We're going to change things up a bit today and write directly to all the hotel owners out there. So all you GM and revenue managers- or all of you that don't want to own the place someday- go ahead and put this down, or minimize this window.
Oh, everyone's still here? OK, let's get to it then.
We want to talk about RevPAR (no surprise there), but specifically how it pertains to the capitalization rate of the property. Everyone knows how important RevPAR is to cash flow, and to the net income of the operation, but too often RevPAR's inextricable link to cap rate is overlooked. And this is unfortunate, because in hotels, even moderate increases in RevPAR can translate into spectacular increases in cap rate; if we take for example a 10% increase in RevPAR at a $50 million in revenue hotel can yield a 50% gain in cap rate or more.
Wednesday, April 28, 2010
Monday, April 26, 2010
A Bigger Divisor Helps Your FC %
Don't overlook sales when reviewing your food cost results. There are several important reasons to scrutinize the divisor in the formula as much as the net purchases total. Your sales figure depends on covers, check average, promotions, coupons, discounts and lost revenue.
Lost revenue is related to menu items your service staff can serve a guest with no order entered in your POS system. Typical examples include slices of cake or pie, small pastries, coffee, tea, cocoa, soup, rolls and ice cream. Less common items include modifiers normally ordered through the POS system which have a small charge to the guest.
A second source of lost revenue involves unauthorized voids and price adjustments. I remember working with a family restaurant with a special price for ice cream sundaes for dinner patrons. Anyone visiting the restaurant for dinner was offered a sundae for 99 cents. After reviewing several POS data tables, I noticed late shift changes on many $3.99 items to $0.99. These patrons did not have dinner. They all paid cash. Their orders were changed from the full charge for the sundae to the dinner special price.
Lost revenue is related to menu items your service staff can serve a guest with no order entered in your POS system. Typical examples include slices of cake or pie, small pastries, coffee, tea, cocoa, soup, rolls and ice cream. Less common items include modifiers normally ordered through the POS system which have a small charge to the guest.
A second source of lost revenue involves unauthorized voids and price adjustments. I remember working with a family restaurant with a special price for ice cream sundaes for dinner patrons. Anyone visiting the restaurant for dinner was offered a sundae for 99 cents. After reviewing several POS data tables, I noticed late shift changes on many $3.99 items to $0.99. These patrons did not have dinner. They all paid cash. Their orders were changed from the full charge for the sundae to the dinner special price.
Crisis management 101 from the eTourism expert : Lessons for stranded passengers and travel organisations
Crisis management 101 from the eTourism expert : Lessons for stranded passengers and travel organisations
by Professor Dimitrios Buhalis Bournemouth University
by Professor Dimitrios Buhalis Bournemouth University
MY EXPERIENCE
After 20 years of very intensive travelling with years of experience in using systems and travel resources, I found myself stranded in Barcelona on my way back from giving a keynote at the World Tourism Organisation on Mountain Tourism in Andorra due to the volcano ash situation. Admittedly Barcelona is a wonderful place to be stranded, I have an intimate knowledge of the place, had fantastic company and friends and I know the best cervezerias, pulperias and gelaterias in town. With friends and cash at hand it felt like an enforced mini holiday rather than an ordeal. I was hoping that the ash triggered travel chaos would have settled in a couple of days and things will go back to normal. Being an optimistic soul it is quite difficult for me to see things pessimistically. However the closure of Barcelona airport for the critical five hours on Sunday morning and the endless queues in the ticketing offices and the opening and then closure of Heathrow on Monday afternoon really tested my last reserves of optimism. I feared that I will not be able to return to the UK for weeks! Not that I would be really unhappy to stay in Barcelona for a period! Then seeing a lady complaining to police that her bag was snagged in the Rablas and a large family eating spaghetti on top of their suitcases in Barcelonetta clearly demonstrated the suffering that people had to deal with.
The Future of Marketing Starts with Publishing Part 1
(Brian Solis write some interesting Marketing Advice)
I recently called for businesses to broaden their perspective of Social Media from an experimental stage of acting and reacting, to one of learning and leading through intelligence, participation, and also publishing. Creating social profiles and broadcasting tweets and status updates is elementary, whereas creating a meaningful presence through the development and dissemination of remarkable content is judicious.
