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Garvin O'Neil Professor of Practice -Hospitality and Retail Management
Texas Tech University PO Box 41240
Lubbock, TX 79409 Phone: 806.834.2570
Email: [email protected]
Mr. O’Neil teaches undergraduate courses in hotel management focusing on lodging operations. As a 40-year veteran of hotel operation’s management, he merges academic rigor with real world experience and application. He has held executive management positions with some of the country’s top hotel establishments which include successful tenures as General Manager at the Moody Gardens Hotel, Spa and Convention Center in Galveston, Texas, The Hotel Adolphus in Dallas, Texas and LaPlaya Beach Resort in Naples, Florida. He was also the Food and Beverage Director at Rosewood Hotels’ Mansion on Turtle Creek Hotel and Hotel Crescent Court in Dallas as well as the Hotel Bel-Air in Los Angeles. He served on the board of the Texas Hotel and Lodging Association for over 15 years and is currently on the THLA Education Committee and an instructor at their annual Short Course, a nationally recognized industry education conference for entry and mid-level hotel managers. He has held management and consulting positions at many other independent and chain hotels.
Mr. O’Neil received his BS Degree in Hotel & Restaurant Management from James Madison University in Harrisonburg, Virginia and his MS Degree in Restaurant, Hotel and Institutional Management from Texas Tech University.
Food and Beverage
Garvin O’Neil, Professor of Professional Practice, Hospitality & Retail Management, Texas Tech University
OK – So who here has never tried CAVIAR!!- Here’s Your Opportunity!!!
Hospitality and Retail
Management
Tom Hanks in Movie Big Garvin’s Tom Hanks Moment at
the Mansion on Turtle Creek What is Caviar? The Roe of a
Sturgeon
http://www.youtube.com/watch?v=8PBMCgxIuYI
http://youtu.be/8PBMCgxIuYI
What is Caviar?
Traditional caviar is considered to come from sturgeons living in the wild in the Caspian and Black Sea.
The international community has banned the sale of Caspian Sea sturgeon caviar world wide.
Beluga Caviar is considered the best and rarest of caviars- virtually unavailable now.
How Much is the Real Stuff? Petrossian Special Reserve Ossetra Caviar - $400 an oz. On website
Farm Raised Kaluga Caviar - $300 oz.
Too Big A Subject for 90 minutes
We cannot begin to really tap into the vast culture that is hotel F&B…
…So we’ll hit some highlights
We’ll do a little wine training
Hopefully have time for some Q&A at end
Strap in, we’re going to run through lots of stuff.
F&B, The Craziest Career You’ll Ever LOVE!!!
Fast Paced, Everyday Different, Most Diverse Workforce, Fun, Stressful, Exciting, Scariest, Most Rewarding of all Hotel divisions
More departments, more supervisory positions, more opportunity to shine.
The only way to succeed is to not walk around the POOL, You’ve Got to JUMP IN!
Shape of Your Successful
Career Progression
Versus
How Do You Get There From Here? Garvin’s Work Progression Garvin’s Work Progression High School and College
• Soda Fountain, Drug Store 1974-75- $1.85 per hour - High School – FIRED!!! –Dressed like Groucho Marx on Halloween!
• Line Cook, Restaurant 1977-79 - College• Bartender, Waiter 1978-79 – College
– College Degree HRM – 1979
Garvin’s Work ProgressionCorporate Trainee Hyatt Regency DC -$10,400 year - 1979
Beverage Asst. Mgr. – Hyatt DC - 1980 Restaurant Mgr. Hyatt - 1981 – FIRED!!! –
Partied too much! Beverage Mgr. Worthington Hotel, Ft. Worth
- 1982 Asst. F&B Director, Worthington - 1983 Associate Mgr. Mansion on Turtle Creek
Hotel, Dallas - 1984 F&B Director, Hotel Bel-Air, Los Angeles -
1985
Garvin’s Work Progression F&B Director, Hotel Crescent Court,
Dallas - 1986 Hotel Trainer/Consultant- 1987 F&B Director, Mansion Dallas – 1988 Resident Manager, Adolphus Hotel, Dallas
1990 GM Adolphus Hotel - 1992 GM LaPlaya, Naples, FL– 1994 GM Pelican Strand Country Club, Naples,
FL -– FIRED!- I wish I could say it wasn’t my fault!
