Operational benchmarking allows organisations to evaluate various aspects of their operations and compare them to industry standards. This then allows organisations to determine their relative performance and can give key insight into what parts of business operations are performing well and what can be improved on.

In the hospitality and leisure sectors, some of the key benchmarking measures include the following:

• Earnings Before Interest, Tax, Depreciation, Amortisation, Rent and Donations (EBITDARD) as a percentage of total revenue
  
• Total wages as a percentage of total revenue
• Advertising, promotion, marketing and entertainment (AEMP) expenditure as a percentage of total revenue
• Metered win per gaming machine per day
• Gaming staff wages as a percentage of gaming revenue
• Gaming promotion expense as a percentage of gaming revenue
• Bar revenue to gaming revenue ratio
• Bar gross profit as a percentage of bar revenue
• Bar staff wages as a percentage of bar revenue
• Catering revenue to bar revenue ratio
• Catering gross profit as a percentage of catering revenue
• Catering wages as a percentage of catering revenue

Controlling is an ongoing process. Therefore operational benchmarking is a tool that should be consulted regularly.

Benchmark diagrams

The below diagrams indicate how a typical club and hotel operate. These models are highly simplifed and attempt to represent the typical trading characteristics of both clubs and hotels. Each diagram indicates how $100 in revenue goes through a venue. Each diagram indicates the respective ratios each trading department receives, followed by the surpluses generated by each of those departments. This the is summed to produce a 'Front of house GP', Overheads are then taken from this amount to produce an EBITDARD in the case of the club model and an EBITDA in the case of the hotel model.

Club model