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Hospitality News February 2008

 

 This news page is produced by Raymond Cote, author.  The customers of my texts make it possible to provide this information. 

 Thank you to my loyal customers for your support.

 

BASIC HOTEL AND RESTAURANT ACCOUNTING is a hospitality principles and systems text based on the uniform system of accounts for hotels (AHLA) and restaurants (NRA). It offers state of the art hospitality accounting with computerized general ledger accounting as the basis for processing financial data. The text also contains several introductory managerial accounting chapters.

Accounting for Hospitality Managers is a hospitality managerial accounting and financial management text. The text provides comprehensive coverage for hotels, restaurants and casinos. Premier hospitality companies demand hospitality candidates that know the uniform system of accounts and the application of hospitality financial management principles in addition to the usual specialty courses in purchasing, menu planning, et al. Successful executives in the hospitality industry have a profit results objective and exceptional financial decision skills.

  Hospitality Articles

 

U.S. NEWS

Mergers, Sales, Acquisitions, Divestitures

  • Darden Restaurants will sell its Smokey Bones Barbeque & Grill chain to a Sun Capital Partners affiliate for $80 million.
  • Dunkin' Brands (parent company of Dunkin' Donuts and Baskin-Robbins) sold Togo's Eateries, a franchiser of a West Coast fast-casual sandwich chain having 261 locations, to San Francisco-based Mainsail Partners.
  • CKE Restaurants sold 30 Hardee's restaurants in the Kansas City market, which includes Topeka, Kansas, and St. Joseph, Mo., to two franchisees as part of a re-franchising program.
  • Sun Capital Partners completed it acquisition of Smokey Bones Barbeque & Grill, a 73-restaurant chain. (Darden Restaurants originally owned the chain.)

Product Rivalries

  • McDonald's, Wendy's and Burger King will all offer 99-cent double cheeseburgers in 2008. Will these promotions cause customers to ignore the higher priced/premium menu items? Will these low cost specials create profit problem?
  • CKE Restaurants states that its Hardee’s and Carl's Jr. chains will focus on premium burgers instead of meeting the 99-cent burger competition. CKE hopes to benefit from its premium quality products and service.
  • Guatemala-based Pollo Campero, a chicken chain, is opening its first South Florida location this month. Plans are to open about four more in that area in the next 18 months. The chain plans to open 500 restaurants throughout the U.S. by 2013.

New Product Entries

  • Carl’s Jr. is featuring a Huevos Rancheros Burrito, a breakfast item, containing refried beans, eggs and two kinds of cheese, topped with ranchero sauce and chips selling for $2.39. The chain hopes to expand its U.S. Hispanic customer base.
  • Yum Brands! (KFC, Pizza Hut, Taco Bell) experienced a disappointing year for U.S. sales. New breakfast meals and beverages, and expanding its value menus are targeted to bolster profits.
  • In January, Starbucks will market the "skinny latte," a 12-ounce nonfat latte drink made with sugar-free syrup It will have 50% or less calories than the regular latte.

Technology News

  • Menus for the vision impaired with Braille Labels and in which a portion of the menu is read aloud is available for about $300.

Payroll Costs

  • Colorado waitstaff base pay (tips excluded) increases from $3.83 to $4 an hour in 2008.
  • Washington's minimum wage (the highest in the U.S. since 2001) goes up 14 cents to $8.07 on January 1, 2008.
  • The minimum wage in California and Massachusetts increases to $8 on January 1, 2008.

North Carolina News

  • More than 230 food-serving ventures opened last year in Buncombe County, N.C.
  • The FDA has requested the North Carolina Department of Agriculture to develop a better system for ensuring the safety of the country's food supply. North Carolina has helped monitor imported and domestic products since 2005. It one of the five states the FDA seeks advice and assistance.

Trends

  • Many fast-food chains are extending their hours of operation or are open 24 hours. Many McDonald’s operations are now open 24 hours.
  • Camille's Sidewalk Cafe (a fast-casual chain) will now be operating in Wal-Mart stores.

