Hospitality Management Test !
Hospitality Management Test ! HOSP 1603
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This 8 page Study Guide was uploaded by Brandon Notetaker on Sunday October 2, 2016. The Study Guide belongs to HOSP 1603 at University of Arkansas taught by Kelly Way in Fall 2016. Since its upload, it has received 24 views. For similar materials see Intro to Hospitality Mgmt in Hospitality at University of Arkansas.
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Date Created: 10/02/16
Hospitality Management Week 1 (Week of 8/21/16) Chapter 1: Perspectives on Careers in Hospitality HOSPITALITY Originates from the word “Hospice” – medieval house of rest for travelers and pilgrims The reception & entertainment of guests, visitors or strangers with liberality and goodwill private clubs, casinos, resorts, attractions, hotels, restaurants, etc. • share the management problems of providing food and shelter The hospitality professions are among the oldest of the human professions One of the fastest growing sectors of the economy A multibilliondollar enterprise CHARACTERISTICS OF THE HOSPITALITY INDUSTRY Hospitality business is open 365 days a year and twentyfour hours a day Depends heavily on shift work (morning and afternoon) Has a graveyard shift (10 or 11pm until 5 or 6am) Produce guest satisfaction Products of the hospitality business are intangible and perishable LEARNING STRATEGIES FOR THE WORKPLACE • Try to understand the organization • Formal organization • Informal organization • Try to understand the physical plant • Work flow • Guest flow • Try to understand the different functional areas • Backofthehouse • Frontofthehouse • Try to work in both WHAT DO EMPLOYERS LOOK FOR? Dedication and commitment Desire to serve others Decision making skills Communication Skills Experience Involvement Technical Skills What can I put in a letter or say on the phone? OUTLOOK FOR HOSPITALITY The outlook for the industry is very positive but there are several trends/factors that are affecting how the industry operates and the products and services that are offered to customers. September 11th and recent events have resulted in: • Travel restrictions • Safety and security issues • Cost of operations • Government regulations • Destinations that have been effected Polarization: Limited service versus Service Intensive Organization Accelerating Competition: Value doesn’t always mean lowest price Technology: New technologies introduced every year Empowerment: Act of providing additional levels of responsibility to both employees and mangers Diversity: Some of the most diversity companies are in the hospitality industry Concern with security: Increased and greater level of safety for travelers Concern with sanitation: Increases in foodborne illness Quality of food & water Globalization: Impacts every facet of operations: Competition Work Force Travel Patterns Company alliances Chapter 1 Vocab 1. Hospitality – The reception and entertainment of guests, visitors or strangers with liability and good will. 2. Managers Role – Make Guest feel welcomed, make things work for guests, and make sure operation will continue to provide service while also making profit. 3. Knowledge Worker – The person who applies to productive work ideas, concepts, and information. 4. Hospitality Industry – Service industry, and the management of a service of a service is vastly different. 5. Work as a Vocation – Calling from God. 6. Job Benefit Mix – The money and knowledge earned from a job 7. Managerial Organization – major organizations have formal charts to separate job titles 8. Informal Organization – social organization with indefinite leaders 9. Physical Plant – Maps out the main work areas and major pieces of equipment 10. Strategy of Job Placementconsists of Income, Professional status, evaluating an employer determining job satisfaction, accepting skilled jobs. Hospitality Management Week 2 (Week of 8/28/16) Chapter 2: Forces Affecting Growth and Change in the Hospitality Industry DEMAND Factors affecting demand: Changing population To understand demographics: age, income, level of education, gender Age: “the population is aging” what does that mean? 1. getting older 2. oldest segments of the population are increasing in percentage size Baby Boomers Born between 19461964 Represent 26% of the population in their high income years Are driving the economy share of overall spending on foodservice, lodging, travel and recreation Generation X (Dr. Way’s Generation) Born between 19651975 Only represent about 14% of the population Difference between Boomers and Gen Xers— Tech savvy Most education generation Generation Y or Millennials (Echo Boomers) Children of Boomers Born 19762004 21% of the overall spending in the US diverse generation Generation Z Born 2004 present High Schoolers Generation Z in the aftermath of those cataclysms in the era of the war on terror and the Great Recession Buyers of tomorrow WHAT DOES THIS “AGE” FORCE MEAN TO THE HOSPITALITY INDUSTRY? Adjust to the shifts in population By creating niche markets (younger customers, young families, aging customers) New concepts Allinclusive package “fast casual” dining Growth in the AfricanAmerican and Hispanic segments of the population AsianAmerican market (100% growth in 20year period) Working women: Not new any longernot the change Up to 1940 fewer than 25% women in the workforce 50% in 1980 57% in 2016 48% of foodservice managers and 44% of lodging managers INCOME DISTRIBUTION Shrinking Middle Class Includes family income ranging from $25K to $50K per year SUPPLY Hospitality industry wouldn’t exist without