Business Case for Hotel Management PDF

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BUSINESS CASE FOR HOTEL MANAGEMENT

Business Case for Hotel Management\ Harshit Rawat Wilmington University

EXECUTIVE SUMMARY

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ABC Hotel Management provides hotel and resort owners with sustainable and durable management and marketing solutions. It edges the strengths, the experience, and the track record of creatively and effectively addressing the challenges faced by the hospitality industry and hospitality business in general. Clients and users will be supported by a well schooled and sophisticated infrastructure and highly experienced management team who understands the magnitude of the problems and know how to deal with the and resolve the issues of optimising revenue across the spectrum - from increasing room sales, upgrading finance and business revenue, maximizing meeting and conference opportunities and enhancing the unique image and positioning of the property. ABC hotel management opens the doors to many of the unique advantages and benefits that the customers and the clients will take benefit from as a result of the skills, resources, and world wide exposure that ABC hotel management can provide. The aim is to provide a satisfactory and pleasant stay to the customers and coax them into doing business with the hotels again. The hotel industry is an important and essential industry in the U.S., because it plays an important part on not only the lives of the people but also on the national economy. Facing the capacious market of the U.S. and potential tremendous need of data, there will be a great opportunity for the hotel management system industry.

INTRODUCTION ABC Hotel Management system was designed and developed following the system

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development stages for smooth and effortless running and management of the hotels. After several months of examination and analyzing the systems, the system analyst recognized and defined the problem in the existing manual systems in the hotels. It took a lot of information and data gathering from several hotels managed by manual and computerized systems, the design team recognized the hotels indeed needed a computerized management system. After a close and thorough analysis of the data and the information gathered during the problem definition stage of the restoration, the system analyst and the design team came to a conclusion that all the hardware and the software equipment needed for the upgrade, implementation, and the maintenance of the system was readily available in the market at a price that was easily affordable by the hotels. The system was designed keeping in mind the proper upgrade and ensure maximum efficiency of the system at the hotel. It was also kept in mind that there weren't any loopholes in the renovated system. The system was coded to seal any possible escape clauses in the system. The newly designed system will indeed help not only the hotel staff but also the hotel management to manage and steer the hotel’s functionality and transactions to realise its maximum potential in addition to its competence in the hotel business field.

SITUATION ANALYSIS The current manual system uses paperwork and direct human interaction by mouth to manage the hotel. This procedure delays the information transmission in the hotel. Booking for

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the hotel is done via phone call or by visiting the hotel booking office. The guest’s personal details like Name, Age, nationality, and Duration of stay is input at the time of checking in. the booking office orders for the preparation of the guest’s room just a day before the check in. The guest’s documents are manually transferred to the filing department for the compilation of the guest’s file. On the reporting date, the file is transferred to the reception for verification. For the payment procedure, the reception needs to hand over the guest’s file to the accountant for the payment to be made by the guest at the accounts department. The account department is also responsible for managing and updating the guest’s file on the basis of the expenditure of the guest. The reception generates the bills for the guest’s expenditure as forwarded by the accounts department. The guest pays at the account desk.

PROBLEM STATEMENT Following are the problems that are that are present in the existing manual system at the hotel: 1. Difficulty in location of guest files: Due to the large number of guests files, location of

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guest files during checking in, updating of daily expenditures, receipt generation and checking out is extremely difficult for the hotel employees. 2. Large storage space: The physical files occupy too much space of about two rooms full of storage cabinets. This occupies the hotel’s space that could have otherwise been used for income generation by the hotel. 3. Human and computational errors: Many errors enabled by the system due to tedious computations required during data processing cost the hotel management heavily. 4. Poorly generated records: Poorly generated records encourage omission of some important data by the employees. Such data as the guests luggage is omitted. This leads to security problems at the hotel such as armed robberies. 5. Complaints from guests: Due to poor management of documents aided by the manual system, several cases were reported where guests complained of overcharging, charging for services not used by the guests. 6. Difficulty in data analysis: The accountants usually found it difficult to analyze the guests data during generation of expenditure bills due to missing of some records. 7. Poor communication: Due to poor communication between the departments, guests are often served with services they didn’t order.

PROPOSED SYSTEM There are certain objectives behind the renovation of the management system of the hotel. They are mentioned as follows: ● To enable online booking via the internet. ● To enable automated data entry methods.

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● Ensure efficient and reliable communication within the hotel. ● Avoid data entry errors by use of input masks. ● Enable easy authorized modification of data. ● Enforce security measures to avoid unauthorized access to guest records. ● Enable fast and easy retrieval of guest records and data for fast reference activities SCOPE OF THE SYSTEM The system will cover, booking, accommodation, meals, and account details of the guest.Moreover, complementary services like laundry, ironing, and room services will be automated by the system too. Not to forget the additional facilities information will be efficiently handled by the system. In order to help the system smoothly carry out its intended purpose to meet the hotel management needs, the following tables in the database will be used to store data of the guests and the employees: 1. Booking table: The table contains guest details that will be input when the guest books into the hotel. For booking, the system will give room for online booking, personal visit to the booking office, telephone calls or facsimiles. For online booking, the guest will have to log on to the hotel’s website and fill his/her personal details in the booking web page provided by the system. Fortelephone call the guest provides his personal details over the phone as the hotel’s booking staff do the actual entry of the details into the system. For personal visit to the hotel, the guest provides his details verbally which the booking staff enters into the computer system. 2. Admission table: The table contains guest details input on admission of the guest into the hotel at the reception.This information keeps track of the duration that the guest has stayed at the hotel. If the guest intends to stay for more than a day, he has to book in for

