15 women of hospitality finance

Transcription

Volume 30, Number 2
Spring 2015
Special Feature:
15 WOMEN OF
HOSPITALITY
FINANCE
Key Communication Skills
USALI 11th Revised Edition:
Operating Metrics
Report: How Hotel Guests
Use Mobile Devices
PLUS:
Financial Reporting: Allocating the Unallocated
Building a LinkedIn Profile
T HE J O U R NA L O F H O S P ITA LITY FIN A NCIAL AND TECHNOL OGY PROF ESSIONAL S
Table of Contents
SPRING 2015
Special Feature: The Women of Hospitality Finance
A profile of the industry's notable and influential female finance professionals
14
Introduction
24
Michelle Russo, CHAM, MAI, CHA
16
Kapila Anand, CPA
25
Tina Samson, CPA, CHAE
18
Clare Cella, CPA
26
Jerilyn Schnitzel, CHAE, CHTP, CAM
19
Agnes DeFranco, Ed.D., CHAE
27
Gina St. George, CPA, CFE
20
Monique Jaqqam
28
Tammy Tassitano, CPA
21
Lisa Funk Martin, CHAE
29
Marie-Josee Theoret
22
Anna McFarland, CPA, CFE, CHAE, CHTP
30
Wendy Zurstadt, CPA, CAM, CHAE
23
Arlene Ramirez, MBA, CHE, CHAE, CHIA
31
Alice Banks, CHAE
F eatures
32
The journal of
hospitality FINANCIAL AND
TECHNOLOGY PROFESSIONALS
Use transparency to build trust and motivate employees
to exceed expectations By Danny Goldberg, CPA, CIA, CISA
34
Allocating the Unallocated
40
A Close Look at the USALI 11th Revised
Edition, Part II
Volume 30, Number 2
HFTP® and HITEC® are registered service marks of Hospitality
Financial and Technology Professionals. GUESTROOM 20X is a
service mark of Hospitality Financial and Technology Professionals.
Submissions and Inquiries
Individuals interested in submitting an article for publication
should contact the editor. The Bottomline is a peer review journal.
All materials submitted for publication are reviewed by members
of the editorial review board or recognized experts in the field.
The Bottomline (ISSN 0279-1889), the journal of Hospitality Financial and Technology Professionals, Inc., is published bimonthly
with two special editions by HFTP®. Copyright © by Hospitality
Financial and Technology Professionals. All rights are reserved.
All opinions expressed herein represent the views of the authors.
The Bottomline and HFTP disclaim any responsibility for views
expressed or statements made in any articles published. HFTP
disclaims any liability with respect to the use of or reliance on any
such information. The information contained in this publication
is in no way to be construed as a recommendation by HFTP or
any industry standard, or as a recommendation of any kind to be
adopted or binding upon any member of the hospitality industry.
Written consent must be obtained from HFTP before reprinting
articles. Subscription fee of $30 for HFTP members is included
in the membership fee. HFTP is headquartered at 11709 Boulder
Lane, Suite 110, Austin, Texas 78726. Periodicals Postage Paid
at Austin, Texas. POSTMASTER: Send address changes to The
Bottomline, 11709 Boulder Lane, Suite 110, Austin, Texas 78726,
(512) 249-5333.
Good Communication Skills Are Key to
Leadership Success
An alternative method for financial reporting that puts focus on
the two main profit centers: The Rooms and F&B departments
By Essam A. Mohamed, MSA
Using Operating Metrics to Manage
By Raymond Schmidgall, Ph.D., CPA; Agnes DeFranco, Ed.D.,
CHE, CHAE; and Ralph Miller, CPA, CA, CBV, CHA, CHAE
45
Laptops, Tablets and Phones! Oh My!
Survey results that illustrate how hotel guests use mobile media
while traveling
By Agnes DeFranco CHAE, Ed.D. and Cristian Morosan, Ph.D.
D epartments
5
Between the Lines
8
Q&A from the Research Center
12
Business Across the Globe
Changes For the Better — HFTP makes quick progress on
adapting the association to attract a global membership
Building a LinkedIn Profile — Explore the social media
outlet's multiple features to help enhance your profile for
a more professional presentation
Focus on Toronto
The Bottomline
3
HFTP
ProLinks
Webinars
ProLinks Webinars offer participants a chance
to engage and connect virtually with innovative thought leaders on the most relevant topics
to the hospitality industry. Enjoy presentations
from the comfort of your own computer while
interacting not only with the speaker, but other
attendees from all over the globe.
Get Started
Visit the Membership/ProLinks section of the
HFTP web site at www.hftp.org to view the
upcoming webinar schedule.
THE BOTTOMLINE STAFF
Frank Wolfe, CAE
Executive Vice President/CEO
[email protected]
Eliza R. Selig
Editor/Director of Communications
[email protected]
Jennifer Lee
Advertising Sales / Director of Marketing
[email protected]
HFTP OFFICERS
President
Daniel N. Conti Jr., CHAE, CAM
Wyndham Grand Jupiter at Harbourside Place
Jupiter, Fla.
Vice President
Arlene Ramirez, CHE, CHAE
ADR Hospitality Consulting
The Woodlands, Texas
Treasurer
Lyle Worthington, CHTP
Austin, Texas
Immediate Past President
Jerry Trieber, CPA, CHAE, CFE, CFF, CGMA
Crescent Hotels and Resorts
Fairfax, Va.
2014–2015 EDITORIAL PEER REVIEW COUNCIL
Scot Campbell, CHTP
Caesars Entertainment
John D. Daum, CPA
Condon O'Meara McGinty & Donnelly, LLP
Archived Sessions
ProLinks Webinars are recorded and available
to members for viewing on demand. Archived
topics include e-commerce, millennial learners, green IT, Wi-Fi and more.
Mehmet Erdem, Ph.D., CHTP
iHITA
Chris Koepper, CPA
Cliffs Club Partners
Arlene Ramirez, CHAE, CHE, MBA
ADR Hospitality Consulting
Thomas G. Smith, CHAE
Justin Tallion
Texas A&M University
Lyle Worthington, CHTP
George L. Zoglio, CPA
Batchelor, Frechette, McCrory, Michael & Co.
11709 Boulder Lane, Suite 110 • Austin, TX 78726–1832
+1 (512) 249-5333 • (800) 646-4387 • Fax +1 (512) 249-1533
www.hftp.org • www.hitec.org
4
Spring 2015
Between the Lines
A Letter from the HFTP Global President
Changes for the better
HFTP makes quick progress on adapting the
association to attract a global membership
L
ast year, as I looked forward to
taking on the role of HFTP Global
President, I had committed myself
to take HFTP on the fast-track. I
wanted the association to adapt to the
changing global business environment
as quickly as it evolved. This spring
HFTP's activities exceeded my expectations, as HFTP and its leadership
moved quickly to enact some changes
that will lead to a stronger association.
This past March, HFTP held a
Leadership Strategy Summit in Dallas
to discuss the mega issues facing the
association. Keeping the core purpose
of HFTP at the forefront — to lead
and advance the hospitality profession
by providing a forum for continuous
learning and knowledge sharing —
leaders from across the globe gathered
to give their opinions and debate the
direction of HFTP. Ultimately, we
came away with a consensus on the
proper direction and projects HFTP
should be focusing on. As a result, the
HFTP Global Board will take a cue
from these discussions on: continuing global expansion and educational
opportunities; examining the current
chapter structure; and improving the
association’s communication strategy.
This meeting was like an adrenaline shot, as we haven’t stopped since.
Our first order of business was to hold a Chapter Task Force meeting in early
April to examine the current chapter structure. This group was tasked with
analyzing how the current chapter structure is working, how it should be adjusted as we continue global expansion, and how to make everyone’s experience a great one in HFTP. We had some thought-provoking discussion at the
meeting and came away with, what I think, is a workable plan to accommodate the changing makeup of the association.
The first takeaway is a bylaw change which removes the requirement for
a member to affiliate with a chapter. The reasoning behind this is that during the last round of renewals, hundreds of HFTP members did not choose
a chapter affiliation and had to be pursued by staff to choose a chapter. The
Board recognizes that many younger members and members outside of North
America enjoy taking advantage of HFTP’s education, webinars, conferences
and social media communications, but not necessarily the option to participate in a local chapter. Some also do not have a local chapter nearby. It is the
Board of Directors’ hope that with this bylaw change, we will be able to spur
membership in areas where there is no geographical chapter and with the
young professionals who are coming into the workforce.
" I wanted the association to adapt to the changing global
business environment as quickly as it evolved. This spring
HFTP's activities exceeded my expectations, as HFTP and
its leadership moved quickly to enact some changes that
will lead to a stronger association."
Daniel N. Conti, Jr., CHAE, CAM is director of finance for the Wyndham Grand Jupiter at Harbourside Place located in Jupiter, Fla. USA.
The Bottomline
5
Between the Lines
Also coming out of the Leadership
Strategy Meeting was the recommendation to expand our Global presence
and educational opportunities. We
have done that with the redesigned
Hospitality Technology @HOFEX
2015 (previously AHTEC). The halfday seminar, held May 7 in Hong
Kong, featured a keynote by HFTP
Global Director Scot Campbell, CHTP
and vice president of strategy for Caesars Entertainment who discussed how
Caesars Entertainment uses technology as an enabler for guest satisfaction
and achieves operation cost savings
throughout the globe. The program
also looked at the results of a study on
hospitality technology use conducted
by the HFTP Research Centers (look
for the study results in the Summer
2015 issue of The Bottomline).
Continuing the momentum, the
association has also expanded the
program for the Financial Executive
Exchange (FEE). This is an invitationonly event for C-level executives to
discuss key industry issues. It is the
third year for the hotel-focused event
(on June 15 in Austin, Texas); but in
addition, HFTP will also later produce
a club-focused event in July (on July
23 in Orlando, Fla.).
To top it off, we have to look
forward to: the Club and Hotel Con-
trollers Conference (June 15–17 in
Austin, Texas); HITEC (June 15–18
in Austin, Texas); and the Annual
Convention & Trade Show (October
21–24 in Bellevue, Wash.). I hope to
see you at one of these events. If your
schedule does not allow it, don’t forget the fantastic value of the ProLinks
webinars. These are absolutely free
for HFTP members, and are offered
twice a month. In addition to the live
sessions, there are 97 hours of education available in the archives.
Didn’t I say that HFTP is going
full-speed? Well, I think we might be
moving down an Autobahn.
This year at HITEC, HFTP is
introducing the newest installment
of its 20X series: Entrepreneur 20X.
The program will gather innovative start-ups to pitch cutting-edge,
transformative hospitality technology
to an audience of venture capitalists,
angel investors, serial entrepreneurs
and HITEC attendees. In addition,
top pitch participants will receive
kiosk display space within the HITEC
exhibit hall. This is going to be a fascinating, and entertaining, feature at
HITEC, and I can’t wait to watch the
pitches, as well as meet one-on-one
with the winning innovators.
Now, it is time to slow down my
announcements as I turn our attention
to this issue’s special feature: The
Women of Hospitality Finance. Part
of the goal of our association is to recognize those individuals who excel in
the industry and have made a positive
impact. The 14 women written about
here are a great representation (though
does not cover all) of the type of
leadership that has made our industry
successful. I have had the opportunity
to get to know and work with many of
these women through our work with
HFTP, and I know that we are a better
association because of their involvement. For those I haven’t met, I look
forward to reading their professional
story within these pages.
I think I have covered quite a bit
here and have demonstrated why your
membership with HFTP is a value to
you as a professional. Make sure to
take advantage of your benefits. To
learn more about all these endeavors,
visit the HFTP web site for details. I
also encourage you to regularly visit
the HFTP Connect blog (www.hftpconnect.org) for a continuing discussion on industry topics, HFTP news
and more.
Conti Represents HFTP
HFTP Global President Daniel Conti
represented the association at a variety of
events this past spring, discussing member
benefits and the future direction of HFTP.
Top-left: Conti poses with HFTP UNLV student chapter
member Riley Keohen on a visit in mid-April to meet with
the HFTP Las Vegas Chapter.
Top-right: Conti gives a guest lecture at the University of
Nevada Las Vegas's College of Hotel Administration.
Bottom-right: Conti meets with the HFTP Chapter Task
Force in Jupiter, Fla.
Bottom-left: Conti gives a presentation to the HFTP Las
Vegas Chapter in mid-April at The Caesars Palace.
6
Spring 2015
2015/201 6
EVENTS
MARK YOUR CALENDAR FOR THE HT EXECUTIVE EVENT LINEUP.
R ES TAURANT EXECU TIVE SUMMIT 2015
www.twitter.com/
htmagazine
OCT 7-9, 2015
M O NTAG E R E SO RT, LA G U NA , CA
www.linkedIn.com/in/
hospitalitytechnology
M UR TEC 2016 www.murtec.com
www.facebook.com/
M A RCH 1 5 - 1 7 , 2016
PA R I S L A S V E G A S
youtube.com/
H OTEL TECH FO RUM 2016
A P R I L 2 0 - 2 2 , 2016
R IT Z C A RLT O N, LA G U NA NI G U E L, C A
R E G I ST E R N OW AT H T E VE NT S@E D G EL L M A IL . C O M
AT T E N D A N C E I S L I M I T E D T O O P E R AT O R S O R S U B S C R I B E R S T O H O S P I TA L I T Y T E C H N O L O G Y. I F
Y O U A R E A T E C H N O L O G Y S O L U T I O N O R S E R V I C E P R O V I D E R T O T H E I N D U S T RY, P L E A S E C O N TA C T
L E N O R E O ’ M E A R A A B O U T AVA I L A B L E S P O N S O R S H I P O P P O R T U N I T I E S AT L O M E A R A @ E D G E L L M A I L .
C O M . H O S P I TA L I T Y T E C H N O L O G Y R E S E R V E S T H E R I G H T T O D E C L I N E A N Y E V E N T R E G I S T R AT I O N
AT T E M P T I F I T S C R I T E R I A F O R AT T E N D A N C E A R E N O T M E T.
ALL EVENTS PRODUCED BY
Q&A
HFTP Research Center
Building a Linkedin Profile
Explore the social media outlet's multiple features to help
enhance your profile for a more professional presentation
By Tanya Venegas, MBA, MHM
Q.
I am thinking about making a
career move. What is the best
way I can use LinkedIn to make possible job connections? I have a basic
profile, but haven’t really used any of
the other features.
A.
Since LinkedIn started back in
2003, this social networking
site has developed multiple features
which are beneficial to job seekers.
According to the LinkedIn web site,
at the time this article is being written,
there are 332 million members on
LinkedIn. Think about the potential of
reaching out to these individuals. For
this very reason, you have to make
sure you put forth your best effort in
your profile and everything else you
post on LinkedIn. The following will
outline some of the best ways to set
yourself apart from your peers while
using LinkedIn.
Profile Updates
First of all, keep your profile and
summary updated. The summary is an
attention grabber and should incorporate several previous positions and a
clear message about you. Make sure
your summary includes key words
related to the position you want to
acquire so that your name comes up
when potential employers are searching LinkedIn. The summary should be
two to three paragraphs long and include your e-mail address and phone
number at the end.
If you are making a bunch of changes to your profile in preparation to apply
for jobs, before you get started, make sure you turn off profile updates. It is one
thing to add a recent certification or project, but if you are updating your profile
to include projects you have done over the last five years, individuals do not want
to be inundated with multiple updates. In addition, your current employer may
become suspicious. You can turn off updates by changing your privacy settings.
What should be included in your profile? Nearly everything related to your
professional career can be included in your LinkedIn profile. This list should
include former employers, schools, projects, special awards and any other type
of recognition you have received relevant to your profession. A good rule is to
include the details on any positions or accolades you received in the last seven to
10 years. Unlike printed resumés, there is not a limit to the amount of information you can include on your LinkedIn profile. This allows you to provide a complete picture of your career to possible employers. You can also include videos or
links to projects you have completed for examples of your work.
Remember to always keep your profile updated when you achieve a new position, complete a major side project or receive a special award or recognition. Your
profile is like your own personal brochure, should point out all of your accomplishments and set you apart from the rest of your peers. Finally, make sure your profile
is public so that people can search for you and examine your career experience.
Tanya Venegas, MBA, MHM ([email protected]) is executive director and HFTP Fellow at the HFTP Americas Research Center. She is a regular contributor to The Bottomline and speaker at HFTP educational events.
8
Spring 2015
Q&A
Profile Pictures
It is important to include a picture on your LinkedIn profile.
Researchers say that a profile is 14 times more likely to be
viewed if you have a picture. It doesn’t necessarily need to
be a headshot taken by a professional photographer, but one
that casts you in a professional manner. If you have the time
and money, a professional headshot typically costs around
$250 and is well worth the expense for a professionally
composed photograph to use on LinkedIn, in conference
programs and in other professional publications.
