Is your hotel F&B profitable? A closer look at breakfast, the restaurant, bar and banqueting
A full dining room does not tell the whole story. How to review breakfast, restaurant, bar and banqueting performance and allocate shared hotel F&B costs.
Plenty of work, but what is the result?
A full breakfast room, a busy restaurant and more banquets in the diary. The team is working hard and sales are growing, yet the month-end result disappoints.
I recognise this situation from my work in hotel F&B. To understand it, we need to examine the individual areas. Each operates differently, although they often share the same kitchen, stockroom and people.
Breakfast: what does it cost to serve one guest?
For breakfast, I check how many guests actually attend, how much product is used and what is left after service. There is also the labour involved in buffet preparation, service, washing up and cleaning.
The way the stay is accounted for matters too. If all revenue from a room-and-breakfast package sits under accommodation while F&B carries the costs, it is difficult to assess performance fairly. A clear revenue allocation policy needs to be agreed with the person responsible for finance.
Moving an amount between departments does not, by itself, make the hotel more profitable.
The restaurant: quiet hours still cost money
A hotel restaurant often needs to remain available during quieter periods. I therefore look at sales by time of day and the work needed to maintain service.
Does the menu fit the volume of orders? How much preparation does it need? Does staffing match demand? Does the team also prepare for banquets during a quiet shift?
These questions help identify improvements without rushing to reduce service.
The bar: a good selling price is only the beginning
A drink can look excellent in a recipe calculation while the bar’s actual performance is much weaker.
I review portioning, losses, non-sales issues, purchasing and stock. I compare beverage cost with net beverage sales for the same period.
At one property where I worked as a manager, this ratio fell from 33% to 28%. The changes covered loss control, stock rotation and a review of suppliers and purchasing.
Banqueting: count the work before and after the event
The price per person less the menu cost does not yet show an event’s result.
There is room setup, kitchen preparation, extra service staff, equipment hire, cleaning and unused products. It is also worth checking whether a large event disrupted the restaurant’s operation.
Only then can you assess whether a similar booking is worth accepting again on the same terms.
A shared team needs a clear approach to allocating costs
The same chef may prepare breakfast in the morning and then work on a banquet. If all their time is charged to breakfast, the banquet will look more profitable than it really was.
Products and labour should therefore be assigned to where they were used. For shared costs, we agree a reasonable and consistent allocation method. If something cannot be measured precisely, we identify it as an estimate.
Moving a cost from one outlet to another is not a saving. The overall F&B result stays the same.
Finally, consider the whole hotel
Suppose PLN 100,000 remains after subtracting the costs assigned to breakfast, the restaurant, bar and banqueting. If shared F&B costs not already included total PLN 40,000, the balance is PLN 60,000.
This is a simplified example. That PLN 60,000 is not the hotel’s net profit: the property also incurs other costs.
F&B can also support room and conference sales. A good breakfast and an available restaurant matter to guests. That contribution should be examined rather than using “We have to offer it” to explain every loss.
Where should you start in your hotel?
Ask for a report covering one closed month, broken down into breakfast, the restaurant, bar and banqueting. Check where package revenue, product consumption and staff hours have been recorded.
This comparison may reveal costs charged to the wrong outlet or left out altogether. Until that is clarified, it is difficult to decide what to develop, what to change and where to look for savings.
If the figures still do not explain what is driving performance, we can examine those accounts together.