Finance USA & Canada News - Hospitality Net

March 20, 2020

The Importance of Financial Relief for the Hotel Industry

The coronavirus (COVID-19) pandemic is having a profound impact on the hospitality industry, as travel restrictions, limits on large gatherings, the closure of restaurants and bars and, perhaps most influential, fear of the virus, have brought travel—and most other aspects of hospitality—to a virtual halt. According to Chip Rogers, president and CEO of the American Hotel and Lodging Association (AHLA), "The impact to our industry is already more severe than anything we've seen before, including September 11th and the Great Recession of 2008 combined."

By Anne Lloyd-Jones, MAI, CRE, Director of Consulting & Valuation Services, National Practice Leader, at HVS New York, HVS

United States

External Article

March 20, 2020

Hotel Industry Faces Huge Crisis in Coming Months, Discusses Recovery Solutions

The COVID-19 health crisis is unprecedented in its size and scope, and represents the single largest decline in travel in modern times. And its effects on the hotel industry are already staggering.

Forbes

United States

Press Release

March 19, 2020

Top U.S.Hotel CEOs Meet With President & Vice President in Whitehouse

Leading hotel CEOs met today with the White House to discuss urgent economic recovery solutions needed to protect millions of U.S. hotel employees and 33,000 small businesses as travel grinds to a virtual halt across the country. From Main Street to major cities across the country, hotels everywhere are on the verge of shutting their doors in the coming days - many by the end of this week.

AH&LA

United States

Press Release

March 19, 2020

Report: Coronavirus Having Catastrophic Impact on Travel Businesses and Workers

A new analysis released Tuesday by the U.S. Travel Association projects that decreased travel due to coronavirus will inflict an $809 billion total hit on the U.S. economy and eliminate 4.6 million travel-related American jobs this year.

U.S. Travel Association

United States

Press Release

March 19, 2020

hotelAVE Projects A Five-Year Recovery Period For Hotel Industry Post Coronavirus

Hotel Asset Value Enhancement (hotelAVE), the premier hotel asset management company, in a study released today, estimated that it will take the hotel industry in the United States approximately five years to achieve pre COVID-19 occupancies, revenues and profitability. In addition, the hotelAVE COVID-19 Hotel Outlook predicts that the pace of the five-year recovery from the pandemic will be extended after an immediate mini-spike beginning in May or June, as the impact on the travel and hotel industry is both devastating and unprecedented. The conclusions of the study were announced today by Michelle Russo, Chief Executive Officer of hotelAVE.

Hotel Asset Value Enhancement (HotelAVE)

United States

Press Release

October 7, 2019

2019 HVS Lodging Tax Report - USA

State and local governments charge lodging taxes on the short-term stays at hotels, motels, bed-and-breakfasts, and other lodging accommodations. The rate of lodging taxes across the United States varies at a state, county, and city-level.

HVS

United States

Press Release

October 4, 2019

OYO Announces Partnership With Biz2Credit to Provide Small Business Financing Options to Hotel Owners

OYO, the world's third-largest and fastest-growing chain of hotels, homes and spaces*, has partnered with Biz2Credit, a leading online financing resource for small businesses, to provide working capital and commercial real estate loans to existing and potential hotel partners across the United States. The partnership with Biz2Credit will aid its efforts to provide hotel owners with fast financing efficiently for a wide range of purposes, including renovation, redesign, infrastructure upgrade and investment in technology for improved revenue management and operations.

PRISM (formerly Oravel Stays Ltd.)

United States

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Hospitality Financial and Technology Professionals (HFTP)

Ad Guide

The next-gen metrics that move hotel P&L

Hotel tech has changed what's possible – and measurable. RevPAR and ADR aren't enough; discover the metrics that really matter.

Mews

Opinion Article

September 23, 2019

U.S. Hotel Development Cost Survey 2018/19

In 2018/19, the national lodging market continued to climb to new heights, albeit at a more moderate pace than in previous years. In 2018, hotels in the United States operated at the highest occupancy and average rates ever recorded, with both metrics registering additional growth during the year-to-date July 2019 period. While the pace of new hotel development and the entrance of new supply has remained tamed when compared with the previous cycle, this pace has been accelerating, as evidence by increases in supply in 2018 and 2019, as well as the number of hotel rooms under construction as of mid-year 2019.

