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Driftwood Acquisitions & Development Marks Sale Of First Hotel Asset In Its Portfolio

Hotel Online·16 January 2019
Driftwood Acquisitions and Development (DAD) – a privately held firm specializing in the acquisition, repositioning and investment syndication of high-quality hotel assets – announced today that it sold the SpringHill Suites Altamonte Springs, a Marriott-branded, 90-key hotel located 10 miles north of Orlando.

USALI Part V: Gross vs. Net Reporting -- Amended and Restated

HFTP ·15 January 2019
The Uniform System of Accounts for the Lodging Industry (USALI), 11th Edition: Part V -- Gross vs. Net Reporting has been rendered obsolete by new GAAP Revenue Recognition (ASC 606). This amendment replaces Part V and reflects current GAAP. Published by Hospitality Financial and Technology Professionals (HFTP) under the guidance of the AHLA Financial Management Committee.

Sue Your City For Sharing Economy Damages

mycloud HOSPITALITY·15 January 2019
An interesting case was brought before the Canadian courts near the tail end of October for the car service industry which may have a few implications for the disruptive fight of hotels versus alternate accommodation providers operating under the umbrella of the sharing economy.

Is It Gross or Net Revenue

The Restaurant Expert·15 January 2019
Have you ever wondered if you should be using gross or net revenue? What is the difference between gross and net revenue or gross and net sales? Why you should use one over the other in your restaurant? Watch this video to learn what goes into each one and which one you should use in your restaurant, or continue reading below.

Understanding the Importance and Use of The Reserve for Capital Replacement

The Hotel Financial Coach ·14 January 2019
The concept for the use of the reserve account is important to understand. It is also essential that hotel operators ensure the reserve is properly funded per the terms of the Hotel Management Agreement "HMA." The use of the reserve is an important tool to utilize to protect the operator's rights and long-term viability. Many people mistakenly think the reserve account is the owner's responsibility and therefore it's up to the owner to determine and ultimately control the funding. But not so fast, the manager has a right and a duty to ensure the proper transactions are performed on a timely basis using the clauses that are in the HMA. There are many important aspects to understanding the reserve and how it impacts the ultimate success of the hotel. This includes the hotel's values as well as the value of the management agreement. One could say that there is something for everyone here!First and foremost, the intended use of the reserve account is to ensure the hotel is kept looking and functioning at a high standard. It's essential that both the owner and the brand ensure this is the objective and the funds are set aside to properly maintain the asset. The reason it is not simply left to the owner to decide the amount to fund and when is because it's often the case that the money is not available. This is due to the hotel's profit performance or the owner's other needs, which can be many and endless. Whether the hotel is making its profit targets by way of the budget is irrelevant to the requirement to fund the capital reserve in most cases. Owners are usually quick to request or even try and demand the reserving be stopped when the hotel faces a bad year or a cash crunch. These circumstances are all too often and challenging for both the owner and the manager. Operators need to be on their toes so to speak and hold the owner's feet to the fire, to do what is necessary. Protecting the operator's rights is what is at stake here. Although it may appear counterintuitive to have the manager insist the owner fund the reserve when facing a cash shortage, it is what is required. It is in the agreement to begin with because it is essential for the ultimate success of the hotel, which is what everyone wants.The clause or clauses in your HMA will outline the amount to be set aside in the reserve account. In some cases, the cash must also be transferred into a special bank account. By doing so it ensures its availability and separation from the operating funds. Look closely at the exact wording in paragraphs covering the reserve account use. Look for "funding" and "transfers." Normally it is somewhere between three and five percent of total revenue monthly. However, it is common for a new hotel to have a period where less or even no funding is necessary until the end of the capital funding grace period.From the point of view of understanding the HMA's intent around the requirement to fund the reserve, the manager needs to ensure funds are available for future improvements. This is a must for the ultimate goal of keeping the property competitive. This helps to ensure the hotel's longevity, an important aspect for the operating company as it helps to protect the all-important management fees. If the hotel fails to stay ahead of its competitive set and loses its market share, the hotel management company can also lose the right to manage the hotel. The RevPAR test is sometimes included in HMA's for the purpose of protecting the owner should the management company be unable to perform. It is imperative that the manager ensures the capital is properly funded and ultimately spent to keep the asset fresh, helping to ensure that its performance is adequate.The other test that is constantly being evaluated is the annual profit target test. Most HMA's will have a clause that defines the profit test. When it comes to the hotel's performance everything is tied together. Customers want fresh hotel products, the hotel needs a constant supply of business, the competition makes improvements, and the hotel's profits go up and down based on the performance of the asset. Availability of capital is essential to maintain the profitability in the long-run. The proper use of the capital reserve is inexplicably linked to the ongoing success of the hotel and that means the funding cannot be played with. If it is, the operator risks shooting him/herself in the foot!Be vigilant when it comes to protecting the rights of the operator and know that owners will try and distract you from your prize. The enjoyment of managing a well-capitalized hotel asset is that prize.
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CMS Calendar Widget: Filter ADA Updates

