CHAPTER 2

The Structure of the Hotel Industry

Objectives and Student Goals:

Student Objectives for this chapter are to:
• Create in the student a mental image of the organization of a hotel and of the place of
the front office therein.
• Develop an appreciation for the interconnection among the several front-office
positions and between the front office and the other operating divisions of the hotel.
• Develop knowledge of the hotel's product (the guest room) including floor design,
room shape, room size, and exposure.
• Create an ability to distinguish among bed types and between bed types and room
types.
• At the conclusion of this chapter, the student should be able to:
• Name jobs within the front office and describe the duties and responsibilities that
accompany each job. Distinguish the level of staffing and the organizational
structures that differentiate various types, sizes, classes and plans of hotels.
• Visualize the design of guest floors, guest rooms and guest accommodations as a basis
for the assignment of arrivals and the development of room rates, which are discussed
in later chapters.

Chapter Summary:
This opening part is fashioned as a base structure. On it—that is, on a fundamental
knowledge of what the lodging industry is all about—is built the balance of the text. The
units that follow examine in detail the duties, responsibilities and procedures of the rooms
division of the hotel and of the several other departments that support the front desk.
Throughout the text, the authors intermix the terms of rooms’ department, front office
and front desk in order to add variety to the prose. Except in rare instances, this chapter
being one, the terms are used interchangeably. Similarly, except here in chapter 2, no
sharp distinctions are made elsewhere between the General Manager (sometimes called
the Hotel Manager) and the Rooms Manager. The General Manager has operational
responsibility for the entire hotel except for food and beverage, although in many hotels
the food & beverage manager also reports to the GM. The Rooms Manager has lesser
responsibility. Where there is a complete staff, as illustrated in this chapter, the Rooms
Manager has the assistance of either or both an Assistant Manager and/or a Front-Office
Manager. The latter focuses chiefly on the operational areas of the physical front desk.
In Canada today the position of Resident Manager has almost disappeared and Duty
Managers are taking their place in large hotels.

The distinctions are less sharp today because front-office staffs were reduced
dramatically as hotel organizations restructured during the dark days of the early to mid-

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1990s. Numerous middle-management positions were cut as a result, and many titles
were collapsed into one. The new structure that was created has remained and with it the
merger of titles and responsibilities. Chapter 1 reviewed the fiscal causes behind the
downsizing. Hotels offset the diminished management structure by enlarging the scope
of employee authority and responsibility. Chapter 6 discusses this new empowerment of
guest-service agents. The front-office organization described in this chapter does not
reflect this loss of supervisory staff because many positions were being reinstated as the
lodging industry entered a strong period of recovery until September 11, 2001, followed
in some parts of Canada by the SARS outbreak and concerns over mad cow disease, West
Nile Virus and the Avian bird flu. The industry in Canada has recovered to pre 9/11
levels although travel to Canada by Americans has shrunk and they are our largest source
of international travellers.

From the organizational charts, it should be apparent to the student that the rooms
department is but one unit within the operating hotel. Moreover, it is not an independent
unit, but is one heavily dependent on other departments within the hotel.
Notwithstanding that interdependence, the front office is the most important unit of the
hotel. Evidence for such an assertion harkens back to the previous chapter. Various
hotels can and do function without food and beverage facilities. The manager of a small
hotel often takes on marketing. Some hotels get along without departments of human
resources. Others outsource their payroll and accounting systems. Not so with the front
office. The very definition of the hotel as a purveyor of rooms necessitates the presence
of the rooms division, which is most evident in two functions: the front desk and
housekeeping. In the book, we focus on the former and Chapter 3 focuses on the latter.

Key Concepts of the Chapter:

The Bath. The hotel bath – that’s the room, not the tub—has a split personality. In the
low and mid-priced hotels, it serves as a basic necessity. In upscale hotels the bath has
become an amenity: large in square footage, as much as 10-12 square meters, with many
extras from hair dryers to Jacuzzi baths.

The Old Design and the New. There are many reasons behind the rise in room rates.
The changing design of hotels and hotel rooms is one major contributor. Hotel rooms are
much larger today than before World War II, and rooms of that era (1920s to 1950s) were
larger than those of the late 19th Century. Furthermore, the open design of today’s hotels
requires far more land – has a larger footprint – than their predecessors. More square
meters per room and larger footprints in design add immensely to construction costs, and
hence to the room rate needed to recover the investment. We discuss room rates in
chapter 8.

