Professional Documents
Culture Documents
Productivity in Hotels:
Measures of Labour Productivity
Physical Measures
Financial Measures Sales & Payroll
Physical/Financial Measures Sales Per Employee
Productivity Measures Value Added Approach
Some Ways to Higher Productivity
Productivity Standards
Computers in Hotels
Marketing:
From Product to Sales to Marketing
The Marketing Concept
Special Features of Hotel Marketing
The Marketing Cycle
Marketing Resources
Hotels in the Total Tourist Product
Property Ownership & Management:
Property Ownership
Property Operation & Maintenance Energy
Finance & Accounts:
The Hotel Balance Sheet
Balance Sheet Ratios & Analysis
The Hotel Profit & Loss Statement
Profit & Loss Ratios & Analysis
Hotel Operating Profit
Balance Sheet & Profit & Loss Relationships
Liquidity Ratios
The Small Hotel:
Products & Markets
Ownership & Finance
Organisation & Staffing
Accounting & Control
The Future of the Small Hotel
Hotel Groups:
Advantages of Groups
Problems of Groups
Scope for Centralisation
A Concentrated Hotel Group
A Dispersed Hotel Group
International Hotel Operations:
Products
Markets
Cost & Profit Ratios
Ownership & Finance
Organisation & General Approach
Recommended Reading
Reading List
Main Text:
The Business of Hotels (Third Edition) S Medlik (Butterworth/Heineman
Non- Residents
Characteristics
They may be staying at other hotels or accommodation establishments or with friends or
relatives or day visitors to the area or local residents using the hotel restaurants and bars.
They tend to represent important hotel users at mid- day as well as in the evening
particularly at weekends.
Organized Groups
Characteristics
They make advance arrangements for functions at the hotel.
They require separate facilities and organizational arrangements.
They include local clubs, societies, business and professional groups as well as
participants in meetings and conferences originating from outside the area.
SOURCES OF HOTEL DEMAND
To most people, demand for hotel accommodation is a derived demand- that is, few stay or eat in
an hotel for its own sake: their primary reasons for doing so lie in their reasons for visiting an
area or for spending their time there in particular ways.
For many others the use of hotel is a matter of choice; they do so in their pursuit of leisure and
recreation: for them hotel usage involves discretionary use of their time and money.
The main types of hotel generating sources are;
Institutional sources
Recreational sources
Transit sources
Institutional Sources
These include industrial and commercial enterprises, educational institutions, government
establishments and other organizations. They generate demand for hotels through their own
visitors and their requirements for hotels facilities and services.
Recreational sources
Include historical, scenic and other site attractions and event attractions. They generate demand
for hotels from tourists, local events and activities in the social and cultural life of the
community. They generate demand from clubs, societies and other organizations.
Transit sources
This stems from individuals and groups with no intrinsic reason for spending time in particular
locality, other than being on the way somewhere else and the need to break journey.
It is closely related to particular forms of transport, it expresses itself on highways, at ports and
at airports.
HOTEL MARKET AREAS
Main approaches of defining market areas
Reference to the people who buy hotel services
A network of dealings between the hotel and its users. From the above definition, hotel
users may come from within the area, from various parts of the country and from abroad.
This gives rise to local, domestic and foreign markets.
Physical area served by the hotel The area may extend from its immediate vicinity to a
radius of several miles or more for hotel accommodation.
For hotel catering services, the market area depends on market density the availability of
spending power within an area as well as on the accessibility of the hotel to the different sources
of demand and on the availability of other catering services in the area.
HOTEL MARKET SEGMENTATION
This refers to the subdivision of the market based on different criteria. It enables individual
hotels to identify their actual and potential users.
Some Criteria Used in Segmenting Hotel Markets
Products Bought Buyers of accommodation, food, drink and functions.
