In this blog, you will learn about the revenue and nonrevenue-producing departments in detail, So stay tuned to this blog.
What are the revenue and non-revenue-producing departments in a hotel?
Major Revenue Producing Department in a hotel
Front office Department
This department is one of the major revenue-producing departments in a hotel. As this is the first department that greets and comes in touch directly with the customers guests are provided information and even their inquiries are solved. It is the first place where revenue production takes place.
This department generates lots of revenue and makes a hotel profitable as room is the first preference for the guest and even the basic requirement, as wherever the guest will travel he or she definitely will book a room in a hotel of that particular destination. The front office department manages the reservation, provides check-in and check-out services, room rates, guest services, handles guest complaints, etc. And this major revenue-producing department aims to provide excellent services so that guests should have a positive experience. In the hospitality industry, this department has its value.
Food and Beverage Department
This department is also considered as the major revenue-producing department. As we know food is the basic need of humans. This department also generates lots of profit and makes the hotel profitable as it is obvious wherever the person travels he will have food, and the visitor does visit the hotel for the food, that is why in every hotel there is a food and beverage department.
This department especially looks after the production of food, item, their sale, and service. In the food and beverage department, the food and beverage production like the kitchen, bakery, pantry, and stores are responsible for the preparation of the food items to the preparation of the final dish. Food and beverage services include services and outlets where food is being prepared (production area) and sold to the guests, like restaurants, coffee shops, bars, banquets, events, etc. Its culinary excellence, event hosting, beverage offering, and loyalty programs in luxury hotels have enhanced the guest experience. In the hospitality industry, this department has its importance.
Minor Revenue Producing Department in a hotel
Telephone department
This department is considered a minor revenue-producing department as it generates less income from the guests. As we know in today’s generation everyone has a mobile to contact and connect with other people so in hotels, this department has less demand and is less preferred by visitors. If the telephone department is being used by the guest, then the guest has to pay for the local or STD calls.
And charges can be paid directly to the telephone operator and in some cases, direct billing is also done by telephone meters. Generally, a hotel guest uses the telephone for making reservations, enquiring about nearest and local attractions, making complaints, etc. Hence this department serves valuable profit to the hotel.
Laundry department
This department is responsible for cleaning clothes, tidying up uniforms, dry cleaning, etc. And if the guest is taking this service then he has to pay charges. This department comes under a minor revenue-producing department because fewer people prefer this service and sometimes, the hotel has its laundry but has zero contract outside.
Operating and revenue-producing department
- Personnel – The personnel department is also known as the human resource department. This department is responsible for hiring and training employees in a hotel.
- Security – The security department is responsible for safety and security, preventing theft from being in a hotel, and any unauthorized access, and ensuring compliance with regulations. This department is also responsible for protecting the hotel’s reputation. The main agenda of this department is to manage and minimize risk from being in a hotel.
- Maintenance – This department is responsible for repairing and maintaining rooms and public areas like lighting, electricity, air conditioning, plumbing, etc. The main aim of this department is to take care of the machines and equipment in the hotel.
- Accounts – The accounting department is responsible for financial management, keeping records, handling money flows, etc. This department aims to maintain financial control and to keep transparency.
- Sales and Marketing- This department is responsible for selling services or products, innovating sales strategies, marketing, advertising, promotion, and targeting the audience. And the main purpose is to attract more and more people and to create awareness.
Non-Operating and Revenue Producing Department
Non-operating and revenue-producing departments include travel agencies, airline offices, salons, bookshops, etc. These are mostly on rental bases or commission bases. They are considered the concessionaires as they are part of the hotel services.
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FAQs
What is the difference between revenue and nonrevenue items?
Revenue items mean things which can bring money. For example - selling a product to a customer. Nonrevenue items are the expenses. For example - paying salaries to employees.
What are the two main sources of hotel revenue?
The two main sources of hotel revenue are room revenue and food and beverage revenue.
What is the full form of RDO?
The full form of RDO is Revenue Division officer.
What is the full form of IRS?
The full form of IRS is Indian Revenue Service.
Conclusion
This post is about major, minor, operating, and nonoperating revenue-producing departments. In today’s world hospitality industry is growing day by day. In hotels, some departments make a hotel profitable and some departments make it less profitable, so to get know in detail must go through this blog, I have explained how and which department is profitable and which makes it less profitable.