Garvin’s Job Progression
Ex. Director, Moody Hospitality Institute, Galveston, TX – 1999
Resident Manager, Moody Gardens Hotel,– 2001
GM, Moody Gardens Hotel, 2003-2016 Professor of Professional Practice, Texas
Tech University. First Entry Level Management Job –
Hyatt $10,400 year. Current Pay – Not Telling!
Can You Survive Getting Fired? Get up off the Mat – No career is a
straight shot up! Set Personal Goals – Example: I want to
be a Banquet Manager in 3 years. Or I want to be an F&B in 5 years
My goal back in 1980 – I want to be the youngest Hotel GM of anyone I know!– Did I reach that goal – Darn Close. Not the
youngest but a GM at 34!
Don’t be afraid to take a challenge.– Take over screwed up departments and fix
them!
Don’t be afraid to work big joints! Don’t be afraid to move
F&B Offers Best Opportunity to Shine and Advance Think number of management positions
Think about the number of screwed up departments
Your chance to be a hero.
F&B BIG THINGS- Great Arrivals
Food That “Eats Good”
Timely, Friendly and Attentive Service
Great Bread
Great Drinks, Well Made, Wines Too
Managers Running the Dining Room
Great Desserts and Great Coffee
Timely Check Resolution
Thank you and Departures
VALUE- A very elusive concept!!!
The F&B BIG THINGS- As I go through these, think about your
favorite Restaurant and see how it stacksup with these BIG THINGS
How does your restaurant stack up?
Great Arrivals and Departures
Who’s seen this?
Mansion Story – We owned Arrivals! Food That “EATS GOOD”
– OK SA, Where is the best burger in your town?– OK Dallas, Where is the best Fajita?– Have a passion to deliver GREAT FOOD
The F&B Big Things Making Sure the Associates have their Brains Turned On while working!!!– Pinball Service
– Pre-shift Meetings
Uniforms and Grooming
First Approach to the table by server!– Timing and Greeting and Upselling
Which Server Looks More Like Yours?
The F&B BIG THINGS- Bread – Great Bread – Crescent Story
– Why is Olive Garden so popular?
Great Drinks made well and Great Wine at a great price
The best Bloody Mary is still the recipe I learned in a small bar in Harrisonburg, VA…made from scratch in 1978.
Adelmo’s in Dallas – wine list, Not Just Cabs and Chards
The F&B Big Things Managers Running the Room
– Managers approaching tables and reading the room.
– Pouring Coffee and NOT Bussing!
My Mentor – Jean Pierre
Great Desserts and Great Coffee– Cheesecake Factory
– STARBUCKS
The F&B Big Things
Timely Check Resolution
Nothing can kill an experience like waiting for a check
Thank you and Departures
Remember Arrivals?
VALUE- A very elusive concept!!!
How Does One Evaluate Value? Was that dinner really worth $100? The value of making a guest feel welcome The value of a smile on everyone’s faces The value of knowing the guest by name The value of a guest not having to be the
server – Pinball Service. Been There? The value of a birthday candle in a pastry The value of seeing and solving a problem
before the guest does The value of professionally handling a
complaint– Mansion story, Bel-Air story
The F&B Big Things Do these big things apply to Room
Service? Do these apply to Banquets and
Catering? Do these apply at the Bar? DARN STRAIGHT! Key to success as an F&B manager
– Keep your eye on the ball of the BIG THINGS and the little things follow
– Never forget to value the guest
F&B Accounting
Please refer to my handout. It is way too brief to be comprehensive but it is a good overview.
Going over it would be a bit like fingernails on a chalkboard – BUT Accounting and Cost Control are critical disciplines to learn to financially succeed in F&B
Remember, all departments in F&B are like a complex version of the Lemonade Stand you ran as a kid.
Remember Your
Lemonade Stand as a Kid?
Lemonade Stand Accounting Start with:
Money (Revenue) made by selling cups of lemonade (at
5 cents a cup)
Minus
The cost of the lemonade (usually zero if your parent
gives you the Kool-Aid)
Minus
Cost of Labor (usually zero if you are the seven year
old kid doing all the work)
Minus
Cost of cups, signs, napkins (usually zero because
parent gives these to you)
Equals
Profit (in this scenario – 5 cents a cup sold)
F&B Outlets are Just a Complex
Lemonade Stand!