Accommodation Market holiday, business and other users
Hotel Catering Markets hotel residents, non-residents and functions
Origin of Demand may be classified into institutional, recreational and transit
sources
Needs of hotel Users and the means they have to pay for their satisfaction
Socio-Economic Characteristics this groups people according to their occupation
and employment status, for example;
Social Grade Social Status Head of Household Occupation
A Upper middle class Higher managerial, administrative or
professional
B Middle class Intermediate managerial,
administrative or professional
C1 Lower middle class Supervisory or clerical, and junior
managerial, administrative or
professional
C2 Skilled working class Skilled manual workers
D Working class Semi-and unskilled manual workers
E Those at the lowest State pensioners or widows (no other
level of subsistence earner), casual or lowest grade
workers
HOTEL HOUSEKEEPING
Housekeeping functions
Servicing of guest rooms
Cleaning bedroom floors, staircases, public cloakrooms and other public areas of the
hotel
Other Housekeeping services these may include;
Provision of first aid to guests and staff
Dealing with lost property
Dealing with floral arrangements
ORGANIZATION AND STAFFING
The dimensions and characteristics of each hotel are the main determinants of the organization
and staffing of the accommodation function.
ACCOUNTING AND CONTROL
The financial performance of the hotel accommodation function is reflected in the rooms
department operating statement, which shows the revenue and expenses of the department for a
given period resulting in the departmental profit. These figures may be compared by the budget
or with the same period of the previous year.
FOOD AND DRINK
Introduction
The provision of food and drink in hotels account for a larger proportion of employees than the
provision of sleeping accommodation and related services. This is because;
In contrast to hotel rooms, meals and refreshments in hotels may be supplied to non-residents as
well as to resident guests and include substantial functions sales
The provision of meals and refreshments is relatively labour intensive.
THE FOOD CYCLE
It represents a sequence through which food passes from the supplier to consumer in a hotel.
The cycle consist of several stages, namely; - purchasing, receiving, storing and issuing,
preparing and selling.
Purchasing normally one person has a designated responsibility for food purchases.
The purchasing function includes identifying best sources of supply, making
arrangements with suppliers and placing orders, close liaison with the kitchen and other
user departments regarding requirements, yield and quality, and with the accounts
department regarding payment.
Receiving this entails ensuring that the hotel is being supplied with food of the ordered
quantity and quality at the agreed price, and its transfer to stores or directly to the user
departments. It takes place by comparing delivery notes against orders and by a physical
inspection of the deliveries.
Storing and Issuing consists of maintaining an adequate stock of food for the day-to-
day requirements of the hotel, without loss through spoilage and pilferage and without
capital being tied up unnecessarily through overstocking, and of issues of food to user
departments.
Stocktaking takes place to ascertain the value of stocks held in order to determine the food costs
for a given period and stock values for accounts purposes.
Preparing/Food production it represents the conversion of the purchased foods by
chefs and cooks into dishes and meals.
Main Aspects of Food production
Volume forecasting it seeks to predict the number of meals and of particular items
of the menu to be served in each outlet of the hotel each day
Yields postulate the quantity obtained from items of food after their preparation and
cooking
Recipes give the formulae for producing particular dishes, including the quantities
and qualities of ingredients and the method of preparation used
Portions represent the size or weight of food served to customers
Selling it consists of the service of particular foods, dishes and meals by various
categories of food service staff to the customer in a restaurant or another hotel facility at
particular prices.
Main Aspects of Selling
Menu
Form of service
Physical environment and atmosphere
Menu - The main types are two, namely; table dhtel and a la carte
Table dhtel menu is a limited choice menu with a single price for any combination of items
chosen or with a price determined by the choice of the main dish
A la carte menu provides a choice of items, each of which is priced separately
Forms/levels of service
Self-service the customer orders and collects the food from a counter and takes it to a table
where he/she consumes it
Counter service the customer is presented with the food he/she has ordered and consumes it at
the counter
Table service the customer is served by a waiter or waitress who takes the order and serves the
meal at the table
Physical environment and atmosphere
This include; the shape and size of the room, the design and dcor, the type and layout of seating,
the lighting, temperature, noise level, cleanliness and comfort, the age, appearance and dress of
the staff and guests.
The food cycle
Selling
Preparing
Storing & Issuing
Receiving
Purchasing
Main characteristics
Customers are organized groups such as clubs
The organized groups make arrangements for dates and times, numbers attending, menus
and other requirements for each occasion, in advance
Each occasion can be treated as a separate operation planned and organized as such
Normally the same agreed menu is served to all participants
The operation usually takes place in separate rooms and is served by staff who are
distinct from those serving others in restaurants and bars, although they may be
interchangeable between these facilities
Main Records Used
A function agreement it summarizes the arrangements for each function
A function diary it lists details of all functions in date order
A function chart it provides a visual record of all functions arranged for a period ahead
N/B: The volume of identical meals prepared and served together enables higher profit margins
to be achieved from functions than from other food and beverage activities, and functions often
represent the second most profitable hotel product, after rooms.
