Hotel asset management for food and beverage

Area Directors often lack the skills set to analyze and critique a hotel’s asset management  program for food and beverage.Many just don’t have the experience or background, and many corporate food and beverage executives are more focused on bringing out group-wide programs or promotions, mostly of some meaningless importance, which could well be driven at hotel level, instead of focusing on areas where real difference can be made to an owner’s real estate asset value.

Given approximately 65% on average of full service hotels revenue comes from room sales, at around a 80% profit margin, and with that the majority of a management company’s fees , it is no wonder the focus is on the rooms department to drive profits, but this is barely partially correct.

Owner’s needs are therefore often neglected. Positioning a hotel’s food and beverage offering is critical to drive profits in both rooms and the food and beverage operation, lack of skills and ability at corporate level therefore affect profits and with that a hotel’s value is not maximized.

Lets take the UK here, and ok, some efforts at corporate level have been made by some, but let’s face it, they are few, and hotel restaurants on the whole are a dying breed. I blame corporate leaders and so called brand franchise standards.

Asset Managers are not tied to some corporate protocol and brand standard, and have the skills set to asses a food and beverage operation to bring in positive change. They can bridge the gap between owners and management, safeguarding the owner’s asset interests.

In food and beverage this is a detailed process, from understanding a hotel’s investment strategy, its type, positioning, asset hold period, and capital resources, to assessing the existing conditions, studying the hotel offering or what is termed the food and beverage program, the competitive set and local offering, doing a swot, and compiling a financial analysis.

Then produce a road map, putting it all together. For owners’ best interests.

Let’s take just the financial aspect of this process alone. No help here from external sources and industry reports, this involves knowledge and the ability to get down to the core of how the food and beverage department is operated. Scary stuff for some management companies!

An important key to this process is to breakdown the profit of each outlet within this department. Opportunities are so often lost because of management mostly just looking at the whole department’s net profit and not what outlet is drawing down profit potential within the whole department. A lazy approach at best.

I could talk all day on this, but let’s as an owner ask ourselves a few questions, in this small segment of financial analysis within this large area of expertise.

  • Do you know how each outlet is contributing to profit, that’s breaking down all costs including kitchen production cost?
  • Do you know if all your labor costs and labor production skills are in line with your average checks and service levels?
  • Do you know your group vs. transient per cover expenditure?
  • Do you know how your average check per seat compares throughout your departments, and with it the reasons and opportunities and the action plan you have to improve it?
  • Do you know your outlet loss leaders?
  • Do you have a detailed financial profile on each outlet and with that the issues and plan to improve performance?
  • Is your pricing focused on margins only, and not based around menu engineering and with that a focus on the amount you actually bank?? That’s an eye on $’s not %’s

That’s a few of many that need asking, just in the finance reality check.

For a reality check on your food and beverage department contact me at


What makes a great hotel

My top 10 of what makes a great hotel from the shortest to the longest of what hotel owners, management companies and asset managers should focus on.

  • Cleanliness
  • Feel at home
  • Service is friendly
  • Great use of space
  • Design reflects the location
  • Everything offered is great value
  • You feel great sitting in the restaurant
  • Tasty fresh food which reflects the location
  • User friendly technology, you can read instructions
  • The booking process on their web site does not involve having to figure out why there are variations on price on the same room for the same night.

To discuss your top ten as an owner, and how we can be of assistance in making your hotel or your planned hotel project in the top 10, and how we can offer resort management services that stand out from the crowd, email

Why so many underperforming hotels in Costa Rica?

One would have thought that in a country that has tourism at the top of its agenda that the industry would be a roaring success with world-class quality services all over the place with properties that have and are achieving their operating potential.

Sadly this is far from the case, and now more than ever, with a declining tourist base and an oversupply of inventory we see hotels in stress mode.

Why? Some reasons are as follow.

Lack of investment in people and education during the good times.

Poorly thought out project in the first place.

Non trained management with no eye for detail and no creative flair, same old boring offerings led by that antiquated menu.