Invitations and Connections
There are some basic rules you should follow when making
connections using LinkedIn. There are really two divisions
of thought: make as many connections as you can or only
send connection requests to people you know. Most professionals agree that you should only send invitations to connect to people you know or have a connection to through
professional settings. Treat connections in the virtual world
like you would in the “real” world. When meeting someone
at a conference, you wouldn’t immediately ask them for
a job. The same goes in the virtual realm. Build rapport
with the person first, join groups, post comments on their
postings, etc. After a while, you can approach the subject. It
may take some time, but it will be worth the effort.
When you are ready to make connections, personalize
the invitations. Do not use the standard “I’d like to add you
to my professional network.” As mentioned earlier, most
professionals do not want to make random connections;
therefore, make sure you have a good reason to connect
with someone and be able to defend that reason if needed.
Also, do not feel obligated to connect with everyone that
sends you an invitation. Individuals are not notified when
they are rejected, but if there is not a legitimate reason to be
connected, then their feelings shouldn’t be hurt.
A good piece of advice, if you meet someone at a
conference: wait until you are back in the office to connect.
There is one primary reason for this: they are out of the
office as well. What is the likelihood that an individual will
go through your profile while they are out of town? Probably pretty slim; but, if you wait until they return to their
office, then they are more likely to look over your profile
when they receive the invitation.
Messages
You need to treat LinkedIn messages with the same concern
as work e-mails. Check your notifications and make sure
your settings are correct. E-mail notifications can be sent
individually as they are received, in a weekly digest, or no
e-mail notifications. Respond to messages in a timely manner and make sure you are checking them on a regular basis.
The Bottomline
9
Q&A
Posting Content
One of the best ways to get noticed is by posting content
in LinkedIn groups. You can post articles about the industry which will solicit comments and interactions of people
with similar interests. Secondly, you can post comments
in discussions on LinkedIn. A thoughtful comment could
prompt a potential employer to view your profile. Even
something as simple as telling a connection congratulations on a new position or a career milestone may get you
noticed. Again, you most likely do not want your current
boss to know all of your activity when it comes to groups
and networking, so visit your privacy settings to hide your
activity in these groups.
Other Tips
The following are various other tips that can help get you
noticed using LinkedIn.
• Recommendations: Most people indicate that recommendations can be very helpful when on the job hunt. A
360 degree recommendation including managers, peers
and clients provides an excellent look at your work capabilities. It is also important to provide recommendations
and meaningful endorsements for others as well.
• LinkedIn URL: If you are interested, you can personalize your LinkedIn URL. If you look under your picture
in your profile you will see your LinkedIn URL. You
can click to the right of the provided URL and it will
give you an option to create your custom URL. This
URL can be included in your e-mail signature or on
your business cards.
• Keep Your Profile Active: Not only is it important to
keep your profile updated, but you should also be active on LinkedIn. Some simple ways to do this are to
make comments on posts, post articles, make recommendations and endorsements, etc. Even after you have
landed a new position, keep working on your LinkedIn
profile. You never know what new opportunities may
come your way.
• Follow Companies and Groups: Follow companies
you would like to work for to learn about their organization. This will put you ahead of the game if you land an
interview or meet someone from these potential employers. Following groups also allows you to learn about the
industry and make important connections.
To sum up, one of the most important pieces of posting
anything on LinkedIn is proofreading. You can have the
best experience, but if you have a misspelled or misused
word, it is difficult for potential employers or clients to look
past your mistakes. ■
Join HFTP's social media dialogue
Ongoing updates, photos and comments
on the HFTPGlobal page.
Post your impressions from HFTP events at
@HFTP and #HITECatx.
Read thoughtful blog posts written by expert
professionals on HFTP Connect, including
the HITEC 2015 guest bloggers in June.
Maintain your professional connections with
other HFTP members.
New! Download the HITEC 2015 and HFTP apps for the latest event and benefit information directly
to your mobile devices. Available on both the Apple App Store and Google Play.
10
Spring 2015
Research Center
Business Across the Globe
Focus on Toronto
By Justin Taillon, Ph.D. and J.C. Hough
As HFTP expands and adds chapters throughout the world, it is interesting to learn about
different cultures and conducting business in other countries. HFTP currently has chapters in
the following locations outside the United States: Asia, Canada, Caribbean, Hong Kong, India
and Switzerland. The following short report gives a basic introduction to the country, business
climate and state of the hospitality industry.
C
anada and the United States
share an overlapping history
and a close relationship. Examples include Canada being the
largest trade partner for the U.S., the
countries having a common language
(two of only 13 countries in North
America that speak English and also
the two largest countries), and the
fact that these neighbors share the
world’s longest international border
in the world. Enhancing the importance of the shared border is the fact
that the international border is heavily
populated. For example, 90 percent
of the Canadian population lives in
the southern 10 percent of the country
along the U.S. border.
The commonalities between these
two countries stems into pop culture
(e.g. music, films), business, and the
hospitality and tourism market. For
example, the mega-events 2015 PanAm Games and 2015 Women’s World
Cup are bringing both the pop culture
and hotel market of these games to the
forefront. In fact, Toronto has experienced massive growth in the hotel
market in preparation of these games.
This has included an influx of new
luxury properties in Toronto’s downtown core: Ritz-Carlton, Four Seasons, Shangri-La, Thompson Hotel,
Trump, Park Hyatt and other luxury
properties have opened in just the past
couple years.
Yet for all of the commonalities, cross-border trade and shopping, and shared
history, the two countries remain separated by many influences. This includes factors such as Canadian weather, the insulation each country enjoys as strong economic and cultural hubs on the global scene, and government regulation. These
factors influence how hospitality and tourism businesses operate cross-border.
Understanding Canada as a market, culture and country is important, yet too
often individuals on each side of the border fail to recognize the uniqueness of
each country.
Justin Taillon, Ph.D. ([email protected]) is an assistant professor at the University of Guelph in Guelph, Ont. Canada. J.C. Hough ([email protected].
ca) is a student at the University of Guelph in Guelph, Ont. Canada.
12
Spring 2015
Research Center
Canada’s Regions
Canada’s 10 provinces and three territories have traditionally been divided into Atlantic Canada (four provinces),
Central Canada (two provinces), Western Canada (four
provinces) and the Northern territories (three territories).
From a population perspective, as mentioned above, 90
percent of the Canadian population lives in the southern 10
percent of the country along the U.S.border. The Northern
territories are sparsely populated with “major” cities in
Canada’s northern regions such as Whitehorse, Yellowknife
and Iqaluit having fewer than 25,000 residents.
Toronto will become one of the most populous cities in
history to hold the Pan American Games while the Women’s World Cup is taking place in multiple cities throughout Canada (e.g. Ottawa, Montreal). Toronto is the most
populous city in Canada and the Greater Toronto area has a
population of approximately 6.75 million people. If Toronto
were located in the United States it would be the fourthlargest metropolitan area after New York City, Los Angeles
and Chicago.
Recent Examples of Cross-border Business Growth
The economies of Canada and the United States are
similar. They are each other's largest trading partners and
it can be easier for companies based in one country to expand into the other country than Europe or Asian markets
due to culture, language and proximity. That being said,
Canada’s population and GDP are both about a 10th of the
United States’. Furthermore, there are differences in the
business environment. For example, Target in the United
States is burgeoning, while Target in Canada was forced
to close amid billions of dollars in financial loss. Yet other
companies have found success. U.S.-based Fortune 500
organizations such as Walmart, McDonald’s, IBM, Home
Depot, Lowes and several major hospitality chains (IHG,
Marriott, Starwood, etc.) have a significant presence in
Canada. Several Canadian-based companies have a significant presence in the U.S. including Restaurant Brands
International (owner of Burger King and Tim Horton’s),
the Hudson Bay Company (owner of Saks Fifth Avenue),
TD Bank Group (owner of TD Bank and TD Ameritrade)
and Blackberry Limited.
Most recently, Marriott acquired Delta Hotels & Resorts’
38 properties in Canada for an estimated $168 million,
making Marriott Canada’s largest hotel company. Deals
such as this are typical in some ways in that businesses on
either side of the border are seeking to enter the other’s
marketplace in the name of growth and increased profits.
Pan Am Games
The Pan Am Games attract more than 25 million Canadian,
American and international visitors annually. This year they
will be July 10–26 in Toronto, Canada’s most visited tourist
destination. The expansive tourism infrastructure in Toronto
boasts 19,000 tourism-related businesses, employing more
than 329,000 people who work in tourism, hospitality and
related services.
More than 16 million tourists arrive in Canada annually with international tourism receipts equalling US$17.4
billion. The combination of domestic and international
tourism contributes 7 percent of Canada's total GDP and
supports 309,000 jobs in southern Ontario. The Pan Am
Games, alongside the 2015 Women’s World Cup, seek to
grow these figures.
In 2015 the Toronto region will host the Pan/Parapan
American Games (August 7–15) and Women’s World
Cup (June 6 – July 5). These Games will promote major
infrastructure developments across the region. Examples of
infrastructure development include:
• Investments of $1.4 billion in for stadiums and athletic
villages which will be enjoyed by tourists and locals
once the games have been completed.
• To accommodate the visitors and spectators around
the world there are currently two major transportation
projects that are currently under construction to provide
enjoyable access to tourist venues around the region:
o The revamp of Union Station is a $640-million
completion expected in time for the games
o With a total budget of $456 million forecasted in
2010, the Union Pearson Express will provide fast,
safe and suitable service between downtown Toronto
and Toronto Pearson International Airport.
Growing Tourism Opportunities
Toronto is currently experiencing enormous growth in the
hospitality and tourism sector. Coupled with lower gas
prices in North America, the strong U.S. dollar and megaevents in 2015, there is an expectation that North America’s
fourth largest English-speaking city is poised for continued
hospitality and tourism sector growth. ■
The Bottomline
13
Monique Jaqqam
14
Spring 2015
Kapila Anand, CPA
Clare Cella, CPA
Agnes DeFranco,
Ed.D., CHAE
Anna McFarland,
CPA, CFE, CHAE, CHTP
Arlene Ramirez,
MBA, CHE, CHAE, CHIA
T
o celebrate HFTP's strategic goal of elevating our members' professional stature, we decided
to publish a special feature on some of the most influential women in hospitality finance. The
list was generated by polling HFTP membership. This list might not be complete, but it is certainly
an excellent representation of the industry’s best and brightest.
They came to finance because of their affinity and interest in working with numbers. And while
financial reports might be their own special language, they thrive on interpreting the information
to those outside of the accounting/finance departments to demonstrate the health of a business.
In our interviews with these women, there was an overall consensus that while females have
been few and far in between in leadership positions, they have proudly taken on the responsibility
to share their expertise to support a diverse workplace.
“It is so encouraging to see the growth in affinity networks, development programs and mentoring
initiatives that help to advance diverse candidates,” says Kapila Anand, CPA. “At KPMG, I have
seen the great impact such programs can have in advancing women’s careers, and I encourage
the industry to continue to implement programs that foster diversity and inclusion in the workplace and the C suite.”
What follows is a cross section of the women — working on-property, as auditors, academics
and consultants, with a variety of specialties — who are guiding the path of hospitality finance.
Michelle Russo,
CHAM, MAI, CHA
Tina Samson,
CPA, CHAE
Jerilyn Schnitzel,
CHAE, CHTP, CAM
Gina St. George,
CPA, CFE
Marie-Josee Theoret
Wendy Zurstadt,
CPA, CAM, CHAE
In Memoriam
Alice Banks, CHAE
The Bottomline
15
Women of Hospitality Finance
Kapila Anand, CPA
A customer-focused professional who
thrives on change and the ability to
“go where no one has gone before"
Partner, Management Consulting Practice and
Segment Leader for Travel, Leisure and Hospitality
KPMG, LLP • Chicago, Ill.
K
apila Anand has quite a significant role at KPMG LLP, the audit, tax and
advisory services firm. She leads the U.S. hospitality practice, chairs the
global hospitality network and has served as the leader for the advisory services
delivered to KPMG’s U.S. private equity, hospitality and real estate clients. If
that’s not enough to occupy her time, Anand also co-chairs the Financial Management Committee of the American Hotel and Lodging Association (AHLA)
and co-leads KPMG’s Asian Pacific Islander Network.
Anand’s career could have been different had it not been for a particular class
she took in college. While many students pad their grades by taking classes
deemed simple, Anand, looking to boost her GPA as a computer science major,
took accounting. “It came easily to me and appealed to my sense of logic.” The
class led her to a finance internship and, as she tells it, “I never looked back.”
She’s now been with KPMG for more than 30 years, advising clients in the
hospitality industry such as Hyatt Hotels Corp., Marriott International, Starwood
Hotels and Resorts, and FelCor Lodging Trust.
While, specialty areas within the industry such as financial analysis are often
left to the experts, Anand believes that there is an important benefit to getting
some hands-on experience in the finance department. She says, “In my experience, using finance as a training ground for professionals who then transfer to
"In my experience, using finance as a training ground
for professionals who then transfer to other areas
within a hospitality enterprise has worked well to cross
pollinate the operations, risk and reporting sensitivities
of the broader organization"
other areas within a hospitality enterprise has worked well to cross pollinate the
operations, risk and reporting sensitivities of the broader organization."
In the early years of her career, Anand can attest to a dearth of women in
leadership and operational roles within her field. Today, the makeup has changed
somewhat, but women are still a minority at the top, which has a lasting effect.
“It limits the number of role models, which in turn has an impact on talent in the
pipeline,” she says. “That is why it is so encouraging to see the growth in affinity
networks, development programs and mentoring initiatives that help to advance
16
Spring 2015
diverse candidates. At KPMG, I have
seen the great impact such programs
can have in advancing women’s careers, and I encourage the industry to
continue to implement programs that
foster diversity and inclusion in the
workplace and the C suite.”
Anand is committed to taking an
active role in sharing her expertise
and experiences for the benefit of the
industry. She is a frequent speaker at
industry conferences and forums for
organizations such as AHLA, HFTP,
National Association of Corporate
Directors and Women Corporate Directors. She has also authored articles
on hotel and real estate investment and
finance for Hotel Management, the
Wall Street Journal and more.
As she continues to weigh in on
industry issues, Anand thinks this is
an exciting time to be a part of it. The
industry has always been a customer
service and data-driven business, but
innovations in data and analytics are
transforming the industry.
“Today’s data science and analytics tools allow us to learn from data in
ways we couldn’t imagine years ago,”
she says. “Using information gathered
from social and digital platforms, we
can see customer preferences or buying patterns and act upon that data to
engage and reward individual guests in
unique ways.” ■
Written by David Eisen
Clare Cella, CPA
A trusted advisor to her clients and
professional network — working together
to achieve the same goal: success
Partner • PKF O'Connor Davies
New York, N.Y.
C
lare Cella, a partner at PKF O’Connor Davies, is not your vanilla, run-ofthe-mill accountant. Sure, she knows U.S. GAAP backwards and forwards,
but reeling off tax code procedure only begins to illustrate Cella’s story.
No matter what, Cella’s focus first and foremost is on her clients, and making
sure that they understand the ramifications of their business. “I strive to provide
clients with a number of beneficial resources beyond basic accounting and auditing services,” she says.
Her biggest strength being the ability to take the complex and break it down
into what’s digestible. “I am capable of breaking things down into terms that my
clients will understand. These tools ultimately help them succeed,” she says.
It’s an aptitude that was fostered and burnished at an early age. Like a preacher born into an ecclesiastical family, Cella was reared in a finance surrounding.
“There are several people that have been influential in my career, but my mother
was the one who taught me bookkeeping,” she says.
It was from her mother that she grasped the technical aspects of accounting,
and it was also from her, and later those at her firm, that she learned maybe a
more important lesson, in ethics. “Both my mother and the managing partner of
PKF always advised me to be confident in myself and always do what is right,
even if it is not the most beneficial for me personally.”
"Over the years I found my confidence. I made sure I was
seen and heard... I knew what I was doing and didn’t
need to hide it. I am definitely a stronger woman now.
Never let ‘em see you sweat."
Which is why she is a favorite of clients, who seek out her advice and knowhow in hospitality accounting and management. Cella provides accounting and
business consulting services to purchasers and sellers in both the hotel and real
estate markets and is accomplished in purchase and sale transactions.
Though Cella is an accountant by trade, it’s accounting within the context of the
hospitality industry that gives Cella her most joy as a practitioner. Her introduction
to hotels came during her first year with PKF (she’s now been with the firm for 27
years), when she was assigned to an audit of a New York hotel. That experience
laid the foundation for her career. “Learning and understanding the behind the
scenes of a hotel operation was intriguing,” she says of the time.
