A prestigious hotel group reaped the benefits of commissioning Venners to manage their full UK estate’s stocktakes. Within the space of 11 months they saw a resulting £83,734 total profit increase.
- Improved GP percentage of 3% over the space of 11 months
- A significant reduction in excessive stockholding
- ROI of £49.5K
The hotel group, which has a portfolio of 12 hotels across prime city and countryside locations in the UK employed Venners to scope and improve their stock management capabilities. Leaning on the reputation Venners had built up for itself, the hotel group hoped to benefit from further maximising their profits. After a full year, it was clear their investment paid off.
Challenges
As can be expected from well-renowned hoteliers, the management of stock across their estate was already in fine order when we were called in. There were no glaring issues one would have pointed out. Nevertheless, when our stocktakers began their work, they started noticing small details in hotel management processes that were leading to noteworthy losses.
As individual stocktake reports for each of the hotel group’s venues were analysed, it became apparent that revenue had simply gone missing on some occasions. The till records were not lining up with revenue records.
Upon further investigation some of the causes were identified. For example, in one of their venues, wine bottles were being allocated as “open food” instead of being rung in under their own product button. Another cause linked to shortages in soft drinks could have been attributed to building refurbishments, due to which stock had been moved to unlocked public areas and was possibly lost or stolen.
The stocktakers also ascertained that wastage was an area that needed improvement.
Solutions
The primary issue to address was operational protocol. Enlightening managers about the need to instruct staff to properly record sales in the system would eventually lead to fewer differences between the tills and recorded revenue. Keeping a closer eye on soft drinks and their transactions was another piece of advice our stocktaker was able to give the hotel’s management team.
Introducing a tighter control process regarding wastage logging and stockholding management was the second area of focus. Venners Cellar Management Software was installed to start managing the movement and transfer of stock throughout the site. A suggestion was also made to do a cellar stock count and balance analysis every week. This would mean that any major variances could be investigated immediately to identify the source and subsequently limit or eliminate these variances in future.
Results
As the year went, on stockholding became better defined across the hotel’s sites. Significant progress in stock management as well as a reduction in excessive stock were reasons for this. By the end of the year in December 2016, a reduction of £7K in stockholding compared to the beginning of that same year was the result – despite the usual rise during the Christmas period.The overall outcome was that Venners helped the hotel group maintain their margins and yield at the optimum level.
It is important to note that even for well-oiled hotels further improvements can be made to help maximise profits. Small changes across an estate can amount to a substantial profit increase.
