Other Operated Departments — Schedule 3
In a modern hotel setting, there are more revenue streams than just rooms and restaurants. That’s where Other Operated Departments come in — services like spas, golf courses, and parking operations that enhance guest experience and contribute meaningfully to a property’s bottom line.
1. What Are Other Operated Departments?
These are profit-oriented services beyond core room and dining operations. To qualify:
- They must generate income and carry their own operating costs.
- Revenue must be recorded before any deductions like commissions.
- If a service is provided entirely by a third party or generates no direct income, it’s excluded from this category.
Examples include: Golf Courses, Spas, Parking, Marinas, Retail Stores, and more.
Each one should have its own detailed breakdown (sub-schedule), while smaller operations can be grouped under Minor Operated Departments.
2. Sub-schedule 3-1: Golf Course & Pro Shop
This department serves both leisure and retail needs, generating revenue from gameplay and product sales.
Revenue Streams
- Greens Fees: Charges for playing golf.
- Tournament Fees: For organized events.
- Cart & Equipment Rentals: Income from renting gear.
- Practice Range & Lessons: Training and usage fees.
- Club Maintenance & Storage: Charges for cleaning and storing equipment.
- Memberships: Tiered or flat-fee programs.
- Retail Sales: Merchandise (clubs, balls) and Clothing.
- Other Fees: Includes service charges or surcharges.
Any price reduction due to service issues (not billing errors) is tracked under allowances.
Cost of Sales
- Merchandise Costs: Inventory sold to guests.
- Clothing Costs: Apparel sold in the shop.
Profit Calculation
Gross Profit = Total Revenue – Cost of Sales
Labor Costs
Includes:
- Salaries & Wages (regular and temporary staff)
- Outsourced Labor
- Service Charge Payouts
- Incentives & Bonuses
- Payroll-Related Items: Taxes, Benefits, Paid Leave
Shared staffing should be fairly allocated across departments.
Other Expenses
A sample of common costs:
- Course maintenance (fertilizer, irrigation, landscaping)
- Equipment and uniform costs
- Laundry, licenses, printing
- Guest transportation, tournament costs
- Water, fuel, and vehicle maintenance
- Reservation systems and royalty fees
Bottom Line
- Total Expenses = Labor + Other Expenses
- Departmental Profit = Gross Profit – Total Expenses
This data rolls up into the master report under:
- Departmental Expenses — Golf Course & Pro Shop
- Departmental Profit — Golf Course & Pro Shop
3. Sub-schedule 3-2: Health Club/Spa
Spas and fitness centers provide both wellness and revenue opportunities. Here’s how to break it down:
Revenue Categories
- Massages & Body Treatments
- Skincare & Waxing
- Hair & Nail Services
- Fitness Classes & Personal Training
- Health Programs
- Membership Fees
- Retail Sales (beauty, wellness, sundries)
- Other Charges (surcharges, service fees)
Price adjustments for unsatisfactory service are captured under allowances.
Cost of Sales
This includes the cost of items sold in the spa’s retail section. Complimentary giveaways are recorded as expenses under Gifts.
Gross Profit
Gross Profit = Total Revenue – Cost of Sales
Labor Expenses
Just like in Golf:
- Direct payroll and temp staff
- Service charge payouts
- Independent therapist fees
- Incentives and bonuses
- Taxes, insurance, paid time off
Operating Costs
- Ambience (aromas, music)
- Athletic supplies, towels
- Laundry & linens
- Beauty product usage (massage oil, polish, etc.)
- Equipment rental, decorations, dues, training
- Third-party bookings (e.g., SpaFinder)
Departmental Outcome
- Total Expenses = Labor + Other Costs
- Net Profit = Gross Profit – Total Expenses
4. Sub-schedule 3-3: Parking Operations
A well-run parking area can be more than just convenience—it’s a revenue source.
Revenue
- Self-Parking: Guest-managed vehicle storage
- Valet Parking: Staff-managed service
- Other Charges: Car washes, repairs, fuel
Allowances again reduce revenue where service issues arise.
Cost of Sales
Applies when tangible items (like fuel) are sold.
Labor Costs
Staff wages, tips, contracted valet teams, and full payroll costs are included.
Other Operating Expenses
- Lot maintenance and line-painting
- Cleaning supplies, printing (parking tickets)
- Short-term lot rentals for overflow events
- Royalty or brand licensing
- Guest gifts or promotional passes
Final Figures
- Total Departmental Expenses = Labor + Other Costs
- Net Parking Profit = Gross Revenue – All Expenses
By managing each of these departments with detailed tracking and tailored sub-schedules, hotels can maintain strong profitability and a guest experience that extends far beyond the front desk.