18
Spring 2015
Indeed, she was hooked, and requested additional assignments in the
hospitality space of the firm’s practice.
It’s the intricacies of hotel operations
that, she says, gives her most satisfaction, “an appreciation of the complexity,” she calls it.
Beyond her professional duties,
Cella acts as a mentor to those rising
through the ranks at PKF. “I try to be
a good role model,” she says. For that
reason, Cella is involved in the firm’s
career advisory program. “People want
feedback to know what they are doing
well and what they need to improve
upon,” she say. “This program has
proven successful within our firm as
our retention rate is very good as compared to the industry average.”
Undoubtedly, Cella has a wealth
of knowledge to pass on to younger
generations of accountants. “Early
in my career, my biggest challenge
was as a young woman dealing with
male clients who were older and more
experienced and feeling dominated by
them,” she says. “I didn’t feel seen or
heard, and it affected my confidence.
That annoyed me.” But, it didn’t take
Cella too long to find her stride. “I
made sure I was seen and heard, which
is difficult to do while remaining
professional,” she says. “I knew what
I was doing and didn’t need to hide it.
I am definitely a stronger woman now.
Never let ‘em see you sweat.” ■
Agnes DeFranco,
Ed.D., CHAE
A teacher and life-long learner, who embraces
the challenge of demonstrating the importance
and fun of finance and accounting
HFTP Global Past President, 2006 – 2007
Paragon Award Recipient, 2009
Professor and Conrad N. Hilton Distinguished Chair
University of Houston • Houston, Texas
T
he Lone Star State is where Agnes DeFranco calls home. More specifically,
Houston, where she currently teaches hospitality finance at the University of
Houston. Considering DeFranco’s backstory, that she’s even in Houston now is
extraordinary enough.
Growing up in Asia, the University of Houston was literally and figuratively
miles away. But DeFranco, at an early age, displayed an intrepid spirit. “Being from Hong Kong, and leaving home to study abroad at age 18, I originally
planned to return to Hong Kong upon graduation,” she says, adding that a degree
in hotel management is considered a great asset back in Asia. But whether it was
Texas hospitality, or something else, DeFranco remained in the U.S., and at the
university ultimately received a master’s degree in finance. She was eventually
asked to stay as a part-time finance teacher. Though a career in teaching hadn’t
dawned on her until then, she accepted.
“Doors kept opening for me,” she says. She liked to teach and went on to
pursue a doctoral degree. “Twenty-six years later,” she says, “it is still one of the
best decisions of my life.” Indeed, it has been. Her resumé is full of accolades and
achievements, including co-authoring more than 80 peer-reviewed articles and
serving as a project leader on HFTP's Global Hospitality Accounting Common
Practices. And what she finds most challenging, she also finds most rewarding.
"I am like a mother to my students (that is what my fellow
colleagues tell me) — I want them all to be the best they
can be, never give up, never give in. Most importantly,
I want them to earn a degree not just to make a better
living for themselves (that is a given), but make living
better for everyone around them."
Teaching accounting and finance to hospitality students is a formidable task,
DeFranco says, primarily because a majority lean more toward people pleasing,
not tracking debits and credits. “Most of our students are very gregarious, and
love to interact and serve,” DeFranco says. “Their inclination is toward people,
not numbers, and definitely not sitting in an office all day, working on Excel
worksheets.” The difficult part then is convincing students that accounting and
finance are not only important, but can be fun. “It’s not easy to do,” she says.
Nonetheless, many of DeFranco’s students have taken up hospitality accounting or finance as careers, as she continues to nurture and mold the future minds
of the industry.
“Our industry is a multi-faceted
industry,” DeFranco says. “Going
forward, to be successful, our future
leaders not only need to be hospitable
and people-centered, but they also need
to be mobile, technologically savvy,
adaptable, resourceful and critical thinkers. Seeking, training and retaining such
leaders are our top challenges.”
As a professor, DeFranco dismisses
the notion that accounting and finance
are static disciplines. “One may say
they don’t change much, but with technology, everything is impacted,” she
says, adding that at the operation level,
it’s all about balancing newfangled
technology with the human touch.
Beyond the classroom, DeFranco
is an avid reader of mystery novels (“I
have all of Agatha Christie’s books except one — and it is out of print,” she
says) and is also a yoga devotee — the
bird of paradise pose, her favorite.
As an academic, DeFranco understands that many in her position look
at tenure as the ultimate goal, but it’s
the path there that is most gratifying
for her. “What I remember the most
are the tears of happiness at graduation, the smile from the student who
struggled through a semester in accounting and finally made his or her
first A, the news from a student that he
or she just received a promotion,” she
says. “I will always remember those
precious moments.” ■
The Bottomline
19
Monique Jaqqam
An analytical thinker who looks behind the
numbers to understand what they mean for
improving a company’s financial performance
Vice President, Finance Europe
Director of Finance • Kempinski Hotel Adlon
Berlin, Germany
M
onique Jaqqam has an analytical perspective on the industry. When asked
about the challenges and opportunities facing the industry, Jaqqam is quick
to go in-depth on what makes finance departments tick.
"The most important developments are around systems and back-of-the-house
processes," Jaqqam explains. "Over the last years, a lot of solutions were developed for cash handling, account reconciliations and automated procurement-topay workflows. What needs to happen now is that we find solutions that integrate
those functionalities, reducing the number of interfaces and applications we use."
One example she cites is the use of separate accounting and inventory systems, something that still exists, she says, even at big chains. "With the number of ERP [enterprise resource planning] systems on the market, that became
relatively inexpensive, we now have a chance to combine both and become a lot
more efficient."
From a bigger picture perspective, what she calls "the other great challenge"
is one that has to do with changing perceptions on who owns the numbers. The
information derived from financial analysis is a great strategy tool for all managers. "Controlling does not 'own' the P&L (Profit and Loss), but merely provides
data and data analysis to be used for department heads and executives to manage
their department successfully. The business plan/budgeting process is not a con-
"The best way to address the challenge of explaining the
numbers involves understanding where the other person
comes from, then you train and explain things. The good
thing about hotel finance is that it is not complicated and
very tangible, so people grasp the concepts quite easily."
troller's exercise, but needs to be a combined effort of the hotel executive team,
setting the course and strategy for the next year," she says. "The finance/figure
part is then merely a translation of strategy into numbers."
She knows that translating the information can be tricky for many in financial departments. "What is always difficult is to find the right balance between
being the rigid financial controller who challenges the operations team and asks
unpopular questions, and being the business partner who is there to support," she
20
Spring 2015
says. She encourages her peers to, of
course, pay attention to details and
provide accurate work, but not be one
of those "bean counters who argue for
the sake of arguing over insignificant
matters. It takes stepping back and
evaluating the situation to select a
course of action that promises the best
solution and outcome."
Detailed training of staff on all
parts of operations and processes can
help make this happen. "Operations
knowledge is essential to gain credibility within the company. It enables me
to evaluate planned actions, foresee
the (financial) outcome and propose
alternatives."
For Jaqqam, decompressing away
from the office comes in a way that
might surprise her coworkers. While
the core of her professional experience has been with five star hospitality
companies (she also worked at Conrad
International and Sofitel earlier in her
career) and loves luxury hotels, she
spends her summer vacation camping
with her family. "I like being in nature,
and find it important for kids growing
up in our over-technologized world;
it's also a good way to spend some
'analog' time: running around outside,
getting dirty and having fun." ■
Written by Margaret Littman
A numbers person with a
personality who likes to take
the mystery out of finance
HFTP Global Past President, 2011-2012
Corporate Controller • Dow Hotel Co.
Yakima, Wash.
T
here's a stereotype of the person who chooses a career in accounting. And
Lisa Funk Martin does not fit it. In fact, Martin says, "I have often been accused of being in sales and marketing because of my outgoing nature." But sales
and marketing's loss is accounting's gain. Since 1997, when she "accidently fell"
into the industry when she accepted a job as the controller/office manager for the
Yakima Country Club, she hasn't been able to imagine another career.
She now sees part of her job as "teach[ing] others the why and how of numbers. When an individual understands the numbers (the story) they become better
managers. I love helping people understand that numbers are not scary," Martin
says. "Those in accounting/finance need to become teachers. It is our responsibility to spend time with our managers so they understand where the numbers are
coming from. Numbers should not be a secret: Everything we do has an impact
on our business and when everyone understands that, we can work as a team."
Martin, who has worked in a country club, hotel, an athletic club, a university and for hotel management companies, remembers when she was director of
financial operations at Willows Lodge. "I remember the executive chef telling me
he couldn’t believe I was his manager because I didn’t really care about food."
She promised "to teach [him] about his role as executive chef and how to analyze
his numbers so they were more meaningful to him." Eight months later that same
"I love to teach others the why and how of numbers.
When an individual understand the numbers (the story)
they become better managers. I love helping people
understand that numbers are not scary."
executive chef was at a meeting with food and beverage directors, chefs and general managers from across the country, and that chef was impressing everyone
with the statistics he knew about his kitchen and his operation. He gave credit to
Martin (who wasn't even in attendance) for teaching him those fundamentals.
Her interest in sharing the numbers is why as HFTP Global President, Martin
helped initiate the development of the Global Hospitality Accounting Common
Practices, an online resource offering a searchable database of operating financial
reporting practices. She says, "Being able to understand how others in your region
or around the world are accounting for aspects of their business helps everyone with
comparability. The sharing of information is huge and I hope to see more of it."
At the same time, there are other
nuances to the hospitality business that
need to be understood. "Finance/accounting professionals need to understand the operations side of hospitality.
Any accountant can do journal entries
and balance sheet reconciliations, but
in order to be an effective financial
leader you need to understand how the
operations work," she says. "When the
accounting staff spends time behind
the front desk, cleaning a room, working in the laundry department and time
in the restaurant, they become better at
their jobs." Basically, Martin's mantra
can be boiled down to one sentence:
"Accountants need to get out from
behind their computers."
When Martin is able to take her
own advice, she goes big. She is an
outdoors lover, and at age 50 she took
up downhill skiing and swooshing
down the slopes in nature is one of
her favorite away-from-the-computer
activities. For relaxation at slower
speeds, she's an avid reader who plows
through a book a week.
Be it personally or professionally,
Martin doesn't get bored. She sponsors
three children through World Vision
(one in Ecuador, one in the Dominican Republic and one in Kenya). And
of her career she says, "My favorite
part is that every day is different. One
never knows what a member or guest
is going to require." ■
The Bottomline
21
Anna McFarland,
CPA, CFE, CHAE, CHTP
A professional who transforms the
ordinary into the exceptional through
innovation, collaboration and strategy
Vice President / CFO
Hospitality Industry Performance Management
Kaufman, Texas
A
nna McFarland understands the language of business finance, and it is this
understanding coupled with a fascination for how businesses are managed
that has driven her professional journey. McFarland is not only a trusted advisor
with the know-how to drive property-level profitability, but she has also extended
her expertise to fraud prevention, ethics and leadership. Brought into this mix is
hospitality. She says, “There is a challenge to managing hospitality with the ups
and downs of the economy and the [amount] of acquisitions, dispositions, mergers, repositioning, renovations, contract negotiations, [etc.].”
It was by way of her do-it-all auditor position at a public accounting firm
that led her to specialize in hospitality. Not interested in banking, insurance nor
automotive dealerships, she asked the managing partner if she could start a hospitality business unit. He agreed and “from there I polished my business development skills and recruited several domestic and international hotel companies,
expanded my country club clientele, and various restaurants in the Dallas area,”
McFarland says. “The business unit was a great success and this was the start of
my dedication to the hospitality industry.”
She followed up with a career that included successive finance positions at
both hotel companies — Rosewood Hotels & Resorts, Sofitel Luxury Hotels,
Benchmark Hospitality, Carver Hotel Group — and developing business solu-
"To learn and be successful in business helped me to
achieve my personal/family financial goals. I entered
the finance field because it touches every level of
a person’s personal and professional life, this field is
fascinating to me."
tions through her own consulting firm. And as her expertise was built, she saw
first-hand how important it is to set the right “tone at the top.”
“A culture of strong ethics and compliance is proven to improve branding, employee loyalty/moral and company pride, while deterring potential litigation,” says
McFarland. “Changing a negative culture is not an easy endeavor, but it is possible
if leadership’s desire is strong enough and is persistent. These things all add up in
building a strong company culture and successful, sustainable company.”
Looking to provide effective guidance, McFarland takes action to solve
problems, even looking outside the hospitality industry at common issues that
present across the business landscape:
credit card fraud, hacking and new
technology. “I always want to provide
the appropriate answer to a question.
So by being able to research, network
and having the means to cultivate an
answer, I also see what is just over the
horizon,” she says.
The trend on the horizon that interests her is how technology will recreate the hospitality industry. “Ten years
ago, we were not having discussions
about social media or big data. Predictions for 2015 include conversations
about advanced automation, jobs that
will be extinct soon and skills needed
to adapt. I find this type of advancement and quick adoption to be exciting
and creates a positive energy within
the hospitality environment.”
Much of her skills as an industry
leader she credits to HFTP. She served
on the HFTP Global board, executive
committee and as HFTP Global President. And, she still continues to be
active with the association, most notably as an advisor for HFTP’s Global
Hospitality Accounting Common
Practices (GHACP) online database.
“My best professional experience was
being installed as the Global HFTP
President. The experience… provided
me with an opportunity to practice and
improve my public speaking, run efficient meetings and embrace debate as
a healthy learning experience, instead
of a conflict.” ■
22
Spring 2015
Arlene Ramirez, MBA,
CHE, CHAE, CHIA
A practitioner of all hospitality trades
— clubs, hotels and academia —
who never settles for the status quo
HFTP Global Vice President
Faculty • C.N. Hilton College of Hotel and Restaurant
Management, University of Houston
Principal • ADR Hospitality Consulting
The Woodlands, Texas
F
ew things bother Arlene Ramirez; one, however, is resistance to change. She’s
a big fan of innovation and has never been afraid to shake things up. Which
may sound a tad strange for someone in the hospitality finance field; but she
finds that the status quo oftentimes doesn’t cut it. “My top worse answer from
anyone when I would go to properties to complete operational audits was, ‘Because we have always done that!’ It made the hair on the back of my neck stand
up,” she says. Not so much because processes had to change she explains, but
because it is a challenge for a staff to be effective when they don’t have a good
understanding of how they contribute to the business' overall success.
Instead, it is incumbent on organizations to foster open communication
amongst their team members so that they can beat back the status quo. “Make
sure that everyone knows why they are performing certain tasks or jobs, and
provide an environment where your team feels open to question and determine
if there are more effective, efficient, profitable, imaginative ways of running the
business,” Ramirez says. “Some ideas may surprise you.”
What’s not surprising is Ramirez’s passion for the field of hospitality finance.
She’s been priming for it since high school. “I always knew that in college
business administration would be my course of study.” And so it was, first at the
University of Texas, where she studied accounting, followed later by an MBA at
"Provide an environment where your team feels open
to question and determine if there are more effective,
efficient, profitable, imaginative ways of running the
business. Some ideas may surprise you and be so obvious
that many will wonder why it was not done before and
may not require any significant capital investment."
Sam Houston State University. Her career in finance began at the property level,
first as assistant controller at two Marriott properties and then at The Woodlands
Resort and Conference Center, and eventually serving as a director of finance
with Four Seasons. From the corporate side, she served as corporate director of
finance with Benchmark Hospitality International, where she was involved in
many aspects of the business, from property issues to new project development.
All these experiences led her to her present role as lecturer at the Conrad N.
Hilton College of Hotel & Restaurant Management at the University of Houston
and running her own consulting company.
She attained her goals by not following the norm, having the opportunity to
work on some unique projects that required different approaches. These experi-
ences varied, from finding off-theshelf software for a small country
club, setting up a PMS system for a
13-room luxury lodge in Montana
and being involved in the opening of
a property in Thailand. “I learned to
draw from my different experiences,
both professional and personal, and
find the solution that would be most
effective and the best source of the
owner’s capital,” she says.
While she has been through numerous ups and downs in the hospitality
industry, her outlook remains positive.
She is drawn to changes such as the
impact of the downsizing of hotel accounting/finance staffs, the increased
regulatory environment and the move
to more self-service in hotels.
Her sense of hospitality is not exclusive to her professional role, as she
is committed to being involved with
her local community. To her, giving
back in any way is important; something she feels is a common sentiment
among those in the industry, as hospitality is about taking care of others.
While Ramirez has achieved much,
there are still moments in life that
present challenges. Like when she
had her first piano recital, having just
started learning to play three years
ago. The lesson was clear, she says.