By Luigi Major, Vice President, Houston, HVS

United States

Opinion Article

August 26, 2019

Employee Benefits Reporting on Your P&L

When it comes to payroll we are not just paying the cash wages. We have additional dollars that are substantial in the form of supplemental costs and employee benefits.So, what we want to have are three areas we can see and analyze in our financial statements:

By David Lund, The Hotel Financial Coach, David Lund

United States

Opinion Article

August 13, 2019

CFO Compensation in the Gaming Industry

The CFO is typically the second most important role in a public company behind the CEO. That is clearly the case in the gaming industry. As most industry leaders know, AETHOS conducts a study of gaming CEO pay each year, so we decided to look at the state of CFO pay as well. Our analysis included 33 public gaming companies, that includes operators and manufacturers. The data represents CFO total direct compensation, including base salary, short and long-term incentives and other pay, reported in percentile format and includes cuts at the 25th, 50th and 75th percentiles for each component of compensation. The raw data is provided here.

By Keith Kefgen, Managing Director & CEO, AETHOS Consulting Group

United States

Supplier News

July 15, 2019

Access Point Financial Appoints New Senior Leadership Team to Accelerate Corporate Growth and Program Expansion

Access Point Financial, LLC (APF), a leading direct lender and specialty finance company focused exclusively on the hospitality industry, today announced two key appointments to its senior leadership team, naming Dilip Petigara as Chief Executive Officer and Michael Lipson as Chairman of the Board of Directors. The appointments were made as part of aggressive new corporate growth initiatives put in place to meet the growing demand for financial services in the global hotel sector.

Access Point Financial, LLC

United States

Ad Guide

The next-gen metrics that move hotel P&L

Hotel tech has changed what's possible – and measurable. RevPAR and ADR aren't enough; discover the metrics that really matter.

Mews

Opinion Article

June 24, 2019

Zero Based Expenses – How to Plan and Manage

I help hotels manage their profits more efficiently and in the hospitality world, there are only two main cost types that need a system and a strategy to properly control them. The two culprits are payroll and expenses. In this piece, I am going to talk about expenses, namely a process for establishing and managing your expenses on an ongoing basis in real time using a zero base.Zero based expenses are nothing new. Here is the definition from Wikipedia. Zero-based budgeting originated in the 1970s. Many businesses will budget and plan out things to maintain financials. In the past, businesses would only look at specific things and would assume that everything is already in place and does not need to be double-checked. However, in zero-based budgeting, everything that is to be budgeted needs to be approved. Since zero-based budgeting requires approval for budgeting, this means that budgets are started from a zero-base, with a fresh decision on everything being made every year. In hotels, we find the zero base very hard to establish but, in my experience, it's just the opposite. It's actually easy to find and define the detail but it competes with the other business constituents, the guests and the colleagues. Both of its competitors have voices and they can speak, so unfortunately the expenses in many instances take a perpetual back seat. What this means is hotels operate without a concrete plan when it comes to managing their expenses.Oddly enough this is OK for most hotel managers, but owners have a very different view. Managers are interested in keeping things fluid and smooth. This means department managers can operate with a certain amount of flexibility and their spending reflects this. After all, the top line is coming in and we all know a certain amount of volume hides a multitude of sins. At least that's the case until the customers slow down or, heaven forbid, the phone stops ringing. When it does or when the hotel chooses to make the effort to control their expenses the system they need to use is the tried and true Zero Base.In order to establish a zero base, we need to do some homework - nothing too complicated but it requires a focus and some discipline. When this is required all too often the task of getting the detail is left to a Jr. somebody. This is a mistake. Teaching them the system once established is a good idea, but getting this process working and right requires the individual who can organize and allocate resources within their department and that means they need to be seasoned.To establish the zero base, we need to create our list for each General Ledger account in complete detail. The best way to do this is to run the line by line from each account for the prior 12 months. Once we know the vendors we then pull the corresponding invoices and record the items purchased, the quantities and the unit price. This is not rocket science, but there is no other way. Once this is done you have your detail and now it's time to plan. What are the parameters of your expense budget or historical cost for this expense line? From your research and your knowledge of how your department operates what do you need to include in your forecast? Make your plan and include all the items, the price and the quantity. Taking into account the forecasted occupancy or cover counts for rooms or F&B, and for non-operating departments, it's total revenue you want to measure your expenses against. From the forecast of each line, we now have the departmental total expense forecast for the month in front of us. We submit the totals for each line to the finance leaders and they consolidate our data with all the other departments. When this is done it's inevitably too many dollars of expense and this is the pivot point and the most important part of the exercise so far. You may be asked to reduce your department's expenses by a dollar value - say a $5,000 reduction is requested. Now you have a list to look at and you get to decide what you can live without next month. Remove these items from your forecast detail and retain a copy of what was axed. Now you have the detail to support the forecasted dollars of expenses and it's time to start ordering your supplies. This is another critical junction because we want to ensure our spending is in keeping with the revenue projections. In most hotels, we book a significant portion of our revenues in the rooms area "in the month - for the month." We need to order in 1 or 2 week installments allowing the ability to reduce or even increase quantities needed based on the pickup. This is what we do the zero-based work for, the ability to flex our spending based on revenues, allowing our department to manage its flow thru. If the forecast was for 75% occupancy and a rate of $150 and the projection on the 15th of the month is 70% and $145, I need to adjust my ordering and expenses to compensate for the drop in revenues. If I don't have my detailed list, I'm sunk and I have no way of knowing what to trim.I have a section in my workshops where we discuss zero-based expense planning and I explain it like a household grocery shopping experiment. It goes like this. If I send you to the store with $200 and ask you to buy some groceries, you will spend the $200 and come home with lots of interesting things. On the other hand, if I send you to the store with the same cash and a shopping list you will come home with what's on the list. Now the pivot. I only have $180 this week, so I send you to the store with the same list and I ask you to decide what we can live without this week. Now we have a chance to get what we really need for groceries given our revised forecast. Your hotel departmental expenses control and your zero-based system are the same.It's not rocket science it's just being organized and having a list. With that list you're going to know what you need, what to order and if need be, what to trim. Without it you're sunk.

