Evolution of Hotel Management Agreements and Rise of Alternative Agreements
Evolution of Hotel Management Agreements and Rise of Alternative Agreements — By Hala Matar Choufany, Ersin Yildirim

HVS · 30 Sep

Hotels are complicated investments and therefore selecting an appropriate hotel agreement for a property requires exhaustive research and investigation by an investor. The choice of an operator as well as the hotel operating agreement has a significant impact on the cashflow and the potential value of the property. Hotels and the hospitality market are constantly evolving as a result of brands consolidating, owner profiles changing, technology disruption, changing traveler behavior as well as hotel investment trends altering.

Property Taxes Post COVID-19
Property Taxes Post COVID-19 — By Suzanne R. Mellen, Brian F. Bisema

HVS · 29 Sep

After realizing record-high RevPAR levels with over 100 consecutive months of growth, the lodging industry continued to strengthen through 2019, albeit at a significantly more tempered rate. Then, in the first quarter of 2020, COVID-19 struck. The unimaginable pandemic erased years of RevPAR gains virtually overnight, leaving owners and operators scrambling to strategize the forthcoming steps. While logistics pertaining to reopening hotels, new sanitation standards, and controlling variable operational expenses are on the forefront of hoteliers' minds, fixed expenses, particularly an asset's property tax burden, are also key factors that hotel owners should keep on the horizon.

Mentoring: An Important Source of Training
Mentoring: An Important Source of Training — By Kirby D. Payne

HVS · 23 Sep

With the tremendous growth of the lodging industry over the last three decades, the industry's ability to develop competent management staff has been severely strained.

Benchmarking 101: The Bottom Line on Utility Costs
Benchmarking 101: The Bottom Line on Utility Costs — By David Eisen

HotStats Limited · 22 Sep

In the age of COVID, numerous operating costs have decreased, as hoteliers have done all they can to reduce expenses to help offset the extreme reduction in revenue.

5 Tips for Cutting Down Food Costs
5 Tips for Cutting Down Food Costs — By David Eisen

HotStats Limited · 17 Sep

With COVID-19 slicing into hotel profit, cutting food costs is more important than ever—especially with so many hotels now relying on food and beverage (F&B) services to meet guest expectations.

Boutiques may be adapting faster than other hotel sectors, but still hurting
Boutiques may be adapting faster than other hotel sectors, but still hurting

Hotel Law Blog · 15 Sep

The theme of the Boutique Lifestyle Leaders Association’s (BLLA) upcoming Boutique Lifestyle Digital Summit is “Dare to Adapt” and there are some com

HVS Monday Musings: Hotel Owners Should Think Like Institutional Owners in the Post-COVID Era
HVS Monday Musings: Hotel Owners Should Think Like Institutional Owners in the Post-COVID Era — By Dipti Mohan, Akash Datta

HVS · 14 Sep

As we all gradually get back to business one of the pertinent questions that is being asked is whether hotels can still be considered a good investment vehicle going forward. We believe the answer to be a big 'yes'. It's true that the demand will be subdued for the near to medium term, but the industry is expected to regain its 2019 glory in the next 2-3 years, and this is perhaps an opportune time to invest in hotels. However, hotel owners need to re-evaluate their investment objectives and don the hat of an institutional investor now more than ever.

Using Metrics — Other Than RevPAR — to Inform Better Business Decisions
Using Metrics — Other Than RevPAR — to Inform Better Business Decisions — By David Eisen

HotStats Limited · 14 Sep

In the hotel industry, normality has been put on hold, requiring hoteliers and stakeholders to rethink how to move forward. One example is budgeting season, which is quickly approaching. Zero-based budgeting, a method of budgeting in which all expenses must be justified and approved for each new period, is now fundamental.

How To Create A Forecast Plan For Hotel Businesses In Unknown Times
How To Create A Forecast Plan For Hotel Businesses In Unknown Times — By Alex Sogno

Global Asset Solutions · 11 Sep

With the advent of the 'new normal', hotel owners and operators must begin considering the various financial and operational scenarios in their forecasts extending into 2021. Accurate forecasting is notoriously tricky, even in "business as usual" times. Often, some operators need more pressure to deliver detailed breakdown forecasts and they rarely extend more than three months in the future. The objective of a forecast plan is to ask the hotel operator to propose tangible actions: to increase the performance of specific areas of the hotel, to manage the production of the personnel, to schedule productive activities and to increase customer satisfaction.

