• The Art of Pitching: Is it Overrated - or Essential?

    Pitching… that thing we force notoriously introverted geeks to do for funding. The main idea is that an entrepreneur — unless his name is Elon Musk or Tony Stark — has limited resources and needs the financial support of pockets that are substantially deeper than his own.

  • What to Expect: New Changes Coming to Lease Accounting Standards

    The upcoming revision to lease accounting standards was one of the topics discussed by the HFTP Hotel Advisory Council in their February 2018 meeting. The surprising conclusion from the council: The hotel industry in general is not prepared for the changes, and there is no viable off-the-shelf software that any of the members were aware of that would assist with the accounting for the new standard.

  • HFTP GDPR Guidelines: Hospitality Organization Flow Charts

    This document is a set of flow charts illustrating data flow scenarios, involved parties providing hospitality services, steps of the guest journey and more. Four scenarios are presented: independent hotel, independent hotel with third party agreement, branded hotel and branded hotel with independent control.

  • Job Description Template: Club Accounting Positions

    The HFTP Americas Research Center has developed example job descriptions for club accounting positions. The process involved reviewing sample job descriptions, and compiling the information into standardized job descriptions.

The Biggest Mistakes Hotel Managers Make

Minett Consulting ·25 April 2018
Take resource management, for example. The price of electricity is going up, and there is more pressure on hotels to lighten their ecological footprint. Experienced managers know there are countless ways to save resources - including voltage optimisation, water conservation measures, LED lighting, high-efficiency appliances, solar panels and so on. If none of these solutions are researched or exploited, the hotel's profit margin will be much narrower than it could otherwise be.Housekeeping is another oversight that costs dearly. Take a look at popular review platforms like TripAdvisor and Google. Notice how many negative reviews are centered on housekeeping issues. Even one guest who doesn't feel the room has been properly cleaned can put a large dent in a hotel's online reputation. We could use clearer statistics on the reasons for negative reviews, but lack of cleanliness is clearly among the most common. Avoiding this pitfall involves clear direction, careful oversight, regular inspections, and more effective training for staff.What about truth in advertising? This is another mistake that gets hotel managers in deep trouble. It sounds simple enough to be aware of your hotel's promotional photos, where they appear online, and whether they match your current fittings. But these things can get lost in a busy year at a busy hotel. OTA listings - whether due to confusing upload procedures or shortcuts taken by hotel managers - often feature inaccurate photography for different room types. Negative guest experiences are generated, and reputation is lost.Making your hotel a great place to work - this is another area where so many blunders are made. Personalities may clash; priorities may be forgotten. Managers may lose sight of the simple fact that when staff are happy and motivated, every aspect of the guest experience is elevated. The experience of being a manager is elevated too.But this is notoriously easier said than done. It takes skillful and empathetic leadership to build a rapport with employees; to reward them for great work and include them in critical problem solving. When done correctly, this gives the hotel a rock solid foundation. When good leadership is lacking, it's not just the team but also the guest who pays a price.We could go on and on about the various things hoteliers can get wrong - and there are many - but what is the biggest?In 2018, one of the biggest mistakes is not being aware of how many options travelers now have - if we are aware, then not acting on that is equally as bad. The hospitality landscape has grown more competitive and transparent. We can no longer say, "this is my product and you will like it". There are new properties popping up all over Australia and the world, from privately managed apartments to boutique hotels converted from warehouses. Technology continues to have a massive impact on hotel design. Management styles are becoming more inclusive. Service models are changing too, according to what managers and executives think people want. Travellers have choices and they are vocal in making them.Hotel managers shouldn't feel compelled to make drastic or hasty changes though just because one guest says something, but they should be aware of how things are changing. It's true that certain aspects of hotel management are fundamental. It will always be vital to be develop a strong team, keep standards high in the housekeeping department, get employees what they need, conserve resources, and practice truth in advertising. Making mistakes in these areas will always hurt performance.Beyond that, what matters most in our industry is understanding what guests value, taking action to acknowledge this, and then capture the most business over the long haul. These issues emphasise that professional hospitality, whilst based on a set of established values is just like everything else these days - a conversation. For a hotel manager to thrive professionally and avoid costly mistakes, they have to join that conversation with a vested interest in understanding what their guests want and creating great guest experiences. So, how do you converse?

Fiennes' scaling of huge heights inspire AHIC hoteliers

hotelnewsnow.com Featured Articles·23 April 2018
The 2018 Arabian Hotel Investment Conference ended with the most memorable keynote speech I have ever heard. Get ready for some rousing adventures courtesy of the world’s greatest living explorer, Sir Ranulph Fiennes, that will keep you out past dinnertime. Regular attendees at hotel investment conferences have become accustomed to several days of deals, meetings and panel discussions that wraps up with a keynote address delivered by a speaker from outside of the industry. Professional athletes and personalities connected with the politics of the day are often favorites to end the festivities, but at this year’s Arabian Hotel Investment Conference, delegates had a real treat when the guest speaker was Sir Ranulph Fiennes, often referred to as the “world’s greatest living explorer.”

6 Simple Hospitality Management Ideas

Carolin Petterson ·20 April 2018
In order to make the most out of a hotel, the management needs to take into consideration the resources it has at its disposal and create a team that's based on the needs of your guests and customers.Find the best peopleEvery company is only as good as its employees, but this is especially true for the hotel industry. Almost everything that's done in this line of work is oriented towards the guests and clients and, therefore, each employee is there to represent the company in the best possible light.This, in turn, means that an HR team behind a hotel needs to work on finding the best employees at all times. It's a mistake to wait for an opening before hiring. Lists of talented and potential employees are probably the most important asset a hotel can have and they should be updated regularly.Distribution channelsHospitality-related businesses can't work on their own because they offer too wide a service. They are dependent on numerous other companies and, therefore, on the channels between them. It's imperative to always have the supplies that you need and the access to the professionals that are needed to run the business smoothly and effortlessly.It should also be noted that every long-term relationship that a hotel forms also means that the business is dependent on another external company. This can be troubling because it's essentially giving a lot of control to another business.AccountingAccounting is probably one of the most important concerns for any company. It makes sure that a business is compliant with the laws and rules, but still helps it use most of its resources toward the goals of expansion and growth. The main issue a business manager needs to solve right away is whether to use a general purpose accounting company or one that's specialized in the hospitality industry.It's probably best to rely on hospitality accounting specifically because those professionals know the details of the industry and can provide a more comprehensive service, as well as a more lucrative one.Embrace the modern technologyAutomation, social networks, and mobile devices are the three most talked about topics in the hospitality industry. The changes in technology are disturbing the industry and acting as an equalizer between smaller hotels and bigger ones. A successful hospitality business should embrace these changes and use them as much as possible.The first area in which the modern technology will have the most impact is the customer service. That's one of the most important features of a hospitality business and it gets noticed the most, by the guests themselves. Using mobile apps and metadata info to make the stay more convenient to each guest can get you a long way.Focus on the feedbackCustomers are usually the best judges of how a business is doing. It's imperative to stay on top of the complaints and the feedback that come from the customers themselves. That way, a business shows that it cares about the customers and that it's willing to adapt to them.It isn't enough to rely on sites such as Yelp that are designed for this purpose. Every hotel should have their channels of feedback in order to get a more detailed response and be able to act on it.Expanding the servicesA hotel business needs to expand the services it offers on a regular basis in order to stay competitive and engaging for its guests. This can be a problem for smaller businesses that can't afford to add new features and, therefore, new employees to its offer, but such expansions should be a part of the plan from day one.A modern hospitality company should try to provide services suited to all kinds of tourists, from those that are looking forward to learning about the history and the culture of the place they are visiting to those looking for an adventure and an active holiday.Hospitality management is an interesting and expanding field. It's going to change and adapt in order to accommodate the changes in this market brought about by more competitors and more demanding guests.