What lies ahead is an inflection point in the maturation of social media, publishing, marketing and communications. And, it all begins with the realization and the corresponding actions that businesses must become media in order to earn greater relevance and ultimately thought leadership within their respective markets.
I recently called for businesses to broaden their perspective of Social Media from an experimental stage of acting and reacting, to one of learning and leading through intelligence, participation, and also publishing. Creating social profiles and broadcasting tweets and status updates is elementary, whereas creating a meaningful presence through the development and dissemination of remarkable content is judicious.
What lies ahead is an inflection point in the maturation of social media, publishing, marketing and communications. And, it all begins with the realization and the corresponding actions that businesses must become media in order to earn greater relevance and ultimately thought leadership within their respective markets.
Courtyard by Marriott Receives Hotel Visionary Award at the Hotel Technology Forum for Its Interactive GoBoard
For today’s business travelers, technology is at the forefront of everything they do and that is why Courtyard by Marriott is being honored for putting technology at the forefront of its new Refreshing Business lobby concept.
Hospitality Technology magazine is recognizing Courtyard by Marriott for its leadership in innovative technology, bestowing the brand with its Hotel Visionary Award for 2010. In awarding Courtyard by Marriott at the Hotel Technology Forum in Las Vegas, the magazine highlighted the brand’s “…innovation in responding to travelers’ needs” with the interactive GoBoard™. The 57-inch LCD touch screen GoBoard™ is a signature element exclusive to Courtyard hotels that feature the brand’s new Refreshing Business lobby concept.
Hospitality Technology magazine is recognizing Courtyard by Marriott for its leadership in innovative technology, bestowing the brand with its Hotel Visionary Award for 2010. In awarding Courtyard by Marriott at the Hotel Technology Forum in Las Vegas, the magazine highlighted the brand’s “…innovation in responding to travelers’ needs” with the interactive GoBoard™. The 57-inch LCD touch screen GoBoard™ is a signature element exclusive to Courtyard hotels that feature the brand’s new Refreshing Business lobby concept.
Sale Prices and Brands - Historical Trends in Hotel Sale Prices
Developers, lenders, investors, and public-sector clients sometimes seek advice from consultants about what brands are the best match for their hotel development goals. Which brands have maintained the highest values over time? Which brands offer the highest degree of consistency nationally? Which brands would be a good fit for a particular market? In this article, we evaluate historical transaction data in search of some evidence that may address, or partially address, these questions.
This study evaluates historical transaction volumes and sale prices within various hotel brands during the past four decades. The authors evaluated data from 11,519 hotel transactions dating back to 1970. Although the authors analyzed all of these transactions, we narrowed our research for this article to brands within the "upscale” and "upper-upscale" chain scales, as defined by Smith Travel Research. As such, the data set analyzed for this article includes 2,391 transactions that occurred between 1978 through 2009.
This study evaluates historical transaction volumes and sale prices within various hotel brands during the past four decades. The authors evaluated data from 11,519 hotel transactions dating back to 1970. Although the authors analyzed all of these transactions, we narrowed our research for this article to brands within the "upscale” and "upper-upscale" chain scales, as defined by Smith Travel Research. As such, the data set analyzed for this article includes 2,391 transactions that occurred between 1978 through 2009.
Friday, April 23, 2010
Guest Room Balancing Act
Guests have high expectations of guestroom services, wanting both high functionality and intuitive ease of use, preferably at no charge. Both the issues and the technology are complex; how can hotels keep guests satisfied and still stay within budget?
Finding the right mix of guestroom technology has always been a balancing act between functionality and budget. The hotel’s desire to create a home away from home has become harder as guests’ homes contain increasingly sophisticated consumer technology, upgraded on a regular basis. And when those upgrades bring major changes in how people access entertainment (such as the current switch to Internet-sourced content), this inevitably ripples through into the hotel environment and upsets the old models
Finding the right mix of guestroom technology has always been a balancing act between functionality and budget. The hotel’s desire to create a home away from home has become harder as guests’ homes contain increasingly sophisticated consumer technology, upgraded on a regular basis. And when those upgrades bring major changes in how people access entertainment (such as the current switch to Internet-sourced content), this inevitably ripples through into the hotel environment and upsets the old models
Maximize profitability with accurate data
Preparing for recovery means you need to have accurate information to grow your business and quickly boost profitability as the economy improves. The old saying “garbage in equals garbage out” is true, but does it apply to your property?
