What Is a Discretionary Cost?

Entrusted management is to sign the management contract between the hotel owner and the management group to agree on the rights, obligations and responsibilities of the two parties to ensure that the management group can export professional technology to the managed hotel with its own management style, service specifications, quality standards and operating methods , Management talent and management model.

Hotel delegated management

This entry lacks an information bar and an overview map . Supplementing related content makes the entry more complete and can be upgraded quickly. Come on!

Entrusted management is to sign the management contract between the hotel owner and the management group to agree on the rights, obligations and responsibilities of the two parties to ensure that the management group can export professional technology to the managed hotel with its own management style, service specifications, quality standards and operating methods , Management talent and management model.

Entrusted management is one of the management models in line with the modern market economy. It is especially suitable for owners lacking hotel operation experience. Hotel owners and professional hotel management companies define the relevant rights and obligations of hotel operations through contractual forms. Within the scope authorized by the owner's board, Having the autonomy and decision-making power over the hotel's daily affairs can quickly improve the hotel's operating level.

a.Help the owner hotel design meet the management mode of the entrusted hotel and establish a set of scientific and complete and feasible rules and regulations

b. To train and create a group of qualified hotel operation and management talents and good quality staff for the entrusted hotels.

c. Integrate the entrusted hotel into the global reservation network of the hotel management group, and establish a complete customer source network and sales team for the entrusted hotel.

The first category: daily business management, opening preparations, personnel recruitment, training, brand use, etc.

Generally refers to a large hotel management group, which has an independent hotel brand.

The second category: daily business management, opening preparations, personnel recruitment, training, excluding the use of management company brand,

But seeking a franchise way to provide management brands.

Generally refers to a professional hotel management company (professional management team), but the company itself does not have a hotel brand and

Marketing network.

The first category: 2-4% of total operating income (basic management fees), and incentive management fees agreed within the agreed cost control range.

The second category: 2-4% of total operating income (basic management fees), and franchise chain fees up to 5% of total room revenue.

The basic management fee of these two models is the same, but since the first type of incentive fee is determined according to the setting of operating costs, this method is more easily accepted by the owners.

The management company tends to charge the hotels it manages for consistency in four ways: including the basic management fee based on the percentage of total operating income and the percentage of operating gross profit. The management fee is the two direct revenues recognized by the management company, and two The project management company believes that it is used as the offset of the cost of sales instead of income (domestic considered as indirect income), according to the marketing fee drawn based on the percentage of total operating income, and the global reservation fee charged based on the reservation of the room.

The specific amount of management fees paid by each hotel to the management company varies. Generally, the basic management fee accounts for 2-4% of the total operating income, and the incentive management fee accounts for 4-10% of the gross operating profit. (Some hotels will (With additional conditions). For example, based on an average gross profit margin of 35%, basic and incentive management fees can account for 2.4-5.5% of the total operating income. So it can be seen that the average management cost of the discretionary management method is approximately 4 %about.

Entrusted management is suitable for underdeveloped regions and countries where hotel management lacks human resources. In the early days of China's reform and opening up, the international management brands introduced all adopted the entrusted management model. The main drawback of discretionary management is the salary and welfare costs of middle and senior management personnel sent by the management group (including general managers, directors, department managers, etc., about 5-7 people), which generally account for 10% of the total hotel salary and welfare expenses -Around 25%.

In developed countries in Europe and the United States, including famous international hotel management brands such as Hilton, Marriott, Intercontinental, and Accor, they have basically adopted franchise chain business models. In recent years, domestic hotel owners have gradually realized the high cost of international hotel management brands and the cultural differences between expatriates and local employees. In addition, the level of domestic hotel management talent has gradually reached or exceeded the level of foreign personnel. Therefore, from the perspective of reducing management costs and avoiding the cyclical risks of hotel operations, hotel owners generally adopt a short-term full-consignment management or franchise chain operation model.

Entrusted operation management is the main cooperation mode under the current separation of operation rights and ownership of the hotel industry.

In this cooperation mode, the owner and the management company sign a fully-trusted operation and management contract, the management company appoints the management staff, and the owner sends the owner representative to jointly manage the hotel. With its management advantages and experience, the management makes the hotel's operation and management reach the cooperative goals agreed by both parties.

