HTM 2030 Lecture Notes - Lecture 18: Physical Therapy, Life Insurance, Unemployment Benefits

• School: University of Guelph
• Department: Hospitality and Tourism Management
• Course: HTM 2030
• Professor: Alison Crerar

Document Summary

Labour cost and product cost are the two biggest costs for a hospitality operation. Therefore, it is very important that you control labour costs as well as product costs. There are several problems associated with labour costs in hospitality and tourism businesses. First, hospitality and tourism businesses are labour intensive, so the cost of labour is generally high. As well, wage rates and benefit costs continue to increase. Without major changes in the style of service (table service to buffet), productivity is hard to increase to reduce labour costs. Finally, guests do not understand the costs of running hospitality and tourism operations, so it is difficult to pass on increased labour costs in the selling price of food, beverages, and rooms. The authors define labour cost control as a process used by managers to direct, regulate, and restrain employees" actions to obtain the desired levels of performance at appropriate levels of cost.