supply Land Food Labor These all affect the how, where, and how effectively we service our customers LAND Important: Availability, cost, & what it produces Availability of “good” locations is decreasing FOOD Important: Seasonality Effects of weather Overfishing Disease: bird flu, mad cow LABOR Important: Labor demands increasing for management positions More educated management staff Complexity of managing businesses with high turnover (exceed 100% in some sectors) Part time versus full time workers Immigration rates & restrictions Summary: outlook is good, but there will be challenges filling entrylevel jobs Chapter 2 Vocab 1. Demand – Customers 2. Demographics – Characteristics of our population (Age, and Income) 3. Empty Nesters – Those who do not have children 4. Food Supply – Weather and Shortages can drive prices in short time Hospitality Management Week 3 (Week of 9/4/16) Chapter 3: The Restaurant Business The First Restaurant public dining room known as the restaurant came from France. France continues to make major contribution to the restaurant's development. The first restaurant proprietor is A. Boulanger, a soup vendor, who opened his business in Paris in 1765. The French are credited with culinary art largely due to two main events: French Revolution and Thomas Jefferson The French Revolution In Paris restaurants did not become an important part of the gastronomic scene until after the Revolution. In the early too mid18th century only taverns and inns served food and drink, but even in those establishments there were no menus or intricate dishes. Meals usually consisted of boiled or roasted meat, served without sauce, and a seasonal vegetable. Thomas Jefferson The president of the United States, believed in intelligence towards fine food and health. Thomas Jefferson had "potatoes served in the French manner" at a White House dinner in 1802 Auguste Escoffier The Patron Saint of Cooking French chef, restaurateur, culinary writer Wrote first cookbook Created / designed the modern day kitchen and flow of the kitchen NRA facts •1 million+: Restaurant locations in the United States. 10%: Restaurant workforce as part of the overall U.S. workforce. •9 in 10: Restaurant managers who started at entry level. •8 in 10: Restaurant owners who started their industry careers in entrylevel positions. •9 in 10: Restaurants with fewer than 50 employees. •7 in 10: Restaurants that are singleunit operations. •Currently more Americans spend money in restaurants rather than grocery stores Fine dining restaurants Good selection. Generally, at least 15 or more 3 different entrees. Many of these restaurants serve “haute cuisine” Elaborate or skillfully prepared food Wait staff is usually highly trained and often wear formal attire Food portions are smaller but more visually appealing Fine dining restaurants have certain rules of dining which must be followed by visitors Mostly French cuisine Consistency and quality are not easy to maintain Limited market appeal Casual upscale dinning Food has become more sophisticated in presentation & seasoning, but is till approachable Menus are familiar, often a blend of cuisines Service is friendly & downtoearth Serves moderatelypriced food in a casual atmosphere Quick Service Restaurants Quick Service “FAST FOOD” or QSR Emphasize speed of service Operations range from smallscale street vendors to franchises Mid Scale Restaurants Appeal to businesspersons, couples, singles, and families who desire a dining experience with valuepriced food, good service, cleanliness, and atmosphere which, in total, represent the dining experience Family restaurant Buffets Pizza parlors Home meal replacement Very unique segment for a variety of reasons Long history, are among the most productive types of restaurant operations in the entire industry & have a history of leading the industry in terms of innovation Began in 1920s with White Castle, followed by Carl’s Jr and InNOut in the 1940s Past 60 years have been dominated by McDonald’s Characterized by: Location Limited menus Sales volume Fast service Types of employees (many parttimers) Use of unskilled labor Key roles for unit managers Highly competitive menu prices Chain domination Simple unit, complex system Changes in QSR Going more “upscale” Companies diversifying Introduction of healthy items Expansion of menus Nontraditional locations Fast Casual Restaurants Full service quality in a QSR format Hybrid combines convenience with quality ingredients Midscale restaurants They have simplified production systems Requiring lesser skilled employees Specialized menus Moderately priced food Category includes: Family restaurants Buffets Pizza Home Meal Replacements Casual Restaurants “stepup” from midscale restaurants Become more popular in recent years Characterized by a relaxed atmosphere, more varied menus & reasonable prices Theme restaurants and ethnic restaurants fall into this category Mainstream casual restaurants include: Ruby Tuesday, Chili’s, Applebee’s More specialty casual restaurants include: Outback, Red Lobster Restaurants as a Business These restaurants in this category do not really fit neatly into another category These exist to serve another business or businesses Examples: restaurants in retail stores or restaurants in shopping malls Differentiate these because they are not “free standing” Starbucks in Wal Mart Chapter 4: Restaurant Operations This module should reinforce the notion that to understand the restaurant business, one must not only study it but also work in it – Even though there are many different types of restaurants, much of the actual work that is performed in