Factors Driving Hotel Wellness, Asset Management and Revenue

HVS ·19 April 2018
Built-In from the Ground UpHotel design aspects have lined up with wellness construction counterparts and evolved into a thriving wellness-driven real estate market. This marks a profound shift in the design and permutation of wellness and hospitality. Wellness Lifestyle Real Estate represents approximately $119B USD of the $3.7T USD global wellness economy and is projected to increase 6% annually in the next several years, growing to $180 billion by 2022. "Source: GWI Build Well to Live Well 2018 ReportManagement and LeadershipThe urge to activate new wellness overlays continues to gain momentum. Yet, operational development is often encumbered by lack of investment, time, or concentrated action. Generally, a Spa or Fitness Director would assume the responsibility of developing a property's wellness channels. Meanwhile, their primary focus would be dedicated to these respective areas, without typically being able to effectively cross into other departments i.e. food and beverage programs, in-room services or expanding into potential meeting and group opportunities. If the intention is to create substantial layers of well-being throughout the hotel or resort, it's wise to form a complete department assigned to appropriately develop and refine these features throughout the property. Companies who are seeking to advance their wellness programming and diversify their approach, should consider the benefits of enlisting a proficient Wellness Director or Well-Being Manager. This person would facilitate program excellence and drive successful department crossovers. Furthermore, having a dedicated manager to oversee program efficiency, would add focus to the wellness lineups. This individual would manage and track the percentage of growth to safeguard the ratio between program performance and return on investment. Having someone in this role to lean on would shape the property's unique attitude towards wellness and measure the impact and percentage of wellness-driven revenue on ADR and RevPAR performance. This person would also unite the wellness theme throughout the hotel, be responsible for quality auxiliary services and facilitate discoveries for internal and external marketability that is suitable for the property.Cross-Department RevenueIn the past, spa and fitness assets have mainly been viewed as amenities to augment guest comfort and convenience. While the booming years of luxury spa experiences thrived in the 1990's until 2008; the spa market has rebounded and surpassed the success of prior years with an upsurge of both new spa development, and wellness-driven market growth. Spa revenue in the U.S. has been experiencing steady growth since 2010 and now represents at $16.3 billion market.For many properties it has become essential to not only offer a well performing spa and fitness component but also include features that support healthier choices and nurture well-being. These assets impact the eminence of stay, healthy food, level of quality experiences and so on. For example, food and beverage outlets must increasingly cater to specialized lifestyles, food and diet restrictions, i.e. vegan, gluten-free, and so on. These distinct menu selections are common requests shared across the whole of the hotel, no longer considerations for singular outlets. With increasing department overlaps, the rise of business and solo travelers has amplified the demand for various, beneficial in-room and poolside amenities. These have taken the form of in-room fitness programs, private tele-guided yoga and meditation sessions, relaxing in-room tub soaks, and on-demand massage services. New products are showing up as in-room indulgences, in addition to snacks and drinks in the mini-bar. And spa and fitness features are actively mixing with other key areas throughout the hotel. These segments stimulate guest stay, add value and advance new opportunities to increase the capture of add-on revenue.Ways to Boost Add-on EngagementIntroduce add-on offers at check-in or through in-room marketingCreate add-ons that enhance existing treatments or servicesDesign new spa and dining combinations with motivating themes for couples, etc.Format memberships with an uncommon mix of add-on benefitsCreate employee recommendation structure with percentage incentivesStrategic OverlaysNothing beats a well performing business strategy when it comes to incorporating various enhancements and add-ons. However, it's vital to understand how manageable and appropriate the range of services are. Just because something might be trending in the marketplace, does not mean it will produce lucrative results, or have rewarding potential. Customizing the operational business structure with tactical planning is fundamentally important. It's as vital as setting up goals for successful integration and program development. The success of the Miraval Group represents one example of how a well-tooled strategy can significantly impact the RevPAR and the ADR of a business by incorporating an advanced perspective and mobilizing well-being at the core of the company mission. "As a global leader in wellness resorts and spas, we observed that Miraval understood that wellness is a mindset, not a commodity to be thrust upon consumers, which is a distinction that underscores our wellness strategy moving forward. Miraval is truly an integrative and authentic approach to wellness and wellbeing - an approach that we, over time, think will go over the broad mention of Hyatt in general." Said Marc Ellin, the global head of Miraval Group. Last year, Miraval Arizona's RevPAR grew 20.4 per cent, he said, while its ADR increased by 15 per cent and occupancy grew by another 6 per cent.Add-ons and EnhancementsOne of the most effective ways to instigate new service engagement is to create offers that add weight to existing, premium selling packages. Introducing services this way, reduces perceived customer risk and complements overall package value. Add-ons are a popular way to expand upon spa treatments, and fitness amenities. They are generally easy to sell and have unique benefits when paired with the right services. Enhancing a well performing offer can spark curiosity and help garner attention for less noticeable services. There are multiple ways to craft a solid selection of services. Committed retail partners can be valuable resources to provide support through special spa product allowances or backboard discounts. They are also good allies to develop and collaborate with to form a new layer of services. "Packages targeted at couples were mentioned by over nine in 10 resort/hotel spas (94%) compared to 71% of day spas. Wedding party packages were more frequently mentioned by resort/hotel spas (70%) than day spas (51%). "Final ThoughtsChoosing to embrace wellness with an all-inclusive methodology can transcend wellness themes to new heights. On behalf of new property development, it's prudent to review the capacity and influence new building and construction possibilities hold. The lines between health and hospitality will undoubtedly continue to crossover into the future. These intersections will intensify the need for diligence, program management and new outlooks on enhancement provisions. This will also reveal new value propositions and drive the creation of new revenue channels. Disjointed programming is a common challenge. The central keys to building successful wellness integrations rest in understanding how to incorporate add-ons that add meaning, capture with a widespread attitude, and spearhead meaningful momentum.HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.

The Quickest Way to Improve Your Marketing ROI: Upgrade What Your People Do

MarketingProfs·Requires Registration ·18 April 2018
We marketers have an affinity for shiny toys. Yes, we do—just admit it. We love cool technologies that promise us improved leads, higher conversion rates, and better prospects. As the CEO of a technology company, I'm also the first one to tell you that the ROI on many of those shiny new toys hasn't panned out—and won't pan out. In our pursuit of better organizational performance and higher ROI from our marketing budget, we marketers consistently overlook the one area that will give us the highest ROI boost: investment in our marketing team. Before you dismiss this as just another article on team motivation and skill development, know that it's not. Read on to get solid tips to improve the ROI of your marketing investments.
Article by Richard Evans

What to look for in a Vacation Rental Property Management System

The Revenue Report Card ·17 April 2018
In doing in-depth research of over 25 systems I provide an illustration below of 4 highly trafficked and respected companies in the industry and the questions you may consider asking when seeking a new System for your operation. Vacation Rental Property Management Systems, unlike traditional hotel Property Management Systems, manage rental agreements, send and collect electronically executed contracts, manage roving staff, manage scheduling, manage staff hours, communicate with guests, communicate with roving staff, integrate with smart phone applications and offer a whole array of other unique functions to the industry.While no recommendations or evaluations are made in this article, I provide a chart showing respected and sought companies on the internet (used Alexa.com to identify several of the highly trafficked sites and word of mouth for another). In my book, "the Definitive Study of Vacation Rentals", I provide a list of 25 different Property Management Systems that are presented as the four are below.Disclaimer - website traffic is not always a good indicator of quality and so the companies and the order of those companies presented may be said to have the best website marketing campaigns. Still, numbers do tell a good part of the tale and cannot be discounted. Companies shown below can be said to be amongst the "cream of the crop" with many whistles and bells that are good for some and not needed by others. It's important to know what they are as you expand and grow.There are many other extraordinary systems. Like most sophisticated programs, one thing that is extremely important is its ability to grow and expand with your operation. An opened API system that enables Property Management System connections to independent 3rd party modules, provides the ability to "add-on" applications that include, but are not limited to, smart phone, revenue management, channel management, staff management and staff tracking applications and others. Here is a list of 4 busily trafficked Vacation Rental Property Management System websites and what they offer. I have no affiliation with any of them. For a more expansive description of each of the features/functions shown above, please see the detailed description list I've placed at "Consider asking these PMS Questions"http://bit.ly/2zykw1h (on LinkedIn Pulse). This is an Important Investment; Don't Shop by Price Alone The Property Management System is the backbone of any Vacation Rental operation. The investment is an important one and I can't emphasize enough that no system should be purchased based on price alone. This is a system you will have to live with for many years to come; so find the right features and expansion capability and consider spending a little bit more here if you're able. It will be well worth the cost in the long run. As your company grows, an inadequate or insufficient system will require you to replace it down the road. Conversions from one system to another can be a substantial, costly and time consuming undertaking. Exercise appropriate due diligence before acquiring a Property Management System. There are many great ones that can grow with you into the future! You may not need all the whistles and bells offered, but be aware of them before choosing the system that's the right fit for you. I have reviewed websites, interviewed staff and did email follow ups on the 4 companies presented in the illustrations above. There is always a possibility that I incorrectly understood whether a feature is offered or not. It's always best to double check directly with the company. The book will be available as a COMPLIMENTARY GIFT to all HospitalityNet.Org readers ON April 17, 2018! The Definitive Study of Vacation Rentals on Amazon... http://amzn.to/2AReAjSMore about the book at http://www.tdsovr.com/

Commissions Vs. Revenue Trends Are 'Alarming'

4hoteliers.com·17 April 2018
The hotel industry, both in North America and worldwide, has been riding a long winning streak, with increasing occupancies, revenues and profits and while the performance has been good for bottom lines, one area of concern has been alarming increases in some cost centers, especially commissions paid to third-party distribution platforms.

