Strategic Planning and Revenue Management in Hospitality Industry

This report discusses the strategic planning and performance management of the food and beverage department in Hilton Hotel. It includes key performance indicators, key priorities, and recommendations for improvement. The report emphasizes the importance of performance management in the hospitality industry.

Running head: STRATEGIC PLANNING AND REVENUE MANAGEMENT
strategic planning and revenue management

STRATEGIC PLANNING AND REVENUE MANAGEMENT 1
Executive Summary:
Organizations working in hospitality sector afe required to frame an effective and competitive
strategic analysis methods for survival as they are orerating in an environment where both
investor and customer are demanding more form all organizations. For this purpose, a
hospitality organization should always include perfromace management functions and
activties in its strategic management policies. This report is based on perfromance
measurement methods and requiremnets of the food and beverage department of a worldwide
groou of hotel named as Hilton. The report summarizes some important information of the
departmnet that is collected grom authenticated sources and journal articles. The study of this
report provides an understanding to the reader about the need and importance of performance
management of food and beverage department in hospitality industry.

STRATEGIC PLANNING AND REVENUE MANAGEMENT 2
Table of Contents
Introduction:..........................................................................................................................................3
Food and Beverage Department Performance:......................................................................................3
Quality index of Hotel:......................................................................................................................3
Kitchen Labor Hours:........................................................................................................................4
Food Costs:........................................................................................................................................4
Best and Worst sales:.........................................................................................................................4
Public Awareness:.............................................................................................................................4
Staff Satisfaction:..............................................................................................................................4
Food and Beverages Department Key Priorities:...................................................................................5
Maintaining day to day operations:....................................................................................................5
Maintaining a clean and organized kitchen environment:..................................................................5
Beverage Control:..............................................................................................................................6
Cost Control and budgeting:..............................................................................................................6
Training to employees:......................................................................................................................6
Laws:.................................................................................................................................................6
Recommendations to relevant departments:..........................................................................................7
Conclusion:............................................................................................................................................7
References.............................................................................................................................................9

STRATEGIC PLANNING AND REVENUE MANAGEMENT 3
Introduction:
Strategic planning can be defined as a process of determining vision and mission of an
organization for the purpose of achieving goals and objectives in future. This process
includes creating and establishing a system to be followed by the company to achieve
predetermined goals. A company develops its strategic plan at the time of offering services to
employees. Without an effective strategic plan, it is not possible to accomplish the objectives
in the desired manner (Phillips & Moutinho, 2014).
This report includes the strategic planning along with its key indicators and execution
plan of Hilton Hotel. Hilton hotel manages its operations under Hotel Operation Tactics and
Strategy (HOTS) simulation. This simulation is based on a problem-solving exercise where
different departments and teams work together to frame and execute decisions (Pratt & Hahn,
2015). This report includes the key performance indicators of last three months with defining
the key responsibilities of a manager working in food and beverages department. Further it
includes some recommendations for the improvement in performance and eliminating issues
occurred in the past three months. In order to provide an overview of report, a conclusion has
been drawn on the bases of entire essence of the report (Esenyel & Mahafzah, 2016).
Food and Beverage Department Performance:
There are number of key performance indicators which facilitate Hilton group of
hotels to analyses and measure the performance of its food and beverage department. A key
performance indicator is a tool to measure the effectiveness and efficiency of the
organization. There are mainly two types of key performance indicators, Low-Level KPIs and
High-Level KPIs. Both of these types focus on different operations and process of the hotel
(Iveta, 2012). Hilton can measure and evaluate its KPIs with the help of balance score card
that includes vision and mission and focuses on the overall performance of an organization.
In the hospitality industry, main categories of a score card provides the management a
considerable feedback to improve the service and performance of a hotel (Srivastava &
Maitra, 2016). The review of the performance with the help of KPIs can be described as
follows:
Quality index of Hotel:
Quality index of hotel is a key performance indicator that facilitates Hilton to analyses
and evaluate the perceptions of customers about quality provides by the hotel.

STRATEGIC PLANNING AND REVENUE MANAGEMENT 4
Kitchen Labor Hours:
The department keeps track of the working hours of kitchen staff to measure their
efficiency and productivity. For this purpose, their work is divided into small categories like
time is taken to serve breakfast, the time consumed in cooking main courses and desserts,
washing dishes, cleaning etc. The results indicate various things like if the number of staff is
less then requirement or it is more than the requirement if the staff members are lazy or doing
their work with full capacity etc (Meilani & Anugrah, 2015).
Food Costs:
The food and beverage department of Hilton hold a tight command regarding the
stock. It adds food purchased for the week and compare the sum with actual food sales to
understand the actual need of the stock. This makes the department to fulfill the sudden
requirements of the customers (Onyeocha, Anyanwu, Opoola, E, & Maduakolam, 2015).
Best and Worst sales:
The department is often trying to find the best and most popular selling item to avoid
the circumstances of short of stock. Similarly, the management also tries to find out least
selling item so that investment of money in that item can be saved. These items are easily
found out with the help of POS system (Ivanovic, Perman, & Grlj, 2015).
Public Awareness:
It is an important indicator of performance that is used by Hilton to identify how
much people are aware of the food and beverage related services of the organization. It also
indicates the relationship of the management with its customers (Dutescu, Popa, & Ponorica,
2014).
Staff Satisfaction:
Guest satisfaction in the hospitality industry is directly linked with the staff-
satisfaction. Hilton believes that it is very essential to satisfy staff members and employees to
provide complete satisfaction to the guests and customers. The data reflects that Hilton is
continuously trying to develop staff satisfaction with the help of promotional plans and
schemes. The hotel also rewards and motivates its employees to provide better customer
service (Azic, 2017). Below graph shows the increasing number of employees from 2013 to
2017 in Hilton. This shows that management is successful in satisfying the staff and thus their
performance level is also increasing.

