Case Study D: Improving Profit Margins and Reducing Deficits in a City Centre Hotel

Overview

• Type of Business: City Centre Hotel

• Initial Situation: Purchasing Manager handling stock valuations, resulting in a 63% profit margin deemed acceptable by the accounts department

Introducing Independent Stocktaking Services

• A new financial controller was not satisfied with the 63% margin and hired Stock Watch for monthly stocktakes starting in April

Identifying Profit Margin and Deficit Issues

• After the initial stocktake, a similar profit margin of 62.75% was found, but a serious deficit of €7,134 was discovered

• Stock Watch conducted bi-weekly stocktakes for the next two months, with the deficit reducing after each stocktake

Implementing Solutions to Improve Stock Management

1. Introducing New Systems

   • Implemented systems to control complimentary and waste drinks, as staff were abusing the till system

2. Holding Staff Meetings

   • Informed staff of stocktake findings and made them accountable for improvements

Results and Ongoing Success

• After 6-8 months, the hotel's profit margin increased to 69.89%

• The monthly deficit was reduced to 1.02%, a significant improvement from the initial situation

• Stock Watch played a crucial role in the hotel's successful turnaround, providing valuable insights and guidance

Stock Watch’s independent stocktaking services helped this city centre hotel identify and address issues with their profit margins and stock deficits. By implementing new systems and holding staff accountable, the hotel was able to improve its overall performance and achieve greater profitability. This case study demonstrates the effectiveness of Stock Watch's stocktaking solutions in helping hospitality businesses optimise their stock management and financial performance.