Benchmarks for Food Profitability
Food Revenue (100%)
Minus - COGS (25-35%)
Minus - Labor (30-45%)
Minus -Other Expenses (10-20%)
Equals= Profit (5-35%)
* And this does not factor in
overhead costs (rent, utilities, etc.)
F&B Outlets are Just a Complex
Lemonade Stand!
Benchmarks for Beverage Profitability
Beverage Revenue (100%)
Minus – COGS (15-30%)
Minus – Labor (10-25%)
Minus – Other Expenses (10-20%)
Equals = Profit (25-65%)
*The ability to drive bigger profit margins
in beverage is why restaurants push
beverage sales!
Calculating COGS
The Cost of Goods Sold Calculation
Opening Inventory
Plus + Purchases
Minus– Closing Inventory
= ACTUAL Cost of Goods Sold
* One good method of tracking COGS
on a daily basis is to track purchases
daily and consider the total
purchases MTD as COGS.
Costing a Menu This is a pain but it needs to be done! Take each menu item and cost out the portion of each
ingredient that ends up on the plate to come up with a
total cost per menu item.
Multiply all menu items sold times the plate costs of
each menu item and you get a total BENCHMARK
COGS.
Today’s POS systems can provide these benchmarks
automatically if loaded properly, which allows you to
track this daily and MTD. BUT
Benchmark COGS is not what ultimately
counts…it’s ACTUAL COGS.
Why is F&B Financial
Management So Hard?
There are no
Magic Bullets!
It’s all about
managing the little
things…everyday!
Where do you
start?
Overriding Thought Process with F&B Accounting
Key concepts in F&B management to always have as top of mind
How do I maximize monies coming in the FRONT DOOR
How do I minimize monies going out the BACK DOOR
An effective F&B manager should NEVER have nothing to do!!!!
How Do I Maximize Monies Coming in the Front Door? Incremental and pro-active salesmanship
to build the average check– Restaurant examples– Room service examples– Banquet examples– Bar examples
Training and staffing properly to turn tables and maximize covers
Servers are your most cost effective employees, don’t be caught short in the dining room.– Group dynamic on first day in outlets and
Room Service
How Do I Maximize Monies Coming in the Front Door? Making sure add-on items make it on the
check; drinks, desserts, upsells!
Managing the Telephone
Saying Yes before saying No with reservations.
Audit Checks opened to tables served.
Audit guest count on checks to guests served.
Run Server Contests with incentives!
How Do I Minimize Monies Going Out the Back Door Proper Purchasing and Receiving!!!! Proper controls!!!! Supervision and POS audits Waste control – Your dishwashers can be
your best arbiter of what EATS GOOD and what doesn’t
Theft Control – Your associates are often robbing you blind!!!
Assertive payroll management and scheduling Being Visible- Hyatt Manager Office
philosophy – Noble House Hostess Policy
How Do I Minimize Monies Going Out the Back Door
FIFO – First In, First Out!
Portion Control (food and beverage-size of shots and wine pours)
Overtime!!!!
Cash Control
Investigate Variances or Red Flags!
Wine Handout
There is a Great and Wonderful world of wine out there for you to manage and enjoy.
Too much for today’s session but I will mention some wine concepts and put some notes on a handout
Wine party idea
Key Distinctions on Naming Wine
The US, Australia, Chile, Argentina
and in Alsace, France name their
wines by the name of the grape
varietal!
In France and Italy and Germany the
wines are named after geographical
places!
Country: France
Region: Burgundy
Town: Beaune
Vineyard: Clos des
Mouches
If a French Burgundy came from
Lubbock
State: Texas
Region: Houston
Town: U of H
Vineyard: Conrad Hilton College
The wine might be called: U of H,
Clos du Conrad Hilton College.
French Guide
Bordeaux Red Wines are blends of Cabernet Sauvignon, Merlot, Malbec, Cabernet Franc and other minor varietals.