Notes of Interest

  • A $27 hamburger sold at Daniel Boulud's casual DB Bistro Moderne now accounts for 30% of the eatery's food sales.

 

Tax/Accounting News
  • Employees must report tip income on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. This report is due on the 10th day of the month after the month the tips are received. No report is required from an employee for months when tips are less than $20.  Forms 4070 and 4070-A, Employee's Daily Record of Tips, are included in: Publication 1244, Employee's Daily Record of Tips and Report to Employer.
  • An employer must ensure that the total tip income reported during any pay period is, at a minimum, equal to 8% of total receipts for that period, excluded are nonallocable receipts. Nonallocable receipts are defined as receipts for carry out sales and receipts with a service charge added of 10% or more. When the total reported to you is less than 8% (employers can request a lower rate, but not lower than 2% for tip allocation purposes by submitting an application to the IRS), the difference between the actual tip income reported and 8% of gross receipts must be allocated. There are three methods for allocating tip income:
        • Gross Receipt Method
        • Hours Worked Method
        • Good Faith Agreement

    Detailed instructions for computing allocation of tips, reporting allocated tips to employees, and for requesting a lower rate can be found in the Instructions for Form 8027.

  • The 2007 standard mileage rates for the use of a car (including vans, pickups or panel trucks) are:

    • 48.5 cents per mile for business miles driven

    • 20 cents per mile driven for medical or moving purposes

    • 14 cents per mile for service to a charitable organization.

  • The FASB starts its one-year validation of its Accounting Standards Codification, a system that reorganizes GAAP pronouncements into accounting topics using a harmonious structure. The U.S. GAAP is to be organized by 90 topics on this new Web site, http://asc.fasb.org. FASB provides a 52-page document on how to use the new tool at: http://asc.fasb.org/imageRoot/56/2304556.pdf
  • Publication 17 (Your Federal Income Tax) online version now contains electronic links for faster navigation. Allowing users to jump immediately to other parts of the publication, reducing access time.
  • A spouse can now get FICA credits in a proprietorship form of business. Spouses who operate a business together now have a new option for reporting the business income. In the past, husband and wife joint owners were technically considered a partnership for income tax filing purposes. They were required to file a Form 1065 (partnership return). However, many couples simply filed a Schedule C resulting in that only one spouse received credit for Social Security and Medicare tax. New rules for 2007 filing season provide the option of reporting as two sole proprietorships, each using a separate Schedule C with the income and expenses allocated based on respective ownership interests, most likely the income and expenses will be claimed equally.
  • The Section 179 deduction is limited to $125,000. If more than $500,000 of qualifying assets is put into service during 2007, the Section 179 limit is reduced until it reaches zero when the total investment amount hits $625,000. Also, the Section 179 deduction is limited to the net income from all of the taxpayer's trade and business activities, including W-2 wage and salary income. While an amended return for prior years regarding Section 179 deduction can be filed, the depreciation deductions will change in subsequent years, and require amended returns for those years.

                       

ACCOUNTING FOR HOSPITALITY MANAGERS consists of 20 chapters covering major areas such as:

  • Hotel Revenue and Expense Accounting plus comprehensive coverage of Hospitality Payroll Accounting in its separate chapter
  • Property and Equipment Accounting and Other Noncurrent Assets Accounting
  • Hotel Departmental Statements, Hotel Income Statement, Hotel Balance Sheet
  • Ratio Analysis of the Income Statement and the Hotel Balance Sheet
  • Statement of Cash Flows
  • Interim and Annual Reports
  • Budgeting Expenses and Forecasting Sales
  • Budgetary Reporting and Analysis
  • Financial Decision Making (Close for the off-season, Acquire a Franchise, Leasing)
  • Cash Management and Planning (Cash float, lockbox, zero balance accounts, sweep accounts)
  • Casino Accounting (Principles, internal control, casino financial accounting & Financial Statements)
  • Inventory Accounting
  • Assorted Topics Chapter (Feasibility Study, Allocating Service Areas, Fair Value Accounting, Compound/Present Value)