By David Lund, The Hotel Financial Coach, David Lund

United States

Opinion Article

June 11, 2019

Conducting Financial Operations Reviews

Hands down one of the best experiences I ever had in my career was being part of the team that reviewed the financial performance of the hotels in my region. The reason I enjoyed it so much, and have such great memories, is because I learned so much at each one and not only did I learn about the business of hotels, I had a lesson in people.The review team consisted of my boss, the hotel GM, the hotel Controller and me. In addition to the four of us, one by one the other executives or department heads would be in attendance or be called when it was their turn to review their area. The examination was a low-tech event. No PowerPoints and no presentations - just financial statements, eyes, notes and questions. We would typically visit each hotel 2x per year to take a deep dive into what they were doing and how they were performing.There was always a bit of pomp involved in our visit. We would typically arrive the evening before and we were always treated very well. A nice room or suites and a special dinner in the hotel or some new hot restaurant were the standard fair. No expense spared here. I almost think it was like they knew we were "going away" tomorrow so they put on a big show just to deny one last time any guilt. They all knew that tomorrow the sheets were coming off and the truth would be revealed. You could feel the curious anticipation of the victims just like in the movies when you know the mobster knows he's going to get whacked!The day starts with breakfast in the private lounge where my boss and I cover some basics. He is a master at knowing what's really going on in each of his hotels. He wants nothing but a path forward to improved financial results for the hotel and he knows all the tricks. We run through the year-to-date performance to budget and the prior year. Flow through is the pulse and blood pressure of the patient. We zero in on what it should be and the difference equals what's been squandered. With our direction clear we head into the battleground so to speak, the meeting room. My job is mostly to listen and make notes. It's funny how some people see things. You see we're all friends so to speak. We know each other quite well. We have been working together for some time and it's a small world we live in. We always start with the welcome. Sometimes we're greeted by the core team for a hello and casual coffee. Often, we are welcomed by the whole department head squad like we're visiting politicians or celebrities. Occasionally they even line up as you would at a wedding to say hello. I remember one time we walked into the meeting room to be greeted by the core management team all sitting on one side of the table, their side of the table, like a military tribunal. Heads were down, books open, pens drawn. Serious business that day! What messages people send by their actions.We always start at the beginning with rooms revenue. What's going on in the market and how is the hotel performing relative to the competition, aka the STR comp set. Where is the RevPAR index YTD and what is driving the results? Product, competition, new supply, sales team, corporate resources, regional economics, renovations, asset, service levels, weather, citywide performance, etc. It all gets laid out to paint the picture of where the hotel is, where it has been and, most importantly, where it's going. A combination of the revenue management discipline, the sales strategy and the marketing plan get flushed out.The director of sales lays out the strategy and the information. You can tell very quickly if he or she has their act together. There is a very small circle of key indicators of performance in this arena and you can easily see what's working or what's missing. The sole purpose of the review is to find ways to improve moving forward. What strategies from the sales and marketing plan are working and what's not? What new ideas need testing and what old processes need to be deleted?From the rooms revenue, we turn our attention to F&B - namely banquets. What has been the performance of the conference services area with conventions and meetings and what's the social scene with catering and events? Banquets are the engine that runs F&B in any hotel with meeting space. Always an interesting aspect is a view of how the meeting space is managed. Group sales vs. catering. A good DOS knows when to release the space and when to hold on to it. Banquet performance is such that a hotel, when it's busy is like a turbocharger on your car's engine; you can feel it kicking in and propelling you further and faster.Now it's time to review the MOD's - any other department that makes revenues in the hotel. Here we take a different approach and do a top-down review looking at the whole picture. My boss is always looking for the path forward. He hates looking at a departmental statement with what he calls hooks! Or expressed another way - a loss. We sift through the revenue picture in each department and then the payroll and expenses looking very closely at each line and always asking the same 3 questions.