VIZERGY Blog·11 January 2019
Vizergy continues to stay on top of the latest ADA standards for digital products within the hospitality industry. The newest enhancement includes an update on our calendar widget allowing the user to filter ADA updates.

Running Your Restaurant by the Numbers

The Restaurant Expert·11 January 2019
This restaurant industry podcast is an audio version of SMART Systems Insider, a video magazine from TheRetaurantExpert.com, is your fast track to lower food costs, lower labor costs, an accountable management team and a team of reliable restaurant employees. It’s an hour-long (or so) masterclass with restaurant industry experts. Use what you learn here to thrive in the sea of chain restaurants. Make more money, get your life back and have managers know what their job is.

OTA & Travel Distribution Update: Mistakenly discounted rates a regularoccurrence; Report discloses rampant disclosure of personal information bytravel apps

mycloud HOSPITALITY·11 January 2019
Details emerged this past week about Cathay Pacific’s unprecedented discounting of first class and business class tickets on certain flights. In some instances, the discounted tickets reflected over a 95% discount off the normal fare. As suspected by many (including those who report on such discounts), the discounts were not intentional and were instead the result of a technical glitch in Cathay Pacific’s systems. Whether for legal reasons or reputational concerns, Cathay Pacific chose to honor the discounted fares for those customer who purchased tickets before the glitch was discovered.

USALI 11th Revised Edition: Part IV (Templates)

HFTP ·10 January 2019
This document consists of templates for the USALI 11th Revised Edition Part IV: Revenue and Expense Guide.

USALI 11th Revised Edition: Part III (Templates)

HFTP ·10 January 2019
This document consists of templates for the USALI 11th Revised Edition Part III: Financial Ratios and Operating Metrics.

USALI 11th Revised Edition: Part II (Templates)

HFTP ·10 January 2019
This document consists of templates for the USALI 11th Revised Edition Part II: Financial Statements.

USALI 11th Revised Edition: Part I (Templates)

HFTP ·10 January 2019
This document consists of templates for the USALI 11th Revised Edition Part I: Operating Statements.

Clarification USALI 11-03: Reporting of Day Use Rooms Occupied

HFTP ·10 January 2019
This clarification of the USALI 11th Revised Edition refines the definition of Day Use rooms and provides reporting alternatives for inclusion of Day Use in the occupancy statistics, solely for the purpose of ensuring the consistency of productivity metrics.

Clarification USALI 11-02: Update of Revenue and Expense Guide Classification

HFTP ·10 January 2019
This clarification of the USALI 11th Revised Edition identifies known inconsistencies between references in the Revenue and Expense Guide and Part I: The Operating Statement for the classification of certain revenues and expenses . It also provides revised guidance as to which account classification should be used in each instance.

Clarification USALI 11-01: Group Rebates as Contra Revenue or Expense

HFTP ·10 January 2019
This clarification of the USALI 11th Revised Edition addresses group rebates as contra revenue or expense in the Rooms Department expense section under Commission and Fees--Group on pages 19 and 20.

