1

Module II

Hospitality Organizations

Lesson 1 Hotel Organization and Management

Lesson 2 Club Management, Gaming

and Casino Hotels

Lesson 3 Restaurant Organization and

Management

Lesson 4 Floating Resorts: The Cruise

Line Industry
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MODULE II

HOSPITALITY ORGANIZATIONS

 INTRODUCTION
The multibillion-dollar hospitality industry has three primary areas. The first
area is accommodations, which include hotels, motels, bed and breakfasts, and other
lodging businesses. The next area is food and beverage. This area comprises
restaurants, fast food chains, and other establishments that provide food and
beverages. Some food and beverage providers might be located in hotels or be stand-
alone facilities and the last area of the hospitality industry is travel and tourism,
which includes airlines, trains, cruise ships, and other forms of transportation.

There are many definitions of the term organization. In an early definition,

Chester Bernard labeled it "a system of consciously coordinated activities of two or
more persons." Hari Das said that "an organization is an abstract social entity." A
social entity is "a structured group of two or more people brought together to achieve
certain objectives". According to Howard E. Aldrich, Organization.

“An organization can be conceptualized as a collection of individuals

deliberately structured within identifiable boundaries to achieve pre-determined
goals” such as; organizations as social entities, all organizations have a structure,
have identifiable boundaries, exist on a relatively permanent basis, and use specific
knowledge or technology to perform work-related activities. These features are
visible in most organizations in like manner with the hospitality organizational
structure.

Module two consists of four lessons that define the different hospitality
organizations.

OBJECTIVES

After studying the module, you should be able to:

1. understand the hotel organizational structure;

2. explain how a hotel is organized, distinguish revenue centers from cost
centers, and describe the rooms division management;
3. summarize the background information about clubs;
4. list and describe the revenue sources of clubs and gaming casino hotels
5. describe the restaurant industry and the restaurant segments that comprise
the industry;
6. outline the structure and determinants of the cruise line industry sector;
7. examine the significance of cruise tourism to destinations in terms of
economic, environmental, cultural, and social impact.
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Lesson 1

 Hotel Organization
and Management

To gain perspective on how hotels are organized, a few hotel characteristics

should be renowned at the outset;

 All hotels are in the business of renting rooms.

 Hotels vary in size from under 100 rooms to over 5,000 rooms.
 Hotels vary in type. They can be center city-city hotels, resorts, highway
properties, conference centers, and others.
 Hotels vary in the nature and extent of their facilities. Some hotels offer only
rooms, while others have coffee shops, gourmet restaurants, swimming pools,
golf courses, and other facilities.
 Hotels vary in the level of service they offer. For example, some offer 24-hour
room service, others offer room service from 7 AM to 10 PM only, and some
do not offer room service at all.

Hotels are not all alike, No matter what category a hotel falls into, however,
it must be organized to (1) coordinate many specialized tasks and activities
necessary to attract and serve guests, and (2) produce a reasonable profit consistent
with the amount of money and time invested in the enterprise. Organizing is one of
the management functions necessary in the structure of the business enterprise.

How is a Hotel Organized?

A hotel organizational structure is a comprehensive plan by a hotel owner to

define departmental activities and responsibilities. This structure brings order to
every aspect of hotel operation from the front desk and room service to the human
resources department. Hotel organizational structures are necessary to ensure
maximum profitability from each room, restaurant and bar daily. The hotel can run
efficiently if it creates an organizational structure that is easy to understand.

Most hotels use a hierarchical organizational structure with pre-defined roles

and departments. Their employees have clearly-defined responsibilities and
everyone knows their roles. Usually, a general manager is at the top of the hierarchy,
and this position oversees the various departments within the hotel.

No two hotels are the same. The structure of the hospitality industry depends
on several factors, including the establishment size, its services and amenities, its
budget, and its business goals. Most facilities have several key areas in common,
though; these usually include executive management, front desk services,
housekeeping staff, kitchen staff, maintainable personnel, accounting, and
marketing. A small hotel may assign its marketing activities to the front desk
department, while a luxury resort may have a separate division in charge of
advertising, public relations, and sales.

The purpose of a hotel organization is to clearly describe the authority,

responsibilities, and duties of each department and its staff. It illustrates who is in
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charge and makes it easier to monitor employee performance. It also helps

employees understand their daily tasks and relation to other employees.

Exhibit 1. Sample Organizational Chart - Small Hotel

Source:
[Link]
Exhibit 2. Sample Organizational Chart - Large Hotel

Source:
[Link]
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The Specific Organizational Structures that comprise the hotels’ organization.

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Source: [Link]

Revenue Centers versus Cost Centers

The division in a hotel can be categorized as revenue centers or cost centers.

Revenue centers generate income for the hotel through the sale of services or
products to guests. Cost centers also known as support centers, do not generate
revenue directly. Instead, they support the proper functioning of the revenue
centers.

Hotel Revenue Centres: Distinctly identifiable department, division, or unit of a

firm that generates revenue through the sale of goods and /or services. For example,
the rooms department and food-and-beverages department of a hotel are its revenue
centers. A revenue center is one of the five divisions of a responsibility center.

Cost center, Revenue center, profit center, contribution center, and investment
center. Cost centers, like revenue centers, only monitor costs, thereby making them
a counterpart to the revenue center, Revenue centers are solely responsible for
activities that bring cash into the business. Because the focus is on generating gross
revenues and not controlling costs, it might seem this goal runs counter to the long-
term success of a business.

Sales or marketing departments are the most common forms of revenue centers
in small or large businesses. The marketing team is responsible for selling products
or services that the company produces at a specific cost. The team sets a selling
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price based on production costs plus a margin for profit. Its objective is to meet or
exceed revenue targets while maintaining the agreed profit margins.

A profit center is a branch or division of a company that directly adds or is

expected to add to the entire organization's bottom line. It is treated as a separate,
standalone business, responsible for generating its revenues and earnings. Its profits
and losses are calculated separately on accounting balance sheets. Peter Drucker
coined the term "profit center" in 1945.

An investment center is a business unit in a firm that can utilize capital to

contribute directly to a company's profitability. Companies evaluate the
performance of an investment center according to the revenues it brings in through
investments in capital assets compared to the overall expenses, and

A contribution center is presented and refers to a profit center in which marginal

or direct costs are matched against revenue.

Based on the Large organizational of a hotel in exhibit 2, these are examples of

revenue centers and cost centers in a hotel organization.

Revenue Centers Cost Centers

Rooms Marketing
Food and Beverage Engineering
Telecommunications Accounting
Concessions,Rentals,Commissions Human Resources
Fitness and recreation facilities Security

The Main Department in a Hotel or Resorts

To run the Hotel as a functional unit, there are several departments in the hotel
which work and coordinate together, and the major departments of the
Hotel are:

1. Front Office Department - This department performs various functions like

reservation, reception, registration, room assignment, and settlement of bills of
a resident guest, and the front office department is considered the nerve center
of a hotel.
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2. Housekeeping Department - The housekeeping department is responsible for the

cleanliness, maintenance, and aesthetic upkeep of rooms, public areas, back
areas, and surroundings in a hotel and for the immaculate care and upkeep of all
guest rooms and public spaces at all times.

3. Food and Beverage Service Department - This department looks after the service
of food and drinks to guests. The Food is made in the Kitchen and Drinks are
prepared in the Bar for the Customers (guests) at the Food & Beverage premises.
Some examples of food and beverage outlets are Restaurants, Bars, Hotels,
Airlines, Cruise Ships, Trains, Companies, Schools, Colleges, Hospitals, Prisons,
takeaways, etc.

4. Kitchen or Food Production Department- All the food and beverages that are
served to the hotel guest is prepared in the kitchen. Culinary preparation, as an
art and science in the modern kitchen, required more than just knowledge of the
food being prepared and the methods of preparation.

