Usama Khalid Mustafa Farrukh Asad Butt Muhmmad Ahmed

Group Profile

Hashoo Group of Companies was established under the leadership of Mr. Sadruddin Hashwani. In a period of some three decades he through his single handed dedication and commitment to the Profession has transformed this Group in to a leading industrial group of Pakistan, well known for its forward-looking approach, and highest standards of quality and integrity. Starting with Cotton Trading, Hashoo Group of Companies today boasts the only chain of Five -Star Hotels in Pakistan namely The Pearl Continental Hotels chain and the Karachi Marriott and the Islamabad Marriott Hotels with presence in all the provincial capitals and the Federal Capital except one. Today, Hashoo Group of Companies besides hotel industry encompasses oil and gas exploration, mining, ceramics, pharmaceuticals, tourism and travel. It also has considerable investment in real estate. Mr. Sadruddin Hashwani with his keen eye on the future is now guiding the Group to enter the field of Information Technology (IT). Towards that end a wholly owned subsidiary of the Group known as Net 21 (Pvt) Ltd is currently operating as Internet Service Provider, which is planned to serve as springboard to launch substantive IT projects. The oil and gas exploration is being done under the Orient Petroleum Inc, which has recently met with successful find. The Group is constantly on its forward march. Some examples of it are: The construction of Pearl Continental Hotel Bhurban in the picturesque Murree hills, Construction of new wing called Atrium Wing of The Pearl Continental Hotel Lahore equipped with the most modern amenities, Continual upgradation and modernization of Pearl Continental Hotels and Islamabad as well as Karachi Marriott Hotels, Acquisitions of the state-of-the-art Ceramics Factory to design and produce crockery and a plant known as Gelcaps to manufacture halal gelatine capsules for the pharmaceutical industry according to the most stringent quality standards. Mr. Hashwani’s Vision knows no bounds and it will be difficult to predict as to what will be his focus of attention tomorrow. For him time is short and the Art is long. Therefore, his philosophy is that each moment of life should go towards advancement of cause of humanity at large. Mr. Hashwani runs Hashoo Foundation whose sole objective is to engage in philanthropic projects in support of social and cultural causes and for the uplift of the deprived. Through this Foundation he not only fulfils his corporate responsibilities but also more importantly his unwavering commitment to promoting the good of common man.

Pakistan Services Limited Introduction
Pakistan Services Limited was incorporated in 1958 as a Public Limited Company and is quoted on the Stock Exchange. It owns and operates the Pearl Continental Hotels (formerly Inter Continental Hotels) and is recognized as the largest and oldest hotel company in Pakistan. Pearl Continental Hotels is the first Pakistani chain which has achieved excellent international standards of quality products and services. In recognition of its high standard, the Pearl Continental Hotel, Karachi was conferred the prestigious membership of the "Leading Hotels of the World", an exclusive global organization of deluxe hotels established in 1928. Pearl Continental Hotels, beside in -house reservations network, are also linked with Utell International to have international exposure and overseas reservation network. Investment in people and human resource development is an ongoing process in the Hashoo Group. New management concepts and intensive training programs have been introduced at all levels of supervisory and managerial positions through establishment of an in-house Training School located at Pearl Continental Hotel, Bhurban. The Training School looks forward to imparting systematic and scientific knowledge of the operations of both tourism and hospitality business. Pearl Continental Hotels have become synonymous with a tradition of personal services, efficiency, convenience and guest satisfaction.

