100+Percent+Occupancy

Kate Wilson lives in New Jersey but commutes to Manhattan two hours each way to work at a prominent New York City hotel as one of four executive-level concierges. She is blac, in her thirties, and has a very positive attitude about life. She typically works the 6 A.M. to 2 P.M. shift. Her warmth and optimism provide a pleasant start to a guest’s day.
 * 100 Percent Occupancy**

The U.S. Tennis Open, which occurs for three weeks at the end of August and beginning of September, was taking place. Thousands of players, media, and spectators from around the world had descended on New York to see the games. This hotel, along with most other nearby hotels, was at full capacity, and the general manager required that they have 100 percent occupancy for those three weeks. In this situation the reservations desk overbooked the hotel by a certain percentage and also took walk-ins. Front office personnel had to check in the correct balance of guaranteed reservations and walk-ins to ensure that the hotel was 100 percent full. However, if they did not have enough rooms for guests with guaranteed reservations, they had “walk” them to another hotel and pay that hotel’s rack rate. It was a very stressful situation for front office personnel.

Kate had switched shifts with another concierge, so she was working the late shift on the executive level, from 3 P.M. to 11 P.M. The executive-level floor is popular because it has a larger rooms, bigger baths, and an executive floor lounge which serves a continental breakfast, afternoon cookies and tea, and evening cocktails. At the hotel, guests who know they are staying on the executive level can check in either at the front desk, which is in the lobby, or with the executive concierge.

As the evening progressed, Ben, the front office manager, made a decision to sell rooms to walk-ins assuming that guests with guaranteed reservations were not going to arrive. By 10 P.M. the hotel was 100 percent occupied except for two rooms that were being held for guests who might yet arrive with guaranteed reservations. Ben chose not to hold any rooms on the executive-level floor, because “walk-ins” paid the rack rate of $250 for these rooms. This way not only would occupany be 100 percent but the average room rate would increase. Although he ran the risk of not being able to provide a room on the executive level for a guest with such a guaranteed reservation, Ben felt that the 100 percent occupancy and average room rate increase were more important.

At 10:40 P.M. a guest came to the executive-level floor to check in. After checking in the computer, Kate told the gentleman that executive level floor was completely occupied but offered him a room on another floor. The gentleman in a very condescending manner, pulled out his confirmation letter and restated the he had a reservation on that floor. Having stayed on the executive floor before, he was adamant about his reservation. Once again, she told him that he could have another room. Very angry, he demanded to see the manager. Kate called Ben, who also happened who also happened to be the manager on duty that night.

Ben went to the floor quickly and described in more detail the situation at the hotel. He explained the importance of achieving 100 percent occupancy, and given that it was so late at night they did not think he would keep his reservation. Realizing that the guest was still dissatisfied, Ben reiterated that he would get a room on the executive level floor as soon as one became available. In an attempt to appease this customer, Ben granted him all executive-level privileges and promised that his first night’s stay on the executive level would be complimentary. The man agreed to stay in one of the other regular guest rooms, but made a vow that he would speak to the other regular guest rooms, but made a vow that he would speak to the general manager in the morning. At the end of her shift, Kate went down to the front office to drop off her paperwork and noticed that there were several people at the front desk attempting to register in the fully occupied hotel. She was glad to be going home. It was not until two days later that the man was placed on the executive-level floor. He did not seem angry at Kate, but he was also not friendly. During his remaining three-day stay on the executive-level floor, he was brisk with her and refused to engage in a relaxed conversation, regardless of Kate’s efforts. v
 * 1) Is it effective to attempt to achieve 100% occupancy? Why?
 * 2) What are some of the costs incurred in this situation?
 * 3) What would you have done differently?
 * 4) What caused the problem?