“Sometimes we need to stretch ourselves past our comfort zone so that
we can appreciate that we still have
much to accomplish.” ■
The Bottomline
23
Michelle Russo,
CHAM, MAI, CHA
A foward-focused thought leader and
innovator in the hospitality asset management
and hotel real estate space
Founder and CEO
HotelAVE
Providence, R.I.
M
ichelle Russo began her accounting career in hospitality at an early age.
She recalls that as a child, she would help her dad complete inventory in
his restaurants. She would check off the number of units as her dad called out the
numbers. Upon her graduation from Cornell University, with a degree in hotel
administration, she pursued her love for finance in a career that has spanned 25
years, working at multiple financial advisory firms. She now pulls focus on her
experience and hard work to oversee and grow her own hotel asset management
company, Hotel Asset Value Enhancement (hotelAVE).
Russo is known for three significant strengths. She is able to see both “the
forest and the trees," meaning recognize both the details and the big picture.
She is also good at creating change and having a forward focus (something she
learned as a stock analyst). "I have taught my team to put a stake in the ground
and constantly reevaluate the forward outlook in order to help our hotels manage
to that expected outcome," she says. "As a result of the proactive outlook, we
influence forward change instead of reporting on the past."
Despite her hard work, it wasn’t always an easy journey for Russo who had
a difficult time being recognized for her skills and abilities. Early in her career,
she explains that she was often shown the design boards for hotel renovations,
while the general manager would speak to her male summer intern about the
"My clients say I can see both the forest and the trees.
That is a serious compliment about my ability to get
into the details, as well as the ability to pull out and
see the big picture. "
numbers. She says being overlooked because of her gender didn’t faze her
though, as long as the objective was accomplished. To combat the perception,
she pursued professional designations in her early-'20s: the Certified Hospitality
Administrator (CHA), Certified Hotel Asset Manager (CHAM) and Appraisal
Institute Member (MAI).
Russo recalls her biggest challenge has resulted in one of her largest successes. When she left Deutsche Bank Alex Brown in her mid-'30s. She had a strong
resumé, a good range of experience, a successful career and multiple job offers,
24
Spring 2015
but none gave her the amount of responsibility she was capable of executing. This was the primary reason she
started her own business. "During the
first few months of starting my new
company, one of my competitors said
I should call them for a job. I asked
them if the job would be at the partner
level and the answer was a quick no.
I’ve never looked back."
Russo knows the value of her expertise, and likes to work with the industry
on knowledge-sharing projects. She is
on the Financial Management Committee of the American Hotel and Lodging
Association (AHLA) and helped revise
the Uniform System of Accounts for the
Lodging Industry (USALI) for the 11th
Edition, a two-and-a-half year process. "I was incredibly interested and
invested in the process," she says. She
is also author of several hotel financerelated white papers and is a frequent
speaker at industry events, primarily
speaking on asset management.
Outside of work, Russo has a keen
interest in space and stars: observing
constellations through her telescope,
watching all of the recent series Cosmos, and attended a talk by show host
Neil deGrasse Tyson. In addition to
her love for space, she aspires to be a
beekeeper. "I will be one someday!" ■
Written by Kathy Zheng
Tina Samson,
CPA, CHAE
A results oriented professional with an
acumen for driving profitability and a
keen sense of organizational behavior
CFO
UCF Hotel Ventures, DBA Loews Hotels at Universal Orlando
Orlando, Fla.
A
s a driver of a Corvette, Tina Samson does everything on the fast track.
Take, for example, her start in the industry. Many professionals have spent
their entire careers in finance. But Samson can go back pretty far. While she was
a sophomore in high school she worked as a cashier for a major retailer, working up to office supervisor, then responsible for reconciling the daily cash drops
from cashiers older and more experienced than she was. By the time she was
a high school senior she worked as an accounts payable clerk. By the time she
graduated from LaSalle University in Philadelphia, where she studied accounting, she was a financial analyst.
That experience set her on a trajectory of results and performance above all
else. She's weathered all sorts of ups and downs in the industry. Beginning her
career in hospitality when a job opportunity opened up for her after a move to San
Diego, she went from line accounting operations at Wells Fargo Alarm Services to
vice president controller at Hotel Del Coronado. She followed-up with five years
at Planet Hollywood headquarters in Orlando, and was then hired by Loews Hotels
(where she is still CFO) one week after the September 11 terrorist attacks. "That
tragedy was devastating for our nation in so many respects," she says. "The travel
and tourism industry was impacted significantly and the trickle-down effect on the
economy took years from which to recover." Then in the summer of 2004, Central
"You get what you expect, and if you expect to encounter
discrimination or expect to be treated differently, then
you will be. Focus on the skills of executive leadership and
the rest will take care of itself."
Florida was hit with not one, but four hurricanes. And, of course, she had the experience of being one of a small group of women at the top of hospitality finance.
"While I did work in environments that did not filter performance or ability
through a gender lens, I do believe that my leadership style helped to cultivate
that culture," Samson says. "You get what you expect and if you expect to encounter discrimination or expect to be treated differently, then you will be. Focus
on the skills of executive leadership and the rest will take care of itself."
As she has climbed the ladder of success, she's held on to one best practice
she learned in college: active listening. "The technique trains you to refrain
from the natural instinct to formulate
a response while the person you are
engaged in conversation with is still
communicating," she explains. "An
effective active listener can facilitate
through an exchange of conflicting
ideas to a mutual conclusion without
creating misunderstanding and more
conflict."
Careful communication and action
translates to her stringent application of “RTRFT: doing Right Things
Right the First Time.” She first used
this method when she chaired a committee of colleagues to develop a
method to improve work flow across
departments. She says, “Our project
of re-engineering the workflow was a
huge success. And I have applied the
concept to countless situations.”
Samson's interested engagement
and dedication to effective leadership
has helped her grow as a professional.
And she has sought it out by being
active in the industry outside of her
office walls. She credits her experience in HFTP Global leadership as
“an avenue for and a facilitation of
networking within our industry like
no other. Being an integral part of the
association has helped me be the best
that I can be. As a former officer of
the association (1995 – 2004), I had
amazing experiences and formulated
lifelong friendships that I cherish.” ■
The Bottomline
25
Jerilyn Schnitzel,
CHAE, CHTP, CAM
A club accounting problem solver who
helps clubs in times of turmoil and trouble
Principal
Schnitzel Hospitality Consulting
Punta Gorda, Fla.
H
aving no concept of stranger danger as a child, Schnitzel grew up with a love
of people. This combined with her hard working tenacity and skilled accounting experience has led her to establishing her own consulting firm, Schnitzel
Hospitality Consulting. The independent nature of her business fits right in with
her outgoing personality, as she is at ease walking into new environments, country
clubs and community associations, to serve as an interim or consulting controller
and helping the entities during times of struggle.
She began with an accounting career in Washington, D.C. working for Private
Career Schools. She recalls that she fell into the hospitality industry when she
moved to sunny Florida in 1987 to work at Burnt Store Marina as their data
processing manager. During that time, country clubs were beginning to transition
into the hospitality industry, and the company was installing their first computerized general ledger system that she was hired to implement. She was quickly
promoted to accounts manager, and followed up with multiple career moves that
gave her a strong list of credentials for her resumé. In 1999, she was hired by
Laurel Oak Country Club to set up its accounting functions. She says, "At that
time I did my first install of the Jonas Accounting System. My career in finance
just progressed from that time on."
Integrating accounting systems, as well as technology in general, at clubs was
"I am a problem solver. I like to put the pieces of
the puzzle together and have them fit. The nice
thing about accounting is it has to balance.
When it doesn’t, the fun begins. "
a huge challenge in that period of her career, partly because the funding to support it was not a priority. “Country clubs tend to be about five to 10 years behind
hotels with technology. Good news is a lot of our members are more tech savvy
these days and are beginning to demand more technology in the clubs," she says.
And when it comes to managing the books, she suggests treating every month
like a year-end close, and not putting off the things you hate most (for Schnitzel,
that's fixed assets). "I challenge all of the clubs I work with to reconcile all of
their balance sheet accounts monthly. If this is done, then year-end audit preparation is a snap and you will recognize a problem early on."
26
Spring 2015
It's professional insight like this
that has gotten her known as an industry problem-solver. She is often called
upon to step into tense environments
and turn things upright. "I have been
described as a pinch hitter for club
accounting. I specialize in helping
clubs out during turmoil and turnover.
I like to solve the puzzle and build
the financials back so the new person
coming in can have smooth sailing
going forward."
Schnitzel's business acumen is
nothing new to her, as both her mother
and sister are successful women in
their own right and have given her
guidance and inspiration. Her mother,
who ran her own business, and who
at 84 still leads computer classes, told
her, "be honest, work hard and you
could do anything you set your mind
to." Her sister, who demonstrated by
example, is someone she can sit down
with and talk through a problem,
helping her find solutions she wouldn't
have otherwise seen.
If traveling from club to club is her
workplace standard, then traveling
from baseball field to baseball field is
what she does in her leisure. In 2013
she was, together with her husband
Greg, placed in the Sports Travel and
Tours Stadium Hall of Fame in Cooperstown, N.Y. for having visited and
attended a baseball game in every city
in the Major Leagues. ■
Gina St. George,
CPA, CFE
An auditor, accountant and controller
with a love of forensic investigations
Business Assurance Senior Manager,
Hospitality and Gaming Services
Moss Adams LLP
Tacoma, Wash. USA
W
hile Gina St. George — a Certified Fraud Examiner — fully admits to
enjoying the puzzle-piecing process of a fraud investigation, she still
would prefer to have less cases to delve into. And so as a lead auditor, forensic
accountant and business consultant, she works together with her clients to build
a proactive approach to fraud prevention. She says, “I’d much rather help companies protect themselves and their employees from temptation by establishing the
right internal controls to mitigate fraud risk in the first place.”
A prevention approach is what makes St. George a trusted advisor to her
hospitality industry clients. With the promise and challenges of new technology,
cost-cutting measures and the increase in hotel transactions, she sees additional
areas where caution is needed. On the financial side, scrutiny is needed: Both the
rise in hotel transactions (with changeovers revealing questionable practices) and
lean accounting departments have brought blind spots that are easy to manipulate. “The cost-cutting measures many companies have had to take in the last
several years mean there’s often one less person available for the segregation of
duties — which is a critical component of any good fraud prevention program.”
In terms of cloud-based technology, St. George counsels companies to look into
a service provider’s background and infrastructure before turning over important
data to its domain.
"A good leader does not always have all the answers, but
he or she needs to know the questions to ask, who to talk
to, and then how to translate that into a road map for
change. The change may be operational, financial or
organizational in nature, but it is all about resolving issues."
"A good leader does not always have all the answers, but he or she needs to
know the questions to ask, who to talk to, and then how to translate that into a
road map for change. The change may be operational, financial or organizational
in nature, but it is all about resolving issues."
Keeping watch over the numbers wasn’t St. George’s entry into her hospitality career. Rather, she was in the kitchen as a short-order cook, then as a trained
chef. While she’s still an avid cook today, she realized that, professionally, the
positions of controller and CFO were more exciting to her than wearing a chef's
toque. So she went back to school and became a CPA. Since then, she’s worked
for casinos and accounting firms that
serve hospitality clients — a total of
three decades in the industry.
She calls on her experience in a
multitude of ways. "One thing I learned
early on in my career in operations
management — I call this Management 101 — is that if there’s some kind
of equipment malfunction, turn the
machine off and on again before you
call the service technician," St. George
says, referring to that time-honored
method of starting with a simple fix.
"Today I don’t take that lesson quite
as literally, but it still applies. When
you’re facing a complex issue and
aren’t sure where to start, take a step
back and think about the basic problem. I often take that approach to client
work, asking questions and developing
an understanding of what the client
needs most. From there you can build
on your basic understanding and then
dive into the more complex issues."
Given the breadth of her experience,
St. George knows that she's a problemsolver, and will often do everything
from providing training to a client’s
employees to answering a client’s question that falls outside the scope of an
engagement. "I’ve lived their challenges as well. I take great pride in knowing
they can reach out to me and have an
answer. And even if I don’t have the
answer myself, odds are I know where
to refer them to find a solution." ■
The Bottomline
27
A club professional passionate about
keeping the numbers and industry upright
Partner, National Director of Club Services
McGladrey LLP
Fort Lauderdale, Fla.
H
aving grown up under a father who owned a restaurant and bar, Tassitano
never strayed far from the hospitality industry. After playing collegiate golf
at the University of Miami, Tassitano knew that she wanted to specialize in the
recreational sector. Twenty years later, she is sitting at board meetings, listening,
participating and enjoying discussions on the nuances of industry. “I am passionate about taking care of the people I serve at private clubs and the people I work
with,” Tassitano says.
Despite wanting to be a lawyer when she was younger, she fell in love with
accounting after having been introduced to the “doors and windows” (debits and
credits) and realizing that she could work the numbers with ease. After earning
a bachelor of business administration and master of professional accounting,
she decided to further pursue her passion and expertise in accounting, finding
her way into the private club industry early on. “I worked on my first audit of a
private club only a few months into my start in public accounting and decided to
specialize in this area soon after,” she says.
She began her career in the early-'90s during a recession period. While those
times were not easy on any industry, they were especially tough on an industry
that depends heavily on discretionary spending, and she powered through. Tassitano has definitely found her niche, but not without the guidance from two of her
"I am very passionate about the industry, but even
more passionate about taking care of the people I
serve at private clubs and the people I work with."
colleagues, which she credits. Her mentor and friend Robert Patasnick demonstrated to her a passion for what he did and the private club industry. Frank Compiani gave her counsel on navigating the fifth largest accounting firm in the U.S.
As she has built the years of experience, she has also developed some strategies of her own, including sharing ideas of what other clients have implemented.
For example, one client began using a spa minimum, an option that was not
explored previously, and is now being considered for other clients. She is now
looking forward to seeing how private clubs evolve in their amenity offerings
to match today’s demands. "Additionally, it has been a while since a significant
28
Spring 2015
accounting change has affected the
private club industry, so I am interested to see how the revenue recognition
and lease accounting standard changes
will impact my clients."
As Tassitano has made a professional home for herself in the industry,
so has she made a mark. She became
the very first female audit partner for
McGladrey in Florida. She was also
part of a team of 30 that worked on
the seventh edition of the Uniform
System of Financial Reporting for
Clubs (USFRC). The project took over
18 months and allowed her to gain a
wealth of knowledge from the other
club industry professionals involved.
In 2007, she also spearheaded a
McGladrey task force that created the
“Club Internal Control Tool,” later
purchased by the Club Managers Association of America (CMAA).
She frequently speaks and gives
presentations at the National Club
Association (NCA), CMAA and
HFTP conferences, and contributed to
CMAA’s Understanding Club Finance.
She also sits on the board of the
NCA Foundation which funds critical
research and education for the club
industry. “The Foundation is a great
way for all of us to give back to the
industry that provides our livelihood.
Without successful clubs, we would
not have jobs.” ■
Marie-Josee Theoret
A finance professional with a strong blended
focus on operations and customer service
Vice President
Loews Financial Shared Services Center
Nashville, Tenn.
M
arie Josee Theoret's expertise has always been in finance, but she knew
hospitality would become her specialty when she felt right in her element
as the accounting generalist for a five star hotel in Montreal. " I love that there
is no routine. I love the fast pace of 24/7. Above all, I love the look of a satisfied
internal or external customer. That is the confirmation of a job well done."
Going back to the beginning, Theoret graduated from the Hautes Études
Commerciales de Montréal (HEC) with a degree in finance. And over her career
she has worked as director of finance at three properties in Montreal, before being recruited to move south to Nashville in 2011 to be an executive at the newly
opened Loews Shared Services Center. The office centralizes the company’s billing, accounting and IT services for its hotels and resorts, and Theoret oversees
the financial shared services where the metrics are absolutely essential. "It is
just too easy to get lost and dilute your focus measuring too many things. Our
philosophy is to focus key metrics and to measure them on as many angles as
possible. This tells a more complete story and leads to improvements."
Getting to where she is today has come with a lot of hard work, having to
maintain confidence in her talent for analyzing the numbers. When she first
started, finance was dominated by men; and as a woman, she had to earn the
learning opportunities that would help her grow professionally. A combination
"I am surrounded by a dedicated team of directors,
managers and, most importantly, team members.
Despite our differences, we share a vision and goals...
We have found that working together is the best way to
give the best possible service. I’m very proud of them."
of technology advancements, which she had an affinity for, and supportive colleagues, provided the elements that helped her career movement. Even as early
as two years into her first hotel position, she was the second woman in her chain
to be in a financial leadership role when she was promoted to assistant controller.
