Index: hospitality news, hospitality accounting text, hospitality managerial accounting text, hotel accounting, restaurant accounting, accounting, finance Raymond Cote provides this website for hospitality educators, students, and professionals.  Cote is the author of: BASIC HOTEL AND RESTAURANT ACCOUNTING (Click the Principles/System button at left) ACCOUNTING FOR HOSPITALITY MANAGERS(Click the Managerial Acctg Text button at left) My textbook customers make this website possible. Thank you.                                          BASIC HOTEL AND RESTAURANT ACCOUNTING is a hospitality principles and systems text; it also has several introductory managerial accounting chapters. Press the button at left of this page labeled Principles/System Text. ACCOUNTING FOR HOSPITALITY MANAGERS is an advanced hospitality managerial accounting and financial management providing coverage for hotels, restaurants and casinos. Press the button at left of this page labeled Managerial Acctg Text. 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See bottom of this newslett       My new email address is: profcote@otowhomes.com                                                                                                                   NEWS OFGENERAL INTEREST How did KFC become the leader of the Chinese restaurant industry in terms of market share, profit, and revenue, prevailing over McDonald’s and other restaurant brands – foreign and domestic?http://youngentrepreneurfoundation.wordpress.com/2009/10/01/the-world-is-flat-3-how-kfc-went-global/ Drive thru customer survey: http://www.qsrmagazine.com/reports/drive-thru_time_study/2009/consumers-1.phtml Tipping advice for world travelers (also use the Forbes links in the article): http://www.cbc.ca/consumer/story/2009/09/24/f-forbes-travel-tipping-for-service.html Top 5 small, boutique hotels: http://www.reuters.com/article/lifestyleMolt/idUSTRE58H16K20090918                                  UNITED STATES NEWS   Fast-food Chain Rankings According to a QSR Magazine study, Chick-fil-A ranked No. 1 overall. Of the 20 brands surveyed during the four-month-long test, Chick-fil-A scored highest and placing No. 1 in two of the four categories tested. The Drive-Thru Performance Study is featured in the October issue of QSR. The winners in each category were: Speed of service: Wendy's. Order accuracy: Chick-fil-A. Speaker clarity: Chick-fil-A. Menu board appearance: Whataburger. QSR Magazine ranks the top 50 quick-service chains according to sales volume. http://www.qsrmagazine.com/reports/qsr50/2009/charts/09rank.phtml   Burger News Wendy’s, the number 3 hamburger chain, is planning to spend $75 million on TV, radio, print and digital ads in the fourth quarter (as reported per the Wall Street Journal). Wendy’s is a division of Wendy's/Arby's Group. The Big 3 Burger War. Wendy’s Bacon Deluxe premium burger, Burger King's Steakhouse XT Burger, and McDonald's Angus Third Pounder. Sources of beef according to management. Wendy's uses "fresh, never frozen, North American beef" Burger King "mainly sources its beef from the U.S. and Canada" but "also uses some beef from Australia and New Zealand" McDonald's "100% pure USDA inspected beef" and "a small percentage of its beef is also imported from Australia and New Zealand"   Coffee News Dunkin’ Donuts is the official coffee of the Dallas Cowboys football stadium; it is also the official coffee of the Patriots, Red Sox, Celtics, Bruins, and Revolution. Starbucks’ VIA enters the instant coffee market. Via is an instant coffee sold in individual packets and made with hot or cold water. U.S. locations will also sell a decaf version of VIA instant coffee, starting Nov. 17. Americans account for 4% of worldwide sales of instant coffee. However there is a $20 billion global market with no Starbucks presence. Tim Hortons is the official coffee of the Buffalo Bills and Ralph Wilson Stadium. A discounted coffee price will be charged at Bills home games. The deal also has Tim Hortons providing a special Bills-branded Tim Card, or gift card and Bills team-colored doughnuts on game days. Tim Hortons is opening a coffee shop at Fort Knox.     