Index: hospitality news, hospitality accounting text, hospitality managerial accounting text, hotel accounting, restaurant accounting, accounting, finance Raymond Cote, Author of hospitality accounting textbooks provides this news website for educators, students, and professionals in the hospitality fields of accounting, management and operations. Cote’s textbook customers make this website possible. These texts are: Basic Hotel and Restaurant Accounting (Click the Principles/System button at left) Accounting for Hospitality Managers (Click the Managerial Acctg Text button at left)                     Items of General Interest Improve Employee Training: http://www.businessweek.com/smallbiz/content/feb2010/sb2010021_434293.htm 2010 Job Market Outlook: http://hotjobs.yahoo.com/career-articles-2010_job_market_outlook_cloudy-1046 10 Tips When Searching For A Hospitality Job: http://www.articlesbase.com/career-management-articles/10-tips-to-remember-when-searching-for-a-hospitality-job-1735639.html The job market and job-search strategy: http://www.quintcareers.com/job_market.html U.S. Breakfast sales down due to economy and unemployment: http://www.washingtonpost.com/wp- dyn/content/article/2010/02/20/AR2010022003718.html    Defining the term "Basis Point." Today’s financial vocabulary often uses the term "basis point." A basis point explains a mathematical change between two numbers or measurements. For example, 100 basis pints = 1%, 200 basis points = 2%, etc. For smaller changes, for example, 1 basis point = .01%, 10 basis points = .1%. Here are some examples. In financial analysis, a stock dividend increasing from 2% to 2.5% means that the yield has increased by 50 basis points. If instead the yield increased from 2% to 3%, the change is an increase of 100 basis points.   Burger Update The $1 double cheeseburger by Burger King is discontinued to pacify franchisees who complained that the deal was critical to profits. Instead, Burger King will promote, in April, a $1 double burger with one slice of cheese calling it the BK Dollar Double. McDonald’s is the world's No. 1 fast-food company with 32,000 restaurants in 120 countries serving more than 900,000 customers every day and employing 25,000 people, and plans to spend $135 million this year on its expansion. Also see the International news below.    Coffee Update  Starbucks Update: Since opening its smaller Seattle's Best to franchising last year, Starbucks has signed deals with 10 new operators that plan to open small locations in California, Illinois and Texas. The company is gearing its growth plans to its junior brand. Starbucks had closed more than 800 of its main coffee shops in the past two years. Now, It is also facing increased competition as McDonald's Corp. and Dunkin' Donuts introduced lattes that cost less than at a regular Starbucks. Starbucks is offering 20 percent discounts on franchisee fees to veterans and minorities in a partnership with the International Franchise Association. Franchisees invest from $265,200 to $440,000 to open a Seattle's Best location.   Starbucks and Burger King: Burger King, the nation's No. 2 burger chain, plans to add Starbucks Corp.'s Seattle's Best Coffee in its U.S. restaurants this summer. About 7,000 (90% franchised owned) Burger Kings will sell Starbucks coffee in several varieties; iced, plain, vanilla, mocha, plus whipped toppings. Prices will be set by franchise owners and should range from $1 to $2.79. Rival McDonald's has had great success with its McCafe line of coffee drinks, which also benefited its food sales.   New Menu Concepts Ruby Tuesday is no longer simply a casual burger-and-salad restaurant, the 40-year-old chain has invested in a $100 million new concept with upscale menu additions such as steak dishes, herb-crusted tilapia, North Atlantic lobster tails and wine.   News of Interest The Virginia Senate has voted to allow concealed weapons permit holders to carry guns in restaurants that serve alcohol, as long as the person carrying the weapon does not drink. The House has passed a similar bill. Both chambers had passed it last year, but the governor vetoed it. Opponents stated that guns have no place in eating establishments, especially where alcohol is served. Even though the bill prohibits a weapons carrier from drinking, it is impossible to determine if the drinker has a concealed gun. Latin chicken fast-food Pollo Campero is scheduled to open in the later part of 2010 at the Walt Disney World Resort. After 40 rears, H.J. Heinz Co. has re-designed its ketchup packets; the new package will enable the customer to dip and squeeze. It will be available in some quick-service restaurants later in 2010. Domino's Pizza the world leader in pizza delivery with more than 8,000 stores in over 60 countries.     International Expansion of U.S. Companies McDonald’s international menu plan is to customize its menu according to geographic location. For example, its new offering is a "McItaly" burger in Italy. Other local favorites around the world include the Maharaja Mac in India (made of lamb or chicken), the McLobster in Canada and, in Japan, the Ebi Filit-O, a shrimp burger. The European operation of McDonald’s is its fastest-growing part, accounting for about 40% of global operating profits while being even though those operations are only 20% of all its international restaurants. By the end of 2010, McDonald's will have 45 more stores in Russia; bringing the number of McDonald's in Russia to 290 presently in 60 cities. This expansion corresponds with rival Burger King coming to Russia. McDonald’s expansion in China continues; it plans to open 150 to 175 restaurants. The company will add more restaurants and redesign 80% of existing stores within the next three years. The year 2010 will add about 10,000 jobs. Presently, McDonald’s, has more than 1,100 outlets in China. P.F. Chang’s China Bistro Inc. and Global Restaurant Concepts Inc. plan to develop eight restaurants in the Philippines over the next five years.   