them is common across segments Three Areas of the Restaurant 1. Front of the House • The key responsibility of the FOH is great satisfaction where the exchange of goods and services takes place • The guest expects a friendly greeting, accuracy in order filling, cheerful willingness to handle any problems that occur. Tasks: Greeting the guest Taking the order Serving the food Removing used table ware Accepting payment and accounting for sales, charge as well as cash Thanking the guest and inviting comments and return business – Roles: Hosts/Hostesses – Counter person – Servers – Cashier – Bussers 2. Back of the House Kitchen area and staff. The principal responsibility of BOH is the quality of the food for the guest. Food safety is extremely important. Controlling quality and cost are significant parallel activities. Standardized recipe is important (correct ingredients ensuring quality and cost. Closing (cleaning up, shutting down, locking up). Tasks: Purchasing and receiving – Food “prep” – Food production – Portion control – Quality control – Safety and sanitation 3. The Office Handles correspondence, phone calls, keeping the books. Cashier’s deposits, preparation of the payroll, approval of bills, bill payments. Restaurant Forecasting: Budget projections, Guest counts or covers, Meal periods, Day of week, Special holidays, Average guest check Management Different operations use different titles – General manager – Unit manager – Assistant manager – Manager on duty – Responsibilities will differ as well – In all forms, there is a hierarchy Making a Profit in a Food Service Operation: 2 basic approaches 1. Increasing Sales To sell more to people (advertising) To sell more to your present customer (selling products more). Increase the check average (to increase the price), however this is not very effective. It may result to the loss of customers. Bundling, (another strategy) ex. Combo meal Suggestive selling 2. Reducing Cost Careful scheduling of employees. Improve portion control More careful monitoring of the issue and the use of supplies Financial Considerations Operating ratios used on a daily basis: Expense ratios usually focus on variable costs: Food cost Beverage cost – Labor cost – Sales/customer statistics commonly used include: Number of covers – Average check Food Cost Control Process 1. Purchasing: Standard for each item (product specification) Systems that minimize effort and maximize control of theft and losses from other sources. 2. Receiving: Is a point of control in the restaurant operation. The purpose of receiving is to ensure the quantity, quality, and price are exactly as ordered. 3. Storing/ Issuing: Records must be kept of all items going into and out of the stores. If more than one person has access to the stores, it is difficult to know where to attach responsibility in case of losses. 4. Budgeting: (2 Categories) a. Fixed costs – are constant regardless the volume of business. (rent, interest, depreciation) b. Variable cost – fluctuate with the volume of business, it also includes the controllable expenses (payroll, benefits, direct operating expense, marketing and promotion, energy & utility) Typical Cost Percentages Cost Percentages – Labor costs 20 to 24% – Food costs 28 to 32% – Beverage costs 18 to 24% Controls Loss of $20 billion a year due to theft and cash mishandling – One out of every 3 employees will steal – 35% of restaurants fail due to theft – 75% of missing inventory is from theft – 73% of all job applications are falsified – Use of POS can solve some problems Trends More flavorful food – Increased takeout meals and home meal replacement – Food safety and sanitation – Guests becoming more sophisticated Trends in Restaurant Operations More flavorful foods – Increase takeout meals – Increase food safety and sanitation – Twin and multi restaurant locations – Quickservice restaurants in convenience stores – Difficulty in finding good employees. Summary 1. Most restaurants forecast on a weekly and monthly basis. 2. Products need to be purchased, received, and properly stored. 3. The front of the house deals with the part having direct contact with guests. 4. The back of the house do not come contact with guests. This include receiving, storing/issuing, food production, stewarding, budgeting, accounting and control. Chapter 3 Vocab 1. Food Dollar – 48% food budget spent away from home. 2. Offpremise sales – Takeout, Drive home, Delivery. 3. Dining market – Provides for social needs 4. Eating Market – Provides for biological needs 5. Distribution – Marketing problem of gaining a presence in many markets. 6. Points of Distribution – Anywhere there is consumer traffic Chapter 4 Vocab 1.Service Recovery – Permits the server or a supervisor to correct any error promptly and cheerfully. 2. Check Control – Being sure that every order is recorded, and prevents servers from going into a business themselves 3. Management Presence – Important to provide greater confidence to the customers 4. Mise en place – Everything is in place prepared for next meal 5. Bundling – effective way to increasing check is to bundle food items, and suggestive selling 6. table d’hote – Complete dinner or lunch. 