Pakistan Services limited
PC PC PC PC PC hotel Rawalpindi Hotel Burbhan Hotel Karachi Hotel Lahore Hotel Peshawar

Hashwani Hotels

Islamabad Marriot Hotel Karachi Marriott Hotel


Net21 Gel caps Cera-e-Noor Hashoo Foundation Hashoo Holdings Zaver mining Company Zaver petroleum Corporation

Corporate Profile
Board of Directors Mr. Sadruddin Hashwani Mr. Murtaza Hashwani Chairman Chief Executive

Ms. Sarah Hashwani Mr. Vazir Ali F. Mohammad Mr. Syed Sajid Ali Mr. Mansoor Akbar Ali Mr. Shiraz Noordin Audit Committee Mr. Sadruddin Hashwani Ms. Sarah Hashwani Mr. Vazir Ali F. Mohammad Human Resource and Recruitment Committee Mr. Sadruddin Hashwani Mr. Murtaza Hashwani Mr. Vazir Ali F. Mohammad Mr. Mansoor Akbar Ali Mr. Shiraz Noordin

Compensation Committee Mr. Sadruddin Hashwani Ms. Sarah Hashwani Mr. Vazir Ali F. Mohammad Company Secretary Mr. Mansoor Akbar Ali Bankers Habib Bank Limited National Bank of Pakistan PICIC Commercial Bank Limited Saudi Pak Commercial Bank Ltd. Union Bank Limited Registered Office A-9 Mohammad Ali Bogra Road Bath Island, Karachi, Pakistan Tel : 021-5872941-4 Tlx : 21259 HOTEL PK Fax :021-5879872-73 Chief Financial Officer Mr. Shiraz Noordin Auditors Taseer Hadi Khalid & Company Chartered Accountants Legal Advisor Liaquat Merchant & Associates Credit Rating Agency JCR-VIS Credit Rating Company Limited

Mr. Sadruddin Hashwani
Mr. Sadruddin Hashwani hails from an illustrious family of Karachi. In 1960, he entered the business of cotton trading and through his hard work and genius he within a decade emerged as a prominent businessman on Pakistan’s Industrial scene. Within a short span of 10 years, Mr. Hashwani was at the pinnacle of cotton business and was rightly known as the ``Cotton King” being top exporter of cotton, besides rice and other commodities In 1972, Mr. Hashwani diverted his attention to other business ventures in diverse areas such as hoteliering, real estate, trading, and property development. Again he made history when in less than a decade, he earned the reputation of a highly successful hotelier. In 1978 and 1981, he consecutively built Holiday Inn Hotels first at Islamabad & then at Karachi under the banner of Hashwani Hotels Limited. In 1992, these hotels were totally revamped and refurbished to qualify for the well-known international 5-Star hotel chain Marriott. The Islamabad Marriott and the Karachi Marriott to day enjoy the same reputation as any other highest-class hotel anywhere in the world. In 1985, he purchased the controlling shares of Pakistan Services Limited, which owned Inter Continental Hotels in Pakistan. These hotels were in bad shape and losing lot of money. Mr. Hashwani changed the name of this chain of Hotels, to “Pearl Continental Hotels.” He by dint of persistent hard work against all odds combined with extraordinary sense of correct direction of the future transformed the Pearl Continental Hotels chain in to Pakistan’s largest and most elegant five-star hotel chain having presence in Karachi, Lahore, Rawalpindi and Peshawar. He took another bold initiative when he went ahead with the construction of a new Pearl Continental hotel at Bhurban in the picturesque Murree Hills. The Pearl Continental Hotel, Lahore was expanded with the addition of a new wing called Atrium Wing and refurbished with most modern amenities. The international recognition of high standards of Pearl Continental Hotel chain and those of the Islamabad Marriott and Karachi Marriott Hotels are documented in various forms. As an example, the Pearl Continental, Karachi is recognised as “One of the Leading Hotels of the World.” Mr. Hashwani’s business acumen encouraged him to diversify into Petroleum Industry. In 1995, he acquired controlling stocks of the US based Corporation, Occidental of Pakistan Inc., (now known as Orient Petroleum Inc.), which is actively engaged in the exploration and production of Oil & Gas in the country. The Orient Petroleum has recently been rewarded with a successful find that is under evaluation for reservoir capacity. In addition to being in hotel industry, he is also active in trading, real estate, pharmaceuticals, ceramics, mining, and oil & gas. His industrial conglomerate is known as Hashoo Group of Companies. Orient Petroleum Inc. is one of the major divisions of the Hashoo Group. His latest focus is on the Information Technology (IT) and already an Internet Service Provider company by the name of Net 21 (Pvt) Ltd., is functioning as a subsidiary company of the Hashoo Group. Net