Donut News There are 6,300 Dunkin Donuts nationwide. The typical Dunkin Donuts store serves about 700 doughnuts per day. There are only a few Dunkin’ shops that bake donuts in house. Most Dunkin’ stores get at least two deliveries a day of the doughnut rings and shells, which are then frosted and filled on site by employees. Stuart Morris, president of QSR Consulting Group, states "Baking primary menu items on site is a rarity in the quick-service restaurant industry."   Hotel News Ameristar Casinos, Inc. has opened Colorado's largest casino hotel, (536 rooms) in Black Hawk. Marriott International had a loss of $466 million in the third quarter ($1.31 per share) compared to a profit of $94 million, (25 cents per share) in the comparable quarter a year ago. The results included a $752 million pretax charges related to its timeshare business. Revenue declined 17 percent to $2.47 billion. RevPar declined 23.5 percent. The Best Western Sea Wake Beach Resort on Clearwater Beach, FL is seeking bankruptcy protection while it restructures. A Chapter 11 petition was filed in U.S. Bankruptcy Court, Middle District of Florida, Tampa. The company estimated its assets and debts in a range of $10 million to $50 million. Drury Hotels Co. has opened its first hotel in Phoenix, a new 178-room Drury Inn & Suites. Drury Hotels Co. has more than 130 hotels in 20 states; it reported $352 million in revenue last year. Host Hotels and Resorts Inc. reported a third quarter loss of $58 million, (9 cents per diluted share) compared to net income of $47 million (9 cents per diluted share) for the third quarter of 2008. Total losses for the first three quarters of 2009 reached $187 million (33 cents per diluted share). RevPar declined 21.3 percent in the quarter. Orlando’s hotel occupancy was 43.6 percent for the week of Sept. 27 through Oct. 3, down 8.1 percent year-over year, according to Smith Travel Research. Revenue per available (RevPar) was $35.23, a 23.7 percent decrease from the previous year. ADR (Average daily rates) dropped 16.9 percent to $80.89 for the period.   Travel Industry News The number of passengers carried by Hawaiian Airlines in September was up nearly 15 percent Stuart Blumberg resigns as president and CEO of the Greater Miami and the Beaches Hotel Association at the end of the year. The 72-year-old Blumberg founded the association 15 years ago. A campaign to allow all Americans to travel to Cuba is aimed at Congress. If approved it is estimated that one million American tourists would visit the island. Havana has stated that ending the U.S. travel ban would be significant enough to require some sort of Havana concession. President Obama had recently ended travel restrictions, but travel to the island was specifically limited to Cuban-Americans. However other U.S. citizens may travel only under special permits for groups such as churches, academics and business, but not for tourism.     Minimum Wage News Colorado will become the first state to reduce its minimum wage because the cost of living index has dropped. The minimum wage has is decreased .04 cents per hour; from $7.28 down to $7.24 which is lower than the federal minimum wage of $7.25. Therefore most minimum wage workers would lose only 3 cents an hour. Colorado is one of 10 states where the minimum wage is indexed to inflation Bill The lower wage will take effect Jan. 1. Other states with adjustable minimum wages are Arizona, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont and Washington.   International Growth of U.S. Companies McDonald's will open a restaurant and McCafé in the Louvre museum. See France below in the International Section for more information. Domino’s Pizza is the UK’s largest pizza delivery chain. See United Kingdom below. Great Britain will soon have more pizza chains. See United Kingdom below. McDonald's plans to open about 1,100 McCafés in Europe. See Europe - General below. California Pizza Kitchens will expand into India. See India below.    