August 2011 Newsletter

Hospitality Accounting - Hotel Accounting - Restaurant Accounting - Hospitality Finance - Hospitality Texts -Hospitality Management

AUGUST 2011 Edition

Basic Hotel and Restaurant Accounting: NEW EDITION 2011: A principles and systems text based on the uniform system of accounts for hotels (AHLA) and restaurants (NRA). The text also contains several introductory managerial accounting chapters. Click the HRA DESCRIBED tab at top of this page for more information.This text has been recently revised.

Accounting for Hospitality Managers: A managerial accounting and financial management text providing the student with the necessary skills and knowledge to analyze financial information to solve hospitality business problems and achieve profit objectives. Click the AHM DESCRIBED tab at top of this page for more information

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GENERAL NEWS OF INTEREST

·Memphis-based Elvis Presley Enterprises Inc.Elvis Presley Enterprises Inc. has licensed the EAD International Group to start Elvis Presley-themed restaurants in Eastern and Central Europe.
http://www.bizjournals.com/memphis/news/2011/07/26/elvis-presley-enterprises-clears-path.html

·Theme parks and casinos are booming in Asia.
http://abcnews.go.com/Travel/wireStory?id=14133474

·Fish Farming – problems and benefits.
http://www.time.com/time/health/article/0,8599,2082630,00.html

·A survey of fast food diners by Consumer Reports reveals surprises
http://www.ajc.com/business/survey-chick-fil-a-993741.html

·The 50 fastest growing chains with sales of $25 million to $50 million, as tabulated by Technomic.
http://www.monkeydish.com/growth/future-50?subscribe=1#

·New training and recruitment strategy of chains
http://www.qsrmagazine.com/reports/recruitment-revolution

·More restaurants are crafting their own sodas.
http://www.chicagotribune.com/features/food/ct-dining-0623-house-made-sodas-20110707,0,2646696.story

·Samples of ill-advised statements made by servers.
http://www.chicagotribune.com/features/food/stew/chi-trite-server-sayings,0,6877183.story

UNITED STATES NEWS

Bob Evans Farms Inc. announced plans to extend its “Farm-Fresh Refresh” renovation project to 44 locations in the Detroit and Toledo, Ohio from August 2011 to November 2011. The new stores will have a bakery, a carry-out area and a redesigned retail area, and an updated dining room with modern furnishings, light fixtures and brighter color schemes. Currently, Bob Evans operates 563 restaurants in 18 states. During fiscal 2012, the company plans to remodel a total of 56 Bob Evans restaurants and complete six new locations.

·Chick-fil-A is offering multigrain oatmeal for breakfast. Its 8 oz. bowl of oatmeal starts at $2.49, or can be ordered as part of a $5.65 Chick-fil-A Breakfast Meal that includes a small coffee and medium fruit cup. Chick-fil-A’s states that its oatmeal is slow cooked in kettles to retain the nutritional value naturally found in oats; the mixture is a combination of steel-cut oats, rolled oats, flax, buckwheat flour and whole wheat flour

·Chipotle Mexican Grill, the organic fast food chain, has 1,100 sites in the US and Canada. After a market trial in London's Charing Cross last year, it has just signed up for its second site – a 50-cover restaurant in Baker Street, London.It is also exploring to open restaurants in Paris and Munich.

·Dunkin' Donuts has signed agreements with two franchisees to develop 11 new restaurants throughout Arkansas over the next several years.The first is to open in 2012, with the others to open by 2018. Dunkin' Donuts also announced an agreement with Eastern Iowa Food Service Inc. for 12 restaurants in Cedar Rapids, Iowa; the first will open in 2012 and the remainder by 2018.

·Krispy Krunchy Foods, a quick-serve restaurant concept with more than 700 retail locations in 23 states, opened seven stores in July; its total openings for the year are 159.Krispy Krunchy Foods features Cajun-style chicken, pizza, jambalaya, Boudin Bites (Cajun rice balls), catfish and honey butter biscuits. The program is completely customizable and has no franchisee or royalty fees. The program may be co-branded with another food program and can use existing on-site equipment. Krispy Krunchy Foods provides training and support programs.

·Moe’s Southwest Grill has 428 restaurants in 32 states, Canada, and most recently, Turkey. They are growing at a rate of about one new restaurant a week and plan to have 65 new locations open by the end of this year.

