Chapter 8: Food and Beverage

Similarities: Hotel & Restaurant Foodservices Planning issues Plan by focus on menu Menu impacts operational factors Menu focus on guests’ wants, needs & preferences layout / equipment labor for production, service & clean-up F&B products for purchase Financial concerns All foodservice operations must assess financial status Operating budget income statement / balance sheet / cash flow statement Necessity for standard operating procedures Purchasing / receiving / storing / issuing / pre-preparation / preparation / serving / service Marketing concerns Repeat business important to financial success Emphasis on consumers Cost control procedures Stress that basic principles for planning, for managing financial resources, for implementing marketing efforts, and for controlling costs are similar in all hospitality segments. Review terms, “commercial foodservice operations” and “institutional foodservice operations” and their target audiences, when discussing “emphasis on consumers.” Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Standard Operating Procedures: Cycle of F&B Product Control Step 1: Purchasing Step 2: Receiving Step 3: Storing Step 4: Issuing Step 5: Pre-Preparation Step 6: Preparation Step 7: Serving Step 8: Service Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Cycle of F&B Product Control (continued…) Develop purchase specification Supplier selection Purchasing correct quantities No collusion between property and supplier Evaluation of purchasing process Step 1: Purchasing Development of receiving procedures Completion of necessary receiving reports (e.g., addressing financial and security concerns) Step 2: Receiving Effective use of perpetual & physical inventory systems Control of product quality Securing products from theft Location of products within storage areas Step 3: Storing Purchasing: describe the purposes of documenting purchase specifications: they provide detailed descriptions of desirable quality, size and weight for a particular item. In addition, the standardized purchase specification format includes usage of product, product test procedures and special instructions and requirements. Receiving: Provide examples of financial and security concerns in receiving Storing: For a perpetual inventory system, keep a running balance of the quantity of stored products by recording all newly purchased items as they enter storage areas and all quantities issued from storage to production areas; in a physical inventory system, physically count stored products periodically. Product rotation concerns Matching issues (issue & usage) Purchasing as inventory is depleted Step 4: Issuing Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Cycle of F&B Product Control (continued…) Step 5: Pre-Preparation Mise-en-place Minimizing food waste / maximizing nutrient retention Use of standardized recipes Use of portion control Requirements for food and employee safety Step 6: Preparation Timing of incoming F&B orders Portion control Revenue management concerns Step 7: Serving Pre-Preparation: Mise-en-place means “everything in its place” and “getting ready for service.” Define serving and service (serving is the process moving products from products personnel to service personnel; service is the process moving products from service personnel to the guests). Revenue control concerns Serving alcoholic beverage responsibly Sanitation and cleanliness F&B server productivity Step 8: Service Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Personnel Requirement Similarities: Hotel & Restaurant Foodservices Practice of empowerment Transferring some decision-making responsibility and power to front-line employees Enhancing service to guests and increasing profits for the organization  To meet unanticipated guest needs effectively Staff must be trained in standardized procedures. Managers must provide clear direction to employees. Managers must provide necessary resources.   Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Profitability Differences: Hotel & Restaurant Foodservices Profitability = Revenue - Expenses Profit amounts generated by restaurant F & B is relatively easy to calculate. The process of allocating revenues and expenses applicable to F & B services in a hotel is more difficult. Costs of F & B sales is generally higher in a restaurant than in hotel. Define allocation as the process of spreading costs between two or more profit centers to more accurately identify each department’s profitability. Discuss Question 2 in “Issues at Work” (Chapter 8) to explain the process of allocating revenues / expenses between departments in hotels. The text (Figure 8.2) discusses why costs for products and labor differ between restaurant and hotel F & B. Hotel’s “bottom line” profit from F & B sales is likely to be lower than a restaurant’s. Payroll costs (or fixed labor costs) are higher than in a restaurant. Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Marketing-related Differences: Hotel & Restaurant Foodservices Location within the community Restaurants: locations easily accessible to potential guests Hotels: locations most accessible to guests desiring lodging accommodations Location within a hotel Restaurants: locations easily accessible to potential guests Hotels: locations most accessible to guests desiring lodging accommodations Menu For hotels, F& B service is viewed as an amenity or secondary (sale of guestrooms is primary objective) Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Room Service Operations: Profitability Concerns Why lose money? Relatively few properties generate profits from room service Very high labor costs High expenses incurred for capital costs - delivery carts / warming devices Why offered? Service to guests Impacts hotel rating - some guests select hotels based on room service availability Hospitality suite business involves providing food and beverage service during conventions / conferences; hosted events are functions served by a hotel which are complementary for invited guests. High expenses incurred for capital costs - Delivery carts / warming devices Offer hospitality suite business Provide hosted events How to offset losses? Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Room Service Operations: Menu Planning Factors Quality Concerns Less likely to oversee room service food quality Must offer products maintaining quality during holding and transportation to guest room (example: problems with omelet & French fries) Cross-Selling Advertising availability of other hotel services - dinner menu providing info about Sunday brunch Discuss issue of the prompt removal of soiled room service items, and how to design procedures for this operating challenge; use the first case study to facilitate discussion with students. Menu Language Language barriers for international guests - uses of pictures and multi-lingual menu descriptions Clearly state ordering-requirements - minimum order charges / mandatory tipping policies Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Room Service Operations: Operating Issues An inaccurate room service order cannot be corrected quickly. A minor problem in room service may impact guest’s perceptions about the entire lodging experience. Communication Guest placing order / order taker / room service production-service staff / room service staff Abbreviations should be clearly understood by order taker and food production staff Technology Improving the accuracy of room service orders electronic cash register (ECR) / point-of-sale terminal / remote printer Ask students about “upselling techniques” they have used in any segments of food and beverage service; then discuss how those techniques can be applied in room service. Upselling Technique Opportunities for upselling are overlooked Upselling increases guest check average Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Room Service Operations: Within-Room Service Training issues for room service attendants Explaining procedures to retrieve room service items Asking guests where room service meal should be set up Presenting guest check and securing payment Opening wine bottles (where applicable) Question 4 in “Issues at Work” (Chapter 8) addresses special training that a room service attendant needs to become an efficient dining room server. Providing an attitude of genuine hospitality Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Banquet Operations: Profit Opportunities Well-planned banquets can be profitable! Banquet menu has higher contribution margin. - banquets frequently celebrate special events Forecasting & planning production, service and labor are relatively easy. - formal guarantee is made - less likelihood of overproduction of food with subsequent waste Beverage sales from hosted or cash bars increase profit. - capable of increasing alcoholic beverage sales Question 5 in “Issue at Work” (Chapter 8) addresses communication problems applicable to planning and delivery of banquets. Stress that coordination between banquet chef and banquet manager, between production staff and service staff, between sales / marketing department and the banquet department is critical to success. Distinguish between hosted bars and cash bars. Market share is the percentage of the entire volume of business of a specific type which the hotel enjoys. Increasing market share of the community’s banquet business Increasing property’s profitability Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Banquet Operations: Menu Planning Factors / concerns for planning banquet menus Guest preferences Ability to deliver desired quality products Availability of ingredients required to produce the menu Production / service staff with appropriate skills Equipment / layout / facility design issues Nutrition issues Discuss the use of a banquet event order, and how this helps the banquet planning process; show an example of a banquet event order either from text (Figure 8.6) or from other resources. Sanitation issues Peak volume production / operating concerns Ability to generate required profit levels Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Banquet Operations: Service Styles Butler service Appetizers and pre-poured champagnes can be served by service staff at a reception while guests stand. Buffet service Quantities of food are pre-arranged on a self-service line; guests pass along the line and help themselves Family style (English style) Platters and bowls of food are filled in the kitchen and brought to guests’ tables French service Meals are prepared or finished at tableside by service staff: (e.g., tossing Caesar salad / flambéing entrée) Each service style varies uniquely in terms of required staff skills, costs, elegance, needed equipment, etc. Discuss advantages / disadvantages associated with each service style. (For example, for English service, the portion control procedures can be challenging. Although Russian and French service styles offer elegance, well-trained service employees and specialized equipment are needed, which increases costs. On the other hand, American service style involves low equipment- and labor- costs.) Platter service Production staff plate food in the kitchen; service staff bring it to the table to place individual portions on guests’ plates Plated service (American service) Production staff pre-portion food on plates in kitchen; service staff serve to guests Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Banquet Operations: Beverage Functions Various ways to charge for beverage Individual drink price Collecting cash or a ticket when each drink is sold Bottle charge Charging on a by-bottle basis for each bottle consumed / opened Per-person charge Charging a specific price for beverages based on attendance at the event Hourly charge Define the terms “Call brand beverages,” “Premium brand beverage”, and “House brand beverage.” Charging the host a specific price for each hour of beverage service Specific per- event charge Using hours of beverage service; charging number of drinks / hour X number of guests Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Banquet Operations: Banquet Room Set-Up Size Timing Determined by : number of expected guests local fire safety codes / ordinances types and sizes of tables, chairs, other equipment number of seats per table required space for aisles, dance floors, band stands, other entertainment, head tables, etc. reception / buffet tables Becomes critical when: the same room to be used same day for different functions when large evening event precedes following day’s large breakfast event in same room Two critical concerns Many factors should be considered in banquet room set-up. A key aspect of the space issue is that banquet managers / planners should consider easy accessibility for both guests and service personnel. Stress the importance of considering the size of the banquet space and implementation of service styles when booking events. Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Banquet Operations: Banquet Contracts & Billing Policies Topics in banquet contract Last date that banquet space will be held without signed contract Time by when a guarantee of attendance must be received Cancellation policies Guarantee reduction policy Show students a sample copy of a banquet contract while discussing topics commonly listed in the banquet contract. Explain how fees are assessed when the banquet contract is canceled and how the guarantee reduction policy works. Billing: amount & schedule for guest payment Information about service of alcoholic beverages Other information applicable to specific event Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

Alcoholic Beverage Service in Hotels Good training protects guests, public and hotel from tragedies and lawsuits Responsible service & consumption of alcoholic beverage is an integral part of the responsibility of all F & B managers in all types of operations. Train for all staff in the hotel (i.e. including non-F&B positions, e.g. front desk, housekeeping, maintenance and/or security staff ) to recognize and respond to visible signs of guests’ (non-guests’) intoxication. Question 6 in “Issues at Work” (Issues at Work) asks students whether they agree or disagree with the statement that “all personnel in the hotel require training in responsible service of alcoholic beverages.”   Develop and implement ongoing training for responsible service of alcoholic beverages. Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458