21 (Pvt) Ltd. is designed to serve as a platform to make further inroads into the brand new and vital field of IT. In recognition of his contributions to Pakistan’s business and economic Institute of Business Administration, Karachi honoured Mr. Hashwani the “Outstanding Professional Contribution Award”. For his services to the Tourism Industry of Pakistan, he was awarded a Gold Tourism Convention held in 1993 progress, the in 1988 with distinguished Medal at the


ORG Pearl C



We are committed to dynamic growth and service excellence built upon our heritage of traditional hospitability. We strive to consistently meet and surpass guests, employees and other stake holder’s expectations. We feel pride in making efforts to position Pakistan in the forefront of the international arena.

Corporate culture:
 Innovation: • Listening and two way interaction • Participation • Encouragement • Motivation • Enterprise • Initiative Growth and development for all: • Competence and contribution as the only basis for job security. • Promotion from within • Learning environment and opportunities • Provision for world class education and training • Aligning people with latest trends. Trust: • • • • • • • • •  • • • • • Cooperation Support Teamwork Sense of ownership Empowerment Integrity Dignity Respect Candidness Recognition Reward: Achievement orientation Performance based evaluation Appreciation Incentives Setting ever-rising standards of performance.

1. Customer service: Pearl Continental Hotels- the largest chain of hotels in Pakistan maintains the standards of excellence for which it’s famed worldwide. At the hotels, the art and science of hospitality are applied in perfection to offer the most luxurious ambience and a wealth of services to the guests who are as precious as pearls. 2. Training: Investment in people and human resource development is an ongoing process in the Hashoo Group. New management concepts and intensive training programs are incorporated at all levels of supervisory and managerial positions. Hashoo group looks forward to imparting systematic and scientific knowledge of the operations of both tourism and hospitality business. 3. Profitability: In order to maximize profit through sourcing new business, different marketing arrangements are being made which include joint ventures and exclusive marketing agreements. 4. Growth profile: The outstanding growth can be achieved with excellent service, improvement in décor and facilities, variety of cuisine, expansion/addition of banquet halls, increase in airline catering business, and permission to serve food at marriage parties. 5. Compatibility: Pakistan Services Limited has pledged to keep pace with the change through consistent efforts and shall continue to achieve better results through higher sales and improved profitability. They compete with others through their high standard services and traditional environment and chain of PC’s. 6. Traditional hospitability: Pearl Continental Hotels is synonymous with a tradition of personal services, efficiency, convenience and guest satisfaction. Repeat customers’ business due to their exquisite cuisine and courteous service which give full value for money, is one of their most valuable assets.

7. Health and safety environment:

PSL is committed to constantly strive for higher standards in health, safety and environment to their employees, and guests. The hotel is very mindful of the Occupational Safety and Health issues and to cement their "environment friendly philosophy," they have undertaken a number of steps, which include periodical meetings and safety training of associates to acclimatize the human resources and create safety awareness amongst them. 8. Environment of professional enhancement: At Pakistan Services Limited, management strongly believe that without the development of top quality personnel, dynamic growth is not possible. Our core value is "Growth and Development for All" with the elements of learning environment and opportunities, provision of world class education and training and aligning people with latest technological trends.