·Popeyes Louisiana Kitchen, subsidiary of Atlanta-based AFC Enterprises Inc., has opened its 2,000th restaurant; the store is located in Memphis, Tenn.Popeyes operates restaurants in the United States, Guam, Puerto Rico and 25 international countries.

·Wendy’s/Arby’s Group Inc.Wendy’s/Arby’s Group Inc. has completed the $430 million divesture of Arby’s to Roark Capital GroupRoark Capital Group . The Wendy’s operation is now separate and called Wendy’s Co.Wendy’s has more than 6,500 restaurants in the U.S. and 25 other countries and U.S. territories worldwide.

Noteworthy food news

>Turkey burgers are a good seller.Ruby’s Diner chain has a Premium Baja Turkey Burger, Hardee’s promotes Charbroiled Turkey burgers, Jack in the Box added its Turkey, Bacon & Cheddar Grilled Sandwich in February 2010. T.G.I. Friday’s menu lists just five burgers, but one is a turkey burger. Turkey burgers also are on the menu at The Cheesecake Factory, O’Charley’s and others.

>·An ever increasing number of restaurants have changed their recipes to replace high-fructose corn syrup (HFCS) with sugar.Some packaged-food companies are also satisfying consumer concerns about HFCS and replacing the sweetener with sugar. In the last two years, Wheat Thins, Pepsi, and other brands have introduced products with sugar instead of HFCS.

·>Starbucks new menu items are Bistro Boxes; small meals under 500 calories, such as Chipotle Chicken Wraps and Sesame Noodles, that cost less than $7.This introduction comes months after the chain's debut of its Petites line of bite-size desserts.Low calories are in high demand. Kraft recently introduced SnackWell's treats in 100- to 150-calorie servings. Coke's 7.5-ounce, 90-calorie minicans are a success.

>The latest NPR-Thomson Reuters Health Poll of more than 3,000 adults across the country showed that 58 percent prefer to eat organic over non-organic food. Thirty-one percent favor non-organic food and 11 percent don't care one way or the other.The top reasons people prefer organics are to support local farmers and concern about toxins, such as pesticides, in non-organic food. The worries about toxins are strongest among people with at least a college education.Those who prefer non-organic foods state that organic food is too expensive and secondly is that non-organic food is more readily available.

International expansion of U.S. companies

International expansion plans are numerous.Refer to the separate International News section to examine each listed country.

Divestures, bankruptcies and closings

>Publix Supermarkets has sold Crispers LLC Crispers LLC, a 36 fast-casual restaurant chain all in Florida, to Healthy Food Concepts LLC.Crispers is a The Maryland Dining Out Growth Act of 2011, effective July 1, allows patrons to bring dogs to outdoor dining areas at restaurants.Under the new law, restaurants must first apply to their local Department of Health and wait 30 days before allowing dogs to dine with their owner.

>Starbucks Corp won dismissal of a lawsuit by former assistant store managers in New York who accused the world's largest coffee chain of cheating them out of customer tips.A U.S. District Judge said the plaintiffs failed to show that they had a right to share in money left in the plexiglass cube containers, known as tip boxes, located beside cash registers.Starbucks' written policy on tips lets baristas and shift supervisors handle and receive tip box proceeds.In contrast, store managers and assistant store managers, are typically salaried, full-time workers receiving other benefits such as holiday and sick pay and life insurance. The policy is silent about individual tips.

Casino Industry news

·Hard Rock Hotels and Casinos has applied for a New Jersey construction permit for a full gaming floor, restaurants, shops, and a Hard Rock Cafe.The resort will have 850 hotel rooms; 200 in the first phase and the other 650 in the next phase of construction. The gaming floor will be 100,000 square-foot

·The Seneca Nation is one again aspiring to build a new gaming facility in the Catskills; the federal government lifted a ban on tribes acquiring land off of their reservations and using that land for casinos.The tribe already operates casinos in several New York locations.Opponents claim that the Senecas would be violating the law if they move forward with their casino plans.

·Nevada becomes first state to legalize on-line poker (subject to federal approval).The bill, AB 258, authorizes the Nevada Gaming Commission to draft regulations for online gambling; such gambling cannot be legal until the federal government makes Internet gambling legal; the federal government is considering such change.