Other features:

  • Case studies applicable to the chapter
  • The most current edition of the Uniform System of Accounts
  • Each chapter provides Internet Sites for students to research and further study the topics.
  • RevPar is given substantial presentation in Chapter 8.
  • The Sarbanes-Oxley Act, the SEC, and the 10-K Report are given extensive coverage in Chapter 12

For more information press the Managerial Acctg Text tab at left of this page.

                           

BASIC HOTEL AND RESTAURANT ACCOUNTING consists of 16 chapters covering major areas such as:

  • Essential Need of Accounting for Business
  • Business Organization and Taxation
  • Introduction to Financial Statements
  • Balance Sheet Accounts and Income Statement Account
  • The Bookkeeping Process
  • General Ledger Software
  • Computerized Accounting Cycle
  • Restaurant Accounting (NRA based. Accounting Principles: Fast Food vs. Full Service/Income Statement/Operating Ratios)
  • Hotel Accounting (AHLA Based. Accounting Principles/Financial Statements/Operating Ratios)
  • Internal Control of Cash
  • How to Read and Analyze Financial Statements
  • Annual Report to Shareholders Chapter
  • Merchant Account (Set up Credit Card Systems/POS/Holdbacks/Fees)
  • Introduction to Forecasting and Budgeting Chapter (F,V,SV/BEP/New and Existing businesses)
  • Starting A Business (Planning/Resources/SCORE/Insurance)

Other Features:

  • Case Studies: 12 Ethics Cases and 4 Financial Cases
  • 6 Actual financial statements of leading hospitality companies
  • Each chapter provides Internet Sites for students to research and further study the topics.
  • The Sarbanes-Oxley Act, the SEC, and the 10-K Report are given extensive coverage in Chapter 13

For more information press the Principles/Systems Text tab at left of this page.

 

 INTERNATIONAL NEWS

Bahamas

  • The new Sheraton Cable Beach Resort in Nassau, owned by Baha Mar Resorts Ltd., and managed by Starwood Hotels & Resorts, has opened and includes 15 restaurants and lounges, tennis courts, a 35,000-square-foot Las Vegas-style Crystal Palace Casino, and a wide range of water sports, including snorkeling, kayaking and sailing.

Belgium

  • Pullman, the Accor group's new chain of upscale non-standardized hotels, opened the Pullman Cologne and Pullman Dortmund.

Canada

  • Choice Hotels International and Winport Developments, Inc. plan to build a minimum of 25 MainStay Suites and Suburban Extended Stay hotels; all anticipated to open by September 30, 2010.
  • Quebec’s minimum wage rises 50 cents an hour on May 1, 2008: the minimum wage for tipped employees will be $7.75/hour and the rate for non-tipped employees will be $8.50/hour.
  • The minimum wage in Manitoba will rise from $8.00/hour to $8.50/hour on April 1, 2008, the second substantial increase in one year.
  • The minimum wage in New Brunswick will jump from $7.25/hour to $7.75/hour on March 31, 2008.

China

  • China plans to build 97 new airports by 2020. According to this plan the total number of civil airports will be 244; there will be five regional airport groups: northern, eastern, central southern, southwest, and northwest.
  • Pullman, the Accor group's new chain of upscale non-standardized hotels, opened the Pullman Dongguan.
  • Hilton Hotels Corporation has signed a management agreement with China Merchants Property Development Company Limited for the Conrad Beijing scheduled to be open at the end of 2010.
  • A new Nikko Hotels International will be built along an old canal, a five- to 10- minute-drive from the center of Wuxi, in China. Wuxi is an industrial city, with many sightseeing attractions, has become a prime business location for foreign companies in China.