How COVID-19 Pandemic Has Affected Hospitality Lending Activity Predominantly In European Assets
How COVID-19 Pandemic Has Affected Hospitality Lending Activity Predominantly In European Assets — By Korosh Farazad

Farazad Group Ltd. · 11 Sep

COVID-19 has had a tragic impact on the hotel industry when lending transactions and liquidity reduced significantly since the pandemic began. Most of lenders have largely pulled back or put a full stop to new lending in the European hospitality industry. The market has slowed down as new investments are on hold due lenders exercising more of a conservative underwriting approach.

6 Ways to Turn a Crisis Into an Opportunity
6 Ways to Turn a Crisis Into an Opportunity — By David Eisen

HotStats Limited · 8 Sep

When a crisis strikes an industry, most hunker down to reduce damage. Amid the chaos, it's easy to overlook the opportunities a crisis turns up. As a hotelier, you don't have to sit back and absorb financial hits. There are ways to go on the offense.

Hospitality Financial Leadership – Why Does it Take So Bloody Long to Do the Annual Hotel Budget?
Hospitality Financial Leadership – Why Does it Take So Bloody Long to Do the Annual Hotel Budget? — By David Lund

The Hotel Financial Coach · 7 Sep

Bloody is a great word. It's English and I'm Canadian so that's close enough and I'm adopting it for this piece. The word is so descriptive, and it immediately conjures up images of battle and of great suffering. Much the same as the annual carnage we refer to as budget season in the hotel business. It's the epic contest between line managers and executives, hotel leadership teams and the brand and hotels and their owners.

How Turning to Benchmarking Can Stave Off Financial Ruin
How Turning to Benchmarking Can Stave Off Financial Ruin — By David Eisen

HotStats Limited · 1 Sep

When the winds of crisis whip, and a hotel's cash begins flying away, it's easy to panic. During a crisis, it might feel like the whole market has been pulled out from under you.

HVS Monday Musings: Improving Hotel ROI – Thinking Out of Box from Design to Operations
HVS Monday Musings: Improving Hotel ROI – Thinking Out of Box from Design to Operations — By Ajay Mehtani

HVS · 31 Aug

As an industry there is a need to make hotels more viable. The pandemic has taught us to rethink in this direction and develop hotel assets that can drive higher ROI. It can only be done when we look at making changes from Design to Operations. Ideally, we should make changes to the industry status, compliance cost and interest cost, however, as these are policy matters, we cannot do much ourselves.

Hospitality Financial Leadership – What Everyone Needs to Know About Hotel Financial Skills 11-20
Hospitality Financial Leadership – What Everyone Needs to Know About Hotel Financial Skills 11-20 — By David Lund

The Hotel Financial Coach · 31 Aug

Regarding both the financial leader and the operationally managers roles: On the eve of starting my financial leadership course for the third year with Royal Roads University, I realized that most people have it somewhat wrong when it comes to how they think about the financials inside the hotel business. It occurred to me that most people think that a mechanic is the only person who can drive a car.

The Long-Term Incentive Dilemma Of Asset-Management Pay
The Long-Term Incentive Dilemma Of Asset-Management Pay — By David Mansbach

AETHOS Consulting Group · 28 Aug

The economic impact of COVID-19 has devastated the hotel industry in myriad ways, from sinking revenues to company restructurings. Hilton announced in June that it was laying off 2,100 employees, about 22% of its corporate staff. In March, Marriott reported it would furlough roughly two-thirds of its 4,000-person corporate workforce.

HVS Monday Musings: Why Professional Asset Management Adds Value to Hotel Investors?
HVS Monday Musings: Why Professional Asset Management Adds Value to Hotel Investors? — By Dipti Mohan, Ajay Mehtani

HVS · 24 Aug

The role of a professional Asset Manager has traditionally been underplayed in India, even though the expertise brought in by a quality Asset Manager can yield great results for Investors. This is already a proven fact in several mature markets where Hotel Investors extensively use their services. The role of the Asset Manager has become even more crucial in the current times of uncharted waters.How do professional Asset Managers add value to Hotel Investors? Asset Managers work with owners to maximize the asset value and potential by optimizing operational efficiencies to deliver better ROI.

Hospitality Financial Leadership – What Everyone Needs to Know About Hotel Financial Skills 1-10
Hospitality Financial Leadership – What Everyone Needs to Know About Hotel Financial Skills 1-10 — By David Lund

The Hotel Financial Coach · 24 Aug

Applies to financial leaders' and operational managers' roles: On the eve of starting my financial leadership course for the third year with Royal Roads University it occurs to me that most people have it somewhat wrong when it comes to how they think about the financials inside the hotel business.