It is through knowledge of basic skills, terminology, and rules of the kitchen that
a final goal, preparation, and service of quality are achieved in the hotel kitchen.

5. Engineering and Maintenance Department- The engineering department is

responsible for repairing and maintaining the plant and machinery, water
treatment and distribution, boilers and water heating, sewage treatment,
external and common area lighting, fountains and water features, etc. Also, It
looks after the maintenance of all the equipment, furniture, and fixture installed
in a hotel.

6. Accounts and Credits Department- This department maintains all the financial
transactions. Accounting departments typically handle a variety of important
tasks. Such tasks often include invoicing customers, accounts receivable
monitoring and collections, account reconciliations, payables
processing, consolidation of multiple entities under common ownership,
budgeting, periodic financial reporting as well as financial analysis.
Also common are setting up adequate internal controls for all business processes
(to prevent theft/misappropriation of assets), handling external audits, and
dealing with banks to obtain financing. Taxes are sometimes handled by
accounting departments in-house, but this work is often contracted to outside tax
accountants.

7. Security Department- The security department of a hotel is responsible for the

overall security of the hotel building, in-house guests, visitors, day users, and
employees of the hotel, and also their belongings.

8. HR department- The human Resource department is responsible for the

acquisition, utilization, training, and development of the human resources of the
hotel.
The role of the HR department also has to do with the administration of an
impartial and internal justice system that will promote transparency and openness
in organizational communication. The Human resources department also serves as
a progressive voice in a common system and strives to ensure competitiveness in
the conditions of service for staff.
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9. Sales and Marketing Department- The major role of the sales and marketing
department is to bring in business and also to increase the sales of the hotel’s
products and services are the major task of the department.

10. Purchase Department- The purchase department is responsible for procuring the
inventories of all the departments of a hotel.

11. Information Technology (IT) / Systems- The Information Technology department is

responsible for the day-to-day support of all IT systems, business systems, office
systems, computer networks, and telephony systems throughout the hotel/resort.
The department also is responsible for Information Technology issues, products,
and services at the property. It provides the user’s training and support of all
property/site systems, network enhancements, hardware and software support,
etc.

Review Questions:

1. Differentiate the revenue center from a cost center. In what way that the cost
center department helps in increasing the revenue of the hotel or resort?
2. Make a distinction between the duties and functions of a small organization from
the large organizational structure.
3. From the organizational structure given, such as the Front Office Department &
Housekeeping Department or otherwise known as the Rooms department, and the
Food and Beverage department. Please take note of the duties and functions of
the people working in the said departments.
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Lesson 2

 CLUB MANAGEMENT, GAMING

AND CASINO HOTELS

Introduction

In this lesson, we discuss the organization and management of private clubs

and gaming casino hotels. Lesson 2 explains the different kinds of the club and their
membership composition. It also describes how clubs are owned, organized, and
managed likewise gaming and casino hotels. To understand casino hotels is to think
of them not as hotels with casinos attached, but rather as casinos with guestrooms,
restaurants, shopping arcades, and even theme parks attached.

Background on Clubs

Private clubs are gathering places only. They bring together people of the
same interest. These interests could be recreational, social, fraternal, or
professional. In many parts of the world, the club that you belong to is an indication
of your position in society.

Private club management is solely related to hotel and food service

management. Most clubs have dining facilities; others have multiple dining facilities
and lounges as well as extensive private meeting rooms for catered events.

There are some similarities in the organization of clubs and hotels. A basic
difference between clubs and hotels is that the club’s “guest” is a dues-paying
member with financial and emotional attachment to the club. Whereas hotels are
open to the public and the relationship between the guest and the hotel is less
personal.

Different types of clubs and their functions

1. Country Clubs - are private clubs that offer a wide variety of recreational
activities, services, and facilities to their members or families. Such clubs are
usually located in suburban or rural areas. Recreational or sports facilities may
include, but are not limited to, a golf course, tennis courts, swimming pools, pro
shops, outdoor children’s play areas, gym rooms, dining areas, and lawns.
Therefore, members can play or practice sports there, hold different events or
parties on the lawn, as well as dine with families and friends at the lounges or
restaurants.

2. City Clubs - are predominantly business-oriented. These clubs vary in size,

location, type of facility, and services offered. They try to cater to various needs
and wants of members. City clubs are often located in urban areas; some may
lease space in the city while some well-established clubs may own their buildings.

3. Business-oriented Clubs - These clubs focus on business entertainment and usually

have dining areas, conference rooms and banquet halls, etc. They serve lunch and
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dinner and cater special events or parties for their members. For example,
members may hold lunch meetings or corporate events at the clubs.

4. Yachting clubs - are located by the sea. Members of these clubs are usually people
who are interested in sailing and rowing, or even yacht or boat owners. Yacht
clubs are not only places for promoting the sport of sailboat racing and cruising,
but also provide a venue for meeting and social places. Some clubhouses provide
a wide range of services to their members, including repair and maintenance for
members’ yachts at the boatyard and F&B services. In addition, some may have
various recreational and leisure facilities like squash courts, bowling alleys, and
video libraries. Clubs may also organize regattas or racing programs regularly
ranging from informal local events to the national championship.

5. Fraternal clubs - mainly serve members or alumni of particular fraternities (while

sororal clubs serve sororities). The type of a fraternal club depends on the
missions or purposes of the fraternity, such as social, professional, academic, and
service. For example, they may aim at fostering camaraderie and assisting
charitable causes. Members may host social gatherings, meetings, talks, academic
activities, or functions related to community service in the clubs. Some clubs may
also provide dining areas, bars, or banquet rooms for members of fraternities.

6. University clubs - can be sports and social clubs (some with accommodation) which
offer alumnus (or staff and graduates) catering and hospitality facilities or
services. For example, they may offer lunches, evening meals, and private
catering for functions as there are usually restaurants, cafés, and bars. Besides,
members may play in the sports areas, do exercise in the gym rooms or gather at
the BBQ areas, etc.

7. Health or fitness clubs are places that contain fitness equipment for members to
do physical exercises. Most of them normally have spacious workout areas that
consist of free weights including dumbbells, barbells, and exercise machines. Such
clubs also have facilities like cardio areas, boxing areas, snack bars or dancing
rooms, etc. They always offer members with different training or group exercise
class, such as aerobics or yoga classes.

8. Professional clubs - gather people who are in the same profession and may provide
them with advanced education, presentations on current research, business
contacts, and public advocacy for the professions. For example, lawyers' clubs
may group professionals from the legal areas while medical associations may
include all the top medical personnel including doctors and nurses. These kinds of
club houses may provide comprehensive conference and banquet facilities as well
as catering services for members and guests invited.

9. Dining clubs - normally located in large city office buildings. They offer lunch and
occasionally dinner for members. Members can enjoy a superb dining experience
and exclusive privileges at these private clubs. These clubs may also have grand
ballrooms and spacious function rooms for social gatherings, parties, and
community-related events. Therefore, some people may hold weddings in the
clubs.

10. Military Clubs - These clubs cater to both non-commissioned officers and enlisted
officers. They are similar to other city clubs and normally have F&B offerings, golf
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courses, and other recreational facilities for members. They may organize various
social events and programs including holiday-themed events, live entertainment
events, theme buffet dinners, poolside movie nights, or cooking class series for
members.

Club Ownership

Privately clubs are usually owned in one of two ways. A club can be owned by some
of its members, such clubs are called Equity clubs. Those members who fund the
purchase or development of an equity club are known as founder-members. Or a club
can be owned by a company that sells memberships in the club. These for-profit
clubs are known as corporate or developer clubs, or less-frequently - as propriety
clubs.