Theoret gives credit for her confidence to two mentors, "They taught me to
move forward even when scared and then fear would disappear. Above all, if you
stop believing in yourself, so will others!"
The world of hotel finance does have its challenges, and rewards. Theoret
recalls one instance when the hotel was undergoing a brand transition. For the
changeover, they had to recreate
their financial history in a standalone
system. She was very influential in
the process from the selection of the
system to its installation, and through
this she gained so much valuable accounting knowledge that she jokingly
credits this opportunity as her obtaining an honorary master's degree.
It is the promise of technology that
Theoret loves, as it is essential to the
efficiency needed in a shared services
environment. "Every day presents
new and innovative ways to do things.
Technology definitely gets my attention. The challenge is integrating new
technologies."
From a team perspective, a top challenge is the generational mix. While
this can be a struggle in the workplace,
she describes the situation as ultimately leading to a more effective environment. "Having generational representation in the leadership team leads to
a better understanding and helps us
find ways to keep our team members
interested and engaged. The mix in
leadership is key to the integration of
our management strategies."
And just as precision is needed in
finance, Theoret applies it to her other
passion: cooking. She enjoys adding to
her cookbook collection and trying new
and different things, to the point where
her husband would say, “Wow this is
great, will we ever eat this again?” ■
The Bottomline
29
Wendy Zurstadt,
CPA, CAM, CHAE
Ready for a challenge, the club finance
veteran is ready to bring technology to
the forefront of the club environment
Director of Customer Relations & Business Development
Northstar Club Management Software
Coral Springs, Fla.
W
hen Wendy Zurstadt thinks back on the club industry from a quarter of a
century ago, she remembers that technology was a challenge. "Twenty-five
years ago the club industry was still very manual in both operations and systems.
Club members didn’t want technology in their faces. Yet we were seeing the efficiencies available to us in the back office. We were allowed to use technology…
as long as the members didn’t see it."
Technology adoption may still be an issue for clubs, but certainly Zurstadt
and her peers don't have to hide using it anymore. Today she sees club finance
professionals using both technology and their accounting acumen to help the
industry adjust to changing times. "Club finance professionals must be able to
produce relevant, useful information quickly and in many different ways." This
applies, she says, to those in management, governance and staff, as well as to external stakeholders. "Information is power and knowing how to capture the right
data to produce current and future outcomes is critical. The club industry is very
susceptible to the economy and measuring membership dollars is an ongoing
necessity to the success of a club."
Technology always played a very large role in Zurstadt's 25 year career in
club finance, which had provided her the tools to work efficiently and achieve
results. And so while her transition two years ago from club finance to club
"The best piece of professional advice I've been given is
never to take anything at face value — something every
finance professional learns, often the hard way. And it
doesn’t just apply to numbers — peel back the layers,
question the original outcome and don’t give up."
technology may be perceived as a big switch, it actually drew from an area of
great interest to her. "I moved from a comfort zone I had known for more than 20
years to an entirely different environment. I love being actively engaged in the
technology world and helping clubs solve problems."
Looking forward, Zurstadt is interested in hospitality technology that will
both improve members' experiences at clubs and also provide live feedback to
clubs' management. "The ability to capture utilization and usage of services,
delivering data to mobile applications and the reduction and elimination of paper
processes are all becoming more important than back office applications. Tech30
Spring 2015
nology is moving to the front of the
operations," she says.
Zurstadt herself has come a long
way, too. She remembers when she
was working at Hartford Golf Club
while studying to pass her CPA exam
and raising a toddler. "I know that I
wasn’t easy to work for during this
time: Often I was tired and my sense
of humor didn’t prevail. When I found
out that I had passed the exam, my
general manager and the office staff
gave me a special cake with CPA on
it. We all celebrated with champagne,"
she recalls. "The best laugh was that
they were more relieved that I passed
than I was. I don’t think they could
have gone through another six months
of me studying and stressing out. Their
appreciation made the accomplishment very special to me."
Zurstadt's career has had multiple
achievements, which she credits to her
determination, "I have always viewed
myself as the person who doesn’t have
all the answers; but was always willing to put in the extra effort and help
deliver results. Recognizing that I was
only as good as my staff, my resources
and my determination, I never lost
sight of what mattered in my business
life — continuing education, networking, mentors, colleagues; all of which
I found with HFTP." ■
In Memoriam
Alice Banks, CHAE
A dedicated HFTP leader passionate
about supporting industry education
Assistant Controller, Sheraton Park Hotel (at retirement)
Washington, D.C.
A
lice Hester Banks was a notable hospitality woman of finance and a dedicated leader of HFTP. She had a 28-year career with Sheraton, beginning in
1964 as a food and beverage cashier at the Sheraton Park Hotel and worked her
way to assistant controller at the time of her retirement in 1992. Alongside her
career, she was active in the International Association of Hospitality Accountants
(now HFTP).
She served as the president of the HFTP Washington-Baltimore chapter and
joined the ranks of HFTP Global leadership in 1978 as secretary. She later served
as president in 1982–83. During her term on the executive committee, her prime
objectives were education and scholarships. Her signature was on the first CHAE
certificates awarded in 1981. Banks' other focus was on establishing scholarships
and served three terms as chair of the HFTP Global Scholarship Committee.
"From the day I became a member of 'National Association of Hotel-Motel
Accountants [HFTP]' until the present, I have never had a really dull moment,"
she wrote in 2002. "Of course, there have been times when we wondered if we
would survive, but we always came through."
She was honored for her dedication to the profession and mentoring new leaders with the Alice Banks Scholarship in 1994 at the Conrad N. Hilton College
of Hotel and Restaurant Management, University of Houston. In 1998 HFTP
"The greatest honors were having a scholarship and
endowment in my name and the very prestigious
Paragon award. I am extremely proud to be a
member of this great organization and will be
active as long as you will have me."
bestowed upon her the first Paragon Award, alongside Henry "Buddy" Weeks, for
her contribution to the organization and the hospitality industry.
She wrote, "The greatest honors were having a scholarship and endowment in
my name and the very prestigious Paragon award. I am extremely proud to be a
member of this great organization and will be active as long as you will have me."
Before her career in hospitality, Banks enlisted in the U.S. Women’s Army
Auxiliary Corps (WAACS) in 1942 and was in the first group of black women
sent to France during World War II. In 2004 she was elected to The Black Patriots
Foundation Hall of Honor and her uniform is at The Women’s War Memorial
at Arlington National Cemetery.
Banks was also a lifetime “big
tent” Republican and was active in
both local D.C. and national Republican activities. She was a precinct chair
beginning in 1968 and held numerous
leadership positions in the D.C. Republican Party, including Ward 1 chair
and vice chair of the D.C. Republican
Committee. She was a delegate at numerous Republican National Committee Conventions dating back to Ronald
Reagan’s nomination in Detroit in
1980. She also was a delegate for
George H.W. Bush, Bob Dole, George
W. Bush and served as Washington
D.C. co-chair for several delegations.
Throughout her life she was an
active volunteer for multiple organizations including Special Olympics, the
Boys and Girls Clubs, and literacy
programs. She was also a supporter of
The Humane Society.
Banks passed away on March 24,
2015 at Sibley Memorial Hospital in
Washington, D.C. at the age of 93. In
accordance with her wishes, contributions in her honor can be made to
the Alice H. Banks Scholarship Fund
c/o the HFTP Global headquarters or
the Women in Military Service for
America Memorial Foundation, Dept.
560, Washington DC 20042-0560,
womensmemorial.org. ■
The Bottomline
31
Management
Good Communication skills
are key to leadership success
Use transparency to build trust and motivate employees
to exceed expectations By Danny Goldberg, CPA, CIA, CISA
T
he foundation of good leadership is communication. This is a
belief I have held for many years
and continues to be reinforced through
my interactions with management of
all levels. In fact, the older I get, the
more I realize good communication
skills are the most important asset in
the path to success. As accounting/
finance professionals, our professions are not well known to have
the strongest communication skills.
Strengthening our communication
and interpersonal skills will lead to
not only more efficient workmanship,
but also a better understanding of our
industry. Additionally, I have also
learned that communication skills are
imperative in all facets of our lives.
Be Willing to Communicate
My eight-year old son Caleb plays
select soccer and basketball. He is a
very good athlete, but our main goal is
to make sure he gets taught at a high
level in addition to developing good
teamwork and competitive skills. Over
the past year, our experience with
coaching at that level has been mixed,
to say the least. In the past year, we
have now switched teams/coaches
twice; not due to lack of sport knowledge, cost or competitiveness; but,
plain and simply, due to a lack of any
communication skills. His basketball coach would not respond to texts or e-mails
and not communicate well with parents, even though we were paying his “salary.”
More importantly, he struggled with reaching the kids. He even told me such.
In January, my son and I were watching an indoor soccer game before his
scheduled game when his coach came by and said something to Caleb. Nothing
negative, nothing derogatory; just a simple statement on preparing before the
game. Caleb looked distraught. I did not understand his reaction whatsoever. He
finally admitted to me that he was scared of his coach. This was a very unique
reaction for Caleb. I coached him for years and I am aggressive and I am a yeller
and there was never anything like that. We had been with this coach for a season
and “Steven” was a yeller. Steven is not only a yeller, but he is a negative yeller.
There is not any positive reinforcement in his coaching. For four months, I never
Danny M. Goldberg, CPA, CIA, CISA ([email protected]) founded GOLDSRD and co-authored People-Centric© Skills: Communication and Interpersonal Skill ls for Internal Auditors. GoldSRD is a provider of communication professional development, in addition to courses on internal audit, IT
audit and other related people-centric skills. He is a past speaker at the HFTP Annual Convention & Tradeshow.
32
Spring 2015
heard anything positive like good hustle, nice try, great effort… it was you scored because you finally listened to me,
etc.
For a few months, I thought my son was scared, but he
never came out and said it. On numerous occasions, I tried
to engage Steven; I would ask him what we could do at
home to continue to improve, how are things going, is Caleb meeting expectations, etc. He would either not engage
at all or take days to respond. In fact, when we chatted in
person, he could not keep any eye contact at all. Not at all.
There were many indicators of issues, but I tried to
ignore them because I wanted it to work. After the scared
conversation, I spoke to Steven and he told me he would
address the issues, but underneath the contrition was a
recurring theme — I am what I am, so either adjust or
leave. Concurrently, we were introduced to a new team and
a coach that is in customer service as his full-time job. The
differences were striking and we moved on and are very
happy with his current position. Bottom line is communication is the foundation of businesses and industries because
they involve one common theme — people.
Be Transparent to Build Trust
Employees should become managers because they can
communicate effectively. That is not always the case;
people get promoted due to technical ability and, even
though that factors into management, the key effective
management is continuous, transparent communication.
The simplest aspects of communication are not practiced
at times, which leads to conflict and employees leaving the
organization. Every company should have basic training for
new managers on how to effectively manage.
One key aspect of effective people management is transparency. As a reformed internal auditor, this has become
one of my favorite business terms. Internal auditors have
to be transparent in order to build the foundation for any
effective relationship: trust. Managers must be able to build
trust with employees to effectively motivate them. Without
trust, employees focus only on self-satisfaction instead
of working towards the greater good. How is trust build?
Transparency is the best way to build that foundation. Managers can be transparent by:
• Keeping employees informed of what is occurring inside
the organization
• Addressing issues as they occur
• Giving timely feedback on performance
• Setting and communicating expectations
Many employees' perception of happenings inside the
organization is directly correlated to their own job satisfaction. Employees tend to not trust when they are not in the
loop. Rumors and hearsay tend to hurt employee morale.
Managers cannot always control this, but they can mitigate
the noise factor by adding a few simple checkpoints with
their team. Here are some simple ideas:
Managers must be able to
build trust with employees to effectively
motivate them. Without trust, employees
focus only on self-satisfaction instead of
working towards the greater good.
• Schedule and conduct monthly staff meetings that are
focused on informing the team of what is going on in the
department and in the company
• Forward all relevant and non-confidential communication to the team
• Do not ignore office gossip; Address it head on, with the
entire team, rather than individuals.
Confrontation is not an inherently negative term;
however, we have made it as such in corporate America.
Confrontation is a face-to-face meeting concerning different view points. As a manager, it is important not to avoid
confrontation and address issues as they occur. The quicker
they are addressed, the less relevant each issue becomes.
Another way managers can promote transparency is
timely, continuous feedback. Formal feedback, in most
organizations, is given annually. However, annual frequency
can really set up employees to fail rather than succeed. Employees cannot correct issues in their work without continuous feedback on how they are doing and progressing. Now
the other side of this argument is companies tend to become
too meeting-oriented, which is a fair complaint. Managers, depending on the number of staff that report to them,
should try to plan at least bi-monthly one-on-one conversations with each team member.
Finally, one of the simplest and most obvious steps
managers should take is effectively communicating expectations. I would say, based on unrefined polling I have
conducted, less than 25 percent of managers have this type
of conversation. This is not the here is what you are supposed to do conversation; this is the here is the pathway to
success. Managers should tell staff exactly how to not only
meet expectations, but how to exceed expectations. Let's
make sure everybody is on the same page as to what is to
be done; employees cannot succeed working towards gray;
make it black and white.
Good leadership is defined by strong communication; in
fact, as I steal the premise for this next statement from the
classic Steve Martin movie My Blue Heaven, I don’t believe
in communication; I believe in OVER-communication.
Do not leave it up to chance or assumption; make it clear
exactly what you want and how you want it. Over-communication and transparency breeds trust and trust makes
employees not meet expectations, but constantly strive to
exceed expectations. ■
The Bottomline
33
Financial Reporting
Allocating the Unallocated
An alternative method for financial reporting that puts focus on the
two main profit centers: The Rooms and F&B departments
By Essam A. Mohamed, MSA
O
ne of the rules of thumb that
we have learned in the hotel
industry is that: Rooms revenue
produces much higher profit than the
Food and Beverage (F&B) revenue.
We actually rely on such conclusions
in our day-to-day decisions. Just ask
any hotel operator to choose between
Rooms revenue and F&B revenue,
and without a doubt the choice will be
Rooms revenue. How accurate is this
perception and based on what?
We calculate the departmental
profit or loss after deducting only
the allocated operating expenses.
Accordingly, if most of the operating expenses in the F&B department
are the allocated type and most of
the operating expenses in the Rooms
department are the unallocated type,
comparing Rooms and F&B profitability at the departmental level is
definitely misleading.
Let us assume that we can reasonably allocate the unallocated expenses, or undistributed between the profit
centers, would the Rooms department
still look more profitable than the
F&B department? There is a doubt
and regardless of the answer, it has to
be supported with actual data.
The purpose of this article is to
focus on our financial reports that
our industry relies on to measure, analyze and evaluate the performance of the
hotel operation and to question the reason(s) for pooling a material portion of
the operating expenses. Can we allocate the unallocated instead of pooling them
and do without the cost centers? Do we need to measure the departmental profit
or can we have a Gross Operating Profit (GOP) for each profit center and for the
total of the hotel?
Essam Mohamed, MSA ([email protected]) is director of finance for the Westmont Hospitality Group based in Toronto, Ont.
34
Spring 2015
Financial Reporting
The Current Concept
We produce two sets of financial
information:
• Financial Statements — Namely
the balance sheet, statement of
income and statement of cash flows
which, as per the Uniform System
of Accounts for Lodging Industry
(USALI), are produced for the
purpose of the external users, such
as lenders and stockholders, etc.
• Financial Reports — Or the departmental operating statements, which
hotel operators rely on, as they are
more detailed and focused on the
performance in every corner of the
business. Therefore, we have to
make sure that they are complete,
accurate, timely and most importantly, meaningful.
Generally speaking, to measure
the performance of a business over a
period of time, we have to match the
revenue and all the expenses created
by/for that revenue during the same
period, making sure that every revenue
and expense dollar are not only accounted for, but also distinct from
each other. They are then classified
and grouped in a logical order and
presented in a meaningful way to help
the user identify areas to be recognized
for positive performance and also to
improve or eliminate the areas that
underperform.
This matching process is much
easier when the business produces
only one type of product/revenue.
When the business produces different
and distinct types of products, then we
have to create a profit center for each
production line. Then it's necessary to
present only the revenue and expenses
created by/for that center to come up
with the profitability of each profit
center, and in turn the total profitability
of the business.
The hotel industry has a few
profit centers, or operating or revenue producing departments (such as
the Rooms and F&B departments),
where the expenses are classified and
grouped accordingly. If tracing the expense shows a relationship with a particular profit center, the expense is then
called: distributed, allocated or direct
and/or departmental expense, which is
charged to the right profit center.