Hospitality Financial Leadership - Catch Me If You Can

The Hotel Financial Coach ·16 April 2018
Frank Abagnale is arguably the world's most famous modern-day impostor. Leonardo DiCaprio played his character in the 2002 movie directed by none other than Steven Spielberg, with the same title as this piece. The movie was based on the 1980 book that Frank wrote. I am writing about Frank Abagnale because I had the pleasure of meeting him personally, and experiencing his trickery, just a little. Also, there is a direct link between what his story is all about and your own financial leadership journey.If you have not seen the movie, watch it. Tom Hanks plays the lawman chasing after Frank and it is a wild ride. The book is also a must if you are even mildly interested in a good con man's story.My story of meeting Frank and the parallel to Financial Leadership starts early in the winter of 2003. I was the hotel manager of a popular downtown hotel in Vancouver, Canada. The movie "Catch Me If You Can" had just been released and a local business association had booked Mr. Frank Abagnale to speak at a luncheon in my hotel. I had the pleasure of attending the luncheon, listening to him speak passionately about children and the role of a parent or guardian. We even held a private reception the evening before he spoke, and I got to meet the famous impostor. I was a big fan, having read the book and seen the movie just days before. Frank has a cameo in the movie and I had seen his picture, so I was a little familiar with what he looked like.For those of you who are wondering about my character and you have not heard of him, he successfully pulled off taking on eight different identities from the age of 15-21. He traveled the world as a commercial pilot (jump seat only), physician and lawyer, just to name three. He also was a master at check forgery. He was caught by Hanks, turned legit and has worked with the likes of the FBI using his talents for the good, and he has even testified before the US Senate about his former life as a master counterfeit check man.The funny thing was--he was even an impostor at our reception.Here is how we metI was speaking with a couple of people at the reception and all of a sudden there was another person engaging in the conversation. We were talking about our guest of honor and what a great story he had and his movie. All positive things, thank goodness because he was now part of our discussion and I, like the other couple, thought Frank was someone else. I am not at all sure who I thought he was, but he simply assumed the role of a person who made me believe he knew me. The other couple experienced the same comforting feeling. I do not know what he said to gain our confidence and allow us to drop our guards, but it was pretty cool. We continued our dissertation of our guest of honor until he spoke and introduced himself. We were all quite embarrassed and completely surprised at the same time. He smiled, and you could tell he was a master in action, simply practicing what he does, pretending to be someone he is not.After he left our little group at the reception, the other couple and I marveled at his bravery and the pure entertainment we just experienced. How he made us all think he was someone we knew. Actually, he convinced me he knew the couple and, in turn, the couple thought he knew me. Genius.This is the magic of being an impostor. Knowing enough to fool someone who should know something about how you need to look, sound, smell and feel like. That is the con. It is a confidence game and to be successful you need to show up with that level of confidence in who you are and what you are doing so other people do not get suspicious.The Tie to Financial Leadership - My First Budget Review MeetingI vividly remember the first time I had the opportunity to see the corporate budget review team in action. I was invited to the meeting where we reviewed the hotel annual budget. I really had no idea what to expect. I was nervous, and I had convinced myself that I would be found out and singled out for not really know what was going on. You know, the impostor syndrome. I know this is what holds many people back from jumping into the numbers game in their hotels. Fear.What I experienced that day was nothing short of theater. A lot of chest pounding and pontificating in that room. Who had the best stories, the most convincing comparisons, the examples that paled the rest? Each person in the meeting that day was in some way an impostor, playing a part and trying to convince the others that they knew what they were talking about. All the while we followed the president's lead. If he liked a particular story or theory, we all followed that dog. It was an amazing dance to watch. I barely said a word beyond hello, goodbye and kissed my calculator. But what I did see that day was that these captains of my industry, they were all trying to convince one another and the boss they knew the story. It is a confidence game. It is how human beings play together in the business world. If you have been there you know what I am talking about. If you have not experienced this yet, be patient, be ready and above all else take your shot.Here is the parallel: being an impostor and financial leadership. You must be willing to walk into the meeting room like it is your room. That does not mean you are cocky or arrogant. Humble and respectful is the demeanor you want to have. Your number one job is to listen, observe and learn. You also need the stomach for what is coming your way, and the willingness to respond. This is where most people turn away. They do not feel they have the knowledge or the experience, so they do not feel they can play, let alone play at this level. This is a big mistake. What you do not realize is everyone in that room is in the same boat as you. At some level or another, they are thinking the same things you are, namely, who am I to be here with my limited knowledge and sooner or later will someone find me out?I have seen hundreds of examples of people playing this game and I want to share a few things about this experience with you. In fact, once you see this you will realize everyone you encounter is playing the game at one level or another.One, the biggest impostor is almost always the bossThat is right--he or she ultimately knows the least about the detailed subject matter. That does not mean they lack the experience or the knowledge to do their job, they just do not have the knowledge and firsthand experience you do. Do not think for a moment they know your reality. At the time my experience began, our president had just joined our hotel group from a sister company that made baking supplies. Now he is in a boardroom with 15 hotel people talking about our business. The best con man that day was him.Two, people have your backThe people in the room want to hear from you and they have your back. They have a natural desire to want you to feel comfortable and to hear your thoughts. They instinctively know you are the rookie and they want to put you at ease and they do not want to see you suffering. They will not hang you out to dry.Three, play the gameIf someone you work with thinks enough of what you are up to and they have invited you to the big show, then you are ready. The only thing that is missing is you and the courage to play the game. To listen and learn.When you are called upon, speak from your heart and above all else do not try to BS your way. If you do not know the answer, ask a clarifying question. Someone will bail you out. Many times, not having the answer is the best strategy.Point to a possible answer or conclusion and watch others fall in.Fourth and final, they've been in your shoesEveryone in that room has passed through the same door as you. They have all been in your shoes and in some way, they are all impostors just like you, so enjoy the show. You are about to witness human interaction at a whole new level. Be conscious enough not to miss this. Over the years, every time I have attended a similar meeting I received an education that cannot be taught in school. Do not lose sight of this.What "Catch Me If You Can" taught me was a willingness to get it wrong was more important than being right. The readiness to show up and see what happens is more important than staying home until you are ready because you never will be completely ready. Taking the numbers in your hotel by the horns is the way to go. Trust yourself enough to walk into the cockpit and take a seat and welcome those probing questions."All the world's indeed a stage / And we are merely players / Performers and portrayers / Each another's audience / Outside the gilded cage" - Rush "Limelight"

Keep an eye on where privacy discussions are headed

hotelnewsnow.com Featured Articles·13 April 2018
After a decade or so of constant oversharing, a fair amount of people now seem to care about their privacy. The government, surprisingly, appears to care as well. You’ve likely read online (possibly by someone who shared it on Facebook) about Facebook CEO Mark Zuckerberg’s more than 10 hours in front of members of Congress, answering their questions about his company and social media network, how Cambridge Analytica was able to scrape the data of 87 million Facebook users and possible regulation to catch up with how fast technology has advanced.

Are we moving toward the era of economy?

hotelnewsnow.com Featured Articles·12 April 2018
A few weeks ago at the Hunter Hotel Conference in Atlanta, STR’s own Jan Freitag announced that the U.S. hotel industry was celebrating 96 consecutive months—eight years—of revenue-per-available-room growth. That statement really made me sit up and take stock. “Eight years? Eight YEARS? What was I even DOING eight years ago?” I asked myself. (STR is Hotel News Now’s parent company.) Well, I was reporting on an industry coming out of recession is what I was doing. The point is that all of a sudden, eight years ago seemed like yesterday, given the fast pace of change this industry experiences. And if we’re celebrating eight years of positive growth now, that means that this fall we’ll “celebrate” 10 years since the Great Recession first hit the U.S.

AI for fraud detection: beyond the hype

The Analytic Hospitality Executive | SAS·12 April 2018
The financial services industry has witnessed considerable hype around artificial intelligence (AI) in recent months. We’re all seeing a slew of articles in the media, at conference keynote presentations and think-tanks tasked with leading the revolution. AI indeed appears to be the new gold rush for large organisations and FinTech companies alike. However, with little common understanding of what AI really entails, there is growing fear of missing the boat on a technology hailed as the ‘holy grail of the data age.’ Devising an AI strategy has therefore become a boardroom conundrum for many business leaders.
Article by David Lund

Hospitality Financial Leadership - Management Incentive Plans

The Hotel Financial Coach ·10 April 2018
Recently I have been working with a client who has four hotels and we worked on putting together an incentive plan for his executives. This is a story about how we structured the incentive and the goals around the plan and his business.Bonus plans or management incentive plans are nothing new. Even a recent client had almost always given his senior people an annual bonus, typically at the holiday time. When I asked him what it was based on, he said it was just the overriding feeling of his thanks for a job well done.We then discussed the very real fact that he had not shared his financials with his leaders and this was something he wanted to do. This is a good thing because without it and other measurements the real power of the incentive is lost. Sure, his managers appreciated the bonus, but no one knew what it was really for.We discussed creating an incentive plan that is broad-based, measurable The hotels were relatively small, less than 150 rooms each, but still they had some very good tools to put to work in the incentive arena. We decided the first year's incentive plan would have three components and it would also have three performance levels.First component: Guest service score His hotel used an app that gave him good data on a daily, monthly and annual basis. The guest service score was a percentage up to 100 percent. The score for the prior year was 84 percent and the score from 2016 was 85 percent. When I asked him what his goal for 2018 was he said it was to get the score back up to 85 percent. OK, so now let's look at the kickoff and touchdown levels. He is a big football fan, and this was exciting for him. I asked him if he would pay an incentive for service if the score for 2018 was 84 percent again. He said he would. I then asked him if he would be willing to pay a higher amount if the score was 86 percent or higher. He said he would.So, now we have an important part of the incentive. The different payout levels. We used kickoff (starting point for payout), goal (the full payout) and touchdown (the outstanding result). With this breakdown, participants can see the importance of the measurement and it is not an all or nothing result. He will still reward good results that do not quite make the goal and also will allow participants to "double up" on the result of each individual component.Second component: RevPAR index He used STR and the previous year's result was 107 percent. One big challenge with this part of the incentive was new competition. Late in 2017, a new hotel which was a direct competitor entered his market. So, I asked him what a really good result would be for 2018 on RevPAR Index. At this point, he had two full months under his belt and his index year-over-year had dropped to 98 percent. He thought about this one quite a bit and decided a really good result would be 100 percent. We then came up with kickoff at 97 percent, goal 100 percent, and touchdown at 103 percent.Now for the third component: Profit He had his financials for the last two years and we zeroed in on the Gross Operating Profit number. Why GOP? Well, that is the number the manager can control. Pricing, staffing, supplies and overall efficient management cumulate at the GOP number. Most brands use this as well for management incentive plans. The GOP in this property was $2,001,418 in 2017 and $1,955,008 in 2016.Now, for the toughest question so far: What's the budget for 2018? He took a while to explain he did not really have a budget. This is not uncommon, and we had a good discussion about what he thought should happen in 2018. With the budget rhinoceros on the table, we agreed the most effective process would be to map out 2018 month-by-month using occupancy and average rate to produce room revenues and then model the payroll and expenses on 2017 levels. In short order, we came up with a GOP goal for 2018 at $1.95 million. Given the new competition, he would be very happy with that. We then established the kickoff $1.85 million and the touchdown at $2.1 million.We have the framework for the plan He now has a decision to make on the incentive gatekeeper. Will the profit target be the gatekeeper? In other words, do we need to make the profit kickoff point for the other components to pay off? Or, will the fact that the other scores are achieved generate an incentive payment?He decided that no gatekeeper will be necessary for 2018 because it will be a challenging year and he does not want the team to be discouraged if the profit is missed. Focusing on the service, in the long run, is important. The market is changing and it is also the first year for the plan, so he wants to give his managers a fair shot.Next step: Decide on payout percentages He decides the "goal" is 12 percent and applying our kickoff, goal and touchdown metrics we put the data above into an Excel spreadsheet. The very last thing he had to decide before we were done is what weight each component would carry. He decides guest 30 percent, RevPAR index 30 percent and GOP 40 percent, adding up to 100 percent.Three scenarios are mapped out, and the payout can go from 1 percent to 200 percent of the targeted 12 percent. So, a manager making $100K can earn a bonus from $120 all the way up to $24K.The last part of what this client needed to do to put some wheels on this plan was to meet with his incentive plan participants. This is necessary to review the structure of the three components as well as the different levels of the program. This ensures the members understand the system and, most importantly, see that the goals are achievable.One last note (play)We agreed to visit the plan each quarter, and he, in turn, would update his team through regular communication and monthly copies of the guest service score, STR and financial statements. This is the best part because we will see how managers react to the plan and what ideas they put into action this year in those hotels to create better results.That is the middle tasty part of the incentive plan sandwich. It will be interesting to see how this unfolds and how effective it is.
Article by Laura Patterson