Sign of the Times Gourmet magazine, in publication since 1941, has closed. Anheuser-Busch InBev plans to sell its 10 amusement parks. The buyer is The Blackstone Group for up to $2.7 billion. Anheuser-Busch InBev's subsidiary, Busch Entertainment Corp., is the second-largest entertainment park operator in the United States with 25,000 employees and 25 million visitors a year. Walt Disney Co. is the largest amusement park operator. The purchase price includes cash of $2.3 billion. Busch Entertainment operates 10 amusement parks that include 3 SeaWorld Park and 2 Busch Gardens parks. Family-run businesses are closing down. The economic downturn, income taxes and estate taxes are some of the reasons. Hotel sold for $2.6 million; cost last year was $6.1 million. CW Capital sold the downtown Dayton Crowne Plaza hotel to Dallas-based Integrity Hotels Group LLC for less than 50% of what it paid last year. Wholesale wing prices are presently more than breast prices --- a reversal of customary market pricing. According to the Agriculture Department, the Northeast’s wholesale average price for chicken wings in September was $1.48 a pound and skinless boneless breasts were $1.21 a pound. Because of the price difference, some restaurants are substituting slices of breast meat deep-fried to look like wings and served with the same sauces. The Centers for Disease Control and Prevention issued its survey of public schools in 34 states, comparing results from 2006 to 2008. High schools and middle schools that sell sugary or salty snacks dropped from 54% to 36% and soda and artificial fruit drinks dropped from 62% to 37%. The CDC will continue its effort to combat childhood obesity.   Accounting/Finance Small Business Crisis: More than 50% of U.S. jobs are provided by small business. However, in this recession, small businesses have accounted for 45% of job losses. Yet, very little financial assistance is provided in this current economic climate. Loans backed up as much as 100 percent by the U.S. Small Business Administration are generally not available. Todd McCracken, president of the National Small Business Association (NSBA), says "That unless more credit becomes available, America's entrepreneurs cannot expand, hire people and grow the economy. The situation when it comes to credit is just as bad as it has been for months," but it's now that we see some signs of a potential recovery that we need credit the most. Without credit, the recovery is not going to happen." New York Fed President Bill Dudley stated "Despite the more than a trillion dollars from the Fed and from the Troubled Asset Relief Program, the banking system has still not fully recovered. The biggest banks raised billions in new capital, as ordered by Washington after the stress tests, but "banks are still capital constrained and hesitant to expand their lending," Bankers admit that loans are harder to get than in the past. The reason given is that many borrowers have a serious financial weakness; it is not that banks are reluctant to loan funds. Large companies find that credit is available. Bond issues are selling well. However, many smaller companies find it difficult (if not impossible) to secure financing. Businesses with fewer than 500 employees hold more than half of the nation’s private sector jobs, according to the SBA. IRS closing a business checklist: http://www.irs.gov/businesses/small/article/0,,id=98703,00.html Taxation accounting for the sale of a business depends if the corporation is sold, the partnership interest is sold, or if only the assets of the business are sold. For more information, see: http://www.irs.gov/businesses/small/article/0,,id=98692,00.html                                                                              INTERNATIONAL NEWS Australia According to STR Global, provider of market, Australia had a 71.4-percent occupancy rate through July-down; 4.9 percent from the same period last year and its ADR dropped 4.3 percent to AUD 165.67. Cairns experienced the following decreases: RevPar 13.9 percent, occupancy, 6.2 percent and ADR 8.2 percent. Perth showed the highest occupancy at 78.4 percent. Sydney had the second best occupancy at 75.4 percent. Bahrain A 279-room Holiday Inn Express Manama is due to open in the fall of 2011. The hotel will be the brand's first venture in the Kingdom of Bahrain and the first outside of Dubai. Belgium The government has decrease sales taxes on restaurant dinners in addition to other measures to help the country out of its recession. Canada According to Smith Travel Research (STR), the operating statistics for the weeks ending 26 Sep, 19 Sep, and 12 Sep respectively were as follows: Occupancy 72.1%, 72.7%, 63.2%; ADR $129.69, $131.72, $128.72; RevPar $93.56, $95.72, $81.31. British