Cypress

  • The welcoming and relaxed nature of Cyprus makes it a popular destination for retirement and tourism, claims James Dearsley, European sales manager for real estate company Atlas International. He states "that one of the most attractive attributes of the island is the ease with which foreigners can gain residency and that Cypress offers a blend of atmospheres and cultures, with the more peaceful western side of the island likely to appeal to older travelers and retirees."
  • Cyprus's currency changeover to the euro earlier this year is completed. Both the euro and the pound had been in joint circulation since the new currency was introduced at the beginning of January. The pound has now been discontinued and the euro is the sole legal tender.

France

  • Pullman, the Accor group's new chain of upscale non-standardized hotels, opened the Pullman Paris Rive Gauche, Pullman Paris Charles de Gaulle Airport, Pullman Paris La Défense, Pullman Versailles Château, Pullman Marseilles Palm Beach, Pullman Marseilles Provence, Pullman Toulouse Airport.
  • For 2007, hotel chains in France had an increase of more than 11% in turnover with 8.5 billion euros, and a 9.2% increase in RevPAR.
  • Accor plans to sell 47 hotels to a Real Estate Consortium.

India

  • India's economy should increase 8.7 percent in the current financial year despite a recession in the United States that would decrease demand for exports. Services, construction and manufacturing sectors are likely to be the biggest gainers.
  • Starwood Hotels & Resorts Worldwide, Inc. has opened its first Westin property in India, The Westin Sohna Resort.
  • Starwood Hotels & Resorts Worldwide, Inc. new lifestyle brand, aloftSM hotels, will partner with Urbanedge Hotels Private Limited to develop aloft hotels across India. The brand's first two hotels will be aloft Bangalore, Whitefield and aloft Chennai, OMR - Sholinganallur.
  • Westin Hotels & Resorts will manage three New Properties in Hyderabad, Pune and Kolkata.
  • Golden Tulip has opened its first hotel in India, the Golden Tulip Jaipur, in Jaipur.

Japan

  • IHG ANA Hotels Group Japan has re-branded six ANA hotels to ANA Crowne Plaza hotels.
  • Hilton Hotels Corporation has signed an agreement with Citigroup Principal Investments Japan Co., Ltd, to manage the conversion, re-branding and operations of the Hilton Niseko Village in Japan, to be launched on 1 July 2008.
  • W Hotels signs agreement to open its first property in Japan, W Yokohama to debut in the Minato Mirai 21 Redevelopment in 2010


Korea

  • The Chosun Tourist Hotel, in Suanbo Hot Springs resort area of Chungju, South Korea, will join the Ramada brand following a property wide renovation and expansion.
  • First California Pizza Kitchen Restaurant has opened in Seoul.

Malaysia

  • Wendy's International, Inc. and Berjaya Corporation Berhad have signed a development agreement to build Wendy's restaurants in Malaysia. Berjaya plans to open the first restaurant in Kuala Lumpur in late 2007 or early 2008 and will continue development over the next 10 years. The new franchisee expects to open more than 70 Wendy's restaurants in Malaysia.
  • The newly opened Lok Kawi Wildlife Park along the Penampang-Papar Road features monkeys and various other animals of the tropical rainforests.
  • A total of 1,642,899 tourist arrivals to Malaysia were recorded for August 2007 an increase of 9.3% from August 2006. Tourist arrivals recorded from January to August 2007 were 14,047,276, representing an increase of 22% compared to 11,518,288 in 2006.