Bordeaux Whites are Sauvignon Blanc and Semillon
Burgundy Reds are Pinot Noir and Gamay
Burgundy Whites are Chardonnay
Loire Whites are Chenin Blanc, Muscadet and Sauvignon Blanc
Rhone Reds are Syrah, Grenache and many lesser known varietals
Italian and Spanish Guide
Tuscan Reds are Sangiovese
Piedmont Reds are Nebbiolo,
Barbera or Dolcetto
Spanish Reds are Tempranillo and
Garnacha (Grenache)
Look at the Bottle Shape for a Clue of
the Varietal
Quality producers around the world keep like
style wines in the same shaped bottles.
California Cabernets are in Bordeaux shaped
bottles (So are Merlots)
California Pinot Noirs and Chardonnays are
in Burgundy shaped bottles.
There are, however exceptions.
Winemakers around the world keep
bottle shape to tradition
Bordeaux, Tuscany,
Piedmont,
Cabernet Sauvignon,
Merlot, Sauvignon
Blanc
Malbec, Pinot Grigio
Sangiovese,
Borolo,
Burgundy,
Rhone, Pinot
Noir, Gamay,
Chardonnay,
Voigner,
Syrah,
Grenache
Alsace,
Germany,
Riesling,
Gwertz.,
Pinot Gris
Let’s Learn the Proper Way to
Open a Bottle of Wine
I need 3 volunteers.
For Reference Instructions and Video
go to Winefolly.com:
https://winefolly.com/tutorial/how-to-
open-a-bottle-of-wine/
Winefolly.com has provided the
images and instructions for the following
slides.
The Correct Corkscrew: The
Waiter’s Friend.
Step 1: Hold the Bottle
Stationary.
Step 2: Cut across the front, back,
and top of the foil. Keep your fingers
clear of the blade and the foil.
Step 3: Set the screw just off
center and insert, rotating
straight into the cork.
Step 4: Continue to screw into
the cork until only one curl
remains.
Step 5: Lever on the first step,
then the second, finally easing
the cork out with your hand.
Step 6: Once the cork is
extracted, wipe the lip and
inside of the bottle to remove
any bitter sediment.
Step 7: Remove the cork and
serve the wine.
Success Disciplines for Managers in F&B
The Guest ALWAYS comes First – Petrus Story
Avoid this thought process – “Oh, that guy is just an A-hole.” “There’s no pleasing some people”
Making decisions after asking yourself, “How does this impact the GUEST?”
Making your boss look good and I don’t mean butt kissing!
Helping your HEROES succeed– Fill in the gaps - Anticipate– Make Emotional Deposits– Thank genuinely and often– Have a Servant Attitude
Success Disciplines for Managers in F&B Be the Property’s BEST complaint
handler Train and teach – You will end up
learning more than your students There is no such thing as Quality Time,
there is just time. Invest in your future by working hard and putting in the time (better young than old)
Catch someone doing something right (One Minute Manager – a great read!!!)
Give credit and don’t take credit…those that know will know!
Success Disciplines for Managers in F&B
Set the mood of the day. Be happy
Don’t hold grudges
Don’t be afraid to apologize
Identify the problem children in your department and DEAL with them!!
Don’t PARTY on property
Enjoy the Ride…It’s a great ride
1970 Petrus - $1800 today,100 pt. Score, Robert Parker
Hotel Food and Beverage Accounting - The Basics (Here is a handout designed as a quick overview and not part of the presentation).
Revenue Formula In the Room’s Division, the formula is fairly basic: Occupancy X ADR (average daily rate) = Room’s Revenue The two major ways to dramatically impact Room’s Revenue is to INCREASE Occupancy or INCREASE the ADR...or better yet both! The problem is that many times these items work against each other! Booking more rooms often means lowering the rate. What is the optimum? The same formula is in play in the F&B Division of hotels. Covers (people) X Average Check = Food and Beverage Revenue The two major ways to dramatically impact F&B revenue is to INCREASE Covers or INCREASE the Average Check…or both! The problem is that many times these items work against each other! Think about it - MacDonald’s servers more people than Papa’s Steakhouse in large part because the Average Check at Mickey D’s is about $5.00 and Papa’s is about $50.00.
