Cost Control - Hotels

This query is : Resolved

Report Abuse Follow Query Ask a Query

Querist : Anonymous

Querist : Anonymous (Querist)

01 September 2010 Whar are the cost control measures to be adopted in a Hotel?

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
Follow

01 September 2010 Pls specify which area of hotel like Front Office, F&B, Housekeeping, etc

Querist : Anonymous

Querist : Anonymous (Querist)

01 September 2010 All the areas including the ones mentioned above and energy cost.

Upgrade to CAclubindia Pro. Subscribe Now!

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

01 September 2010 Cost control cannot be suggest in simple way, it needs to analysis the Business nature, expenses nature, past cost behaviourness so you can provide the complete details is very use ful to suggest

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
Follow

02 September 2010 As another expert mentioned this could be a lengthy discussion.

I think, we will have to go area by area. To start with F&B, pls let me know the number of rooms, number of outlets and whether the hotel is following uniform system of accounting or not.

Based on your answer I will reply on F&B Controls.

Querist : Anonymous

Querist : Anonymous (Querist)

02 September 2010 We have a single outlet with 50 rooms.Pls let us know abt F & B and Housekeeping areas.

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
Follow

02 September 2010 This I suppose is a small 3 start hotel. F&B Cost Controls as follows:

1. Establish the standard food cost %. Involve Chef and F&B controller (if you have one). Ideal ratio is 30% of revenue. Chef may have to do the recipe costing to arrive at standard cost of each item sold.
2. Sign annual provisions contract for most of the supplies (veggies, groceries, etc). This will put control on the pricing of inputs. Put a mechanism to automatically highlight when the input prices go up.
3. Close the books daily to arrive at daily food cost. Daily controls are key.
4. Have a sound policy on staff free meals. Eligibility and limits. This can be an area of abuse and senior level management involvement is necessary.
5. Have a sound policy on complementary (govt officials, owners friends, etc). Ensure that this is reported correctly and Top management is aware.
6. Put controls on all exceptions like KoT reversals, Bills prepared and canceled, discounts given due to guest not happy.
7. Have control over open items (items not in menu). How the pricing is charged.

Key - Food Cost % and hold chef responsible for food cost. A similar control can exist in Bar as well (with some modifications)

If you do not have any more questions on F&B, I will move to HK.

Querist : Anonymous

Querist : Anonymous (Querist)

02 September 2010 Yes,pls proceed with Housekeeping.

Upgrade to CAclubindia Pro. Subscribe Now!

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
Follow

04 September 2010 House keeping:

1. Put a house keeping budget in place. Mostly the driver is beds occupied. Your HK component will include toiletries, news paper, or any item that is given to guest to consume.
2. You may also have HK dept consuming items of fixed cost nature (whether the guest stay or not) like cleaning materials. Have a fixed budget on that.
3. Regarding laundry. make sure that laundry runs like an in dependant unit with revenue matches with cost .

Ideally you should not be spending not more than 30 rupees or so per guest per night stayed. Could be less, depending on what you give.

Hope your doubt is clear.