Financial Health News Jack in the Box Inc. (NASDAQ: JACK) reported net earnings of $24.2 million or 43 cents per diluted share for the first quarter ended Jan. 17, 2010; compared with $28.0 million or 49 cents per diluted share for the first quarter of fiscal 2009. Same-store sales at Jack in the Box company restaurants decreased 11.1% in the first quarter of 2010 compared with a year-ago increase of 1.7%. Corporate payroll and employee benefits costs were 30.5% of restaurant sales versus 30.2% in the year-ago quarter. Occupancy and other costs increased 2.30%. SG&A expense for the first quarter decreased by $17.4 million and was 10.8% of revenues compared with 11.7% last year. More than 47% of the Jack in the Box outlets are franchised; the company’s long-term goal is to have franchise ownership at 70 to 80% by the end of fiscal year 2013. Denny's Corporation (NASDAQ: DENN) year ended December 30th, 2009. Opened forty new restaurants. Sold eighty-one company restaurants under to franchisees; franchised restaurants are now 85% of Denny's system. The corporate Net income was $41.6 million, including $19.4 million of gains on sale of assets. The company received $40.7 million in cash from asset sales and reduced outstanding debt by $49.0 million. Same-store sales decreased 3.7% at company units and 5.2% at franchised units. The P.F. Chang's China Bistro, Inc financial results for fiscal year ended January 3, 2010. Revenues increased 2.5% to $1,228.2 million. Net income increased 57.5% to $43.2 million. Income from continuing operations per diluted share increased 29.0% to $1.87. Net income per diluted share increased 62.3% to $1.85 (Prior year net income includes a loss from discontinued operations related to the fiscal 2008 closure of 10 Pei Wei restaurants,)   Travel News Employment in the U.S. airline industry dropped 3.3 percent in December from a year ago. This was the 18th consecutive drop in full-time equivalent employee staffing levels. American Airlines Inc. and Southwest Airlines cut full-time employment by 4.9 percent and 2.2 percent, respectively. Delta AirLines was the only carrier with a net gain in employees from December 2008 to December 2009 due to its merger with Northwest Airlines. American has the most employees, with a full time-equivalent work force of 66,700. Southwest led low-cost carriers with the equivalent of 34,726 full-time employees. Orlando area hotels reported a 64.8 percent occupancy rate for the week of Feb. 7-13, down 4.2 percent from 67.7 percent for the same time period a year ago, as reported by Smith Travel Research. ADR was $103.68; a 6.5 percent drop from $110.92 the year prior. REVPAR was $67.20, down 10.5 percent from $75.08 in the same period of 2009. Developers are canceling plans for new hotels because lenders are requiring too much equity to qualify for loans. "The equity requirements at one point were 25 percent loan-to-value," said Tony Audi, owner of Northeast Realty Holdings LLC, an Albany-based developer. "Now, if there is a lender out there, it’s probably 40 to 50 percent equity." The tougher financing environment comes at a time when a slowdown in corporate and leisure travel has hurt occupancy levels and revenue per available room.   Accounting/Tax Notes The plug-in electric drive motor vehicle credit is available for qualified vehicles primarily for use on public streets, roads, and highways. Vehicles manufactured for use on a golf course do not qualify. For more information http://www.motorauthority.com/blog/1029800_obamas-stimulus-package-expands-plug-in-hybrid- incentives-but-diesel-fans-unhappy http://www.irs.gov/businesses/article/0,,id=214841,00.html http://www.irs.gov/newsroom/article/0,,id=206871,00.html Taxpayers not allowed to convert traditional IRA's into Roth may be do so starting in 2010. See: http://www.goodfinancialcents.com/2010-roth-ira-conversion-rules/       INTERNATIONAL NEWS General McDonald’s international menu plan is to customize its menu according to geographic location. For example, its new offering is a "McItaly" burger in Italy. Other local favorites around the world include the Maharaja Mac in India (made of lamb or chicken), the McLobster in Canada and, in Japan, the Ebi Filit-O, a shrimp burger. The European operation of McDonald’s is its fastest-growing part, accounting for about 40% of global operating profits while being even though those operations are only 20% of all its international restaurants. Canada News regarding the minimum wage: Alberta has frozen the minimum wage for 2010 Saskatchewan t is currently reviewing its minimum wage policy. Manitoba’s is debating the next minimum wage increase The Ontario government has passed regulations increasing the minimum wage from $9.50/hr to $10.25/hr on April 1, 2010. The hourly minimum wages for liquor servers will increase from $8.25 to $8.90 and for students from $8.90 to $9.60 Approximately 75% of minimum-wage earners in the