FOOD AND BEVERAGE SUPPORT SERVICES
Kitchen
Stores
Kitchen
The numbers and size of kitchens in an hotel depend on the scale and diversity of the food
operations as well as the operating preferences and philosophies of hotel management.
Kitchen services may be provided in any of the following ways;
One centralized kitchen supplying food to all restaurants
Individual kitchens serving particular outlets
Stores
Basic types of food and beverage stores
Food stores these are sub-divided into;
Dry stores
Perishable stores
Cold rooms
Beverage stores or cellar
Linen, china, glass and silver stores
ROOMS
The accommodation function of the hotel is described in terms of reception, uniformed services
and housekeeping
Typical Organisational Approaches
All the three activities operate as separate departments with their own heads of
departments
Reception and uniformed services are grouped together as the front hall or front house of
the hotel under an assistant manager for whom this is the sole or main responsibility
Reception or uniformed services are grouped together as front hall or front house
department with its own head of department
All the three activities are grouped together as the rooms department under an assistant
manager for whom this is the soul or main responsibility
All three activities are grouped together as rooms department with its own head of
department
Some Activities Connected with Rooms
In most hotels advance reservations form an integral part of hotel reception and the same
employees deal with them and with other reception tasks.
In smaller hotels guest accounts are normally handled by bookkeeper/receptionists
however, this is an extension of the accounting function.
In some hotels room service is provided by housekeeping staff, though this function is
clearly part of the food and beverage function of the hotel.
FOOD AND BEVERAGES
Food and beverage function of the hotel is described in terms of the food and beverage cycle, the
main sales outlets, and the related support services.
Typical Organisational Approaches
Each sales outlet and supporting service operates as a separate department with its own
head of department
Several departments are grouped together under an assistant manager for whom they
represent the sole or main responsibility eg purchasing and storage bar etc
Several of these departments are grouped together as one department under its own head
of department
All food and beverage activities are grouped together under an assistant manager from
whom they represent the sole or main responsibility
All food and beverage activities are grouped together as a food and beverage department
with its own head of department
Aspects of Food and Beverage Function
Most hotels have facilities serving both food and beverages although in some of them
food or beverages may predominate.
Food and beverage control based on the food and beverage cycles may be appropriately
seen as part of the total accounting function of the hotel
Where there is a separate sales department, food and beverage sales are usually closely
monitored by that department.
HR Manager (a)
Each hotel
Head office
ORGANIZATION OF TRAINING
The main aims of training are to;
To Improve employees knowledge, skills and attitude to work
Improve output and sales
Improve recruitment
Increase employees loyalty
Improve the image of the company in the outside world
Reduce breakages, waste of materials and misuse of equipment
Reduce accidents
Reduce absenteeism
Reduce labour turnover
Reduce stress on management
FUNCTIONS OF THE TRAINING DIVISION
Main Functions of the Training Division
Formulate a training policy for the approval of the general manager and the board to keep
them regularly informed of its implementation
To prepare an annual budget for the approval of the general manager and the board to
report regularly to them on income and expenditure
To identify quantitatively and qualitatively the training requirements for all grades and
categories of employees and keep them under review
To maintain close liaison with educational institutions and training centres, asses the
appropriateness of their facilities and services for the training requirements of the
company and to arrange for new courses
To establish and operate induction, orientation, refresher and other appropriate courses
for different grades and categories of company employees as necessary and to make
arrangements for their attendance
To co-operate with appropriate staff of the human resource management and supervisory
staff and those suitable for developing into such positions for systematic development of
existing new managers and supervisors
To establish and administer training schemes for all grades and categories of employment
To maintain adequate premises for purposes of training administration and instruction
To maintain all necessary procedures for training within the company
To represent the company in all natters concerned with training both within and outside
the company and advice the general manager and the board on all such matters
PERFORMANCE IN HOTELS
Introduction
Performance of hotels reflects their success in a range of areas. Success in performance is
necessary for any hotel to survive and prosper, often in an increasingly competitive environment.