Equity Clubs – are generally non-profit since they are typically formed not for money-
making purposes but simply for the enjoyment of their members. Members are either
founder members or other members who pay a one-time initiation fee and annual
dues. If an equity club has an excess of revenues over expenses, the profit is not
given back to the founder members but is invested in improving the club’s facilities
and services while;

Corporate or Developer’s club – operates for profit and is owned by individuals or

corporations. Persons who wish to become members purchase a membership and not
a share in the club. Members may or may not be involved in running the club.
Sometimes developers sell or turnover the club to its members when all memberships
are sold.

Corporate or developer clubs proliferated with the real estate boom in office
buildings, condominiums, and single housing developments. Some corporate
developer clubs are built exclusively for the use of employees of particular
companies and are owned and operated by those companies.

Sample Organizational Structure for an Equity Club

Members

Board of Directors

Club Manager

Staff

In an equity club, the members own the club and elect a board of directors
who are members of the club to oversee the budget and set club policies. The club
manager reports to the board or a member of the board.
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Sample Organizational Structure for a Corporate or Developer Club

Owners
_____ Board of Directors

Club Manager

Staff

Marketing

In a corporate or developer club, the club is owned by a corporation or

developer, not the clubs’ members, Members may or may not be involved in running
the club. For example, the club owners may form a board of directors, made up of
club members, to advise them on club matters. The club managersreport to the
corporation or developer, not the club members.

Club Operations

Clubs are similar to other hospitality businesses in that they generate revenue
and incur expenses. Differences between clubs and other hospitality businesses can
be found in the club’s sources of revenue.

Revenue

Since the club is a private enterprise used primarily by members, the bulk of
its revenue is derived from its members. The following are some typical sources of
club revenue;

1. Membership dues – are the cost to a member for the exclusivity of the club.
2. Initiation fee – Most clubs charge new members an initiation fee, some consider
the contributions to capital and show them as an addition to members’ equity or
owners’ equity.
3. Assessments – are sometimes imposed on members instead of increasing dues.
Some assessments cover additional short falls, other are used to raise capital for
improvements to the club.
4. Sports activities fees – account for 17 percent of total country club revenues.
5. Food and beverage sales – the sales of food and beverage are the major source of
revenue in both city and country clubs.
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Gaming and Casino Hotels

A casino is a facility for certain types of gambling. Casinos are often built near
or combined with hotels, resorts, restaurants, retail shopping, cruise ships, and
other tourist attractions. Some casinos are also known for hosting live
entertainment, such as stand-up comedy, concerts, and sports.

History of Gambling Houses

The precise origin of gambling is unknown. It is generally believed that

gambling in some form or another has been seen in almost every society in history.
From the Ancient Greeks and Romans to Napoleon's France and Elizabethan England,
much of history is filled with stories of entertainment based on games of chance.

The first known European gambling house, not called a casino although
meeting the modern definition, was the Ridotto, established in Venice, Italy, in 1638
by the Great Council of Venice to provide controlled gambling during the carnival
season. It was closed in 1774 as the city government felt it was impoverishing the
local gentry.

In American history, early gambling establishments were known as saloons.

The creation and importance of saloons were greatly influenced by four major cities:
New Orleans, St. Louis, Chicago, and San Francisco. It was in the saloons that
travelers could find people to talk to, drink with, and often gamble with. During the
early 20th century in America, gambling was outlawed by state legislation. However,
in 1931, gambling was legalized throughout the state of Nevada, where America's
first legalized casinos were set up. In 1976 New Jersey allowed gambling in Atlantic
City, now America's second-largest gambling city.

Casino Hotel

A casino hotel is an establishment consisting of a casino with temporary

lodging provided in an on-premises hotel. Customers receive the benefits of both
gambling facilities and lodging. The casino may offer common forms of gambling
including slot machines, poker, blackjack, and sports betting.

The best way to understand casino hotels is to think of them not as hotels
with casinos attached, but rather as casinos with guestrooms, restaurants, shopping
arcades, and theme parks attached. A description of what casino hotels are like
appeared in award-winning humorist Dave Barry’s syndicated newspaper column:

Organization and Management

The most striking difference between a casino hotel and other types of hotels
lies in the organization and management of the facility. The importance of this point
cannot be overemphasized, because it changes completely the way casino hotels are
operated compared to traditional hotels. In casino hotels, the hotel operation is
subordinate to the gambling operation. The vice president of hotel operations is not
in complete control of the hotel; he or she reports to a higher resident authority who
usually holds the title of hotel President.
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There is also a vice president for casino operations who is as important as the
hotel manager when it comes to making decisions about almost everything and other
vice presidents too make a lot of decisions that in a typical hotel or resort are usually
handled as a part of hotel operations.

How Casinos Work: The Operations of a Major Casino

The first thing to understand about a casino is how many people it takes to
keep it going. Labor is one of the major expenditures of a casino and to understand
why you have to see the sheer number of employees that most casinos have. Here
are just some of the positions at a casino.

The casinos take major steps to ensure that fraud and illegal activity do not
happen. Fraud concerns include everything from someone counterfeiting casino
chips and trying to turn them in for real money to card counting, using a stolen credit
card, or many other things. In addition, casinos need to always be on the lookout for
counterfeit money and ensure that everyone in the casino is of legal gambling age
by checking identification cards (Ids).

Casinos also need certain equipment to make sure that they can protect
themselves, suppliers, and even customers. Cameras and security monitors help
security watch the building, paper shredders and protective document boxes keep
customer records secure and there is quite a bit of other equipment as well.

Casinos also need to manage the various games that they have. There are
several different areas in most casinos and each one has its management team. For
example, there may be certain staff closely watching high-stakes card games in one
section while the slots have a completely different set of managers.

When someone wins big, the manager’s job in that section is to make sure
that as many people know about it as possible. That will keep them playing, hoping
for a similar win. Of course, these places are also looking for fraud or other security
concerns but they also have the responsibility of making sure that the customers in
that part of the casino are happy. The most vital part of their job is simply to make
sure that people keep playing.

Finally, casinos also have entertainment, food, and drink concerns. Since
casinos run 24 hours a day, often all three of these things must be managed 24 hours
a day as well. Casinos often have extremely well-known acts performed there to
bring people in to gamble, and they also pay smaller acts to perform throughout the
day to keep people entertained.

In addition, casinos usually have restaurants and bars within them and some
even provide alcoholic drinks to gamblers at no cost. A casino has all of the major
challenges of a resort hotel but also has gambling to manage as well, and it takes a
lot of dedicated people to do it well.
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Sample Casino Organizational Chart

The organization of a business is critical to its function and daily operations.

Casinos especially rely on well-thought-out business organizational structures,
given the nature of their business and the large quantities of money that pass
through the doors hourly. Casinos typically have a large number of management
positions to oversee their many departments.

At the top of a casino organizational pyramid is the president or general

manager who is responsible for overseeing the overall operations of the casino, as
well as the hotel if applicable. In this position, the president must guide the
operation through the day-to-day activities as well as present an overall view of the
future of the casino operation. This involves both strategic and financial planning
skills, as this position reports directly to the casino owner or board of directors.

