1. FOOD AND BEVERAGE MANAGEMENT Interactions, Ratios and Contract Services
Entrepreneurship- BIS 301

2. Operational Interactions
F & B division and other units are mutually dependent.
There should be direct interaction between:
Front desk and F & B - specific guest requests
Sales department and banquet unit – banquet and conventions bookings
F & B and Front Office – announce new menu or special activity
Guest relations unit and F & B – feedback on utilization rate of F & B outlets

3. Operational Interactions
F & B manager must know who the customers are, what they like and how many customers to expect with the input from other departments and units.
Every hotel employee should be trained to refer / recommend F & B services to guests.

4. Operating Ratios - important
Food and Beverage Sales per Available Room
total food and beverage sales = $? per room
no. of rooms available
Food and Beverage Occupancy
number of covers = ? turns
number of seats
Sales per Available Seat
total food and beverage sales = $ per seat
no. of seats available

5. Average Check
total food and beverage sales = $AC
no. of covers
Ratio of Beverage Sales to Food Sales
Beverage sales x 100% = ? %
Food Sales
Food Cost Percentage
Cost of food x 100% = ? %
Food sales
Labor Cost Percentage
F&B Labor Cost x 100% = ? %
F&B sales

6. Director of Food and Beverage
Objectives:
Meet and exceed guests’ needs and expectations by ensuring proper service standards, providing quality food and beverages, managing all aspects of operations.
Provide all guests with the highest quality F&B experience by working as a team with all F&B outlets, ensuring prompt, polite and professional services, resulting in increasing employee morale, decreasing turnover rates and lowering service times.

7. Director of Food and Beverage
Objectives:
Seek profitability in the F&B department by decreasing all costs, maximizing sales in all outlets, achieving budget and profit guidelines, meeting and / or exceeding long / short range goals.

8. Director of Food and Beverage
Specific Operations Functions:
Provide the highest quality in food, beverage and service in all outlets.
At least one daily walk through of all F&B areas
Maintain existing programs and develop new programs
Daily talks with all staffs and managers
Maintain high quality image through effective housekeeping and sanitation
Maintain physical security for all outlets and inventories
Know local competition and industry trends
Change menus based on seasonality
and product availability

9. Director of Food and Beverage
Specific Management Functions:
Directs and coordinates all activities of personnel and departmental responsibilities
Daily contacts with staff and performance reviews
Marketing of each F&B outlet
Achieve budgeted sales and maximum profitability
Maintain fair wage and salary administration

10. Strategic Alliance between Hotels and Restaurants
Four key questions
What are the hotel customers’ F&B needs and expectations?
Which F&B concept best aligns with the positioning of the hotel?
Would converting the restaurant to a brand name restaurant improve the hotel’s bottom line?
Would turning to a brand name F&B operation give the hotel a competitive advantage?

11. Strategic Alliance between Hotels and Restaurants
Reasons for alliance between brand name hotel and restaurants:
Create financial benefits
Provide guests with greater value
Improve the hotel’s overall image
Strengthen the hotel’s competitive advantage
Create operational advantage

12. Strategic Alliance between Hotels and Restaurants
Types of restaurants:
Quick Service
KFC
Lotteria
Pho 24
Casual / Family
Al Fresco
Pizza Hut
Ngon
Upscale
Yeebo
Au Lac Do Brazil
Li Sheraton
Theme
Hard Rock Café

13. Restaurant Franchise Advantages Disadvantages
Helps to reposition hotel
May increase revenues, occupancy, profits
Franchiser is continually assessing and improving menu
Franchiser is knowledgeable about restaurant business
Disadvantages
Franchise fee
High initial investment
Requires a certain volume to warrant using a franchise brand

14. Restaurant Franchise Factors to consider
Desired hotel position and customer perception you want to create for your hotel.
Assess the revenue and costs, profitability of having a franchised brand restaurant
Select a restaurant company that has the same corporate culture and shares the same operational goals
Consider the menu offered, restaurant décor, training support and management support from franchiser, and ability to handle room service

15. Contract Relationships
4 types of relationships between hotel and F&B outlets
Internally developed restaurant brand
Franchised restaurant brand
Straight lease
Management contract

16. Contract Relationships
Internally developed restaurant brand
Hotel develops own restaurant with little outside help.
The restaurant is a unit belonging to the hotel controlled by F&B director.
Advantages:
Hotel has total control over all the operations.
No need to pay any fees to outside parties, hotel keeps all profits

17. Contract Relationships
Disadvantages:
Hotel may not have the expertise to successfully run a restaurant business
Developing the restaurant into a famous brand takes a longer process

18. Contract Relationships
Franchised restaurant brand
Hotel buys a franchise from a famous restaurant franchisor.
Franchisee (hotel) operates the restaurant according to the guidelines laid down by franchisor including:
Menu
Décor
Food preparation
Service processes

19. Contract Relationships
Advantages:
Franchisor has the expertise and know-how
Franchisor can provide training to the personnel in the restaurant
The franchisor’s brand is already a recognized brand with a ready customer base.
Disadvantages:
High franchise fees
Hotel has less control in the operations

20. Contract Relationships
Straight lease
Hotel rents out the space inside the hotel to an outside restaurant company.
Hotel only collects rent; it has no say in the operations of the restaurant
Advantages:
Guaranteed revenue from rental
Disadvantages:
Little control over the operations
Restaurant may be a mismatch with the
hotel’s positioning

21. Contract Relationships
Management Contract
Hotel lets an outside company manage its restaurant.
Hotel pays the company a management fee
Management company is responsible for recruitment, selection and training, as well as all day-to-day operations
Personnel may or may not be
under the payroll of hotel.

22. Contract Relationships
Advantages:
Management company has the expertise and know-how
Disadvantages:
Management fees and possibly profit sharing
Hotel has little control in the operations

23. Hotel Catering
Refers to providing food and beverage service outside of a restaurant / bar / café setting.
May be done in a meeting room / ballroom / courtyard / garden or other locations.
The F&B division is in charge of not only food preparation but also decorations, such as table settings and lighting.
A huge revenue generator for the hotel
High visibility and can create an image
for the hotel

24. Hotel Catering - Personnel
Director of catering (reports to director of F&B)
Oversees all catering functions
Works closely with Director of Sales and Marketing
Catering managers (reports to director of catering)
Maintain client contacts, plan menus, themes, room set up, décor, negotiate with clients

25. Hotel Catering - Personnel
Banquet Manager (reports to director of catering)
Supervises maitre d’, room captains, servers, bartenders.
Acts on director of catering’s requests
Supervises table settings and décor
Scheduler (in a big catering operation)
Plans the rooms, reception area and time schedule
Keeps records to avoid overbooking or
double booking

26. Hotel Catering - Personnel
Maitre d’
Supervises all service personnel including captains, servers & all aspects of guest service
Captain
Manages a section or a specific room
Supervises the servers in the section or room
Server
Serves either food or beverage
Bartender
Serves alcoholic drinks

27. Hotel Catering - Personnel
Steward / Housemen
Set up the equipment, tables , chairs, glassware,
crockery and cutlery
Engineering department personnel
Provides necessary utilities such as air-conditioning, electrical wiring, audio visual equipment, banners