·Rhode Island lawmakers putting full-scale casino gambling decision to voters.Residents in Rhode Island will vote in 2012 whether or not to allow blackjack, roulette, craps, and other table games at Twin River. If approved, the table games at Twin Rivers could generate millions in tax revenue and hundreds of jobs.

·Massachusetts legislators have been debating the casino resort issue for several years. Governor Deval Patrick is a strong advocate of expanded gambling, lawmakers do not agree with his plan.

Legal and governmental regulation

·Connecticut becomes first state to mandate paid sick time.http://www.reuters.com/article/2011/07/10/us-connecticut-sickleave-idUSTRE7692QE20110710

·The Maryland Dining Out Growth Act of 2011, effective July 1, allows patrons to bring dogs to outdoor dining areas at restaurants.Under the new law, restaurants must first apply to their local Department of Health and wait 30 days before allowing dogs to dine with their owner.

·Starbucks Corp won dismissal of a lawsuit by former assistant store managers in New York who accused the world's largest coffee chain of cheating them out of customer tips.A U.S. District Judge said the plaintiffs failed to show that they had a right to share in money left in the plexiglass cube containers, known as tip boxes, located beside cash registers.Starbucks' written policy on tips lets baristas and shift supervisors handle and receive tip box proceeds.In contrast, store managers and assistant store managers, are typically salaried, full-time workers receiving other benefits such as holiday and sick pay and life insurance. The policy is silent about individual tips.

·A provision of the Small Business Jobs Act of 2010 allows self-employed taxpayers to use their self-employed health insurance deduction to reduce net self-employment profits for purposes of calculating self-employment tax.

INTERNATIONAL NEWS

Africa

Since 2000, at least eight theme parks have opened or are scheduled to open in West Africa.Dwarfing every other park in the region is Heritage City, a 25,000-acre nature reserve and theme park planned outside Abuja, Nigeria.

Bahrain

>The hospitality sector in Bahrain is recovering as Saudi Arabian tourists return.

>Two factors which helping to revive the Bahraini market have been the return of guests from Saudi Arabia and the lifting of travel international warnings, such as in the UK, which has improved the return of business travelers.

Canada

·>Burger King Restaurants of Canada Inc. Ha opened three new featuring the company's new 20/20 global restaurant design.The 20/20 image has distinctive graphics and a variety of self-seating options.All restaurants have high-efficiency lighting and are equipped to reduce operational and energy costs.Throughout the next three to five years, Burger King Restaurants of Canada Inc. will open 150 new 20/20 locations across the country, adding to the chain's current 300 restaurants in the country.

>Ritz-Carlton will open its second "reserve" property in Puerto Rico, a 1 14-room resort on Dorado Beach.It will feature 100 guestrooms and 14 one-bedroom suites, all on the beachfront, and also a separate five-bedroom VIP.There is a five-acre spa and an eco-adventure courtesy of Jean-Michel Cousteau.As of December 2012, the resort will also be home to the second Ritz-Carlton Reserve, 50 acres with a mile (1.6 km) of beachfront.

>Abercrombie & Kent, the travel company, offer trips to Cuba from the United States made possible by President Obama’s recent easing of travel restriction which allows any United States citizen to go to Cuba, in spite of the long-time American economic embargo; however the travel must be with a group licensed by the Treasury Department.

China

>Subway currently has 220 stores in China; 73 in Beijing. "By the end of this year, we expect to have more than 90 stores in Beijing and nearly 300 in China. By 2015 there will be 180 stores in Beijing and well over 600 stores in China," said Alexander Moody-Stuart, Subway franchise's general agent in Beijing.

>The Four Seasons Hotels, a Canadian luxury hotel company, operates four hotels in China and will ultimately have 12 locations in China.The Company currently operates 85 hotels across 35 countries with about half of them located in North America.

>Hyatt Hotels Corporation opened its first Hyatt hotel in Southwest China, the Hyatt Regency Guiyang in the capital city of Guizhou province.The hotel has 366 guestrooms with the latest modern amenities, including a Regency Club comprised of 144 rooms and suites for guests who desire an extra level of personalized service.The Hyatt hotel has five food and beverage outlets and a wide selection of dedicated meeting and event facilities, including a 863 sq m (9,289 sq ft) Regency Ballroom.The hotel can accommodate 800 people for banquets and six function rooms measuring from 81 to 131 sq m (872 to 1,410 sq ft), each with natural light.Leisure facilities include a fitness center, an indoor heated swimming pool and a modern spa.

