Hospitality Management Week 3
Hospitality Management Week 3 HOSP 1603
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This 12 page Class Notes was uploaded by Brandon Notetaker on Sunday October 2, 2016. The Class Notes belongs to HOSP 1603 at University of Arkansas taught by Kelly Way in Fall 2016. Since its upload, it has received 9 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 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 Generatio 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 6 (Week of 9/25/16) Chapter 9: Lodging: Meeting Guest Needs Chapter 9 LODGING 1. The lodging industry has been in existence ever since the first traveler looked for a place to spend the night (thousands of years ago) 2. Over the years, these facilities have evolved and have been known as hotels, motels, inns, taverns, ordinaries, etc. 3. We use the term “lodging” to characterize the overall category of facilities LODGING TODAY 1. The lodging industry is a huge segment, by any measure Over 49,500 properties Over 4.6 million guest rooms Generates over $40.6 billion in revenues Supports more than 7.5 million jobs THE EVOLUTION OF LODGING 1. Structures built specifically for overnight accommodation have been around for thousands of years dating back to Mesopotamia which was a center for commerce 2. Hotels in the US date back to the late 1700s and the early 1800s including hotels in Boston, New York, Chicago, and Philadelphia 3. Important features of early hotels included location and accessibility to transportation 4. “Grand” hotels were later built in resort areas, city centers, and along transportation routes – Waldorf Astoria, Palmer House, 5. The Tremont (in Boston) was the first to offer guests their own room! 6. Other “Grand” hotels were built in the 1800s and early 1900s, each offering a new amenity or feature 7. First developed in California in 1925, motels (Motor Hotels) are a relatively recent development 8. Holiday Inn was the first well known chain of “motels” built in the US (1952) 9. Holiday Inn was started by Kemon’s Wilson after a family vacation 10. There have since developed many different types of lodging facilities focusing on different customer needs (example: guest suites) CRITERIA FOR CLASSIFYING HOTELS 1. Price (or service), Function, Location, Market segment, Distinctiveness of style or offerings HOTELS CLASSIFIED BY PRICE 1. Limitedservice hotels, Selectservice, Fullservice hotels, and Luxury hotels CLASSIFYING HOTELS BY PRICE 1. LimitedService Hotels Usually no public meeting space and limited food and beverage Typical ADR is between $80.00 and $90.00 and the average number of rooms is 122 Examples include Holiday Inn Express, Comfort Inn, and Fairfield Inn 2. SelectService Hotels Relatively new addition to lodging; akin to addition of fastcausal restaurants in the food service sector With 100 to 200 guest rooms, focus is on value and a cheaper alternative to fullservice properties Hot breakfast service and sometimes other food service is offered along with limited meeting space 3. FullService Hotels Have a wide range of facilities and services including public meeting space and choice of food and beverage Typical ADR is over $150.00 Business and leisure travelers represent 57.3 percent of room sales Average size is 272 rooms 4. Luxury Hotels Have a wide range of facilities and services offered in an upscale environment including concierge and multiple dining options Rooms number between 150 and 500 Higher ratio of employees to guest room Typical ADR is over $225.00 Industry leaders include RitzCarlton, Four Seasons, and Fairmont CLASSIFYING HOTELS BY FUNCTION 1. Convention hotels Typically, more than 500 rooms Often located near convention centers 2. Commercial hotels Smaller than convention hotels with 100 to 500 guest rooms Typically, in downtown locations CLASSIFYING HOTELS BY LOCATION 1. Downtown hotels 2. Suburban hotels Typically have 200 to 350 guest rooms and interior corridors 3. Highway/interstate hotels 100 to 250 guest rooms 4. Airport hotels 250 to 550 guest rooms HOTELS CLASSIFIED BY MARKET SEGMENT 1. Where different types of hotels have been built to respond to specific traveler needs Executive conference centers, Resorts, Casino hotels, Health spas, and Vacation ownership CLASSIFYING HOTELS BY OFFERINGS 1. Allsuite hotels 2. Extended stay hotels 3. Historic conversions 4. Bed and breakfast inns 5. Boutique hotels. PRINCIPAL CUSTOMER TYPES 1. Leisure or vacation travelers 2. Transient business travelers ─ individual traveling alone 3. Business travelers attending conferences 4. International travelers 5. SMERF – social, military, educational, religious, and fraternal WHAT’S CHANGING? 