Canada foodservice industry are young people under 25 years of age, and 67% work part time. China McDonald’s expansion in China continues; it plans to open 150 to 175 restaurants. The company will add more restaurants and redesign 80% of existing stores within the next three years. The year 2010 will add about 10,000 jobs. Presently, McDonald’s, has more than 1,100 outlets in China. Life Resort Management reports that the 187-room resort on Bac My An Beach will open April 4. Data from STR Global shows the decline in RevPAR was due to falling ADR of 21% and decline in occupancy of 6.5 percent. Cyprus The 2010 Horeca Hospitality and Foodservice event, "Le Rendez-vous du Gout," is from April 27-30, at Beirut International Exhibition and Leisure center. The annual hospitality foodservice exhibition will cover 10,000-square-meters of space and have 250 exhibitors, including official partners from Cyprus, Egypt, Iran, Argentina and Poland, and companies from Canada, France, Jordan, Saudi Arabia, Lebanon, Syria and the United Arab Emirates. India Wyndham Hotel Group has signed four franchise agreements. It now has 14 hotels opened or under development. The franchised properties currently being built and scheduled to open later this year, are the 140-room Ramada Amritsar hotel; the 130-room Ramada Gurgaon Expressway New Delhi hotel, the 392-room Ramada Plaza Dwarka New Delhi hotel and the 100-room Ramada Gurgaon Central hotel. Japan Bain Capital has signed a definitive agreement to acquire Higa Industries Co., Ltd., the long-time master franchisee of Domino's Pizza in Japan. Domino's Pizza has been in Japan for 25 years under an exclusive agreement with Higa Industries who now operates 179 franchised Domino's Pizza stores in Japan. Malaysia Naza Group of companies, best known for selling imported cars has announced its plans of investing $231 million to build five hotels in the Kuala Lumpur area within five years; the company presently has . 3 hotels in its portfolio, Local business investors are unwilling to build local hotel chains, but big international brands have become aggressive. The Mandarin Oriental, Nikko Hotels, Hilton and others have entered the market. A new Doubletree in Kuala Lumpur is expected to open in May. The Hyatt and Four Seasons chains will open hotels in Malaysia in the next few years. Nigeria Hawthorn Suites® by Wyndham opened its newest extended-stay hotel, the 108-room Hawthorn Suites by Wyndham Abuja in Abuja, Nigeria. The newly renovated Hawthorn Suites by Wyndham Abuja includes free high-speed wireless Internet access, complimentary hot breakfast buffet, business and fitness centers, shuttle service and swimming pool, and a full-service restaurant. The Wyndham Hotel Group currently has more than 10 hotels throughout Africa under its Days Inn, Ramada® and Wyndham Hotels and Resorts® brands. Philippines P.F. Chang’s China Bistro Inc. and Global Restaurant Concepts Inc. plan to develop eight restaurants in the Philippines over the next five years. Russia The first BURGER KING has opened in Moscow, Russia. By the end of 2010, McDonald's will have 45 more stores in Russia; bringing the number of McDonald's in Russia to 290 presently in 60 cities. This expansion corresponds with rival Burger King coming to Russia. Singapore Wyndham Hotel Group announced that its Ramada and Days Inn brands will enter Singapore with the development of two hotels: the 391-room Ramada Singapore at Zhongshan Park and the 405-room Days Hotel Singapore at Zhongshan Park. The 17-story Ramada Singapore at Zhongshan Park will include a full service restaurant, fitness center, swimming pool, business center and more than 600 square-meters of meeting space. The 14-story Days Hotel Singapore at Zhongshan Park will feature amenities such as a full service restaurant and fitness center. Hard Rock International has opened the Hard Rock Hotel Singapore, a 360-room hotel. The 49-hectare Resorts World Sentosa is Singapore's first integrated family resort destination, complete with a Universal Studios theme park, a Marine Life Park, and six unique hotels offering 1,800 rooms, more than 60 dining outlets and a casino. Notice for canceling further receipt of this newsletter.This newsletter is distributed only to educators. Your email address is treated highly confidential and is not harvested, sold, or transferred in any manner to any other institution or individual. The main purpose of this newsletter is to provide hospitality news and research. The author of this letter does have a commercial interest in the sale of his texts, which may be displayed or described therein. Upon notice from you, you may opt out of receiving this newsletter. Please mention "Opt Out" in the subject portion of your email. Immediate removal from my files will follow. 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 Intellectual Property Rights and  Copyrights.  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: (a) Present adequate contact information (postal address, telephone number, and e-mail address (b) Contain your physical signature (c) Identify the copyrighted work or other intellectual property alleged to have been infringed (d) Contain a statement that the information in your written notice is accurate (g) Contain a statement, under penalty of perjury, that you are authorized to act on behalf of the copyright or other intellectual property right owner. (h) Any incomplete or fictitious claims will be deleted upon receipt