How to Save a Year of Research for Your Account-Based Marketing?

visionedge marketing · 9 April 2018
We've enjoyed the privilege of being engaged with a number of our customers for nearly two decades and last year were fortunate to add new projects and new customers. Our 2017 target for the number of new customers was significant, so, with all the rage about Account Based Marketing (ABM), we decided to experiment with the concept. Being a data-driven organization, our first action was to conduct research on the topic as well as to dig into our own data to understand the best way to deploy ABM for our company. And being a metrics-based organization, we wanted to establish specific measures of success, key performance targets, and a quantifiable outcome. While we work with firms of all types in all industries around the world, for this experiment we focused on our sweet spot of mid-Market global US-based B2B companies. Over the course of 2017 we put our ABM strategy and plan into place. As many of you begin to deploy ABM, we thought our processes and lessons learned might serve you well as you embark on your 2018 ABM efforts. We'd welcome your comments and suggestions.For those of you still coming up to speed with the concept, ABM is a strategic approach for connecting and engaging with a clearly defined set of target accounts. Personalization is a key component of ABM. This wasn't new to many of us at VisionEdge Marketing. Earlier in our careers, all of us were responsible for what in those days we called target-account or strategic-account Marketing, which has morphed into what today is known as Account-Based Marketing (ABM).How did this year long ABM adventure start?As with all well-planned initiatives, we began by gaining insight into what the effort would entail. Taking our own counsel to seek third-party expertise to develop skills in new areas, in 2016 we attended a FlipMyFunnel gathering to learn the nuances of today's ABM. Then we had the opportunity to connect with long-time associate Jon Miller, who is now at the helm of Engagio. Using guidance and best practices from these experts and others, we designed our ABM strategy and program.The first step was to decide who we wanted to engage with, and our strategy. We set aside the first quarter of 2017 for this phase. During this time frame, we selected 533 companies along with their C-level and Marketing executive members that we believed could benefit the most from our expertise in customer insights, competitive intelligence, marketing analytics, marketing alignment, marketing accountability, and marketing processes. We then built a database for this group and found emails, LinkedIn (LI) profiles, mailing addresses, and phone numbers for each of the contacts. We conducted further research to find and identify primary triggers and personas.We used the triggers as the basis for our strategy and messaging. We set performance targets for both response rates (such as open and click through rates), conversion-to-conversation rates, as well as request for proposal and proposal-to-close rates and total net new customers.The second step was development and execution. In the second quarter we designed our ABM playbook which included a first half and second half of the year series of "plays" by persona and company. The Ascend2 study found that ABM is more effective when messages and content are personalized. We followed suit and personalized and customized each message.The first half of the year playbook consisted of a series of 6 persona based emails to be distributed every week starting mid-April through until Memorial Day weekend. We are avid fans of Co-Scheduler's headline analyzerand the email tester and employed both of these tools. White papers, case studies, and educational content were offered in each email, tailored to the persona and the trigger.Everyone who opened more than one email received a personal follow-up call during the first two weeks of June. We made our response rates targets but the conversion rates were below expectation.We took a step back in the summer and revised our second half of the year's plays based on what we learned. We refined our areas of focus and messaging. We expanded our touches and channels. In the second half, we doubled- down on a list of 34 companies each with four personas.We designed a series of eight touches and incorporated social, video, and direct mail into the mix. This phase began with a personal LinkedIn (LI) invites and a personal custom video email. Then using the Enthusem platform we created a short personal direct mail for everyone on the list that also included a video that addresses alignment and accountability. This touch was followed with a personal email that included a link to a longer-version video focused on the topics of alignment and accountability (you can also see this video on our website). We gave email a break and moved to direct messaging on Twitter followed by a personal phone call. We anticipated that this phone call might result in leaving a voice mail and had specific messages for each person.We immediately followed all voice mail messages with an email that included a link to our explainer video (professionally produced). We ended the plays with a final LI message and final email message.How to Learn from Our Year-Long ABM ExperimentHere's the top three things we learned from this experiment that you might find helpful as you plan yours.Our targets aren't as active on certain social media platforms as we'd like to believe. While everyone on our list has a LI account, 82% had less than 100 connections and weren't involved in any groups. Only 3% had personal Twitter accounts.People movement presents a challenge. There were personnel changes weekly with nearly a third (28%) of the contacts having changed from the start of the initiative to the final touch. While we kept the database up to date and reinitiated touches for the new people, new people were focused on navigating their organizations and team. We attempted to follow people we connected with to their new organizations, but they too were focused on integrating into their new roles and organization.Return on Energy is low. Since this was our first formal attempt at ABM, we approached it as an experiment intentionally keeping the "sample" size manageable. And because it was an experiment, many of the steps were manual. The energy to personalize and customize messages was extensive, especially when the time to generate results is taken into account. This is not unusual. According toFlipMyFunnel, time to generate results is the number one challenge associated with ABM.Are you experimenting with ABM? We'd love to hear your own thoughts and takeaways. Share with us in the comments.
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GDPR in the EU and UK: AETHOS' 3 Steps for Complying with Employer Responsibilities

AETHOS Consulting Group · 6 April 2018
GDPR. Four letters of the alphabet that are proving to represent one of the biggest challenges facing businesses in 2018. The General Data Protection Regulation (GDPR) comes into effect on 25th May across the European Union, including the UK, and impacts any organisation that operates within the EU that processes data of EU citizens wherever they may be in the world. How organisations hold, store and process personal data will now be subject to higher and more consistent scrutiny - with potentially significant penalty for non-compliance. AETHOS Consulting Group's London Managing Director Chris Mumford emphasizes that much attention is already given to how customer data is handled under GDPR, especially in the hospitality sector where hotels process a high volume of personal information and payment data. "GDPR not only impacts how a business interacts with its external customers but also how it manages data internally with regard to its employees. In an industry such as hospitality where the labour force is so often highly diverse and comprised of multiple nationalities, most organisations will be affected by GDPR."Mumford spoke exclusively to Adele Martins, Partner and head of the Employment Department at law firm Magrath Sheldrick LLP, who clarified that GDPR is considerably stricter in its requirements than the UK's Data Protection Act (DPA). Mumford and Martins highlight a number of key features hospitality employers should consider as they address compliance with the new regulations:- What qualifies as 'sensitive data'? People will regard information about their health or their sexual orientation as more confidential. Technically Sensitive Personal Data or Special Categories of Data include information about a person's race or ethnic origin, their health or sex life, their sexual orientation, political opinions, religious / philosophical beliefs, trade union membership and genetic and biometric data.- How is employee consent defined and best obtained? The GDPR makes it clear that consent must be freely given, specific, informed and unambiguous. It can no longer be implied from silence, pre-ticked boxes or inactivity.- Regarding businesses which have external suppliers that are exposed to personal employee information (ie. payroll providers), where does GDPR compliance lie? With all parties. The advice to controllers is to have appropriate agreements in place with providers to ensure that those providers (processors) are contractually obligated to process data appropriately.- Would a hotel in New York which employs a French national in the kitchen be subject to GDPR? So, a hotel in NY employing a French national is processing the personal data of an EU national but that EU national is not within the EU. Does that mean they are off the hook? No. The EU national is still likely to be protected by the GDPR - not least because they are bound to return to the EU at some point and the processing will not stop when they do.- What are the sanctions for failing to comply? The maximum sanction under the GDPR is a whopping Euro 20,000,000 or in the case of a corporate undertaking 4% of global annual turnover - so potentially much higher than the maximum Euro 20 million figure.Mumford and Martins urge hospitality employers to immediately manage three critical steps to prepare for the GDPR compliance deadline:Dedicate data protection personnel internally and at a senior level;Appropriate security measures to ensure that personal data is properly stored, securely processed and retained only for as long as necessary;Clarify Privacy Notices to ensure that the individuals in question understand what data they are providing.
Article by David Lund

Hospitality Financial Leadership - The OTA Distraction: Pushing Rather Than Pulling