USALI Treatment of Pre-Opening Expenses

HFTP ·10 January 2019
This article on the USALI 11th Revised Edition discusses pre-opening expenses, prepared by Financial Management Committee (FMC) member Gordon Potter, Ph.D. for the American Hotel & Lodging Association (AHLA).

Guidance on Financial Ratios and Operating Metrics in the USALI 11th Revised Edition

HFTP ·10 January 2019
This article on the USALI 11th Revised Edition presents guidance regarding the new financial ratios and operating metrics presented in the USALI, prepared by Financial Management Committee (FMC) member Agnes DeFranco, Ed.D., CHE, CHAE, CHIA for the American Hotel & Lodging Association (AHLA).

USALI: Gross vs. Net Revenue Reporting

HFTP ·10 January 2019
This article on the USALI 11th Revised Edition presents guidance regarding the reporting of revenue on a gross vs. net basis, prepared by Financial Management Committee (FMC) members Agnes DeFranco, Ed.D., CHE, CHAE, CHIA and Raymond Schmidgall for the American Hotel & Lodging Association (AHLA).

Implementation of the USALI 11th Revised Edition

HFTP ·10 January 2019
This article on the USALI 11th Revised Edition discusses the increased reporting standards for Labor Costs and Related Expenses. The article was prepared by Financial Management Committee (FMC) members Ralph Miller and Robert Mandelbaum for the American Hotel & Lodging Association (AHLA).

USALI: Treatment of Service Charge for Revenue and Expense Reporting in the Hospitality Industry

HFTP ·10 January 2019
It is important to differentiate a tip or gratuity from a service charge. This article on the USALI 11th Edition considers applicable rules, standards and legislation regarding revenue and expense reporting for service charges in the hospitality industry.

USALI: A Historical Perspective

HFTP ·10 January 2019
This article is a history of the USALI prepared by Financial Management Committee (FMC) member W. Peter Temling for the American Hotel & Lodging Association (AHLA).

USALI 11th Revised Edition: Lease Accounting Guidelines

HFTP ·10 January 2019
With the adoption of ASC Topic 842: Leases (Topic 842) quickly on the horizon for entities reporting under U.S. GAAP, certain accounting and reporting changes will also become effective for hotels reporting in accordance with the Uniform System of Accounts (USALI), Eleventh Revised Edition.

USALI 11th Revised Edition Part V: Gross vs. Net Modification

HFTP ·10 January 2019
This article explores the modification of the USALI 11th Edition due to ASC 606 and ASU 2016-08, specifically Part V: Gross vs. Net Accounting.

Hilton's Diplomat Beach Resort Hollywood Could Fetch $1 Billion

mycloud HOSPITALITY·10 January 2019
The Diplomat Beach Resort Hollywood Curio Collection by Hilton, owned by a subsidiary of Brookfield Asset Management, has been put on the block and could fetch as much as $1 billion, according to people familiar with the matter. Thayer Lodging Group, the Brookfield subsidiary, has tapped Newmark Knight Frank and Hodges Ward Elliott to market the 1,000-room resort in Hollywood, South Florida, according to one of the people, who requested anonymity.

HFTP Research Report: Pre-opening Expenditures in Hospitality

10 January 2019
A study of the pre-opening budget; the timeline for these expenditures; timeline for onboarding of staff; and the selection, installation and training of the technology component. By Agnes DeFranco, Ed.D., CHAE; Arlene Ramirez, MBA, CHAE, CHE, CHIA; and Tanya Venegas, MBA, MHM, CHIA. A report from Hospitality Financial and Technology Professionals (HFTP).

HFTP Research Report: Pre-opening Expenditures in Hospitality

HFTP ·10 January 2019
A study of the pre-opening budget; the timeline for these expenditures; timeline for onboarding of staff; and the selection, installation and training of the technology component. By Agnes DeFranco, Ed.D., CHAE; Agnes DeFranco, Ed.D., CHAE; and Tanya Venegas, MBA, MHM, CHIA. A report from Hospitality Financial and Technology Professionals (HFTP)

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