How to Calculate Beverage Cost

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Surprisingly, many people that are in food and beverage management positions and even general management positions do not know how to calculate beverage costs, one of the most important costs in every hotel’s budget.  Don’t worry, we won’t tell!  We will help you keep that secret by showing you how beverage cost is calculated.  It is really quite simple.

Here is the way that most actual costs are calculated.  This is the cost that you usually try to get as low as possible in order to beat your budget.

First, you will need your bar’s total purchases (in dollars) for the period.  Remember, these should be liquor purchases only.  Second, you will need to know your change in liquor inventory (in dollars) for the period.  You will then subtract the total change in inventory from the total purchases (if the total change in inventory is negative, keep it that way but still subtract it from total purchases).  We must take into account the inventory change because if you do not, purchasing more liquor to stock up would drive your liquor cost up while lowering your inventory by purchasing less would lower your liquor cost.  If the liquor inventory is not considered, your liquor usage will not be properly seen in your cost calculation.  Lastly, you will need your bar’s total liquor revenues for the period.  Divide the first (purchases – inventory) number by the revenues.  That final number will be the cost percentage for the period.  A formula for those of you that need to see it visually is below.

 Actual Cost Formula

Check back soon for more useful tips that just might make your job easier.

The Importance of Random Bank Audits

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Conducting random audits of your cashier banks is one of the most important actions you can perform to keep theft out of a hotel.  Even though it is so pertinent, almost no hotels actually conduct random bank audits as part of their normal operations routines.

Why is conducting a random bank audit so important?  If you have an employee who is stealing cash during their shift, they need a place to store the cash they are going to steal.  They typically store the cash in the drawer and then pocket it at the end of their shift when they are closing out their paperwork.  This often applies to guest service agents, bartenders, gift shop cashiers, and coffee shop baristas.  A good program of random bank audits can be one of the most important tools to help you keep theft out.

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TrueGuest Service Tips for Every Hotel!

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Logo_Mark-Five_Diamond_Hospitality copy2We are very fortunate to be able to stay at some of the top hotels, including some amazing five-diamond properties.  While your hotel may not have the staffing budget of a five-diamond hotel, there are still plenty of service tips that everyone can learn from the five diamonds.

Here are some tips for providing five diamond service that does not cost much:

  1. Teach all of your associates the phrase ‘my pleasure’:  When a guest says ‘thank you’, associates at top properties always respond with ‘it is my pleasure’.  Other properties respond with ‘you’re welcome’ or ‘no problem’.
  2. Every associate must be guest-focused instead of task-focused:  At a three-diamond hotel, a housekeeper held up the elevator that I was in to wait for her friend so they could go to lunch together.  The next day at a five-diamond, an engineer who happened to be walking near an elevator saw me walking down the hallway and automatically pressed the elevator button.  The engineer was aware of my need as a guest.  The housekeeper was only aware of her own need for a lunch break.
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Perpetual Beverage Inventory How-To Video

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mqdefaultPerpetual Beverage Inventory How-To Video

Training Video Goal: Successful implementation of perpetual beverage inventory by providing instructions and necessary tools

Training Video Length: Approximately 10 Minutes, Video can be paused and replayed at the viewer’s chosen speed

Training Video Audience: All Food and Beverage Managers implementing a perpetual beverage inventory system

This video takes approximately 1 minute to load and will automatically play once loaded. For your convenience, all templates and instructions that are mentioned in the video are available free for download on this page below the video.

To download the Perpetual Beverage Inventory Template in Excel Format, click here.

To download the Perpetual Beverage Inventory Template instructions in PDF format, click here.

To read an article on Perpetual Beverage Inventory, click here.

To download the free Banquet Bar Requisition Template in Excel format, click here

To download the Banquet Bar Requisition Template instructions in PDF format, click here

Hotel ‘Hidden Charges’ Under Attack This Summer

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Parking Picture

Maybe it is just a sign of the weakening economy, but the major news outlets are attacking hotel hidden charges this summer. Just last week, I saw two different morning news channels run pieces on how to avoid hidden hotel fees.  This article has appeared in the main section on MSN as well.

Hotels have been notorious for high fees since the beginning of time.  Who doesn’t know that picking up a phone in the hotel room is disastrous for your wallet?  I remember once staying at a resort and calling to reserve a time to go horseback riding.  The hotel charged over $18 for the 2-minute phone call…. and the horse stable was on the resort’s property!

How badly do these ‘hidden fees’ impact your guest service?  More than you can imagine.  The $18 phone call was almost 10 years ago and I am still a bit bitter today.  The real reason for my anger was that not only was I taken for $18 but then I was insulted when I asked about the fee at check out.  The snobby GSA responded with ‘phone calls come at a real premium at the resort.’

Charges for parking, internet access, phone calls, and resort fees are part of hotel life.  How can your hotel charge the fees without hurting guest service?