1. Increasing competition (subject of Chapter 12) 2. Inroom technology 3. Unique hotels 4. Increased service levels 5. Blurring of segments 6. Increased business travel 7. Increased occupancy in city hotels 8. Rising room rates 9. Condo/time share conversions Chapter 9 Vocab 1. Ordinaries – Inns of colonial America. Named because they provided respite for the ordinary person, typically provided a meal. 2. Limited Service Hotels – typically offer guest rooms only. 3. Fullservice hotels – offer a wide range of facilities and amenities. 4. Luxury Hotels – At the top of price category. Upscale decor and furniture. 5. Convention hotels – made for large amounts of groups. 6. Commercial Hotels – in comparison to convention hotels less public space, smaller meeting and function space, fewer food and beverage outlets, and limited recreational amenities. 7. Executive conference centers – welldesigned learning environments for meetings. Made with audiovisual and technical support. 8. Vacation Ownership – timeshares and vacation intervals 9. AllSuite Hotels – Guest rooms are much larger than average hotels 10. Boutique hotels – Range all price spans, and looks/feels like a more traditional lodging. 11. Corporate market segment – consists of forprofit companies and therefore may have more money than nonprofit or other business segments. 12. Association market segment – consists of individuals or companies that have banded together in sharing common purpose or goals. 13. SMERF – another market segment for most lodging properties. Called this because it originates from 5 sources: Social, Military, Educational, Religious, and Fraternal. 14. Employers of choice – obtain this from customers by providing better benefit packages, more career development opportunities, increased recognition, and mentoring. 15. Internal Customer – employees of the hotel industry Hospitality Management Week 6 (Week of 9/25/16) Chapter 10: Hotel and Lodging Operations LODGING OPERATIONS: Hotels are generally divided into three major functional areas 1. Rooms division includes front desk, reservations, uniform services (security, etc.), and housekeeping 2. Food and beverage department includes restaurants, bars, banquets and room service 3. staff and support departments includes accounting, engineering, marketing, human resources, and contracted areas ROOMS DIVISION 1. The heart of the house The main business of the hotel and the main source of revenue rooms can contribute 70 percent or more to overall revenue and even more to profit 2. The center of activity in the rooms division is the front office it is overseen by the resident manager, front desk manager (or assistant general manager) and various department heads responsibilities include: checking guests in, checking them out, securing payment, listening to complaints, communicating with other departments, determining room availability, and selling additional rooms RESERVATIONS DEPARTMENT 1. Reservations can be made by the guest via other methods (more and more online) but many requests are still made through the hotel’s reservation department 2. Reservations must maintain contact with other departments as well as other reservations channels to be able to forecast available rooms 3. The reservations department attempts to maximize: Room rate, and occupancy rate. this is known as yield management –maximizing these two at any given time. Reservations departments must consider city wide events, competition, minimum stays, etc. HOUSEKEEPING 1. The essential requirement that guests have is to be able to check into a clean room 2. Housekeeping department is responsible for: cleaning of guest rooms, stocking essential supplies and amenities, laundry (sometimes) and maintenance of public areas 3. housekeeping is one of the largest departments in the hotel (up to 50 % of all employees) 4. the executive housekeeper is the head of the department he or she must be adept at scheduling, coordinating, managing people, etc. 5. room attendants are responsible for cleaning of individual guestrooms 6. housekeepers work from a rooms report, which provides them with the status of all guest rooms from which they can prioritize their work 7. the housekeeping department must know at any given time: the occupancy of the hotel the number of guests checking in the number of guests checking out the number of guests staying over late checkouts, etc. 8. rooms can take as little as 15 minutes or as much as 1 hour to clean and prepare for the next guest 9. checkin and checkout times are based in large part on the