7. prix fixe menu – Predetermined items offered as multicourse meal at a set price for higher increase sales. Popular in Europe 8. Controllable Expenses – Costs that are expected to vary. Ex: Payroll, Employee Benefits 9. Covers – Number of guests Hospitality Management Week 4 (Week of 9/11/16) Chapter 5: Restaurant Industry: Chain, Independent or Franchise CHAINS Chains have strengths in seven areas: • Marketing and brand recognition • Site selection • Access to capital • Purchasing economies • Centrally administered control and information systems • New product development and • Human resource development Marketing and Brand Recognition • Chains are able to achieve a high level of brand recognition by keeping their messages simple, large marketing budgets and the additive effect (repeating the message) • The large cost of the marketing a national company is spread among a large number of units Site Selection Expertise • Much of a restaurant’s success is owed to choosing the proper site • It has become much more competitive to identify suitable sites • Choices are based upon a thorough examination of the feasibility of the site Access to Capital • This can be a challenge because of the rising costs of opening a restaurant coupled with lenders’ view that the restaurant business is risky • Options include loans from banks, friends and family, personal savings, limited investors, “going public” Purchasing Economies • The power of purchasing large quantities for distribution among different locations or entering into a contract with a company for multiple individual purchases • When one considers that food is a primary expense, the savings of 1% – 2% can be significant Control and Information Systems • Chains can also afford to purchase expensive systems with the justification that the cost will be spread across multiple units • Contrast this with the challenge of an individual operator purchasing a system beyond his or her means New Product Development • This is only becoming more important as competition increases • Large chains can afford to staff and equip development kitchens Human Resource Program Development • Again, the cost of recruiting, hiring, training, and developing is spread across multiple units • Also, human resource expertise can be centralized • There can also be disadvantages • Largely as a result these strengths, chain domination (as measured by market share) has grown over the last several years • The top 100 chains alone generate over 50% of all restaurant sales • This domination has increased from just 33% in 1975 2015 Independent Restaurants To survive independents must achieve differentiation that earn customer patronage. Flexibility and highly focused operation are Mom and pop Small operations • Marketing and Brand Recognition • Ronald McDonald • Colonel Sanders • Friendship with customers • Word of mouth advertising is more important to independents • Site Selection: Location! • Access to Capital: bank, support from Small Business Administration (SBA) loans, venture capital groups, Initial Public Offerings (IPOs) • Purchasing Economies: have advantage to get topquality products consistently • Control and Information Systems: purchase POS systems with complex software—generates reports that are equivalent to those of chains • Human Resources: having close personal ties can reduce turnover, have high marketing to employees who are tied to community and family • Advantage: Flexibility! • Having only one boss or small partnership • Fast decisionmaking—marketing changes, menu changes, sustainability, uniforms, etc.… • Differentiation: • Personal identity of the owner • Reputation as a local firm • Choose a concept—menu, style of service, ambience & atmosphere FRANCHISED RESTAURANTS • 45% of all restaurants are franchised • QSR serving hamburgers make up the largest category of franchises • 2 kinds of franchises: – Product or trade name franchising (Coke, Toyota dealership) – Business format franchising (use of product and service—access to and use of other systems and standards) – This franchisee has a substantial investment beyond that has daytoday operating control and responsibility – The essence is an agreement between the franchise and franchisee to follow the franchise business system • Characteristics of a franchise agreement: – Use of trademark – Location of franchisee – Term of franchise – Franchisee’s fees and other payments – Obligations and duties of the franchisor – Obligations and duties of the franchisee – Restrictions on goods and services offered – Renewal, termination, and transfer of franchise agreement – Also: operating procedures, advertising and promotion, training and accounting services • A welldeveloped franchise minimizes risk • Offers the following services: – Screening – Financing – Site selection and planning – Preopening training – Operations manuals FRANCHISE SERVICES…. • Once a unit is up and running for a year or so, advice and assistance are most crucial • Such services are: – Operating and control procedures – Information management – Quality control – Training – Field support – Purchasing – Marketing – Advertising – New products – New concepts FRANCHISEE’S VIEW • Drawbacks from owning a franchise: – Loss of independence – Payment of substantial advertising assessments – Franchise fees • Advantages: – Recognizable brand – Attested product & service concepts – Technical assistance FRANCHISOR’S VIEW • Advantages: – Investment in a new unit – Expand rapidly w/out use of its own capital – Good source of knowhow • Disadvantages: – Find their own stores yield higher sales and profit margins – Higher profits from stores they own Chapter 5 Vocab 1. Publicly Traded Companies – Stock is traded can gain from investors 2. Small Business Administration – Helps small business get bank loans 3. Initial public offerings – Sale of stock through underwriting firm of stockbrokers 4. Business format Franchise – franchise used in hospitality. Requires use of product and any other services of the company 5.
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