The Hotel Financial Coach · 4 April 2018
You cannot go a day online in the hotel community without seeing a ton of OTA related discussion. Hoteliers are like scared kittens when it comes to how they have been treated by the evil empire that the "On-Line Travel Agencies" has created. There is no doubt that the OTAs have dramatically changed the landscape in the last 20 years since Expedia bounced into the world under the strict parenting of Microsoft.In this piece, I want to offer a different perspective--one based on a different view of the OTA revenue creation and resulting costs. I also want to look at and analyze some black and white revenue and profit facts from industry leading organizations that I researched for this article.Hoteliers complain that the OTAs are greedy and they take too much commission. They especially feel the pinch when the commission hits their room P&L statement in the form of a commission. With the merchant model all but on life support, hotels in most cases need to record the gross revenue paid by the guest to the OTA on their income statement. In turn, the hotel needs to pay their room reservation commission expense which is recorded in the rooms department as an expense. On top of this, the hotel needs to pay the credit card commissions and all the other brand-related fees that ramp up on total room revenue or gross hotel revenue, etc., as dictated by the franchise or management agreement.For many hotel owners and operators, this is a bitter pill to swallow. But why so bitter and hard to swallow?My perspective is different The hotel just got a room night or several and, in exchange, they pay a fee--the dreaded commission--and additional ancillary fees. I believe we need to be fair and look at the transaction just made. In the old days, hoteliers were happy as could be to pay the travel agency commissions to the tune of 10 percent of room revenue. This was largely a manual process with a fax or phone call to the reservations office. No one ever complained about this other than perhaps the person who had to manage all those pesky $12 payments and the reams of TA commission inquiries the hotel received and had to research.The comparison to today is hotels allow distribution channels to manage and accept reservations, payments are electronically processed, and they pay roughly double the commission, to the tune of approximately 20 percent. They have, in effect, traded the additional commission--the plus 10 percent--for additional distribution and shear advertising horsepower that the OTA delivers. We can argue all day about the amounts, the pluses and the minuses and how much more we are paying in commission expense. That's not my point or the intention of this piece, so stay with me.Rather than do that let's take a radical approach and disrupt the jailer. Much like the story of the prisoner who needs to pull rather than push his cell door to escape, hoteliers are held prisoner by the expenses they see pumping through their P&L. They are prisoners simply because they look at the cell door and how it works the wrong way.Let's look at another aspect of the business to get a clue for how to operate the cell door--to look at it through a different lens: banquets. When a banquet customer comes knocking, we don't try to kick him in the knee because we will have to record the "cost of sales" from the event she just proposed for the hotel. We welcome them in and service their needs all the while knowing we just added a 20-30 percent food and beverage cost of sales to our operating statement, plus the direct payroll and other expenses. So why then do we scoff at the OTA who brings us business and in turn gets a fee? I say it is because we simply look at it, "the commission," differently.We want our cake (the room revenue) and we detest the commission. But we can't have one without the other and maximize room revenue capture in today's world. We would like all our business to be commission free but that is not the way the game is played. We all know that to maximize RevPAR we need more rooms distribution horsepower than we can ever create by ourselves.Let's look at this scenario with some fresh eyesWhat if we looked at the OTA transaction and the resulting commission as a cost of sales? In F&B the whole profitability deal is built on volume. Get the F&B machine pumping at a good rate and we are profitable. But wait a minute. For every dollar we let in the front door we automatically need to recognize the cost of sales (20 to 30 percent). We never have a problem with this so why is the commission to the OTA any different? We know without the volume cranked way up high in rooms operation we will not hit the desired profitability.I say it is simply because we are pushing rather than pulling. Bring me another 1,000 room nights this month through OTA that I cannot and will never have the distribution to generate and let's both have a good look at the financial result. We all know there are many days and months in the year when we cannot fill rooms with only direct sales tactics and brand efforts. The way we can look at the cell door most effectively is to not get hung up on the percentages.Financial facts boiled down into profit dollarsI am going to use data from the 10-year period 2006-2015. According to CBRE hotel rooms department, profit went from a high in 2006 of just over 76 percent to a figure of just under 75 percent in 2015--down 1.25 percent. This, on one hand, is alarming. But I believe this is where we are pushing rather than pulling.According to a Cushman and Wakefield report, RevPAR in the US has increased over 35 percent in the same time frame as the falling rooms department margin. This room revenue growth is on top of the additional supply growth of more than a half million rooms. Who in their right mind would not like that deal? The adage that we do not take percentages to the bank is our industry "pushing the rooms profit percentage myth" and it is completely misleading. Profit margins are down but the growth on top is a trade anyone in their right mind would jump at. We have enjoyed record growth in RevPAR in the last decade which has been in no small part because of the OTAs investment in computing and marketing that our industry, if left to its own devices, would never have accomplished.I cannot prove the statement I just made about the revenue impact the OTAs have had, but think about it for a moment and imagine the hotel world without the OTAs in the last decade. A decade led by brands continuing to exit the ownership piece. A decade where hotel companies continue their quest to become management companies. Not a decade of bold hotel innovation and distribution investment that was led by who? That is the pedigree of hotels and why OTAs emerged because there was a need and an opportunity not being delivered by the hotel industry because the investment fundamentals are always backward. OTAs made the investment and they created a huge hotel industry windfall. Thank you very much.Now for some facts, I can proveAccording to my math, using a RevPAR of $57 dollars in 2006 and $78 dollars in 2015, that is a 35 percent increase and when I apply that to the 5 million guest rooms (AHLA 2015) in the US I get a whopping $38 billion increase in room revenue. Let's back out the additional supply over the same period (500,000) and I still get an additional $35 billion in room revenue. Apply that figure to the 1.25 percent decrease in rooms profit margin, I get a $26 billion increase in rooms profit over the same period. When it comes to rooms flow thru on that additional income, it is just north of 74 percent. I ask again, who in their right mind would not take that deal? Especially when someone else (AKA the OTA) is laying out the capital expenditures to create the RevPAR universe.My question after all of this is: How much of this increased RevPAR in the last 10 years is due to the OTA effect? And what effect has that had on hotel profits that left to our own devices would not have materialized without the OTAs? That answer is beyond my calculator, but I know a very good portion is due to their continuous innovation and our industry's use of their service. I put my stake in the ground and say there is no way our industry--without the OTAs--could have had the same proliferation of global RevPAR impact, travel growth, and sheer distribution might.It is time hotels stop their bellyaching.My comment and conclusion: What a good problem to have.Stop pushing and start pulling.

What Legal Problems Could Hotels Encounter

Media Gurus ·29 March 2018
Hotel hygiene and overall maintenanceProbably the most common issue that most hotels are facing are, in a way, related to the environmental health. When cleaning a hotel, there is just so much to cover, that some hotels are forced to enforce not-so-safe policies or employ people who are not well-trained when it comes to following environmental regulations. This could turn into a proper nightmare upon the arrival of the health sanitary inspector. Nonetheless, no matter how clean your hotel is, the area you want to focus most of your attention is definitely your kitchen. A slip-up here can run you out of business in no time.Moreover, if the hotel has a pool area that is not properly maintained, they might become responsible for the safety of their visitors. Contrary to popular belief, a notice that your clients are swimming at their own risk is not enough to protect you from a lawsuit. This is also why you badly need a reliable lifeguard on your staff.In-house theftOne of the first major issues that everyone points at when it comes to the issue of hotel security, is the one of in-house theft. The problem with hotel staff is that not a lot of venues can brag about the same full-time team for a prolonged period of time. Most commonly, these are seasonal workers or even people on immigration visas. This brings us to the issue of the reliability of your hotel's staff, which is not a matter to be looked down upon. In order to prevent this, do a background check when hiring and, when bringing people from abroad, make sure to have a reliable law firm experienced in both criminal and immigration law.Keep in mind, however, that there is a limit to the hotel's liability in this situation. For instance, if a valuable item is lost due to the hotel's negligence, or failure to take reasonable care of your assets, they might be responsible for the full value of the items stolen. On the other hand, if this was not the case, a client might not be able to get a full dollar amount of the item stolen in return.Physical crimesApart from the in-house theft, you will also face the issue of the outsider crime. What this means is that a third party walks into your hotel and endanger your guests. This happens due to the fact that tourists are usually deemed as a perfect pray for criminals, due to the fact that they don't know local laws and customs, don't know which neighborhoods to avoid and barely even speak the language.Needless to say, in some regions of the world (even touristic epicenters) terrorist activities are also considered as a massive threat. In order to protect your hotel from these issues, you need to hire a reliable security team, as well as invest in a powerful surveillance system. This alone can, at times, act as a deterrent.On the other hand, a hotel is not responsible for any of these, unless it is located in a high-crime area and failed to invest in safeguards. Another loophole happens if they should have anticipated the crime and did nothing to prevent it. The latter scenario is incredibly rare and highly unlikely to prove in the court of law.Identity theftThe problem with checking into a hotel lies in the fact that you need to give a lot of sensitive information in order to submit a reservation. This includes your credit card number and, upon the arrival, even your ID. The problem is that most hotels keep this information in digital form, which makes them into a massive target for hackers all over the globe. Unfortunately, most smaller hotels don't have the infrastructure to fend-off this threat. Nonetheless, failure to protect their client's confidentiality can still be interpreted as their fault. In order to prevent this from ever becoming an issue, you might at least look for a decent encryption software.In conclusionAt the end of the day, there are many other things that a hotel might get sued over. For instance, a damage to a guest's vehicle that happened due to the bad handling or lack of adequate protection can also be a reason for a lawsuit. So can a person who hurt themselves while at a hotel, although this mostly depends on specific circumstances. All in all, every hotel needs at least some form of legal protection or an expert on their retainer.