Make sure the following two areas of your hotel are doing their part to provide all of the information into the system so you can get all of the information you need out of the system.
Make sure the following two areas of your hotel are doing their part to provide all of the information into the system so you can get all of the information you need out of the system.
Thursday, April 22, 2010
AH&LA Launches Energy Slasher Challenge | Hoteliers challenged to reduce energy costs over next 12 months
In conjunction with the 40th anniversary of Earth Day, the American Hotel & Lodging Association (AH&LA) is launching an Energy Slasher Challenge. The year-long challenge asks hoteliers to track their quarterly energy and natural gas consumption from April 1, 2009 thru April 1, 2011, and report the totals via www.ahla.com/slasher. Participants can benchmark their progress through GreenQuest, a Web-based service free to AH&LA members; EPA’s Energy Star Portfolio Manager; or your brand or corporate benchmarking program.
Each quarter AH&LA will update an online leader board, and Green Guru Pat Maher will provide monthly strategies, assistance, and best practices to help participants in their quest to slash energy costs. The grand prize for the biggest average reduction in energy and natural gas is a day with Pat Maher, who will help optimize your property’s eco-strategy and identify areas to streamline operations.
Each quarter AH&LA will update an online leader board, and Green Guru Pat Maher will provide monthly strategies, assistance, and best practices to help participants in their quest to slash energy costs. The grand prize for the biggest average reduction in energy and natural gas is a day with Pat Maher, who will help optimize your property’s eco-strategy and identify areas to streamline operations.
Cornell Hotel Management Study Finds Discounting Did Little to Offset Revenue Loss During Economic Downturn
Hotels worldwide faced a difficult decision regarding which hotel marketing tactics to apply when travel levels plummeted in 2009. They could try to drive room-nights by matching competitors' discounted rates, or they could hold rates steady and watch occupancy drop. A new hotel management study from the Cornell Center for Hospitality Research found that many hoteliers admitted engaging in price wars but they wished they had held firm on rates while using other tactics. The study, "Successful Tactics for Surviving an Economic Downturn: Results from an International Study," by Sheryl E. Kimes, is available at no charge at ww.hotelschool.cornell.edu/research/chr/pubs/reports/2010.html.
Kimes, the Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell School of Hotel Administration, surveyed 980 hotel managers worldwide early in 2010 to determine what tactics they used in response to the Great Recession, and how well those tactics worked. The tactics used were, in descending order: discounting, marketing initiatives, obscuring room rates, and cost cutting.
Kimes, the Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell School of Hotel Administration, surveyed 980 hotel managers worldwide early in 2010 to determine what tactics they used in response to the Great Recession, and how well those tactics worked. The tactics used were, in descending order: discounting, marketing initiatives, obscuring room rates, and cost cutting.
Tuesday, April 20, 2010
How To Recover In 2010
The March 2010 edition of PKF Hospitality Research’s (PKF-HR) Hotel Horizons® report predicts hotels in the U.S. will suffer a 1.1 percent decline in RevPAR for 2010, which will translate into an estimated 5.3 percent drop in net operating income (NOI) for the year. This will represent the third consecutive year of decreases in these two important performance measures. While the annual forecasts are disappointing, a closer look at the quarterly movements of these indicators throughout 2010 reveals that U.S. lodging industry demand, occupancy, average daily rate (ADR), and rooms revenue per available room (RevPAR) will all start to show year-over-year quarterly gains sometime during the year.
Given the turn towards favorable market conditions that is expected to occur during 2010, an opportunity will exist for some U.S. hotels to improve their performance and achieve growth in NOI. To identify potential tactics managers can implement to take advantage of the improving operating environment, PKF-HR has examined the financial performance of hotels that achieved a gain in profits (NOI) during 2003. The year 2003 was chosen because, like 2010, this historical period represented that last of year of a three year (2001 – 2003) industry recession. The data that was analyzed comes from PKF-HR’s proprietary Trends® in the Hotel Industry database of revenues, expenses, and profits from 6,000 hotel operating statements.