Success enable the hotel to earn the revenue required to pay its debts, reward its staff and make a
profit to give a suitable rate of return for its owners or investors.
Some Criteria of Measuring Performance
The hotel can be regarded as a systems model which takes in inputs that lead to desirable
outputs.
Revenue
Job satisfaction
Fed & rested customers
Return on investment
Wages & salaries
Costs
Employees
Tired & Hungry Customers
Capital
Time & effort
INPUTS OUTPUTS
The effort, time and capital that is put into a business can lead to outputs of job satisfaction,
wages and salaries for staff and return on investment for owners.
The hotel system can input tired and hungry customers and output those whose needs are
satisfied by the services provided by the hotel.
Performance is the relationship between the inputs and output of an hotel, Including tangible
goods and intangible services. Tangible goods include food and drink to be consumed by the
customer, while the services produced by a hotel are less tangible and are often judged
subjectively by the customer.
Integrating the Tangible and Intangible Measures
Since the running of an hotel nowadays is such a complex activity, managers need to be able to
monitor the business from a number of perspectives such as;
Financial perspective
Internal business perspective
Innovation and learning perspective
Customer perspective
Financial perspective
Customer perspective
FINANCIAL PERSPECTIVE
It deals with how the hotel looks to shareholders.
In order to succeed hotels must generate outputs that can be measured in terms of profitability,
growth and shareholder value.
Because the fixed costs of hotels are usually high, it is important that sales and revenue (outputs)
are maximizes and costs (inputs) are minimized.
Measures of labour productivity
These relate output to labour input. The main types are;
Physical measures these relate physical units of output to numbers employed or hours
worked.
Financial measures relate output measured in financial terms to pay roll
Physical/financial measures relate output measured in financial terms to numbers
employed or hours worked.
Also productivity may be measured by considering the number of employees per bedroom
INTERNAL BUSINESS PERSPECTIVE
These include activities and processes in which the hotel must excel in order to be successful,
such as:
Management of the property, people and planning for the future. Hotel management is
an important activity and a determinant of the success of the hotel.
Operations the day-to-day running of the business that is central to the way that hotels
run. The operational day often runs from check-in time to check-out time on the
following morning.
Systems these the internal processes that ensure that, for example, information is sent to
the right department.
Information all hotels need to keep records about, for example, customers and finance.
Communication managers and staff need to work together to satisfy customers, so
there is a constant need to communicate effectively.
MARKETING
FROM PRODUCTION TO SALES TO MARKETING
Consumer markets have evolved through several phases, namely;
First Phase (Production Phase)
Main Characteristics
Shortage of available goods and services when demand exceeds supply
There is no sales problem
What is produced can be sold
The major problem is to increase output
It leads to a sellers market and a production orientation on the part of the seller
Second Phase (Sales Phase)
Main Characteristics
There are higher real incomes
Increase in purchasing power
Greater supply that exceeds demand leading to a buyers market and a sales orientation
on the part of the seller
Third Phase (Marketing Phase)
Main Characteristics
There is growth in capacity and output accompanied by a further growth in incomes
leading to the affluent society.
It leads to a realization of the need for goods and services to be produced to match
consumers needs
It gives rise to a buyers market and a marketing orientation
THE MARKETING CONCEPT
MARKETING - According to the British Chartered Institute of Marketing, it refers;
The management function which organizes and directs all those business activities involved in
assessing and converting customer purchasing power into effective demand for a specific product
or service and in moving the product or service to the final customer or user so as to achieve the
profit target or other objectives set by the company.
Marketing is based on the belief that sustainable profitability can only be achieved by
identifying, anticipating and satisfying customer needs and desires.
Differences between Marketing and Selling
Selling focuses on the needs of the sellers while marketing on the needs of the buyers
Selling is pre-occupied with the sellers need to convert his products into cash while
marketing with the idea of satisfying the needs of the customers by means of the product
SPECIAL FEATURES OF HOTEL MARKETING
The demand of hotel products is a derived demand the reason for a guest stay at the
hotel may be a business visit or holiday but rarely the room itself
The hotel room is fixed in time and place in the short run the number of rooms or
beds on offer cannot be significantly changed and location is part of the highly
perishable product
Hotel investment is primarily an investment in land and buildings and interior assets.
