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6

Hotel Management Reports

Learning Objectives
1. To learn about internal hotel management reports.
2. To understand and be able to use Daily Revenue Reports.
3. To understand and be able to use revenue forecasting reports.
4. To understand and be able to use labor productivity reports.
5. To understand the relationship between revenue changes and profit changes.

Chapter Outline
Internal Hotel Management Reports
Definition
Types and Uses
Daily Reports
Daily Revenue Reports
Labor Productivity Reports
Weekly Internal Management Reports
Weekly Revenue Forecast
Weekly Wage and Cost Scheduling
Profitability Forecasting
Monthly Internal Management Reports
Monthly P&L Statement
Profitability, Retention, and Flow Through
Monthly P&L Statement Critiques
Summary

Hospitality Manager Takeaways


Key Terms

Review Questions

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CHAPTER 6 HOTEL MANAGEMENT REPORTS

The three financial reports that we have discussed in previous chapters—the Profit and
Loss (P&L) Statement, the Balance Sheet, and the Statement of Cash Flow—are used by
both management and outside parties in evaluating hotel operations. We will now talk
about two types of internal financial and management reports that hotel managers use:
• One report summarizes and presents the operating results for the previous day or
week.
• The second report forecasts or schedules operations and functions for the next day
or next week.

Managers use these reports to understand and evaluate past operations and to plan their
daily and weekly future operations. They will make any necessary changes to daily oper-
ations to achieve budgets and forecasts or to respond to market or outside conditions.
Internal management reports are prepared by the accounting office and distributed to
hotel managers for their use. Refer again to the Financial Management Cycle:
1. Operations produces the numbers.
2. Accounting prepares the numbers.
3. Operations and accounting analyze the numbers.
4. Operations applies the numbers to change or improve operations.

The reports that we will discuss in this chapter are examples of the Financial Man-
agement Cycle. Operations produces the numbers, whether they are good or bad. It is
accounting’s job to collect and prepare the management reports from these operational
numbers so that managers can use them to identify and analyze operations. Then man-
agement can apply the information from the numbers to the next day’s or week’s opera-
tions. The goals are to understand what happened, why it happened, and how it can be
changed or improved.

Internal Hotel Management Reports

Definition
An internal management report contains detailed operating information covering a spe-
cific time for a specific product, customer, department, or for the entire hotel or restau-
rant. It can contain the operational results for activities of the previous day or week, or it
can contain the information required to plan the next day or week. Daily and weekly
reports are used internally as management tools, whereas monthly reports are used both
as a management tool and to report the monthly financial results for the three formal finan-
cial statements: the P&L, the Balance Sheet, and the Statement of Cash Flow.
These internal management reports are extremely valuable to operations managers.
They are a guide—a true management tool—for them to use in managing their daily

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DAILY REPORTS

operations. The more a manager understands these reports, the better she or he will be
able to use them to improve or change operations.

Types and Uses


Reports contain daily, weekly, monthly, and quarterly information. They include reports
that provide actual operating information and financial information for previous time
periods and reports that plan in detail for future time periods. Daily and weekly reports
that provide the results of actual operations are used to forecast and schedule operations
for the next day, week, month, or quarter. Table 6.1 illustrates the types and uses of inter-
nal management reports.
We will discuss these reports in detail, including examples of the reports used by some
of the major hotel and restaurant companies. Keep in mind that one type of report pro-
vides historical operating information and the other type forecasts and schedules opera-
tions for the next week.

Daily Reports
The two most important daily reports provide information on revenues and labor costs.
The names and formats of these reports can be different from company to company, but
the content is the same. They focus on providing the actual operating results for the pre-
vious day and comparing those results with forecasts, budget, the previous month, and
last year’s information.

TABLE 6.1
Internal Management Reports
Daily Weekly Monthly Quarterly Annually
Performance Reports—The Past
Daily revenue report X
Daily labor report X
Weekly financial report X
Monthly P&L X
Profitability measurement X X X
Planning Reports—The Future
The daily room count X
The daily banquet schedule X
Weekly revenue forecast X
Weekly labor forecast X
Monthly revenue forecast X
Quarterly revenue forecast X
End-of-year revenue forecast X

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CHAPTER 6 HOTEL MANAGEMENT REPORTS

Daily Revenue Reports


This report is prepared during the night audit or day audit shift and collects and presents
all of the operating information for the previous day. It can be called the Sales and
Occupancy Report, the Daily Revenue Report, or the Gross Revenue Report depending
on the company. All contain virtually the same information. We will discuss a Daily
Revenue Report that is organized into the following section: (1) hotel daily revenue by
department, (2) hotel daily room statistics, (3) Restaurant and Banquets Summary, and (4)
hotel market segment information.
The daily revenue by department is organized in a similar format as the P&L Statement.
The title provides the name of the hotel, type of report, and date of the report. The hori-
zontal headings provide revenue for the day and compare it to the budget and last year’s
revenues. It also provides month-to-date accumulated revenue for actual, budgeted, and
last year’s totals. Managers can then evaluate how their current financial results compare
to the budget and to the previous year for both time periods. The vertical headings show
the individual revenue centers (or departments) for the hotel. Exhibits 6.1 and 6.2 are
examples of daily revenue report formats for two major hotel companies:

