Rooms division management Essay Example

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Rooms Division Management

Task 1 – Distribution Channel Management

  1. Briefly, define the role of intermediaries. Outline a minimum of three (3) advantages and three (3) disadvantages in dealing with intermediaries.

Intermediaries are a person or entity that acts as a link between different parties with a purpose of agreeing on a subject.

Advantages of intermediaries

  • Increased reach

  • Burden sharing and costs sharing

  • Engaging and assisting the customers since they have first hand contact with the customers or retailers near the customers

Disadvantages of intermediaries

  • Increased cost because they have to receive commission

  • Loss of control of business activities

  • Some services and products can be sidelined during the processes

  1. Identify three (3) common distribution channels that a guest would most likely use if they were traveling to a distant location and needed information on an accommodation property.

The following are the common distribution channels

  1. Internet technology

  2. Travel agencies

  3. Visitor information centers

  1. Identify and briefly describe two (2) advantages and disadvantages for each of the three (3) channels identified in part 2.

  1. Internet technology

    1. Advantages

      1. It is easy to book and request for services

      2. Extensive recommendations and validation

    2. Disadvantages

      1. Restrictive terms and conditions

      2. Challenges of integrating technological systems meaning the booking may not be effective or skewed information can be provided

  2. Travel agencies

    1. Advantages

      1. Comfort in the country of destination

      2. Convenience

    2. Disadvantages

      1. Some of the agencies are not reliable

      2. Some of the services are expensive compared to alternative

  3. Visitor information centers

    1. Advantages

      1. Have clear and specific information about destination

      2. Can provide government assistances such as visa, especially when it is a government-framed information center

    2. Disadvantages

      1. The information may be limited to specific destination

      2. The assistance offered is limited compared to alternative channels

  1. Describe two (2) future challenges that Front Office Managers face in the ongoing management of reservation distribution channels.

    1. Knowledge of international languages

    2. Lack of skills and competencies to deal with the requirements of international customers

Task 2: Capacity Allocation

We have to calculate capacity allocation given by the formulae:

rooms division management

The lost opportunity is ($400 — $240) = $160

Calculating p values using the equation (lost revenues/cost of reserving + lost revenue)

rooms division management 1

As the z-table is a half table, need to lookup 0.4-0.5 = (-) 0.1

Checking the z table, the value of 0.1 is 0.25

Substituting the values

rooms division management 2

X = 320 + (0.25 * 30) = 320 + 7.5 = 327.5 = 328 rooms

328 are rooms to be released for full rates while the discounted rooms should be 500 rooms – 328 rooms = 172

Task 3: Adjusted Room Count Calculations

  1. Adjusted room count table

Rooms in the hotel

Less OOO rooms

Rooms available

Occupied last night

Expected check-outs

Understays (4%)

Overstays (2%)

Adjusted departures

Adjusted stayovers

Today’s reservations

Cancellations (2%)

No-shows (6%)

Early arrivals

Today’s adjusted reservations

Rooms committed today

Adjusted rooms for sale


  1. Should the Front Office Manager sell a room to this guest?

If though there are no rooms, the Front Office Manager should sell a room

  1. To justify your decisions, explain why or why you have not decided to sell a room to this guest.

The customer is common and contributes immensely to the development of the hotel. The incidental costs and marketing through word of mouth can mitigate the costs of cancelling a booking. If the customer goes to another hotel, the chances of the customer returning for future room booking are minimized.

Task 4: Overbooking Calculations

Filling the table (based on 40 days)


Probability of no shows (Frequency/days)

Cum. Prob. Of no shows


Based on the provided formulae and the following details:

C = the $350 cost of walking a guest

C = the $250 lost potential revenue

Substituting these data:

P (d<x) = 250/350+250 = 250/600 = 0.417

From the table, 3 rooms satisfies the critical fracticle criterion

By checking the table, the frequency of overbooking by 4 rooms is higher meaning the amount of overbooked rooms should be reviewed