The Key to the Challenges in Hospitality Industry – ‘Technology’

By M Dave and Aditi Gupta

If we have a microscopic look at the challenges faced by  the hospitality industry on a whole today we will notice that an independent boutique hotel or a five star modern hotel chain, both face the same challenges alike in their day to day operations.  In this article we will look at 3 significant challenge themes faced by the hotels:

Challenge No 1. – Open 24 hours

The longer working hours in hospitality are here to stay. Business in this sector no longer closes in a normal 9 to 6 shift but instead work goes around the clock to suit the needs of international travelers arriving at all times. Most of the hotels including small B&B’s  have now expanded their horizons to extending  their properties into a multipurpose venue to maximise their cost- effectiveness. They are now serving snacks, meals and drinks from pre-work coffee to late-night cocktails, not to mention playing host to meetings and catered functions as well. In such a high pressured environment, there is no scope for downtime and reliability on technology that runs without a glitch has become one of the pivotal factors for success. For example, today’s PMS are more resilient and prepared for disaster recovery, with features such as auto back-up in case of malfunction.

Challenge No. 2 – Pushy and Demanding Customers

There has been a clear shift in the industry trends, where the businesses have moved from ‘provider push’ to ‘consumer pull’. Today’s customers demand more value for money from services and products and are extremely unforgiving of delays. Which brings us back to the topic of reliance on technology… it’s unacceptable for hotel PMS systems to fail during check-in/check-out and for queues to build at the concierge/reception.  Keeping this in context, technological vendors have responded with offline working solutions in case of an internet mishap.

Challenge No. 3 – Business Knowledge

Technology is the key to knowing and analysing one’s own industry and business. Today’s PMS systems shine a spotlight on the comprehensive features that they provide for the hospitality business like revealing trends and anomalies, forecast, revenue comparisons and so on. Using the business intelligence functionality provided with these solutions, managers and owners can analyse what is sold, when and to whom. These systems come with real-time accurate reporting tools that help the hotel manager to be on top of his game and maximise the ADR’s. This helps the hotel to achieve their targets and increase profits. Such technologically advanced systems can provide you with a helicopter view of the business and can help establish patterns and vulnerabilities that an individual can’t see.

With such increasing importance and reliance on technology, it is difficult not to see hotels big and small investing in different systems suiting their hotels. With such high surge of vendors in the industry, some notable budget friendly vendors with great support service that I came across some hotel software’s like mycloudhospitality, WISH.NET and @your WSIH while researching by Prologic First. (www.prologicfirst.com)
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Profit Generating Formula = Food Cost Control

By M Dave and Aditi Gupta

The food & beverage industry is witnessing a surge in the number of small to medium restaurants. Though, the Chef’s are highly capable, it has been discovered that a talented chef also needs to inculcate the art of costing a plate of food besides gaining culinary expertise. Most of the hotel management institutes do not emphasize much on financial and profit modules until much later in their curriculum. This is reflected in the lack of knowledge about accurate financial control among the aspiring chef’s. One needs to realise that with severe competition in the restaurant industry one can thrive only if they have a right mix of a talented chef, consistent access to quality ingredients, dependable suppliers and a cosy ambience with provides a magic touch of personal customer service. However the success of all the above-mentioned elements can only be measured if the restaurant is making profits and meeting its targets, which is the underlying principle of any business. Hence it’s reasonable to state that any business in the food & beverage industry has to be cost conscious. The window of profit margin in the industry has been depleting with every passing day with increasing competition and prices mixed with customer’s demand of higher quality food at a lower price tag.

So the question is whether the restaurant managers are missing the trick and facing the challenge of costing? Most chefs can estimate roughly what a plate should cost however it is impossible to estimate the exact cost of the plate without appropriate tools. For example: – A chef might be able to guess the cost of a bowl of salad but what about the garnish? Often the sprinkle of oils, dressing, spices which are forgotten also has an implication-on the total cost of the salad. This leads to underestimating the cost of a very simple dish like salad which -can have higher repercussions on the overall P&L of the restaurant.

This boils down to one point that if you need to make the profit in this business your cost of plate needs to be accurate. Good financial control will include complex calculations like taking into account the food wastage/shrinkage which reduces your gross profit; at the same time it is equally important to ensure good inventory and stock rotation. All of the above sounds very obvious but, if one lack training to think this way just because it was not focussed when they studied how can one be expected to make the profit in this business?

For those managers who run and manage their restaurant but lose revenue due to underestimating the cost of plate of food the market have various options to help you. We get various EPOS, inventory management and stock taking; menu engineering and accounting software which are budget friendly. Why not try it?  Yes, there would be a small cost to your business in the start however the return on investment mixed with profits will make you overlook the initial investment.

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