Okay. So, here we are going to see the typical hotel structure. So, typical hotel structure is divided into different different divisions. So, what is the room division Daniel has front office housekeeping concierge then it has front of food and beverage department, which has service kitchen stewarding, then you have the other operating department which may include spa health, transportation or other departments. So, maybe each hotel we have these all the services or may not have all the services but it doesn't matter is the standard document then we will discuss how the income audit is checking in each of these documents Okay. Then you have administrative system marketing.

So, how what is why income audit is concerned in the audit is concerned because it all interrelated to each other. Right. They are these departments information flow from one department to another department and it affects the hotel revenue. So the room department is the major The center of everyone correct because then because handles the guest. So the front office is the Information Center for most of the hotel operations. So it get the information from reservation and pass on the information to the front office or it gets information from front office as well to get the Billings for in house guests, the spies importing to the front office then the other operating department also report to the front office, not so much from the administration or maintenance but more from the marketing, revenue management.

So revenue management is concerned with the income audit because they need to get a market segmentation report correct revenue reports how the revenue is recorded in the system. Okay. Okay, now we are going to take a little bit of the question answer session. So I will be asking question and you're going to be answering Okay, these are basic terms of the industry. So, the first is average daily rate. So, who can tell me what is the average daily rate?

What is average daily rate of the individual? Ah No no, but exchange average daily rate is means, when you divided by the cover or by the occupied lights so occupied two nights means which one which occupied one night paid occupied two nights are all occupied nights. Two nights can be two time right it's free and paid. So, for any rate, what do you concerns it all is only make So, average every 30 days is concerned by revenue divided by paid occupied room times not all occupied two times. Even if the room is occupied free of cost, then it is not calculated. It is not Included in the calculation of average daily rate calculations, average daily rate is only for the room revenue exclusive of veteran service someone so, it does not include bad as service charges okay includes all these other revenue which is service money you pay to stop government texts we need to pay to the government.

So, whatever hotel retains means the net revenue divided by the paid occupied rooms Okay. Then the next is occupancy percentage. So, what is the occupancy percentage? We normally say hotel is 50% occupied 60% occupied 70% occupied, so, what is this percent occupied What does it mean? How many rooms are occupied out of total available right. So, in this case also we are using only the paid occupancy, not the free occupancy This is financial term Danger, not the operation the operation is okay.

You can include everything together because operation is concerned with the total occupied, but finance or income audit is only concerned with pay, not for free. Okay? Free means paid means if let's say it's free as part of contract. Let's say that the travel agent does get a deal, one free for 10 rooms, so means they will stay 11 times but so in that case, this one is not free. It's a part of the contract. So it's paid.

Okay, it's not free, but if it's for promotion, the chairman is older is staying his son is staying his friend staying his girlfriend's day. Those are three minute charts right, but those are three. So that one you cannot include it occupancy percentage or a calculation of average anyway, okay. So this is the calculation, total available nights also is only the which you can So on a daily basis, but let's say the you are you're the toilet ball off one of the room is damaged What will you do? Is it out of because you cannot sell them right okay tomorrow maybe okay thanks Yes sir. So are you able to take out from the available nights?

No know total variable nights is affected by the out of order Night Only if it's a long time if you are doing a renovation of the hotel. So means that you are not changing the available two nights every day because every day you may have problem light bulb is not working. wallpaper is scraped solid wall is not working is flooded. So there are many problems in the room right but you cannot say okay now I every day I take out the available information available online you cannot change like this every day. Available two nights are the nights which are available to sell in general course, means you can fix the room. But if you're doing a renovation now Say you are doing innovation for three months, then you can take out the blue light from calculation, because you cannot sell for three months.

Right? So that's the calculation of total available room nice. Next is revenue per available room. That's normal that is the most use term in hotel industry, rev par In short, rev par. So what is the report? simple right?

Revenue per available calculate this. Simple is already the name revenue divided by available, somebody there. But there's another shortcut formula. shortcut formula is occupancy multiply by average daily rate. So if you know the average daily rate and you know the occupancy, you don't need to know the revenue. You don't need to know the total available nights you can calculate the red bar easily.

Just can just multiply every time occupancy percentage. So you don't need to know the total revenue. You don't need to know the available nights you can get the record easy. So that's another shortcut of reefer. Okay? towers covers this for fnb right?

How many guests who are serving in the restaurant? So it is multiplied by the meal period. So if one cover same guest is coming for breakfast lunch and dinner is counted three times, not one time. Three times is one guest but it's coming for breakfast lunch or dinner separately. So we are counting, we are counting them three times. Okay, so it's three cups.

Why do we do that? Why do we do this? Because we want to understand how many times the surface has to suffer guests, because every time the guests come, we have to clean the table. We have to set up the time away glassware, silverware table, man, whatever you need to do, right. You have to do every time So then if you don't count that separately, then the productivity of the staff is not measured properly and also the employee spending. So next time is also the average spending average check means how much is each guest is spending in the restaurant per guest bacala so if the if the totals he spent in the morning he spent $6 for breakfast, lunch he spent $10 breakfast he spent another $15 the total is 21.

So but it does not mean that every check is 21 it means every check is 21 divided by three so we just seven Okay, so means out an average one guest if he's come for any period either spent $7. But every check is normally we always check by medium. How much is the average check off breakfast how much is average check off lunch how much is average check off demons because the average age is different for all the demons Good years, okay, the breakfast is the lowest. Lunch is medium and dinner is usually the highest. Why? Because you're serving a lot of other alcohol or beverages in the dinner.

People tend to spend more on dinner than the lunch. Okay, clear. Okay.