9. Enterprising: PSL is eager to expand its activities in all major locations of the country and abroad and to play a pivotal role in the development of tourism in Pakistan which can only be achieved through sustained support of the government, financial institutions, and of course our valued share holders

Hotel industry in Pakistan has been under a lot of stress in the past few years due to the severity drives launched by the successive government, the deteriorating law and order situation in the country and continued duty of large number of taxes. This industry is dependent upon the business and tourist activity in the country. In Pakistan, repeated efforts with the government to come to the rescue of the hotel industry have so far been all in vein. The business activity in Pakistan has overall remained sluggish. Tourism, also, has never been properly emphasized, including development of tourist spots and support infrastructure, despite the exquisite scenic beauty of the landscape of Pakistan and its rich cultural heritage. The fall in foreign nationals traffic to Pakistan in the upshot of September 11 incident and frequent acts of terrorism have continued to adversely affect the hotel industry. In the above circumstances, the management of Pakistan Services Limited proved its managerial skills and overcame to a large extent the negative impact of sluggish business on the performance of the Company by successfully achieving sales and services for the year, as targeting. However, change in sales mix gave rise to increase in cost of sales and the administrative cost. As a result, the profit after tax declined. Due to the prevalent conditions in Pakistan and worldwide, the rooms sales did not maintain the desired growth momentum. Pursuant to the policy of PSL to enhance the image of the "Pearl" chain, they plan to expand their properties and continue to follow a program of rehabilitation and refurbishment in all the five properties.

Pearl continental hotel, is the most preferred hotel chain to visit by its customer, but due to economic upheaval in the country and effect of international environment on tourism and hotel industry, PC could not retain its growth momentum as required. Though the Company was able to achieve sales and services of Rs.1.932 billion for the current year, which was almost equal to what they had achieved during the last year; change in sales mix gave rise to increase in cost of sales and the administrative cost as compared to last year. As a result, the profit after tax declined to Rs.32.889 million for the year as compared to Rs.84.891 million last years. The rooms sales during the year, did not maintain the desired growth momentum. Pearl Continental Hotels of Lahore, Rawalpindi and Peshawar have won an exclusive contract for the lodging of cabin and cockpit crew of the national carrier, Pakistan International Airlines (PIA). This success contributed towards increase in overall room occupancy to 58% as compared to 54% during the corresponding period last year. However, due to decline in average room rate, the room revenue stood at Rs. 831 million as against Rs.890 million in the corresponding period last year, which is a decrease of Rs. 59 million. In order to get more business and maximize profit, Pearl Continental executed a Marketing & Reservation Agreement with M.H.R. Collection Limited (Medotels, Hotels and Resorts). As per agreement, MHR Collection will provide the services through their network for promoting PC hotels in Pakistan and for making room reservations, which will positively improve room revenue in the years to come. This revenue generating business comprised approximately 51% of the total sales revenue of the hotel as compared to 44% last year. The gross room revenue for PC during the years is shown in the diagram from the year 1997 to 2003.This graph shows overall decrease in gross room revenue for the

Chain of PC’s in recent year. The total revenue years.

has also decreased for previous

Business overview Pearl Tours & Travels (Private) Limited registered a decline in both Sales and Operating Profit by Rs.5.8 million (10%) and Rs.6.6 (85.68%) respectively as compared to last year. However, due to increase in other income and favorable tax decision at appeal levels, Company made after tax profit of Rs. 1.2 million as compared to last year’s after tax loss of Rs. 3.8 million. During the year2003, old vehicles were disposed of and new additions to its fleet were made in order to provide better service to the customers. In order to improve the liquidity of the holding company to meet other hotels projects, the directors have proposed to dispose off this company. Trans Air Travels (Private) Limited, despite recording a modest decrease in revenue by Rs. 0.433 million as compared to last year, succeeded in reducing its after tax loss to Rs. 3.366 million as compared to after tax loss of Rs. 4.917 million of last year. This Company is under consideration of disposal due to continuous accumulation of losses during the last several years. During the year, food and beverage revenue increased to Rs. 988 million from Rs. 851 million, marking an improvement of 16%. The diagram on next page shows the trend analysis for the sales of food and beverage from year 1998 to 2003.