The Hotel, Its Desk and the Market. The organizational structure presented in this
chapter is, of necessity, a composite picture. Chapter 1 emphasized that hotels differ as
to size, plan, type, purpose, markets and so on. As they differ, various organizational
structures emerge. Large hotels differ from small ones. Hotels soliciting discounted

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packages structure reservations, registration and billing differently than hotels pitched
toward, say, conventions. Even the physical design of the lobby and the desk may differ.
In turn, the organization and design of convention hotels differ from that of hotels selling
individual FITs at high ADRs. The configuration of the resort is certainly not that of an
urban high rise. Casino hotels differ quite dramatically from traditional houses both in
organization and physical design. Obviously then, the structure of the desk is a reflection
of the hotel’s market.

From Host to Executive. Without question the host-guest relationships that one likes to
picture in the colonial tavern has not existed for sometime, if ever. Managing facilities
with hundreds or thousands of employees, with capital investments of hundreds of
thousands, or millions of dollars restructures the priorities of management. The shift has
moved the hotel executive into the role of chief operating officer and away from the role
of Mine Host.

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Professional Vocabulary:
Exposure. Exposure describes the prospect from the guest-room window. Most often,
the view is directional: north, south, east or west. Terrain is used also to describe
exposure: mountain view; ocean view; lakeside. Manmade identifications can be
substituted for the natural terrain: poolside; golf course; marina; slopes (ski).
Unfortunately, some exposures are negative, so these would not be touted to the guest:
receiving dock; garbage pickup; employee entrance.

Suites and All-suites. Suites are very different from all-suites. Suites have been
available in hotels for generations. All-suites are a new creation first coming on the scene
during the early 1970s. Suites are luxurious upgrades within a hotel; all-suites are a
special hotel segment within the lodging industry. Suites are scattered throughout a
regular hotel, although frequently on the upper floors or with corner exposures. All-
suites are specially designed buildings with each room having the attributes of a suite:
with the bedroom separated from the parlour, which is a somewhat old-fashioned term for
the modern living room. Suites are frequently named, either generically: Presidential
Suite; Honeymoon Suite, or in honour of notable personages or historical figures: The
Shania Twain Suite; The Stephen Harper Suite. All-suite rooms are not distinguishable
and carry no special identification other than the room number.

Single and Double – Bed and Occupancy. Single beds have all but disappeared. There
are still some double beds in use, particularly in older motels and motor inns. Double
beds, approximately 145cm x 190cm, are often found paired as twin-doubles. As rooms
have increased in size, large beds (queens 152cm x 203cm) and kings (183cm x 216cm)
have found favour. Longer beds are called California or European lengths. The term
single is still used to convey occupancy by one person; likewise, double refers to
occupancy by two persons. The terms single and double occupancy apply irrespective of
the room’s bedding. Most hotels now also charge the same rate for a room whether it is
occupied by one person or two.

Square Feet vs. Square Metres. Much of the world operates on the metric system
where square metres not square feet are the measure of room area. The conversion is
simple: one square metre is 10.76 square feet. To make an estimate from square feet to
square meters, the student divides the square feet by 11. To make an approximate
estimate from square metres to square feet, the student multiples the square metres by the
same 11 value. For example, a 550 square-foot guestroom would be approximately 50
square metres, 550 ¸ 11 (a truer figure is 51.1). Given the area of a room as 51 square
metres, the estimate is 562 square feet (51 x 10, + 1/10 = 510 + 51). Neither is strictly
accurate, but they both serve to conceptualize what another party may be describing.

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Answers to End-of-Chapter Questions:
1. Members of the staff include:
Assistant Manager – Bailey, Sous Chef – Andre Lemieux, Bell Captain – Herbie
Chandler, Assistant General Manager – Peter McDermott, Bartender – Tom Earlshore,
House Detective T.I. Ogilvie, Controller – Royal Edwards, Housekeeper – Blanche
DuQuesnay, Personal Assistant to Trent Warren – Christine Francis, Valet to Trent
Warren – Aloysius Royce, Trash Sifter – Booder Graham, Owner of the St. Gregory –
Trent Warren, Credit Manager – Sam Yakubiec and Chief Engineer – Doc Vichery.
The hero, Peter McDermott, as Trent’s manager, is involved in different aspects
including the possible sale of the hotel. Simultaneously, he is investigating some strange
happenings with several different guests: an ill man; a suspicious loss of valuables; and a
group of young people in trouble. Helping him is a girl friend, Christine Francis who is
also the personal Assistant to Trent Warren, Owner of the hotel. A good portrayal of an
operating hotel.