156 | Asset Protection for Real Estate Investors with Scott Smith

The Lodging Leaders Podcast: Powerful Business Strategies for Hotel Professionals·28 March 2018
Scott Smith, Esq. is an experienced podcast guest, and owner of Royal Legal Solutions, Austin, TX, one of the top asset protection companies for real estate investors in the country. In order to develop strategies to maximize tax savings and protect from devastating lawsuits, Scott invested several years deconstructing real estate investing.

Hospitality Financial Leadership - Creating and Using Your Own Labor Productivity Tools

The Hotel Financial Coach ·27 March 2018
With major wage increases in many jurisdictions, it is more important than ever to have a system for planning and measuring labor productivity in your hotel. This article explains how you can do this and it is not just for the big boys, you can utilize this system in any size operation.I am working with a client who is just in the throes of getting this going in one of his hotels. It is a bit of work but well worth the effort as the results are going to pay off big time. I want to share what is working for him because I know it will work for you as well.The first thing to create is a baseline for current productivity in your hotel. If you have a food and beverage operation in addition to your rooms, you should create two baselines: one for your rooms operation and the other for F&B. The productivity measures to establish are hours per room occupied in the rooms department, and hours per cover served in the food and beverage department.For your system to produce the numbers you need, you must split the payroll hours into three main groups (or buckets): rooms, F&B and other. Once you have the three main groups, split the first two groups again, so you will end up with five groups. The American Hotel Associations 11th revised edition of the Uniform System of Accounts for the Lodging Industry (USALI) revenue and expense dictionary lays out all the positions that fall into all the various departments of any hotel. For this exercise you will use only three. You need to use three so you can get the two to measure separated from the third. Here are the three:Positions in the "Rooms Department" include all persons with guest-facing rolls: reservations, guest arrival, reception (day and night), concierge, all housekeeping positions, public spaces cleaners and, if you have a laundry, include it as well. Add all positions, both salaried and hourly, union or non-union. For this exercise now split the rooms section into two separate buckets: housekeeping and front desk.Positions in the "F&B Department" include all persons who contribute directly to the service and operation of your restaurants: beverage operations, banquets, kitchens, meeting spaces, cleaners and stewards. Include servers, bussers, hosts, runners, cooks and dishwashers. Include all positions, both salaried and hourly, union or non-union. Now split the F&B bucket into its two parts: kitchen and service."Other" will include all general administration, sales, maintenance, retail, spa, golf, grounds or any other position that does not directly support these departments.Do not fuss too much about positions that seem to not belong in either bucket. Make a decision as to where you will record it and just be consistent. The key here is to create the analysis and the productivity system, not to be perfect.Once you have the positions organized into the five different buckets, group all record-keeping efforts in the same manner. All schedules, time sheets, payroll classifications, department numbers, etc. They need to be set up, so you can subtotal all the payroll activity within the five separate groups--both hours and dollars.Now that you have the payroll organized by group you can start your analysis. The first section is the rooms, housekeeping and front desk. Pull your time sheets or run reports from your time clock or payroll system. What you are looking for are the total hours worked in these two rooms categories by all colleagues for the past full calendar year. Yes, that's right: one full year. You are only interested in productive hours, not vacations, holidays or sick pay. When you have the total hours worked in each category divide it by the rooms occupied. Here is where you see the first light of day.In a 75-room hotel that runs an annual occupancy of 75 percent you are servicing over 20,500 rooms.xxxDetermine the total productive hours for each category, housekeeping and front office and divide the hours by the rooms occupied to establish the base line productivity for a full year. Overtime hours are just another hour, do not add a multiple for over time, it is 1-1.xxxNow you have your baseline of .89153 for housekeeping and .337 for the front desk. What you want to do now is use this baseline to target your productivity, information that will be used for improvements. From this point forward, use the same buckets for weekly schedules and on these, add the forecasted rooms occupied daily. Also total the hours worked and divide that by the rooms occupied, producing a daily productivity and a total productivity for the week. Tracking and managing productivity is like a baseball game, with innings. You are going to win some innings and lose some but what you really care about is the final score. Productivity is the same concept. You will have good productive days and poor days, mostly dependent on volume.Always remember the most important things about managing labor:Your managers have little control over wage rates. Someone else sets most of these.Your managers have little control over business levels. Sure, you do right things through your advertising and promotion efforts. But the business that walks through the door, good or bad, needs to be serviced.What your managers do control is the schedule. This is where you want them to put their focus.xxxLooking at this schedule you can see the productivity scheduled for the week is below the annual standard of .892. The housekeeper must find some hours in their schedule. Looking at the least productive days of the week, he reduces the schedule by a total of 30 hours over three days.The final and most important step is to update the schedule spreadsheet each day with the actual results for both rooms occupied, and the real hours worked.xxxIn the scenario above, the hotel managed to almost meet the annual productivity target. By having a productivity target and something to measure by, they managed to save 26 hours from the original schedule. Do this every week and I'll let you do the math on that. Big savings and this is only the beginning.IncentivesNow that you have your baseline and your housekeeper is tracking and making improvements, it is time to introduce an incentive. Knowing that last year the baseline was .892, you will want to improve this in 2018. That means a lower number. Say target a 5 percent improvement with a threshold improvement of 3.5 percent and an exceptional target of 8 percent. If housekeeping productivity increases by 5 percent that means a thousand hours less payroll at 75 percent occupancy. Depending on your wage rate and benefits, this could easily be $25,000 in savings. Structure the incentive so it equates to a targeted $3,000 bonus, hit the threshold and it is $1,500, hit the exceptional target and it is $4,500.By using a productivity improvement target, you are looking at potential savings if the goal is met and it can bet met regardless of occupancy. Let's say the year is a tough one and occupancy dips to 70 percent. You still focus on productivity because it can be achieved at any occupancy level. When you are achieving a higher productivity level, having incentives is smart when business is good or bad.InnovationThat is a natural by-product of focusing on increasing productivity. Getting your team focused on what brings better work processes to the table is powerful. Your leaders and staff all have ideas and when you set the stage to welcome those initiatives people will appreciate you for taking their ideas and making them a reality. Many hands make light work, my mother would always say. Being more productive is not about working harder, it is about working smarter. If you can study the processes and materials, you will find ways.Efficiency is doing better what is already being done. ~ Peter DruckerBack to the other bucketsOnce you have your payroll positions organized and the baseline established, do the same processes with the schedules and the daily tracking for the front office, food and beverage service and kitchen operations. In the food and beverage space it is covers you want to measure against the hours worked. A cover by the new definition is anyone who you serve who orders any food or beverage item. A table of four who all have a meal and drinks is four covers. A table of four that orders chicken wings to share and a round of drinks is four covers. A table of four that orders a round of drinks is four covers. Training your staff to record proper cover counts in your point-of-sale system is key.Having a manager in place that sees the value in better productivity is essential and part of the culture you want to promote and reward.Make sure this conversation is part of the hiring process as well as the merit review discussion.

How Long Do Economic Cycles Last?

Hotel Online·26 March 2018
In June of 1857 the U.S. economy entered its 30th consecutive month of expansion. But banks were already starting to feel the impact of bad loans piling up. As the gold rush slowed, the pace of migration westward across the country also slowed. Railroad stocks began to decline. Land speculators lost big when new railroad construction projects did not materialize as they had hoped. When international newspapers reported that the British government had circumvented rules pertaining to gold reserves, U.S. depositors wondered whether something like that could happen here. Banks came under increasing pressure to meet withdrawal requests for gold. Then, in August, a large shipment of gold headed for U.S. banks sank into the Pacific Ocean when the S.S. Central America steamship was hit by a hurricane. The next day, the Ohio Life Insurance and Trust Company suspended payments to depositors, eventually setting off a bank run and financial panic. By Hans Detlefsen

What GDPR Means for Marketers [Infographic]

MarketingProfs·Requires Registration ·26 March 2018
Half of UK and US marketers say the European Union’s new General Data Protection Regulation (GDPR) law will make their marketing efforts more difficult, according to recent research from Act-On. The report was based on data from a survey of 200 marketing professionals in the United Kingdom and the United States.

Helping Hotel Workers Manage Their Financial Stress

Hotel Online·26 March 2018
PwC reports that a third of the American workforce is stressed about their personal financial situation and they bring those frustrations to work. Additionally, the average wage for many employees in the hotel and travel-related industries is about $11 per hour, with many desk and service workers making less. This means that many hotel workers are stretching their paychecks each month to both cover bills and try to plan for their future. For hotel and hospitality employers, helping their employees better address their financial stresses can not only reduce turnover rates, but also foster a healthier workforce overall. Where Does Employee Stress Come From? Before employers can create a plan to address employee financial stress, they first need to understand where it comes from. As mentioned, many service workers are making low hourly wages. Given the hourly wage of many hotel workers, the BLS classifies them among the lowest percentiles of worker compensation. By Chris Whitlow
Article by Norman Harvery