Columbia: all foodservice companies are now required to limit trans fats in menu items. It is technically impossible to completely eliminate trans fat. Therefore, the regulation restricts the amount of trans fat to two per cent of total fat content for oils and spreadable margarines. Trans fat content of all other foods are limited to five per cent of total fat content. Caribbean Duane Vinson, vice president at STR says 'It appears that earlier projections are now a reality. With fewer than 50 projects in the active pipeline, new projects have come to a stand still.' The Bahamas ended the month with 1,439 rooms in the total active pipeline. Puerto Rico reports 1,163 rooms in the In Construction phase and 1,627 rooms in the total active pipeline. China Dunkin’ Donuts recently opened its first two shops in Shenzhen, Guangdong Province. More than 150 Dunkin' Donuts are planned in Guangdong over the next 10 years. Kentucky Fried Chicken and Pizza Hut will open their units in Nepali capital Kathmandu in October. Anantara Hotels, Resorts & Spas plans to open its Anantara Sanya Resort & Spa at the end of 2010. Round Table Pizza announced an agreement to develop 30 restaurants in Beijing with Beijing Guanghua Zhijia International Hotel Company. The hotel Fairmont Yangcheng Lake in Kunshan, China has opened featuring deluxe guest rooms and suites, outdoor event sites, spa, fitness centre, indoor and outdoor pools and a 4,000 square foot Grand Ballroom, a 6,500 square foot restaurant featuring Cantonese cuisine. Cyprus Finance Minister Charilaos Stavrakis states that 'We should be optimistic that by mid-2010 we will see the positives of the global upturn in Cyprus as well,' Egypt The 567-room hotel Fairmont Nile City has opened in Cairo; the hotel features 11,000 square feet of indoor space plus over 5,000 square feet of outdoor space for meetings and conventions. Europe (General) McDonald's plans to open about 1,100 McCafés in Europe. Starbucks is currently Europe's top coffee chain with nearly 1,200 stores. McDonald's opened its first Italian McCafé in Milan in 2005. At present it has 65 McCafés across the country. The existing cafés are located inside restaurants but with a separate counter. France McDonald's will open a restaurant and McCafé in the Louvre museum, in November, at the world's most visited museum. The Louvre’s decision has caused much discontent. An art historian working at the Louvre said: "This is the pinnacle of exhausting consumerism, deficient gastronomy and very unpleasant odours in the context of a museum." The Louvre states that it had agreed to a "quality" McCafé and a McDonald's in place by the end of the year, which it said was "is in line with the museum's image. "The Louvre welcomes the fact that the entirety of visitors and customers, French or foreign, can enjoy such a rich and varied restaurant offer, whether in the museum area or gallery." The Louvre further stated that McDonald’s "has taken the utmost care in ensuring the quality of the project, both in culinary and aesthetic terms." According to McDonald’s, France has become its biggest market in the world outside of the US; it opened 30 new outlets last year in France and welcomed 450 million customers – up 11 per cent on the previous year. Accor has sold 158 hotelF1 properties, its entry-level hotel brand with an average room rate of around EUR33. Following the sale, Accor will continue to operate the 158 hotels under the hotelF1 brand. Guam Tourism increased 9 percent between Sept. 1 and 18 this year compared to the same period last year, according to preliminary data from GVB. The number of tourists from Japan, Guam's largest visitor market, increased 7 percent with 79,732 visitors as of August this year, compared to 74,475 during the same month last year. India California Pizza Kitchens will expand into India. The franchise has signed a franchise agreement with JSM Corporation Pvt. Ltd. (JSM) and Daud Arabian Trading. A minimum of 15 new California Pizza Kitchen restaurants will open in the next 10 years. At the end of fourth quarter of 2009, the international hotel chain Swissôtel Hotels & Resorts is due to open its first Swissôtel in India under a management contract between Bengal Ambuja Housing Development Limited Pvt. Ltd. The new 147-room hotel will be part of City