During the pre-opening period of the hotel, the management company collects a management fee at a certain amount per square meter per month, and after the hotel opens, the management company collects a monthly management fee according to a certain percentage of the total hotel operating income. The salaries, benefits and other related expenses of the management personnel sent by the management company are paid in the hotel's daily operating expenses.

Adopting the full-trust operation and management model has the benefit of sharing brand benefits, and enables the entrusted management hotel to enjoy professional and standardized management, marketing network support, complementary customer source advantages, operating system support, human resources backup, team resource support and many other services. With these advantages, the asset value of the owner can be maintained and increased, which will play a good role in the hotel's long-term stable development. During the cooperation period, the owner will send a representative to serve as the hotel's deputy general manager and financial director / manager to supervise the preservation and appreciation of assets on behalf of the owner, be responsible for the coordination of major issues with the owner, and participate in daily business management.

The hotel management company's output of the discretionary operation and management services. The management team dispatched to the hotel is a professional with the same star-level hotel practice experience as the project general manager or resident general manager. Personnel with the same level of hotel department manager qualifications as the situation and demand assignment, respectively, act as the department manager of the hotel, responsible for the operation, management, training and supervision of the relevant department.

All the personnel dispatched are senior professional managers who have worked in the "hotel management company hotel" chain brand project or have been strictly trained by the hotel management company.

For the entrusted party, the management party must ensure that its original star service standards are even higher. If there is no star rating, it must cooperate with the entrusting party to achieve the predetermined star rating evaluation.

The management party must establish daily management methods such as a complete management manual, operating procedures, rewards and penalties for the hotel.

Hotel Management Expert: Mr. Zeng Wenkai

Mr. Zeng Wenkai, a Hakka in Guangdong, has 20 years of hotel experience. He has rich experience in the operation and management of high-star hotels and hot spring hotels. In the past ten years, he has mainly served as a hotel investment technical consultant and participated in dozens of domestic high-star planning consultants, including : Shanxi Jinmei Group's five-star hotel project, HNA Liuyang resort-type five-star hotel project, Shanxi Southeast Suburban Group Zibo Hot Spring Hotel Project, Zhuhai Zhuofan Group Fortaishan Hotel Project, Shenzhen Zhuohong Investment Daya Bay Hotel Project, Shenzhen Zhenye Group Zhenzhen Industry club hotel project, Zhengzhou New District CBD platinum five-star hotel project, etc. Books published include: Hotel Positioning and Functional Planning

[Reference Books]

Title: Food Service and Management

Author: National Tourism Administration, Personnel, Labor and Education

Publication: Beijing: Tourism Education Press, 2004

Title: Food Service and Management

Author: Zhou Zhihong

Publications: Changsha: Central South University Press, 2006

Title: Tourism Psychology

Author: Li Yiwen

Publication: Dalian: Dalian University of Technology Press, 2006

Title: Tourism Psychology

Author: Xiao-Ou

Publication: Beijing: University of International Business and Economics Press, 2006

Title: Tourism Psychology

Author: Zhang Jingpeng

Publication: Beijing: Science Press, 2005

Title: New Hotel Financial Management

Author: Zhang Xiao Sheng Huang Lili

Publications: Guangzhou: Guangdong Tourism Press, 2004

Title: Hotel Conference Management

Author: Wei Yan

Publication: Beijing: China Textile Press, 2004

Title: Budget Hotel Management

Author: Hu Ping Yu Meng

Publication: Shanghai: Lixin Accounting Press, 2005

Title: Hotel VIP Service and Management

Author: Zhang Yan

Publication: Liaoning Science and Technology Press, 2004

Title: Hotel Cases and Reviews

Author: Wen-Sheng Chen

Publication: Fuzhou: Fujian People's Publishing House, 2004

Title: Hotel Front Office Service and Management

Author: Kai Liu Xian

Publication: Beijing: China Commercial Press, 1999

Title: Hotel Room Service Management

Author: Guo Chunmin

Publication: Guangzhou: Nanfang Daily Press, 2004

Title: Human Resource Management in Hotel Industry

Author: Frank Ge Mali · M · L Mengnacheluo Tom Baum Sun Hongying Wang Zhe

Publication: Dalian: Dalian University of Technology Press, 2002