Before the next ski season begins, every food and beverage manager needs to examine the previous season’s performances. Getting solid numbers from past performance is essential for creating realistic budgets as well as identifying positive and negative trends. Correctly analyzing these trends can help to maximize sales and profits for each food and beverage operating unit.
To set goals for next season, prepare two charts. The first is revenue per skier (RPS), a daily tracking of sales per unit divided into the numbers of skiers on the mountain on a particular day. The second is profit and loss chart for Food and Beverage by food service outlet or sales unit.
Keeping in mind the square footage of each sales unit, you can use these numbers to decide which units need help through marketing, physical plant improvements or other solutions. The RPS for the resort in this example is $4.12. Day ski areas average $3 to $4 RPS, while large ski areas and destination resorts average $7 to $9 RPS. This is for day business only and does not include any night restaurant or bar sales. Because the example resort is in the destination category, action needs to be taken to increase the RPS.
If this chart is compiled using a computer, Lotus 123 or a similar program can be used to sort the information many ways. For example, by sorting weekend and holiday periods, this resort had an RPS of $4.29, while during the slower mid-week and shoulder weekend times, the RPS was only $3.93. It is realistic to assume that a larger RPS can be captured during slow periods because of shorter lines and therefore more capacity per skier. This lower RPS during the mid-week period indicates where more dollars can be realized and therefore greater management awareness can be concentrated. Another use of RPS is to compare RPS vs. square footage of each food service facility. In the example, the square footage of Unit #3 is equal to Unit #2, yet the RPS of #2 is less than half that of Unit #3.
| Date | Skier Count | Unit #1 Sales | Unit #1 RPS | Unit #2 Sales | Unit #2 RPS | Unit #3 Sales | Unit #3 RPS | Unit #4 Sales | Unit #4 RPS |
|---|---|---|---|---|---|---|---|---|---|
| Dec. 25 | 2443 | 6231 | 2.55 | 677 | .28 | 1834 | .75 | 1364 | .56 |
| Dec. 26 | 3483 | 7994 | 2.30 | 1716 | .49 | 2225 | .64 | 1443 | .41 |
| Feb. 3 | 6852 | 13149 | 1.92 | 5692 | .83 | 7696 | 1.12 | 4421 | .65 |
| Feb. 4 | 4092 | 9085 | 2.22 | 2770 | .68 | 5323 | 1.30 | 2377 | .58 |
| Feb. 5 | 2182 | 3929 | 1.80 | 1035 | .47 | 1650 | .76 | 1730 | .79 |
| Feb. 6 | 2259 | 3806 | 1.68 | 1025 | .45 | 2495 | 1.10 | 633 | .28 |
| Feb. 7 | 2276 | 3760 | 1.65 | 592 | .26 | 2818 | 1.24 | 2073 | .91 |
| Feb. 8 | 2173 | 2965 | 1.36 | 677 | .31 | 2706 | 1.25 | 2226 | .99 |
| Feb. 9 | 2671 | 4797 | 1.80 | 893 | .33 | 3519 | 1.32 | 2154 | .81 |
The second to prepare is a profit and loss statement for each outlet. This chart indicates which units are performing well and which are not. At the example resort, a goal of 50 percent gross profit can be realistically expected from all units. Looking at units #3 and #4, it appears that a detailed marketing or cost-control program needs to be set up. Both of these units are located on-mountain and their RPS is low, so rather than containing costs, unit volume needs to be improved. (Note that snow cat transportation has not been considered here, which would make these units seem even less profitable.)
| Sales Item | Unit #1 Annual Sales | Unit #1 % of Total | Unit #2 Annual Sales | Unit #2 % of Total | Unit #3 Annual Sales | Unit #3 % of Total | Unit #4 Annual Sales | Unit #4 % of Total | Total for Four Units Annual Sales | Total for Four Units % of Total |
|---|---|---|---|---|---|---|---|---|---|---|
| Food | $527,614 | .92 | $100,552 | .38 | $86,795 | .81 | $120,687 | .95 | $835,648 | .78 |
| Liquor | 40,552 | .07 | 167,463 | .62 | 19,871 | .19 | 6,905 | .05 | 234,791 | .22 |
| Other | 6,010 | .01 | 0 | .00 | 114 | .00 | 0 | .00 | 6,124 | .01 |
| Total | 574,176 | 1.00 | 268,015 | 1.00 | 106,780 | 1.00 | 127,592 | 1.00 | 1,076,563 | 1.00 |
| Annual Labor Costs | ||||||||||
| Hourly | $56,347 | .10 | $41,786 | .16 | $18,826 | .18 | $21,122 | .17 | $138,081 | .13 |
| Mgmt. | 20,596 | .04 | 6,828 | .03 | 9,500 | .09 | 6,068 | .05 | 42,992 | .04 |
| Tax | 6,863 | .01 | 6,381 | .02 | 2,879 | .03 | 2,464 | .02 | 18,587 | .02 |
| Total | 83,806 | .15 | 54,995 | .21 | 31,205 | .29 | 29,654 | .23 | 199,660 | .19 |
| Annual Product Costs | ||||||||||
| Food | $127,462 | .24 | $28,376 | .28 | $20,940 | .24 | $30,709 | .25 | $207,487 | .25 |
| Liquor | 7,958 | .20 | 35,604 | .21 | 5,322 | .27 | 1,467 | .21 | 50,351 | .21 |
| Other | 0 | .00 | 0 | .00 | 0 | .00 | 0 | .00 | 0 | .00 |
| Total | 135,420 | .24 | 63,980 | .24 | 26,262 | .25 | 32,176 | .25 | 257,838 | .24 |
| Supplies | 26,782 | .05 | 8,298 | .03 | 6,886 | .06 | 11,979 | .09 | 53,945 | .05 |
| Misc. | 8,915 | .02 | 8,833 | .03 | 585 | .01 | 450 | .01 | 18,726 | .02 |
| Profit | $319,253 | .56 | $131,909 | .49 | $41,902 | .39 | $53,329 | .42 | $546,393 | .51 |
Solutions could be either an aggressive marketing plan to make people aware of these locations or different menus or themes to draw them in.
To track each outlet’s performance daily, figure an RPS average for each unit. Then, as weather and other factors affect skier visits, each unit can still be measured on RPS. Too often, when skier days go up over daily budgets, the food operation can look artificially inflated and when skier visits are down, it can look artificially deflated. Using RPS gives a truer picture of the performance of the units.
To measure labor costs, a daily labor schedule by unit can be created. How many hours and at what hourly rate will it take to run unit #1 on Tuesday if we expect 2,500 skiers? Rather than using a percentage of sales, an actual labor number by day can be developed. By charting this, you can see how well labor is being allocated as the weather changes.
The food-cost portion of the budget can be stated in terms of percentages, with most ski areas running between 24 percent and 33 percent of sales, depending on management’s view on price/value relationships.
By using the RPS approach and using profit and loss statements to compare units, realistic budgets can be drawn up. This allows for tracking of performance of the food and beverage department during the season and spotlights past problems that can be corrected with new marketing or cost control programs. It will also allow unit managers to have daily goals and get daily feedback on performance. Maximum sales volume and profit potential can be reached if the budgets reflect accurate and realistic numbers.
