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E-grāmata: Practical Guide to Understanding and Raising Hotel Profitability

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The Practical Guide to Understanding and Raising Hotel Profitability

offers a comprehensive, easy-to-follow breakdown of how to understand profit and loss accounts for hotels. It offers practical advice on how to maximise the profits of this customer-facing business and improve performance results.

Chapters cover every aspect of the profit and loss account including marketing, accommodation, food and beverage sales, quality, budgeting, event sales, and all the corresponding costs involved. It explains all the relevant KPIs and industry quirks within the profit and loss document as well as industry benchmarks to equip the reader with the skills to attend high level meetings, complete finance-based assignments and ultimately run their own business. Valuable tips from leading professionals within the industry are included throughout, giving advice on how to improve hotels’ financial results and positively influence net profit through everyday actions.

Packed full of practical case studies and written in an easy-to-read-style, this book is essential reading for hospitality students and current hospitality and hotel managers.

Recenzijas

A welcome and easy-to-read book to help Hospitality students and hotel management teams become financially literate and understand all aspects of the business. Financial management has never been more important as all costs, especially labour costs, continue to rise. Many hospitality businesses fail due to poor business acumen and lack of experience in improving financial performance. This book includes industry benchmarks to help measure performance and will give you the tools you need to improve the profitability of your business.

Harry Murray, MBE MI FIH, Chairman Lucknam Park Hotel & Spa & President of HOSPA

Understanding profitability and finance is crucial to the success of any hospitality business. As a lecturer and head of a hospitality department in a university for 40 years, this subject was always very difficult to teach to non-financial students. Many students required extra tuition in order to understand the concepts and apply these concepts and theories to real industrial operations. This book will become a very useful resource that will both assist the students learning and aid lecturers in preparing teaching material. I would recommend that this valuable resource become a compulsory text.

Professor David Foskett, MBE CMA FIH BEd (Hons) FRACA HMCGC, David Foskett Associates, Chair of the International Hospitality Council

Strong financial management is such an important part of running a successful hotel and is a skill that many hospitality team members struggle with as they progress into management roles. Adrian has successfully captured the fundamentals of this in his book and communicated them in such a way that both students and professionals at every level can absorb the knowledge and put it into practice. There is something for everyone at every level of hotel management a must-read in my opinion.

