Cost Control in the Hotel Industry

The assignment delves into cost control strategies employed within the hospitality sector, specifically in a hotel setting. It examines an interview with an Executive Chef from the Occidental Hotel, exploring their techniques for managing costs in both the front-of-house and back-of-house areas of operation. The analysis highlights methods such as food cost management, waste reduction, and inventory control to ensure profitability while maintaining service quality.

Running head: FOOD AND BEVERAGE MANAGEMENT
Food and Beverage Management
Name of the Student:
Name of the University:
Author Note:

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Contents
Introduction......................................................................................................................................2
Analysis of the Interview findings...................................................................................................2
Type of hospitality enterprise managed by the chef....................................................................2
Maintaining the cost control of front of house operation............................................................3
Maintaining the cost control in back of house operation.............................................................4
Financial cost control methods used in daily business operation................................................4
Evaluation of the findings and its effectiveness in managing food service operation.....................5
References........................................................................................................................................6
Appendix..........................................................................................................................................8

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Introduction
The Occidental Hotel in Sydney is a famous seafood restaurant with classic bar. It has
also provisions of lodging facility. Occidental Hotel is a dining restaurant with families and
friends with great service quality. This paper will highlight the summary of the executive chef of
Occidental hotel. The prices of various cuisines and the famous seafood of the restaurant are
provided at an affordable rate to the customers. The chef of the restaurant co-ordinates with the
front house of operation and the back house of operation. The chef also properly maintains
proper communication with the front house and the back house of operation. The customers are
provided with affordable service and they recommended their friends to visit the restaurant. The
chef also tries of analyze the cost of operation as it will benefit the customers as well as the
management authority (Saleem and Raja 2014).
Analysis of the Interview findings
Type of hospitality enterprise managed by the chef
The chef of Occidental hotel tries to increase the reputation of the hotel by training,
managing and developing the members of the kitchen. He provides them necessary training and
he maintains the entire kitchen brigades. Occidental hotel is one of the leading seafood
restaurants in Sydney. It also has the provision of beverages and thus is preferred by the tourist
as well as the local community. The executive chef of Occidental hotel prepares special dishes
for the people on weekends (Molina-Azorín et al 2015). The chef along with the executive chef
implements new palns and brings changes in the food items. The customers also visit the
restaurant to try out their famous cuisines. The chef personally meets with the customers

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sometimes and thus interacts with them to know their likes and dislikes. The chef brings
innovative ideas to develop the restaurant so that it will yield more profit to the hotel. The chef
also has to confront various challenges and thus work co-operatively in the group (Karatepe et al.
2014). He has to motivate his team members and thus convince them so that they can improve
the food quality and thus prepare good food for the customers. As the hotel industry is
competitive, the chef has to implement new innovative ideas and retain the customers. The chef
must also be able to fulfill the needs and demands of the customers by providing them the right
cuisines. It is also the duty and responsibility of the chef to communicate with the customers
frequently and thus bring out necessary changes in the menu (Leung et al.2015)..
Maintaining the cost control of front of house operation
The front hose of operation in a restaurant refers to the area outside the kitchen. It is
usually the dining area, the rest room and the bar. The chef must manage the front house of
operation and it includes customer service, designing the dining space, planning out different
promotions in the restaurants and many more. It is important for the chef to understand and
analyze the front house of operation of the restaurant. The chef of Occidental hotel has
mentioned that it is necessary to generate food cost between 28% and 35% without deteriorating
the quality of food (Jani and Han, 2014). This is vital and necessary for the attainment of
profitability. It is also necessary to keep the food cost reasonable or else it will affect the bottom
line business of the restaurant. The menu must be prepared in such a way so that it can be easily
altered. If the customers do not get their desired food according to choice, they will not be
willing to visit the restaurant again. Thus, it is necessary that the chef provides alternative
cuisines to the customers so that they do not return home disappointed. The chef must also insist
the customers to place cost effective orders and thus it will help in controlling the food cost. The

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chef must also maintain a monthly and weekly inventory of the food items. They must also keep
a track of the kitchen equipments and the services that are delivered to the customers(Gin Choi,
Kwon and Kim 2013).
Maintaining the cost control in back of house operation
The back house of operation of the restaurant involves those areas which are not visible
to the public. It involves the storage room and the kitchen in the restaurant. The chef has
highlighted that they try to use the written recipes so that they can use the correct proportion of
seasonings and spices. It is also necessary to streamline the waste reduction. It is also necessary
to manage the in-house staffs and thus maintain the daily schedules. The chef must be able to
maintain a healthy inventory and also keep a track of the monthly inventories. This will help in
identifying the loses of the restaurant and thus keep a track. It will also help in improving the
ordering processes. The chef also has to take care of the administrative tasks and hire different
kitchen staffs according to the specialization (Ali and Amin 2014).
Financial cost control methods used in daily business operation
There are huge costs which are associated with the receiving, purchasing and storing of
raw materials in food and beverage establishments. There are various cost control measures
which area associated at various stages of operation and thus it also helps in mitigating the
problems. The role of standards is necessary and it is the vital responsibility of the chef. There
are certain procedures which are important for the preparation of food items within a specific
cost. Several steps are taken for the improvement and maintenance of the food standard. Proper
training is necessary and thus it becomes easier for all employees to understand the duties. The
most important aspect of cost control which is followed by the chef is the operation budget. This

