and ways to optimise the process and make it more cost- and time-efficient. Another important part of the resource management is housekeeping which is a core activity of a hotel that ensures cleanliness and comfort for guests and guarantees that a hotel is maintained at a level not lower than before.

Jones (2007) illustrates such problem related to housekeeping as room thefts (p. 314) because such an event may potentially influence the rating and overall reputation of a hotel making it less desired and of low quality. However, housekeeping activities do not only include cleaning the hotel rooms, bringing clean towels, and maintaining the rooms in terms of supplies.

One of the greatest advantages of a small hotel, in this respect, is the number of employees necessary to maintain a hotel with regard to the resource management and competencies of employees in terms of housekeeping activities and their understanding of the importance of various activities as a part of effective management.

Competencies of housekeeping employees should be discussed because qualified personnel is capable of delivering services required by guests whereas inability of employees to satisfy customers’ needs can be negatively reflected in the rating of a hotel. Special importance should be given to a small five-star hotel-motel where employees should be perceived as a family that performs duties of hotel personnel.

In other words, competencies and behaviours as well as grooming and hygiene, basic etiquettes, orderliness, teamwork, attitude, self-discipline, courtesy, ‘intrapreneurship’, continuous education, customer orientation, physical fitness, and eye for detail are outlined to be the key aspects to consider for every employee engaged into housekeeping activities in a small five-star hotel (Andrews, 2007, pp. 143-150).

In this respect, skills of employees should be analysed and corresponding training should be conducted in order to improve their level. Responsibilities of a housekeeping manager are numerous including the basic ones clear for every person that knows at least something about the hotel activities and inventories of the items belonging to a hotel.

As suggested by Banerjee and Chakravarti (2007), periodic reports and maintenance records are also claimed to be the activities for which a housekeeping manager is responsible (pp. 61-62). As provided by DIANE Publishing Company (1994), housekeeping is included into a list of obligatory programmes in hotel management (p. 47). As a rule, housekeeping

US Department of Labor, and Bureau of Labor Statistics (2004) report that in 2002 “Self-employed managers — primarily owners of small hotels and motels — held about 50 percent of these jobs” (p. 54) claiming that a small five-star hotel/motel may be effectively maintained by its owners who also work in it managing the key activities and signing contracts with subcontractors to perform different types of activities that cannot be carried out by the owners.

As such, housekeeping management can be really effective for a small five-star hotel/motel in case when the owner is a self-hired manager who controls and organizes the process effectively. Yield management is another important characteristic of hotel management applied to a small five-star hotel/motel because it enables the manager to optimise all activities and processes.

Kumar (2010) claim that yield management and revenue management are the same (p. 82). Ingold, Yeoman, and McMahon-Beattie (2000) state that ‘small hotels seek to match their markets and product offerings” (p. 163); besides, they “tend to approach their markets less formally and more intuitively from their detailed, close contact with their guests and their requirements” (p. 163).

As such, yield management can be used effectively in a small hotel offering particular services that may influence the price and revenue received from a room or align the revenue received from a hotel in general in particular period of time. “To practice yield management effectively, a business must be able to measure demand and respond to it in a timely and dynamic fashion” (Ingold, Yeoman, & McMahon-Beattie, 2000, p. 163).

In addition, yield management techniques can be effectively used in a hotel and other fields related to hospitality industry. For instance, Sfodera (2006) reports about the positive impact of variable pricing on customers in hotels and restaurants as a part of yield management (pp. 56-63). Shy (2008) suggests different attractive offerings for customers as a part of yield management.

As such, this type of management includes a number of methods aimed at attracting guests and introducing measures to gain more from rooms or compensate some losses. Room rate is one of the important issues of hotel management, especially when considering a small five-star hotel/motel with a self-employed manager who is also the owner of this place.

Special attention should be given to the problem of price in cases when the room is rated high whereas the level of services does not correspond to the price required. Moutinho (2000) claim that “the problem for hotel management is that the demand for discounted rooms tends to precede the demand for higher rated rooms” (p. 206).

In this respect, the key aspect that should be taken into account when dealing with a small hotel with regard to yield management is that the desire of a manger to gain as much as possible may turn to give just the opposite results. As suggested by Bardi (2010), “one of the goals of revenue management is to sell all available rooms at the highest rate (rack rate)” (p. 182).

However, it is necessary to remember that some rooms may appear to be in high demand and the price for those should be aimed at compensating the losses from rooms that are not occupied due to inappropriate pricing. Jagels and Ralston (2006) suggest the following formula for counting the yield in case of hotel rooms and other issues related to hospitality industry:

“Yield=Actual sales revenue/Potential sales revenue x 100” (p. 282).

In addition, “Potential sales revenue is defined as the room sales that would be generated if 100%occupancy was achieved and each room was sold at its maximum rack rate” (Jagels & Ralston, 2006, p. 283). In this respect, yield can be reached in case of 100% occupancy which can be reached only in exceptional cases or in a spot-of-booking season.

At the same time, Reid and Bojanic (2009) claim that real hotels provide their guests with a variety of rooms with different rack rates when customers may select the room which is more appropriate for them in terms of price, services, and overall factors.

As such, the job of every yield manager in a small five-star hotel is to indicate the customers’ ability to pay more for the rooms of the same quality as others though considering some specific situations. Different price incentives are considered to be an effective tool of practicing yield management in hotels.

For instance, O’Fallon and Rutherford (2010) report that possible incentives may be offered to customers in different situations such as “customers who reside outside the local area receive complementary hotel rooms or transportation, while drive-in customers receive food, entertainment, or cash incentives” (Nickell, 2002 as cited in O’Fallon and Rutherford, 2010, p. 420).

In this respect, the occupancy may be one of the indicators of effective yield management techniques whereas room rates may be changed in accordance with the favourable situation for changes that can help to receive maximum revenue. Khosrow-Pour (2002) emphasise the importance of the internet for a hotel.

The concept of the internet should be definitely analysed in terms of its use for a small five-star hotel/motel because it enables the manager to provide the employees and guest with communication tools. There are many benefits of the internet connections for the hospitality industry as it enables the employees to communicate their messages through the intranet as well as search for creative decisions that may be applied to difficult and challenging situations within a hotel.

As such, Khosrow-Pour (2002) conducted a research that evaluate the internet for a hotel in terms of potential benefits and outcomes of its use for a manager, employees, guests, and overall rating of a hotel. For instance, internet can be used as a communication tool; “the small-size hotel manager rated that the increasing sales/reservations, the improvements in customer service and the savings in cost/time, as the most important benefits to [this] hotel” (Khosrow-Pour, 2002, p. 210).

At the same time, a manager in the research also enumerated the drawbacks of the internet connection for a small-size hotel including “maintenance and site-update costs, and unauthorised staff use and wasted time…, security and confidentiality, and training/lack of knowledge/ignorance” (Khosrow-Pour, 2002, p. 210).

The wide use of the internet connections as an incentive for customers can be treated as one of the most popular measures to attract customers. For instance, different cafes and fast food restaurants provide their guests with an opportunity to use their laptops and the local internet connections in case they order something to eat or drink.

Pearson (2005) dwells on the wide use of the internet in hotels as a way to attract tourists because this issue became an integral part of our live. Besides, some people cannot leave their projects at work and have to supervise and control the process whereas the internet is a convenient way of communication.

In addition, Müller (2011) analysed the way internet influences the effectiveness of the hospitality industry and overall effectiveness of different hotels with regard to their size, the level of services, the competency of personnel, and other factors that can be related to the use of the internet or may be perceived as separate parts of the hotel management activities.

References

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