Food & Beverage Division Profit Formula Revenue – COGS (cost of goods sold) – Cost of Labor – Other Expenses = Profit (or Loss) A food or beverage outlet is really a complex version of a neighborhood kid’s LEMONADE STAND (remember when you were a kid?). Here is the formula-Start with: Money (Revenue) made by selling cups of lemonade (at 5 cents a cup) Minus The cost of the lemonade (usually zero if your parent gives you the Kool-aid) Minus Cost of Labor (usually zero if you are the seven year old kid doing all the work) Minus Cost of cups, signs, napkins (usually zero because parent gives these to you) Equals Profit (in this scenario – 5 cents a cup sold) A Food Outlet is really just a more complex version of a Lemonade Stand. The key is to manage the complexities while focusing on the basics.
Here are the F&B Benchmarks for Profitability Food Revenue (100%) – COGS (25-35%) – Labor (30-45%) – Other (10-15%) = Profit (5-35%) The DANGER in managing F&B operations is that if you manage badly one or more areas of costs, you can quickly find yourself in a LOSS situation in the Food Division. The Food Division leaves little room for error. If an F&B manager doesn’t keep a DAILY eye on costs, he or she can find themselves with a monthly payroll over 50% and a food cost over 40% and will quickly find themselves under water at the end of a month.
Beverage Revenue (100%) – COGS (15-30%) – Labor (10-25%) – Other (10-20%) = Profit (25-65%) The Beverage Division (i.e. Lobby Bar) has more room for error and can still stay somewhat profitable when not managed carefully. It is the higher profitability margin (ratio of cost to price) of the beverage division that allows the over all F&B profit picture to be more palatable. This is why restaurants work so hard to sell alcoholic beverages during meals. Think about the wine lists, drink menus, tent cards and verbal up-selling that goes on in restaurants and you understand why. If a food server can be effective in selling alcoholic beverages with a meal, then the payroll is more efficient, higher margin items are sold (lowering overall COGS) and profitability is increased.
How to determine the ACTUAL Cost of Goods Sold Opening Inventory + Purchases – Closing Inventory = ACTUAL Cost of Goods Sold How to cost a menu
Take each menu item and cost out the portion of each ingredient that ends up on the plate to come up with a total cost per menu item. Multiply all menu items sold times the plate costs of each menu item and you get a total BENCHMARK COGS. Today’s POS systems can provide these benchmarks automatically if loaded properly. The same theory comes into play in costing alcoholic beverages and specialty drinks. Price out the portion cost of each ingredient going into a drink. Compare the ACTUAL COGS against the BENCHMARK COGS to see how well you are managing the operation. A large variance between the Actual and Benchmark COGS signifies WASTE or THEFT. Waste and Theft can ruin any and all profitability in F&B. Theft is a rampant problem to be constantly vigilant of in running any F&B operation.
Pricing a Menu Beyond Finding a Benchmark Cost of Sales To come up with a total Menu COGS typically managers will cost out each menu item to determine the cost of each plate. If they want a 33% food cost, they just multiply the cost of the plate times 3 to get the menu price. But it is not that simple. There are many considerations to pricing a complete menu. Here are a just a few:
Soups are often low cost items made with leftover ingredients and can be priced in a way to yield a very nice margin (cost versus price).
Steaks and specialty meats have high portion costs and therefore cannot be priced at a standard multiple because the resulting menu price would be too high for the customer to purchase. The manager would put these meats at a higher cost margin, hoping to make it up with soups and other lower cost / higher margin items. (For example- if a 12 oz. Prime NY Strip costs 18.00, the menu price would need to be $54.00 to yield a 33% COGS. Pricing the NY Strip at $40.00 would yield a 45% COGS, but at $40 the steak would sell. Selling a soup (at a 20% COGS) or a dessert (at a 20% COGS) would balance out the overall menu cost).
Why do you see so many chicken dishes at Applebee’s? Because chicken is the cheapest protein with the widest appeal and Applebee’s uses the same chicken in many menu items to increase productivity and reduce WASTE.
Why does Cheesecake Factory push Cheesecakes? Because desserts are typically among the lowest cost/highest margin menu items (lowest cost versus price). Think of it, sugar, flour and eggs are a lot cheaper than Prime Rib.
Non-alcoholic beverages among are the lowest cost/highest margin FOOD items on a menu. Since sodas and coffee are non alcoholic they are NOT included in the Beverage division. How much money does MacDonald’s make on a $1.00 priced super sized coke? About 80 to 90 cents!