The critical factors to a successful hotel operation are:
The right location
Correct capacity
High level of utilization
In the reception of an hotel, marketing can contribute first through a market feasibility
study to assess the demand a study may identify the best market opportunity for an
hotel , a gap in the market, a location or choice between alternative location for a
particular hotel concept; or given a particular location a study can determine the most
appropriate hotel concept
In planning a new hotel, there is full scope for adherence to the marketing concept
from the outset
In the short run, the existing facilities and services are given within narrow limits
Hotel services are less tangible and therefore they cannot be tried out before purchase.
They are often bought individually or as part of a package, and they may be bought
directly by the user or through an intermediary such as a travel
The Marketing Cycle
Market Research
Selling Promotion
Market Research
This is concerned with providing the management with information about market and product in
such a way as to contribute to systematic decision making.
Quality Management
This is a systematic process that consists of several stages, namely;
Determining the guests requirements
Designing hotel facilities and services to meet the guests requirements
Operating the hotel in conformity with the established standards
Monitoring the guest satisfaction
HOTELS IN THE TOTAL TOURIST PRODUCT
More often than not hotel accommodation and other hotel products are parts of the total tourist
products, which covers, from the point of view of the tourist, the whole experience from the time
s/he leaves home to the time they return.
In inclusive tours the tour operator or another organizer brings together all the elements of a
holiday which the operator promotes and offers for sale as a single product at one inclusive price.
This has important implications for hotel marketing, increasingly, hotel beds and other facilities
and services cannot be successful if marked in isolation.
Main Types of Co-ordination required for effective marketing in travelling and tourism
At the destination It is the role of the official tourist organization to formulate and
develop tourist products based on the destination and to promote them in appropriate
markets
At the generating end It is the role of tour operators to assemble component services
into packages and to promote them and sell them as a single product
It is the role of individual operators to formulate, develop and supply their products as
parts of a total tourist products
FACILITIES MANAGEMENT
Most hotels concentrate on what they do best and outsource other non-core activities to it. This is
done to achieve cost effectiveness in operations
Some non-core activities include; cleaning, laundry, waste collection, ground maintenance, re-
decoration, minor repairs, heating and electrical matters, swimming pool maintenance etc
ENERGY
Energy costs include;
Cost of electricity
Cost of gas
Cost of oil
Cost of steam
Cost of water
Cost of other fuels
NOTE: Energy costs may be affected by climate in the following ways;
In warmer climates energy costs account for the higher proportion of the hotel
revenue to air condition the rooms in first class hotels
In cold climates heating represents the major parts of energy consumption
HOTELS AND THE ENVIRONMENT
The major environmental problems in this century are;
Global warming
Ozone layer depletion
Acid rain
Land pollution
Pollution of water and other natural resources
Hotels should therefore use energy and other resources responsibly and control consumption as a
social responsibility as well as good business
In hospitality and tourism this can be best achieved by acknowledging the importance of
sustainable development and eco-tourism.
FINANCE AND ACCOUNTS
Introduction
The major accounting statements include;
The balance sheet it shows the financial position of a business at a particular time eg, at the
end of the year
The profit and loss accounts (Income Statements) It shows the revenue and the costs and
expenses incurred in earning that revenue for a given period such as a week, a month or a year
Main Users of Accounting Information
Owners and long-term lenders
Short-term lenders and trade creditors
Management
Owners and Long-term lenders they are interested in the sustained profitability of
the hotel. Their focus is on the return on investment, which indicates the use the
business makes of its assets, and at the relationship between owners capital and
loans.
Short-term and Long-term lenders They take a more limited view and wish to be
particularly satisfied that the hotel can meet its current obligation
Management has responsibilities to investors and to both long-term and short-term
creditors. Are also concerned with planning and day-to-day control of the business.
THE HOTEL BALANCE SHEET (STATEMENT OF FINANCIAL POSITION)
This may either be presented horizontally or vertically.