Management structure at Pearl Continental
There are seven major functional departments in Pearl Continental Hotel Rawalpindi. These are 1. Finance Department 2. Sales & Marketing Department 3. Engineering Department 4. House Keeping Department 5. Human Resource Department 6. Food And Beverage Department (Front Office & Restaurants) 7. Cost & Control Department A brief introduction of these departments is as follows.

Sales department:
The basic sales are concerned with reservation of rooms. The sales department works under this consideration.

Marketing department:
The marketing department is concerned with promotional activities, which includes  Above the line marketing  Below the lone marketing Above the line marketing includes promotional campaigns in print and electronic media. Below the line marketing includes local campaigns including banners, bill-boards and handouts.

Finance department:
It is concerned with the financial recording, provision and payments. It consists of a finance control controller, who is the supervisor of the department. There is also a credit section for employees and customers.

Engineering department:
It is concerned with the maintenance of the rooms, offices, floors and lobby area. It ensures full time provision and maintenance of water, power and light in all places.

House keeping:
It is concerned with general cleanliness and hosting services to the guests. It has a supply section which ensured provision of accessories and valuables. Corporate level purchases are made from Karachi section, while local level purchases include daily items.

Human resource department:
This department is concerned with recruitment, promotion, training of Workers in the organization. There are 500 plus workers in the Hotel for which the department have to keep a union of worker which works for social security of the employees. It has three sections, which includes personnel department, human resource management department and human resource development department.

Food and beverage department:
It is the main department in the hotel, which includes

A sumptuous food is served at four outlets.

Exclusively Chinese, it serves the best Cuisine in Town, and opens both for Lunch and Dinner. In Taipan Restaurant, people can have buffet lunch from 12:00 PM onwards where the finest Chinese buffet is served. In the evening timings are from 7:30 PM to 11:00 PM.

It serves Pakistani and Continental Buffet Cuisine, and is open for Breakfast, Lunch, and Dinner. Breakfast starts in Marcopolo in the early hours of the morning serving lavish buffet breakfast. Lunch timing in Marcopolo start from 12:00 PM to 3:00 PM.

Opens to the lilting sounds of the local Ghazal Singer, and is most famous for its mouth watering Pakistani cuisine, including live Bar–B–Que. It opens at 7:30 PM serving Bar-B-Que. Buffet layout starts from Chicken Tikka, Seekh Kebab to endless number of Bar-B-Que delicacies.

The Front Page Cafe is royally famous for its very affordable and varied spread of “Hi-Tea” delicacies in the evening and it open round the clock for light snacks and refreshments.

Immense Services and Facilities
Rooms 200 well appointed rooms include Presidential, Deluxe and junior Suite. Modern day facilities include direct dial local, National and International Dialing, Cable TV, Heating and Air-conditioning. Electronic Safe with a self-setting code, and Computer controlled electronic door locks are also installed for your security. The attached bath boasts of a spacious tub, shower and continuous Hot and cold running water. Do not fret if you have forgotten your essentials, we take care of your basic toiletteries. Stepping on to the into your room, you awaits you together arrangement on one elevator and going find a spacious bed with a cosy seating side of the room.

Not to mention the various options that are at your disposal to keep you entertained and comfortable while in the room. We provide you with the option of keeping you musically entertained 24 hours of the day by giving you access to the music channel. Our 34 TV Channels keep you updated on current news to the latest movies and programs. Other important room accessories include the electronic safe. To cater to your off time eating urges we provide you with a beverage room minibar within the confines of your room. Luxury does not end here. Walk into the bathroom and you will find it fit for a King/Queen. A full range of bathroom accessories are available for your personal use. You also have the added facility of taking your calls in the bathroom as each bathroom is fitted with a telephone unit. Our services do not end here, PearlContinental Hotel, Rawalpindi provides you with the facility of choosing from a range of deluxe rooms, executive suites with its separate lounges and facilities unmatched by any other hotel in Pakistan

Sumptuous foods served at our four outlets make it a memorable culinary experience.