One of the most critical aspects of managing a profitable F&B division is the proper ENGINEERING of a menu. For restaurant chains it is a true science and why most restaurant chains have an entire division of chefs and computer geeks working together to find the most profitable combinations that make for a great overall menu and can predict the best results.
A Quick Peek at Wines The subject of wines is so large that a simple handout cannot begin to address the subject. But here are some short little notes that might help you get started as you address the wonderful world of wines. (These notes are general in nature and there are exceptions to these notes but overall they are helpful) Wines can be categorized as Old World and New World The Old World includes France, Italy, Spain and Germany. French wines are the Kings of the old world and the basis where all wine culture is derived. New World wines include the US, Australia, Chile, Argentina, New Zealand. California wines are the Kings of the New World wines. Most Old World wines are labeled by LOCATION (either landmarks, vineyards, districts or towns) Most New World wines are labeled by GRAPE VARIETAL (grape type) Comparing Old World Wines to New World Wines France (location) New World (Grape Varietal) Bordeaux (usually blended varietals) Cabernet Sauvignon, Merlot,
Cabernet Franc, Malbec, Sauvignon Blanc
Burgundy Pinot Noir, Chardonnay Rhone Syrah, Viognier Loire Chenin Blanc, Sauvignon Blanc Alsace Riesling, Pinot Gris, (only French region where the varietal is on the label) Gewurztraminer Italy (location) Tuscany Sangiovese, Pinot Grigio Piedmont Nebbiolo Spain (location) Rioja Tempranillo Germany (location) Rhein and Mosel Riesling Most Popular Whites: Chardonnay, Sauvignon Blanc and Pinot Grigio. Most Popular Reds: Cabernet, Merlot, Syrah, Pinot Noir and Zinfandel The New World wines are put in the same shaped bottles as their cousins in the Old World. Example: A White Burgundy is Chardonnay. A Red Bordeaux has A blend of one or more of Cabernet, Merlot and Malbec (among others)
French Bordeaux French Burgundy & Rhone French Alsace
Cabernet, Merlot, Pinot Noir, Syrah, Chardonnay Pinot Gris, Riesling
Malbec, Sauvignon Blanc
If you want to look like you really know something about wines memorize the Famous First Great Growths of the French Bordeaux (all of these are VERY EXPENSIVE!!!). All are blends of Red Bordeaux grape varietals. Chateau Lafite Rothschild (For me, way too delicate and subtle) Chateau Mouton Rothschild (lots of Cabernet Sauvignon!!!) Chateau Latour (in great vintages can age over 100 years) Chateau Margaux (a iron fist in a velvet glove) Chateau Haut Brion (Love the Cabernet Franc in this one) General Rules
Not all Red wines age well – unless you are buying expensive reds, buy to drink!\
Vintage years mean something in the Old World because of the European climate
Vintage years do not mean as much in the New World as climates are more even.
There are great value wines coming from Washington State, Chile and Argentina
Great wines are not always the expensive ones. Many pricey wines are a RIP-OFF.
There are great value wines that drink great that are under $20 a bottle.
One of my favorite Cabernet Sauvignons is Liberty School, under $10 at Specs!
Cabernets, Merlots and Chardonnays are over exposed. Good but pricy.
There are great values in other varietals and they drink great.
Cheap Pinot Noirs (under $15) are usually disappointing.
Zinfandel is best in a red wine form. No real Old World Heritage. Truly American!
When matching food and wine – Red meat with Reds, White meat with Whites.
Fish can be either and great with Chardonnay and Pinot Noir
Game meats are great with Pinot Noir
Barbecue and Burgers are great with Syrah, Malbec and Zinfandel The best first book to read to learn about wines Windows on the World Complete Wine Course: 25th Anniversary Edition (Kevin Zraly's Complete
Wine Course) by Kevin Zraly (Hardcover - Sep 29, 2009)
12 new from $59.40 27 used from $20.56
The best place to look for the best value wines on the market-The Buying Guide Section of the Wine Spectator Magazine –a great magazine to subscribe to http://www.winespectator.com/ The best way to learn about wines is to do a wine seminar for your staff and you run the class. It will take study and preparation, but you will learn much more than your students (employees). That’s how I learned.
