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Modern Hotel Innovators Lodging Management Associations Hotel Revenue Sources Profit Margin Room Cost Profit Margin Food Cost Opportunity Cost Captive Audience Quotient Internet Exercises Hotel Web Sites
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Shared Benefits
Differences Greater Quality Control Higher Fee to Owners Less Owner Control Higher Employee Standards Higher Performance Expectations Less Quality Control Lower Fee to Owners Greater Owner Control Varying Levels of Employee Experience and Training
Management Contracts
Franchising
Figure 1-4
Figure 1-5
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#2 Selling meeting/function space to utilize its best potential
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#3 Maximizing the capacity of the outlets and ancillary profit centers through the selling of #1 and #2
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Profit Margin
Room Cost
Room Cost Components H/L/P
Heat Light Power
Labor
Housekeeping Engineering (internal structure maintenance) Grounds Maintenance (land surrounding building).
Overhead
Debt Service of Owners Marketing (local effort) Management Costs (including applicable franchise or management contract fees) Taxes Corporate Obligations
Profit Margin
Food Cost
Item Purchase Price Steak $5.95/ea. Chicken $3.95/ea. Caesar Salad $1.99/ea. Menu Price Food Cost $22.00 27.0% $17.95 22.0% $ 9.95 20.0%
Figure 1-8
Opportunity Cost
Each night, when a room goes unsold, the hotel loses the opportunity to ever sell it again. A hotel cannot regain that opportunity. The Empty Room Theory states that once a room goes unoccupied, it is gone forever. Why does opportunity cost differ in catering/outlet food and beverage sales?
Figure 1-9
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