TAIPAN: Exclusively Chinese, it serves the best Cuisine in Town, and opens both for Lunch and Dinner. Seat yourself in our cosy Taipan Restaurant where you can have buffet lunch from 12:00 PM onwards where the finest Chinese buffet is served. In the evening enjoy the cuisine of your choice from 7:30 PM to 11:00 PM. MARCOPOLO: Serves Pakistani and Continental Buffet Cuisine, and is open for Breakfast, Lunch, and Dinner. Breakfast starts in Marcopolo in the early hours of the morning serving lavish buffet breakfast along with Ala Carte service. Lunch timing in Marcopolo start from 12:00 PM to 3:00 PM. Whether you are a busy executive pressed for time or whether you want to enjoy your meal, Marcopolo is an ideal Restaurant to do so. BUKHARA: Opens to the lilting sounds of the local Ghazal Singer, and is most famous for its mouth watering Pakistani cuisine, including live Bar–B– Que. It opens at 7:30 PM serving you Bar-B-Que. Buffet layout starts from Chicken Tikka, Seekh Kebab to endless number of Bar-B-Que delicacies. FRONT PAGE: The Front Page Cafe is royally famous for its very affordable and varied spread of “Hi-Tea” delicacies in the evening, and it open round the clock for light snacks and refreshments.

The guests have access to all kinds of services and facilities so as to make their stay, not only comfortable, but also a memorable one. Besides these the following services and facilities are available to our guests: Room Service: Server you in the warmth and comfort of your own room, and offer a varied menu depending on the time of the day. Banquet Facilities: Tastefully refurbished, our Conference and Banquet facilities can cater from small meetings, to Royal banquets of 650 to 1500 people, in our Halls and the vast Eastern and Western lush green gardens. Conference Facilities: The new Conference facilities have state of the art Audio visual aids, and are complemented by available ISDN lines. The Business Centre The Business Centre will assist you with all your correspondence, tele-faxing and other executive needs. The rooms are ably supported by a state of the art Business center for the modern day businessman, and can cater to all your electronic needs. Features a Grand Ballroom measuring 155 ft. by 70 ft. and can accommodate up to 1000 guests. An attached prefunction hallway measures 117 ft. by 15 ft. The Banquet can also be divided into three portions for smaller groups. The newly added Kohsar halls are available for smaller meeting requirements. They cover a total area of 39 * 65 sq ft.

Health & Creation Facility The aesthetically built Health club includes Tennis, a temperature controlled swimming pool, treadmills and steppers for aerobics, multi machines for weight training, Sauna, Steam, Jacuzzi, and a soothing massage. A snooker / pool table and Table tennis are also available. Today the Health conscious people look towards PCHR. Our newly added Health Club offers you light music in the back ground and modern workout machines. Like motorized Jogger, Double Burner, Easy Glider, Massage Static Cycling. Our Health Club Memberships are economical our monthly membership is Rs. 3920.00, 3 Monthly Rs. 7177.00, 6 Monthly 10830.00, and Yearly 16960.00 (inclusive all taxes).

Now you can swim at our modern Swimming Pool at any time of the year as the Swimming Pool has a controlled heating system. So dip into our swimming pool whenever you feel like. We offer you an opportunity to play billiard near the pool or suntan yourself. Clay courts are also available where you can play tennis by day or by night.

The Privilege Club [See Exhibit 3 for details] The world of Pearl-Continental Hotels welcome you to the Privilege Club. Your membership to the Privilege Club entitles you to a host of exclusive privileges. When visiting the Pearl Continental Hotel restaurants in Karachi, Lahore, Peshawar, Rawalpindi, and Bhurban. Renowned for unparalleled quality of cuisine attentive service and authentic design surroundings, your dining experience in any one of the restaurants when using your Privilege Club Card is guaranteed to be unique and memorable. Furthermore, you will be afforded a variety of other benefits when using selected hotel services. We look forward to extending our hospitality to you soon.