Reporting directly to the president or general managers, several vice

presidents oversee specific areas of the casino operations. Typically, the human
resources, finance, security, and casino operations departments are led by vice
president positions who are all responsible for guiding their respective staff members
through the daily operations. The VP for Finance manages all financial activities
including supervising accounting, casino cage operations, credit approval,
collections, and purchasing. The VP for Casino Operations is charged with managing
the overall operation of the casino including all table games, slot machines, and all
other types of gaming. A major responsibility of this position is compliance with
gaming regulations. The VP of Human Resources manages all aspects of employee
relations, including compliance with labor relations, health insurance, and overall
compensation of all casino employees. The VP of Security is responsible for all
activities relating to surveillance, security, risk management, and safety of both
casino employees and guests. Also included in his duties are working with insurance
companies and theft or other security concerns of casino guests.
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Next in the line of authority are the managers throughout the casino
operations. These include managers of table games, slot machines, drop teams,
guest services such as hotel operations, food and beverage managers, casino cage
managers, shift managers, pit managers, and floor managers. Each manager oversees
the employees of that particular area, for example, the drop team manager is
responsible for supervising the count room activities to ensure all deposits are
accurate and in compliance with casino policies in addition to federal and state
regulations.

The casino employees who spend the most amount of time with the customers
fall into this category. The table-game dealers, food-and-beverage servers, slot-
machine attendants, and casino cashiers all are responsible for ensuring guests enjoy
their time spent at the casino and deliver goods or services. Also included in this
category are the bellmen if a hotel is on-site, concierge staff, valet drivers, and
other general workers in the casino.

A surveillance team is typically a separate group of employees in the casino

environment. To ensure quality and honesty throughout all levels of casino
employees from the server that delivers the beverage to the casino president -- the
surveillance team often reports directly to the owner or board of directors rather
than anyone on-site at the casino.

[Link]

Review Questions:

1. Differentiate Casino Hotel from a Resort or Hotel.

2. What is the basic difference between a club and a hotel?
3. What are the sources of revenue for a club?
4. How are casino hotels organized and managed differently from other types of
lodging operations?
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Lesson 3

 RESTAURANT ORGANIZATION
AND MANAGEMENT
Introduction

In this lesson, we will focus on organizing a restaurant for success. We will

discuss the importance of guests, ambiance, and menus. We will partly talk about
the financial and operational controls of restaurants including accounting systems,
budgeting, menu planning, forecasting, purchasing, receiving, and storing. We will
briefly consider how to serve guests since a restaurant is a facility for hotels, resorts,
and other forms of accommodation.

Organizational Structure of a Restaurant

Source:
[Link]
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A restaurant organizational chart will show employees in an organized chain

of command. A general restaurant organizational appears to be the business that
belongs to the owners, and they will make all major restaurant decisions. They hire
a general manager and an executive chef to control the day-to-day operations. A
front-of-house manager stays on the floor and keeps communication directly with
the general manager, while shift leaders are chosen by the front-of-house managers
for their leadership qualities and experience.

Owners in the Restaurant Hierarchy

Corporate or local owners are ultimately in control of the restaurant. They

are the ones who stand to make or lose the most due to the success or failure of the
restaurant. The owners usually are responsible for hiring the management team for
a restaurant and may also choose the executive chef. There is an expectation that
the ownership's policy information will be passed down the chain of restaurant
command.
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The General Manager

The General Manager is responsible for the day-today-decision-making of the

restaurant. They are often responsible for scheduling and payroll paperwork as well
as sales, accounting, and budgeting. The general manager does most of the
restaurant's hiring and firing. The general manager must also stay in regular contact
with ownership to both relay information and request guidance.

The Executive Chef

In a restaurant hierarchy, the executive chef is the manager of the entire

kitchen. They are responsible for the products coming into the kitchen from vendors
and suppliers. Executive chefs report directly to the general manager about
inventory and ordering. The executive chef is also responsible for menu design and
all the meals that leave the kitchen.

Executive chefs are usually consulted in the interview process for all kitchen
help. They take responsibility for all the decisions made in the kitchen regarding
everything from quality control to nightly specials.

Front of the House

The front-of-house manager is an important tier in the restaurant chain of

command. The term front-of-house (FOH) refers to not only the dining area but all
parts of the restaurant excluding the kitchen. The job of the FOH manager is to assist
the general manager and the executive chef in customer relations and managing the
front-of-the-house employees. They are charged with choosing and monitoring the
performance of shift leaders. They are also responsible for the appearance of the
staff and the restaurant.

Restaurant Shift Leaders

Shift leaders are the last level of the management team for a restaurant. They
are the people in each front of the house station with the most experience.

A shift leader is usually chosen for the host station, bar, busing station, and
among the servers. Their jobs are to handle small problems and decisions that need
to be made through the course of service. They should stay in regular contact with
the floor manager for customer problems and employee disputes.

Restaurant Supervisor Duties

Restaurant supervisors have a wide range of responsibilities in day-to-day

operations, managing everything from food ordering to employee schedules. It is a
fast-paced job and requires a wide variety of skills and knowledge. A restaurant
supervisor could be planning a sophisticated menu in one minute and helping to
resolve a simmering dispute between employees. Besides extensive knowledge and
experience with food, these managers must be organized and capable of handling
complex logistics. Knowledge of accounting or the basics of money management is
helpful as well, as restaurant supervisors may be required to help monitor the weekly
cash flow of the restaurant, as well as pay outstanding bills.
 20

Restaurant supervisors are the first line in managing the employees. A

supervisor typically conducts interviews for open positions and does the hiring, as
well as oversees the training of new employees. In addition, supervisors discipline
and fire employees, and thus must be familiar with personnel laws and regulations.
In small restaurants, a supervisor may be tasked with handling the payroll.
Supervisors are also responsible for creating schedules and monitoring employee
hours.

Supervisors need to ensure that the restaurant has what it needs to operate.
This includes ordering food for the kitchen and planning menus, which is often done
in collaboration with the head chef. The restaurant also needs linens, paper
products, computer equipment, furniture, cleaning supplies, and the like, all of
which have to be ordered before needed and delivered on a timely basis.

Supervisors must be cognizant of, if not managing directly, the restaurant’s

bottom line. This means checking the daily receipts and tracking income. If dips in
receipts are evident, it may be up to the supervisor to suggest or employ plans to
bring in more income, either through promotions or menu changes. Supervisors need
to be aware of the restaurant’s cash flow, to ensure that the bills and payroll can be
met.

Supervisors are responsible to ensure that the restaurant meets all code and
licensing requirements, from dealing with food inspectors, and getting liquor or
other required operating licenses, to renovations and repairs. They may also have to
deal with internal disputes between employees to keep the restaurant running
smoothly, or field complaints from disgruntled customers in a way that keeps them
happy, thereby retaining them as customers.

The Menu

The importance of the menu to a foodservice operation cannot be emphasized

too often or too much. The fact that it is an early topic in this book underscores its
importance for those studying the management of foodservice operations. The menu
is also called “the driver” of a foodservice operation. This descriptive term indicates
that every part of a foodservice operation is affected by the menu and stresses how
a menu is a managerial tool for controlling many aspects of a foodservice operation.
As you learn more about menus and menu planning, keep in mind menus from your
favorite restaurants or your recent meals in other types of foodservice operations.

Menu Content

Food is at the heart of every restaurant, and a diverse, delicious menu that
appeals to diners while still maintaining profitability is essential for your overall
success. In determining the kinds of things that should go on your menu, first
consider the basic categories found in eateries of all shapes and sizes such as;

Appetizers
Salads and vegetarian dishes
Fish
Chicken
Red meat
Pasta and grains
 21

Sides
Desserts
Drinks

A well-rounded menu often has a few selections from all or most of these
categories. How you choose to approach this will depend on the kind of restaurant
you’re running – An Italian bistro, for example, will require a different menu than a
casual burger joint – but a strong, flexible final product should be your primary goal.
An appealing menu often has a little something for each of your customers, including
lighter choices, vegetarian options, meat dishes, and an array of small plates.

A huge menu of complicated dishes is likely to require higher inventory costs

and more room for error than one that sticks to the point. It’s also important to stick
to a theme with your food and master it. If you want to run a burger joint, focus on
mastering your burgers, and don’t try to also sell pasta and sushi. It’ll be too tough
to execute well and it’s confusing to customers. By mastering a style of food you
develop an identity and build a brand, which is a huge part of running a successful
restaurant.

