Managing Revenue and Expenses 10 01 2013 Making a profit Revenue in the hotel industry is effected by o Seasons o Competition o Lowering costs Income sources Occupancy Percentage o Ratio relating to the number of rooms and the number or rooms available Rooms sold Number of rooms that you have total 650 1000 65 o Compare with the national average o Use of daily audit reports with past records o Goals of management o Compare with competitors rates Double Occupancy o Price by umber of guests in a hotel room Additional costs include Extra bed used linen laundry costs Extra time for house keeping Additional continental breakfast consumed Additional happy hour consumption of guests rooms sold rooms sold 1000 750 750 250 750 33 33 or 1 3 33 of rooms had double occupancy Average Daily Rate o Measure of how well management is maximizing revenue income through double occupancy and selling more expensive rooms o Attempting to sell as many rooms as possible at the highest the market will allow o Room revenue rooms occupied ADR o 74 140 revenue and 674 rooms occupied o 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 maximum ON THE TEST If room revenue is 63 210 and 430 rooms are occupied what is the average daily rate 63 210 430 147 Yield Management o Occupancy percentage and ADR combined Attempts to restrict occupancy Holding out for a higher rate later on Adjusting rates according to changing conditions Goal Attain the maximum possible for each room Controlling costs in the Hotel Industry Energy management Changing lobby temperatures Labor costs influenced by seasons o Adjusting in staffing should be made to reflect the of the hotel s occupancy Revenue in the Restaurant Industry Revenue concerns are crucial due to high failure rate Private restaurants o 50 fail within the first year of operation o 90 fail within the first3 years of operation Prime costs Food Beverages Salaries o Two largest expenses in the restaurant industry Food Beverages Sold given away wasted stolen Food cost percentage Cost 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 selling o Discounting deals and coupons o Up selling upgrade for slightly more o Top Down Approach My favorite is more expensive than o Cheaper to fire part time because full time requires health before Payroll Cant hire too much benefits etc Key management positions Director of food and beverages Executive house keeper Catering manager Beverage manager Executive chef Remember 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 Human Resources Management In today s business world people are the key 10 01 2013 The HR human resources department handles this challenge Human resource management Handle all the paperwork related to o Selection o Termination o Legal mandates o Benefits o Training o Compensation Human 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 Planning Staffing Training and development Turnover and employee loyalty Evaluation Compensation and benefits Health and safety Legislation The breakdown Planning o HR must develop the plan to conduct needed training o Predict the future HR needs to be kept updated about industry shifts so that they con assist the workforce in handling the changes o HR must remain competitive with wages to attract the best in the industry People look for the highest wage If you re not offering a good wage they will move to a place that pays better o Before an organization can open their doors they must first determine the following What work needs to be done How the work should be completed The skills necessary to finish the job HR Tools Job 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 specifications Are the basis for o Recruitment get people to apply o Selection who is the best o Training and development teach your employees o Evaluation give feedback for improvement o Compensation and benefits salary raises o Health and safety issues insurance benefits Job design how the job needs to be preformed and organized o Look for productivity for an employer and job satisfaction for an employee Techniques of a job design Simplification don t make it too complex Enlargement add additional responsibilities over time as the employee gets more training and more experience Enrichment training for an employee Rotation 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 o The key element is o find the right employee for the job o Several ways to advertise a job Ad in the newspaper discouraged not used anymore Guest speaker Alumni groups Internet o Once people are gathered an HR manager has to train a manager has to develop a list of appropriate questions to ask No illegal questions Be fare to those who has a disability Structure so you can compare candidates qualifications without bias Behavioral and situational questions are effective These questions will tell you if people can act correctly under the situations that your job opening requires Reference checks ask previous supervisors to find out if this person acts the way you thought they would Pre employment tests Personality tests Honesty tests All of this is done to find employees that will fit well in the firm and enjoy their job
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