Given the turn towards favorable market conditions that is expected to occur during 2010, an opportunity will exist for some U.S. hotels to improve their performance and achieve growth in NOI. To identify potential tactics managers can implement to take advantage of the improving operating environment, PKF-HR has examined the financial performance of hotels that achieved a gain in profits (NOI) during 2003. The year 2003 was chosen because, like 2010, this historical period represented that last of year of a three year (2001 – 2003) industry recession. The data that was analyzed comes from PKF-HR’s proprietary Trends® in the Hotel Industry database of revenues, expenses, and profits from 6,000 hotel operating statements.
Hotel REITs: Hot Deal or Suckers' Bet?
Lodging companies that focus on luxury were hit the hardest, with rates falling 20% to 25% on average, according to Smith Travel Research. "No CEO wanted to be seen going into New York City and staying at a luxury hotel, so they suffered," says Garner. But the segment that was pummeled the hardest also offers the biggest potential windfall as the economy rebounds. "If you fall less, you have less to recover, but if you fall hard, you have more to recover," he says.
Of course, that assumes that travelers step up to full-priced luxury lodgings, and that may be a ways off.
Of course, that assumes that travelers step up to full-priced luxury lodgings, and that may be a ways off.
STR and STR Global releases global hotel pipeline for March 2010
The Asia/Pacific hotel development pipeline includes 976 hotels comprising 248,156 rooms, according to the March 2010 STR Global Construction Pipeline Report released this week.
Among the region's countries, China reported the largest number of rooms in the total active pipeline with 131,175. The country also reported the most rooms in the In Construction phase (93,300 rooms). Three other countries ended the month with more than 10,000 rooms in the total active pipeline: India (43,448 rooms), Thailand (15,449 rooms), and Vietnam (10,869 rooms).
Among the region's countries, China reported the largest number of rooms in the total active pipeline with 131,175. The country also reported the most rooms in the In Construction phase (93,300 rooms). Three other countries ended the month with more than 10,000 rooms in the total active pipeline: India (43,448 rooms), Thailand (15,449 rooms), and Vietnam (10,869 rooms).
Monday, April 19, 2010
Our ever changing foods
Many of the contributors to this year’s Hotel Yearbook are focused – understandably – on the gradual improvement expected in the economy next year, and how this will affect various aspects of the hotel business. But what about the way we dine out? Are changes in our eating habits also dependent on the economy, or are other factors at play as well? We asked CHRISTOPHER MULLER, Professor at the Rosen College of Hospitality Management at the UNIVERSITY OF CENTRAL FLORIDA in Orlando, for his views on the current culinary trends.
Costing Out Soda & Free Refills in Foodservice - How to Price Soda
Refills are very popular in a number of establishments and there are certainly nothing wrong with them, many guests love it. Just make sure to reconsider your sale price to keep and ideally retrieve more gross profit and keep you soda cost around that 18% to 20% mark.
Thursday, April 15, 2010
The Origins of Hospitality and Tourism
In The Origins of Hospitality and Tourism, Kevin O'Gorman provides a unique and rich analysis. His historical/philosophical approach invites the reader to share in a deep understanding of the terms by a thorough engagement with textual evidence from and about Classical Antiquity. A fascinating read.A" Professor John Tribe, University of Surrey, UK and Editor of Annals of Tourism Research All those interested in hospitality and tourism will benefit great by reading this book, not only by understanding more clearly from whence the key elements of hospitality came, but how much the principles of modern hospitality are based on those of the past.
The thorough and careful research in this book ensures that it will become a key reference for teachers and researchers in hospitality, and also for all who are interested in the origins of both hospitality and tourism.
The thorough and careful research in this book ensures that it will become a key reference for teachers and researchers in hospitality, and also for all who are interested in the origins of both hospitality and tourism.