Menu Pricing

Pricing your menu depends on a few key factors, including;

a. The defining characteristics of your restaurant
b. The kind of food you serve
c. Food cost
d. The dining experience, like fast casual versus fine dining
e. Competitor pricing and area averages and;
f. Operation costs for your restaurant, like payroll and overhead
expenses

Menu pricing is the engine behind your company's success, as sales are your
restaurant's sole source of revenue. Pricing for food directly impacts your ability to
fund essential aspects of your business, including equipment, utilities, labor,
ingredients, and more. When creating or updating your menu, follow the guidelines
to effectively price your menu for maximal profits.

a. Calculating Menu Prices with Food Cost Percentage

b. Calculating Menu Prices with Gross Profit Margin
c. Essential Tactics to Price Your Menu
d. Menu Psychology: Selling Your High-Profit Items

The Importance of Accounting to a Restaurant

Accounting refers to the collection, interpretation, classification, analysis,

and reporting of financial data. It goes a notch higher than bookkeeping, which is
just recording the financial transactions of the business.

Another way of looking at accounting is that it is the process of preparing and

communicating the financial statements of a business entity. This includes
communication of financial statements like income statements, balance sheets, and
cash flow. Although the process is almost the same across many industries, it is quite
different in the restaurant industry.
 22

Restaurant accounting involves the collection, interpretation, and analysis of

restaurant financial information. This includes the revenue of the restaurant, cash
flow, inventory levels, and income statements. The process allows restaurant owners
and managers to document all financial transactions of the business and determine
how well it is performing.

A restaurant accountant is a professional who has specialized in restaurant

accounting. They document all the financial transactions of the restaurant, keeping
track of the inventory, cash flow, and income statements.

The information provided by restaurant accounting allows you to manage your

cash more efficiently, predict your profits, balance your financial books, and plan
for your business future. Now let’s take a detailed look at how accounting is
important to your restaurant.

Financial Management

For a business to be successful, it needs to have solid financial management.

If you are running a restaurant, you need to have a way of accounting for the salaries
paid to the employees, recording transactions, reporting total sales, and analyzing
your restaurant. Without an efficient accounting system or function, such
administrative areas of your business will be mismanaged and inefficient.

Accounting helps you get the necessary financial information needed for
running every aspect of your business. This allows you to make proactive decisions
and structure your business in a way that improves your profitability.

Accounting information provides a deeper insight into the financial status of

your business. Using real-time reporting of your restaurant’s financial activities, you
can regularly understand what is going on with your business. You will be able to
determine which expenses cost you the most or which menu items are selling the
best. This means you will be able to make better decisions and pursue strategies
with greater outcomes. You also have a clear way of handling your business since
you have a proper record of what is happening.

The two important financial statements that provide insights into your
business's financial status are the profit and loss (P&L) statement and the balance
sheet. While the restaurant P&L shows the profitability of the business during a given
period, the balance sheet shows how much your business is worth at a specific time.

A profit and loss statement provides you with a clear sense of how your
restaurant business is currently performing financially. You will know how much you
are spending on labor or creating each menu item, and your best and worst sellers.
Showing you the profitability of your business, it allows you to determine areas of
your business that needs improvement. Since you can prepare this statement under
various periods like monthly or yearly, it allows you to make necessary adjustments
and continuously monitor your growing business.

The balance sheet provides a summary of your business assets, equity, and
liability at a specific point in time. While the assets are what your business owns,
the liabilities are what your restaurant owes others. Equity represents your net worth
 23

in the business and it is calculated by subtracting liabilities from the assets. If this
figure is negative, it means that your restaurant's liabilities are more than assets.
This means that your business will not be able to fulfill all the liabilities by liquidating
its assets if they all come due at the same time.

Better Tracking of Cash Flows

Good accounting practices allow restaurant owners and managers to track

their business cash flows and record transactions. This is a critical factor in getting
an accurate understanding of how the restaurant earns and spends money and the
exact flow of it in and out of the business. Using such information, you can plan and
allocate resources to specific divisions of your business to ensure it is running
efficiently.

The cash flow statement shows the sources of your restaurant’s cash and how
you spent it over a given period. Since this statement does not include any non-cash
items, it gives a clear impression of the financial health of your business. It also
helps you understand the difference between having cash on paper and having cash
in your business accounts. This information is important in planning and forecasting
the needs of the business. It allows you to introduce products and services that meet
the needs of customers better and enhance your returns.

Control Your Prime Costs

Prime cost is among the most important key performance indicators (KPIs) of
a restaurant business. It represents the total sum of your cost of goods sold or
inventory and your labor costs. This is the cost incurred to ensure you have both the
products and services needed for the restaurant to run. Controlling these costs is
critical in keeping your business profitable.

Prime cost is what guides you in managing the day-to-day revenue of your
restaurant to achieve a good profit margin. Restaurant accounting helps you analyze
your prime costs to decide how much you are going to charge your services to make
a profit. It also helps in calculating the amount of money that you can spend on
running your business without compromising it. Monitoring costs is the first step in
controlling them.

Tracking Inventory

Restaurant accounting plays a crucial role in ensuring accurate tracking of

inventory and cost of goods sold. At any one time, you can tell what your ingredient
stock count is, your current purchase orders, and the amount of money spent on
purchasing the ingredients. When the accounting function has been integrated with
a restaurant POS (Point of Sale) system, the process is fully automated. This means
that you will have an easier and simplified way of calculating menu item costs,
getting insights into the most profitable items, and monitoring your food waste and
portioning.

Accurate tracking of your inventory will help you reduce food waste, budget
mismanagement, customer dissatisfaction, and theft.
 24

Help in Pricing Your Menu Items

Accounting helps in tracking costs and calculating how much money you spend
on your restaurant. Among the important data that you derive from accounting is
the cost of goods sold (COGS). This figure is crucial in determining the prices of your
products and controlling your revenue.

Knowing how accounting ratios are calculated and the impact of your COGS in
determining the price you should place for your menu items. The price that you
choose should be able to cover the cost incurred in preparing the meal. It should
also generate the desired profit margin to ensure that your business is running at a
profit.

Tracking of Your Restaurant Expenses

The accounting system usually provides two types of information that can help
you in tracking your expenses better. First, it shows the types of payments you make
periodically, such as remitting taxes. Second, it shows the things that you pay for
continuously throughout the life of your restaurant business. This includes your food
costs, beverage costs, and labor costs and their relation to your sales. Each of these
items is useful and important in controlling how much money you spend on your
restaurant. In tracking these items, accounting helps you in keeping accurate records
of:

Sales: The amount of revenue that you make on a day-to-day basis. This can be
broken down to food and beverage revenue, or be presented in categories of
individual dishes depending on the type of restaurant that you are running. If you
have good accounting software integrated into your restaurant POS, generating daily
sales reports should be quite straightforward.

Orders: Accounting information shows how many orders your restaurant has
received and how many were fulfilled. Apart from the sales made, you also need to
find out how well your restaurant is meeting the needs of your customers. This is
also a great approach to determining the amount of inventory your restaurant needs
to run smoothly.

Payroll: Payroll is all about what you pay someone else to work in your restaurant.
As one of the key expenses of running a restaurant, you need to accurately track and
manage how much you are paying your employees. Accounting provides such
information, helping you to budget better.