GDPR, the New Regulation for Personal Data in 2018

HospitalityTechGuru ·26 March 2018
GDPR, what is it and why is it important for the hospitality sector?EU and United Kingdom currently are governed by Data protection act of 1988, this law was enacted following the 1995 data protection law of the EU, which was created much before the internet and cloud that allowed ways to share data. GDPR regulations will provide people more control over how their personal data is used, today many companies like Google, Facebook, Twitter, other social media and marketing companies swap user data to provide services and GDPR has been designed to protect all EU citizens' privacy. GDPR will protect all information related to name, a picture, an email address, credit card information, banking details, timeline posts on social media websites, medical information, or a computer IP address.What is GDPR?The General Data Protection Regulations (GDPR) is a most important regulation of the EU data protection law that will unify and strengthen data protection for individuals in the European Union. The European commission first published GDPR in the year 2012 and following 4 years of discussions, it was adopted in April 2016. This regulation will replace the existing data protection act, With GDPR in from 25th May 2018 will signify the major changes to the data protection law and harsh penalties to those who don't comply with this regulation.What will be the impact of GDPR on the Hotel Industry?The Hotels business is considered as one among the most exposed to data threats, according to Verizon 2016 investigations, data breach report - The Hospitality industry is accounted for the second largest share of security breaches, when it comes to lost cards following a data breach. This isn't a surprise with guests handing over card details & hotels processing information on a daily basis that attracts highly motivated financial criminals. Hotel software's will need to adhere to new GDPR rules and provide parameters along with access to management and IT admins to purge data that guest does not want hotel to retain. Things to consider before adapting the regulationOne of the Primary issues with a hotel is they need to deal with data discovery. Hotels receive guest payment card information through a website, phone, email at the time of checkout, SMS and WhatsApp chats, and fax etc. and this data has been often available in multiple locations. When the management is aware of where and what information is stored, they will be able to process the information to protect it.Then, Hoteliers need to secure and compile their website. The business must be having access to data stored, also they must have the ability to change or delete this information. Also, they must prove to relevant authorities their use of system activity through logs in order to track and oversee action to their network resources when necessary.Hotels should now become more cautious of their third-party partners, so they don't prove a threat to Hotels business in terms of data protection. An important regulation of GDPR is that data processors are captured by the regulations as well as data controllers. For example, if a Hotel, as a data controller is outsourcing the process of data to a third party who is not GDPR compliant, the hotel will be held responsible if any data breach occurs. Current credit card sharing practices between OTA's and hotel and other third-party service providers will need to change drastically.In order to comply effectively with GDPR regulation, it is vital to conduct regular staff training on how to securely handle card information. Educate staff, it's unsafe to write down or email card details and sensitive information. They must also be advised on how to create strong passwords.Under GDPR act, if you find your Hotel is attacked by a security breach, this breach must be reported to the authorities and all stakeholders with 72 hours of its discovery.Will GDPR only apply within the European Union?Although the fact that it's an EU regulation, GDPR act will apply to any organization, regardless of the location which is processing or holding EU citizens personal data.This regulation is causing some confusion for British Hoteliers who do not hold any EU data or do not operate their business overseas, Given the large uncertainty surrounding Brexit. The British Government announced that all UK companies including Hotels need to comply with the regulation regardless of Britain exiting the EU.What if I am not compliant?If there is complaint received by an EU Citizen, the penalties are Harsh for not complying with GDPR. The maximum fine is set to 20 million Euros, or 4% of the annual global turnover (whichever is the greater). However, this loss can be easily avoided if the hotel leaves enough time to efficiently adapt to the regulation.Hotels should start complying as soon as possibleThe reality is that hotel operators tend to keep customer information in several different places like central reservation system, web booking engines, Property management system, point of sale, e-mails, and credit card authorization forms. Simply put, in there are too many places where the data is vulnerable to theft and intrusions are possible.The need for GDPR is largely technology driven, today's guest expects a seamless experience and hence more and more technologies are sharing data, thus giving rise to data swap and possible intrusions and hacks.It is important for organizations to start complying with the regulations as soon as possible in order to ensure they are prepared for the enforcement before May 2018.Important facts and actual policy implementation requires.Internal processing - Business must provide detailed information on the need to process personal data and how long they plan to keep it. This procedure involves organized retention policy, so the business knows the status of such information.A Hotel must keep system logs, user activity logs, the technical records and obtain the necessary certificates to prove it is protecting data. These help businesses to show the supervisory and regulatory authorities the important mechanism is in place.Hotels need to include an option on the websites that mentions "opting in," which helps hotels to store guest data. Also, they must explain the section and process to enable guest to access, modify and delete their data. This poses a significant threat to information when it is help in different places.We highlight few things to consider while planning for improving securityMalware was one of the major threat and reason for 94% of breaches in the Hospitality sector. So install better Anti-Malware security, update virus definitions on a regular basis and maintain logs.When it comes to GDPR compliance, conduct regular staff training on how to securely handle card information. Educate staff, it's unsafe to write down or email card details and sensitive information. They must also be advised on how to create strong passwords.Payment gateways are one of the primary ways to store guest card details. Most hotel properties need a third party vault provider. By using these vaults, the sensitive information is removed from your custody & you are given a tokenization system that can be used for billing. By using this integration, you move the risk of storing data to a third party who specializes in doing that, and have all security controls in place to keep the sensitive information safe.SummaryAll Hotels must be prepared and comply with GDPR regulation before the deadline date, i.e., 25th May 2018.GDPR act is applicable to all the business, regardless of location who handles EU citizen Data & non-compliance will attract hefty penalties.This act is applicable for business in the UK, despite the aftermath of Brexit.Data processors are also under the radar by the regulation.Certainly adapting your Hotel to comply with new regulations will be difficult. But the outcome the benefits will improve the Hotels key performance and allow management to know where all of their confidential information is stored and ensure their customer gets a secure and satisfying service.Get subscribed to technologies that are PCI compliance and get trained so they can avoid data breaches and hefty financial penalties."Guests nowadays care about their privacy and they expect hoteliers to respect that".

Brand Building: a More Cost-Effective Way to Raise Your Company's Profile?

EHL ·26 March 2018
When Arnaud Bertrand and Junjun Chen finished their studies at Ecole hoteliere de Lausanne in 2008 they went on to set up HouseTrip, an alternative accommodation start-up which would compete head-to-head with Airbnb and other online travel agencies.Initially the couple had just a laptop, an internet connection and an idea. They went literally from zero to annual revenues of 100 million dollars within just five years or so. Junjun takes up the story. "We were still in school, doing our second internships. We were in London and wanted to go to Scotland but we were students so didn't want to spend too much money. So we wanted to rent an apartment in a nice, traditional Scottish house. We did find one through craigslist but the logistics part was very painful because we needed to contact the owner by phone and arrange payment by bank transfer. So it was just really painful."They had - by chance - stumbled upon a gap in the market and wondered why it was that although online travel agencies like Expedia and Booking.com focused on hotel bookings, no one was providing similar services for holiday homes. "We said, 'look, no one has done it. Let's do it ourselves.'"That was easier said than done. The first major challenge they faced was how to raise funding, based on little more than an idea. "(We had) no track record and no work experience because we had just studied at EHL," says Arnaud. As it turned out, some of their EHL classmates were 'crazy enough' to invest in the new venture and helped to get the project off the ground.That initial funding helped but Arnaud and Junjun would need to go on to raise substantial funds from venture capital, some seventy million dollars over several years. Part of the problem they faced was in marketing the start-up. They would raise millions but would end up spending massive amounts too, pumping money into keyword marketing."Most of [the money] went on marketing and hiring," says Arnaud. "We had a fairly large team, north of 200 people by the time we sold the company (to TripAdvisor for an undisclosed figure in 2015)."And their biggest mistake? "I would say probably using Google or paid marketing as our main acquisition channel," says Junjun. "Basically it works and we became addicted to it. And then at one point we couldn't get rid of it.""The best marketing is free marketing," adds Arnaud, whether that's word of mouth or getting media coverage. That means engaging with journalists and trying to concentrate on public relations rather than spend huge amounts of money on digital marketing, which proved to be a losing prospect.But to get the right word of mouth, you need to make sure you have a great product. "No one is going to speak about a so-so experience."Eventually, after several years of scaling up the company, Arnaud and Junjun chose to exit their venture rather than aim for an initial public offering or IPO. (HouseTrip is now one of 20 travel media brands belonging to TripAdvisor). "I don't have any regrets", says Arnaud. "We sold at the right time.""You don't have so much strategy as you have dreams. Of course you dream of the best possible exit from your company but you have to be realistic and opportunistic as well."Now they've set up a new virtual reality dating company, LovInVR, and plan to learn from their mistakes by focusing on building the brand rather than spending millions on performance marketing.Arnaud says that, after selling the company, he wrote a 600-page book, more for himself than for possible publication, on the lessons learnt, "especially all the mistakes we made which were many.""We created an internet start-up that, 10 years down the line, is still alive, that's already success ... It's actually why being an entrepreneur is so fascinating because you get to learn so much from what you're doing."HotelTonight: An integrated approachAnother tech firm which is focusing on brand building to get its message across is HotelTonight, which has just celebrated its seventh anniversary.HotelTonight VP, Amir Segall, came to Ecole hoteliere de Lausanne recently to speak to students about the company which aims to offer clients the best deals for last-minute hotel bookings via its mobile app.Segall told Hospitality Insights that brand building is critical for the company. Brand awareness, he says, is its biggest opportunity - and challenge."We feel we have a really good product and have mastered the customer experience. So it's really about growing that brand awareness, letting more people know about this great product, this great service you can use, and the way we're dealing with that is that we have an array of marketing initiatives, starting from online marketing, focusing on mobile and trying to stand out and differentiate the way that we speak about our brand."In addition to PR activities, HotelTonight has formed strategic partnerships with the likes of Chelsea Football Club in London and Madison Square Garden (home to the Knicks and Rangers) in New York. For fans of these sports teams there's an obvious connection as they'll be looking for hotel accommodation when going to away matches, but there's also a brand relationship. "(This) is a very good way for us to associate ourselves with brands that have more awareness than we do and really create strong trust with customers."The partnerships are part and parcel of HotelTonight's branding and marketing mix, which also includes online and customer relationship management (CRM) activities. "We feel that you have to have a really integrated marketing approach so we want customers to see us in different places and this way we believe we're creating trust." The company has recently released HT Perks, which the company regards as a 'modern, innovative take on the traditional loyalty programs provided by legacy desktop OTAs (online travel agencies).'An IPO might be an option in the future but for now HotelTonight is focusing on its core business. "It's about becoming kind of the most prime way to book a hotel last minute and we like to think of ourselves as a mobile OTA. So we want people to be thinking about us, to be repeatedly using us as the mobile option. And so that's also what we focus on.""So right now we're very much focused on mobile, continuing to build the business, growing the business, expanding in the markets where we operate. And that's the thing that we're focused on right now."Learning from experienceHouseTrip co-founders Arnaud Bertrand and his wife Junjun Chen are also focusing on their new business, LovINVR, determined that they won't make the same mistakes this time around. "I'd say we're less naive about it," says Arnaud, adding that they believe virtual reality will be the next big thing in the digital sphere. "Dating in virtual reality completely makes sense for us. So we think the potential is absolutely enormous.""I think we're a tiny bit wiser after the HouseTrip experience, so we're trying not to repeat the mistakes that we made at HouseTrip. But I'm sure we'll make plenty of new ones." That means a more cautious, organic approach to growing the company and building brand awareness, rather any sort of dependence on pumping millions of marketing dollars into online advertising.In a presentation at EHL last year, Arnaud advised would-be entrepreneurs not to push for growth in revenue, but rather to focus on creating 'a great product that people love', even if it takes several years."My mistake at HouseTrip was to choose not to develop a brand but to go for so-called performance marketing, so to spend a lot of money on Google, buying keywords on Google and so on and I continued to do so because it worked. We were, at one stage, spending north of 40 or even 60 million dollars a year with Google."While the company was earning 70 to 80 million dollars, that still made sense. But once competitors with deep pockets began bidding for keywords, and potential customers began going directly to Airbnb and other companies than use Google search, the cost of keyword advertising became a major issue as traffic fell."It's a bit technical but that situation led us a stage where we were paying 60 million to Google still, but instead of getting 90 million, we were getting 50 million back. So we were losing money and that's a bad situation to be in.""So my recommendation would be, instead of (using) performance marketing where you don't grow your brand, try instead to go the harder way, grow your brand. It's harder, it's a lot more work, you need to spend all day calling journalists, involving your community, to develop positive word of mouth and so on ... but it's a great investment because those people will come for free and they will spread the word if your service is good.""So I would recommend you spend zero money on marketing and that's what I'm going to do with LovInVR."Dr Maggie Chen Meng-Mei, associate professor of marketing at EHL, writes:A strong brand focuses on providing a better solution than competitors can offer. Through the delivery of its unique value proposition, a brand grows its fan base and benefits from the word of mouth of passionate advocates. These statements remain true, even with all the emerging digital marketing tactics.The challenges of branding are never about using the newest digital tactics, but cleverly leveraging owned, paid, and earned channels to reach, convert, and retain customers. In the digital world, the traditional media and promotional mix (promotion, advertising, public relations, personal selling) still work.Instead of bidding for keywords, focus on finding customers who may need your solutions, as shown in the partnership between HotelTonight and Chelsea Football Club. Be present - or better still, top of mind - when customers discover they have a problem. An effective solution may convert a first-time user into a repeat customer or even an advocate.As for the new approach taken by LovInVR, which is relentlessly executing its value proposition, it will organically build its own fan base, and eventually become a powerful brand.

