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The five megatrends that will impact the Middle East's travel and tourism industry: PwC report

PricewaterhouseCoopers - ·16m
PwC issues report: "Global Megatrends and their impact on the Middle East's travel and tourism industry"Emerging markets will overtake developed markets as a tourism and hospitality destination but also as key provider of customersReport finds an increasing need for mid-market accommodations to cater to a younger generation that does not put much emphasis on star ratingsThe global megatrends are set to have a profound and disruptive effect on the Middle East travel and tourism industry, says a new PwC report. According to PwC, the five global megatrends that are widely believed to be shaping the future of our world are: demographic shifts and social change, a shift in global economic power, accelerating urbanisation, climate change and resource scarcity, and the rise of technology.With the Middle East leading the emerging market population boom over the past decade,demographic and social change is a key issue that the industry will need to tackle, and tackle fast, the firm says. The region is young, with 40% of its people under the age of 25; and its population expected to rise by almost 50% over the next 25 years. The travel and tourism industry today finds itself at the helm of a multi-faceted demand shift driven by these generational and demographic changes. Whilsts historically designed to cater to middle-aged business and leisure tourists from advanced economies, it must today transform itself to cater to a wider variety of visitors, age groups and backgrounds. This change from what the report calls "Generation Z and the Millennial to the Silver tourist" - brings with it numerous opportunities and challenges, mainly because of the polarising demands it requires. It will bring forth a new age of innovation, which the report addresses. From targeted rebrandings and proactive actions to attracting new types of travellers whilst retaining existing customers; overhauling traditional marketing concepts and embracing the power of social media; to embracing a digital era.The shift in global economic power has placed the Middle East at the center of many of the world's fastest growing markets, most important of which are India and China. As this handing over of the torch from advanced to emerging economies continues, the region, which finds itself at the epicenter of these shifts, will have to take proactive steps to benefit from these. Dubai in particular has leveraged that position to turn itself into a global hub for aviation, tourism and logistics. Through Dubai International Airport, the city has also turned itself into a key link, connecting the economies of the East and the West and placing the UAE within a four-hour flight of 40% of the world's population. Opening itself to mass markets such as China and India, the development of large-scale tourism projects, the trim down of corporate travel budgets during trying periods and the consumer behavior of the millennial traveler, it is important for Dubai and other major cities in the region to address the skew of its hotel supply towards the luxury hotel sector and open its door to welcome more budget-friendly mid-market, i.e. 3 and 4 star hotels, into the mix.The report cites the steps which countries across the region will need to take to further take advantage of that enviable position and central location on the West-East corridor. It argues that emerging markets are indeed set to overtake developed mones as both tourism and hospitality destination but also as providers of key customers.Accelerating urbanisation is impacting the Middle East like no other place in the world, making it in fact the most highly urbanised on earth. And with new cities under construction, this level continues to rise - making it a struggle to develop sufficient infrastructure to cope with this population explosion. However, the years of skyrocketing population expansion are now almost behind us, focus will have to shift today to making urban spaces, including hotels, function optimally. This, PwC says, reflects a $4 trillion opportunity of projects planned or under construction in the Middle East and North Africa. A majority of the countries within the GCC attract urban tourists; wherein the main city is the targeted destination for the traveler. Dynamic development of urban tourism is strongly dependent on economic growth, technological growth and increased air connectivity; all of which are positive factors for the GCC region. Tourism offerings usually vary from retail, leisure and wellness, cultural, theme parks, sun and sand but are usually concentrated "in-the-city."Whilst this too presents considerable opportunities for the region's tourism landscape, governments and business in the region will need to prepare for the challenges ahead: constrained capacity and finance for infrastructure delivery, investments in service provisions, proper planning and resource scarcity, among others.Meanwhile, climate change and resource scarcity is today more than ever, a pressing issue for the Middle East. Water is and will remain a significant issue for the region over the coming decade, with the GCC already relying on 70% of its water and water consumption being forecast to grow by one-third by 2020. In addition to water scarcity, the Middle East is of course vulnerable to warmer summers - the region will therefore need to implement some critical control measures in the form of a sustainability roadmap with clear targets and mitigation strategies, says PwC.Technological breakthroughs, however, could be part of the answer to these issues, but the disruption that digitisation is bringing to today's travel and tourism industry will require new skills and a shift in strategies. The Middle East travel and tourism industry has many of the right ingredients to benefit from these technological breakthroughs, with young, tech savvy populations across the spectrum and smartphone penetration in the GCC amongst the highest in the world, reaching 78% in the UAE and 77% in Saudi Arabia. Digitisation will affect the entire value chain of the travel and tourism industry; from influencing traveling decisions, to collecting feedback and improving the delivery of their products and services. A business strategy, befit for the digital age, will have to be the order of the day for the industry. Commenting on the report, Dr. Martin Berlin, Middle East Partner and Global Deals Real Estate Leader at PwC said:"Over the past decade, the Middle East has developed into a global hub for tourism and leisure, attracting visitors from all over the world. However, new winds of change will require further transformation within the region's travel and tourism industry. From changing the way the industry markets its products, to completely overhauling traditional concepts, our report aims to offer insight and solutions for the hospitality and tourism industry to survive and thrive in this era of "new normal".About PwCAt PwC, our purpose is to build trust in society and solve important problems. We're a network of firms in 157 countries with more than 223,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com. Established in the Middle East for 40 years, PwC has firms in Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman, the Palestinian territories, Qatar, Saudi Arabia and the United Arab Emirates, with around 4,000 people. (www.pwc.com/me). PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please seewww.pwc.com/structure for further details.
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Emirates CEO Still Perplexed at U.S. Laptop Ban

skift.com - Transport - 25 April 2017
The chairman and CEO of Dubai’s long-haul carrier Emirates said Tuesday he “can’t dig into somebody’s mind” to understand why the U.S. instituted a ban on laptops and other personal electronics in carry-on luggage from 10 cities in Muslim-majority countries.
Article by David Lund

Flow Through - Understanding How it Works and How to Include Flow Thru in Your Financial Statements