Adam Rowledge, GM, Georgian House, Independent Hotelier of the Year 2018

Contributors xv
Note from the series editor xvii
Preface xix
Acknowledgements xxi
1 Understanding and raising profits in hotels
1(8)
1.0 Introduction
1(1)
1.1 What is a profit and loss account?
2(1)
1.2 The different sections of the profit and loss account
3(5)
1.2.1 Revenue
3(1)
1.2.2 Costs of goods sold
4(2)
1.2.3 Expenses
6(2)
1.3 How to improve the Net Profit of a hotel
8(1)
2 Maintaining and improving quality
9(8)
2.0 Introduction
9(1)
2.1 Knowing your product
10(1)
2.2 Picking apart the detail
11(2)
2.3 Finding ways to improve
13(1)
2.4 Improve and Measure
14(3)
3 Marketing and sales
17(12)
3.0 Introduction
17(1)
3.1 Knowing your customer
18(1)
3.2 The dangers of overselling
19(2)
3.3 The sales process
21(8)
4 Budgeting
29(10)
4.0 Introduction
29(1)
4.1 Where budgets come from
30(3)
4.2 How to create a budget
33(3)
4.3 How budgets are developed
36(3)
5 Accommodation sales
39(9)
5.0 Introduction
39(1)
5.1 How to measure performance in room sales
39(3)
5.1.1 Occupancy percentage
40(1)
5.1.2 Average daily rate (ADR)
41(1)
5.1.3 Revenue per available room (RevPAR)
41(1)
5.2 Where the measure comes from
42(2)
5.3 Revenue management
44(2)
5.4 Overbooking
46(2)
6 Food sales
48(10)
Dimitri Lera
6.0 Introduction
48(1)
6.1 Measures
48(3)
6.1.1 Increasing loyalty
49(1)
6.1.2 Alternative payment methods
50(1)
6.1.3 Maximising table turnover rate
50(1)
6.1.4 Enhancing online presence
50(1)
6.2 Upselling and cross-selling
51(1)
6.2.1 What upselling and cross-selling mean
51(1)
6.3 Sales techniques
52(3)
6.3.1 Know the customers
53(1)
6.3.2 Know the dishes
53(1)
6.3.3 Know the drinks
54(1)
6.3.4 Know the extras
55(1)
6.3.5 Know thyself
55(1)
6.4 Oversell
55(1)
6.5 Menu positioning
56(1)
6.6 Conclusion
56(2)
7 Beverage sales
58(12)
Jennifer Kaye
7.0 Introduction
58(1)
7.1 Merchandising, sales and upselling
58(3)
7.2 Factors that can improve beverage revenue
61(2)
7.3 Wastage and stock control
63(1)
7.4 Weights and Measures Act
64(1)
7.5 The Licensing Act 2003
65(5)
8 Event sales
70(11)
Philip Berners
8.0 Introduction
70(1)
8.1 The problem with hotels
70(2)
8.2 Why use hotels for events?
72(1)
8.3 Winning event business into hotels
72(1)
8.4 Pricing
73(4)
8.5 Managing event costs
77(2)
8.6 The one-person management structure
79(2)
9 Accommodation costs
81(7)
9.0 Introduction
81(1)
9.1 Calculating the cost to clean each room
82(1)
9.2 How to reduce the cost of cleaning bedrooms
83(4)
9.3 Impact of savings
87(1)
10 Food costs
88(23)
10.0 Introduction
88(1)
10.1 Calculating the food cost percentage
89(2)
10.2 Calculating the food cost in recipes
91(3)
10.3 How to increase profitability in kitchens
94(17)
10.3.1 Wastage
94(2)
10.3.2 Supplier prices
96(1)
10.3.3 Order and delivery check
97(2)
10.3.4 Menu flexibility and seasonality
99(1)
10.3.5 Forecasting and over-ordering
100(2)
10.3.6 Storage
102(2)
10.3.7 Staff meals
104(1)
10.3.8 Theft
104(3)
10.3.9 Accounting errors
107(2)
10.3.10 Pricing
109(2)
11 Liquor costs
111(12)
11.0 Introduction
111(1)
11.1 Calculating the liquor cost percentage
112(2)
11.2 Calculating the liquor cost in recipes
114(1)
11.3 How to increase profitability in bars
115(8)
11.3.1 Ullage
115(2)
11.3.2 Supplier prices
117(1)
11.3.3 Order and delivery check
117(1)
11.3.4 Theft
118(1)
11.3.5 Accounting errors
119(2)
11.3.6 Pricing
121(2)
12 Payroll costs
123(12)
12.0 Introduction
123(1)
12.1 Calculating the payroll cost percentage
124(1)
12.2 Reducing payroll costs from the turnover of staff
125(1)
12.3 Calculating levels of staff
126(4)
12.4 Calculating what to pay
130(1)
12.5 Training costs
131(1)
12.6 Motivating employees
132(3)
13 Marketing costs
135(6)
13.0 Introduction
135(1)
13.1 Getting the message out in a cost-effective way
135(2)
13.2 To spend on marketing or not to spend?
137(2)
13.3 Social media
139(2)
14 Fixed costs
141(11)
14.0 Introduction
141(1)
14.1 Accounting costs
141(1)
14.2 Depreciation costs
142(1)
14.3 Refurbishment/equipment maintenance
143(2)
14.4 Utilities
145(1)
14.5 Insurance
146(1)
14.6 Online travel agent commission
146(2)
14.7 Tax
148(1)
14.8 Bank charges and interest
149(1)
14.9 Bad debts
150(2)
15 Net profit and EBITDA
152(7)
15.0 Introduction
152(1)
15.1 What is net profit?
153(1)
15.2 How incremental changes to the hotel affect net profit
153(2)
15.3 Ebitda and valuing a business
155(4)
Glossary of terms 159(4)
Index 163
Adrian Martin is Vice Principal of the Edge Hotel School, University of Essex the UKs only Hotel School.
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