Hospitality Financial Leadership – EFTEs, Productivity Measurements – Why Use Both
Hospitality Financial Leadership – EFTEs, Productivity Measurements – Why Use Both — By David Lund

The Hotel Financial Coach · 19 Oct

Most hotels measure payroll as a percentage of revenue or, as it is commonly referred to, labor cost percentage. This is not helpful. Why, you ask? Well, first of all, if sales magically increase because of an increase in the average room rate or average cover, your labor cost will automatically improve. Did anyone actually do anything better with the payroll? No. Or, if there is an increase in wages due to an outside force like the minimum wage increased, then your labor cost will suffer and did anyone actually do anything negative? No. So you see the limitations of labor cost percentage.

Adjusting Asset Management Staffing Strategies
Adjusting Asset Management Staffing Strategies — By David Mansbach

AETHOS Consulting Group · 16 Oct

The hotel industry faces an extraordinary challenge today: how to operate a hotel in the "new normal." With the near future so cloudy, it is close to impossible to effectively set accurate property and company forecasts; at this time occupancies and revenue per available room numbers are at painfully inadequate levels.

U.S. Hotel Development Cost Survey 2020
U.S. Hotel Development Cost Survey 2020 — By Luigi Major

HVS · 15 Oct

In 2019, the national lodging market reached new heights, with hotels reporting the highest occupancy and ADR levels ever recorded. Similarly, hotel development continued at a steady pace, with new hotels opening to a burgeoning market and new and exciting projects continuously being moved through the development pipeline. Since the start of the COVID-19 pandemic, government restrictions, travel and group cancellations, and an overall fear of traveling have caused an unprecedented drop in travel and tourism demand in the country and around the world, which has resulted in substantially lower occupancies and average rates.

To pay or not to pay: when dividend policy rhymes with business strategy
To pay or not to pay: when dividend policy rhymes with business strategy — By Cédric Poretti

EHL · 15 Oct

The COVID-19 crisis is putting the global economy under pressure in an unprecedented way. Companies worldwide have been forced to cut their dividend payouts. Based on the Janus Henderson Global Dividend Index (August 2020), global dividends fell by 22% to $382.2bn in the second quarter of 2020. However, significant variations appeared across regions and industries. North American dividends barely changed on a year-on-year basis, while in Europe, 54% of firms reduced their dividend payouts. In France, payouts dropped by 57%, in Spain by 70%, in Germany by 19%, while no change appeared (on a year-on-year basis) in Switzerland.

HVS Musings: Mixed-Use Development - The Most Sustainable Model For Hotels Going Forward
HVS Musings: Mixed-Use Development - The Most Sustainable Model For Hotels Going Forward — By Mandeep S Lamba, Dipti Mohan, Akash Datta

HVS · 14 Oct

Mixed-use development, usually a planned combination of hotels, retail, office or residential space, is a fairly widespread concept globally with several such iconic projects around the world. In the last decade or so, the concept has been gaining ground in India as well, though the combination (two or more elements) of retail, office, and residential spaces have been more popular. However, as investors look to maximize returns through efficient land usage and optimal utilization of FSI, hotels have also been added to the mix.

What Are the Best KPIs for Measuring Hotel Profitability?
What Are the Best KPIs for Measuring Hotel Profitability? — By David Eisen

HotStats Limited · 14 Oct

As COVID-19 continues its charge unabated, it's natural for hoteliers to feel like they're on loose financial footing. And as room revenue becomes less predictable, many hoteliers are seeing their revenue-only strategies give way beneath them.

Budgeting Season is Here: Oy Vey! But It Doesn’t Have To Be
Budgeting Season is Here: Oy Vey! But It Doesn’t Have To Be — By David Eisen

HotStats Limited · 9 Oct

By now, most hoteliers are in the throes of budget season. Only this year's version is unlike any before. COVID-19 has made it so.

HVS Musings: DCF is the most appropriate method of hotel valuations, especially during the COVID era
HVS Musings: DCF is the most appropriate method of hotel valuations, especially during the COVID era — By Dipti Mohan, Akash Datta

HVS · 6 Oct

In a market like India, where land most often than not is mis-appropriately valued resulting in exaggerated project costs and hotel transactions are limited in number, the only viable methodology that remains relevant especially in the current uncertain & volatile market scenario is that of Discounted Cash Flows (DCF). Moreover, the current pandemic has had an unprecedented impact on the hospitality sector, with hotels being temporarily closed and the sector witnessing all-time low performance metrics, by the virtue of which, assessing the value of a hotel on current income fails miserably.

Hospitality Financial Leadership – Internal Control Reviews
Hospitality Financial Leadership – Internal Control Reviews — By David Lund

The Hotel Financial Coach · 5 Oct

Hot on the heels of creating a hotel policy manual is the newfound ability to create an internal control review process. Policies are all about the rules of the road and the ICR is all about the roadside check stop.

2021 Hotel Forecast
2021 Hotel Forecast — By Bob Rauch

RAR Hospitality · 2 Oct

The COVID-19 pandemic has caused unprecedented disruption to the hospitality industry, so when it comes to mapping a post-pandemic recovery, it's clear that we are in uncharted territory. The Lodging Conference hosted Bernard Bauhmohl, Chief Economist of the Economic Outlook Group. His remarks related to vaccines, treatments, lack of stimulus package and election results led us to believe we are in for a longer ride along the trough of this recession.

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.