The Hotel Financial Coach - 25 April 2017
"it's great that you increased the rate and overall revenues in my hotel, but what I really want to know is how much you will keep and give me in profits" - anonymous hotel ownerManaging flow thru in your hotel is a key attribute to understanding the profit model for your hotel. The reason it is so important to understand is the different characteristics that emerge when revenues go up or down in different departments. Measuring flow thru by department and by key driver is the basis for understanding your hotels real financial results and most importantly its financial potential.Here are some motherhood questions to get your flow thru imagination going.The overall revenues year to date are up by 1.3 million dollars how much should flow in GOP?Occupancy is up over last year by 5% - and the rate is up $15 as a result room revenues are up $720,000 - how much should flow in rooms profit and GOP?Restaurant average check is up by $2 and as a result food revenues are up $10,000 - how much should flow in F&B profit and GOP?Liquor revenues are up over last year in my lounge by $7,000 - how much should flow in F&B profit and GOP?Banquet food sales are $50,000 higher this month than the same month last year driven by higher volume and average check - how much should flow to the F&B profit and GOP?The way we calculate flow thru is straight forward. The first step is you subtract the revenues from two different periods and step two is to subtract the profit from the same two periods and the thirds step is to divide the difference in revenues by the difference in the profit. See the sample charts below.All the revenue streams in your hotel have two attributes, pricing and volume. Understanding the difference and measuring the impact is the key to understanding and measuring departmental flow thru.Measuring flow thru to the prior period is normally a stronger comparison than measuring flow thru to budget or forecast. The reason being when we compare the flow thru from one real period to another real period it's more of an apples to apples comparison. When we compare flow thru to budget were comparing a real result to a projection. A word of caution, when comparing the flow from one period to another it's important to include any events that may have had an impact on the results. This is where a good memory and a great monthly property commentary come into play. Let's say that last year in the month of May we had a great group month, off the charts because of a city wide. That fact will skew the flow thru to this month. Being able to articulate the impact of past and current events is very important.Negative flow is also an important concept and calculation to master. When revenues decrease, we want to be able to mitigate the impact to the profit lines. We want to be able to retain the profit loss. If we don't act we run the risk of losing 100% or even more of the lost revenue in the form of decreased profits.Rooms FlowThe rooms department is the engine in 99% of the hotels in the world. The greatest contributor to performance is rate and then occupancy. If my rate goes up $10 over the same month last year and I sell 18,500 rooms this month, the same amount as last year, my room revenue just went up by $185,000. The question is how much should I be able to keep as profit. What we need to examine is what else would need to increase to compensate for the additional room revenue? This is the magic in the hotel business as very little needs to go up when my rate grows. Whether it's a transient increase or group the impact is largely the same, i.e. Very Good! Depending on my segmentation I may need to spend some of this increased revenue on third party commissions. I also may need to spend more on my reservation expense from my brand, depending on the mechanics of the charge back. Other than these two cursory items no addition expense or payroll in the rooms department need be spent. Other costs that will be impacted by the increased revenues are credit card commissions, centralized fees and management fees. A good rule of thumb is I should see 90% of any additional revenues flow in rooms profit and 85% in GOP, that result from increased room rate. Your hotel manager may take it upon himself/herself to spend a little more this month to catch up on some cleaning or other expense but it is not directly related to the increase in rate. On the other side of the equation is occupancy. Let's say my hotel this month saw an increase of 6 points in occupancy over the same month last year. This resulted in and an additional 300 rooms sold and an additional $45,000 in room revenue. The question is how much should flow? With occupancy, it's a bit more complicated. Every time I sell a room I have both fixed and variable expenses associated with the sale. Taking the 300 extra rooms, that's an average of 10 more per day. I don't need huge amounts of additional resources at the front desk, in reservations or in guest services. I will however need additional room attendants and housekeeping labor. I will consume more amenities, guest supplies and probably should pay higher commissions to 3rd parties and more in reservation expenses to my brand. I will also pay higher credit card commissions, centralized fees and management fees. So, as a rule of thumb I should see 85% of any additional room revenues from increased occupancy as increased rooms profit and 80% in increased GOP.F&B FlowWhat is the increase or decrease in F&B revenue and where did it come from? In the food and beverage department we need to have a much bigger calculator to see what happened and what the results should be. We want to be able to measure the increase or decrease in all the dimensions that drive our business. Profitability characteristics are very different between food sales and beverage sales. Within food sales the profitability of all the different meal periods as well as distinguishing the relationship between outlet sales and banquets is key. What would you rather have, dinner revenue increase or the same revenue increases from coffee breaks? Would you like to see sales increase in your outlets or in banquets, what would have a bigger impact on profit.? With beverage sales, the profit margins for liquor, beer and wine need to be understood as well as the portion from our outlets vs banquets. When we look at the average cover prices in food we also need to understand the contribution margin. It's nice to see the average cover increase but what profit do I make from the different type of sales inside my F&B operation? All of this looks complicated on the surface but it really is not. With a little analysis and some patience, we can build a model that will help us see the optimal picture for profitability in our F&B operation. With this picture, we can strive to create the optimal recipe for our food and beverage success. That's the key, understanding what the optimal mix is and getting our sales and conference services people selling that. Getting our outlet managers and servers to understand what items have the biggest contribution to profit and have them sell accordingly. If we were selling cars, we would know model that generates the biggest margin, and the accessories that drive profits. Our business is no different. Flow thru and its impact is at the heart of understanding this profit model.Minor operating department flow. Same principles as above, what is the difference in the top line and how much did we make in additional profits. This is valuable information for spa, golf and retail operations.The last part is sometimes the most important, in this case its non-operating department flow. I can't tell you how many statements I see where there is a nice hit on the top line revenues only to have most of the potential profits chewed up in non-operating departmental creep. Administration costs, sales and marketing and maintenance flow needs to be measured, and managed. If you cannot readily see this you're missing a powerful tool.Creating the flow thru measurements in your financials is relatively straight forward. Pulling out the numbers you want to see like the change in revenue and the change in profit from the two different periods and dividing the two is it. Display these on your financials and you will have a whole new understanding of your business and be much more effective in your ability to hold others to managing their departmental flow thru.Mastering flow thru is the key to the hotel profit maximization. Understanding where we win and pointing the team, the sellers, the operators in that direction. Creating alignment around the business model.For a complimentary copy of my excel sheet "flow thru cheat sheet" send me an email requesting a copy todavid@hotelfinancialcoach.com or visit my website and download my free guidebook, "the seven secrets to create a financially engaged leadership team in your hotel". www.hotelfinancialcoach.comCall or write today for a valuable consultation on how you can create more financial leadership in your hotel.
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Seasonal Work Visa Caps Could Hurt U.S. Vacation Destinations

skift.com - Destinations - 25 April 2017
Stone masons in Colorado, thoroughbred caretakers in Kentucky and waiters in Cape Cod are in shorter supply after Congress allowed a temporary migrant worker program to shrink. Lawmakers temporarily lifted the number of seasonal visas for unskilled, non-farm workers for fiscal year 2016: Workers who had used the program in recent years were allowed to re-enter without counting toward the 66,000-person cap. Congress didn’t renew the exemption when it had the chance in December.
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How to Be an Inspiring Leader

harvardbusiness.org - 25 April 2017
When employees aren’t just engaged, but inspired, that’s when organizations see real breakthroughs. Inspired employees are themselves far more productive and, in turn, inspire those around them to strive for greater heights.