Major sections of the balance sheet
Assets
Liabilities
Capital (equity)
HOTEL GROUPS
Introduction
The independent owned hotel may be the dominant firm in the industry, but the growth of the
industry has been increasingly associated with hotel groups. The increase in the size of hotel
firms has come about by firms building or acquiring hotels in different locations and placing
them under central management.
HOTEL GROUP OPERATIONS
The Main ways of Operating Hotels as groups are:
A group operating hotels owned by them or leased by them from their owners to whom
they pay a rental
Groups may manage hotels as agents for the owners under management contracts
Group may operate under franchise agreements
ADVANTAGES OF GROUPS
The advantages that may accrue to hotel groups are resulting advantages of size, ie, economies of
scale. These include;
Financial Economies this is the ability of the group to marshal capital resources from its own
cash flow and from external sources. A group may be able to borrow from lending institutions
and to do so on favourable terms because it is big and because its hotels provide a good security
to its lenders.
Marketing Economies because of its size a group can enjoy marketing economies. It can
create a group image in the market, which may extend to a common name, facilities and
standards throughout the group, and it can engage in promoting its hotels together.
Economies of Buying an hotel group has open to it economies of buying because it can buy in
bulk and negotiate advantageous prices and terms with its suppliers of a wide of goods and
services on behalf of the whole group.
Managerial Economies - a group can attract high-quality staff through the prospects it can offer
within the group and the availability of training schemes, and benefit from an interchange of staff
between its hotels. It can also provide centralized services to its hotels and in these it can employ
specialists with the time and skill to exploit the advantages of group operation in such areas as
finance, personnel, purchasing and marketing.
Technical Economies - when the hotels are concentrated geographically within a limited area,
the volume of business may then make it possible to concentrate such operating facilities as
central food production, maintenance and laundry, when reduction in unit costs may be achieved
as compared with providing the facilities in individual hotels.
Economies of risk spreading these enable groups to reduce risk by product and geographical
diversification. A decline in demand for a particular hotel may be offset by a high volume of
business in another hotel, and thus even out the fluctuations for the group as a whole.
Some Sources of economies of Scale
The weight the group has in the markets
From providing certain services to its hotels
From operating them as a group
PROBLEMS OF GROUPS
The major problems are those of;
Communication
Control
Costs
Communication in order for a group to operate well, the centre has to communicate policies,
procedures and other matters to individual hotels which in turn have to communicate
information, requests and other matters to the centre.
Control whatever the degree of central direction and monitoring of individual units, there is a
need for some control to be exercised over the conduct of the hotels, to ensure group decisions
being carried out and the accountability of individual hotels for their performance.
Costs a group operation gives rise to its own costs, through the need for communication and
control, and through the provision of central services to hotels.
Factors affecting the extent of the above problems
The number of hotels in the group
Geographical dispersal of the hotel
The extent to which the various aspects of the group operation are centralized
SCOPE OF CENTRALIZATION
A group management may adopt a mainly passive ownership role. In order to obtain the
advantages of group operation, a more positive group management approach is necessary. The
group management has to formulate the objectives, policy and operational guidelines, evolve
strategies and plan on behalf of the group.
The major issue for an hotel group is how much to centralize
The Principal Functions that offer scope for Centralization
Accounting and finance
Human resource services
Purchasing
Sales and marketing
Technical services
Accounting and Finance such aspects such as preparation of final accounts for the group,
capital accounts, cash management and detailed analysis of the financial performance of each
hotel.
Human resource service this is concerned with staffing levels, salary and wage structure,
employee records. It normally deals with recruitment, selection and placement, sometimes for all
employees, sometimes only with particular grades and categories, and others are recruited and
engaged locally.
Purchasing substantial economies may be achieved by centralized purchasing. This may be
done in the following ways:
When the hotels are located in a limited area, supplies are bought for central stores from which
they are distributed to a hotel
Orders may be placed centrally against requisitions by hotels and delivered directly to hotels.
Orders may be placed by individual hotels against centrally negotiated contracts, with nominated
suppliers to deliver directly to the hotels.
Sales and Marketing all or some publicity, advertising and direct sales promotion may be
centralized, to project the desired image of the group and to generate sales, particularly from
large hotel users.