The Link Between Corporate Debt And Earnings Manipulation
The Link Between Corporate Debt And Earnings Manipulation — By Cédric Poretti

EHL · 18 Aug

Among the many COVID-19-related uncertainties, increasing corporate debt levels represent a major challenge, even though this is nothing new. Global corporate debt has been soaring since the sub-prime crisis and reached USD 72 trillion at the end of Q1 2019 (excluding financial companies) (Statista). Looking at the current crisis, things are not likely to improve any time soon. In many countries, governments are widening their support for corporate debt to help companies face the economic slowdown caused by the pandemic.

The Owner’s Obligation – Cash
The Owner’s Obligation – Cash — By Robert Mandelbaum

CBRE Hotels · 17 Aug

The COVID-19 virus has had an extreme negative impact on the U.S. lodging industry. According to CBRE's June 2020 edition of Hotel Horizons®, lodging demand in the U.S. will decline by 37.0 percent in 2020. This will cause a 38.0 percent drop in the national occupancy level, along with a 22.5 percent fall in average daily room rates (ADR). The net result is a projected 51.9 percent fall off in revenue per available room (RevPAR) for the year. Using historical data from the CBRE Trends® in the Hotel Industry database of operating statements, the most likely consequence of a 51.9 percent RevPAR decline is a Gross Operating Profits (GOP) decrease in excess of 80 percent.

Hotel Demand and GDP Have a Strong Correlation and That’s a Problem
Hotel Demand and GDP Have a Strong Correlation and That’s a Problem — By David Eisen

HotStats Limited · 10 Aug

Among the many delicious scenes from the movie "Goodfellas" is one where the characters of Ray Liotta and Joe Pesci burn down a restaurant because its credit has run out, putting an end to their graft. "And then finally, when there's nothing left, when you can't borrow another buck from the bank, you bust the joint out. You light a match."

To Capitalize or Expense? The Answer Isn’t Always Clear
To Capitalize or Expense? The Answer Isn’t Always Clear — By Arlene Ramirez

HotStats Limited · 6 Aug

A quote in the 2008 novel "Paper Towns" by John Green reads: "The rules of capitalization are so unfair to words in the middle of a sentence." This droll observation is not at the crux of this blog — well, not that kind of capitalization — but it may be similarly comic for those in financial accounting within the hospitality industry.

Brush Up On Finance & Wine Economics This Summer, Selected By EHL Experts
Brush Up On Finance & Wine Economics This Summer, Selected By EHL Experts — By Beatrice Venturini

EHL · 3 Aug

Dr. Philippe Masset and Dr. Jean Philippe Weisskopf are both associate professors at EHL specializing in Empirical Finance and Wine Economics. They are founding members of the Alliance for Research on Wine & Hospitality Management and have written extensively on the subject. Here they share with us some useful tips on vital pre-learning material for any potential student of economics, equity, finance and management.

HVS Asia-Pacific Hotel Law Guide
HVS Asia-Pacific Hotel Law Guide — By Daniel J. Voellm, Eunice Wong

HVS · 3 Aug

The Hotel Law Guide helps serve hotel real estate owners, developers and operators as a reference for experienced and well-known lawyers and attorneys with a track record in Asia Pacific region. Each law firm highlights their representative attorneys with the type of services offered and notable projects.

Don’t Be Fooled by COVID Hotel Statistics
Don’t Be Fooled by COVID Hotel Statistics — By Larry Mogelonsky

Hotel Mogel Consulting Limited · 3 Aug

Imagine a quick mathematical scenario. Business drops 50% due to the lockdown earlier this year then you see a recovery of 50% of this number once the pandemic is over. Occupancy is back to normal, right? Not true; it is actually still down 25% from where it was before the drop.

Hospitality Financial Leadership – 7 Daily Revenue Audit Must Dos
Hospitality Financial Leadership – 7 Daily Revenue Audit Must Dos — By David Lund

The Hotel Financial Coach · 3 Aug

The hotel business is a retail business and in order to stay on top of your business you must fully and completely balance your daily revenues and settlements. Every day we begin anew and every day is a story unto itself when it comes to the revenues and settlements. I may sound like I am repeating "revenues and settlements," but it cannot be emphasized enough.