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Shift Break Troubles

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Break

Shift breaks are the law here in California.  It is a trouble that most restaurant managers hate to deal with.  It is the policy that most servers fail to adhere to.  Those mandatory breaks that each employee must take are not just a burden on the server and the restaurant managers, it is frustrating to your customers as well.

While eating at the restaurant of a very exquisite and expensive hotel the other day, we had a disappointing experience.  Our service could have been described as good and terrible.  How?  Well, the service and friendliness from our server and bartender was excellent and would have rated a 5 of 5… when they were around.

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Now There is No Excuse Not to Use a Guest’s Name

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A while back, we published an article on how to properly use a guest’s name. Using a guest’s name is one of the biggest struggles for many properties. But now, there is no excuse. More and more businesses are recognizing the value of using a guest’s name and are training their associates on how to do it correctly.

Customer Service call banks have really improved. Call your phone company or your bank’s customer service line. They will probably use your name many, many times during the conversation. They will also try to up-sell you on additional services, but that is a different article!

The other day, my arteries were feeling a little less clogged than usual so I stopped by Jack In The Box for lunch. After I ordered, the cashier asked me my first name. She then wrote it on the ticket. A few minutes later when my order was ready, they called out my name instead of ‘order number 196, ultimate cheeseburger and fries’. Then the associate handed me the tray and then thanked me by name.

Now, if Jack In The Box can use the name of their guests, there really is no excuse!

The Hard (Rock) Sell

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Anyone who has ever worked with TrueGuest will tell you that one of the biggest things we preach is proper selling and up-selling techniques.  We have to give a tip of the hat to a restaurant that really nails the art of selling.  Here is our story:

Three of our team members went to the Hard Rock Cafe for a quick lunch.  Because the Hard Rock is a tourist destination, they really had a lot to sell.  The host sat us at a table, handed us menus, and said that our server would be over in just a minute.  A minute later, the server arrived and greeted us.  She asked for our drink order.  Instead of just asking ‘what would you like to drink’, she also recommended three beverage selections including their specialty iced tea.  When one of us ordered a soda, she casually tried to up-sell him on the souvenir cup.  It probably would have added another $4 or $5 to the tab.

After taking the beverage orders, the server offered us an appetizer.  Instead of just asking ‘what can I get for you’, she recommended an appetizer sampler platter for us to share.  The appetizer platter was $19.

When she came back to take the entree order, she came up with creative ways to up-sell.  She offered different side order choices (at a premium price of course) and extra toppings on the sandwiches (add another buck for bacon, etc.).

While we were waiting for our food, she brought over a miniature catalog of Hard Rock stuff from the gift shop.  She said that if we wanted to purchase a t-shirt or something, she could get it and add it to our bill.

After the meal, she attempted to sell us some desserts.  The dessert menu was cleverly placed inside of the check presenter so you would be forced to look at it.

The server was great at selling and had a lot of opportunities.  She was very casual about everything that she offered.  It would have been very easy to say ‘yes’ to many of her choices.  She probably does very well with her tips and her average check is probably well over $20, even though most entrees are only around $10.

What is Your Hotel’s Internet Reputation?

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Ever watch someone under 30 book a hotel room?  They fire up the internet and go to a site like expedia.com or hotels.com and do a search of the city they are traveling to.  Then they narrow their choices to a handful of hotels that fit their budget.  Then the fun really starts.  People who have spent the last decade on the internet know how to get the most out of it.  No 25 year old is going to trust that 4-star rating that Expedia gave your hotel.  They don’t believe that your hotel was ‘hotel of the year’ for the last five years as stated on your website.  They are going to see what actual people (well, internet people anyway) have to say.

IE_logTheir decision to stay at your hotel starts with a quick review of your website.  Does it have a pool?  Check.  Steakhouse?  Got it.  Gym?  Ok.  They take your hotel into consideration.  But is it better than the hotel down the street that has similar rates?

A quick Google search will tell them what they need to know.  They read the reviews on tripadvisor.com.  Maybe they check out yelp.com or read your Yahoo Travel ratings.  Oh, Mary from Iowa says your staff is rude and your food is lousy.  Three people say that your hotel lost their reservations and two people say that they were overcharged during their stay.

You just lost a reservation.

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Basic Safety and Security for your Guests

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Our analysts have stayed at many hotels so far in 2008.  During those visits, the lack of general safety and security really stands out.  Though we do test for some loss prevention standards, in many instances, things just happen that make it really scary to be staying in a hotel.  Many of those things are due to a lack of employee training and standards.

In one instance, one of our analysts had their car valet parked, she approached the attendant and told him that she had lost the ticket.  He simply asked for the analyst’s last name and retrieved the vehicle that matched.  He did not check ID, match the name with a room number, or anything else of the sort.  The analyst should have asked for the Lamborghini sitting in the driveway!

During another visit, an analyst left the room to visit the restaurant.  Housekeeping cleaned the room while the analyst was gone.  Upon returning, the room door was not closed, but barely open.  The room door did not close automatically as it should have.  She was very surprised that her laptop and personal belongings were still in the room.

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