>The Xinhua news agency reports, "12.87 million foreigners visited China in the first half year, up 2.5 percent over the same period last year," but meanwhile, "about 32.21 million Chinese mainland residents made overseas trips in the first half of this year, up 19.9 percent year-on-year”, according to the Ministry of Public Security.China attracts budget and student travelers, because websites and travel agents offer substantial discounts on airplane tickets and hotel rooms and thecost of living in China is significantly lower than in Europe or North America.China's infrastructure has developed so that airplanes, trains and buses travel over the nation. Living standards in major Chinese cities are comparable to European and North American cities.

Columbia

InterContinental Hotels Group has opened its first Holiday Inn in Colombia; a 191-room hotel, The Holiday Inn Bogota Airport.

England

·McDonald’s Corp. plans to build its largest restaurant, the official restaurant of the 2012 Olympic Games in London, which run from July 27 to August 12, 2012.The 9,843-square-foot (3,000-square-meter), two-story unit will have a kitchen four times standard size because of plans to serve 1.75 million meals during the games.Management states that “The interior is to be a reflection of street life that will use graffiti, the epitome of urban art, as a central theme”. The four Olympic restaurants (two in the Olympic Park, one in the athletes’ village and one at the press center) were designed to be disassembled after the games; the units, including furniture and kitchen equipment, will be recycled into other McDonald’s locations.

France

>Cadel Evans has won the Tour de France and is the first Australian winner of the Tour de France.

>Tour de France runs from Saturday July 2nd to Sunday July 24th 2011, the 98th Tour de France will be made up of 21 stages and will cover a total distance of 3,430.5 kilometres; about 200 of the world's best cyclists will race in the 2011 Tour de France.This year there begins a significant change in the points classification and the battle for the green jersey. Instead of the traditional two or three intermediate sprints per stage where points had been awarded to the first three riders over the line ---it’s now just one sprint per stage; and the allocation goes down to the 15th rider of the ‘prime’.Moreover, the points are far more significant (20 points for first, 17 for second, 15 for third… etc.).There is also a new allotment for the finish of the stage – this depends on the categorization of each stage: high mountain, undulating, flat or time trial.

India

.>The Four Seasons Hotels, a Canadian luxury hotel company, plans to operate 6-7 hotels in India in the next 10-years; it has a currently operational hotel in Mumbai.The company currently operates 85 hotels across 35 countries with about half of them located in North America.

>Hilton Worldwide has started its fifth property in India by taking over management of a 218-room hotel in New Delhi.The Eros Hotel will be re-branded the hotel as Hilton after completion of a 750 million rupees ($16.8 million) renovation program.

>India is at the start of its second round of hotel development which is a focus on the needs of the domestic traveler. The growth of a middle class that spends on travel, increased business travelers resulted in a rooms shortage due to the demand of 675 million domestic travelers last year.India's hotel industry is a mix of branded and unbranded properties, contrasted with global brands of luxury hotels and a sector made up of many individual properties of varying quality.To solve this contrast, 1 in 5 rooms under construction will be a budget or a mid-scale room.

>LemonTree has launched a budget brand called Red Fox to differentiate between its other hotel classes.

>Swiss hospitality chain Mövenpick Hotels and Resorts will open its first India hotel in Bangalore by October. The company plans to have 15 hotels in the India within the next five years in 12 locations, including Delhi, Chennai, Kolkata, Mumbai and leisure destinations like Goa.Since other international hotel chains are entering India, Mövenpick aims to distinguish itself with its specialties in food and beverage. The company operates only one hotel brand of hotel; its goal is grow the Mövenpick brand.

·>InterContinental Hotels Group (the world's largest hotel group by number of rooms) has opened the 94-room Holiday Inn Cochin, its third Holiday Inn property in India; the other two are in Pune and Mumbai.

>The 365-room Jaipur Marriott Hotel has opened, it has seven food and beverage outlets, 43,000 square feet of meeting space, and a 10,000-square-foot spa and fitness area. Dining options range from Saffron, a fine-dining Indian restaurant, to the Jaipur Baking Company, which offers fresh pastries, and Alto Vino, a modern Italian restaurant.

>·Eaton Smart, India’s first airport transit hotel at New Delhi Airport is now officially open with rates from 3,000INR (approx. US$65) per five hour stay.The 93-room hotel is available to passengers with valid tickets.The rooms are available for a minimum of five-hours allowing guests to relax before and after a flight.Services include a spa and a fully-equipped gymnasium.

>JW Marriott opened its 5-star hotel, the JW Marriott Chandigarh – the first JW Marriott hotel in North India and its second in the country.

Indonesia

CKE Restaurants Inc.'s Carl's Jr. brand plans to expand in Indonesia over the next six years, opening 25 new units in the country, mostly in Jakarta, Bandung and Bali.The company recently opened its fourth store in Indonesia; the first unit opened in 2010.Carl's Jr. Indonesia restaurants feature all-you-can-drink beverage bars and partial table service.

Netherlands

Pakistani mangoes have entered the assortment of Hanos, one of the largest chain stores of horeca (hotels, restaurants and catering) supplies in the Benelux market.

New Zealand

·McDonald's plans nine new restaurants in New Zealand and hiring of 4000 people.McDonald's timing is to open one of the nine outlets around Britomart in Auckland for the Rugby World Cup. Balmoral and Britomart restaurants are scheduled to open in the next two to three months. Management plans to open170 restaurants by the end of 2012.Franchisees need about $1 million cash to purchase a McDonald’s for about $350,000 and have sufficient funds for operations.McDonald's expects a 20-year commitment from franchisees.

Switzerland

>Swiss hospitality chain Mövenpick Hotels and Resorts will open its first India hotel in Bangalore by October. The company plans to have 15 hotels in the India within the next five years in 12 locations, including Delhi, Chennai, Kolkata, Mumbai and leisure destinations like Goa.Since other international hotel chains are entering India, Mövenpick aims to distinguish itself with its specialties in food and beverage. The company operates only one hotel brand of hotel; its goal is grow the Mövenpick brand.

>There is Russian interest and activity in the Switzerland real estate, hotel and tourism sectors; especially in the high quality Swiss medical clinics for Russian health tourists.While more Russian enterprises are created, estimating the investment and jobs created has been problematic.It is estimated that the Russian business interests are small with thinly staffed offices.There are over 10,000 Russian residents in Switzerland; however, that number is small when compared to the German, Italian, British, French, United States and many other foreign groups.

United Arab Emirates

>McDonald's is fueling its trucks with oil from its own vats.Dubai-based Neutral Fuels will convert used vegetable oil from McDonald's outlets in the UAE into 100 percent biodiesel to power the fast food giant's delivery trucks. The McDonald's trucks are fueled with pure biodiesel — not a mix as used in parts of Europe and the United States.McDonald's also uses 100% biodiesel, in England and most recently Austria.

>·A luxury hotel at Dubai International Financial Centre is again viable after its original developer, a New York company, exited the project.The hotel is part of a Dh1.6 billion (US$435.6 million) mixed-use project, being built in the financial district by Daman Investments.The opening was originally planned for 2009, but is now scheduled to open in mid-2013.The 250-room hotel is being built opposite a Ritz-Carlton hotel, which opened its doors at the beginning of this year.

>·Rosewood also has a hotel under development by Mubadala on Sowwah Island, which is to become the home of Abu Dhabi's new commercial district.The hotel will have 189 rooms and more than 130 serviced apartments; it is scheduled to open in September next year.

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NOTICE TO READERS· Sources of Information: Some of the information for this newsletter may be assembled, summarized, and re-tailored from many sources. For example, the National Restaurant Association, the American Hotel and Lodging Association, the Wall Street Journal, The Canadian Restaurant and Foodservice Association, Internal Revenue Service, QSR Magazine, Chain Leader, Hotel News Resource, Google, and numerous other professional sites.· Links to third-party websites: Links to third party websites are provided solely as a convenience to you. If you decide to access any of the third-party websites linked in the newsletter, you do this entirely at your own risk. The author of this newsletter is not obligated to review third-party websites, does not control such third-party websites, and is not responsible for any such third-party websites. Ray Cote does not endorse or make any presentations about such third-party websites, their content, products or services. · Procedure for making claims of infringement: Ray Cote respects the intellectual property rights of others. Accordingly, Ray Cote has a policy of removing any content that violate copyright law. Pursuant to Title 17 of the United States Code, Section 512, if you believe your copyright or other intellectual property right is being infringed please provide written notice to::Raymond Cote, Author, PO Box 771383, Ocala, FL 34477.Your written notice must:
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