The challenge comes in the picture
when the expense is common and all
Table 1. Undistributed Operating Expenses Pooled | Hotel Specs: XYZ Group • 13 full-service hotels • 3,980 rooms
Actual 12 Months, Ended December 31
Description
Revenue
Rooms Profit Center F&B Profit Center
Minor Profit Center
Total
$
%
$
%
$
%
$
%
99,600
67.5
44,131
29.9
3,945
2.6
147,736
100
Less
*
*
*
Distributed Operating Expenses
23,979
24.1
30,044
68.1
2,555
64.8
56,578
38.3
Departmental Profit (Loss)
75,681
75.9
14,087
31.9
1,390
35.2
91,158
61.7
Less
Undistributed Operating Expenses
n/a
n/a
n/a
52,382
35.5
Gross Operating Profit (GOP)
n/a
n/a
n/a
38,776
26.2
* In relationship to total revenue
Table 1 above is based on actual data for 12 months ending
December 31 for XYZ Group which manages 13 full-service
hotels. The hotels are mid-size operations under different
reputable brand names, showing how important this
concern is and reveals the following facts:
• Most of the revenue is coming from two profit centers,
namely Rooms which produced 67.5 percent and F&B
which produced 29.9 percent. A very small percentage
comes from the minor operating departments that produced only 2.6 percent of the total revenue.
• After deducting only the “Distributed” operating expenses, the Rooms department produced 75.9 percent departmental profit, whereas the F&B department produced
36
Spring 2015
only 31.9 percent departmental profit. This is clearly nothing more than the result of our methodology in handling
the operating expenses and unfortunately, this is the only
point where we can compare Rooms profitability vs. F&B
profitability, because from this point on, the rest of the
expenses are pooled and must be shared with all profit
centers. This is the reason behind the myth, that room
revenue is more profitable than F&B revenue.
• Minor operating profit centers produced not only minor
revenue, but also minimal departmental profitability of 1.5
percent of the total hotel profitability. Therefore, it does
not makes sense to allocate more expenses such as utilities, repair and maintenance, or administrative expenses.
Financial Reporting
profit centers benefit from it. To deal
with the commonality of the expense,
the industry created a pooling system
to collect those expenses in centers
called cost centers, or service departments based on the nature of the
expenses. The expense is classified
as an undistributed (indirect) and/or
unallocated expense, such as: utilities,
repair and maintenance, sales and marketing, and administrative expenses.
The Concern
Unfortunately, the departmental
financial reports do not measure the
total performance of the profit centers,
because they do not include a material portion of the operating expenses,
which are undistributed in calculating the departmental profit or loss.
Furthermore, separating the operating
expenses between distributed and
undistributed is subjective, based on
the operator’s interpretation of the
traceability concept. See Table 1 (page
36) to see an illustration of this idea.
The Reason(s) for Pooling
Operating Expenses
First, we need to understand the main
reasons for creating “cost centers” and
pooling a material portion (around
50 percent) of the operating expenses
away from the profit centers that created it. Then each one needs to be challenged to test how solid its foundation
is and to identify an alternative to help
the operators achieve their goals.
The idea that "the common nature
of some of the expenses such as utili-
ties, makes it reasonable to pool the
expenses to be shared by all the profit
centers” is considered to be the main
reason, if not the only one, for pooling
a material portion of the operating
expenses. However, let us identify how
many profit centers are there and if all
of them are equal.
Back to Table 1, the actual data for
13 full-service hotels shows that all
minor operating departments do not
represent even 3 percent of the total
revenue. This fact is also true in a
limited-service environment.
The point is, material wise, and
regardless if we are talking limitedservice or full-service environment,
the minor profit centers are immaterial
and we have to accept the fact that we
have only two main profit centers. We
Table 2. Undistributed Operating Expenses Pooled | Hotel Specs: ABC Group • 92 Limited Service Hotels
Description
Hotels Info
Rooms
Profit Center
F&B
Profit Center
Minor
Profit Center
Total
#
Rooms
$
%
$
%
$
%
$
%
Group A
(All one brand)
74
5,900
118,800
98.5
482
0.4
1,318
1.1
120,600
100
Group B
(Different brands)
18
2,700
71,300
94.1
520
0.7
3,980
5.2
75,800
100
92
8,600
190,100
96.8
1,002
0.5
5,298
2.7
196,400
100
Total A and B Revenue
Less
*
*
*
Distributed Operating Expenses
53,798
28.3
1,052
105.0
9,812
185.2
64,662
32.9
Departmental Profit (Loss)
136,302
71.7
(50)
(5)
(4,514)
(85.2)
131,738
67.1
Less
Undistributed Operating Expenses
n/a
n/a
n/a
57,938
29.5
n/a
n/a
n/a
73,800
37.6
* In relationship to total revenue
Table 2 above is based on actual data for ABC Group that
manages 92 limited-service hotels, (74 hotels operating
under one reputable brand name and the remaining 18 hotels
operating under different brand names), shows the following:
• Again, most of the revenue (96.8 percent) is coming from
the Rooms profit center.
• There is 0.5 percent revenue in the F&B, a profit center
that does not exist in a limited-service hotel, because of
the Public Room Rental.
• The minor profit centers are producing only 2.7 percent of
the revenue, not to mention that they are practically more
cost centers than profit centers, and it does not make any
sense to charge any “undistributed” expenses to the
minor profit centers, so why bother pooling the expenses in the first place?
• In a Limited-service hotel, all undistributed expenses,
logically, belong to the room profit center, yet we separated them not for the commonality of the expense, but
for comparability, uniformity and consolidation purpose.
• It is very obvious that the room departmental profit of
67.1 percent is an overstated statement and that the
37.6 percent departmental GOP is definitely a more
meaningful one.
The Bottomline
37
Financial Reporting
do not need to pool a huge part of the
operating expenses and end up with so
little out of it, while also undermining
the departmental operating reports of
the main profit centers. Simply put,
the commonality of the expenses is
not the problem; but the dogmatic
accuracy required for the “too many
immaterial” profit centers is the real
problem.
The idea that, “It is difficult to
allocate the undistributed expense
and stay objective, makes it reasonable to pool the expenses.” Yes! The
financial report needs to be objective
but, simplicity counts too and again
if the profit centers are to be reduced
to only two, ignoring the share of the
minor profit centers, will help manage
the allocation process better. Take for
example the utilities, which is a large
undistributed expense, and let’s assume that there are two sets of meters,
one for the Rooms operation and one
for the F&B operation, we could have
a 100 percent accurate cost of utilities
on both Rooms and F&B operating
statements; therefore, no need for
pooling the expenses in this case.
One might argue: “What about
the lobby and the rest of the public
areas; which profit center, will carry
the cost, Rooms or F&B?” Although
this is a very valid point, but the F&B
operation, like any independent restaurant, can survive without a lobby
whereas the Rooms operation cannot.
Moreover, the completeness and the
meaningfulness of the departmental
operating reports are more important.
The point is that simplicity has a value
too and consistency is the first product
of simplicity and is also the foundation that accuracy and meaningful
comparability is built on.
The idea that: “For accountability
purpose, it makes sense to pool some
expenses such as repairs and maintenance and sales and marketing” is
true, but we should not lose one goal
to achieve another one. There is a better approach to achieve accountability
and maintain simplicity. The engineer
can be the one who is responsible for
handling the purchase request, obtaining the approval, shopping around,
selecting the supplier, placing the
purchase order and doing the repairs,
but at the end of the day, the expense
will be coded to the proper operating statement either Rooms, F&B or
prorated to both.
The idea that: “To achieve uniformity, it makes sense to pool the
expenses and avoid the debate” and
the statement from USALI, 10th Edition: “The Undistributed Operating
Expenses section reports expenses that
are considered applicable to the entire
property. In order to achieve uniformity, it is not appropriate to allocate
these types of expenses to specific
departments." is debatable. We can
achieve uniformity once we have the
debate around this different way of
thinking and come to an agreeable
conclusion where we will be able to
compare and consolidate the financial
reports.
Actually, if hotel operators focus
on only two profit centers in allocating the undistributed expenses, they
will be able to compare the hotel’s
F&B operation, currently not per-
Table 3. All Operating Expenses Treated the Same | Hotel Specs: XYZ Group • 13 full-service hotels • 3,980 rooms
Description
Room Profit Center
F&B Profit Center
Minor Profit Center
Total
$
%
$
%
$
%
$
%
99,600
67.5
44,131
29.9
3,945
2.6
147,736
100
All Operating Expenses
74,161
74.4
32,244
73.1
2,555
64.8
108,960
73.8
25,499
25.6
11,887
26.9
1,390
35.2
38,776
26.2
Revenue
Less
* In relationship to total revenue. Actual data in total and breakdown is based on assumptions to bring the point to the reader. Assumptions are to
allocate 5 percent to F&B operation and the rest for rooms.
Table 3 above, which is Table 1, after grouping all operating expenses together, reveals the following facts:
• Once we allocate the undistributed expenses, the picture is
totally different and it is possible that the room profitability,
in this case titled Room Departmental GOP, is less than the
F&B operation profitability.
38
Spring 2015
• Comparing the profit centers at the Departmental GOP
level is more meaningful than comparing them at the
departmental profit level. Also, we can better compare
room profitability between limited-service and full-service hotels.
Financial Reporting
ceived as profitable as the Room
operation, with all the restaurants in
town regardless if they are part of a
hotel operation or not.
To sum it up, we do not need to
overstate the importance of the minor
operating department’s share in the
undistributed expenses on the account
of the main two profit centers, and we
should not sacrifice the completeness
of the financial report of the main
profit centers, the 95 percent, to accommodate the 5 percent minor profit
centers.
The Alternatives
If we agree that the current scenario is
not perfect then what else is there as
an alternative to handle the common
expenses?
Allocate the Obvious — Not all
undistributed expenses are common
expenses; a lot of them were classified as undistributed for some other
reasons, such as controllability or
accountability. For example, in Repair
& Maintenance, the kitchen equipment
expense is without a doubt an F&B expense and has nothing to do with any
other profit center. So, are elevator,
escalator, swimming pool and building expenses, to name a few which
are mainly Rooms expenses and have
nothing to do with the rest of the profit
centers, even if the restaurant happened to be on the top of the building.
Also, the majority of the Sales & Marketing expenses, such as travel agent
commission, franchise fees, etc. are
created by and for the Rooms profit
center and has very little to do with the
rest of the profit centers.
Profit Centers Charging Each Other
— Using the concept that we all are
familiar with food to beverage and
beverage to food to record the cost
transferred between different outlets,
we can allocate all the undistributed
expenses only to the two main beneficiaries, the Rooms and F&B profit
centers. When part of the goods/service is transferred from one center to
another, a debit/credit note can reflect
the expenses in the right profit center
along with the proper backup.
Undistributed expenses can be allocated at source. For example, worked
hours are to be coded between the two
main profit centers, and all invoices for
goods received or services rendered
are to be allocated at source between
the two profit centers, again ignoring the very small share that belongs
to the minor operating departments.
After all, coding the expenses using
a well-designed chart of accounts is
what produces a meaningful financial
statement.
Charge the F&B for Rent and the
Extra — The idea here is to allocate all
the undistributed operating expenses
to only one profit center, which is the
main beneficiary and, in most hotel operations, the Rooms profit center is the
one. Then Rooms expenses get a credit
by charging the F&B for everything it
consumes based on proper backup.
Standalone restaurants don’t have
an engineer or director of sales or cost
centers. Most of them pay rent and
when they need a certain expertise,
they outsource the service and pay for
it and move on (the pay as you play
concept). Is this not what we do when
we lease out the F&B facilities? We
charge a basic rent and get paid for
any other goods or service rendered
to the lessee as long as the charge is
based on a competitive price?
One might argue that: The F&B
operation in the hotel business is different from a standalone restaurant.
It usually has larger facilities with
too many outlets and a number of
banquets/meeting rooms in different
sizes, stretched all over the property.
These take a lot of space and effort to
maintain, clean and set up, which in
turn makes allocating the expenses difficult. This argument is valid, but that
should not stop us from trying to make
the financial reports more complete
and more meaningful.
Actually, the current presentation
of the meeting room rental, aka public
room rental, needs our attention. In a
limited-service hotel with few small
meeting rooms, the public room
rental still has to be shown in the F&B
department, a profit center that doesn’t
exist, and this is uncomfortable to the
reader’s eye. The picture gets a little
more blurred when F&B caters out.
How do we handle the F&B charged
to the guests and the cost of sale paid
to the next door restaurant and the
labor cost involved in such small functions? At the end of the day, the statement will look strange and usually
immaterial to the user of the financial
report (Table 2, page 37).
Even on the F&B statement the
room rental looks strange and there
is no harmony with the rest of the
F&B revenue. That is why we do not
include “other F&B revenue” when we
calculate the total cost of sales for the
department. It would be more meaningful to treat the public room rental
the same way we treat the income
from leasing the F&B facilities, away
from both profit centers, and consider
it as other operating income; this way,
we focus on the core business of both
profit centers.
Combination of A, B and C — The
goal is to be able to allocate the unallocated and to produce complete and
more meaningful financial reports,
as accurate as we can, for only the
main two profit centers and how we
get there is not as important as getting
there. Let the type and nature of the
expenses determine the allocation
methodology.
Finally, let us assume we have
gone through all the hurdles and have
succeeded to allocate the unallocated
operating expenses.
To conclude, the financial reports
are the tools hotel operators rely on
to measure, analyze and evaluate the
performance of the operation. Its accuracy is vital yet its materiality makes
it more meaningful. Its objectivity is
essential, yet its simplicity ensures
both consistency and comparability.
The idea here is to allocate all operating expenses without pooling them
in cost centers. The recipe is to focus
only on the two main profit centers
and produce a Departmental GOP and
not a Departmental Profit. Just another
point of view to know more, manage
better and improves profitability. ■
The Bottomline
39
Financial Reporting
A Close Look at the USALI 11th Revised Edition
Part II: Using Operating Metrics
to Manage
By Raymond Schmidgall, Ph.D., CPA; Agnes DeFranco, Ed.D., CHE, CHAE;
and Ralph Miller, CPA, CA, CBV, CHA, CHAE
T
he fundamental goal of the Uniform System of Accounts for the
Lodging Industry (USALI) is and
has been to provide a system for the
compilation and reporting of financial
information to support management
decision-making. Through the operating statements, the USALI provides
operators, managers, owners and all
other users standardized operating
statements for the lodging industry.
In revising the USALI, the Financial Management Committee of the
AH&LA took into consideration the
advances and changes in the lodging
industry, technology and electronic
distribution, globalization, increased
competition and other market intricacies; and made various adjustments,
changes and additions.
In the 11th revised edition of the
USALI, with an implementation date
of January 1, 2015, the Ratios section,
from previous editions, has been expanded significantly into the Financial
Ratios and Operating Metrics section.
This change is to recognize the importance of compiling and monitoring
operating metrics for lodging industry
businesses, and not just performing
year-end or period-end overall financial ratios.
The New Operating Metrics
Operating metrics are different from financial ratios, which assess overall liquidity, solvency, profitability and general business activities. They are generally
compiled at higher frequency and emphasize smaller detail. These metrics, as
the name indicates, focus on the operations of a property. Operating metrics are
normally recorded at the departmental level in addition to the property level to
provide each department with relevant performance measurements. In order for
Raymond Schmidgall, Ph.D., CPA ([email protected]) is the Hilton Hotels Professor at The School of Hospitality Business, Michigan State University. Agnes DeFranco, Ed.D., CHAE ([email protected]) is a distinguished chair and professor at the Conrad N. Hilton College of Hotel & Restaurant Management, University of Houston. She is also an HFTP Global Past President, chair of the HFTP Global Hospitality Accounting Common Practices
Advisory Council and a recipient of the HFTP Paragon Award. Ralph R. Miller, CPA, CA, CBV, CHA, CHAE ([email protected]) is president of
Inntegrated Hospitality Management Ltd. based in Calgary, AB. He is also a member of the AH&LA Financial Management Committee which took the lead
on the revision for the 11th edition, a member of the GHACP Advisory Council and an HFTP Global Past President.
40
Spring 2015
Financial Reporting
operating metrics to be relevant and
timely, some are compiled and reported on a daily, weekly or monthly
basis; and they are equally applicable
to monitoring revenues and costs.
Operating metrics can be an
invaluable tool for operators, managers and owners. Operating metrics
can be used to set goals and budgets
so that the actual operating results
can be compared and evaluated on a
systematic or periodic basis against
budgets or prior year performance.
Alternatively, these operating metrics
may provide the opportunity to evaluate the performance of a particular
lodging property against other lodging
properties in a competitive set, or
against other lodging properties under
common ownership or management,
or against published industry benchmark statistics. Operating metrics
are a tool to be used in the effective
monitoring, management and control
of a lodging property.