Netherlands

  • Golden Tulip Hospitality welcomed Golden Tulip Amsterdam City Centre, Golden Tulip Amsterdam Fashion and Golden Tulip WTC Leeuwarden. Golden Tulip Amsterdam Fashion, a planned 272-room hotel is currently under construction and is expected to open in 2009. Tulip Inn Amsterdam City Centre, formerly branded under the Ramada Flag, is located in the heart of Amsterdam and has 106 rooms. Golden Tulip WTC Leeuwarden, a planned 144-room hotel will open in 2009.
  • Mexico
    A new California Pizza Kitchen opened by CPK franchise partner Grupo Calpik, S.A. de C.V., is located in the Santa Fe area of Mexico City. The new 4,300 square-foot CPK restaurant seats approximately 220 people.
  • IHG (InterContinental Hotels Group) is expanding its Hotel Indigo brand, the first property opened in a historic 100-year old hacienda in Mérida, marking the 11th hotel opening for the Hotel Indigo brand. A second hotel will open in Mexico City in 2009.
  • Casa de Sierra Nevada, an Orient-Express Hotel, opens Casa Limón, the newest addition to its collection of historic Spanish colonial mansions in San Miguel de Allende.
  • Viceroy Hotels and Resorts plans for its newest Viceroy project, Viceroy Zihuatanejot to open in 2010, Viceroy Zihuatanejo will be located on the intimate Playa La Ropa Beach in Zihuatanejo.
  • Homewood Suites by Hilton, opened its first property in Torreon, Coahuila.

Saudi Arabia

  • InterContinental Hotels Group has signed an exclusive franchise development agreement with Siraj Capital Ltd (SIRAJ) to develop the Holiday Inn Express brand in Saudi Arabia. Plans are top open 12 new properties within five years.
  • Marriott plans to open a 174-room Courtyard by Marriott Property in Basel in 2010 under a recently concluded franchise agreement with a subsidiary of the SV Group, owner of the Courtyard by Marriott Zurich North property.

South Africa

  • South Africa’s wine exports appear should exceed the 300-million litre mark last year, a record volume. Cumulative offshore sales for the first 11 months of the year reflected a 16% increase on the same period in 2006. Five years ago 72% of the packaged exports went to just the UK and the Netherlands, now has the UK, Sweden, Netherlands, Germany and the US account for 70% of total export volumes. The UK is first and Sweden is second in purchases.

Switzerland

  • Accor plans to sell 10 hotels to a Real Estate Consortium

Thailand

  • Pullman, the Accor group's new chain of upscale non-standardized hotels, opened the Bangkok King Power.

Turkey

  • Hilton Hotels Corporation has entered into a management agreement with Amplio Gayrimenkul Yatirim ve Gelistirme Anonim Sirketi (Amplio) to open its first Hilton Garden Inn location in Diyarbakir, Turkey, scheduled to open in December 2009.

United Arab Emirates

  • Mövenpick Hotels & Resorts has signed a management contract for a first-class city resort in the heart of the city of Al Ain with the owning company Sorouh Real Estate PJSC, the resort is scheduled to open at the end of 2010.

 

                                        

Research Reports Added to the Research Report Archive

  1. What is Organic Sales Growth?
  2. Job Description of Casino Cage Worker
  • The Special Reports Archive contains previously issued research reports on this site. Click the Research Report Archive button at the left of any page on this website.

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  • Publisher:
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Customer Service Notice - Free Instructor Materials directly from the Author

  •  A conversion guide is available at no charge If you have purchased ACCOUNTING FOR HOSPITALITY MANAGERS, 5th editionand previously used its 4th edition.  This general guide will be of assistance in preparation of your class notes.  [This guide will not be of value unless you have both editions.]
  • Test Bank for ACCOUNTING FOR HOSPITALITY MANAGERS, 5th edition.  There are 20 questions per chapter with problems and questions designed in a multiple choice/true false answer format.  All questions relate to the chapter material.  For free test bank: please provide your name, position, and school.  [If you are not a customer of this text, the purchase price is US$100; request instructions for payment.]
  • Test Bank for Basic Hotel and Restaurant Accounting, 6th edition.  There are 20 questions per chapter with problems and questions designed in a multiple choice/true false answer format.  All questions relate to the chapter material.  For free test bank: please provide your name, position, and school.  [If you are not a customer of this text, the purchase price is US$100; request instructions for payment.]
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