Other Facilities: Laundry/DryCleaning: The best service in town offers same day delivery Barber Shop / Beauty Salon: Trained personnel take care of your tresses, and trim and shape them to make you look good. Pearl Tours: A sister concern, offers chauffer driven Cars, Busses, and Mini vans. Open round the clock. Trans Air: Another sister concern, takes care of all your travel needs, Florist: From floral settings to bouquet’s available in the lobby all day. Shopping: From every day utilities, to Carpets, and Antiques, our shopping area provides all. Bakers Boutique: Exquisite Cake, consumption. Bakes, and Patisseries available for individual and party

Banking: Habib Bank Ltd. Operates within the premises, and can take care of all your banking needs. Credit Cards: All major Credit cards are accepted round the clock.

Operations Management
Food and Beverage Right Price Right Time Right Quality Right Quantity

Hierarchy Director F & B Manager (Vacant) Assistant Manager Banquette Sale Manager Assistant manager Executive Coordinator F & B Secretary

Banquette Manager Assistant manager

Divisions 1) Banquettes a. Exhibitions b. Weddings c. Cafeteria d. Meetings e. Funfairs f. Conferences 2) Restaurants a. Taipan b. Bukhara c. Marcopolo 3) Room Service 4) Bakers Boutique 5) Permit Room 6) Catering 7) Kitchen 8) Stewarding 9) Airline Catering (Aero Asia, Shaheen) Documents 1) Function Sheet a. Banquettes

b. Kitchen c. Stewarding d. House Keeping(Clothes, Flowers, Laundry) e. Accounts f. Credit(Bill to company) g. Rooms( 2) Reservation Slip a. Date b. Time c. Availability d. Menus and Rates e. Arrangements f. Guarantee no. 03days g. Full payments A. Staff (Internal scheduling, staff posting) B. Engineering (Audio, visuals)

Cost Control

Introduction The following material has been prepared and adopted to standardize the methods, systems at report presentation of Food and Beverage Cost Control in the IHC Hotels. At the present time we have many variations of cost controlling in our hotels, resulting in various degrees of effectiveness. Undoubtedly methods used by individual hotels, even though different, are effective, because there are several correct ways of accomplishing functions in accounting. There fore, to make the statement that there is one system that is better than all others its functions, for even the so called “experts” differ their opinions of methods. There are several important reasons for all hotels to adopt a standard practice of cost controlling. Firstly, one system in use by number of hotels will continually be upgraded with improvements in techniques as all personnel will be making these suggestions or recommendations they have to the same system. As these suggestions are received and adopted they will be distributed for the benefits of all IHC Hotels. Secondly, the reports to be submitted to local management and the New York Office will be more easily interpreted if they are uniform, and should result in timely and effective corrective action as required. Thirdly, the case of training or transferring Food and Beverage Cost Control personnel from one hotel to another will be facilitated with resulting savings in time and expense. We believe this manual can be of real value in solving difficult problems of controlling the largest cost items in everyday operations. However, it should not be assumed that the installation of food and beverage cost control system spells and end to the food and beverage cost problem. Nothing could be further from the fact. The system is designed to find trouble. Once it is found, management action is required to correct it. PURPOSE OF FOOD AND BEVERAGE CONTROL The purpose of Food and Beverage Control is to assist Management in obtaining the greatest possible gross profit on Food and Beverage Sales, consistent with the policy of Management as to quality, size of portion and selling price. The importance of this function is best brought into focus when it is realized that the food and beverage sales is in the IHC Hotels make up more than fifty percent of all revenues. To attain this objective it is necessary to criminate over preparation and other wasteful practices that can only be controlled by advance planning. Simply stated it is: 1. What to buy. 2. How much to buy. 3. How much to prepare. Cutting quality and portion sizes or raising selling prices is not the answer a better profit.

The solution to high food cost problems is to be found in taking decisive steps before the actual damage is done. No one can cure faulty purchasing, pilferage, excessive spoilage or over preparation merely by being indignant after has happened

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