Managing food service operations to achieve a specific food cost percentage has long been a fundamental principle of the restaurant business. Management bonuses and other rewards are often based on achieving these predetermined goals. Available tools such as menu engineering and contribution margin, although sound in theory, are not frequently used. Demonstrates the use of menu engineering and contribution margin concepts in terms of customers served. Concludes that the goal of any restaurant should be to apply marketing techniques based on menu engineering and contribution margin concepts in order to achieve the highest possible financial results.
The purpose of this study was to determine what capital budgeting and cost of capital procedures are being used in the food service segment of the hospitality industry and to compare the responses, where possible, with those reported in the previous studies of capital budgeting techniques in the hospitality industry. The most popular primary capital budgeting techniques selected were the sophisticated or discounted cash flow methods, such as net present value and internal rate of return. The payback method was selected as a secondary technique.
The authors identified 12 hotel-management schools that maintain full-service hotels as part of their curriculum and that involve faculty in the oversight of the facility. This study investigated the perceived importance of such "captive hotels" in delivering practical hotel-management education. The authors' study measured perceptions of the importance of practical education and the importance of captive training facilities in developing ten competencies that hotel-management graduates should possess. Those perceptions were gathered from entering hotel-management students, faculty, and corporate recruiters at five schools with captive hotels and five schools without such facilities. All three groups validated the importance of practical work experiences for each of the ten competencies. They agreed that an experiential-learning program is a crucial element of hospitality-management education, but there was less agreement among the groups regarding how essential it is to use a captive training facility to teach those skills.
This is the fourth and final article in a series on how hospitality managers can make more money, with this one geared specifically to food and beverage managers. This article discusses maximizing the profit from existing guests (for example, by upselling appetizers, desserts, and beverages) and expanding beyond the restaurant premises (catering and food delivery, as well as partnerships with businesses and special-event organizations). To maximize revenue, restaurant managers must track menu-items' contribution margins and identify the sales mix. Managers also must control seating among different-size parties during peak periods, to ensure fastest table turns and maximum revenue per party. Moving diners away from their table when they are finished eating is also important. Seating control requires a menu-mix analysis combined with a turnover-time analysis of different party sizes. The key to controlling the seating is understanding demand patterns, including how many parties of various sizes want to eat during each hour and how many were refused or walked away. The only way to accurately ascertain demand patterns-total diners and diners per table-is to keep track of all reservation requests.
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