Centre - New Town shopping mall with shops, restaurants, conference room, fitness centre, rooftop swimming pool and a multiplex cinema. Starwood Hotels & Resorts Worldwide opened its Four Points by Sheraton brand in India. Starwood recently opened the Four Points by Sheraton Navi Mumbai, Vashi and has reached an agreement to open the Four Points by Sheraton, Jaipur City Square in October of 2009. Japan Japan’s central bank policy remains concerned about the strength of a recovery in spite of raising their assessment of the nation’s economy. There still remains global doubts about the strength of a recovery Yoshiki Shinke, a senior economist at Dai-Ichi Research Life Institute in Tokyo says "Japan will be the last country to raise its interest rate because it has the added problem of deflation. The Japanese economy is the second biggest in the world. Japan suffered from the global economic crisis because of its heavy dependence on exports. Exports have improved but a strong yen is may cause problems. Deflation and weak domestic demand are a concern. The IMF estimates that the Japanese economy will grow 1.7 percent in 2010. (The economy had a 5.4 percent decline in 2009). Malaysia Malaysia’s export slump eased amid the global economic recovery, showing signs it may emerge from its recession. HOTELIER Impiana Hotels & Resorts has budgeted RM100 million for new four-star or five-star hotels in Petaling Jaya, Selangor or in Bangsar, Kuala Lumpur. Mexico Mexico City announced the inaugural International Tourism Fair of the Americas ("FITA") 2010. The fair is expected to attract more than 200 national and international exhibitors, representing more than 70 countries showcasing wholesalers, tour operators, transportation companies, hotels, event promoters, official tourism organizations, travel agencies, conventions representatives, and the media. IHG (InterContinental Hotels Group) and the investor group Ramirez Organization, opened the Holiday Inn Express Guadalajara Expo, one of 24 hotels in Mexico to feature the brand'. The $12 million new hotel has 152 rooms and features a gym, covered parking and a heated pool. Mexico reports 5,289 rooms in the Construction phase and 10,810 rooms in the total active pipeline. Mozambique Mozambique's government is planning to almost double its annual sugar production due to attractive sugar prices and its plentiful fertile land. Current production is 300,000 tonnes a year from five sugar mills, producing at full capacity. The country plans to increase production to 500,000 by 2012. One of the sugar plants, the Maragra Sugar Company employs 4,000 people and produces 80,000 tonnes of sugar annually. Netherlands The Central Bureau of Statistics reports that the Netherlands exported 1.3 billion euros of candy in 2008; about 400 million pounds of candy. The candy exports are mainly to EU countries (80 percent). Nearly 67% of the exports are chocolate. Germany, the United Kingdom, France, and Belgium are principal consumers of chocolate. In 2008 the Dutch consumed 11.5 pounds of candy per person; chocolate comprised 5 pounds of this consumption amount. Nigeria Mr. Juergen Odenwald, General Manager of the Senegambia Beach Hotel, one of the major hotels in The Gambia in an interview with a reporter stated "Two operators, Thomson - U.K and Thomas Cook - Norway, are not bringing guests but that there are other tour operators who are coming to the Gambia. He however added that these operators will be coming with a lower percentage compared to last year. The forecast has dropped to 35% and 50%, for the months of November and December, respectively." He also stated that the Gambian tourist market cannot compete with others like Egypt, Kenya, Morocco due to internal expenses. Russia Moscow and St. Petersburg are the two Russian cities tracked by STR Global. The increasing supply within both cities and declining demand caused declines in occupancy and average daily rate declines. Moscow reported 56 percent occupancy, ADR US$197, RevPar $110. St. Petersburg's reported ADR US$145, RevPar $60. Saudi Arabia The world's largest operating Holiday Inn Express opens in January 2010 located at Dubai International Airport. Singapore Singapore received 844,000 visitors, a 0.7 per cent drop from a year ago. Average hotel occupancy stood at 