Making Sense of Strategic Planning - Part 2
In continuation of his four part series, Enda Larkin explores how to make sense of the strategic planning process, particularly in the context of small and medium sized operations. Part 1 of the series provided the rational for developing a strategic map and Part 2 examines how to start building the strategic map in practice.
Making Sense of Strategic Planning – Part 2
Creating a strategic map, as we saw in Part 1, requires reflection, analysis, action and evaluation guided by four core questions:
The first thing to highlight is that a strategic map includes having a strategy or strategies, but is not limited to that. Strategy tends to get most of the attention, but any strategy is only as good as the information upon which it is based and the resulting measures put in place to realize it.
Making Sense of Strategic Planning – Part 2
Creating a strategic map, as we saw in Part 1, requires reflection, analysis, action and evaluation guided by four core questions:
The first thing to highlight is that a strategic map includes having a strategy or strategies, but is not limited to that. Strategy tends to get most of the attention, but any strategy is only as good as the information upon which it is based and the resulting measures put in place to realize it.
Tuesday, April 13, 2010
CRM Technology for Travel: Know Your Customer
How well do you know your customer? In a hotel’s attempt to offer a high level of guest service, I’m often asked when checking in, “Have you stayed with us before?” When I reply “Yes,” it is often followed by “Welcome back” or “It is good to see you again,” together with “As you know then the restaurant opens at 6:00 AM” or some other item they feel is important to tell me. Shouldn’t they already know I’ve stayed with them before?
This tells me that the hotel is not practicing effective customer relationship management. Wouldn’t a better interaction be once I tell them who I am, “Welcome back, Mr. Hopkins. Your requests and preferences have been noted. Please let me know if there is anything additional you require during your stay. And, we’ve recently introduced a new Executive Chef in our restaurant so be sure to check out the new menu.”
This tells me that the hotel is not practicing effective customer relationship management. Wouldn’t a better interaction be once I tell them who I am, “Welcome back, Mr. Hopkins. Your requests and preferences have been noted. Please let me know if there is anything additional you require during your stay. And, we’ve recently introduced a new Executive Chef in our restaurant so be sure to check out the new menu.”
Blog: 7 lessons for revenue managers
If you haven’t learned your own lessons during the treacherous year that was, then you may as well stop reading now. You’re like my neighbor’s dog; no matter how many times he’s been shocked by his electric fence, he still charges at me every day during my morning run. Bark … charge … ZAP! … whimper.
For the rest of us, periods of crisis not only force us to adapt and sharpen our skills in the moment, but they also help us prepare for future crises to come.
Sheryl E. Kimes of the Cornell Nanyang Institute of Hospitality Management understands as much. And during December 2009 and January 2010, she put those principles to work, asking more than 3,000 revenue-management professionals what they did to survive the recent economic downturn and whether or not their tactics worked.
For the rest of us, periods of crisis not only force us to adapt and sharpen our skills in the moment, but they also help us prepare for future crises to come.
Sheryl E. Kimes of the Cornell Nanyang Institute of Hospitality Management understands as much. And during December 2009 and January 2010, she put those principles to work, asking more than 3,000 revenue-management professionals what they did to survive the recent economic downturn and whether or not their tactics worked.
Friday, April 9, 2010
Managing Risks Part of Managing Hotels
One of the most important aspects of owning and operating a hotel is minimizing the various physical and liability risks associated with this type of business. Risk management is the process of evaluating a hotel's risk exposure and developing strategies for mitigating those. It incorporates a program for reducing exposure supplemented by insurance protection should an incident occur. A hotel owner and operator would be far better off if they could eliminate all the possibilities of an incident on their property.
Cornell Study Urges Hoteliers to Be Realistic Regarding Guest Self Service Kiosks
When it's good, it's very good, but when self-service goes wrong, guests don't come back, new hospitality study shows
As more hospitality companies implement some form of IT-based self-service, many are seeking to reduce costs, increase customer satisfaction, and possibly reach new customer segments. A new hospitality study from Cornell's Center for Hospitality Research (CHR) points out that when self-service functions correctly, it does enhance guest satisfaction and improves hotels' financial results. However, when a problem occurs with the self-service computer system, guests are far less willing to return, much less pay a premium rate.
