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FSU HFT 1000 - Managing Revenue and Expenses

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Making a profit:Revenue in the hotel industry is effected by:SeasonsCompetitionLowering costsIncome sources:Occupancy Percentage:Ratio relating to the number of rooms and the number or rooms available:Rooms sold/Number of rooms that you have total650/1000 = 65%Compare with the national averageUse of daily audit reports with past recordsGoals of managementCompare with competitors ratesDouble Occupancy:Price by umber of guests in a hotel roomAdditional costs include:Extra bed used/ linen – laundry costsExtra time for house keepingAdditional continental breakfast consumedAdditional happy hour consumption(# of guests - # rooms sold) / # rooms sold(1000-750) / 750 = ?(250 / 750) = 33.33% or 1/333% of rooms had double occupancyAverage Daily Rate:Measure of how well management is maximizing revenue (income) through double occupancy and selling more expensive roomsAttempting to sell as many rooms as possible at the highest the market will allowRoom revenue / # rooms occupied = ADR$74,140 (revenue) and $674 (# rooms occupied)Rule of thumb: in almost all cases the average daily value rate cannot be less than the minimum published room rate or greater than the maximumON THE TEST : If room revenue is $63,210 and 430 rooms are occupied, what is the average daily rate?$63,210 / 430 = $147Yield Management:Occupancy percentage and ADR combinedAttempts to restrict occupancyHolding out for a higher rate later onAdjusting rates according to changing conditionsGoal: Attain the maximum possible for each roomControlling costs in the Hotel Industry:Energy management: Changing lobby temperaturesLabor costs: influenced by seasonsAdjusting in staffing should be made to reflect the % of the hotel’s occupancyRevenue in the Restaurant Industry:Revenue concerns are crucial due to high failure ratePrivate restaurants:50% fail within the first year of operation90% fail within the first3 years of operationPrime costs: Food, Beverages, SalariesTwo largest expenses in the restaurant industry:Food & Beverages:Sold, given away, wasted, stolenFood cost percentageCost of food bought / Food sales$30,000 / $100,000 = 30%ON THE TEST : If food sales is $85,000 and the cost of the food sold is $25,500, what is the food cost percentage?$25,500 / $85,000 = 30%Maximizing revenue through sellingDiscounting: deals and couponsUp-selling: upgrade for slightly moreTop Down Approach: “My favorite is… (more expensive than before)”Payroll: Cant hire too muchCheaper to fire part time because full time requires health benefits, etc.Key management positions:Director of food and beveragesExecutive house keeperCatering managerBeverage managerExecutive chefRemember!!People travel for leisure during the weekend!People travel for business during the week!Therefore, resorts make most of their profit on the weekend, while business hotels make more profit during the week!In today’s business world, people are the key!The HR (human resources) department handles this challengeHuman resource management:Handle all the paperwork related to:SelectionTerminationLegal mandatesBenefitsTrainingCompensationHuman resource management:The process of how to organizations treat their people in order to accomplish the goals and objectives of the firm(when you have happy employees, they will preform better. You want to make sure you treat your employees right and well. Be fair to the individuals)Functions of the HR department:(HR is all about the people that you bring to the operation. You want people that will succeed in accomplishing the goals and meeting the objectives of the company)PlanningStaffingTraining and developmentTurnover and employee loyaltyEvaluationCompensation and benefitsHealth and safetyLegislationThe breakdown:Planning:HR must develop the plan to conduct needed trainingPredict the future: HR needs to be kept updated about industry shifts so that they con assist the workforce in handling the changesHR must remain competitive with wages to attract the best in the industryPeople look for the highest wage. If you’re not offering a good wage, they will move to a place that pays betterBefore an organization can open their doors, they must first determine the following:What work needs to be doneHow the work should be completedThe skills necessary to finish the jobHR ToolsJob analysis: What work needs to be done?Job descriptions: Identifies the task, responsibilities and duties under which jobs are preformed (what will an employee have to do?)Job specifications: The knowledge, skills and abilities necessary to preform the position (does this person need a certification?)Job descriptions and job specificationsAre the basis for:Recruitment – get people to applySelection – who is the best?Training and development – teach your employeesEvaluation- give feedback for improvementCompensation and benefits – salary raisesHealth and safety issues – insurance benefitsJob design: how the job needs to be preformed and organizedLook for productivity for an employer and job satisfaction for an employeeTechniques of a job design:Simplification: don’t make it too complexEnlargement: add additional responsibilities over time, as the employee gets more training and more experienceEnrichment: training for an employeeRotation: cross training! Many companies fail when an individual can’t show up, and nobody knows how to complete the job. Make sure there is someone ready incase there is an emergency.Team building: work together. You get more done when you help out. Yes, you have your own job, but your job and other jobs will be done better when teamwork is used.Staffing:The key element is o find the right employee for the jobSeveral ways to advertise a job:Ad in the newspaper (discouraged, not used anymore)Guest speakerAlumni groupsInternetOnce people are gathered, an HR manager has to train a manager has to develop a list of appropriate questions to askNo illegal questionsBe fare to those who has a disabilityStructure so you can compare candidates’’ qualifications without biasBehavioral and situational questions are effectiveThese questions will tell you if people can act correctly under the situations that your job opening requiresReference checks: ask previous supervisors to find out if this person acts the way you thought they wouldPre-employment tests:Personality testsHonesty testsAll of this is done to find employees that will “fit” well in the firm and enjoy their jobThere are agencies that conduct the interview process and find


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