A major European hotel operator found that shrinkage was costing the business on average €15.5K per annum per site. Our consultants coached the management team on much needed tactics that could help to overcome these unnecessary wasted costs.
The hotel operator wanted to gain better oversight of certain sites’ revenue losses. Having heard about Venners’ Observational Audit services they were keen to discover how in-depth data could help this selection of sites improve their overall revenue figures.
Covertly recording the transactions of bar staff members at ten sites across an entire year, our consultants observed roughly two 4-5 hour trading sessions per site. Because POS data was difficult to track against specific staff members, live surveillance was the most reliable method to isolate operational issues.
The approach provided valuable data about a number of key performance indicators used to identify preventable deficits. This included shrinkage caused by wastage and non-use of alcohol measures. It also quantified how particular members of staff could be losing the business money through poor protocol adherence, for example through the absence of upselling, excessive food and beverage consumption by staff etc.
Collectively, the results shaped a picture of the average loss per transaction each site was experiencing.
At a number of sites it was noted that staff were free pouring drinks; one of the top contributors to high levels of shrinkage. Staff protocol adherence varied amongst the sites: staff were seen eating and drinking behind the bar, receipts were not given and some were seen using their mobile phones during trading. Upselling was neglected across all sites, significantly impacting the potential worth of every single transaction.
All in all, the loss per transaction ranged from 11 cents to €1.42. The estimated annual loss across the investigated sites amounted to a minimum of €15.5K per site.
The consultants held a debrief with the hotel operator’s management team to instruct them on the necessary operational techniques needed to counter these daily unnecessary losses. It is expected that through better staff training and tighter controls the hotel operator can return what would have otherwise been wasted revenue.