QUESTIONS ANSWERSCH 11: MANAGING REVENUE EXPENSESWhat are the tools used to measure revenue in the hotel industry?What impacts revenue in the hotel industry?What is occupancy percentage?Why do hotels want to determine the difference between rooms occupied and double occupancy?How can a hotel have a high occupancy percentage and a low ADR?If you want to measure how well revenues maximized through double occupancy and by selling more expensive rooms, what tool would you use?If your room revenue is $63,210 and 430 rooms are Tools for measuring revenue:1. Occupancy Percentage2. Double Occupancy3. Average Daily Rate (ADR)4. Yield ManagementExternal forces- seasonality (demand for warm weather climates in winter places) & competition (new businesses in the market)Number of rooms sold: Number of rooms availableExample:Number of rooms sold (675) / Number available (1000)675 / 1000 = 67.5% occupancy rateSome hotels charge more for two guests in a room than for single guest. Hotels will have additional expenses for each guest staying at the hotel. By selling mostly the least expensive rooms or the hotel and not charging double occupancy.Average Daily Rate (ADR)occupied, what is your average daily rate?What is the “rule of thumb” in determining if your ADR calculations are accurate? What is yield management?Within the first 3 years the % of restaurant failure is?Within the first year the % of restaurant failure is?Which are the two largest expenses (prime costs) in the restaurant industry? How can we control labor cost?If food sales = $85,000, and the cost of the food sold is $25,500, what is the food cost percentage?In order to manage food wisely you must?Room revenue / # rooms occupied = ADR$63,210/430 = $147 (ADR)In almost all cases the Average Daily Rate cannot be less than the minimum published room rate or greater than the maximum published room rateA combination of occupancy percentage and the average daily rate90%50%Food & Beverage and PayrollRestaurant Industry: Increase staff service during peak meal hours and reduce staffing during the in-between off-peak hoursHotel Industry: Influenced by seasonality and adjustments in staffing should reflect the % of hotel occupancy.Cost of food sold / food sales = food cost %$25,500/$85,000 = 30%Manage food and beverage:1. PurchasingWhat are the methods used by hotel and restaurant managers to gain a competitive edge?Which are the 2 most effective types of cost control in the restaurant industry?What are the 2 most effective types of cost control in the hotel industry?What is the yield factor? What must you take into consideration when figuring out the yield factor?2. Waste3. Giveaways4. Theft*Effectiveness of restaurant management can be measured by the “food cost percentage.”Discounting: reducing an item from the regular price, managers concern of perishability factorUp-selling: Goal is to get the consumer to purchase the more expensive item among those that he/she is already interested in purchasingTop-down approach: Attempting to sell the most expensive item first—similar to up-selling especially in restaurant industry (Ex. waitress offering the most expensive item on the menu as her suggestion)Food costs:Volume purchasing is effective but must consider perishability and storage factorsPortion control and forecasting tools are critical as well as purchasing properly concerning: AP= “as purchased” EP= “edible portion” Energy management(heat, air conditioning, water usage, electric usage, gas usage) and Labor costThe amount that will be lost when, for example, meat is cooked. The AP and EP are taken into consideration.Most restaurants fail financially because they could not control their prime costs.Why do more restaurants fail than hotels? Why is the perishability factor important in the hotel industry?Why should restaurants use portion control as a means of controlling costs?Why is service an intangible?What are the job description responsibilities of a cook or sous chef?CH 12 HUMAN RESOURCES MANAGEMENTBe prepared to describe the following (1) job specification (2) job analysis (3) job description.What is the most important responsibility of the human resource department?These two documents are used as the basis for recruitment, selection, training, evaluations, compensation of health; which are they?The product (hotel rooms) are perishable and consumed on site, meaning if it is not consumed or sold for the day, revenue is lost and cannot be recoveredIf a restaurant does not use portion control, they will never know exactly how much money they are making on each item.Not perceived by touch, cannot be visualized.Prepares and portions out all food servedJob specification: the knowledge, skills, and abilities necessary to perform the positionJob analysis: what work needs to be doneJob description: identifies the tasks, responsibilities, and duties under which jobs are performedPlanning1. Job Descriptions 2. Job Specifications Determines how the job should be performed andStudy and define parts of a job design (HR Planning tool).Job simplification:Job enlargement:Job enrichment:Job rotation: Team building: What is the average turnover rate in the hospitality industry?examines how the job is organizedSeeks: productivity for employer, and job satisfaction for employeeParts of job design:1. Job simplification 2. Job enlargement 3. Job enrichment4. Job rotation5. Team building Process of determining the smallest components of the job and assessing how they fit into the whole jobProcess of broadening the job by adding tasksProcess of adding responsibilities to the jobAllowing an employee to work different jobs within the same operation; requires cross-trainingView employees as members of work groups, rather than individualsTurnover: term used to describe the situation when an employee leaves and must be replaced (expensive occurrence)Average turnover rate = 60%-70% (1 out of 3 hired stays for more than six months)Yes, newspapers are still used to hire.According to the chapter, are newspapers still being used to hire new employees or are they discouraged?What does “team building” mean? Why are teams created?What is job enrichment? Why do human resources go through this process? What is the objective?Which are the standard ways employees usually receive payment for the work they perform?What is a progressive discipline policy? View employees as members of work groups, rather than individuals. Teams are created to solve
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