Damned if you do, damned if you don’t. That is how many general managers looks at their hotel’s F&B expenses. Given the fact the Food and Beverage (F&B) division contributes around 30 percent to the hotel’s revenues, there is a pressing need to ensure to offer interesting offerings on a regular basis. However, at the same time, they have to walk a tightrope walk when it comes to keeping the operations under control. After all, sprinkling exotic truffles or Enoki mushrooms on a salad might sound enticing, but it could also lead to cost overrun.
Anand Nair, General Manager at Crowne Plaza Chennai Adyar Park explains how GMs need to pay close attention to, and ensure, how their F&B run parallel to their budget, to avoid unexplainable gaps at the end of the month.
- How can failure to keep an eye on F&B offerings lead to cash burn?
F&B divisions must constantly update their offerings to align with the demands of the market and what guests are looking for. By not doing this, they risk becoming redundant in the market and their clientele will gravitate towards other hotels that offer the products they need.
An example of this would be offering sweets and dessert gifting options during the festive season. If hotels don’t capitalize on this during the season, they risk being forgotten by their patrons.
- How can hoteliers control their F&B costs to avoid any unexplained bleeding and also ensure this division makes a profitable contribution to the overall revenue?
To avoid fiscal bleeding, hoteliers should place focus and emphasis on cutting costs wherever possible. By updating menus constantly to remove redundant items that aren’t profitable, the hotel can save on material costs greatly.
Up-selling profitable menu items that are in season should be practiced by all the wait staff. Reducing food wastage and reducing the cost of sales and payroll costs can also help divisions ensure that they are making a profitable contribution to revenue.
While setting up a purchasing policy for their F&B division, how can hoteliers ensure that it has an emergency purchase ratio to the standard one?
The best way to achieve this is by looking at the past few years’ worth of data of emergency purchases opposed to planned purchases and understanding the average percentage of that. This will help hoteliers create an allocation for a slightly higher emergency purchase ratio than the average.
- How can they also rotate suppliers to get better bids?
Rotating suppliers to get the best bids can be done on a periodic basis. To be able to achieve this, though, supplier research should be conducted every few months to ensure that the quality and pricing is the best it can possibly be without compromise.
- Why is it also advisable for hoteliers to conduct spot checks in the F&B division from procurement, to accounting, to invoicing and sales?
Conducting randomised spot checks helps maintain consistency in the F&B division of hotels in terms of the quality and availability of the procurement of raw material, the supply chain process and how smooth it is, as well as the pricing of the raw material.
By conducting spot checks on accounting and invoicing, the process of the allocation of funds and how error-free the accounting process is can be understood. Aside from this, they can also understand the ratio of invoicing amounts to sales amounts.
- Why should hoteliers also regularly evaluate their banqueting offerings to discuss past performance, current trends and future plans, to build revenue?
Evaluating banqueting offerings often is essential as the event industry is constantly changing and evolving. The style that events have in terms of necessity for space, food options, and banquet décor, keeps changing from time to time. Making future plans align with the current changing trends is very important. By also assessing past performance, hoteliers can understand the areas in which the performance was lacking and what they can do to improve that.
