© 2011 John Wiley and Sons, Inc.

All Rights Reserved

Selection and Procurement for the Hospitality Industry

Purchasing

ANDREW HALE FEINSTEIN AND JOHN M. STEFANELLI

E i g h t h E d i t i o n

© 2011 John Wiley and Sons, Inc.

All Rights Reserved

CHAPTER

Services

26

© 2011 John Wiley and Sons, Inc.

All Rights Reserved

YOU SHOULD BE ABLE TO:

• Identify management considerations surrounding the selection and procurement of services.

• List and describe the types of services that might be purchased by a hospitality operator.

• Outline the general procedures used when purchasing services.

© 2011 John Wiley and Sons, Inc.

All Rights Reserved

YOU SHOULD BE ABLE TO (CONT.)

• Create a specification outline for services.

• Explain security issues that may arise when purchasing services.

• Describe the major selection factors for services.

© 2011 John Wiley and Sons, Inc.

All Rights Reserved

MANAGEMENT CONSIDERATIONS

• Fixed vs. variable costs• Should I buy or should I do it myself?• Outsourcing?• Lease contracts• Hiring contract workers

© 2011 John Wiley and Sons, Inc.

All Rights Reserved

TYPICAL SERVICES

• Waste Removal What is included with CAM feesPickup scheduleGrease trapsRecycling

• Financial BankingLoansPayroll management

© 2011 John Wiley and Sons, Inc.

All Rights Reserved

TYPICAL SERVICES (CONT.)

• GroundskeepingCommon in CAMLandscaping• Snow removal• Be specific

• Pest Control

© 2011 John Wiley and Sons, Inc.

All Rights Reserved

TYPICAL SERVICES (CONT.)

• AdvertisingNewspaper and magazineRadio and televisionBrochures and flyersPhonebookTypically cost is based on circulationSponsorship of a local team

© 2011 John Wiley and Sons, Inc.

All Rights Reserved

TYPICAL SERVICES (CONT.)

• Consulting DesignersFeasibility researchersComputer specialistsEnvironmental assessors

• Decorating and remodeling• Maintenance

Endless number of repairs

© 2011 John Wiley and Sons, Inc.

All Rights Reserved

TYPICAL SERVICES (CONT.)

• Vending machine• Insurance

HealthcareProperty damageLiability Insurance

© 2011 John Wiley and Sons, Inc.

All Rights Reserved

TYPICAL SERVICES (CONT.)

• PayrollControl payments to others• Federal taxes• Social Security tax• Medicare tax

Accurate reporting of payroll expenseControls skimming by payroll clerks

© 2011 John Wiley and Sons, Inc.

All Rights Reserved

TYPICAL SERVICES (CONT.)

• Laundry and linen You can buy your own and use a cleaning

serviceYou can rent linenYou can buy your linen and create a

cleaning facility

• OtherCleaningKnife sharpening

© 2011 John Wiley and Sons, Inc.

All Rights Reserved

SECURITY AND SERVICES

• Watch for scams• Check bills for services and initial• Beware of “extra” invoices• Don’t pay deposits to unknown

suppliers