The 11th Revised Edition of
the USALI recommends operating
metrics for every major operating and
undistributed department of a lodging
property, complete with definitions,
calculation formulas and schedule
formats.
Examples of daily operating metrics
include, but are not limited to: occupied and sold guest rooms, average
occupancy, average daily room rate,
revenue per available room, F&B
average check value, F&B revenue per
available seat, F&B revenue by meal
service, golf pro shop average green
fee per round, health club/spa revenue per occupied room, health club/
spa revenue per square foot, parking
revenue per available space, overnight
parking capture, and a host of daily
labor cost and productivity statistics
for every operating and undistributed
department.
Examples of monthly operating
metrics include, but are not limited to:
the common size analysis on the face
of the Summary Operating Statement
and related support schedules, rooms
sold by revenue segment, rooms
revenue mix, average daily room rate
For Further Review
More details on the 11th revised edition
The Bottomline, Winter 2015
Part I covered the new guidelines and operating statements. In addition, an overview of changes were given in the "Q&A from the HFTP
Research Center."
The Bottomline, Summer 2015
Up Ahead: Part III will detail the new section of Gross vs. Net
Access the 11th Edition
The USALI 11th edition is available for purchase at www.ahlei.org. To
get the HFTP member discount, enter promo code HFTPC.
In addition, as an HFTP member, you have the access to the Global
Hospitality Accounting Common Practices (GHACP) database where
you can access the USALI 11th revised edition and compare it to the
10th revised edition and other common practices in other regions of
the world (access at www.ghacp.org).
per revenue segment, rooms inventory,
average length of stay and other guest
statistics, F&B revenue mix, F&B
product line cost of sales, F&B inventory turnover, F&B revenue per available and occupied room, catering and
banquet revenue per square foot of
function space, golf pro shop rounds
by category of guest, health club/spa
revenue mix, health club/spa revenue
per treatment room, health club/spa
guest mix, parking revenue mix, and a
host of daily labor cost and productivity statistics for every operating and
undistributed department.
What follows is a discussion on
the recommended operating metrics
for each of the operating departments,
the energy consumption statistics of
the utilities department and labor cost
statistics.
Rooms
Rooms is a universal department
for all lodging properties from an
economy property to a luxury brand.
Unlike previous editions of the USALI
where only formulas and definitions
are given, the 11th edition also provides recommended schedules/tables
so that operating metrics are reported
in a consistent format, whether a
property is comparing itself against its
past performance, budgets and goals,
or against published industry benchmarks, the comparative analysis can
be performed easily. Each schedule/
table contains three sets of columns.
The first column has the names of the
statistics. The second column is for
the current month and it has a set of
three sub-columns: actual, variance
to budget and variance to prior year.
The third column is for year to date
and shares the same set of three subcolumns of actual, variance to budget
and variance to prior year.
There are seven specific areas
under the Rooms departments where
operating metrics are recommended.
The first area is Revenue Mix, reported in percentages. Information on the
revenue mix of any lodging property
is most useful and very important
because this can assist a property in
their revenue management strategy,
setting prices and attracting the more
preferred type of business at the appropriate time. Thus, the categories
of transient rooms, group rooms,
contract rooms and other rooms are
included, with the consideration of
allowance as a line item, as well to
derive the total rooms revenue mix
The Bottomline
41
Financial Reporting
Table 1. Room Operating Metrics — Room Inventory
The 11th edition provides recommended reporting
formats, as shown here, to ensure that lodging
property operators, managers and owners can
leverage on comparability of statistical data sets.
Actual
YTD
Variance
to Prior
Year
Variance
to Budget
Actual
Variance
to Prior
Year
Variance
to Budget
1. Total Room Inventory (Total Keys in Property)
2. Seasonally Closed Rooms
3. Extended Closed Rooms
4. Rooms for Permanent House Use
5. Total Rooms Not Available for Sale (2 + 3 + 4)
6. Rooms Available (1–5)
for the property. Under transient
rooms, this category is subdivided
into retail, discount, negotiated,
qualified and wholesale; and under
group rooms, this category includes
corporate, association/convention,
government, tour wholesalers and the
SMERF market.
These same categories and sub-categories also make up the second area
for tracking: the Average Daily Rate
(ADR). Thus, instead of relying on
one single ADR to guide the lodging
property for a particular day, week or
month, there are now 13 different line
items including: five categories under
transient, five categories under group
and the contract rooms category. In
other words, no stone is left unturned
and each category of business is
tracked, compared and analyzed. After
all, a lodging property with more
detailed information is better equipped
to make the proper decisions on targeting future business sources.
The third area under Rooms is
Room Inventory. Operators, managers and owners understand that not all
rooms in the lodging property are sold
all days of the year. There are seasonal
reasons, extended closed rooms for
renovations or repairs, and rooms
that are designated for permanent
house use. Since rooms available is
the denominator for the calculation of
42
Current Month
Spring 2015
revenue per available room (RevPAR),
a clear definition, tracking and calculation of the room inventory is pertinent.
After Room Inventory, the Room
Occupancy Statistic section is next. This
is an expansion of the first section on
the revenue mix, but instead of looking
at percentage of total revenue for each
category of business/guest, this looks at
the exact occupancy percentage for each
guestroom category and subcategory. For
example, the occupancy statistic for the
transient category is determined as transient rooms sold/rooms available X 100
percent. This same formula will be used
for all five sub-categories under transient so that the property will know for
that particular month, what is the actual
occupancy percentage of each specific
category of transient guest, the variance
to budget and also the variance to prior
year. As with ADR, 13 line items are included in the room occupancy statistics.
In addition, since lodging properties also
have rooms that do not generate revenue
and thus would not have an average daily
rate, three additional measurements are
included: complimentary rooms, rooms
occupied and vacant rooms.
The next area under Rooms is the
Number of Guests. Besides ADR and
Occupancy percent, guest counts are
important. Certain types of business
may bring one guest per room while
others tend to attract more double oc-
cupancy. Although many lodging
properties may offer the single and
double occupancy at the same rate,
others may not. Moreover, an additional guest in a lodging property,
especially for lodging properties that
offer food and beverage and other
services, translates to an additional
guest to whom those lodging properties can sell more additional services.
The last two areas under Rooms
are Per Available Room Statistics
and Per Occupied Room Statistics.
The Per Available Rooms Statistics track revenue, labor cost and
related expenses, other expenses
and the departmental profit; the Per
Occupied Room Statistics track
labor cost, but also other individual
expenses from cleaning supplies to
uniform laundry. These statistics are
comprehensive and provide detailed
information for managers, operators
and owners relative to these important revenue and expense items.
In addition to all of the operating
metric definitions and formulas, the
11th edition provides recommended
reporting formats to ensure that lodging property operators, managers and
owners can leverage on comparability
of statistical data sets. As an example,
an excerpt of the rooms operating
statistics in terms of room inventory
is provided above in Table 1.
Financial Reporting
Table 2. Food and Beverage: Revenue — Audiovisual Revenue
Current Month
Actual
Audiovisual Revenue per Group Room Sold, $
YTD
Variance
to Prior
Year
Variance
to Budget
Actual
Variance
to Prior
Year
Variance
to Budget
Audiovisual Revenue per Square Foot (Meter)
of Function Space, $
Audiovisual Revenue Cost of Sales, %
Food and Beverage
Although this section seems to be
only for full service lodging properties, many limited service lodging
properties also include breakfasts,
others offer complimentary snacks or
afternoon beverage events. Tracking
of food and beverage revenues and
expenses can be very insightful. The
11th edition offers recommended reporting formats to summarize the key
food and beverage department operating metrics. The reporting layout is
identical to that for the Rooms department. The AHLA Food and Beverage Council developed a number of
high level operating metrics, which
will enable operators, managers and
owners to evaluate the performance
of their operations against published
industry benchmark information;
and these F&B operating metrics are
included in this section as well.
A total of 11 areas are included in
the F&B operating metrics. As with
the Rooms department, Revenue Mix
is the first area, dividing food and
beverage revenues into: F&B venue
revenue, catering and banquet revenue,
in-room dining revenue, audiovisual,
function room rental revenue and
other. The second area, Average Check
Value, is recommended for all revenue
venues including: food, beverage,
food and beverage, food and beverage
venues, banquet/conference/catering,
in-room dining and other. Obviously,
the goal is to track revenue in its various forms so as to provide operators,
managers and owners a clear picture
of the source and relative importance
of the F&B revenues within the lodging property.
Next the F&B operating metrics
track both the Cost of Food and Cost
of Beverage products sold, reported
as a percentage. Each area details
the costs of food or beverage in three
categories: food and beverage venues,
banquet/conference/catering and inroom dining.
Then the operating metrics consider Inventory Turns for five areas
tracked under Food and Beverage.
While there is only one line for inventory turns for food, there are four
separate lines for beverages: liquor,
wine, bottled beer and draft beer, and
then finally the number of days of
inventory on hand.
The final six areas assist a lodging property to track revenues in the
following: F&B Venues, Catering
and Banquet, Function Room Rentals, Audiovisual Revenue, In-room
Dining and Total F&B Revenue. In
F&B Venue, two statistics — revenue
per available seat and revenue per
customer are calculated. In Catering
and Banquet, Function Room Rentals
and Audiovisual, the revenue statistics
are measured against group rooms sold
and per square foot of function space.
In addition, for Audiovisual (Table 2,
above), there is a third statistic of cost
of sales. Finally, In-room Dining is
measured against guest rooms sold,
while total F&B revenue is measured
against available rooms.
The 11th edition provides reporting
formats for all of the recommended
F&B operating metrics. These tools
provide the F&B management definitive information to identify opportunities present in each outlet to enhance
the performance of the lodging
property.
Golf Course and Pro Shop
Golf Courses and Pro Shops provide
unique services and amenities to
guests at resort properties. The USALI
recommends operating metrics for
these departments in three areas (using
the same reporting format as in the
Rooms and F&B departments, with
columns for actuals and variances).
The three areas are: Revenue Generated per Round (further divided into
average greens fee, merchandise and
others), Golf Rounds per Occupied
Room Night and also Golf Rounds by
Category of Guest (member, memberguest, resort, outside nonmember or
non-guest, and employee).
The Bottomline
43
Financial Reporting
The recommended reporting formats set out in the revised USALI
are great tools. Progressive operators, managers and owners will
likely share some of these operating metrics, perhaps in graphs and
charts, with team members to provide feedback, discuss progress
to goals and necessary corrective action.
to include the cost of utility service
and information related to consumption of utilities and responsible refuse
and waste management practices. At
this time, no attempt is made to delineate the reporting of carbon footprint
data. The 11th Revised Edition is
preparing for that eventuality.
Labor Cost
Health Club/Spa
A health club/spa is almost an expected amenity. The USALI recommends a number of operating metrics,
the formulas and their potential use.
This section is especially useful for
lodging properties that offer this
amenity, either on a self-operated or
managed basis. Similar to the previous departments discussed, there are
recommended reporting formats for
presentation, with the three sets of
columns, detailing current month and
year to date data.
There are a total of nine areas of
recommended operating metrics for
the health club/ spa department. Revenue Mix, of course, is the first area.
While the Rooms department is divided into categories by types of guests
and F&B by venues, health club and
spa is by treatment and services. Besides Revenue Mix, operating metrics
are also compiled for Revenue per
Square Feet (Meter) and per Occupied
Guestroom. In addition, treatment
revenues are then further analyzed by
per Treatment Room and per Number
of Treatments. Hair care and nail care
are tracked differently under Salon
Revenue and operational efficiencies
are assessed by per Salon Station.
Common size analysis measures all of
the expenses for the health club/spa as
a percentage of the departmental revenue. Finally Guest Mix Percentages,
comparing the percentage of local
versus lodging property guests, Treatment Analysis, assessing Treatment
Room productivity and Treatments
per Hour are also examined. While all
these metrics may sound intimidating
or overwhelming, once the reporting
formats are set up and mathematical
formulas are established, the continuous tracking and reporting of performance can assist operators, managers
44
Spring 2015
and owners in managing the health
club/spa on a daily basis.
Parking
Operating metrics for parking are divided into two areas: Parking Financial
Metrics and Parking Operating Metrics. Using the same reporting formats
as other departments, comparing actuals to variances for the current month
and year to date, some of the financial
metrics include total parking RevPAR
and overnight parking RevPAR to
parking profit margin. Under Parking
operating metrics, the measurements
include drive-in capture, which is defined as number of parked cars/rooms
occupied x 100 percent. The parking
metrics includes a number of very useful metrics to gauge the profitability of
this important department, especially
for city center lodging properties that
are able to charge significant daily
parking rates.
Utilities and Refuse/Waste
The 11th Revised Edition anticipates the importance of tracking the
responsible management of utilities
and refuse/waste and sustainability
issues associated with operating lodging properties. Other forms of real
estate have witnessed the imposition
of government regulations related to
sustainability reporting. For lodging
properties, sustainability reporting
has become an important factor in
sourcing and securing group business,
which uses sustainability issues as one
factor considered in the Request for
Proposal process.
The recommended operating metrics in the area of utilities and refuse/
waste will continue to be developed as
the lodging industry works to develop
standardized reporting. The 11th Revised Edition recommends reporting
While labor cost is not a separate
department, it is the single most
important cost consideration for every
lodging property. The 11th Revised
Edition recommends very detailed
labor cost reporting for each operating
and undistributed department. Recommended labor cost operating metrics
are expressed in dollars, as well as
labor hours and full time equivalency,
and provide productivity measurements across all departments. This is
one section that no operator, manager
or owner should miss.
Bringing Operating Metrics to Life
The 11th Revised Edition, as with
any resource, is only as good as how
the users will use the tools provided.
Accounting and management information needs to be relevant (timely),
consistent, comparable and accurate.
Operators, managers and owners need
to set realistic implementation goals
and milestones for the compilation
of timely reporting for management
information and analysis.
Accounting and management information including operating metrics
need to be compiled and used at all
levels in a lodging property. They also
need to be brought to life and communicated to all supervisory staff and
associates so that each team member
understands his or her contribution to
the success of the lodging property.
The recommended reporting formats
set out in the revised USALI are great
tools. Progressive operators, managers and owners will likely share some
of these operating metrics, perhaps in
graphs and charts, with team members
to provide feedback, discuss progress
to goals and necessary corrective action. It takes an entire village to raise
a child; it takes an entire team to run a
successful lodging property. ■
Technology Study: Mobile Devices
Laptops, Tablets and Phones!
No question, mobile devices are popular; these survey results
Oh My! illustrate how hotel guests use mobile media while traveling
By Agnes DeFranco CHAE, Ed.D. and Cristian Morosan, Ph.D.
Y
es, this headline is a riff from the
famous phrase from The Wizard
of Oz: "Lions, Tigers and Bears!
Oh My!" Well, in today’s world, it is
more: "Laptops, Tablets and Phones!
Oh My!" The only difference is that
while Dorothy and her friends are
scared of lions, tigers and bears, our
guests are very enamored with their
laptops, tablets and phones.
Information in the hotel industry
has changed. In one of the articles
featured in Hotel Yearbook 2014,
Berkus (2013) sums it best when he
shares that information computing in
the hotel industry all started with main
frames, which gives way to mini computers, to personal computers and then
to the Internet. He further states that
there were only 720 million mobile
subscribers in 2000; but by 2013, with
a world population of 7 billion, there
were 6 billion mobile subscribers and
mobile commerce was up over 500
percent! Berkus (2013) also notes that
69 percent of today’s consumer will
research and review products and services online before making a purchase
decision. Indeed, in today’s world, the
real word-of-mouth is not the literal
form, but through Twitter, Facebook,
Pinterest, Instagram and the many
other social media platforms.
All this points to the fact that mobile technology and m-commerce have
become an integral part of the hospitality industry. One great example reported
recently was Starwood’s mobile booking, which grew five times faster than
Web bookings did 10 years ago. In addition, mobile accounts for 42 percent of
Starwood’s site visit, up from 16 percent just two years ago (Borison, 2014).
Starwood communicates with its guests via SMS and offers keyless check-in
via smartphone at most Aloft®, W® and Element® hotels. Marriott International,
Hilton Worldwide Holdings, InterContinental Hotels Group, Hyatt Hotels and
other hotel companies have also launched or will be launching mobile check-ins
(Karmin, 2014). Just recently, Marriott International increased its reliance on
location-based marketing with a novel initiative called LocalPerks (Trejos, 2014).