Other Operations these may be services carried out individual hotels, or obtained from
specialist suppliers, or provided to hotels in a group as a central facility, if their volume is large
enough and if the hotels are close enough to be served centrally.
During a worldwide credit crunch, the hotel and catering industry will continue to make a
significant contribution to the economic and financial stability of a country.
a) Explain how hotels are influential in EACH of the following aspects:
i employers of labour
ii outlets of products of industries not related to food and beverage production [8]
b) Describe how the characteristics of a resort hotel may differ from a city hotel in EACH of
the following features:
i location
ii purpose of visit
iii length of stay
iv range of facilities and services [12]
A number of countries has suffered from a lack of tourism during recent economic
restraint. Examine the role to the economy that the hotel and catering industry plays in
EACH of the following areas:
a) provision of outlets for the products of other industries
b) attracting visitors to the area
c) provision of facilities
d) employers of labour
e) provision of amenities for local residents [20]
Whenever visitors stay in an hotel, they will use the services of the restaurants and bars
depending upon their perceived needs.
a) Describe the needs that EACH of the following categories of customers may have on the services pro
i organised groups [4]
ii non-residents [3]
iii residents [3]
b) Compare and contrast characteristics that will distinguish between the following
types of hotel guest:
i holiday user [3]
ii business user [3]
iii other user [4]
The main purpose of the visit to a particular hotel will determine the extent to which a
guest will use hotel accommodation and services.
a) Examine the distinguishing characteristics of the main types of client that will make up
an hotels accommodation market. [10]
b) The use of hotels frequently represents derived demand, as guests rarely stay or eat in an hotel for its own
Persons who are influential in the functioning of an hotel will have a different priority
towards the operation of the establishment, depending upon their individual involvement.
a) Discuss the interests of EACH of the following categories of person:
i owner
ii employee
iii customer [15]
b) Sectional policies will provide guidance for management decisions and actions.
Explain aspects that a shareholder policy should be expected to define. [5]
The operational success of an hotel will be influenced by a policy that is based on
management objectives specified within sectional policies. Discuss objectives you would
expect to find in the following sectional policies:
a) Customer
b) Supplier
c) Shareholder
d) Employer [20]
Commencing from the time that an enquiry is received through to departure, the progress
of an hotel guest will be recorded whenever an activity takes place.
a) Examine FIVE records that an hotel front office will maintain during a guests stay,
identifying information that is held on each record [10]
b) Throughout a guests stay, the hotel front office will usually be the prime source of
information. Discuss what information the guest can expect staff to provide. [5]
c) Hotel guests may spend up to one-third of their stay in their room. Describe
characteristics of an hotel bedroom that will influence customer satisfaction. [5]
Although the sale of rooms is usually the biggest income provider in an hotel, a range of
services and facilities is usually offered to maximise sales.
a) Differentiate between TWO activities that will increase earnings through the sales of
rooms in an hotel. [10]
b) Explain how the atmosphere in an hotel dining room may be changed. [10]
Front office staff will be aware that a room reservation is a legal contract between a hotel
guest and the hotel, and it is important that details of the transaction are recorded.
a) Explain what information is recorded on EACH of the following front office
documents:
i guest list
ii room status board
iii hotel
iv daily arrival list
v reservation chart
vi reservation form [18]
b) Determine which of the records listed above is complementary to the distribution of
guests incoming mail. [2]
The food and drink service is the second major activity of most hotels.
a) Explain how an la carte menu will differ from a table dhte menu. [6]
b) Identify THREE different levels of food service, and describe the unique characteristics
of EACH type of service. [9]
c) Discuss why the control of food costs is more complex than the control of beverage costs.
The food and beverage operation in an hotel follows a sequence of progressive stages.