Poor quality service, friendly generally yes, but you often get the same service at the local soda as you get in expensive restaurants.

The food offering sucks, the lack of creative flair coming out of the kitchens here in general is a real problem

Lack of investment back into the business over the years, a lack of an ongoing financial and ongoing investment plan that is pivotal to the ongoing success of the business.

No training budget, no training period.

Lack of market understanding, no idea on who the market is and what the customer base require.

Ownership and management that do not have the skills to reposition the property and adjust to different trading conditions.

Lack of awareness of how the industry world-wide has developed, how the expectations of the travelling public have changed.

Lack of value in the product offering, poor pricing strategies.

If you require a review of your hotel and advice on how to implement quality hotel management strategies and services, send an inquiry to

Resort hotel staff retention

At all times and even more now that the world economies are mixed or struggling retaining trained hotel employees at all levels is essential because of the obvious need to exceed the expectations of our guests. Let us assume those expectations are known.

The cost to the owner, the disruption to consistency of service staff delivery cannot be under estimated. One could add to that a list of associated costs to a management company.

To inspire and retain that motivation each employee brought to the work place on his or her first day it is not all about how much compensation and benefits one pays ( although this is certainly a major issue in poorer countries like Malawi where day-to-day survival comes first in most people’s minds), it is about creating and retaining an atmosphere where each person feels appreciated, retaining the team spirit and that requires capable and caring business practices and strong leadership skills.

Some points with questions for leaders to answer.

What ever culture, or to put it another way, what ever the way of life a company operates should be developed from within over time to reflect the goals and particular characteristics of the long-term needs of a company. Questions to ask are is your culture clear? No doubt it is service orientated, but do new prospects understand it and will they buy into that culture, do they fit, are they service oriented? Being a right fit results in a happy and hopefully appreciated person. Message, during the hiring process expose your culture and hire right.

Is the total compensation fair? Is it truly competitive for the skills that individual brings to the company in that location? Try to create a balanced (and incentivized where ever possible) package, and that means other aspects such as retirement plans as suit your location. Does it incorporate bonuses geared to clear performance goals which can be very clearly determined as having been achieved or not during the annual employee performance review? Is this process clearly defined and discussed during the hiring process? As an employer do you dictate the goals to be achieved or is this a two-way discussion so the content can be fine tuned and improved on? Performance-based plans should be designed very carefully to make certain that everyone is motivated to strengthen the business as appropriate to their contributions.

Common sense prevails that ensuring everyone is appreciated for their contribution should be top of the list once the hiring process is completed.

Are all your employees at what ever level encouraged to make suggestions to their immediate superior. Is that idea just brushed off? Is that idea used when suitable? Are you still operating in the dark ages where the culture is very much top down and the employees feel they are being dictated to and bossed around.

Does your organization dictate corporate policy from the board room, are you like one UK hotel management company that insists on incentive plans being approved annually during the annual business plan process?

What employee recognition programs do you have? To the General Manager and then down. As an owner how does your organization thank people, and how often do you thank someone for a job well done? Hand written notes, hotel wide recognition, hotel group recognition, is it done consistently? You don’t have to lavish prizes and small gifts all time, a simple note of appreciation works wonders.

How as a leader do you express pride and appreciation in the numerous ways ones employees exceed your expectations? Do you use employees bios within trade web sites, face book, twitter and the like? Lets say it again and again, people who feel appreciated and valued are more loyal yet how many leaders actually go out of their way to utilize this simple human touch on a regular basis?

No excuse on this one, costs can be controlled, but each employee should have a professional development program including inter department training exposure geared to their career aspirations. A win for long-term staff retention.

There are many others, one being an owners responsibility to invest in adequate  equipment for each person to do their job. That means from cooking utensils to lap tops. A sensible and ongoing capital reinvestment plan, part of a hotel asset management plan.

As experienced operators we can see within an HR audit where opportunities to unlock value exists, it a part of the whole hotel management business plan and the asset management plan.