Value of Inventory: The value of inventory is not just about the physical or manual
count of your inventory. It is also about how much revenue you can generate from
the inventory and how to capitalize on it. Restaurant accounting can help you
determine the amount of inventory you have on hand and estimate how much
revenue can be generated from it.
Evaluate the Performance of Your Business

The accounting record of your restaurant reflects both the result of your
operations and your financial position. This means you can identify areas that are
performing well and those that require certain measures to improve. With several
ratios being calculated from accounting information, you can analyze the
 25

performance of your restaurant and compare it with other players in the industry.
You can also compare your current financial performance with previous accounting
data to determine whether the business is moving in the right direction.

Ensure Your Restaurant is Compliant

Every business is required to be compliant with the laws of the land and
taxation policies. Proper restaurant accounting ensures that your liabilities are paid
and recorded on time. This includes statutory requirements like payment of sales
tax, value-added tax (VAT), and income tax. You will be able to manage and monitor
cash flow to ensure that money within your business is being directed to the right
channels.

The success of a restaurant business greatly depends on the accuracy of your

financial records. Regardless of the size of your business, accounting helps in
providing information showing where your business is headed. You can determine
whether you are running a profitable business or whether measures need to be taken
to achieve better financial outcomes.

The Guest Experience

One of the primary goals of a restaurant is to provide guests with an enjoyable

dining experience. This experience extends beyond the food served and the price
associated. Restaurants strive to provide an atmosphere that is both welcoming and
comforting. Restaurateur Danny Meyer is quoted in his book, setting the Table as
stating “food is secondary to something that matters even more. In the end, what’s
most meaningful is creating positive, uplifting outcomes for human experiences and
human relationships.” Meyer, who is the CEO of Union Square Hospitality has created
an entire organization of restaurants whose primary goal is providing the best
possible service.

Guests create opinions upon arrival onto the property and continue as a guest
is greeted by a host, maître d’, receptionist, or another employee responsible for
welcoming guests. Welcoming employees should be knowledgeable and sensitive to
guests’ requests, needs, and desires. Guests may require accommodations for
disabilities or prefer a table in a non-smoking section. Guests have many preferences
and the welcoming provides an opportunity to learn about a guest before they are
seated.

The service sequence associated with restaurant guests

 Welcoming the guests – Create a comfortable environment

 Serve or pour water – Pour cleanly and confirm if any accommodations or special
requests exist
 Present the menu and beverage list (if alcohol is offered) – Provide any specials and
ensure all guests have appropriate menus
 Take the beverage order – Be specific on how guests' drinks should be served
 Serve beverages – Beverages are typically delivered from the right of the guest with
the right hand.
 Ask guests if they would like to order appetizers – Provides an opportunity to ask
any questions on the menu and initiate the ordering process. Some guests may wish
to order at this time.
 26

 Serve the appetizers – Food is generally served from the left with the server’s left
hand.
 Take the food order – Be specific on any special requests. Answer any questions
guests may have on items
 Remove appetizer dishes – This creates room for the next course and provides
opportunities to create a dialogue with guests.
 Serve salad and bread – Salads should be chilled and bread at room temperature
unless specified otherwise
 Remove salad dishes – If guests are done. Opportunity to see if guests need anything
before the main entrée arrives.
 Serve the entrée dishes – Served as noted or with the main item closest to the
guest. If there are side dishes, they should be placed on the side of the item.
 Confirm that all items are prepared correctly – Are items accurate, temperatures
correct, any necessary condiments, etc?
 Clear the table – Ensure guests are satisfied and provide to go service opportunity
 Offer dessert and after-dinner drink options (if available) – Provide suggestions
 Take the dessert order – Ask about beverages
 Serve the dessert and after-dinner beverages – Confirm guests do not need anything
else.
 Present the guest check – Efficiency, do not let the guest wait.

How to Create the Right Ambience in Your Restaurant

To have the right atmosphere in a restaurant, make sure your customers are
satisfied with more than just your food and friendly customer service. It takes more
than just good-smelling food to bring in new customers (although that helps!). You
need to “wow” your guests and create a space that encourages them to come back
time and time again.

 Lighting -It sets the tone, influences dining decisions, and makes or breaks a social
media photo shoot. When considering the restaurant's overall concept, design, and
feel, lighting should be one of the major points of focus.

 Music - Creates the atmosphere. Music is a key element when it comes to setting
the mood as well as frequency and volume affect the taste of food. The music play
can make your dishes taste more flavorful. And songs can make waiting more
pleasant.

 Clean Environment – Cleanliness is an essential part of customer service. Making

sure each guest has a clean eating area is almost as important as bringing out the
right food. A clean establishment is also important in making a good first impression
on guests and helps to boost customer loyalty. It represents the over-all customer’s
experience.

 Entertainment - Creating ambiance to attract customers depends on whether

managers are targeting hipster foodies, sports-minded locals, or romantic couples.
Other features to consider in setting the tone include; background music or live
DJs, uniforms or casual dress, colorful menus for casual and family restaurants,
neutral colors with simple graphics for upscale facilities, dishware and linens, and
Staff attitudes.
 27

 Atmosphere - A restaurant's atmosphere sets the stage. It's about more than just a
dining room away from home. Food takes the spotlight as guests become its
audience. Factors such as music, lighting, artwork, and spacing combine to create
comfort, intimacy, and even romance.

Review Questions:

1. Relate your experience both positive and negative when you dine out with your
friends or family in a restaurant. Consider the following factors;
a. Food
b. Service
c. Ambiance
2. What are the most success factors for a restaurant?
 28

Lesson 4

 FLOATING RESORTS: THE CRUISE

LINE INDUSTRY

Introduction

A cruise ship is a passenger used for pleasure voyages. Cruise ships are
destinations in themselves with features and amenities comparable or superior to
land-based resorts. Cruising is remarkably affordable and one can enjoy his/her
dream vacation.

A Brief History of the Cruise Ship Industry

by: Michael L. Grace June 17, 2008

The earliest ocean-going vessels were not primarily concerned with

passengers, but rather with the cargo that they could carry. Black Ball Line in New
York, in 1818, was the first shipping company to offer regularly scheduled service
from the United States to England and to be concerned with the comfort of their
passengers. By the 1830s steamships were introduced and dominated the
transatlantic market of passenger and mail transport. English companies dominated
the market at this time, led by the British and North American Royal Mail Steam
Packet (later the Cunard Line). On July 4, 1840, Britannia, the first ship under the
Cunard name, left Liverpool with a cow on board to supply fresh milk to the
passengers on the 14-day transatlantic crossing. The advent of pleasure cruises is
linked to the year 1844, and a new industry began.

During the 1850s and 1860s, there was a dramatic improvement in the quality
of the voyage for passengers. Ships began to cater solely to passengers, rather than
to cargo or mail contracts, and added luxuries like electric lights, more deck space,
and entertainment. In 1867, Mark Twain was a passenger on the first cruise
originating in America, documenting his adventures of the six-month trip in the book
Innocents Abroad. The endorsement by the British Medical Journal of sea voyages for
curative purposes in the 1880s further encouraged the public to take leisurely
pleasure cruises as well as transatlantic travel. Ships also began to carry immigrants
to the United States in “steerage” class. In steerage, passengers were responsible
for providing their food and slept in whatever space was available in the hold.

By the early 20th century the concept of the superliner was developed and
Germany led the market in the development of these massive and ornate floating
hotels. The design of these liners attempted to minimize the discomfort of ocean
travel, masking the fact of being at sea and the extremes in weather as much as
possible through elegant accommodations and planned activities. Mauritania and the
Lusitania, owned by the Cunard Line of England, started the tradition of dressing for
dinner and advertised the romance of the voyage. Speed was still the deciding factor
in the design of these ships. There was no space for large public rooms, and
passengers were required to share the dining tables. The White Star Line, owned by
American financier J.P. Morgan, introduced the most luxurious passenger ships ever
seen in the Olympics (complete with a swimming pool and tennis court) and the
 29

Titanic. Space and passenger comfort now took precedence over speed in the design
of these ships-resulting in larger, more stable liners. The sinking of the Titanic on its
maiden voyage in 1912 devastated the White Star Line. In 1934, Cunard bought out
White Star; the resulting company name, Cunard White Star, is seen in the
advertisements in this project.