Examine activities that take place in relation to food and beverage operations at EACH of
the following stages:
a) purchasing
b) receiving
c) storing and issuing
d) preparing [20]
Budget hotels may offer accommodation only, but the supply of food and drink is a
significant activity in most hotels and will frequently attract visitors, some of whom will
reserve accommodation as well.
a) Discuss how banqueting will differ from other aspects of a food and beverage
operation. [10]
b) Outline the advantages and disadvantages of having one central kitchen in an hotel. [10]
Hotels that encourage group bookings will obtain a significant source of their revenue
from organised activities.
a) Indicate how banqueting and conferences are frequently a separate and distinct sector of the food and
b) Describe how the use of a function diary will differ from that of a functions chart. [5]
c) Specify reasons why the profit gained from a function is usually higher than that
gained from other food and beverage activities. [5]
In addition to accommodation, food and drink, overnight guests will make demands on
hotel services according to their needs.
a) Discuss extra services that may be provided for a guest that will generate additional
income for an hotel. [10]
b) Identify support service departments in an hotel, and explain the specialist activities that
may be provided by EACH of them. [10]
The efficient operation of an hotel is influenced by the successful manner in which
management is able to organise the various departments.
a) Compile an organisation chart for a large hotel, identifying departments and levels of
management, and indicating the span of control in EACH department. [15]
b) State ONE advantage and ONE disadvantage in the use of an organisation chart. [5]
Managers who analyse weekly sales will identify the sources of hotel income and take
suitable action to maximise expenditure across all departments.
a) Examine activities that may be classified within EACH of the following operations:
i primary revenue-earning departments
ii ancillary revenue-earning departments
iii support service departments [15]
b) Specify the type of services that may be operated under rental and concession
arrangements within an hotel [5]
Hotel companies with a successful human resource department are organisations that
have a tendency to accomplish more than their rivals.
a) Describe activities that may be carried out by the human resources, or personnel,
department in an hotel [10]
b) Explain how the size, age and layout of an hotel will be influential on the numbers of
staff employed there. [10]
Training of staff is usually a dedicated section of the human resource department of an
hotel.
a) Identify principal activities of a training manager in an hotel. [10]
b) Discuss the benefits to an hotel of implementing training. [10]
During economic constraint, an hotel will depend on effective marketing to fill rooms.
Examine activities that will be carried out at EACH of the following stages of the
marketing cycle:
a) Market research
b) Product formulation and development
c) Promotion
d) Selling
e) Monitoring and review [20]
The ability to reduce costs without a compromise of standards will enable hotel and
catering managers to improve profit margins. Examine how variable costs may be
decreased. [20]
High-performance hotels have regular training sessions to improve the efficiency and
raise the standards of their staff.
a) Examine the ways in which training will be of benefit to an hotels operation. [15]
b) Discuss how an hotel manager may develop the quality of existing staff, and thereby
increase sales revenue. [5]
The type of holiday package chosen by a traveller will have been selected from a range of
information received.
a) Explain how the role of the official tourist organisation will differ from that of the tour
operator. [10]
b) Hotel products are brought to the attention of the tourist through marketing promotions.
Discuss various methods that may be used to develop the promotional mix. [10]
The role of a facilities manager embraces the care and maintenance of an hotel.
a) Specify the categories of costs that may be included under Property Operation and
Maintenance costs [10]
b) Discuss, with reasons, main factors that will affect these costs. [6]
c) Explain how energy costs will be influenced by climate. [4]
The role of a manager in the hotel and catering industry will benefit from a greater
understanding of the financial situation of the establishment.
a) Define the following financial terms:
i current assets
ii current liabilities
iii equity
iv fixed assets
v gross profit [15]
b) Describe how an hotel manager may calculate whether a particular food item is being
overstocked. [5]
The financial performance of an hotel is reflected in just two key statements the balance
sheet and the profit and loss statement.
a) Examine information that a profit and loss statement may contain. [10]
b) Discuss who will benefit from receiving a copy of the latest profit and loss statement. [5]
c) Compare the frequencies with which a profit and loss statement may be prepared to
the frequency with which a balance sheet may be prepared. [5]
Companies owning hotels regularly review their portfolios and ownership of hotels
changes whenever a smaller company is incorporated into a larger group. Examine issues
that an hotel group will need to consider in order to remain successful in a competitive
market. [20]
The number of hotels owned by national companies is steadily increasing whilst the
number of privately owned hotels is diminishing.
a) Explain how the administration of an hotel managed under a management contract differs
from an hotel operated under a franchise agreement. [5]
b) Examine advantages that an hotel group can expect as a result of its larger size. [15]
In times of economic constraint, the challenge for any hotel group is to remain
competitive. Examine issues that an hotel group will need to consider in order to remain
successful in a competitive market. [20]