Ch 11 Most hospitality managers increase shareholders value by decreasing expenses and increasing revenues External factors can hold back occupancy of a hotel that mangers cannot help such as seasonality and competition Three tools for measuring revenue are occupancy percentage average daily rate and yield management occupancy rate the ratio relating the number of rooms sold to the number of rooms available If you work for an independent hotel no franchises you should find out the percentage of comparable hotels around you another way would be to look at daily audit reports Occupancy number f rooms sold rooms available for sale 675 1000 67 5 always round off the 100th place The only time you should compare the same date from year to year is holidays like Christmas seeing it is always on Dec 25 2nd measure of hotel revenue is average daily rate that is computed by dividing the room revenue by number of rooms occupied This formula is necessary when you sell rooms for more than one rate This is how managers measure how well they are maximizing revenue through double occupancy and through the selling of more expensive rooms Double occupancy of guests of rooms sold of rooms occupied 1000 750 750 33 33 this means 33 33 of rooms are double occupancy and 66 66 of rooms are single occupancy Daily average rate room revenue room occupied 100000 1000 100 ADR Rule od thumb the ADR cannot be less than minimum published room rate nor greater than the maximum published room rate 3rd measurement of revenue is yield management Occupancy and average daily rate combined are utilization of yield management attempts to control occupancy as means of maximizing rev Many hotels change their rates four times a year Failure rate of independent restaurants 50 within the first year of operation 90 within the first 3 years of operation Prime cost is a term restaurants use for food and beverage expenses and payroll Prime cost is your two largest expenses in a restaurant industry Most restaurants fail b c they cannot control their prime cost Labor cost is payroll cost Under staffing will not work in lowering cost it will cause bad service Over staffing is not good either most of the time people will be standing around Peak hours for breakfast are 6 9am lunch is 11 2pm and dinner is 5 9pm that s were you increase staff Food cost is incurred when food is consumed for any reason Cost of food sold given away stolen or wasted Food cost cost of food food sales Point of sale is the popularity of food Discounting method of reducing an item from the regular price Perishability shelf life or how much time you have to sell a product until it cannot be sold anymore Upselling not about selling more items it s about selling higher priced items Top down approach attempting to sell the most expensive item fist and then offering a less expensive item next Energy management is the efficient management of energy usage within your establishment Heat air condition water usage electric usage gas usage and sewer usage Hotels can encourage guests and employees to become part of energy management programs Water can be controlled by low flow toilets and showerheads Energy efficient using lower wattage bulbs Labor cost in hotels is different then controlling labor cost in restaurant industry Hotels have less peak hours Staffing in hotels is based on seasons Housekeepers working part time is more efficient Food cost control factors concerning Volume purchasing is effective but must consider perishability and storage Portion control and forecasting tools are critical as well as purchasing properly AP weights meaning as purchased and EP weights to factor in normal waste or shrinkage that occurs during cooking edible portion Example Portion control is used a lot with meats AP would be before we cut off the fat and bones of the meat after it is cooked and waste is removed is known as EP Yield factor 1lb 75 yield 1 33lbs quantity Ch 12 Human resource department functions Planning is the most important activates especially in HR HR must attempt to predict future employment needs in terms of turnover Last step develop a stepwise progression and timetable on reaching these changing objectives Job analysis information that focuses on what work needs to be accomplished write job descriptions Job specification identify the task responsibilities and duties under which jobs are performed keep a book of daily activities Job specifications knowledge skills and abilities necessary to perform the job Job design ask of determining how a job should be done Job simplification job enlargement job enrichment job rotation and team building Job simplification process of determining the smallest components of the job and assessing how they fit into the whole job Job enlargement process of broadening the job by adding task Job enrichment process of adding responsibilities to the job Job rotation allowing employees to work at diff jobs Team building view employees as members of work groups not individuals Staffing Starts with recruiting and picking the best ones Many go to colleges to find emplyees or aulimi groups they have to make sure they are doing interviews in a non bias way New employee training Introduce corporate culture Discusses the history of the company Learn its mission Hear about its priorities Start to figure out where one fits in Creates a social bond between the workers as all go through it together cooking together is a is one Training cycle Identify problems Goal of program Est training criteria Select trainees Pretest trainees choose training method Implement training Evaluate training Turnover employees leave that must be replaced It is an expenvie occuerence Time is a big expense in the turnover process Avg turnover rate in hospitality is 60 to 70 one out of every three hired stays at least 6 months Job should be fun fair and interesting Money is not the main reason for leaving a job but it is the most used excuse Evaluation Takes place after hire trained and on the job for a period of time Many purposes See if they need more training Is it time for a promotion Is it time pay raise HR role is to provide the form and file after completed HR also trains managers on how to do the evaluation process Compensation Three ways Direct compensation base pay Merit pay where only expected and above expected performance is rewarded Benefits Health insurance is the most expenvie benefit Health Places are excpected to provide employees with safe and
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