World War I interrupted the building of new cruise ships, and many older liners
were used as troop transports. German super liners were given to both Great Britain
and the United States as reparations at the end of the war. The years between 1920
and 1940 were considered the most glamorous years for transatlantic passenger
ships. These ships catered to the rich and famous who were seen enjoying luxurious
settings on numerous newsreels viewed by the general public. American tourists
interested in visiting Europe replaced immigrant passengers. Advertisements
promoted the fashion of ocean travel, featuring elegant food and on-board activities.

Cruise liners again were converted into troop carriers in World War II, and all
transatlantic cruising ceased until after the war. European lines then reaped the
benefits of transporting refugees to America and Canada, and business travelers and
tourists to Europe. The lack of American ocean liners at this time, and thus the loss
of profits, spurred the U.S. government to subsidize the building of cruise liners. In
addition to the luxurious amenities, ships were designed according to specifications
for possible conversion into troop carriers. Increasing air travel and the first non-
stop flight to Europe in 1958, however, marked the ending of transatlantic business
for ocean liners. Passenger ships were sold and lines went bankrupt from the lack of
business.

The 1960s witnessed the beginning of the modern cruise industry. Cruise ship
companies concentrated on vacation trips in the Caribbean, and created a “fun ship”
image that attracted many passengers who would have never had the opportunity to
travel on the super liners of the 1930s and 1940s. Cruise ships concentrated on
creating a casual environment and providing extensive on-board entertainment.
There was a decrease in the role of ships in transporting people to a particular
destination; rather, the emphasis was on the voyage itself. The new cruise line image
was solidified with the popularity of the TV series “The Love Boat” which ran from
1977 until 1986.

The Cruise Industry Development

The cruise industry, which modern version dates from the 1970s with the
development of the North American industry, has experienced an increasing
process of popularization, becoming a major part of the tourism sector, and
reaching a level of enormous significance world-wide as an economic factor.
The modern cruise industry is also one of the most outstanding examples
of globalization, with an increasing number of ports of call and destinations
around the globe, a multinational clientele, onboard personnel from every
continent, and a level of detachment from communities and nations never seen
before in history, with important economic, legal, environmental and social
implications.
A crisis-resistant industry with a diversified offer of airlift options and
modernized port structures that have opened up cruising as a vacation
alternative available for an increasing, more affluent customer base, offering
 30

an exciting, eventful, relaxing, and enjoyable experience for millions of

passengers from across the world each year.
This dynamic sector is continuously expanding its offer of products and
services, and developing new markets, with an average 8.5% annual growth in
the last 20 years, and nearly 90 million passengers since 1980, 60% percent of
whom have been generated in the past decade, in a tendency that shows no sign
of slowing, with 13 and 13.5 million passengers in 2008 and 2009, compared with
the 12,6 million in 2007, and that is expected to continue through the 21st
century.
A fleet composed of several hundred large cruise ships carrying millions
of passengers plies routes in all geographical areas in an expanding range of
more than 500 destinations worldwide, with the Caribbean cruises as the
favorite ones, followed by Mediterranean cruises and European itineraries that
visit diverse popular ports and cities – Barcelona, Venice, Nice, Athens, and the
Greek Islands, Monte Carlo, Istanbul, London, Amsterdam, the Scandinavian
Fjords, Helsinki, San Petersburg, etc. –, including also the opportunity to enjoy
places not included in the usual offer presented by other travel and tourism
service providers, such as Arctic and Antarctic regions.
Indeed, the cruise industry has increased in popularity all around the world,
serving a heterogeneous clientele with well-differentiated expectations and
preferences in the Asian, European, and North American markets.
This phenomenal growth has also created the need for more efficient
managerial, organizational, and planning structures to best the increasing
competition and deal with the many changing factors in an also evolving market
that generates over $15 billion every year – 79% of which corresponds to the
North American and British markets – and hundreds of thousands of direct and
indirect jobs around the world, yielding an indirect multi-billion dollar annual
benefit in diverse industrial sectors in all the world (nondurable and durable
goods manufacturing, professional and technical services, travel services,
financial services, airline and transportation, and wholesale trade).

Cruise Industry Revenue

The main revenues in the cruise industry are generated for the most part
from cruise ship passengers, and the ability to attract and maintain a clientele
is therefore essential to its financial success. However, cruise fares are currently
just another element in the complex mosaic of commercial relations around the
cruise activity, quite far already from the relatively inexpensive or initial all-
inclusive vacation packages offered in the 1970s, with a growing number of
strategies for generating onboard revenue.
The time when onboard shops provided a few items to complete passengers’
luggage, some souvenirs, and duty-free products were left behind long ago.
Never to return. Nowadays, cruise ships offer an increasing range of shipboard
stores and boutiques, spa and personal care services, photography departments,
and art auctions at prices that compete with land-based establishments. Most
of them are provided and managed by concessionaires and subcontractors.

Types of Cruise Ships

1. Mainstream Cruise ship

 31

It is the most common and popularly known type of cruise ship, marketed by
most of the companies in the sector as floating resorts designed and equipped
to suit the needs of the majority of cruise passengers. These vessels have a
capacity for 850 – 3,000 passengers and include all sorts of standard resort
features, amenities, and services, such as restaurants, bars, pubs, nightclubs
and discos, shopping areas, theatres and cinemas, galleries and museums,
libraries, casinos, personal care areas with gyms and spas, swimming pools
and other sports facilities.

2. Mega Cruise ship

Cruise companies have answered the increasing world demand for this kind
of service with the design and building of ever-bigger cruise ships able to
accommodate more than 3,000 persons. It is a new class of cruise vessels,
and the next step in terms of capacity and onboard services, with some units
that routinely serve more than 5,000 passengers; currently the largest and
more sophisticated vessels in the world.

3. Ocean Cruise ship

A type of cruise ship built to more exacting standards than more conventional
vessels, with substantially more solid designs and more resistant structures to
withstand the especially harsh conditions of ocean voyages in long and world
cruises.
 32

4. Luxury Cruise ship

Motor or sail-powered cruise ships equipped with the most sophisticated and
technologically advanced nautical systems, high standard features, and luxurious
comforts to meet the special demands of an exclusive clientele looking for longer
itineraries and more exotic destinations around the world.

5. Small Cruise ship

Cruise ships with a capacity of up to a few hundred passengers onboard, offer

more intimate and relaxing experiences in less familiar destinations.

6. Adventure Cruise ship

It is designed and equipped to provide services that include visits to remote

destinations, most commonly inaccessible to larger vessels.

7. Expedition Cruise ship

Specially designed ships, or adapted research or icebreaker vessels, operated by

specialized companies to offer their customers an exclusive experience in remote
destinations.
 33

8. River Cruise ship

River cruise ships have a capacity for no more than a few hundred passengers and
are specially designed to navigate rivers and inland waterways.

Sample Cruise Ship Organizational Chart

Cruise ships today are floating vacation resorts, in some ways they are similar
to a hotel as far as organization. While each cruise line has its unique organization
for its ships, in general, all cruise ships follow a similar organizational pattern.

1. The Captain – Although a cruise ship can be compared to a hotel, it is in fact at

sea and is therefore first and foremost operating under maritime laws. It is under
the command of a captain, who is responsible for the ship’s operation and the
safety of all aboard.