By David Lund, The Hotel Financial Coach, David Lund

United States

Press Release

December 14, 2018

U.S. Hotels - Who’s Buying?

As of YTD 2018, hotel transaction volume in the United States reached $29.7 billion, more than a 25 percent year-over-year increase, with private equity groups representing 37 percent of hotel acquisitions in the United States, or $11 billion.

JLL

United States

Press Release

December 12, 2018

Hotel Demand Jumps In Areas Affected By California Wildfires

Growth in hotel demand has been significant in wildfire-affected areas of California, specifically Butte County and the Oxnard/Ventura submarket, according to an analysis from STR's Consulting & Analytics office. "The hotel performance impact has been stronger in the areas around the Camp Fire, and that is largely due to market structure," said Hannah Smith, STR consultant. "Butte County, and the surrounding counties affected by the Camp Fire, account for just 94 hotels and 4,810 rooms.

CoStar

California, United States

Press Release

December 11, 2018

WhyHotel Raises $10M in Series A Funding and Announces New Pop-Up Locations

WhyHotel, an alternative lodging service that operates pop-up hotels in newly built, luxury apartment buildings, today announced it has secured $10 Million in Series A funding. The round was led by Highland Capital Partners, with participation from Camber Creek, Revolution's Rise of the Rest Seed Fund, Mendacre, MetaProp and Geolo Capital. The funds will be used to launch new pop-up hotels, beginning with three locations in Virginia, and to continue expanding nationwide in 2019. In addition, the funding will be utilized to hire new positions across multiple areas including technology, brand, sales and human capital.

Placemakr

United States

Press Release

December 7, 2018

Interstate Hotels & Resorts Announces Management Agreements With Three Premium Salt Lake City Properties

Interstate Hotels & Resorts unveils the addition of three new premium branded hotels to its growing portfolio - the Courtyard by Marriott Salt Lake City Downtown, Hyatt House Salt Lake City/Downtown and Fairfield Inn & Suites by Marriott Salt Lake City Downtown in Salt Lake City, Utah. The three new management contracts follow Interstate's news of momentum in Europe, opening the first Staybridge Suites® in the Netherlands.

Aimbridge EMEA

Salt Lake City, Utah, United States

Press Release

December 5, 2018

PGA Of America Relocating Headquarters To Frisco As Part Of Innovative Public-private Partnership

The PGA of America is moving its headquarters from Palm Beach County, Florida to Frisco, Texas, the '2018 Best Place to Live in America,'* where it will anchor a 600-acre, mixed-use development with an initial investment worth more than half a billion dollars.

Omni

Frisco, Texas, United States

Supplier News

December 3, 2018

Driftwood Acquisitions & Development Enters Atlanta Market With Acquisition Of Three Marriott-branded Hotels

