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CH 11 MANAGING REVENUE EXPENSES QUESTIONS What are the tools used to measure revenue in the hotel industry ANSWERS Tools for measuring revenue 1 Occupancy Percentage 2 Double Occupancy 3 Average Daily Rate ADR 4 Yield Management 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 External forces seasonality demand for warm weather climates in winter places competition new businesses in the market Number of rooms sold Number of rooms available Example Number of rooms sold 675 Number available 1000 675 1000 67 5 occupancy rate Some 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 How can a hotel have a high occupancy percentage and a low ADR By selling mostly the least expensive rooms or the hotel and not charging double occupancy If you want to measure how well revenues maximized through double occupancy and by selling more expensive rooms what tool would you use Average Daily Rate ADR If your room revenue is 63 210 and 430 rooms are occupied what is your average daily rate Room revenue rooms occupied ADR 63 210 430 147 ADR What is the rule of thumb in determining if your ADR calculations are accurate What is yield management In almost all cases the Average Daily Rate cannot be less than the minimum published room rate or greater than the maximum published room rate A combination of occupancy percentage and the average daily rate Within the first 3 years the of restaurant failure is 90 Within the first year the of restaurant failure is 50 Which are the two largest expenses prime costs in the restaurant industry Food Beverage and Payroll How can we control labor cost Restaurant Industry Increase staff service during peak meal hours and reduce staffing during the in between off peak hours Hotel Industry Influenced by seasonality and adjustments in staffing should reflect the of hotel If food sales 85 000 and the cost of the food sold is 25 500 what is the food cost percentage Cost of food sold food sales food cost 25 500 85 000 30 In order to manage food wisely you must Manage food and beverage occupancy 1 Purchasing 2 Waste 3 Giveaways 4 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 factor Up selling Goal is to get the consumer to purchase the more expensive item among those that he she is already interested in purchasing Top 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 factors Portion control and forecasting tools are critical as well as purchasing properly concerning AP as purchased EP edible portion What 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 Energy management heat air conditioning water usage electric usage gas usage and Labor cost What is the yield factor What must you take into consideration when figuring out the yield factor The amount that will be lost when for example meat is cooked The AP and EP are taken into consideration 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 Most restaurants fail financially because they could not control their prime costs 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 recovered If a restaurant does not use portion control they will never know exactly how much money they are making on each item Why is service an intangible Not perceived by touch cannot be visualized What are the job description responsibilities of a cook or sous chef Prepares and portions out all food served CH 12 HUMAN RESOURCES MANAGEMENT Be prepared to describe the following 1 job specification 2 job analysis 3 job description Job specification the knowledge skills and abilities necessary to perform the position Job analysis what work needs to be done Job description identifies the tasks responsibilities and duties under which jobs are performed What is the most important responsibility of the human resource department Planning These two documents are used as the basis for recruitment selection training evaluations compensation of health which are they 1 Job Descriptions 2 Job Specifications Study and define parts of a job design HR Planning tool Determines how the job should be performed and examines how the job is organized Seeks productivity for employer and job satisfaction for employee Parts of job design 1 Job simplification 2 Job enlargement 3 Job enrichment 4 Job rotation 5 Team building Process of determining the smallest components of the job and assessing how they fit into the whole job Process of broadening the job by adding tasks Process of adding responsibilities to the job Allowing an employee to work different jobs within the same operation requires cross training View employees as members of work groups rather than individuals Turnover 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 Job simplification Job enlargement Job enrichment Job rotation Team building What is the average turnover rate in the hospitality industry According to the chapter are newspapers still being used to hire new employees or are they discouraged Yes newspapers are still used to hire What does team building mean Why are teams created View employees as members of work groups rather than individuals Teams are created to solve problems and sometimes used to create policies or go across 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 Direct pay often referred to as base pay Merit pay Benefits What is a progressive discipline policy What is human resource


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FSU HFT 1000 - MANAGING REVENUE EXPENSES

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