STRATEGIC PLANNING AND REVENUE MANAGEMENT 5
(Number of Hilton Worldwide employees from 2013 to 2017 (in thousands), 2018)
Food and Beverages Department Key Priorities:
In order to improve the performance of food and beverage department, there are some
key responsibilities that are required to be fulfilled by the employee working in food and
beverage departments. It includes developing a strategic plan for the smooth and effective
working of the department. It is the responsibility of the operational manager of the
department to develop a strategic plan along with the duties and responsibilities of the
employees designated on different levels. The strategy includes below mentioned main
responsibilities of managers and employees:
Maintaining day to day operations:
This will be the responsibility of the manager to manage the day to day operations of
the food and beverage department. It will include functions like the arrangement of raw
material, guidance to waiters, cooks, arrangements of other customer service related items
etc. This responsibility should be the priority of the organization because, without proper
management of day to day activities, a department cannot function in a well-mannered
structure (Yildiz, 2015).
Maintaining a clean and organized kitchen environment:
The responsibility of the kitchen supervisor will include maintaining proper sanitation
and pest control to keep the environment of the kitchen clean and hygienic. This also includes
keeping the things of requirements at their lace so that everyone can know that where
everything is. It is required to ignore some small errors which can lead to severe disasters. A

STRATEGIC PLANNING AND REVENUE MANAGEMENT 6
clean kitchen environment also ensures the safety of guests and it may result in increasing the
goodwill of the hotel (Byrd-Bredbenner, Berning, Biggers, & Quick, 2013).
Beverage Control:
Beverage includes both types of drinks alcoholic and non-alcoholic. At Hilton, both
types of beverages are served as per the requirement of customers. The responsibility of
controlling beverages will be lies upon the supervisor of beverages department. He will be
required to keep the record of all the suppliers and the deliveries for the purpose of cost
assessment. He will also maintain the record of movement of stock between restaurants and
bars, so that balance can be adjusted accordingly. It will also help to estimate Economic
Order Quantity for the stock (AbuKhalife & Som, 2012).
Cost Control and budgeting:
The responsibility of carrying out effective cost controlling and budgeting techniques
will be handled by the accountant of the food and beverages department. The accountant can
use traditional or behavioristic approach for this purpose. These include preparing budgets
and comparison of budgets with the actual results at the end of the term. The accountant can
also use a well-known tool of cost control in this department that is Menu Pricing. This will
help the hotel in identifying the area of extra cost involves so that corrective actions will be
able to apply. The process of the budget is required to be followed to ensure a high level of
accuracy because budgets provide a strict and fair rule of thumb for the functioning of whole
department (Yuan, 2014).
Training to employees:
It is a must and tops most priority of an organization to provide training its employees
so that they can perform in the desired manner. In order to increase its performance, Hilton in
continuously trying to provide best quality training to its employees. For the next 6 months,
training and development of the hotel will be responsible to provide extra training especially
for those areas, which are the main reason of the negative response of the customers
(AbuKhalifeh, Som, & AlBattat, 2013).
Laws:
The food and beverage department is also governed by many regulations and laws.
Some laws are common for all hotel and some are related to a particular hotel. The legal
department of Hilton will be responsible for the proper compliance of these laws in providing
services to the customers. For example: If cocktails are served at customer demand, drink and