4 issues asset managers are thinking about in 2017

hotelnewsnow.com Featured Articles - 25 April 2017
Asset managers shared their thoughts on the big topics facing the hotel industry and their discipline during the recent Hotel Asset Managers Association conference in Atlanta. Asset managers hold a unique position within the hotel industry, working on behalf of owners to bridge the gap between ownership groups, operators and lenders. Speaking with Hotel News Now during the recent Hotel Asset Managers Association conference, some top asset managers shared their perspective on the industry. Here are some of the issues facing the hotel industry that asset managers are focused on.
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ADA Conformity: It's more than just lawsuits

Milestone Internet Marketing - 25 April 2017
What is the ADA?The ADA is a civil rights law that prohibits discrimination against individuals with disabilities in all areas of public life. The purpose of the law is to make sure that people with disabilities have the same rights and opportunities as everyone else. As part of the ADA, the law mandated that websites should abide by a minimum set of best practices to ensure that users with impairments would have equal access to the world-wide web. The challenge with the ADA conformity clause is that Congress did not establish any guidelines regarding what qualified as an ADA conforming website. Over the years, as the legal system has dealt with lawsuits related to ADA conformity and website access, courts have leveraged guidelines established by the world-wide web consortium (W3C), as guidelines by which to interpret the ADA conformity of specific sites. The W3C guidelines, known as the Web Content Accessibility Guidelines (WCAG) are organized in three different levels, level A, AA and AAA. The court system has largely held that websites must meet level A and AA guidelines to be considered "conforming."Why care about ADA?The default answer, of course, is legal protection. Over the past few years a series of well publicized law suits have been brought against website owners, particularly small to mid-sized businesses, resulting in awards that range from as little as a few thousand dollars to many tens of thousands of dollars. While protecting your business from ADA lawsuits is a very viable reason to ensure your website is ADA conforming, there is a much larger issue at play. In fact, by not providing ADA access to your website, you are simply alienating the nearly 20%* of USconsumers who have some form of disability. Having ADA conformity on a business website is more than good legal advice, it's smart business advice.How ADA Impacts your siteHaving established that ADA conformity is a good business proposition, what exactly do you need to consider before making your site ADA conforming? ADA conformity for websites is largely based on four core areas:Visual How does the website work when visually impaired visitors arrive? Is it screen-reader friendly? Are there elements of the site that are only accessible with a mouse and do not have keyboard access?Auditory Auditory conformity is largely focused on the interaction of audio and the user. Specifically, do any videos included on the website contain closed captioning?Tactile Can users access your website without relying on a mouse? Is keyboard navigation of all items on your site, including carousels, possible?Cognitive Cognitive conformity deals with issues around font size, color, contrast and accessibility for users who may have learning or interpretive impairments.The ADA OpportunityThe fact that nearly 20% of Americans have some form of a disability should be of significance for any business. The challenge of ADA conformity for your website starts with protecting yourself from lawsuits. In fact, since 2015, in the hospitality industry alone, more than 240 lawsuits have been filed, many receiving awards between $10,000 to $75,000 per lawsuit.** When you consider the cost of updating your site, the benefits of becoming ADA conforming are obvious. There is, however, a second, more important consideration. ADA conformity is more than just about protecting yourself from suits. In fact, a website that is not ADA conforming creates a barrier to the 20% of Americans who have disabilities; becoming ADA conforming is not just safe, it's good business.Keys to conformityThere are three key considerations to ensuring that your website is ADA conforming: Technology, process, and design.On the technology front, the most important question is about your Content Management System (CMS). Is your CMS capable of creating ADA conforming websites? Do you have alert-systems in place in the CMS that will flag when ADA conformity issues are introduced in your site? For example, when installing 3rd party applications website owners should make sure to understand the impact of these additions. ADA conformity is not a "do it and forget it" approach; modern websites are constantly evolving, changing, and being updated. It's critical to have a CMS that is able to not only create ADA conforming content, but is also able to identify ADA problems in your website.With the constant evolution of websites, having an ADA-friendly development process is also critical. If your website development is done in-house, you need to ensure that planning and testing for ADA conformity is a core part of your website design and development process. If you work with an agency or a third-party vendor it's important that your vendor have a well thought out and documented process for creating ADA conforming content and checking for problems.Finally, ADA conforming design must consider a whole set of subtleties and nuances that might escape the untrained eye. Once again, it's essential to ensure that your in-house or agency designers understand ADA conformity issues and have had experience dealing with ADA conforming design.Examples of Issues with ADATo understand the complexities of ADA conformity, consider a couple of quick examples of some of the subtle changes that must be made to a traditional website to achieve ADA conformity:Skip to content ADA conforming websites must provide a means for a user to quickly skip non-screen-reader friendly content like hero images and jump to the text part of your website.Manual carousel controlWebsite carousels may be popular and fashionable, but they can create problems for users who have disabilities. ADA conforming carousels must be manually controlled and avoid excessive use of animations.Full keyboard control How much of your website can be controlled and used with just a keyboard? Having full access to all content without having to rely on a mouse is a critical part of ADA conformityScreen reader friendliness Is your website friendly to people with visual disabilities? Is your content screen-reader friendly?Field label problems Finally, consider something as simple and, seemingly, straight-forward as a form on your website. While placing field labels within the field may provide a "unique" look, it often makes the form unreadable for screen readers.Getting certifiedYou can self-certify for ADA conformity. In addition, there are several third-party organizations that will provide ADA conformity audits to provide you with a full report, either confirming that your website conforms to ADA guidelines as of a specific date, or providing you with an audit of the changes necessary to become ADA conforming. There is no such thing as a "guarantee" that having an ADA-conforming website will provide 100% protection from lawsuits. It does, however, significantly lower your risk.SummaryThe issue of ADA conformity for websites is not new, and is not likely to go away any time soon. Any consumer-facing business, but especially location-based businesses like hospitality, retail, or financial-services businesses, should make ADA conformity a core part of their business strategy and of their website development process. Not having ADA conformity as a central goal of your website strategy, is simply asking for trouble, and sends the wrong signal to your client-base.* https://www.census.gov/newsroom/releases/archives/miscellaneous/cb12-134.html** https://www.wsj.com/articles/companies-face-lawsuits-over-website-accessibility-for-blind-users-1478005201
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Trump's Laptop Ban Could Be Expanded to Arrivals From the UK

skift.com - Transport - 25 April 2017
U.S. President Donald Trump is reportedly considering extending his laptop ban to the UK. Two UK newspapers, The Times and The Guardian, carried stories quoting anonymous sources that suggested the current proposals might widen the current U.S. laptop ban to include one of the U.S.’s biggest allies.
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How a Macron Presidency Could Fuel More Nationalism in France

harvardbusiness.org - 24 April 2017
This weekend’s election in France has narrowed the field of 11 candidates to two: the most anti-EU candidate, nationalist Marine Le Pen, and the most pro-European candidate, centrist Emmanuel Macron. For the first time in the almost 60-year history of the Fifth Republic, neither the mainstream Left nor the mainstream Right will have a candidate in the second round of the presidential elections. Although Macron is the candidate who promises more continuity with the policies of the previous government than any other, he founded his own political movement only a year ago, and has never previously held an elected office. But although Macron is the strong favorite to win, a look at the broader context shows that his election may only be a temporary reprieve from the nationalistic, anti-EU sentiments that have been rising across Europe.
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The 4 Types of Organizational Politics

harvardbusiness.org - 24 April 2017
The first 100 days are usually the honeymoon period for any new CEO to make their mark and get others on board. However, for Airbus CEO Christian Streiff, it was just a brief window before his abrupt departure from the European aircraft company that’s part of the EADS consortium, along with DiamlerChrysler and Aerospatiale-Matra.
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Diversification Is a Key to Improving Hotel Distribution

Duetto Research Blog - 24 April 2017
Finding the right distribution formula occupies a lot of time and brainpower for revenue managers. During a recent webinar, distribution experts defined three approaches to “righting” your distribution ship:
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Startup Pitch - DistancesBetween tackles India's door-to-door dilemma

Tnooz - 24 April 2017
Door-to-door or multimodal travel search is an engineering challenge which requires the seamless integration of many dynamic data sources. There are still some sites which fall short providing travellers with simple air alternatives between cities with more than one airport. Railway operators, bus and coach services and taxi apps vie for the first and last mile components of a trip, compunding the door-to-door complexity.
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Children's Summer Vacations Under Attack by Teachers and Legislators in North Carolina

skift.com - Destinations - 23 April 2017
Some folks can’t get enough of summer. Others see it as a problem that needs fixing. For more than a dozen years, North Carolina has mandated the beginning and end of summer vacation for public schools. The law was designed to support tourism at the state’s beaches and mountain getaways, and appease parents who were unhappy as some districts kept moving up the first day of school.
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U.S. Customs Confirms It Revoked Global Entry for Muslim Americans

skift.com - Destinations - 21 April 2017
U.S. Customs and Border Protection revoked the enrollment of people in the Global Entry program and other U.S. “trusted traveler” categories as part of the Trump administration’s travel ban on seven predominantly Muslim nations.

Navigating the spreading 'ban the box' laws

hotelnewsnow.com Featured Articles - 21 April 2017
Now might be the time to review your hiring practices to ensure they conform to “ban the box” laws and you have diligent screening of prospective employees for the protection of guests and staff.

HFTP Administers Updated CHAE Exam for Hospitality Professionals

HFTP - 21 April 2017
Hospitality Financial and Technology Professionals (HFTP(r)) recently launched the newly updated Certified Hospitality Accountant Executive (CHAE(r)) certification exam. The new CHAE exam is now available for applicants, and was designed to give applicants the ability to utilize their financial knowledge and skills acquired. The CHAE Application is available for download on the HFTP website, and the policy and procedures includes detailed information on the application process and the requirements necessary to sit for the exam. The CHAE is a hospitality-specific designation which shows both a dedication to hospitality and accounting.The new CHAE exam now has four sections instead of five as was in the previous exam. The new exam features a more global finance focus, and is based on experiential learning from financial knowledge and skills acquired. Exam questions focus on financial accounting, managerial accounting, ethics, fraud, internal controls and general questions. Updated features also include an ethics and CHAE policies and procedures section. As an added benefit to those interested in hospitality certification, HFTP will conduct a CHAE webinar review series in May 2017. Also, exam review topics can be found on PineappleSearch.com, and revamped review slides can be found here on the HFTP website."HFTP certification indicates an individual's commitment to professionalism, continuing education and their chosen career path," said HFTP CEO Frank Wolfe, CAE. "Certification can help hospitality professionals elevate their knowledge and skill as well as demonstrate superior industry performance."HFTP currently offers two hospitality-specific certifications: the Certified Hospitality Accountant Executive (CHAE(r)) and the Certified Hospitality Technology Professional (CHTP(r)). HFTP's certification programs are globally recognized for setting industry standards for hospitality finance and technology. Active certificants have reported higher salaries in the 2016 HFTP Compensation & Benefits Survey conducted by the HFTP Americas Research Center. HFTP offers the only designations for finance and technology professionals who are working in the hospitality industry. Qualification for the exams is based on level of education and experience in the industry; student programs are also available.To learn more about the updated CHAE exam click here. For more information on HFTP's certification programs, contact HFTP Certification Manager Robin Bogdon at certification@hftp.org. For the latest news, visit www.hftp.org and www.hftp.org/hitec/ and stay tuned to HFTP Connect, HFTP News, Facebook, LinkedIn, Twitter (@HFTP) and Instagram (@HFTP_HITEC).About HFTP Hospitality Financial and Technology Professionals (HFTP) is a global nonprofit hospitality association, headquartered in Austin, Texas, USA, that uniquely understands the industry's problems. HFTP has members and stakeholders across the globe. HFTP assists its members in finding solutions to industry problems more efficiently than any organization via its expert networks, research, conferences such as HITEC and certification programs. HFTP also owns the world's only hospitality specific search engine, PineappleSearch.com. HFTP is recognized as the spokes group for the finance and technology segment of the hospitality industry. For more information about HFTP, email membership@hftp.org or download the HFTP/HITEC media kit via the HFTP website.

Time is on your side in Optimizing Revenues

The Revenue Report Card - 21 April 2017
"Time is on Your Side" to baby boomers is a famous song title and lyric by the Rolling Stones. It also should be the rallying cry of today's Revenue Manager.Ten years ago I had just taken the "revenue reins" at a new hotel and was getting to know everyone. Beginning days are often filled with pleasant hellos and polite conversations and I stayed the course! The Director of Sales at some point moseyed into my office and I could see right away that he was very excited to show me something.After some small talk Juan took out his "reservation control report". With great pride he showed me a sold out Saturday that was 2 months away that he explained, happened primarily because of a group he brought in for this one night.It was a proud moment for him. It was an eye opening event for me! I simply didn't have the heart to tell him. But I knew at some point I would have to pick that moment carefully and discuss TIME and REVENUE STRATEGY with him in a positive way.With 50+ and 40+ units left to sell on the Thursday and Friday immediately preceding that sold out date and 60+ on the Sunday following (Exhibit "A")..... it was as close to a revenue management catastrophe as you could get!In that 2 month lead-in TIME we could have managed our "unsold unit parity" from that Wednesday through Saturday and more than likely filled 3 nights and moved the mark on that Wednesday as well.. That result, of course, would have been that we better maximize our revenues and profitability.In managing revenues when time is plentiful and before assured sell out dates that "TIME" is the equivalent of money in the bank. Those precious minutes, hours, days and weeks before sell-out dates must be guarded and "SPENT" with great care. "Over spending" in advance often equates to wasted opportunities, deficient optimization and "money left on the table".How are you "spending" your time?!"Spending" Options!We have two options in "spending" our time.Holding all or most of our inventory to wait for a late expected surge to release units.Release inventory slowly and methodically over time.Every week is unique. DEMAND is our father clock.1) Holding all or most of our inventory to wait for a late expected surge to release units would better serve hotels during guaranteed high demand periods like special events. In south Florida the Super Bowl, the Ultra Music Festival and the Boat Show allow those in the know to use 6, 5 and 5 night minimum length of stay restrictions with solid rates from early on.The best use of TIME involving these 3 south Florida special events would be to place the higher rate and restriction on appropriate dates one year in advance and stay the course. Some might argue this philosophy but there are times when old timer wisdom wins out over scientific equation!2) Releasing inventory slowly and methodically over time serves weekend resorts who sell out consistently.Here perhaps setting your "minimum length of stay" restriction one year out a little more aggressively than your "average length of stay" on that same weekend in the prior year, could serve you well. Needless to say, it's a little more complex than that, but it's good to be on offense and to set the stage early. Selling low and short early, leaves money on the table later.I have always felt that the beauty of revenue management is that we almost can't make a mistake if we're paying attention every day. Let me explain.For most of us it's a constant challenge "test and pull back", "test and pull back". If I'm always monitoring my demand and how I'm filling compared to prior years I can react quickly if my rates and/or restrictions are too aggressive and create resistance. But let's not forget that sometimes resistance is ok... if TIME allows the optimal to surface.Eventually we all find our sell-out "sweet spots" for each and every weekend; the perfect blend of rate and restriction.Unsold Unit ParityI manage my unsold unit parity from Wednesday through Saturday and keep those dates as tight as possible. I'm applying restrictions and manipulating rates as inventory on each day rises and falls, but is kept in check by the decisions and tweaks made.An interesting Study of time management philosophyI've studied the metrics of some of the hotels I've had the pleasure to serve and decided to put pencil to paper to show what TIME management can mean to Gross Reservation Revenues and profitability.In Exhibit "A.1" and "A.2" below, the hotel sells out two weeks in advance of the arrival date.In Exhibit "B.1" and "B.2"the hotel holds back and doesn't sell out until the Friday of that weekend; using those 2 extra weeks to (in "B.1" and "B.2") wait for optimal reservations of 3 or more nights.We know that weekends in both cases will sell out and so in both Exhibit "A" and Exhibit "B" Fridays and Saturdays are full.Using TIME wisely allows the property in Exhibit "B" to increase sales on Wednesday and Thursday, in my estimation by 3% and 11% respectively. At the same time I show a $5, $5, $10 and $10 increase on Wednesday, Thursday, Friday and Saturday in ADR. The philosophy as we get "closer-in" to those sell out dates, and as demand creates more compression, is that both these factors rise as demand increases.So let's take a conservative peak at these assumptions and what they could do in terms of our annual Gross Reservation Revenues and profitability.As always I use southeast Florida as an example and here we have 13 weeks that are in-season and 39 weeks that are off-season. The hotel in the example is 125 units.Simple Hotel in Exhibit "A" is not using good time management strategy. They have an 80.4% occupancy percentage and a $196.21 ADR.Simple Hotel in Exhibit "B" uses better time management strategy. They have an 82.9% occupancy percentage and a $201.14 ADR.Gross Reservation Revenue in Exhibit "A" is $7,180,225 and in Exhibit "B" $7,582,900.This produces a $402,675 increase in Gross Reservation Revenues annually. That's a 6% increase in Gross Reservation Revenues! And if the hotel is bringing 19% to the bottom line it's $76,508 more in Net Profit! Not bad for a 125 unit hotel!More Benefits from Time Management - Channel MixSo far my examination of Simple Hotel is.... simple! But here's where it gets a little bit more exhilarating!During the aforementioned 2 week TIME period (Exhibit "A" & "B"), I usually take the PACE of each revenue channel (shown in Exhibit "C" below) to determine whether they are ahead of last year's sellout PACE.If I'm a good deal ahead in, let's say, the Website and Repeat Guest channels, I see if I can become mathematically comfortable that we can reach the sell out if I close or restrict some of the less profitable channels. I don't like shutting down channels altogether but this is always an option.Needless to say, the earlier I can become comfortable and make this decision, the more profitable the hotel will be.I'm bringing more to the bottom line by carefully displacing business in sellouts by pushing more business through my most profitable channels.Channel Mix actions can push that 19% profit margin higher; 20% - 21%!?Do you know the peeking order of channels, from lowest cost to highest at your property? These change every month!!Hoping you "spend" your TIME wisely!!
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Letter from Penang: Beyond food to tech, heritage and startups

Web In Travel (WIT) - 21 April 2017
I have in my Dropbox a food guide to Penang. It saves me time whenever a friend tells me, “Hey I am going to Penang, what shall I eat and where?” The problem with Penang is the good food is found in places which I don’t even know the name of, just the location – for example, right across the police station in Pulau Tikus or at the traffic light between this and that. See in Penang, we are guided by our internal FPS (Food Positioning System) and it was only until Google Maps came along that I actually knew the name of my favourite coffee shop and on which street it is. Technology has enabled previously hidden places to be discoverable as Lionel Yeo of TripAdvisor pointed out in his talk during the Travel Tech track at Echelon Malaysia, for example, the “char koay teow” uncle at Siam Road is listed as offering one of the best of this Penang signature street food.

STR: US hotel performance for Q1 2017

STR - 20 April 2017
HENDERSONVILLE, Tennessee -- The U.S. hotel industry reported positive year-over-year results in the three key performance metrics during the first quarter of 2017, according to data from STR. Compared with Q1 2016:Occupancy: +0.9% to 61.1%Average daily rate (ADR): +2.5% to US$124.27Revenue per available room (RevPAR): +3.4% to US$75.92"This was the strongest first quarter on record in each of the performance metrics, but it is important to note that results were boosted by a favorable Easter calendar shift (March 2016 to April 2017) as well as the Presidential Inauguration and Women's March in January," said Bobby Bowers, STR's senior VP of operations. "Supply growth for the quarter was 1.9%, which was the highest for any quarter since Q2 2010. So as demand growth becomes more moderate, occupancy will decline, placing further pressure on pricing power. At any rate, muted ADR growth will continue to push modest RevPAR growth for the foreseeable future." Among the Top 25 Markets, Washington, D.C.-Maryland-Virginia, saw the quarter's only double-digit increase in RevPAR (+16.1% to US$107.93). Growth was driven primarily by the only double-digit lift in ADR (+13.6% to US$165.94). Occupancy growth in the market was more moderate (+2.2% to 65.0%). Other top RevPAR increases were reported in Detroit, Michigan (+9.8% to US$63.20);Seattle, Washington (+9.2% to US$96.62); and New Orleans, Louisiana (+8.0% to US$118.90). Top occupancy growth was reported in Norfolk/Virginia Beach, Virginia (+6.2% to 50.9%); Seattle (+5.4% to 71.4%) and Detroit (+5.4% to 62.3%). Miami/Hialeah, Florida, experienced the steepest decline in RevPAR (-8.5% to US$186.36) thanks to the largest drop in ADR (-7.5% to US$227.37). Miami's absolute value for RevPAR was still the highest among Top 25 Markets. "Demand (rooms sold) was up in Miami, but supply was almost 5% higher than the first quarter of last year, placing obvious pressure on occupancy and ADR," Bowers said. Even while hosting Super Bowl LI, Houston, Texas, saw the quarter's largest decrease in occupancy (-3.2% to 63.7%).
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How to Structure Your Startup for Success - A workshop held by Jens Lapinski during the 2016 Accelerator

METRO Accelerator - 20 April 2017
According to Jens Lapinski, Managing Director at METRO Accelerator for Hospitality, some of the first challenges will be organizational. “Everybody within your company will have a tendency to do everything at the same time,” says Jens, who runs a workshop for hospitality startups at METRO Accelerator. This is a common problem with companies at this stage. Jens has experienced quite a few strange situations, as in one company, where the CEO reported to the co-founders as shareholders while telling the co-founders what they should be doing at the same time.
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Newest Premier Gaming and Entertainment Destination ilani Set to Open using InvoTech Uniform Management System

InvoTech - 20 April 2017
InvoTech Systems Inc. announces the recent implementation of its Uniform System at ilani, Washington's newest premier gaming and entertainment destination. InvoTech Systems is the leading provider of advanced Linen Management, Laundry and Uniform Systems that integrate the latest RFID technology to increase profitability for hotels, resorts, casino operators, sports arenas, convention centers and theme parks. The InvoTech System installed at ilani manages the uniform inventory for over 1,000 employees. Click here for more information on InvoTech's Linen, Laundry and Uniform Systems.InvoTech's Uniform System establishes uniform inventory and has extensive reporting capabilities to determine and forecast appropriate uniform purchases. The system provides significant cost saving benefits by eliminating losses, reducing purchases, and lowering laundry expenses and labor costs. Uniform cleaning costs are entered into InvoTech and reports may be quickly generated to audit laundry expenses to update budgets."The system has proved to be an asset through the years at our other properties, so implementing a similar system to establish organization and accountability in our uniform department was an easy decision. The system is easy to use for all team members and the installation and training team were very professional" -Taylor Morelli, Procurement Director for ilani.The system includes an electronic signature capture terminal that records each employee's signature when uniforms are assigned. This increases accountability for the uniform department and creates a paperless "green" system. InvoTech's Uniform System will manage ilani's uniform inventory for its over 1,000 team members working in ilani 368,000 total square feet facility which includes 100,000 square feet of gaming space with 2,500 slots and 75 gaming tables; 15 different restaurants, bars and retail outlets; and a 2,500-seat meeting and entertainment venue hosting nationally recognized performances. ilani will open its doors to the public on April 24th at 10:00AM.Oswald Lares, InvoTech director of sales, said, "InvoTech customers see an ROI in the first year by eliminating losses, monitoring laundry bills and reducing purchases. The InvoTech Uniform System instantly provides additional savings through increased efficiency. More than 500 properties worldwide rely on InvoTech's Uniform System to increase profitability through more efficient operations and processes."InvoTech's clients include Madison Square Garden, Universal Studios Hollywood and Florida, MGM Resorts International, Ritz Carlton, Hyatt Hotels, Marriott, Hilton Hotels, Loews Hotels, Mandarin Oriental, and the Empire State Building. International clients include LEGOLAND Dubai and Japan, Venetian Macau; MGM Macau; MGM Cotai; Park Hyatt Sydney, Australia; Perth Arena, Australia; Four Seasons Hotel Seoul, Korea; Resorts World Sentosa, Singapore; Systematic Laundry, Singapore; Genting Malaysia; and Palace Resorts and Laundry, Mexico.About IlaniLocated on a 156-acre site in Ridgefield, Washington, Ilani, developed by the Cowlitz Tribe and Salishan Mohegan, a partnership that includes Mohegan Sun, one of the world's foremost gaming and entertainment developers and operators, is the West Coast's premier gaming, dining, entertainment and meeting destination. With 368,000 total square feet, Ilani includes 100,000 square feet of gaming space with 2,500 slots and 75 gaming tables; 15 different restaurants, bars and retail outlets; and a 2,500-seat meeting and entertainment venue hosting nationally recognized performances. Pending the receipt of all approvals by the Cowlitz Tribal Gaming Commission and Washington State Gaming Commission ilani is slated to open on Monday, April 24, 2017. For more information visit www.ilaniresort.com.
Article by Paul Sarlas

The 'NEW' Hotel General Manager

- 20 April 2017
That being said, there has been a visible and real shift across the industry in the last ten years. A rare combination of circumstances; including, but not limited to, the financial crisis that have conspired to making today's General Manager very different in character from their predecessors. Whereas, in years gone by, the role was primarily guest-facing, most of the General Managers responsibilities are now performed behind the scenesIn truth, the vision of a General Manager as a lobby-swanning super-host has been out of date for a while. This somewhat romanticised image stems from an era of simpler corporate structures and rather fewer reels of red tape. Nowadays, the General Manager needs to juggle a wider range of tasks and, as big brands come to dominate the market, words such as 'governance' and 'legislation' are rarely far from their minds.If you can balance several tasks while keeping a smile on your face, you may have the chops to work as a hotel General Manager. General Managers oversee every function related to a hotel, from valet parking to the quality of restaurant service. Their job is to keep their property running smoothly, all while handling challenges with a patient and pleasant attitude to keep guests satisfied and employees motivated.So what does it take to be a 'NEW' General ManagerMost distinctly, one of the most important task a General Manager sets is the company's goals. The best General Managers establish goals that drive the team to stretch to achieve them. This does not mean capricious, unworkable goals that are bound to be missed and do not motivate anyone, but rather goals that will not allow anyone to forget how tough the competition is.High standards come from more than demanding goals, of course. Similarly, to the best sports coaches, university professors, or symphony conductors, top General Managers set a personal example in terms of the hours they work, their obvious commitment to success, and the consistent quality of their efforts. Furthermore, they set and reinforce high standards in small ways that quickly develop to success.They reject long-winded, poorly prepared plans and "bagged" profit targets instead of complaining but accepting them anyway. Their department heads must know the intricate details of their business or function, not just the big picture. Marginal performers do not stay long in pivotal jobs. The best General Managers set the bar high and create deadlines which are enforced. Above all, they are impossible to satisfy. As soon as the sales or production or R&D department reaches one standard, they raise expectations a notch and go on from there.Key points to be that "NEW' General ManagerHotel general managers wear many hats, so they must be multitaskers. They oversee the quality of food, guest relations, the front desk, finances, housekeeping, maintenance and team training and development. A General Manager may segue from an employee evaluation to checking on the F&B setup for a meeting in the hotel's conference center. They must be able to organize and keep track of projects, schedules and people. Organizational talents are especially important in larger hotels, which have more complex operations.Hotel General Managers are professional trouble-shooters. They must be able to think of creative and practical solutions to problems in a fast-paced environment. They need the capacity to reason by applying common sense to complete their duties. Hotel managers must know math to interpret financial information. They also need the ability to make decisions based on a combination of company reports and their own professional experiences and ideas.Don't be embarrassed to admit that you don't know everything. Knowledge comes from the years of experience. More and more answers come your way with time. When someone from your team asks you something and you don't know the answer to, just say that you don't know the answer and that you'll get back to them once you know.Of course, you still must maintain a certain level of "distance" between you and your hotel team, but you also have to make sure that you are interested to get to know them personally. Research has shown that businesses who treat their team members as family have a higher productivity rate and have a far better workplace morale.No hotel manager can survive without being decisive. They can never let over-thinking or dithering get in the way of a clear, cool-headed decision. Sometimes it's a question of taking a risk. But the manager has ultimate responsibility for averting or mopping up a disaster - and they must own the consequences if they don't hit the mark.The hospitality industry is evolving every day. In your hotel, this might be a change in policies, staff attrition or a new technology. Don't be frightened of change. Times are changing and you must embrace it. If your employees see that you are adopting to change rather than resisting it, they would follow suit. Especially when it comes to technology. We find our younger team members look forward to the technological changes and will assist the hotel in moving with the times.The elite managers who have a strong vision, always seek a better way to do tasks or apply a more appealing approach. They are enthusiastic for change, curios about what is going on in the hospitality world, and the ability to keep abreast of breaking industry news. You should be aware of new trends and industry news that might affect your hotel. We know you are busy, however it is important to set aside even just 15 to 30 minutes a day to read about industry news and trends. These days it is much easier to do this with all the mobile apps available.Teaching is part of your job as a hotel general manager. Sharing what you know to your team will not only foster a sense of empowerment in your hotel. It would actually make your role as a General Manager much easier due to the fact that you are equipping them with knowledge and skills they can use to perform their job without constant assistance from you.Coaching is fundamental as a General Manager--the basic skills and plays that make a team a consistent winner. Great General Managers do the same thing. They know that sustained superior performance can not be built on one-shot improvements like restructurings, massive cost reductions, or reorganizations. Sure, they'll take such sweeping actions if they are in a situation where that is necessary or desirable. But their priority is avoiding that kind of situation. And they do that by focusing on the six key tasks that constitute the foundations of every general manager's job: shaping the work environment, setting strategy, allocating resources, developing managers, building the organization, and overseeing operations.What Top General Managers Should Do?First and foremost, putting someone in a General Manager role who does not already know the business or the people involved, simply because they are a successful "professional manager," is risky. Unless the business is easy to learn, it will be very difficult for the new General Manager to learn enough, fast enough, to develop a good agenda. And unless the situation involves only a few people, it will be difficult to build a strong network fast enough to implement the agenda.Especially for large and complex businesses, this condition suggests that "growing" one's own executives should be a high priority. Many companies today say that developing their own executives is important, but in light of the booming executive search business, one has to conclude that either they are not trying hard or their efforts simply are not succeeding.Second, management training courses, offered both in universities and in corporations, probably overemphasize formal tools, unambiguous problems, and situations that deal simplistically with human relationships.Some of the time-management programs currently in vogue are a good example of the problem. Based on simplistic conceptions about the nature of managerial work, these programs instruct managers to stop letting people and problems "interrupt" their daily work. They often tell potential executives that short and disjointed conversations are ineffective. They advise managers to discipline themselves not to let "irrelevant" people and topics into their schedules. Similarly, training programs that emphasize formal quantitative tools operate on the assumption that such tools are central to effective performance. All evidence suggests that while these tools are sometimes relevant, they are hardly central.Third, people who are new in general management positions can probably be gotten up to speed more effectively than is the norm today. Initially, a new General Manager usually needs to spend a considerable amount of time collecting information, establishing relationships, selecting a basic direction for his or her area of responsibilities, and developing a supporting organization. During the first three to six months on the job, demands from superiors to accomplish specific tasks or to work on pet projects--anything that significantly diverts attention away from agenda setting and network building--can be counterproductive.Finally, the formal planning systems within which many General Managers must operate probably hinder effective performance. A good planning system should help a general manager create an intelligent agenda and a strong network. It should encourage the General Manager to think about the strategy and how to implement it, to consider both the short and long term plans and, regardless of the time frame, to consider financial, product, market, and organizational issues. Furthermore, it should be a flexible tool so that, depending on what kind of environment among subordinates is desired, he or she can use the planning system to help achieve the goals.To sum up, outstanding General Managers affect their companies in six important ways. They develop a distinctive work environment; spearhead innovative strategic thinking; manage company resources productively; direct the people development and deployment process; build a dynamic organization; and oversee day-to-day operations. Individually, none of these things is totally new or unique. But successful General Managers are better at seeing the interrelationships among these six areas, setting priorities, and making the right things happen. As a result, their activities in these areas make a coherent and consistent pattern that moves the business forward.These six responsibilities don't tell the whole story, of course. Leadership skills and the General Managers personal style and experience are important pieces of the whole. But focusing effort in these six areas will help any General Manager become more effective. And that should mean making the right things happen faster and more often--which is what all of us want to achieve as general managers.

Do Your Hotel Financial Statements Pass The Test? Part 2

The Hotel Financial Coach - 19 April 2017
Do your hotel financial statements give you the information you need to effectively manage your hotel? Are you able to see if your profits are where they should be in an enhanced top line statement? Do your statements measure flow thru? Do you record your rooms business by proper segments and track the rooms occupied, rate and revenue in each segment? Do you record customers served in F&B and do you separate meal periods? Do you record liquor, beer, wine and mineral sales on your financials separately? Do you measure labor productivity in your financials? Do you record hours of work in your financials? Do you have payroll segmented by management and hourly classifications? Do you have a separate supplemental payroll and benefits statement? Do you track arrivals and departures? Most statements I see do not have most of these critical elements included. They're lacking these incredibly effective items that can easily be added. Most people use the standard format as outlined in the 11th addition of the uniformed system of accounts for the lodging industry. This is great however you can produce an enhanced statement with just a little more detail added that will greatly assist you in effectively managing your hotel.How would these elements add insight and value to your business? Let's explore this.In part one we covered the Top Line Statement format, Flow Thru, Rooms Segmentation, F&B Customers and Average Checks by Meal Period. If you missed part one check out my website and blog post from February 27th, 2017, to get the article.Measuring Productivity on Your Financial Statements.The only truly effective way to measure labor productivity in the hotel business is by expressing the productivity in hours per room occupied in the rooms division, hours per cover served in the F&B division and EFTE's per 100 rooms available in the non-operating departments. In this article, we will concentrate on Rooms and F&B productivity. The reason why hours per is the best way to measure productivity is we divide actual hours worked by the actual volume of business, units sold. Others may say that measuring labor percentage, or dollars of labor per unit sold are effective but the fact is our managers and leaders have no control over wage rates, but they do have control over hours worked, the schedule, and this is what we want them to focus on. Being able to see the hours worked and the number of rooms or covers served in our financial statements means we need to record and book these statistics monthly in a statistical journal entry. We accomplish this by adding a "stats" department to our chart of accounts and the statistical entry and department net to a big fat zero each month.The beauty of knowing the hours per room occupied is powerful stuff. If we were making cars we would want to know how many hours of work it takes to make a car. We would then want to innovate and find ways to reduce this. In the hotel, it's the same. We split off the rooms and F&B because they are very different. In the hotel business, we want to know how many hours it takes to service one room or one cover. We then want to innovate to see if our malmanagement practices are actually producing better or worse results and adjust accordingly. The only way to do this is with hours per calculations.In rooms, we want to be able to see the hours it takes to service one room. We want to be able to break that down between the front office, guest services, housekeeping, room attendants, and reservations. We also want to be able to distinguish the hourly and management hours worked. Once we have the hours recorded by area in hourly and management we divide the hours worked by the rooms occupied. So, for example, YTD the front office hourly total is 10,434 hours worked and management is 4,976 hours worked. The rooms occupied are 41,975. To figure out the productivity I divide the hours worked by the rooms occupied. My productivity is .249 for hourly and .119 for management. I do this with each classification of payroll monthly and YTD, for all three financial categories; actual, budget and last year. Below is a chart the shows the complete rooms division picture. Quickly we can see if we have better or worse productivity compared to budget and last year. An increase in our productivity will mean my numbers go down. Why would I hire you to run myhousekeeping department if you're going to be less productive than the last manager? I want you to continually strive to improve productivity and the only way I can measure this is by hours worked divided by rooms occupied. We want to include all rooms occupied and all hours worked. Over time hours count as one hour. We do not include hours for holiday pay or vacations, these are nonproductive hours.In this example were looking at an average hotel and it's the May results and YTD May. The left side is the summary of hours worked and on the right side, it's those hours divided by the rooms occupied which are at the very bottom of the chart on the right side.From this simple analysis, we can clearly see where we're improving and where we are falling in the rooms division for the month and YTD relative to budget and last year with labor. We can see this by area and by hourly and management position. In this example, management in the front office, housekeeping, and reservations have had positive productivity changes. With the hourly, we see improvements in the front office, room attendants, reservations, and bell desk. Overall the YTD productivity is 1.755 hours per room occupied compared to the budget of 1.831 and last year of 1.806. Let's now look at the impact this has on the hotel. Comparing the YTD productivity to last year we see that it has improved from 1.806 hours per room occupied to 1.755 hours YTD this year. To measure the impact, we just need to subtract the two and multiply by the YTD rooms occupied. In this hotel, the wage rates with benefits are $30. (1.806-1.755 = .051) x 41975 rooms occupied = 2140 less hours worked x $30 = $64,221 in labor savings YTD after May. If the trend continues we will save over 150k by year end.The chart and the analysis are great tools but the most useful piece of this is understanding what changes were made that created the enhanced productivity. From there we want to see how these ideas can be extrapolated to our other hotels. One of the chief by-products of this type of analysis is benchmarking all the operations in our portfolio so we can see what hotel is best and in turn discovertheir practices and apply them wherever possible and practical to our other hotels. Brands sell expertise to owners and without productivity measurements in the financials, brands and hotels don't know if they are improving or not. A percentage will not tell you as it's a percentage of something else, usually revenue and this can be very misleading.The food and beverage department productivity analysis is the same but uses F&B hours by area and covers. In F&B we need to organize things a little differently due to the various outlets and kitchens. We want to record direct service for each outlet using hourly and management as well as allocated hours for management, kitchen and stewarding.Separate Schedules for Supplemental Payroll and Payroll BenefitsHaving these two additional costs separated and summarized on a separate schedule is both very handy and useful. These costs are usually allocated to each department using hours worked or some other allocation basis. To be able to see them in total is critical. Without the totals, we don't know the overall picture relative to budget and last year. This schedule can be created quite easily and it's important that we distinguish between supplemental payroll which is defined by costs that are directly related to the payroll. Examples are vacations, statutory holidays, sick pay, bonus, severance. On the benefit side, we want to include items like state and federal programs, health care, cafeteria costs, worker's compensation, and pensions. Both of these categories are big dollars to a hotel and their characteristics are different so having separate reporting that summarizes them is very important.Tracking Arrivals and Departures and Average Guests Per StayI once had a hotel in my region that had an average length of stay of 13 days. Needless to say, this hotel was unique. On the other side of that, I also know an airport hotel that has an average stay of less than 1 day. This statistic allows us to measure the amount of activity for the bell desk and front desk as well as the demand on the room attendants as stay overs are easier to clean than departures. Stay overs mean no additional work for the front desk, door or bell desk. The average length of stay also can point to early or delayed capital needs for everything from the room renovation to the carpets and other operating equipment. A general rule of thumb in rooms is, the higher the average length of stay the better the labor productivity should be. This statistic is calculated by dividing the number of rooms occupied by the arrivals. Finally, were wanting to measure and see the average number of guests per stay. We can achieve this by recording the number of guests in the room and dividing the aggregate of these by the total number of rooms sold. This is particularly useful for measuring F&B capture and it also points to linen and amenity consumption. Typically, the lower the number of guests the lower the laundry and amenity costs per room occupied.Visit my website today for a copy of my guidebook, The Seven Secrets to Create a Financially Engaged Leadership Team in Your Hotel. www.hotelfinancialcoach.com
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Trump Travel Ban Prompts Emirates to Cut U.S. Capacity

skift.com - Transport - 19 April 2017
The Middle East’s biggest airline says it is reducing flights to the United States because of a drop in demand caused by tougher U.S. security measures and attempts by the Trump administration to ban travelers from a number of Muslim-majority nations.

The Impact of VAT on UAE's Hospitality Industry - Horwath HTL

Horwath - 19 April 2017
As of February 2017, all Gulf Cooperation Council (GCC) countries have signed the Unified Value Added Tax (VAT) Agreement. The framework will form the basis for national legislation, which will be introduced in each GCC country. Although there has been very limited official information released regarding the specifics of how the VAT system to be introduced will operate, the expectation is that the GCC Countries will replicate a lot of the features of the European Union VAT System. In the latest Special Market Report from Horwath HTL, Kim Drubbel, Managing Director of Horwath HTL UAE and Oman, explores whether the introduction of VAT might be a limitation for the industry and not in the interest of the sector's sustained growth prospects.
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Travel Industry Investment into Data and Analytics to Rise Substantially in 2017

EyeforTravel - 19 April 2017
Travel is awash with data and companies are loosening their purse strings to get to the insight this provides, according to EyeforTravel's new industry-wide State of Data and Analytics in Travel Report 2017. Amongst respondents, who came from all verticals in the industry, 74.5% report that they expect budget increases in 2017. Amongst the remainedFor those looking forward to more cash to play with this year, budgets are often increasing by a substantial amount. More than half of the entire sample reports that they expect budgets to increase by 6% or more and 30% expect it to increase by 11% or more.However, part of this may be because travel companies data efforts are coming from, in general, a relatively small base. Although 65% of the panel reports that they have a dedicated data, analysis or insight team, they are largely staffed by small teams. Two thirds of respondents report that their team is less than 10 employees strong and 51.5% have a team of five individuals or less."The travel and tourism industry has realised the importance of strong data analysis and is manoeuvring itself into a good position," said Alex Hadwick, Head of Research for EyeforTravel. "We found that in terms of analytics, data deployment and attribution, travel is relatively advanced compared to other industries. These planned budgetary increases will help increase the depth of talent and acquire the tools needed to get maximum value out of the huge amount of data that already exists and will be generated in the future."The survey also found variation between the expectations of data professionals for this year when it comes to where they are based. Respondents were most optimistic about budget increases in Asia-Pacific, followed by Europe and then finally North America.This geographic divide was reinforced in how respondents view the coming year for the travel and tourism industry as a whole. In both Asia-Pacific and Europe 16.3% of respondents are neutral or negative about growth prospects for this year, compared to 23.3% of respondents from North America.Hadwick believes that this is reflective of wider industry sentiment in the region: "With the WTTC warning of changing sentiment towards the US and reports for Q1 indicating lower flight bookings to the US, there appears to be a bigger story here that is reflected in our data."Click here to download the full report for free now. Or to learn the best data and revenue management strategies directly, why not attend EyeforTravel Europe on May 3-4?

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