2. The Chief Officer – the second in command and also the captain’s deputy.

3. Chief Engineer – in charge of the ships’ physical plant and the Hotel Manager.
These persons are officers and wear uniforms with appropriate stripes indicating
their rank and department. A cruise ship is a paramilitary organization. Rank,
regulations, and discipline are taken very seriously. All officers have duties and
must perform; otherwise, they are subject to discipline. Unlike hotel or
restaurant employees’ on land, cruise ships’ officers and crew members cannot
walk off the job or refuse to obey commands.

4. The Hotel Manager – is in charge of the entire hotel operations onboard and
guarantees fullest guest satisfaction and a pleasant working environment for all
crews.

5. The Medical doctor -the medical department on board a cruise ship offers the
following job positions: Chief (Senior) Doctor, Doctor, Nurse Practitioner (NP),
Registered Nurse (RN), and Paramedic. The department usually consists of two
doctors and anywhere from two to six registered nurses depending on the size of
the ship, the number of passengers and crew, and onboard medical facilities.
Aboard cruise ships doing world cruises or remote itineraries, the need for a full
surgical staff and a dentist may be more common. Cruise ship Doctors and nurses
are hired either directly by the cruise line medical operations departments or
through concessionaire companies servicing their line.
 34

Other Officers

A. The Purser – One of the most important departments in the hotel division is the
purser’s office, The Purser is the ship’s banker, information officer, human
resources director, and complaint handler. The Purser also is second in command
of the hotel division and in charge of the operations whenever the hotel Manager
is on leave or off.

B. The Food and Beverage Manager - A Food and Beverage Manager is responsible
to ensure that all of the restaurants and bars, including that of the passengers,
officers, and crew, are clean and that the food is well presented – during and
after each meal. He/she makes sure that all equipment is operating properly.

C. The Chief Housekeeper – runs a department that is very similar to the

housekeeping department of any other hotel. THE Chief Housekeeping staff is
responsible for the cleaning and general maintenance of all cabins and interior
areas of the ship. They are also responsible for passengers’ laundry, dry cleaning,
and also cleaning of all cabin linens, table linens, towels, and the crew’s
uniform.

D. The Cruise Director – The Cruise Director and his or her staff are among the most
visible crew members on board. Members of this department are the
entertainers, musicians, and children’s counselors, and they direct all of the
passenger-entertainment activities.

E. The Physician – In the hotel business, when guests get sick, a doctor is called in;
if guests need further medical attention, they are rushed to a hospital.
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The following are the departments that comprise the Cruise Ship Organization:

1. Activity/Entertainment Department
Most job positions in the activity and entertainment department onboard cruise
ships are synonymous with the positions in the cruise staff department. This
department is responsible for arranging various entertainment activities for
passengers both onboard and ashore. Job positions in this department include
Cruise Director, Assistant Cruise Director, Dance Instructor, Musician,
Photographer, Port Lecturer, Dive Instructor and Shore Excursion Manager, etc.

2. Beauty Salon
Almost all luxury cruise ships have onboard beauty salons and spas to pamper
passengers with their full range of services ranging from aroma and facials, body
massage, and mud baths to hair styling. Even small cruise ships are now hiring
beauty and skin care professionals to attract more and more holidaymakers.

3. Casino Department
Almost every luxury cruise ship boasts a casino onboard. The onboard casino is
an entertainment hub for many passengers who love gambling in an exciting
atmosphere. People who never visited a casino on shore often get attracted to
onboard casinos.

4. Cruise Staff Department

The cruise staff department of the ship is responsible for arranging
entertainment and other recreational activities onboard and ashore for the
passengers. All cruise ships hire singers, dancers, and musicians to entertain
guests onboard.

5. Deck Department
The deck department onboard a ship offers a wide range of jobs from deck
attendants to the captain. Job positions in this department include Ship Captain,
Staff Captain, 1st, 2nd & 3rd Officers, Radio Officer, Security Officer, Seaman,
and Deck Attendant.

6. The Engine Department

This department offers the most crucial positions on board a cruise ship. Job
positions within this department include Chief Engineer, 1st, 2nd, 3rd Engineer,
Chief Electrician, Electrician, Chief Air Conditioning Technician, Air Conditioning
Technician, Plumber, Upholsterer, Fireman, Fitter, and Wiper.

7. Food and Beverages Department

This department takes care of all the dining and dining requirements of the
passengers. Job positions in this department include Food & Beverage Director,
Assistant Food & Beverage Director, Restaurant Manager, Head Waiter,
Bartender, and Steward/Stewardess.
The Food & Beverage Director oversees entire operations related to food and
beverage service quality. He/she is responsible for managing all onboard dining,
special functions, and cocktail parties.

8. The Galley or Culinary Department

This is a 24-hour working department on board. There are several jobs available
in this department that include Executive Chef, Assistant Executive Chef, First,
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Second & Third Cook, Pastry Supervisor, Cooks, Baker Supervisor, Cleaners and
Dish Washers. The Executive Chef oversees the entire operations and staff within
the galley department.

9. Gift Shop Department

All luxury cruise ships boast onboard shops consisting of a gift shop, a boutique,
and a cosmetic and perfume counter. Onboard gift shops are hot favorites for
those passengers who love to buy unique gifts, souvenirs, and perfumes for their
family and friends. The Gift Shop Manager - He/she oversees the entire
operations of the Gift Shop department. Responsibilities include accounting and
managing retail staff within the Gift Shop department. The position requires
previous retail, sales, and managerial experience.

10. Hotel Operations Department

Barring navigation, engine, and entertainment, all other departments onboard a
ship fall under the hotel operation department. Pursers, housekeeping,
concessionaires, and food and beverage departments are covered under the
hotel division. Chief Purser/Hotel Manager - The Chief Purser oversees the daily
operations of all departments onboard a cruise ship except the deck engine and
entertainment departments. He supervises all staff and crew in the pursers,
housekeeping, and food and beverages departments.

11. Housekeeping Department

The housekeeping department onboard is responsible for the daily maintenance
of the passengers’ cabins and taking care of the laundry and dry cleaning
requirements of the passengers and the crew. The Chief Housekeeper oversees
all operations within the housekeeping department on a ship.

12. IT Department
Most cruise lines have a separate information technology (IT) department to
operate and maintain onboard computer systems. Nowadays, passengers have
become addicted to computers and the Internet and look for these facilities even
on cruise holidays to keep in touch with their family and friends back home. As
a result, cruise lines now are equipped onboard Internet cafes.

13. Medical Department

Cruise lines hire qualified and experienced medical staff to deal with the health
problems of the passengers during the cruise. The medical department onboard
a cruise ship usually consists of one to two doctors and between one to four
registered nurses, depending on the requirements and the size of the cruise ship.
Most cruise lines run their medical departments through concessionaire
companies but some of them also hire medical staff and run the department by
themselves.

14. Pursers Department

The Purser Department is the ‘accounting’ department of the cruise ship. Usually
located in the main lobby area of the ship, it takes care of all the accounting
work of the ship. Apart from accounting, it also deals with passengers’
accommodations, complaints, and requests, in a similar way to the hotel
reception. Besides, the department is also responsible for crew payroll, customs,
and immigration, passports and visas, currency exchange, as well as handling the
mails of the passengers.
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Cruise Ships versus Hotels or Resorts

What are some of the differences between staying on a Cruise and a Hotel?

a. Hotels cost less than cruises.

b. Hotel rooms are more comfortable.
c. Hotels offer more flexibility.
d. Hotels provide more upgrades.
e. It’s easy to overspend on a cruise
f. It is easy to overeat on a cruise.
g. Cruise ships are more social and entertaining.
h. Cruise ships are on the water!

Review Questions

1. Differentiate floating hotels or Cruise ships from hotels and resorts.

2. Compare and contrast the organizational structure of a cruise ship from, a hotel
or resort.