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accommodation in advance; else, this information will be input into the system at the reception. The guest luggage information is entered in the system to ensure maximum security of luggage at the hotel. 3. Meals table: The table contains the hotels catering transactions information. This information is vital as this department is the backbone of any hotel aspiring to achieve its goals and realize its maximum potential. 4. Laundry table: The table contains laundry details for clothes washed at the hotel laundry. 5. Ironing table: This table contains the ironing service information for the clothes washed both at the hotel and outside the hotel. Payment is done on clothes that are washed outside the hotel. Clothes washed at the hotel laundry are not charged. 6. Transport table: The table contains information of the transport services offered to the guests at an extra cost. The Guest is charged depending on the type of vehicle used. 7. Ambulance table: The table contains information on the ambulance facility services offered by the hotel to local,foreign individuals and groups. The table stores information on charges and can be used to generate detailed reports on request by the management. 8. Conference table. This is a facility table that contains information on the conference facility services offered to the customers at an extra cost. The table keeps track of the hotel’s conference rooms in use and the amount generated from the facility per meeting. 9. Swimming pool facility table: Swimming pool facility table contain information on the swimming facility services offered to customers at an extra cost. The table can be used to generate reports on the daily activities in the swimming department, on request by the management. 10. Sporting facility table: This table ensures that the information of those who are lovers of

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physical fitness both as a career and as a hobby is well managed. The table holds their information safely and ensures maximum data integrity values. 11. Employees details table: The table contains valuable and delicate information about the employees. The table is for use by the hotel management to keep track of the employee records and performance at the hotel to enable the hotel realize its maximum potential and reduce any possible irrelevant expenditure.

ASSESSMENT OF BENEFITS The new and renovated online hotel management has certain advantages to complement the ease of usage and better functionality. Certain advantages of the online system are as follows: ● The system enables easy and fast access to the guest files. ● The system provides better data management facilities. ● The system enable online booking of guests into the hotel hence international guests can easily book into the hotel. ● The system provides performance evaluation of the employees to ensure maximum output from the employees.

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● The system provides security measures to access to the hotel’s information lowering data security threats. ● The system help reduce the congestion of guests ensuring best service output for customer satisfaction purposes. ● Easy update of the guest records.High customer service standards attract more guests to the hotel. ● Reduction of data entry and processing errors. ● Greatly reduce paper use at the hotel.

RISKS Even though the new and renovated system has many advantages, but it comes along with certain risks involved in it. The primary four risks involved are explained in brief as follows: 1. Data privacy: Cybersecurity has been an area of major concern for a number of sectors, ranging from power and utilities companies to government organizations. While these sectors are more tilted towards preventing cyber terrorism, hospitality industry is more oriented in the prevention of data and identity thefts. Since hotels collect a lot of information and data about their guests, they are insecure about the theft of the data. Any theft or leak of data may sabotage the image of the hotel and eventually lead to shut shop.

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2. Guest Behavior: Guests are the fuel to any company in the hospitality industry. Without the guests and travellers, these industries will not be able to make any money. However, it is evident from some instances that the guests can be the biggest threats to the industry as well. Lawsuits from the people who are injured or damaged to guestrooms can represent a big risk to the bottom line. In order to control that, hotels should have internal controls in place to take care of guest destruction and ensure travellers safety during their stay in the hotels. Small preventive measures like a closer management of property and resources can prevent incidents from taking place in the first place. 3. Staff: The hotel staff is another critical risk. During the period of recession, most of the employees from the hospitality industry were uprooted from their jobs as there were no jobs. But as the economy improves, people will have more options to work both in and out of the industry. This implies that the hotel industry are at a greater risk of having their key personnel being approached by their competitors. Ofcourse, hiring and retaining are options for the hotels but hey come with an additional cost. 4. Branding: The major driving force for the hospitality companies to drive customers is their brand. Popular brands like Hilton and Marriott are familiar with their customers and have established themselves in the industry. The established forms tend to be very vigilant of their brand names and are not afraid to throw their weights around when another company tries to infringe with their trademarks. The number of risks that hospitality businesses are facing is on the face of the rise. It is paramount that companies take due advantage of a risk management software that can help in uncovering these threats before they affect the business in a negative way.

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BUDGET TIMELINE Upgrading the software of a hotel and relocation of all the paper documents into the system requires a lot of effort and capital at the same time. The effort of the people is paid in wages but the factors that are mostly overlooked by the guests and the clients are the ones that cost the hotel the bulk of their money. Following is the list of entities that cost the hotels in developing their management systems:

SERIAL NUMBER

TASK

NUMBER OF DAYS

ESTIMATED COST (IN $)

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DESIGN PLAN

10-15

3000

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WEBSITE DESIGNING

7-10

5000

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MOBILE APPLICATION DESIGN

4-6

3500

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PAYMENT PORTAL INTEGRATION

3-5

1500

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5

DATABASE ADMINISTRATION

10-12

4000

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SERVER ESTABLISHMENT AND CONNECTION

7-10

2000

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MARKETING PLANNING

20-30

8000

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GLOBAL DISTRIBUTION

15-20

5000

9

BOOKING ENGINE

3-4

9000

10

DIGITAL MEDIA PROMOTION

20-30

10,000

11

TESTING OF THE SYSTEM

10-15

7000

12

MAINTENANCE OF THE SYSTEM

3-4

4000

TOTAL------------------------------------------

112-161

62,000

CONCLUSION

In order to design and develop a system that would computerize the ABC hotel activities, the system analyst has been able to come to a successful end of the journey. The establishment has gained a successful and dynamic system which will be able to provide convenience and comfort to the users to book a hotel of their choice and have a comfortable stay. The system analyst has tried to fulfil all the objective to replace the old and outdated paper pen model of the hotel and substitute them with the latest and up to date systems. The current system will not only benefit the customers but also the staff of the hotels as their lives would be made a lot more easier due to the automation of the system.

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