E X H I B I T 6 . 1

SALES AND OCCUPANCY REPORT

Hotel Name
Sales and Occupancy Report
Date

Revenue by Hotel Department


Today Period to Date
Actual Budget Last Year’s Actual Budget Last Year’s
Actual Actual
Transient Rooms Sales
Group Rooms Sales
Contract Rooms Sales
Part Day/Guaranteed
Adjustments
Net Rooms Sales
Telephone Sales
Gift Shop Sales
Rents and Commissions
Other Sales
Subtotal

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DAILY REPORTS

Restaurant Sales
Lounge Sales
Banquet Sales
Total F&B Sales
Total Hotel Sales
Over/Under Budget

Rooms Statistics
Today Period to Date
Actual Budget Last Year’s Actual Budget Last Year’s
Actual Actual
Room Nights
Total Rooms in Hotel
Complimentary Rooms
Out of Order Rooms
Rooms Available to Sale
Rooms Rented
Rooms Vacant
Occupancy Percentage Available Rooms
Occupancy Percentage Total Rooms

Average Rate
Transient Average Rate
Group Average Rate
Contract Average Rate
Full Day Average Rate
Net Average Rate
REVPAR

Miscellaneous
Total Guests
Arrivals
Departures
Drive-Ins
Guaranteed No Shows

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CHAPTER 6 HOTEL MANAGEMENT REPORTS

Restaurant, Beverage, and Banquet Summary


Food Today Beverage Today Period to Date
Sales Customers Average Check Sales & Food Sales Customers Average Check
Actual Budget Last Year Actual Budget Last Year Actual Budget Last Year
Restaurant
Room Service
Specialty Restaurant
Lounge
Total Restaurant and Beverage
Banquet Sales
Banquet Meeting Rooms
Banquet Other
Total Banquet

Hotel Market Segment Information


Today Period to Date
Rooms Revenue Average Rooms Revenue Average
Sold Rate Sold Rate
Weekday
Regular
Corporate
Special Corporate
Discounts
Total Transient
Corporate Group
Association Group
Other Group
Total Group
Contract
Total Weekday

Weekend
Regular
Corporate
Special Corporate
Discounts
Total Transient
Corporate Group
Associate Group
Other Group
Total Group
Contract
Total Weekend

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DAILY REPORTS

Group Business
Individual Groups Listed

Complimentary Rooms
Names Listed

Other Information
Contract Business
Out-of-Order Rooms
Walked Guests

As you can see, this is a lot of information. It is very complete and detailed. Each
manager in the hotel will focus on the operating information for his or her department.
The Front Office and Housekeeping managers will focus on room sales and statistics. The
Restaurant, Lounge, and Catering managers will focus on food and beverage sales and
statistics. Again, there is a lot of information in these reports, but each manager will focus
on his or her own areas and will be familiar with trends, forecasts and budgets, recent
events, and the status of the local economy. Working with the Daily Revenue Report each
day will enable a hospitality manager to get familiar and understand better the opera-
tional results contained in the daily report and internal or external factors that affect those
results.
Exhibit 6.2 is a second example of a hotel daily revenue report. This company orga-
nized the information into the following sections: (1) summary, (2) rooms sales and sta-
tistics, and (3) food and beverage sales and statistics. It includes labor productivities and
profitability estimates.

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CHAPTER 6
E X H I B I T 6 . 2

REVENUE REPORT

HOTEL MANAGEMENT REPORTS


Month to Date MTD
Today (MTD) Variance MTD MTD Variance
Actual Preliminary Actual Preliminary to Preliminary Last Year’s Actual to Last Year
Dollar Percentage Dollar Percentage Dollar Percentage Dollar Percentage Dollar Percentage
Room Revenue
Food Revenue
Beverage Revenue
Food and Beverage Other Revenue
Total Food and Beverage Revenue
Telephone Revenue
Other Revenue
Total Revenue
Rooms Profit
Food and Beverage Profit
Telephone Profit
Other Profit
Gross Operating Income
Administrative and General
Sale and Marketing
Heat, Light, and Power
Repairs and Maintenance
Total Overhead Expense
Gross Operating Profit (Estimated)
Rooms Sales and Statistics
Transient Revenue
Group Revenue
Less Allowances
Total Rooms Revenue
Payroll
Administration
Front Office
Housekeeping
Guest Services
Transportation
Reservations
Total Wages
Employee Benefit Percentage
Total Payroll
Other Expenses
Department Profit
Statistics
Available Rooms
Rooms Sold/Average Rate
Transient
Group
Total Rooms Sold/Average Rate
Complimentary Rooms
Total Rooms Occupancy/Average Rate
Occupancy Percentage

DAILY REPORTS
Hotel Guest and Guests per Room
Arrivals
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Departures
Memo Statistics
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CHAPTER 6
Rack Rate
Discounts
Contracts

HOTEL MANAGEMENT REPORTS


Wholesalers
Total Transient
Association
Corporate
Specialty Group
Travel Industry
Total Group
Labor Hours
Administration
Front Office
Concierge
Housekeeping
Guest Services
Transportation
Reservations
Total Labor Hours

Food and Beverage Sales and Statistics


Food Revenue
Restaurant
Specialty Restaurant
Rooms Service
Banquets
Total Food Revenue
Beverage Revenue
Restaurant
Specialty Restaurant
Room Service