Key benchmarks for the hospitality industry
16 August 2002 by The Restaurant Association
The table below shows key benchmarks for the hospitality industry in 2000-01.
| Indicator | Restaurants | Hotels | Pubs and bars |
| Gross profit margin Operating profit margin Pre-tax profit margin Return on capital Percentage of working capital to sales Turnover per employee Average wage per employee Percentage of wages to sales Total debt to equity Interest cover | 55.7% 4.9% 3.3% 5.4% -2.8% £32,600 £9,500 29.3% 1.3 times 3.9 times | 58.4% 12.1% 6.3% 3.4% 0.9% £34,100 £10,200 30.2% 1.3 times 2.1 times | 58.8% 6.1% 4.1% 4.7% -3.1% £36,400 £7,900 22.5% 1.2 times 2.8 times |
Note: table shows median (average) figures
Source: Restaurant Industry Gold Standard Report 2002, published by the Restaurant Association.
Glossary:
Return on capital is a measure of how effectively a firm uses the money invested in its operations. It is calculated by net income after taxes divided by (total assets less excess cash minus non-interest-bearing liabilities).
Working capital is current assets minus current liabilities.
Debt to equity is the degree to which a firm is making use of borrowed money.
Interest cover is a company's pre-tax operating income divided by its interest obligations, for a given period.