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helps in forecasting the sales activities and the overall business volume(Nieves and Segarra-
Ciprés 2015).
Evaluation of the findings and its effectiveness in managing food service operation
The executive chef of Occidental Hotel maintains good relation with the employees and
the customers. The chef has to maintain the quality of food because the hotel industry is facing
steep competition. The executive chef has to implement new ideas and work in co-ordination
with the staffs and thus improve the business. The chef must also monitor the activities of the
other working staffs and check whether the customers are happy and satisfied with their service
and food quality. He must also take care of the administrative staffs. There must be mutual trust
and respect among the employees and thus they must work in co-ordination for the development
of the restaurant (Ali and Amin 2014).. Moreover, the chef must also prepare the menu in such a
way that the items can be4 easily altered if any particular dish is not available. The executive
chef must try to purchase the raw materials on credit so that it will reduce the cost. To stay in
competition with the other restaurants of Sydney, it is necessary that the executive chef of
occidental hotel takes proper care to include traditional dishes in their menu during festive
seasons. Thus, it is necessary that the chef pays more attention to cost control methods. The cost
control methods must be taken by the chef along with the help of the management authority of
the restaurant. He must also take acre that the brigades serve the food to the customer in proper
time. Direct interaction with the customers will also help the chef to know the needs and
demands of the customers. It is important that the chef must carry out his responsibilities in a
proper way (Benavides-Velasco et al. 2014).

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References
Ali, F. and Amin, M., 2014. The influence of physical environment on emotions, customer
satisfaction and behavioural intentions in Chinese resort hotel industry. Journal for Global
Business Advancement, 7(3), pp.249-266.
Benavides-Velasco, C.A., Quintana-García, C. and Marchante-Lara, M., 2014. Total quality
management, corporate social responsibility and performance in the hotel industry. International
Journal of Hospitality Management, 41, pp.77-87.
Gin Choi, Y., Kwon, J. and Kim, W., 2013. Effects of attitudes vs experience of workplace fun
on employee behaviors: Focused on Generation Y in the hospitality industry. International
Journal of Contemporary Hospitality Management, 25(3), pp.410-427.
Jani, D. and Han, H., 2014. Personality, satisfaction, image, ambience, and loyalty: Testing their
relationships in the hotel industry. International Journal of Hospitality Management, 37, pp.11-
20.
Karatepe, O.M., Beirami, E., Bouzari, M. and Safavi, H.P., 2014. Does work engagement
mediate the effects of challenge stressors on job outcomes? Evidence from the hotel
industry. International Journal of Hospitality Management, 36, pp.14-22.
Leung, X.Y., Bai, B. and Stahura, K.A., 2015. The marketing effectiveness of social media in the
hotel industry: A comparison of Facebook and Twitter. Journal of Hospitality & Tourism
Research, 39(2), pp.147-169.

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Molina-Azorín, J.F., Tarí, J.J., Pereira-Moliner, J., López-Gamero, M.D. and Pertusa-Ortega,
E.M., 2015. The effects of quality and environmental management on competitive advantage: A
mixed methods study in the hotel industry. Tourism Management, 50, pp.41-54.
Nieves, J. and Segarra-Ciprés, M., 2015. Management innovation in the hotel industry. Tourism
Management, 46, pp.51-58.
Sachs, C., Allen, P., Terman, A.R., Hayden, J. and Hatcher, C., 2014. Front and back of the
house: Socio-spatial inequalities in food work. Agriculture and Human Values, 31(1), pp.3-17.
Saleem, H. and Raja, N.S., 2014. The impact of service quality on customer satisfaction,
customer loyalty and brand image: Evidence from hotel industry of Pakistan. Middle-East
Journal of Scientific Research, 19(5), pp.706-711.

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Appendix
Interview Script of an executive chef of Occidental Hotel
Interviewer: Which type of hospitality enterprise do you manage?
Executive chef: We build the reputation for the hotel by maintaining by managing, developing
and training the team members of the kitchen. We also manage the kitchen brigades and provide
them necessary training. We also confront various challenges and work co-operatively in the
group. We try to fulfill the demands of the customers and provide them the right cuisines of their
choice
Interviewer: How do you maintain cost control of front house of operation?
Executive Chef: We try to maintain and attain profitability. It is important that the we generate
the food costs between 28% to 35% without hampering the quality. We give preference to this
because the food cost can affect the bottom line of the business if it is too high.
Interviewer: How do you maintain cost control of back house of operation?
Executive chef: We try to streamline the waste reduction. Moreover, we always use written
recipes so that the proportion or the amount of spices or seasonings is proper. We prefer weekly
inventories so as to keep a track of the food that is wasted and adjust the inventory accordingly
Interviewer: Which financial control methods do you use in daily business operation?
Executive Chef: As the food and beverage establishments involve huge processes which are
associated with receiving, storing, purchasing the raw materials, it is our duty to implement
certain cost control measures which will help in mitigating the problems. We must give more

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importance on the role of standards which is vital and necessary to make comparisons or
judgments.