Hospitality Operations and Revenue Management

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Table of Contents

Executive summary
Literature Review
Conclusion and recommendations
Works Cited

Executive summary

Research findings reveal that the hospitality industry in Australia is steadily recovering from the economic crisis and has great prospects for the future. In total, the hospitality industry had 55% of its employees as females, as opposed to 45% males (Castle 12).

It should also be noted that the industry had employed an average of 4.3% of the total Australian population. This marked a 22% raise from the 80s, an increase higher than the growth in the employment rate which was 9.3% (Castle 12). These figures were expected to rise considerably by the year 2000 and beyond.

In the 90s, the largest source of income for these industries came from food and alcohol consumption, with accommodation offering only 89% of the earnings. The gambling industries recorded the highest takings with $102.2 million, with cafes and restaurants having the lowest earnings at $533,000 (Castle 16). This segment notably recorded the largest growth in terms of new ventures.

An average of $1,000 was spent per head during the same period, with pubs and taverns grossing the highest income taking per head of the populace at $318 (Castle 16). Among individual items consumed, meals and alcohol formed the largest chunk, with an average of $ 718 per head of the populace. Casinos grossed $18 per head on the average, representing 66% of the takings per head of the population (Castle 18).

Literature Review

Operations

This figures had grown considerably by the year 2007, to 13,987 cafés and restaurant enterprises in operation by the end of June 2007. This represented a total of 145,546 employees, generating $9,702.6 million which translated to an average of $693,700 per enterprise for that year.

On average, every enterprise grossed $58,000 per month. Companies spend an average of 9,355.2 million per year, translating to an average of $66,800 per enterprise. The high profitability of the industry is evident from these facts.

Income

The industry contributed 0.4% to Australia’s gross domestic product for 2006-07, which translated to $3,862.4 million. The operating profit before tax during the same period was $368.3 million, translating to an operating profit margin of 3.8%. These statistics reflect a positive end year results, which implies there has been growth on the industry during the years.

Several establishments faltered during the process, but restructuring of management has restored sanity in most business ventures. Out of the $ 9,702.6 million, 65.2% ($6,329.8 million) was drawn from meals taken in the premises. Liquor and alcoholic beverages was second, taking 25.4% ($2,460.7 million) with take away food and catering services being the least earners in the category.

Employed

Research conducted in the course of June revealed that 145,546 people had been employed directly in snack bars and eateries. These are persons providing casual labor and account for 47.4% percent of the working population. Fulltime employees constituted 21.1% of the population. The remaining 17.4% is taken by permanent part-time employees.

It is noteworthy that women constitute 51% of the workforce, with a majority (55.3%) working like casual laborers. The diversity and flexibility of this field has seen an influx in the number of employees working on a tourist visa. A majority of the employees are the waiting personnel at 41.7%, with chefs and cooks at 21.1%. Kitchen hands are the least employed, at an average of 16.4%.

Identify a small business

It has become increasingly impossible to talk about the Australian hospitality industry without coming across the name Peter Doyle @ the Quay. This is a day time restaurant that operates in two sessions, with the morning session running daily between 11.30am to 3.00pm. It has a sitting capacity of 350 people, a kitchen staff of 25 and a front staff of 18 persons.

The restaurant offers premium quality seafood and steak and is ranked among the best in Australia. It provides a relaxing ambience which is the best indicator of what Sydney brings to the table in terms of hospitality management. In addition to their main products, there is a menu for children and vegetarians on offer.

It is located conveniently at the Harbor Bridge section of the overseas shipping terminal located at Circular Bay. Its proximity to the famed Sydney Opera House guarantees spectacular views for patrons.

Like a vast majority of existing business enterprises, this premise was the subject of controversy in its formative stages. A dispute by family members saw the company assets of the hotel divided. Initially, the hotel was supposed to be run by family members after the demise of their father. Constant disagreements due to differences in opinion were detrimental for the business.

These necessitated consultations, where it was decided that one of the brothers (Peter Doyle) and an uncle would assume ownership. This was expected to settle the squabbles since they represented all sides of the family, and it was thought that consensus building would be easy for the two of them.

A difference in their ideologies came into play once more, with the uncle insistent on maintaining the status quo while Peter vouched for the incorporation of fresh ideas and professionalism into the management. His uncle called for the retention of family services to meet client demands. This was an outdated scheme, which had a negative impact on the earnings of the enterprise.

As a result of the protracted arguments, it was decided that the imminent separation was inevitable, and assets were split up without any proper valuation or legal input. Peter and his faction were the losers in this arrangement, by getting the least proportion of assets. They were also forced to cede patent rights to the name Doyle, a factor which implied that they were to initiate fresh branding measures.