Agnes DeFranco, Ed.D., CHAE ([email protected]) is a distinguished chair and professor at the Conrad N. Hilton College of Hotel & Restaurant Management, University of Houston. She is also an HFTP Global Past President, chair of the HFTP Global Hospitality Accounting Common Practices
Advisory Council and a recipient of the HFTP Paragon Award. Cristian Morosan, Ph.D. ([email protected]) is an assistant professor at the Conrad N. Hilton
College of Hotel & Restaurant Management, University of Houston and vice chair of the CHTP Advisory Council. This article is partially supported by HFTP.
The Bottomline
45
Specifically, using iBeacon location
technology, Marriott can locate consumers via their mobile devices and allow consumers to engage dynamically
with the service environment based on
location (Trejos, 2014). Hilton Hotels
Worldwide has also developed initiatives to allow consumers to customize
their entire stay experience using their
mobile devices for room selection,
room access and purchasing of ancillary services (Hilton Hotels Worldwide,
2014). TripAdvisor also has half of its
traffic coming through mobile devices
(“David vs two Goliaths,” 2014).
Besides, bookings and check-ins,
mobile technology can deliver a lot
more, both for the hotels and the
guests. Hotels can link mobile usage
patterns to loyalty program integration. Access to other on-premise
departments, from concierge to guest
services can also be added. From digital property maps and room service,
mobile is not what some may think
as the next phase of business — it is
“the” phase.
We know guests bring their mobile
devices to our hotels. But, what mobile devices do they use? What functions are the devices used for? What
attitudes towards mobile devices do
our guests have? How do our guests
perceived mobile related services
of our hotels in terms of security,
personalization, and value? And, more
importantly, how can we make sure we
are serving their mobile needs?
Our Guests
In April 2014, an online survey was
conducted with hotel guests who had
stayed in a hotel during the past 12
months prior; and a total of 317 questionnaires were collected. The sample
consisted of approximately 59 percent
males, relatively mature, with age categories relatively evenly split throughout the sample (see Respondent Profile
at right). Most respondents had annual
household incomes between $50,000
and $100,000 (45.4 percent).
With regard to their stay (Stay
Characteristics, pg 47), most respondents traveled exclusively for leisure
46
Spring 2015
(42.4 percent), stayed in midscale
hotels (40.1 percent) for approximately two to three nights per stay (59.7
percent), in most cases having three to
six hotel stays per year (44.3 percent).
It is no wonder that hotels have
lamp bases that doubled up as charging stations with plugs, while some
guests are ingenious and use the open
ports on TVs to charge their devices
because 67 percent of the respondents
bring with them at least two devices,
mostly a smart phone and a laptop
(15 percent). But 23 percent or almost
one-fourth of our guests bring with
them three devices during their stay at
our properties (Hotel Guests: Device
Details, page 47).
In terms of smartphones, Apple and
Samsung dominate the smartphone
market with Apple taking 46 percent
and Samsung at 31 percent of the
share. However, there are many other
brands reported including HTC, LG,
Motorola and Nokia. When it comes
to laptops, HP, at 22 percent, tops the
list, followed by Apple and Dell, both
reported in at 16 percent. With Toshiba
and Lenovo also garnering 9 percent
and 7 percent respectively and other
brands such as Acer, Asus, Compaq,
Gateway, LG, Sony, Samsung making
up the remaining 30 percent, the laptop market is more evenly distributed
than that of the smartphone market.
Finally, in the tablet race, Apple
once again is on top with all the various version of its iPads, mini iPads,
and the iPad Air at 47 percent. Amazon’s Kindle (25 percent) and Samsung (11 percent) make up another
third, leaving about 17 percent for all
other tablet brands such as Nexus,
Toshiba, Microsoft, LG and Vizio.
Uses: From Browsing to Buying
Now that we know our guests have
all these wonderful tools and gadgets, what do they use them for in the
rooms? If they are simply working
offline or use their cell phone provider’s service to make phone call, fine.
However, if they need the Internet, are
we equipped to offer what our guests
preferred? Can our broadband handle
Respondent Profile
Gender
Male, 59%
Female, 41%
Age
31–40, 20%
26–30, 9%
51–70, 21%
25 or
younger, 4%
71 or older,
9%
61–70,
22%
41–50,
15%
Income
$50,000 or
less, 23%
$50,001–
$100,000,
45%
$150,001–$200,000
9%
$200,001 or
more, 3%
$100,001–
$150,000,
20%
Stay Characteristics
Hotel Guests: Device Details
Purpose of Stay
Number of Mobile Devices Hotel Guests Bring with Their Stay
Exclusively business
One
Mobile Device
4%
Mostly business
10%
Combined business and
leisure
Smart Phone
17%
21%
Laptop
13%
Mostly leisure
23%
Tablet
5%
Exclusively leisure
42%
Hotel Types
Luxury
One Mobile Device: 35%
Smart Phone + Laptop
15%
Smart Phone + Tablet
13%
Laptop + Tablet
4%
3%
Upscale
12%
Upper midscale
36%
Midscale
40%
Economy
8%
Other
1%
Two
Three
Mobile Devices Mobile Devices
Two Mobile Devices: 32%
All Three Devices: 23%
Popular Smartphone Brands
Samsung,
31%
HTC, 5%
LG, 5%
Length of Stay
1 night
13%
2–3 nights
60%
4–7 nights
24%
8–14 nights
1%
More than 14 nights
2%
Motorola, 3%
Nokia, 2%
Apple, 46%
Other, 8%
Dell,
16%
Frequency of Stay
33%
3–6 times a year
44%
7–12 times a year
11%
More than 12 times a year
Lenovo, 7%
HP, 22%
Other,
30%
Kindle,
25%
6%
1–2 times a year
Apple,
16%
Toshiba, 9%
Popular Tablet Brands
Less than once a year
Popular Laptop Brands
Samsung,
11%
Apple, 47%
Other,
17%
6%
The Bottomline
47
the load? Could there be areas we can
improve upon in order to serve our
guests better and maximize our yield?
The "Top Uses for Mobile Devices"
table (at right) summarizes the top 15
uses by our guests using their mobile
devices in rank order. Four items
can be grouped into the top tier with
two of them receiving a score over
4.0: browsing the Internet and communicating, and two others at 3.98:
connecting to the Internet and search
for destination information. This has
great implications for hotels. Not
only would connecting to the hotel’s
Internet mean revenues for the hotel,
but when searching for destination
information, this is a perfect venue for
the hotel to put advertising for all its
services, be it transportation to attractions and destinations or tours.
The second group contains six items
clustered around the 2.96 to 3.21 scores
and they include providing updates on
trips on their social network, making an
online review of the “current” hotel services, watch videos, actual purchases
(both to be consumed during the current trip or directly from the hotel) and
work. The last two in particular speak
to increasing potential revenue for the
hotel. More importantly, when guests
are having a great experience, they may
take pictures of the view from their
room or the room décor and post them
online and then go to a site to brag
about their wonderful trip. All these
generate positive “word-of-cyberspace”
advertising for your hotel!
The third group consists of five
items with scores ranging from 2.64
to 2.84. These all have to do with services within the room, from connecting to other in-room technologies such
as playing a video game or watching
a movie by plugging in the mobile
device to the television to using the
mobile device as a key to access the
room or other restricted areas such as
the exercise room or pool.
So, the Report Card: The Rating
We know what mobile devices our
guests bring to our properties. We
48
Spring 2015
Top Uses for Mobile Devices
Rank Task
Mean Score
1
Browse the Internet
4.07
2
Communicate with my family or business
4.06
3
Connect to the Internet using hotel connection
3.98
3
Search for destination information
3.98
4
Provide updates about my current trip
3.21
5
Make an online review of current hotel services
3.19
6
Watch videos online (e.g. Netflix, YouTube, Amazon)
3.18
7
Buy services/products to be consumed during the
current trip
3.15
8
Work
3.10
9
Buy services/products directly from the hotel
2.96
10
Connect to other in-room technologies (e.g. TV)
2.84
11
Order in-room TV content or entertainment
2.82
11
Control room atmospherics (e.g. temperature, lighting)
2.82
11
Access room or other restricted area as a key
2.82
12
Create own computer network within the hotel
2.64
know what they use the devices for.
So, how do our guests rate us? With
a scale from "1 to 5" with "1" being
strongly disagree to "5" being strongly
agree, all items received an above
average score of over 3.0 with the
highest at 3.86 and the lowest at 3.10.
Before we look at how our guests rate
our hotels and services, let’s see how
they rate themselves.
First, it is very good that guests
gave themselves a 3.69 average score
on their knowledge in using their mobile devices. More importantly, they
are very interested in what our hotel
can offer them in terms of services and
information (3.62). They also use their
devices to the extent that it has become
a habit (3.51) and are actively involved
in using their devices to access information and perform tasks (3.30).
In the area of trust and security,
our guests also gave us good scores
for keeping our promises and commit-
ment (3.68), being trustworthy (3.65),
and having their best interest in mind
(3.63). However, they are still skeptical about how information that they
provide over their mobile devices is
used by others (3.10). This item, incidentally, has the lowest score. It does
not help the cause when news is spread
about hacks into databases of hotels or
major companies.
Nonetheless, our guests do see the
value of using their mobile devices.
They do believe that it is worthwhile
(3.53) and is a good value (3.38).
They also feel that by using their
mobile devices to access hotel-related
information or doing tasks, hotels will
in turn be able to provide them with
relevant promotional information or
personalized offers tailored to their
travel needs or personal interests.
Last, but definitely not least, guests
also perceive that a hotel stay in which
they can use their mobile devices is
Guest POV: Mobile Use During Stay
Items
Mean Score
About The Guests…
a good idea (3.86 — highest overall
score), is enjoyable (3.69 — second
highest overall score, and has value
(3.68 — third highest overall score).
The Top Takeaways
I have much knowledge of using my mobile devices(s) to
access services/information or do tasks
3.69
I am very interested in hotel-related services/information or
tasks that I can access using my mobile device(s)
3.62
Generally, the use of mobile devices for accessing services/
information or to do tasks has become a habit for me
3.51
I am actively involved in using my mobile device(s) to access
hotel-related services/information or perform tasks
3.30
Trust and Security… Hotels that let me use my mobile device(s) for
accessing services/information or to do tasks:
Keep their promises and commitments
3.68
Are generally trustworthy
3.65
Have my best interest in mind
3.64
Make me feel secure when providing personal information
via my mobile device(s)
3.14
Make me feel that information I provide over mobile (devices)
could not be used by other people
3.10
Value of Mobile Device and Personalization… Using mobile device(s) to
access hotel-related information or doing tasks:
Is worthwhile
3.53
Provides me with more relevant promotional information
tailored to my travel needs or personal interests
3.48
Is a good value
3.35
Provides me with personalized offers tailored to my travel
needs or personal interests
3.38
Value of Stay… A hotel stay in which I can use my mobile device(s) to
access hotel-related information or to do task:
Is a good idea
3.86
Is enjoyable
3.69
Has value
3.68
Is a satisfying hotel experience
3.55
Is one I would enjoy talking about
3.35
Note: Scale is from “1 to 5” with “1” being strongly disagree to “5” being strongly agree.
In today’s world, there is an app for
everything, from hailing a cab with
Uber or Lyft to sharing favorite dishes.
Analyzing the results above, there
are opportunities for hotels to not
only jump on the bandwagon, but to
lead the race! Just as the lions, tigers
and bears are on Dorothy’s and her
friends’ minds, so are laptops, tablets
and smartphones on our guests’ minds.
They are part of our guests’ identity,
and we need to make sure we take
very good care of them, providing secured and efficient access, and partnering with our guests to personalize our
products and services to them.
First and foremost, it is obvious
that while guests trust us, they are still
skeptical about how the information
they supply will be used or accessed.
Thus, the opportunity for hotels to
further drill into the security protocols
exists. So long as there is the Internet, there will be hackers. So, we all
need to revisit our security protocols
periodically to make sure it is well
maintained.
Second, let’s get to the basics. As
more and more devices are used, the
broadband width needs to be able to
support the usage. Oftentimes, guests
complain about a slow connection,
especially for rooms that are at the end
of a hallway. Some hotels are offering
different levels of Internet packages,
depending on the use of the Internet.
Some hotels are including the Internet
charges in the room price. Depending on your clientele, you may want
to revisit the Internet offering at your
property. At the minimum level, make
sure the connection works. Guests
gave their highest rating to the statement “hotel stays where I can use my
mobile devices to access hotel-related
information or to do a task is a good
idea.” It will be a bad idea if the connection does not work.
The Bottomline
49
Third, the important point in this
entire analysis is the real opportunity
for hotels to partner with their guests
to create an excellent stay, using a
tool that our guests prefer to use: their
mobile devices. Some hotels will have
their agents call the room a few minutes after the guests have checked in to
ensure that all amenities are functioning in the room and that the guests are
all set. This is great service. But how
about having a similar message sent
via text message to a smartphone?
Many hotels now would e-mail their
guests a week or so before their stay to
remind them of hotel shuttle service or
other amenities. But how about texting
them a day before the stay to offer a
complimentary glass of wine when
they dine with you at your restaurant?
This is selling your food and beverage
WHAT'S NEXT?
Mobile Payments in the
Hospitality Industry
Authors DeFranco and Moroson
will continue to cover their mobile
device usage research with a series discussing mobile payments.
Summer 2015
Part I. Consumer Engagement
With Mobile Devices in Hotels
Fall 2015
Part II. Privacy in Mobile Commerce in Hotels
Winter 2016
Part III. Survey Report: Mobile
Payment in the Hotel Industry
Look for these articles in the upcoming issues of The Bottomline.
50
Spring 2015
facilities. Airlines are really good in
upselling their seats for more legroom
and other amenities. Does your hotel
offer guests special packages on dining,
amenities or spa treatment during their
stay that would pop up on their mobile
devices? Comparing traditional marketing methods to mobile marketing, the
latter is more economical (Gramigna,
2014) and is also highly personalized.
Fourth, investigate new technologies. Smartphones are now keys to
rooms and restricted guest use areas.
If your hotel is in the category where
your clientele is more tech savvy,
having technologies related to mobile
devices is a must, not something that
you can wait until later. As hotels try
to differentiate their products, you
need to also be able to differentiate
yourself.
References
• Berkus, D. (2013). Riding the
Prevailing Winds. Hotel Yearbook
2014. Wade & Company SA.
Grandvaux, Switzerland. 10–11.
• Borison, R. (February, 2014).
Starwood Hotels See Mobile Bookings Grow at Unprecedented Rate.
Mobile Commerce Daily. http://
www.mobilecommercedaily.com/
starwood-hotels-sees-mobile-bookings-grow-at-unprecedented-rate.
• “David vs. Two Goliaths.” (August,
2014). The Economist, 412 (8899),
54–55.
• Hilton Hotels Worldwide. (2014).
Hilton Revolutionizes Hotel
Experience with Digital CheckIn, Room Selection and Customization, and Check-out Across
650,000-Plus Rooms at More Than
4,000 Properties Worldwide. Retrieved August 4, 2014 from http://
news.hilton worldwide.com/index.
cfm/newsroom/detail/27192.
• Gramigna, K. (July, 2014). Mobile
Offers Economic Way to Market
Finally, one task guests often participate in is posting reviews of your
property during their stay. Whether
the review is good or bad, immediate attention and engagement is the
key (Maycock, 2014). If the review
is good, thank the guest, helping you
develop a partnership and building
the guest's loyalty to your brand.
This will also help you monitor the
services your staff is providing and
alerts you to any issues, giving you
an opportunity to take corrective
action when needed. If the review is
negative, make amends immediately.
Many times, an issue corrected to the
satisfaction of your guests means a lot
more to them. It shows that you care.
At the end, we are hospitality. We
are here to take care of our guests. ■
Hotel. Hotel News Now. Retrieved
from: http://www.hotelnewsnow.
com/Article/14196/Engagementtops-social-media-best-practices.
• Karmin, C. (January, 2014).
Smartphones to Open Doors at
Some Hotels. Wall Street Journal.
Retrieved January 31, 2014 from:
http://online.wsj.com/news/articles/
SB10001424052702304856504579
339130820876304.
• Maycock, P. (August, 2014).
Engagement Tops Social Media
Best Practices. Hotel News Now.
Retrieved from: http://www.
hotelnewsnow.com/Article/14196/
Engagement-tops-social-mediabest-practices.
• Trejos, N. (2014). Marriott to
Locate Guests Via Mobile and
Offer Deals. USA Today. Retrieved August 4, 2014 from:
http://www.usatoday.com/story/
travel/hotels/2014/07/10/marriottlocalperks-flashperks-ibeacontechnology/12422133/.
Take
Advantage
of:
Seven education themes,
including new high-level
technology sessions
60+ expert speakers representing
a wide range of hospitality fields
500+ attendees gathered to
discuss the industry's trends
and best practices in a variety of
networking environments
40+ exhibiting companies

15 women of hospitality finance

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