STRATEGIC PLANNING AND REVENUE MANAGEMENT 7
alcohol laws will impact the bar portion of the department. The food manager will be
required to make sure that these type of rules and laws either being followed by employees or
not (Arisseto-Bragotto, Feltes, & Block, 2017).
Recommendations to relevant departments:
On the basis of above study, it can recommend that the food and beverage department
is a very important part of Hospitality Industry which can lead to an organization to the top of
the hill. Along with above key performance indicators used by the management, there are
also some indicators which should be used by the company. These include sales per hour,
sales per labor hour, seating efficiency, total seats per head, function gross profit per month,
the strike rate of employees, kitchen linen costs, complaints per head, profit per table etc.
This will help in analyzing the performance of department as well as its employees in depth.
Further, it is also to recommend that identified key priorities and responsibilities should be
properly explained by the head of the departments to the employees. It is also to recommend
that Hilton should include more priorities like customer feedback, competitor analyses for
strategic planning, proper coordination with other areas of service department etc. It will
increase the efficiency of the management as well as improve the profitability of the
department.
After analyzing the above report, it can also recommend that hotel should organize
and amend its policies regarding food and beverage department in such a manner so that it
can find a path to work and to perform with. The strategic management of the organization
should be framed in such a way so that it can link the performance and results of different
departments to achieve organizational goals.
Conclusion:
The study of the above report concludes that being a well-known brand in Hospitality
Industry, Hilton is providing a high level of services to its customers in food and beverage
department. It uses a number of key performance indicators to evaluate the performance of its
employees which provides a true position of the employees and their responsibilities.
Although there are some areas which need to be improved by following the strategic planning
that is mentioned above. Further, it also concludes that if it follows the recommendations
suggested above, then it can improve the performance of the whole department as well as the
organization. The hospitality sector is based upon the coordination of many departments and
in order to the successful and an effective performance management of food and beverage

STRATEGIC PLANNING AND REVENUE MANAGEMENT 8
department, support from all the managers and departments is necessary. Recommendations
also suggest that the Hilton should also comply with laws of food and beverages management
in order to increase its goodwill and image in front of customers. The food and Beverage
department and its performance management is an essential aspect of organizational
performance management and should be carried out carefully to find out the actual revenue
generated by the organization.

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References
AbuKhalife, A. N., & Som, A. P. (2012). Service Quality Management in Hotel Industry: A
Conceptual Framework for Food and Beverage Departments. International Journal of
Business and Management, 7(14), 135-141.
AbuKhalifeh, A. N., Som, A. P., & AlBattat, A. R. (2013). Journal of Tourism and
Hospitality, 2(1), 1-3.
Arisseto-Bragotto, A. P., Feltes, M. M., & Block, J. M. (2017). Food quality and safety
progress in the Brazilian food and beverage industry: chemical hazards. Food Quality
and Safety, 1(2), 117-129.
Azic, M. L. (2017). THE IMPACT OF HOTEL EMPLOYEE SATISFACTION ON
HOSPITABILITY PERFORMANCE. Tourism and Hospitality Management, 23(1),
105-117.
Byrd-Bredbenner, C., Berning, J., Biggers, J. M., & Quick, V. (2013). Food Safety in Home
Kitchens: A Synthesis of the Literature. International Journal of Environmental
Research and Public Health, 10, 4060-4085.
Dutescu, A., Popa, A. F., & Ponorica, A. G. (2014). Contemporary Approaches and
Challenges of Tourism Sustainability. Amfiteatur Economic Journal, 16(8), 1045-
1047.
Esenyel, İ., & Mahafzah, A. G. (2016). The Role Played by Strategic Planning in the
Performance of Hotel HR Departments: The Case of Turkish Republic of North
Cyprus (TRNC). Journal of Tourism & Hospitality, 5(5), 1-4.
Ivanovic, S., Perman, L., & Grlj, I. (2015). IMPACT OF TECHNOLOGICAL
DEVELOPMENT IN BUSINESS EFFICIENCY IN THE FOOD AND BEVERAGE
DEPARTMENT. UTMS Journal of Economics, 6(2), 321-330.
Iveta, G. (2012). Human Resources Key Performance Indicators. Journal of Competitiveness,
4(1), 117-128.
Meilani, D., & Anugrah, I. (2015). The Design of Hotel Performance Management System in
Padang. Proceedings of the International MultiConference of Engineers and
Computer Scientists, 2, 18-20.

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Number of Hilton Worldwide employees from 2013 to 2017 (in thousands). (2018, June 15).
Retrieved from Statista: https://www.statista.com/statistics/297758/number-of-hilton-
worldwide-employees/
Onyeocha, O. A., Anyanwu, L. A., Opoola, A., E, Y. F., & Maduakolam, C. C. (2015). Food
costing and control: a vital aspect of hospitality industry business. Pearl Journal of
Management, Social Science and Humanities, 1(4), 60-68.
Phillips, P., & Moutinho, L. (2014). Critical review of strategic planning research in
hospitality and tourism. Annals of Tourism Research, 48, 96-120.
Pratt, M. A., & Hahn, S. (2015). Effects of Simulation on Student Satisfaction With a
Capstone Course. Journal of Hospitality & Tourism Education, 27(1), 39-46.
Srivastava, N., & Maitra, R. (2016). Key Performance Indicators (KPI) in Hospitality
Industry: An Emphasis on Accommodation Business of 5 Star Hotels of National
Capital Region. International Journal of Research in Tourism and Hospitality, 2(1),
34-40.
Yildiz, O. (2015). Internal Communication Function and Hotel Productivity–A Comparative
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Yuan, Y. (2014). Ohiolink. Retrieved June 15, 2018, from https://etd.ohiolink.edu/!
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