Driftwood Acquisitions and Development (DAD) a privately held investment firm specializing in the acquisition and development of quality hotel assets announced today its entry into the Atlanta market with the acquisition of three Marriott-flagged properties as part of a six-property Marriott select-service portfolio. The hotels DAD acquired are: Fairfield Inn & Suites Atlanta Buckhead; Fairfield Inn & Suites Atlanta Perimeter Center; and Fairfield Inn & Suites Atlanta Alpharetta. All of the properties were renovated between 2015 and 2017. Hunter Hotel Advisors brokered the transaction.DAD is inviting accredited investors to co-invest in these three hotels through its unique syndication platform, which allows clients to invest in institutional-quality, fully-financed, income-producing hotel projects in the United States. Since launching in 2015, DAD has built a portfolio that now includes 18 operating hotels and two new-build developments under construction. All of its properties are managed by DADs sister company, Driftwood Hospitality Management (DHM), a leader in providing solutions-based services for the domestic and international hotel industry with over 20 years of expertise in hotel acquisition, development, repositioning, renovation and operations. We are delighted to be entering Atlantas thriving hotel market with the acqui sition of these three high-quality, Marriott-branded hotels, said Carlos J. Rodriguez Sr., chairman and chief executive officer of DAD. With this acquisition, DAD can offer its clients an unprecedented opportunity to co-invest in several recently renovated assets in Atlantas most sought-after submarkets. The other three hotels included in the transaction that will be managed by DHM but owned separately by DADs joint venture partner are: the 82-room SpringHill Suites Atlanta Alpharetta; the 88-room TownPlace Suites Atlanta Alpharetta; and 81-room TownPlace Suites Atlanta Kennesaw.Fairfield Inn & Suites Atlanta Buckhead, located at 3092 Piedmont Road NE, is a 115-guestroom hotel in one of Atlantas most affluent neighborhoods and thriving business districts. Home to nearly 70,000 jobs, Buckhead received over 32 million visitors in 2017. The hotel is a five-minute walk to the Buckhead MARTA rail stop, which offers a direct line to Hartsfi eld-Jackson Atlanta International Airport, and close to the areas most popular shopping and entertainment centers, such as The Buckhead Theatre, Phipps Plaza and Lenox Square.Fairfield Inn Atlanta Perimeter Center, located at 1145 Hammond Drive, is a 114-guestroom hotel conveniently located north of downtown Atlanta in Sandy Springs a city that has more Fortune 500 companies per capita than any other city in the U.S. The hotel is located directly next to the new $1 billion, 2.2 million-square-foot State Farm campus, and within minutes of multinational headquarters for companies including UPS, Cox Communications, Cisco, Mercedes Benz USA, and Amtrak. It is also close to three major area hospitals containing more than 40 percent of the metro areas hospital beds.Fairfield Inn Suites Alpharetta, located at 11385 Haynes Bridge Road, is an 88-guestroom hotel located off Exit 9 on SR-400 in the Technology City of the South. With over 600 techn ology/telecomm companies, (including LexisNexis, ADP, Equifax, HP, FiServ, Comcast and AT&T) and 20 million square feet of office space, Alpharetta has one of the largest concentrations of high-tech firms in a single community in the U.S. Alpharettas healthcare sector includes more than 90 hospitals and psychiatric care centers and more than 13,000 licensed physicians. Home to some of the most affluent families in the southeast, Alpharetta boasts a strong retail/leisure sector with a mix of historic downtown shopping and high-end boutiques.

Driftwood Capital

Atlanta, Georgia, United States

Press Release

November 27, 2018

Trademark Collection by Wyndham Pushes Past 100-Hotel Mark with a Dozen Destinations Debuting in Canada

Since launching less than 18 months ago as Wyndham Hotels & Resorts (NYSE:WH) first soft-brand, Trademark Collection by Wyndham is continuing its rapid growth around the world and raising its flag in Canada with a dozen recently signed hotels and resorts spanning the country. These additions five of which have opened doors in British Columbia and Ontario, and another seven set to open within the next year in Nova Scotia, New Brunswick, Alberta, and Saskatchewan bolster the brands footprint on both sides of the Atlantic with the Trademark name now adorning more than 100 hotels in North America and Europe. Launched in 2017, Trademark is the first soft-brand geared to three- and four-star hotel owners passionate about upholding their hotels independent spirit and designed for everyday travelers seeking distinctive, attainable accommodations in sought-after destinations. Today, travelers can tap global, award-winning Trademark experiences like The INFINITY Hotel & Conference Center in Munich, Germany, and the HYPERION Hotel Basel in Basel, Switzerland, as well as notable American locations like the Galt House Hotel in Louisville, Ky., Ravel Hotel in Long Island City, N.Y., and the Zermatt Utah Resort & Spa in Midway, Utah. This global momentum is a testament to Trademarks mounting appeal as one of the most compelling soft-branded offerings for independent hoteliers across the globe, said Greg Giordano, vice president, brand operations, Trademark Collection by Wyndham. These recent landmark additions, located in some of Canadas most coveted travel spots, underscore what it means to be a Trademark hotelunmatched character, charm, and individuality. These hotels are now backed by the global distribution power of a leading hospitality name in Wyndham, and a team passionate about driving more travelers through entrepreneurial hoteliers doors every day.Planting Roots in the Great White North Trademarks Canadian additions widen the brands presence in North America, joining nearly 50 hotels across the U.S. The first locations flying the Trademark flag in Canada include:

Wyndham

Canada