HOUSEKEEPING
MANAGEMENT
SECOND EDITION ︳MATT A. CASADO
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
CHAPTER 9
Controlling Operations
Main Concepts
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Useful Tips on Budget Interpretation
Housekeeping Operating Budget
Consolidated Room Sales
Rooms Division Budget
Section Housekeepers’ Man-Hour Justification
Useful Tips on P&L (P&L) Statement Interpretation
The Profit and Loss and Variance Analysis
Productivity Control
Weekly Labor Forecast
Computerized Housekeeping Management
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
USEFUL TIPS ON BUDGET
INTERPRETATION (I)
Revenue - Expenses = Profit
• Revenue is the amount of dollars generated from
selling rooms.
• Expenses are the costs of the items required to
operate the rooms division.
• Profit is the amount of dollars that remain after
all expenses have been paid.
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
USEFUL TIPS ON BUDGET
INTERPRETATION (II)
Revenue - Expenses = Profit
The following terms are synonymous:
• revenue and sales
• expenses and costs
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
USEFUL TIPS ON BUDGET
INTERPRETATION (III)
• Labor Costs
– Cost of all employees, including taxes.
• Other Expenses
– All expenses not associated with payroll.
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
USEFUL TIPS ON BUDGET
INTERPRETATION (IV)
• Percent (%) means “out of each hundred.”
• There are three ways to write a percent:
– Percentage Form
• “%” sign is used, as in 10%
– Fraction Form
• the part, or a portion of 100, as in 10/100
– Decimal Form
• the decimal point (.), as in 0.10
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
USEFUL TIPS ON BUDGET
INTERPRETATION (V)
• Percentage of revenue that a particular
expense costs:
Expense
Revenue = Expense %
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
THE HOUSEKEEPING OPERATING
BUDGET
• The purpose of the operating budget is
twofold:
1. To allocate funds for expenditures for a
determined period of time, generally one year.
2. To measure and control the department’s
performance.
• The housekeeping operating budget is part of
the rooms division budget, which also
includes the front office.
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
CONSOLIDATED ROOMS SALES
• The projected revenue of the rooms division
consists of the dollars to be generated by the
sales of rooms at a certain unit price.
• Sales = Number of rooms sold X Average daily
rate (ADR)
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
SECTION HOUSEKEEPERS’ MAN-HOUR
JUSTIFICATION
• Used to ascertain the wages of section
housekeepers and laundry workers, as these
employees report to work based on number of
rooms that need to be serviced daily.
• Purpose of this statement is to warrant the
amount that must be obtained in the upcoming
budget.
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
USEFUL TIPS ON P&L STATEMENT
INTERPRETATION
• The P&L lists actual revenue, payroll costs,
other expenses, and profit for a certain
period of time, usually monthly.
• The P&L is important because it indicates
the financial performance of the rooms
division operation.
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
SAMPLE PERCENTAGES USED
IN A ROOMS DIVISION P&L STATEMENT
1. Labor Cost
Revenue
3. Other Expense
Revenue
4. Total Expense
Revenue
5. Profit
Revenue
= Labor Cost %
= Other Expense %
= Total Expense %
= Profit %
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
VARIANCE ANALYSIS
• The variance analysis is a report indicating
the changes in revenue and expenses from
each budget category.
• The purpose of the variance analysis is to
alert department heads of percentage
changes from budget.
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
COST PER OCCUPIED ROOM
• The cost per occupied room is a good
determinant of expenses per room sold.
• The cost is obtained by dividing each
expense category for a certain period of
time by the rooms sold during that period
of time.
– For example, if rooms sold = 9,672 and
expense = $17,830, the cost per room would
be $1.84
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
PRODUCTIVITY CONTROL
• Productivity is a measure of output
compared to input.
• A useful ratio to control productivity is:
– Revenue : Hours of work = dollars per labor hour.
• Another indicator of productivity is:
– Hours of works : rooms cleaned = mean hours
per room serviced
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
WEEKLY LABOR FORECAST
• The weekly labor forecast projects the section
housekeeper hours needed to service the
forecasted occupied rooms for a particular week.
• By dividing the estimated revenue for the week
by the section housekeeper hours, the revenue
generated per hour worked is obtained.
• The result is compared to the amount stated in
the yearly budget.
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
PAYROLL CONTROL
• If significant variations with planned
results occur, management must:
– Determine if there is too much overtime or
overscheduling of workers
– Take corrective action
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
COMPUTERIZED HOUSEKEEPING
MANAGEMENT
• Executive housekeepers use technology to
perform tasks such as controlling inventory
supplies, scheduling operational routines,
tracking departmental man-hours and costs.
• Software packages exist that perform personnel
management tasks, track inventory supplies,
establish quality assurance programs, schedule
guestroom maintenance, or print daily work
schedules.
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.
COMPUTERIZED HOUSEKEEPING
MANAGEMENT (CONT.)
• Steps in selecting a computerized
housekeeping management software
system are:
– Determine the needs of the department
– Select a system that will fulfill the
requirements to have the job done
– Ensure that the vendor will provide technical
support and employee training
Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved.