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  • HFTP Research Report: Pre-opening Expenditures in Hospitality

    A study of the pre-opening budget; the timeline for these expenditures; timeline for onboarding of staff; and the selection, installation and training of the technology component. By Agnes DeFranco, Ed.

  • New Global Directors Join the 2018-2019 HFTP Board

    The HFTP 2018-2019 Global Board of Directors was installed during the association's 2018 Annual Convention and introduces new directors Toni Bau, Carson Booth, CHTP and Mark Fancourt. These extensive director profiles give insight into the distinguished professions and personal goals of HFTP's newest association leaders.

  • Internal Controls and the Important Roles They Play in Eradicating Fraud

    Although I have been preoccupied with getting in the education sessions purely related to hospitality finance, technologies and hotel pre-opening, I made sure to participate in Fun with Fraud and Enchanting Employee Embezzlement in Clubs and Hotels presented by Jerry Trieber, CPA, CHAE, CFE, CFF, CGMA, HFTP Global past president and director of audit services/support at HEI Hotels and Resorts.

  • Members Only: 2018 HFTP Compensation and Benefits Report

    By Tanya Venegas, MBA, MHM, CHIA. Results to the biannual survey conducted by Hospitality Financial and Technology Professionals (HFTP). Information includes data on compensation and benefits trends for finance and technology professionals in the club and lodging industries.

Accor Reports Revenue Growth in Q1

Hotel F&B Observer·19 April 2019
Accor reported consolidated first-quarter 2019 revenue totaled $1.1 billion, up 34.2% as reported and 8.8% compared to the same time last year.

KHP Capital Partners Closes $361M Fund; More Deals to Know...

Hotel F&B Observer·19 April 2019
Hotel Business is tracking deals. KHP Capital Partners, HFF and HHM have recently completed deals.

Revenue Is Rising, But Collecting Is More Challenging

CBRE Hotels ·19 April 2019
Per the Uniform System of Accounts for the Lodging Industry, an account entitled "Provision for Doubtful Accounts" has been established in the Administrative and General Department of a hotel operating statement. Each month, hotel managers estimate the portion of their property's receivables that they do not believe will be collectible. The Provision for Doubtful Accounts records charges made to provide for the probable loss on accounts and notes receivable. An increase in the dollars expensed to this category indicates a rise in uncollectable accounts. Conversely, a decline in the Provision for Doubtful Accounts indicates that hotels overestimated the amount of amount of revenue they thought would be uncollectable.CBRE's annual Trends in the Hotel Industry survey of hotel operating statements tracks Provision for Doubtful Accounts, as well as Credit Card Commission payments. To analyze trends in hotel collections, we studied data for a sample of 1,456 properties that reported these two expense categories each year from 2010 to 2017 (most recent data available). The following paragraphs summarize our analysis.Doubt On The RiseFrom 2010 through 2017, the hotels in our research sample achieve a 4.7 percent compound annual increase (CAGR) in Total Operating Revenue. Concurrently, the amount set aside for doubtful accounts increased at a CAGR of 10.8 percent.Except for 2012, the annual change in Provision for Doubtful Accounts was greater than the change in Total Operating Revenue each year during the study period. This indicates that over the eight-year period, hotel operators have had to write-off greater amounts of uncollectable revenue than anticipated. Collections were most challenging during the years 2015 and 2016 when the annual change in the Provision for Doubtful Accounts approached 30 percent.The amount of funds expensed for bad collections is still a very small portion of total revenue. Over the eight-year period, the Provision for Doubtful Accounts averaged just 0.047 percent of Total Operating Revenue per year. However, it did peak at 0.063 percent in 2017.Due to the greater transient orientation of limited-service, all-suite, and extended-stay hotels, these properties had the highest ratios of Provision for Doubtful Accounts to Total Operating Revenue in 2017. Convention Hotels, with an extreme orientation to group business, had the lowest ratio.Collecting With Credit CardsWhile an increased acceptance of credit card payments provides greater assurance of collection, it does come at a cost. Like the Provision For Doubtful Accounts, Credit Card Commission payments have grown at a greater pace than revenue the past eight years. From 2010 to 2017, while Total Operating Revenue was rising at a CAGR of 4.7 percent, Credit Card Commissions were increasing at a CAGR of 5.5 percent. Over the past eight years, Credit Card Commissions as a percent of Total Operating Revenue has grown from a low of 2.20 percent in 2010 to 2.33 percent in 2017.Based on our analysis, the greater growth rate for Credit Card Commissions can be attributed to a combination of rising discount rates, and an increased incidence of the use of credit cards. To estimate the usage of credit cards within U.S. hotels, CBRE made assumptions using information from the following sources:Credit card discount rates were estimated from a survey of hotel financial executivesLodging and sales tax estimates were made based on information from public sourcesGratuity assumptions were derived from our general industry knowledge and revenue mix data taken from the CBRE Trends databaseFrom 2010 through 2017, CBRE estimates that 83.7 percent of Total Operating Revenue at the hotels in the survey sample was charged to credit cards. Credit card usage peaked in 2015 at 85.0 percent. Credit card use was lowest in 2017 (80.1%).In 2017, credit card usage was greatest at extended-stay hotels (93.5%) and all-suite properties (88.1%). Resorts (63.6%) and convention hotels (75.6%) had the lowest levels of credit card use.A DisconnectWhen comparing recent trends in the Provision for Doubtful Accounts and Credit Card Commission payments we find a disconnect. It is reasonable to assume that a higher of level of credit card use should result in a decline in ability to collect. Therefore, the increased use of credit cards over the past eight years should have resulted in a deduction in the Provision for Doubtful Accounts. Further, the property types with the highest levels of credit card use should have had the lowest levels of Provisions for Doubtful Accounts. In both circumstances, this was not the case.What this indicates is that hotels are subject to the recent rise in credit card defaults, delinquencies, and challenges that all industries have faced. In addition, the transient nature of travelers using credit cards at all-suite and extended-stay hotels helps explain the greater levels of doubtful collections at these property types.As the lodging industry begins to accept more and diverse forms of electronic payment methods, this will not absolve hotels from bad collections. Property level controllers, as well as corporate financial executives, need to adjust the methods they use to assess and estimate their Provision for Doubtful Accounts to match the benefits and shortfalls of the new technologies.This article was published in the March 2019 edition of Lodging.

Summit Hotel Properties Completes Sale of Six Hotels for $135 Million

Hotel Online·18 April 2019
Summit Hotel Properties, Inc. reported today that it has completed the disposition of six hotels totaling 815 guestrooms for an aggregate gross sales price of $135.0 million which resulted in an estimated net gain of $36.6 million.

New Skift Strategy Deck: Rethinking Revenue Strategy -- A Hotelier's Guide to Thriving in an Era of Disruption

Hotel F&B·18 April 2019
Hoteliers are under pressure to deliver high profit margins, but are saddled with bulky legacy revenue systems. While transforming all operations might appear daunting, having the right technology strategy is crucial to driving profits.

How Are You Measuring Profit?

Hotel F&B·18 April 2019
One key to profitability is getting everyone on the same page with your most important hotel KPIs and metrics. We caught up with global industry analysts and revenue consultants to find out what metrics they believe are most vital to driving bottom line profit.

Hospitality is evolving. Do you have the knowledge to compete?

Triptease Blog·18 April 2019
There's been another shift in online hospitality. The evolution of digital distribution channels and a changing balance in hotel/OTA relationships means that hotels are starting to look beyond the traditional methods of driving direct.

Penn National Gaming to Close Resorts Casino Tunica

Hotel Online·17 April 2019
Penn National Gaming, Inc. (“Penn National” or the “Company”), today announced plans to close the Resorts Casino in Tunica, Mississippi effective June 30, 2019, subject to regulatory approvals.

Deal Report: Seven Hotel Sale and Financing Announcements

Lodging Magazine·17 April 2019
KHP Capital Partners (KHP), a private real estate investment firm focused on acquiring and creating boutique and independent hotels, has closed on $361 million of commitments for its fifth discretionary real estate fund. The new fund is expected to be deployed over the next three years and, with leverage, should translate into nearly $1 billion of buying power. KHP expects to invest in eight to 12 projects over this time, focusing on opportunities in major U.S. markets and select leisure destinations.

Effect of franchising on restaurant firms' risk evaluations in the bond market

International Journal of Hospitality Management·Paid Content ·17 April 2019
Given the volatility of the market and its susceptibility to economic shocks, restaurants consider risk-management to be a critical factor affecting their success and use franchising to mitigate risk by smoothing and augmenting cash inflows.

New Hotel Supply and Strong Economy Influences Hotel Forecast

Lodging Magazine·17 April 2019
New hotel rooms coming onto the U.S. market shouldn’t be a concern for established hotel operators because demand will continue to exceed moderating new-supply levels through 2019, according to the latest CBRE Hotel Horizons report.

UK Travel Bookings Surge With Brexit Divorce Postponement

mycloud HOSPITALITY·17 April 2019
UK tour operators can heave a sigh of relief at last. With the Brexit divorce being postponed to October, Brits are saying "sod it," we are going on a summer holiday. Good for them.

European Hotel Industry Braced For Brexit Impact

Hotel F&B·17 April 2019
Seven trending hotel news stories that will impact your hotel Revenue Strategy.

JLL Bolsters U.S. Hotel And Hospitality Capital Markets Platform

Hotel F&B Observer·17 April 2019
After capturing year-end number one market share in the Northeast, JLL is adding expertise to its hotel and hospitality team.

Airbnb settles all lawsuits for listings in disputed regions·17 April 2019
Airbnb is announcing that we have settled all lawsuits that were brought by hosts and potential hosts and guests who objected to a policy the company recently announced concerning listings in disputed areas.

Rising costs hurt Europe hotel profits in Februrary

Hotel Management·16 April 2019
Despite slight upticks in revenue per available room (RevPAR) and total RevPAR, profit per room at hotels in mainland Europe fell in February, unmasking flow-through challenges, according to the latest data from HotStats.tracking full-service hotels.

Legacy Vacation Resorts Becomes First B Corp. Certified Multi-State Hospitality Company

green lodging news | By Glenn Hasek·16 April 2019
Florida-based Legacy Vacation Resorts (LVR) has officially achieved Certified B Corporation Status, becoming the first multi-state hotel and vacation ownership company in the country to secure the prestigious designation. Administered by the nonprofit, B Lab, Certified B Corporations are businesses that voluntarily meet the highest standards of social and environmental performance, public transparency, and legal accountability to balance profit and purpose through third-party review.

TPI Hospitality leverages ProfitSword integration

Hotel Management·16 April 2019
TPI Hospitality, a developer and operator of hotels, restaurants and conference centers in Minnesota and Florida, has implemented ProfitSword’s ProfitSage operational and financial reporting solution. With ProfitSage now in place across its portfolio with plans to roll out the solution as new properties are added, TPI allows seamless access and sharing of all performance-related data in order to maximize operational efficiency and business strategy planning efforts.

How Today's Hotel Ownership Model Clashes With the Need for Green Energy Investments

Hotel Online·15 April 2019
The hotel industry was an early adopter in embracing energy conservation and other earth friendly practices. However, sizable capital investments like HVAC upgrades, energy generation, or smart materials in renovations exceeds the short-term revenue models for today’s hotel investor. As of now, what a hotel can do has been done - switch to LED light bulbs, key entry-driven lighting, and reduced turnover of towels and linens.

Hospitality Financial Leadership - Nobody Gets to Be Wrong, Everyone is Wrong, No One Gets to Be Right, Everyone is Right

The Hotel Financial Coach ·15 April 2019
I use this quote to start many of my workshops. To me it's the way I want the participants to stand in their individual power during our time together. It's also how I see our industry. In the hotel business we all need to have an opinion and even more important we need to be able to share those thoughts. Reason being is, we all have something important to bring to the table.That's what I tell my workshop participants. To illustrate this, I often ask the following question. "What would you rather have to increase your GOP in your 300-room hotel that is currently operating at 75% occupancy with a $150 average rate, a $4 room rate increase or 2 more points of occupancy?" I get a lot of responses right off the bat. People are quick to jump on both options. But which one is right? The simple answer is they're both right and at the same time they're both wrong.That's the way I see it. Our business is not a science where there is a definitive answer. I have always said, "Put 10 hotel managers in a room and ask one question and you will get at least 12 answers." Hotel people love to pontificate about the answer to just about any question involving operations or the finances of hotels. You're never really short of opinions on what you should do. That's the way it is with most hotel executives. What I want is the same level of bravado in my session today with all my participants, so to stir things up a bit with the audience this is what I like to do.The participants all have an opinion, but often they are hesitant to produce it right away. Many of the workshop attendees are not used to being in the spotlight or on a stage. It takes them a little while to warm up. Just like the audience at a talk show or a quiz game, they need to be properly warmed up before we can get the most from them. I say something like this: Depending upon where you sit you will probably have a different opinion about what you would like better, the rate or the occupancy. Let's play this out a bit longer and do some math on each option to see if one selection is better than the other when it comes to GOP.$4 in rate seems like a no brainer. We all like rate because it's almost all pure profit. (300 room hotel * 365 days = 109,500 room available) currently operating at 75% = (109,500 * .75% = 82,125) and $4 more = ($4 * 82,125 = $328,500) in new room revenue. Less some additional travel agent commissions, corporate fees, credit card commissions and we're left with say.... 90% of that (328,500 *.90%) = $295,650 in GOP2 points of occupancy can also sound pretty attractive. (109,500 * .02 = 2,190) additional rooms. (2,190 * $150 = $328,500) in new room revenue. Less the additional costs for commissions, cleaning and amenities for the new occupied rooms and the additional fees and CC commissions @ 30% = ($328,500 *.70%) = $229,950 in GOPAt this point I say something like, "So I guess the room rate scenario wins; is there anything else we need to consider?" Then I wait and it usually takes about 2 seconds before it starts."What if the new occupied rooms are group rooms?""What if the additional rate comes from the OTA's?""What if the new occupancy is on Sundays?""What if the new occupancy were all stay overs"?"What if the additional rate comes from existing corporate clients?""What if the additional occupancy comes from transient family clients?""What about the additional wear and tear on our rooms with that extra occupancy?""What if we had some of both occupancy and rate, what would that look like?"We now have a full-on debate raging and everyone seems to have an opinion, and some are very strong. The foodies have one slant and the salespeople have another. Rooms division people are all about the right customers staying in our rooms. The administration folks can make the argument either way. The GM says she would take either scenario with a smile. I stop things about now and I make my point. In our business we all have the ability to see things our way. We can justify almost anything as it relates to what's good or not so good for our business. Knowing this about the people in the workshop is a good place to start. Showing them that their opinion counts and it's just as valid as another's is powerful. I want people to see that they make a difference no matter where in the hotel they earn their paycheck. We are all in this together and whether the subject is more business, right sizing the head count or what's for lunch in the cafeteria, everyone is entitled to their own thoughts. Nobody gets to be right today, and everyone is wrong and while we are at it everyone is right, and nobody is wrong.If we can truly model this philosophy, then we can get the entire team to lean into the challenge of figuring out this thing we call a hotel. What is the best way to move forward? There are so many aspects of the business we need to attend to. What can we do to truly engage the hearts and minds of the entire team?That is what it's all about. Getting everyone to play. If we sit on the sidelines waiting for the GM and corporate to fill our heads with what to do and how to think we just ordered the worst dish on the menu. Be a hotel full of the mindset that it's all about having everyone step up and truly contribute!

Report: Supreme Court Ruling Makes Airbnb's Tax Agreements Obsolete

Lodging Magazine·15 April 2019
A new report released today on National Tax Day underscores why the Supreme Court’s Wayfair vs. South Dakota decision eliminates the need for states and localities to enter into “voluntary tax agreements” with Airbnb. The report, issued by Dan Bucks, former director of the Montana Revenue Department and previous executive director of the Multistate Tax Commission, said the decision last year provides the legal framework and incentive to tax Airbnb like every other U.S. online business now.

PMZ Realty Capital arranges $11M loan for CMC Hotels

Hotel Management·15 April 2019
Real estate investment banking firm PMZ Realty Capital arranged an $11 million loan for CMC Hotels’ Fairfield Inn & Suites by Marriott Raleigh Cary in Cary, N.C. The commercial-mortgage-backed securities loan was a 10-year, nonrecourse loan with 30-year amortization.

Highlights from HITEC Europe Panel Discussion: "The Future of Integration: There Is A Right Answer"

Snapshot Blog·15 April 2019
HITEC Europe, the annual conference for hospitality technology by HFTP, is home to some of the brightest minds in the hospitality industry, who navigate through essential topics in the field today. Carson Booth, CEO of SnapShot, a Shiji Group Band/HFTP Global Board member, unpacked the topic of “The Future of Integration: There is a Right Answer,” during a panel session on April 10, in Palma, Mallorca, Spain.

ACRES Capital Originates $37M Loan For Hilton-Branded Finger Lakes Resort

Hotel F&B Observer·15 April 2019
ACRES Capital Corp. (together with its subsidiaries, “ACRES”), a leading commercial real estate middle-market lender, today announced that it originated a $37 million bridge loan to complete the construction and stabilization of the Canandaigua Finger Lakes Resort. The loan, which carries a term of 24 months, is sponsored by experienced developers Robert Murphy and David Genecco.

PMZ Realty Capital Arranges $11 Million Fixed Rate Loan for CMC Hotels

Hotel Interactive ·15 April 2019
PMZ Realty Capital LLC, a boutique real estate investment banking firm, arranged an $11 million loan for CMC Hotels’ Marriott Fairfield Inn & Suites Raleigh Cary, NC. PMZ Realty Capital specializes in hotel real estate investment banking nationwide, with an expertise in sourcing capital.

How Innovation in Hospitality Financing Is Shaking up Commercial Real Estate

Hospitality Times·15 April 2019
For a number of reasons, hospitality services have been very profitable lately. Wisely, the industry is using these times to invest in new technologies that improve processes and experiences. Some of these changes are obvious, personalization for valued guests and smart-room technologies with lobby integrations for example. However, it’s the less talked about advancements never seen by consumers that are making some of the most significant impacts on the growth and success of hotel real estate.


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