Why Protection of Your Staff and Guests Should Be a High Priority

Media Gurus ·23 March 2018
With this in mind and without further ado, here are several things you need to know about these issues, as well as several tips that will help you deal with them as efficiently as possible.Adequate emergency managementThe first thing you need to know about running a restaurant is the fact that the greatest touristic hotspots commonly get hit by all sorts of disasters. Floods, fires and even hurricanes occur with a disturbing frequency, which is why you need to find a way to do something about this and do it fast. Evacuating a hotel is not the same thing as evacuating a residential home and having an adequate plan is paramount.Apart from this, most accidents are caused by a human factor (according to some estimates between 50 and 95 percent), which means that the more guests and staff you have, the higher the probability that something will go wrong. To avoid this, you need to heavily invest in your emergency systems like fire alarms and smoke detectors, as well as to make sure that the expiry date on your extinguishers is far off.Finally, things like drills and cooperation with various government agencies are something you simply can't afford to ignore. Overall, this is one of those things where you're acquiring skill and prowess you sincerely hope you'll never get a chance to apply.Theft preventionThe next major issue you need to focus on is the issue of theft prevention. This is particularly troublesome when it comes to hotel management, due to the fact that the danger sometimes comes from the staff themselves. Keep in mind that these are the people who have an access to your room, which means that merely locking the doors is futile. Therefore, as a hotel manager, you need to do a thorough background check on every single person you bring into your employ. Sure, some may argue that you can't be picky, seeing as how most of these jobs are entry-level and are paid as such, still, bringing an unreliable individual on your staff can horribly backfire.Another way to make your hotel much safer is to invest in a high-end security system. In the 21st century, this usually involves things like access control, CCTV monitoring and a gateway control. It is also possible to minimize the effort of maintaining a high-end security and completely automating your hotel's security. This can allow you a complete insight into all that's taking place at your hotel, as well as allow you to work with a bit smaller staff. The importance of the latter was discussed in the previous paragraph.Protecting your staffIn the past, there was a misconception that the customer is always right, which led a lot of businesses (from various industries) along with a dark path. The greatest problem with this doctrine is that it usually involves abandoning your staff members to be abused by obnoxious clients in hopes of retaining them. Needless to say, this is an idea with a potential to horribly backfire in more than several ways.First of all, we can't stress out enough just how important it is to create and maintain a productive, well-motivated staff. People you can rely on are indispensable, yet, if you show them day in and day out that they are not your top priority, you will likely face a high talent abandonment rate. In other words, as soon as someone becomes experienced and reliable, they will quit and force you to bring in someone new to fill in their gap. This is a problem that every single industry out there faces, yet, in the hotel business, it is an even greater deal, seeing as how your staff determines 100 percent of your brand's effectiveness and even its brand identity.In conclusionAt the end of the day, by raising the overall level of safety in your hotel (from all of these three aspects) you can improve the overall ambiance in the place and create a much more pleasant environment. In turn, you will improve the overall business model within your organization and set your hotel on a path towards growth, expansion and inevitable success.

Combating property tax battle fatigue

hotelnewsnow.com Featured Articles·23 March 2018
For the more than 30 years I’ve been involved with property tax issues specifically regarding hotels, the No. 1 issue facing owners is the over-taxation and double taxation of their property. Most of this occurs because the local assessors who determine the value of the hotel’s real estate are not trained in how to tailor their mass appraisal valuation models to the specific issues presented by operating hotels. The biggest issue, which accounts for possible over-taxation by 20% to 30%, is how to address the issue of separating the real estate from the business. I spoke recently with a few hotel real estate tax consultants, who both felt a sense of “business value” fatigue. Assessors feel they have been given guidelines that sufficiently address the issue. Local boards made up of citizens often side with the assessors, skeptical of the third-party consultants just trying to earn an easy fee. Seems like a lost cause.
Article by Richard Evans

How USALI Rules affect Hotels that add a Vacation Rental Component

The Revenue Report Card ·23 March 2018
Metrics for the vacation rental/residential component have to be consolidated with hotel metrics to arrive at metrics for the entire property.This especially affects luxury brands who carry or plan to carry, sizable "home" inventories adjacent to their hotel properties. While luxury resort brands (or developers) are able to bring in high home sales prices, high-end homes are typically rented out at lower occupancies (and higher ADR's) compared to their adjacent hotels.Hotels that sell "economic achievement" over "home cost offset", via their rental program offering, could find themselves in contentious relationships with investors who are lead to believe that high returns will result from home purchases placed in the hotel rental program.Great care need be taken in home sale marketing. At best, vacation rentals in high-end luxury hotel marketplaces offsets some cost but do not produce homeowner profit. This is contrary to what homeowners expect in typical vacation rental scenarios.Most hotels that add a vacation rental/residential components include a "priority clause" in their rental management agreements that let homeowners know that priority will be given to the hotel over residences in taking reservations.Because limited marketing platforms exist in the luxury market for home rentals (they often will not use Airbnb, Homeaway, etc.) hotel and vacation rental reservations are often coming in through the same reservation sources as the hotel; the hotel website and hotel call centers to name a few. This simply means that, when the opportunity arises, hotels will prioritize hotel reservations over home rentals.Needless to say, with the hotel serving as the main profit center at properties, vacation rental/residential occupancy will suffer.The effect of USALI requirements, on overall results, can create an "altered" year-over-year view of property performance as a whole.This is especially true when the vacation rental/residential product is being rolled out and coming on line (usually over a number of years).In Illustration 1 & 2, I show side-by-side examples of hotel and vacation rental/residential metrics and the overall effect of consolidation. You can see, in these two scenarios, consolidated ADR's are higher than the hotel "standing-alone" and RevPAR and occupancies are significantly lower.In this example, while the hotel is performing adequately, the typical rental of sizable luxury homes shows a significantly lower occupancy. Needless to say, supplemental statements to the consolidated financial statement, would break these differences out. The consolidated statement, however, the one that is issued to stockholders and investors, at face value, is quite different. These consolidated results, without further investigation, would seem to indicate substantial differences in year-over-year performance.USALI Rules require that all Rental Management Agreements of one year or more be consolidated with hotel inventory. Hotels that add vacation rental/residential components typically place automatic renewal clauses in their annual Rental Management Agreements with homeowners. In some cases Rental Management Agreements have a substantially longer term.In the event that some residences are placed in hotel rental programs for only several months in a year, they would not be consolidated.This is something to consider when brands contemplate adding a residential program to their hotels.


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