a. The total revenues for 10/2010 was 583,000. For 10/2009, they were 545,000. Food and beverage revenues typically make up the largest portion of a hotel’s non-room revenue. For those less familiar with the hotel business, it might seem that the pricing of a hotel’s food and beverage products would be identical to that of a restaurant (page 300).
b. In 2009, the GOP dollars were 162,000. In 2010, the GOP dollars were 184,550.
c. The percentage of GOP to total revenues in 10/2009 were 29.72%. In 10/2010, they were 31.66%. Gross operating profit (GOP) is, in effect, total hotel revenue less those expenses that are considered directly controllable by management. Flow-through was created by managerial accountants to measure the ability of a hotel to convert increases in revenue directly to increases in GOP (Page 296).
d. The flow-through percentage achieved by the hotel was 59.34%. Seeing that the flow-through percentage was 9 percent above the 50 percent threshold, it shows that management is efficient in converting additional revenues into additional profits. Flow-through is computed to help managers identify the impact of increases in revenue on profitability. When it is high (over 50%), it usually reflects efficiency on the part of management in converting additional revenues into additional profits (Page 297).
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