time it takes to clean a room UNIFORMED SERVICES 1. The uniformed services department is another important department in the rooms division bell staff, valet, security and concierge the bell staff assists with luggage, acts as an escort, and answers questions the valet assists with parking 2. the concierge is the resident expert in activities, events, restaurants, and attractions the position of concierge is becoming more important as hotels try to offer a higher level of guest services there is an international association for concierges (les chefs d’or) sometimes this responsibility falls to the bell staff or the front desk clerks in smaller hotels SECURITY 1. Hotels are required to provide “reasonable care” of their guestswhich includes general security, locks and lighting and security of guest belongings 2. New security measures that have been introduced in recent years include: inroom safes, keyless locks (with magstrips), tighter security at the front desk, redesigned hotels where guests (and others) must pass through the lobby FOOD AND BEVERAGE 1. The food and beverage department can contribute 15 to 20 percent of overall revenue 2. it should be a profit center but does not always make money for the hotel 3. this department is headed up by a food and beverage manager who oversees both frontof thehouse and backofthehouse functions 4. banquets –are often profitable for hotels. Can support meetings and conferences or outside functions 5. some hotels are limiting what they offer and others are outsourcing 6. bars, room service, food production, and stewarding are other areas STAFF AND SUPPORT DEPARMENTS 1. Sales and marketing responsible for “creating customers” largely revolves around selling “blocks” of rooms can be a large department in convention hotels specialized by market 2. accounting role is moving beyond just bookkeeping includes overseeing the “house ledger” and the “city ledger” also, includes the night audit 3. Human resources labor intensive industry requires progressive hr. responsibilities include supporting line departments in all hr. related activities (hiring and recruiting, training, staffing, etc.) 4. Engineering oversees heating, cooling, water, lighting, telecommunications, energy management, electric, other FINANCIAL MANAGEMENT 1. Income and expenses 2. revenue and profit 3. changes in income and expenses over time 4. outsourcing as a strategy to cut costs 5. cost of maintaining a hotel KEY OPERATING RATIOS 1. Occupancy percentage = rooms sold ÷total rooms available example: 500 room hotel sells 300 rooms o 300/500=60% 2. average rate = dollar sales ÷number of rooms sold example: $18,000 in sales o $18000/300=$60 3. Number of guests per occupied room = number of guests ÷number of occupied rooms o 400/300=1.33 4. RevPAR–revenue per available room= rooms revenue ÷available rooms o 18000/200 =90 5. average rooms cleaned per room attendant day= number of rooms occupied ÷number of eighthour shifts o 300/30=10 CAREER ENTRY POINTS 1. Front office, Accounting, sales and marketing, food and beverage Chapter 10 Vocab 1. Rooms Department – Executive house keeper oversees this department 2. Night Auditor – Desk clerk with special accounting responsibilities. 3. Auditing process – Auditor compares the balanced owed to the hotel at the end of yesterday with today’s balance. 4. Property Management System (PMS) – improves operational efficiency by eliminating repetitive tasks and improves service by providing information more quickly and accurately. 5. Support Areas – Departments of a hotel that go into maintaining the different systems of the hotel operations. 6. House ledger – located at the front desk made to keep bills owed by guests. 7. City Ledgers – Charges by guests posted after they have checked out and any charges by others (Restaurants) 8. Capital Costs – Fixed Costs include expenses such as the management fee, property taxes, and other municipal charges and insurance and are a direct function of the cost of the building and its furnishings and fixtures. 9. Uniform System of accounts – Hotel accounting is generally guided by this. Identifies important profit centers as revenue departments. 10. RevPAR – Revenue per available room. Room Revenue divided by available rooms multiplied by AVG room rate. 11. Leverage – refers to the fact that a small amount of an investors capital often comes forth much larger amounts of money lent by banks or insurance companies on a mortgage. 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 MidScale 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
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