79.5 per cent, down 0.9 percentage point. Both decreases are the lowest percentage drop since the decline in tourism started last June. Average hotel room rate continued its fall estimated at $175 for August, a 24.6 per cent drop from last year. Hotel room revenue was estimated at $125 million, down 24.8 per cent. South Africa The 2010 FIFA World Cup will be staged at 10 venues across nine South African cities: Johannesburg, Cape Town, Durban, Port Elizabeth, Nelspruit, Polokwane, Bloemfontein, Rustenburg and Pretoria. Johannesburg, South Africa’s economic capital, will be home to two World Cup stadiums, Soccer City and Ellis Park. The FIFA World Cup competition will include 5 teams from Africa, 13 from Europe, 4 from South America and Asia and 3 teams from South America. The remaining two spots will be from qualifications between Oceania and Asia, and South America and CONCACAF (North, Central America and Caribbean). As usual, the final World Cup tournament will have 32 teams. South Africans are excited for being the host country of the 2010 FIFA World Cup. Newspapers, radio stations, and TV stations continually report on this international classic. South Africans are enthusiastic to provide assistance to make this World Cup successful and enjoyable. Virgin America and South African Airways now have an interline agreement offering travel on the networks of each carrier, across their United States and transatlantic routes. South Korea The Korea Development Institute said, "The Korean economy recently appears to maintain the recovery phase led by exports. Economic conditions at home and abroad are improving in a relatively steady manner. While exports during July and August registered a slightly larger fall on a year-on-year basis, exports in September improved significantly." There is optimism that Asia's fourth-largest economy is quickly improving. Suriname Rice is the country's staple. Vegetables such as sweet potato, cassava, planatin and red peppers are commonly used. Excellent Indonesian and Hindustani food is available. The central market and roadside stands offer fresh pineapple, tropical fruits including maripa and awarra. The population is about 425,000 mainly of Amerindian, African, East Indian, Indonesian, Chinese, and Dutch origin. Switzerland Starwood Hotels & Resorts Worldwide, Inc. announced that Hotel President Wilson, a Luxury Collection Hotel, Geneva has completed a €26 million (CHF 40 million) renovation of its lobby, public areas and guest rooms. The renovation had been started in late 2007. The renovation uses three themes: water, landscape and light in combination with precious materials of gold and platinum. There are 230 deluxe guestrooms and suites; room rates start at € 590 (CHF 890) per room per night. Dining at Hotel President Wilson includes an all-day menu and a DJ four nights a week, three other restaurants and bars. Thailand TCC Luxury Hotels & Resorts, Bangkok, and Hotel Okura Co., Ltd. have signed a management contract for Hotel Okura Bangkok to open in March 2012. Okura Bangkok" has 242 rooms, outdoor swimming pool, spa, all-day dining with international cuisines, Bangkok is one of the largest international cities in Southeast Asia and the center of the economy of Thailand, it is also the center of Indo-China economics that include Laos, Cambodia, Myanmar. United Arab Emirates Fairmont Bab Al Bahr, meaning 'Gateway to the Sea' opened in Abu Dhabi, the hotel has 369 guestrooms, a variety of world-class restaurants, 27,000 square feet of function space, a private sandy beachfront, a Willow Stream Spa and two outdoor pools. United Kingdom Domino’s Pizza, the UK’s largest pizza delivery chain, had a 10.8% increase in sales for in the third quarter; sales for the 39 weeks to September 27 are up 8.3 %. Domino’s has opened 30 stores this year and plans to open 20 more by January. However, Domino’s competitors are also opening more stores. Papa John’s plans to open 30-40 additional stores (before the end of the year) making its total at 155 outlets. InterContinental Hotels Group announced plan to open a new Hotel Indigo property in Glasgow. Yo! Sushi chief executive Robin Rowland, head of the conveyor-belt sushi restaurant, plans to open ten new restaurants Scotland. 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