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THE ENGINEERING DEPARTMENT AND FINANCIAL INFORMATION

The engineering department is a vital part of
a hotel. Energy cost alone runs anywhere
from 4 to 6 percent of a property’s total operation
budget. Savings in energy cost can be
accomplished by instituting simple steps such
as modifying staff members’ behavior (Dale
and Kluga, 1992). How can financial data be
used to continuously improve the performance
of the engineering department? To answer
this question, a survey was performed to
collect data from hotel engineers to determine
their use of financial information. It is
postulated that if financial information is analyzed
correctly, the engineering department
can serve its profit centers better, which in
turn will assist these profit centers in reducing
both their cycle time and errors.
A number of studies have been done on
the use of financial information by managers
in profit centers of hotels, but not many were
performed specifically to collect information
regarding the engineering department. Malk
and Schmidgall (1995) discuss the use of financial
statements and information in the
food and beverage department of a hotel, particularly
in an effort to contain costs and
maintain a profit. Turkel (1993) also advocates
the development of profit and loss statements
and allocating costs properly to
ascertain the profitability of a food and beverage
department. Malk and Schmidgall
(1994) also investigate the cost percentages in
the rooms division to help rooms division
managers with cost containment. Quain
(1992) explores the use of profit analysis by
the customer segment in addition to yield
management, and the topic of menu engineering
to improve profits in food and beverage
establishments has also been discussed
(Bayou and Bennett, 1992; Dougan, 1994).
However, few, if any, studies can be quoted for
the engineering department.
 THE SURVEY
The purpose of the study was to investigate
the use of financial information by hotel engineers.
Therefore, questions asked included the
types of financial information used, the frequency
at which this information was generated,
the methods used to generate the data,
and the type of hardware and software used
in the department. Hotel engineers were also
interviewed to see how their use of financial
information could improve quality in their
departments by reducing cycle time and eliminating
errors.
The population for this study consisted of
directors of engineering in U.S. hotels that
were listed in the Hotel and Travel Index,
Spring 1994 edition. The sample was randomly
selected from this index, and the selection
criteria were based on the number of
rooms in the property. The sample hotels all
had 200 or more rooms. It was believed that
hotels of this size would probably have an engineering
department. The sample size was
400 hotels, and the sample hotels were located
throughout the 50 states.


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