* Nothing beats Face to Face old - fashioned Customer Service...Technology is great..when it works...
As more hospitality companies implement some form of IT-based self-service, many are seeking to reduce costs, increase customer satisfaction, and possibly reach new customer segments. A new hospitality study from Cornell's Center for Hospitality Research (CHR) points out that when self-service functions correctly, it does enhance guest satisfaction and improves hotels' financial results. However, when a problem occurs with the self-service computer system, guests are far less willing to return, much less pay a premium rate.
* Nothing beats Face to Face old - fashioned Customer Service...Technology is great..when it works...
Thursday, April 8, 2010
Making Sense of Strategic Planning - Part 1
If you were driving somewhere you had never been before, you would probably use a map to guide you. Well, you would, if you wanted a hassle-free trip. Without the map, you are more likely to get lost and even if you don’t, you are certainly leaving things to chance. The same applies to achieving success in the hotel business which, as you well know, is also a journey of sorts and one with many twists and turns, so having a map to keep things on track is useful. In fact, it’s vital, because getting lost in a car is one thing, losing your way in business life is an altogether more serious prospect.
HotelWorld Network launches July summit on hotel design
As the hotel industry begins to show early signs of rebounding from the economic crisis, cutting-edge developers are already making plans for the next generation of hotels. Hotel Design magazine, part of HotelWorld Network, offers these innovators a groundbreaking new summit on the future of hotel design.
Transform: Design Differently will take place July 13-14, 2010, at the St. Regis Deer Crest Resort in Park City, Utah. This invitation-only event will focus on universal and socially responsible design that puts the traveler at the center of every project. The need for flexible and safe design has become paramount in the planning process as hoteliers cater to ever-more diverse groups of travelers.
“In addition to formal sessions, we will allot a significant amount of time for networking and think-tank activities. Our goal is to bring together the innovators and early adopters to create new ideas that will shape the next generation of hotel development and design.”
Transform: Design Differently will take place July 13-14, 2010, at the St. Regis Deer Crest Resort in Park City, Utah. This invitation-only event will focus on universal and socially responsible design that puts the traveler at the center of every project. The need for flexible and safe design has become paramount in the planning process as hoteliers cater to ever-more diverse groups of travelers.
“In addition to formal sessions, we will allot a significant amount of time for networking and think-tank activities. Our goal is to bring together the innovators and early adopters to create new ideas that will shape the next generation of hotel development and design.”
Thursday, April 1, 2010
How to protect yourself from germ-laden TV remotes
I spent the first 7 years of my career in Housekeeping...If you need assistance in this area Please contact us.
Those who read studies about hotel-room cleanliness know that the TV remote control is considered one of the most germ-infested items in a room. Lots of strangers' hands touch it, and disinfecting it is not on the to-do list of most hotel housekeepers (if your lodging or chain does require cleaning remotes between stays, please let us know).
Those who read studies about hotel-room cleanliness know that the TV remote control is considered one of the most germ-infested items in a room. Lots of strangers' hands touch it, and disinfecting it is not on the to-do list of most hotel housekeepers (if your lodging or chain does require cleaning remotes between stays, please let us know).
Special Hospitality Report: Successful Tactics For Surviving An Economic Downturn
In association with The Cornell-Nanyang Institute of Hospitality Management and Professor Sherri Kimes, EyeforTravel is proud to announce the release of The Global Hospitality Report - An in-depth analysis of international hotel performance and strategic manual for Hoteliers facing challenging economic conditions.
Sherri Kimes, Ph.D., is Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell University School of Hotel Administration and has over 25 years experience in the Hospitality industry. She has published over 50 articles in leading journals and worked as a consultant to many hospitality enterprises around the world, including Walt Disney World Resorts, Ruby’s Diners, Starwood Asia-Pacific, and Troon Golf.
Sherri Kimes, Ph.D., is Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell University School of Hotel Administration and has over 25 years experience in the Hospitality industry. She has published over 50 articles in leading journals and worked as a consultant to many hospitality enterprises around the world, including Walt Disney World Resorts, Ruby’s Diners, Starwood Asia-Pacific, and Troon Golf.
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