1. © 2011 John Wiley and Sons, Inc. All Rights Reserved Selection and Procurement for the Hospitality Industry Purchasing ANDREW HALE FEINSTEIN AND JOHN M. STEFANELLI E i g h t h E d i t i o n

2. © 2011 John Wiley and Sons, Inc. All Rights Reserved CHAPTER Services 26

3. © 2011 John Wiley and Sons, Inc. All Rights Reserved YOU SHOULD BE ABLE TO: Identify management considerations surrounding the selection and procurement of services. List and describe the types of services that might be purchased by a hospitality operator. Outline the general procedures used when purchasing services.

4. © 2011 John Wiley and Sons, Inc. All Rights Reserved YOU SHOULD BE ABLE TO (CONT.) Create a specification outline for services. Explain security issues that may arise when purchasing services. Describe the major selection factors for services.

5. © 2011 John Wiley and Sons, Inc. All Rights Reserved MANAGEMENT CONSIDERATIONS Fixed vs. variable costs Should I buy or should I do it myself? Outsourcing? Lease contracts Hiring contract workers

6. © 2011 John Wiley and Sons, Inc. All Rights Reserved TYPICAL SERVICES Waste Removal What is included with CAM fees Pickup schedule Grease traps Recycling Financial Banking Loans Payroll management

7. © 2011 John Wiley and Sons, Inc. All Rights Reserved TYPICAL SERVICES (CONT.) Groundskeeping Common in CAM Landscaping Snow removal Be specific Pest Control

8. © 2011 John Wiley and Sons, Inc. All Rights Reserved TYPICAL SERVICES (CONT.) Advertising Newspaper and magazine Radio and television Brochures and flyers Phonebook Typically cost is based on circulation Sponsorship of a local team

9. © 2011 John Wiley and Sons, Inc. All Rights Reserved TYPICAL SERVICES (CONT.) Consulting Designers Feasibility researchers Computer specialists Environmental assessors Decorating and remodeling Maintenance Endless number of repairs

10. © 2011 John Wiley and Sons, Inc. All Rights Reserved TYPICAL SERVICES (CONT.) Vending machine Insurance Healthcare Property damage Liability Insurance

11. © 2011 John Wiley and Sons, Inc. All Rights Reserved TYPICAL SERVICES (CONT.) Payroll Control payments to others Federal taxes Social Security tax Medicare tax Accurate reporting of payroll expense Controls skimming by payroll clerks

12. © 2011 John Wiley and Sons, Inc. All Rights Reserved TYPICAL SERVICES (CONT.) Laundry and linen You can buy your own and use a cleaning service You can rent linen You can buy your linen and create a cleaning facility Other Cleaning Knife sharpening

13. © 2011 John Wiley and Sons, Inc. All Rights Reserved SECURITY AND SERVICES Watch for scams Check bills for services and initial Beware of “extra” invoices Don’t pay deposits to unknown suppliers