In a span of three weeks, they had established new offices, printed fresh business cards and established new premises for their establishment. They engaged the services of a professional chef and managing director, in addition, to constituting a professional board of directors to steer the affairs of the business.

True to his prediction, the other faction had to close shop due to instances of protracted mismanagement. Peter oversaw his newly established brand grow in leaps and bounds into one of the best Australia’s premier hospitality establishments.

Monitor sales / revenue progress of the business

Figures released by the national bureau of statistics show that, on average, hotels in Sydney grossed a total of $ 58,000 monthly. With respect to the title, it occupies as the only three hat restaurant in Sydney there is a high possibility that the restaurant earns double the amount stated.

Given its proximity to the ocean, funds that could have been spent on the acquisition and transportation of raw materials are minimized, hence reduced overhead costs. This saves the hotel funds, hence a positive reflection on their balance sheet (Krajewski & Ritzman 860). Since their separation from the mainstream Doyle brand, income revenues have been on the rise leading to high profitability and great prospects for the future.

Business hours in reference to customer traffic

Their operation hours have been designed to maximize on incoming customer traffic. Given their price range, it is easier for them to capitalize on the numerous clients looking to have lunch and dinner. This goes down well with their menu and service they provide, enabling them to maximize on their sales. It should be noted that their operational hours limit their clientele to two main meals.

This implies a loss of revenue that would have been received from the sale of breakfast or brunch. Their closing hours also limit their possible clientele, locking out late-night customers who could have brought in more revenue.

Families out to relax and may be frightened off the place due to their strict adherence to a time schedule. This is because they will be forced to leave after having their meals hence may end up spending more money.

Foods the business sells

With its main cuisine being sea food, Peter Doyle at the Quay is located near the source of its primary raw material. This makes it cheaper for them to operate since they do not buy their materials hence save on the acquisition and partly on transportation costs. It also ensures they serve quality goods due to their freshness in the course of processing.

Alternatively, they offer steak and an assortment of wines, in addition to dessert. This gives an option to those consumers who do not consume seafood. On the other hand, it limits their client base since greatly since vegetarians and nondrinkers cannot eat at the establishment. It would be beneficial to the management if special consideration was offered to this group of persons (Jones & Lockwood 178).

Customer(s) patronizing the business

The prices charged for commodities and the time of operation makes this restaurant a favorite for many working citizens. This guarantees a steady inflow of cash into the premise due assured income of their clients (Hilton & Selto 347).

The restaurant also has facilities to allow persons with disability easy access into the premise, with special areas reserved for them. The special menu for children also widens their possible client base. The availability of various drinks allows clients who are not interested in foodstuff an option.

Bread and butter commodity of the enterprise

The restaurant is known world over for its excellent sea food and relaxing ambience, which offers the promise of an unforgettable experience. In the event of unpleasant weather, a relaxed space for sitting has been designed indoors for the customers. Their menu is also comprised of several desserts, with prices ranging from $4.50 for beverages to $71 for the finest of dessert wine.

Other items include a variety of confectionery, cognac, fortified wines and ports, in addition, to liqueurs and dessert wines. They sell wines by the glass and by the bottle.

On average, a glass of wine ranges from $11 to $25 per glass, with a bottle retailing at an average of $30 and $430. It should be noted that a number of these brands are custom made by the enterprise and branded internally. With this range of prices and the quality of service available, visiting Peter Doyle is an experience to savor.

As a result, of the unpredictability of weather patterns, reliance on their main accompaniment, a nice view of the seashore and Sydney is often affected.

Tropical storms make it difficult to provide outdoor service hence proper measures should be instituted to provide alternative service to the clientele (Rea & Parker 245). It is worth mentioning that their price range limits their clientele to the middle and upper class members of the society.

Critical details and aspects that a hospitality manager should know

Hospitality management refers to a field of work and study. In academia, it is the study of the entire hospitality industry and its leadership requirements. Persons interested in careers available in the field are advised to study it and establish their careers on a stable foothold. As an occupational field, it refers to the oversight of hotels, travel agencies and other establishments that constitute the industry (Jones & Lockwood 200).

Hospitality managers need administrative knowledge to enable them carry out floor and kitchen management duties effectively. Floor management refers to the oversight of staff that serves customers and interacts with them directly. The manager allocates duties with reference to operational hours of the premise. He is also required to ensure members of staff follow service standards, with reference to health and safety regulations.

The manager is tasked with the responsibility of ensuring staff motivation, an atmosphere which ensures increased productivity among the workforce. Floor management also entails looking out for the well being of employees, making workforce stronger and hence increased profitability (Krajewski & Ritzman 875).