2. There are several objectives to the exercise: (1) familiarization with the metric system;
(2) the ability to visualize the design of a guest room; (3) the distinction needed to
separate the size and facilities of a room by Choice from that of full-service hotels—a
300 square foot room (27.88 square meters*) is a good assumption; (4) the sensitivity to
bed sizes and types. Understanding the market and reflecting that in the design is the
basic purpose of this assignment. (* Using the 11-rule, given in the Professional
Vocabulary, above, the room size in square meters is 27.27, not 27.88.)

3. The information needed to answer question 3 is available on the Internet. From the
Website, the student learns that the 504-room Pan Pacific Hotel in Vancouver has guest
rooms of 56 square meters. Moreover, full-service properties in the class of the Pan
Pacific may require as much as 93* additional square meters per room to provide for
corridors, elevators, emergency exits, service closets on the floors, convention space,
offices, public restaurants and bars, lobby areas and more. Thus, each room needs almost
150 square feet (56 + 93). Since the property has 504 rooms, one could estimate the
building size at about 75,600 square meters (150 x 504 = 75,600). Taken a step further: if
Vancouver building costs are $1,650 per square meter, the hotel costs $124,740,000 to
build. (* Students may use figures from 50 to 100 square meters and still be correct in the
concept.)

4. Although the specific answer of each student cannot be anticipated, there should be
some commonality among the answers. The response should include some information
about the shape of the rooms that are being compared (probably rectangular); the contents
of the rooms (kinds and number of beds, furnishings, closets and storage spaces); the size
of the rooms (anywhere from 25 square meters to 50 plus square meters) and the rates
being charged for each. As we point out throughout the book, rates reflect more than just
the room size.

5. Before this exercise is assigned, the instructor may decide to have a session on the
interview process, including the student’s need to make and keep appointments, proper

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dress and demeanour and a draft of acceptable questions. This assignment also lends
itself to class discussion of job descriptions and to a review of organizational charts and
their role in the business organization.

6. One possible answer uses seven persons: five guest-service agents (A, B, C, F, H)
covering either the desk or the cashier’s positions. Position E is a float. One night
auditor (D) and one part-time, auditor relief position, identified as X, complete the cast.

Position Shift Mon Tue Wed Thur Fri Sat Sun

Desk 8 a.m. - 4 p.m. A A A A A C C

Desk 4 p.m. – Midnight C C B B B B B

Cashier 8 a.m. - 4 p.m. F F F E C F F

Cashier 4 p.m. – Midnight H H H X E H H

Auditor Midnight – 8 a.m. X X D D D D D

Back-up & Relief- 11a.m.-7p.m. Also

Covers during sickness and vacations E E E

All full-time staffers work five consecutive days. C and E change shifts but always with
at least a shift or day off between. X is one or more persons on part-time schedules.

Answers to Case Study Questions:

This case study was solved by terminating the Assistant General Manager and
eliminating that position. With that salary saving in hand the GM proceeded to divide that
salary up among the remaining department heads: Housekeeper, Maintenance Engineer,
Chef, Front Office Manager, and the Dining Room and Lounge Manager. This would
have allowed the GM to replace any of these department heads with higher paid and more
qualified individuals. In this particular case the GM decided that he had the right people
in place, but they lacked motivation. Being paid more money is only a short term
motivator so what the GM did was delegate decision making responsibility to each of the
department heads for things like budgets, cost saving measures, and H/R measures among
others. What the GM suggested to each of his department heads was that each was now
responsible for their own piece of the total operation. The hotel now had only one coach
and department heads as decision makers. Employees would no longer run to the GM if
they didn’t like the decision of the department head as they were promptly sent back to
deal with the department head. In this particular hotel department heads had not been
privy to budget and financial statement performance. They were now included in that

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process and responsible for their department from budgets to financials as well as the day
to day operations of the property. In a very short time this hotel was financially and
operationally turned around and when the GM left 10 years later all of the department
heads with the exception of one were still in their positions.

1. Terminating a management position or positions may be expensive in terms of

separation pay, effects on staff morale etc. Not making the change may be even more
expensive in terms of future profitability for the hotel.

2. Yes it should – although the company would ask that the department heads not share
financials with the employees to maintain some confidentiality. How can you expect a
manager to manage without the tools that his/her performance is going to be measured
against?

3. For the displaced AGM and department heads the hotel could pay for an outside
company (head hunter) to help the employee gain employment elsewhere. Managers
must manage – and therefore the change should be made with appropriate measures in
place to measure change and the ultimate success or failure of the change.

4. The change should have a dramatic effect on the department heads of the hotel. The
raise in pay was substantial and getting the raise in return for more personal involvement
in the operation should be a great motivator. In the opinion of many a GM cannot
manage a hotel – the department heads and employees are the ones who do that. A GM
position is better served being that of a coach and cheerleader, as well as vision-setter and
team leader.

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