In recent years, hoteliers have entered a period of unexpected disruptions. To address these changes, leading chains and independent operators are looking to integrate modern technologies into their operations and guest offerings. According to Deloitte, over half of hoteliers expect automation to improve their bottom lines as well as guest experiences.
As the travel market continues to evolve, with occupancy levels exhibiting extraordinary growth in most major markets around the world, today’s hoteliers are facing an array of challenges in managing their operations efficiently. From guest experience enhancement to the digitization of financial and operational management, ensuring the seamless integration of disparate property systems has become paramount for success. Particularly within a hotel organization’s finance and accounting departments, the importance of system integration cannot be overstated. Ensuring that all elements of the tech stack complement each other’s capabilities not only streamlines critical property processes, but also enhances accuracy, transparency, and overall productivity.
CFOs are on the move. Since 2022, the hospitality sector has witnessed a dramatic shift in its financial leadership environment. Data shows that during the first six months of 2023, 103 CFO (Chief Financial Officer) changes occurred in Fortune 1000 companies.[1] This number represents a 30% increase from the 79 changes in the same period in 2022. From a hospitality perspective, this CFO “carousel” and the high demand in 2023 for CFOs and other finance executives is unlike anything the industry has ever experienced. The demand for top talent has risen across all disciplines, but 2023 was definitely the year of the CFO. Surprisingly, we didn’t see as much movement in marketing, which usually shows very high turnover.
Over the past four years, utility costs at U.S. hotels have increased at a pace greater than total operating revenue. As a result, utility department expenses increased from 2.9 percent of total revenue in 2019 to an estimated 3.3 percent in 2023. As hotels have struggled to recover from the pandemic, any rise in cost ratios is an area of concern for owners and operators.
The Atlanta Marriott Marquis was bustling this week with another successful Hunter Hotel Investment Conference. Kudos to the Hunter and Marriott teams for executing an extraordinary event! Some key takeaways from the HVS brokerage and consulting staff members who attended the conference are summarized in this article.
As Sophisticated Lodging Professionals, you know the Tax Savings strategy and benefits of a Quality Cost Segregation Study. You know, and understand, that a Quality Cost Segregation Study looks at all Commercial Non-Residential 39-Year Property, and all Commercial Residential 27.5-Year Property, and reclassifies a percentage (%) of that Property away from long-lived 27.5 & 39-year Tax Depreciable Property to short-lived 5, 7 & 15-year Tax Depreciable Property.
For most U.S. hotel owners and operators, one of the major challenges in 2023 has been the need to control expenses amidst slowing revenue growth. Through September of 2023, the properties in CBRE’s monthly survey of hotel operating statements have seen their total operating revenues increase by 7.4% year-over-year, while total operating expenses1 grew by 10.0% during the same period. The net result was a decline in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of 0.2%.
Volatile prices, extended lead teams for goods and services, and keeping up with guest preferences are just a few challenges that continue to impact hotel supply chains years into pandemic recovery. For leading hoteliers, investing in digital procurement innovation is crucial to addressing these concerns — not just as a way to bounce back from COVID-19 but as a lasting component of business growth, resilience, and prosperity for the hotel industry.
Sourcing goods and services effectively is at the epicenter of day-to-day functions in hospitality firms and accommodations. The careful and systematic procedure of procurement not only ensures smooth operations but also reflects our commitment to delivering exceptional hospitality.
When it comes to fraud risk, one area of particular concern is procurement. In recent years, hotels have faced myriad challenges, including supply chain disruptions, economic volatility, and labour shortages. As travel volumes rebound, many hotels are concentrated on meeting evolving consumer expectations while ensuring financial stability. This focus means that many hotels are lacking in their procurement due diligence, creating lucrative opportunities for fraudsters. It’s estimated that hotels lose between 5% and 6% of their annual revenue due to fraud.
As owners, investors and operators met in Los Angeles for the Americas Lodging Investment Summit, a healthy dose of optimism permeated the conference halls and the plaza in front the Starbucks next to the JW Marriott host property.
As 2024 ramps up, the capex market in the hospitality sector is decidedly mixed. On one hand, the increased costs of capital impacting deal flow has reduced the number of transaction-related renovations and has constrained the amount of new development and construction. On the other hand, the backlog of deferred PIPs from the pandemic era cannot be deferred any longer and is providing a steady business for the capex industry.
There is a critical understanding that all hospitality financial leaders need to clearly understand and communicate when it comes to expenses. It is a simple distinction that is many times missed or not clearly understood. That is what this piece is all about: Clearing up the mystery and setting the expense record straight. Here’s the scoop!
The concept of double-entry accounting has been around for over five centuries. In 1494 an Italian monk named Luca Pacioli who was also an accomplished mathematician devised a process for keeping buying and selling among fifth century merchants equitable who did business with each other.
HVS was a proud sponsor of this year’s ALIS conference, where the sentiment was upbeat and optimistic for the year ahead. This article provides our key takeaways from the conference.
Business is, at its core, about problem-solving. To be a good entrepreneur is to be a good problem solver. To create a successful brand is to see a gap in the market – an opportunity to bring disruption with a new solution or build upon what currently exists in a meaningful way. In this sense, leaders in any industry are fluent in the language of their customers’ problems, wants, and needs. They know what keeps them up at night, and they make it their mission to help them rest easy. In the case of Frank Dierberger, the CEO at FutureLog, the mission was simple on paper but lofty in practice – solve the procurement problem by digitising and automating the procurement process.
F&B is usually the second-highest profit driver in the hotel after the rooms. Nevertheless, its margin is not always as high as it the rooms due to the nature of the business with high fixed costs. It is usually divided into two categories: the banqueting and the other outlets such as restaurant, bar and room service.
The year-in-review of hotel media, what was top of mind and who stole the headlines. The annual review is back, in a year of come-back things have shifted a lot. It is clear that what hoteliers have been reading was back to the usual concerns, trends, OTAs and more. A big thank you to hospitality.today and hospitalitynet.com for providing data on the most read articles on their websites.
This second part of EHL Institutional Visibility’s three-part series on China looks into the long-awaited return of Chinese tourists. It also addresses shifting trends in Chinese travel. We turn to Dr Yong Chen, Associate Professor of Economics at EHL Hospitality Business School, for insights.
No one can explain accounting. I have some pretty crazy situations presented to me by potential clients. I say crazy and I what that means is that it is almost unbelievable that anyone would find themselves in such a mess with their business and their books. I also say potential client. Almost always it is never going to be a client, but because I am out there – and in order to find real customers – I must kiss a lot of frogs.