Kitchen management entails management of the kitchen staff, in particular the head chef, and their entire team. This helps them reign in on food quality because most kitchens are controlled environments. This enclosure and the resulting monotony may result in workers boredom and tiredness of the workers, hence compromising the quality of food produced.

The practice also includes cost control and budgeting to ensure efficiency in company cash outflow. Administrative duties performed by these managers include stock control, planning labor costs, harmonizing the expenditure and profits with reference to seasons, scheduling rotations, interviewing and hiring of staff, all these in addition, to maintenance of commercial kitchen ware (Krajewski & Ritzman 880).

Conclusion and recommendations

Peter Doyle contends that it is important to assimilate fresh minds into the premise management structure at regular intervals, in order to boost the operational capacity of the business by incorporating the new ideas they bring on board. He argues that the lack of an inheritance strategy was their main undoing.

They failed to prepare adequately, thereby allowing Family arguments and sentiments were to take precedence over business and other operational facts. This was a blatant deviation from established practices that determine proper workplace procedures. The ensuing wrangles were detrimental for the business, reflecting negatively on the profitability of the enterprise.

The separation accorded him the autonomy he required to integrate professionalism into the administration of the premise, saving it from the imminent collapse. He even noted that had he executed the same earlier on, chances of saving the closed restaurants would have increased considerably.

Since it is difficult to achieve equal asset distribution among family members, Peter Doyle underscores the importance of absorbing fresh ideas to supplement individual competencies of the family members.

These occurrences give credence to Sorensen’s argument, that integrative variance resolution measures, like collaboration, compromise and accommodation provide better outcomes (Sorensen 142). It should be noted that a vast majority of disagreements are amplified by trivial misunderstandings among family members.

This vice ensures small problems are brought over to the workplace hence interfering with decision-making procedures. This makes it important, for parties involved, to maintain harmonious relationships among themselves. This will create a sober atmosphere at the workplace which is requisite for achieving goals.

While compromise and accommodation help the family outcomes, collaboration bridges the gap between the two institutions (Sorensen 142). In instances where professional management teams have been contracted to carry out tasks, it is important that they establish professional working relationships among themselves.

This will ensure fairness and sobriety during deliberations on policy matters and discussions to chart a way forward. It will also minimize instances of conflicts among professionals and family members during important-board meetings.

Effective leadership of family owned enterprises is difficult, since stock ownership moves down to different family members. This is detrimental to the company’s cause, as a result of the verity that a number of family members has dissimilar interests in the said business premise (Thomas 333). As a result of this, determining commitment levels of individual towards affairs of the company is difficult.

In such situations, families find it hard to manage the business, even with the employment of professionals. Such arrangements turn chaotic more than those families with a harmonious relationship. In other families, there is a harmonious state of affairs. This creates a serene atmosphere for carrying out business, since all parties work towards reaching a consensus on critical issues.

Incase external managers are employed to run affairs, the harmonious relationship among the family members constituting the board of directors makes it easy for professionals to work. It is basing on this premise that business performance prior to an election for company leadership positions (Bocatto, Gispert & Rialp 500).

Works Cited

Australian Bureau of Statistics. Cafes and Restaurants. Web.

Bocatto, Eduardo, Gispert, Carles. and Rialp, Josep. Family-Owned Business Succession: TheInfluence of Pre-performance in the Nomination of Family and Nonfamily Members: Evidence from Spanish Firms. Journal of Small Business Management, 48. 2010. 497–523.

Castles, Ian. Hospitality Industry in Australia 1991-92. Australian Bureau of Statistics Catalogue No. 8674.0. 1998. 16 – 18.

Hilton, Ronald., Maher, Michael & Selto, Frank Cost management: strategies for Business Decisions. 4th Ed. McGraw-Hill, Sydney. 2008. 345 – 355.

Jones, Peter & Lockwood, Andrew. The management of hotel operations. London: Continuum 2002. 75 – 182.

Jones, Peter & Lockwood, Andrew ‘From the bottom up: operations management in the hospitality industry, in B Brotherton & RC Wood Ed. SAGE book of hospitality management. London: SAGE. 2008. 192-212.

Krajewski, Lee & Ritzman, Larry. Operations management: strategy and analysis. 6^thEd. Massachusetts: Addison-Wesley, Reading. 2002. 850 – 883.

Rea, Louis & Parker, Richard Allen. Designing and conducting survey research: a Comprehensive guide, 3rd Ed. California: Jossey-Bass, San Francisco. 2005. 200 – 250.

Sorenson, Ritch. Conflict Management Strategies Used in Successful Family Businesses. Family Business Review12. 1999. 133–146.

Thomas, Jill. Freeing the Shackles of Family Business Ownership. Family Business Review, 15. 2002. 321–336.

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