UNDERSTANDING HOTEL ORGANIZATIONS. Organizational Chart Line and Staff Functions Business Forms Revenue Sources Profit and Costs. Contents. Like most service related organizations, hotels are divided between LINE functions and STAFF functions.
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FOOD AND BEVERAGE DEPARTMENT bring them in regular contact with guests.
Food and Beverage Department cont. bring them in regular contact with guests.
Sales and Marketing Department support the line functions and have little contact with guests.
Human Resources Department
Engineering and Security
Engineering support the line functions and have little contact with guests.
Concierge / Bellhop
LaundryHotel Functional Organizational Design
The five basic lodging business forms: support the line functions and have little contact with guests.
Additional costs typically include royalty fees, reservation fees, marketing fees, frequent traveler fees, and miscellaneous charges for items like training or commissions. These numbers are calculated assuming a 300-room hotel with 60% occupancy for the first year, so actual costs can vary. Total costs over ten years can run as high as $10 million or more.
A revenue source is the result of a product or service a hotel makes available to guests for a price.
e.g. 75 rooms sold of 100 rooms available
= 75% occupancy rate
1. Selling space for a specified period
2. Providing food and beverage service in these rooms
Debt service of owners $0.50
Management costs $2.75
Corporate obligations $2.00
Taxes, etc $2.50
Roomcost = Actual CostRoom Rate
= $ 31.00
Room Rate – Room Cost = Profit
Food cost = Purchase Price / Menu Price
Item Purchase Price Menu Price Food Cost
Steak $5.95/ea. $22.00 27.0%
Chicken $3.95/ea. $17.95 22.0%
Caesar Salad $1.99/ea. $ 9.95 20.0%
Consider the following example:
Room Cost Room Rate Profit Margin
Sleeping Room $30.00 $150.00 $120.00
The daily maximum room profit potential is: $48,000 ($120x400)
$17,520,000 is the maximum potential room profit that ABC Hotel could make in a year. Each unoccupied room subtracts from that number. It is easy to understand why hotel operators focus so much attention on occupancy.