East Coast Owner/Operator Beats Industry's 2
to 3% Decline; Increases RevPAR First Quarter-Over-Quarter |
May 2003 - John DePaul is a stickler for three things: hiring
the best employees; utilizing new, forward-thinking technology; and exploring
creative ideas whether they are about RevPAR, employee retention and training,
or his calendar. That�s why the president and CEO of Philadelphia
- based Melrose Hotel Company continues to post positive RevPAR trends
16 months-running while the industry shows declines; trimmed a 102% turnover
rate to 37% in 2002 with the help of a new Human Resources lieutenant;
and prioritizes time with his family, which includes three young children.
�Like Melrose Hotel, they�re small, but they have wonderful ideas,�
says DePaul, who seven years ago spearheaded Melrose parent company�s,
Berwind Property Group, LTD (BPG), purchase of its first hotel, the AAA
Four-Diamond Westin Great Southern Hotel in Columbus, Ohio, and quickly
rolled out three more properties in as many years. BPG is a value
added real estate investment company, and one of the 200 largest private
venture firms in the country. Melrose hotels are full-service, upscale
traditional properties that cater to corporate accounts and discriminating
leisure travelers in major metropolitan areas. Melrose's attention
to detail, plus innovative thinking and back office and business intelligence
software purchases, are paying off. DePaul notes, �The decline in
business travel in 2001 coupled with the events of September 11th clearly
impacted the urban, upper-upscale hotel market. Our decision to invest
in software, and recruit and train the best talent softened the impact,
and gives us an edge as business conditions improve.�
The company�s choice to standardize
on ASP back-office and business intelligence software positions Melrose
Hotel well for future growth; it also lets DePaul and his team �collectively
manage our future from various levels of the organization via the nearest
PC, whether at home or on the road;� reduces monthly closing time from
14 days to a target five business days; streamlines reporting to investors;
and creates personnel efficiencies as the company eyes expansion.
By housing the back office server at the vendor�s site, Melrose property
managers have no hardware responsibility; instead, |
Melrose Hotel
2430 Pennsylvania Avenue, NW
Washington, D.C. |
they pay a monthly service fee and remotely access their accounting and
operational data that includes occupancy, RevPAR, ADR, and cost per occupied
room through Net Income. Business intelligence software at the vendor
location spins nightly cubes, and automatically transmits that data to
Melrose�s corporate headquarters for analysis each morning. It also provides
a daily scorecard to hotels via email to show each property how it is trending
and performing, and the variance between forecast, actual numbers, and
last year�s performance.
�We use our back office vendor as our IT department,� said Melissa Hauser,
director of finance with Melrose Hotel, who shares with DePaul the goal
of ultimately moving the server to the corporate office and then bringing
regional offices online. �The system will grow as we do.�
When Hauser joined Melrose Hotel a year ago, her first action, following
the software purchase, was to standardize the chart of accounts for each
property. �As we acquired hotels, we took whatever chart of accounts
and back-office systems were there. It was difficult to look across
all the hotels and compare cost per occupied room by position, housekeeper,
or cleaning supplier. Now, having all our properties on the same
chart of accounts makes it much quicker to extract the data, and to bring
new hotels on line.�
DePaul agrees. �Instead of getting financial reports on the 15th
of the month, I can look at my P/L on day two of the closing process and
manage the close.� Melrose Hotel�s new business intelligence
software also facilitates exception reporting and the team�s innovative
thinking.
Innovative Edge: Exception Reporting, 12-Month
Rolling Forecast
�Every report we now do manually can be duplicated in either Profitvue
or Execuvue,� said Hauser, referring to the back-office and business intelligence
software Melrose Hotel purchased from Aptech Computer Systems, Inc.
Hauser is currently migrating her staff from entering monthly reporting
numbers into Excel, which is time consuming and prone to human error, to
capturing numbers in Profitvue. She is also weaning executives away
from paper P/L reports to a focus on exception reporting, which is possible
through the business intelligence software.
�Our vision is to create a best practice methodology within the operating
company. Ultimately I would like to send our ownership partners
a month-end email, and they could print out what they want in either PDF
or HTML format,� said Hauser. �Executives could move from managing
every line on the financial statement to exception reporting. They
could look for variances; we can create a snapshot for them of areas that
are positive or negative. Out of that would grow a best practice
methodology for costs per occupied room in cleaning supplies and labor
statistics. We could ask, �Do you want to do laundry in-house or
out-of-house? How much does it cost the properties to do it each
way?��
Another best practice Hauser is eager to implement with the back office
system is a rolling 12 month forecast, by which she hopes to avoid the
labor intensive once-a-year budget process. �People tend to look
more at the trailing 12 instead of the rolling forecast,� explains Hauser.
�Once we get our forecasting data loaded into Profitvue, we will be able
to concentrate more on the rolling forecast using the information provided
by the trailing 12 months.
Again, DePaul agrees. �Now that we have an automated, common platform
of reporting, we have the ability to query financial questions without
burdening the property level Director�s of Finance with time-consuming
data collection. They can spend their time actually analyzing the
data and less time finding and inputting the data. This new
platform gives us a tremendous edge, too, as we acquire more hotels.
We can plug and implement our chart of accounts well before closing instead
of waiting for the close of the acquisition to physically get access to
the accounting office.
�During the past two years, we passed through the eye of the storm brought
on by unprecedented geo-political events and economic ailments, and we
have emerged a better company for going through it,� DePaul concludes.
� Strategic upgrades of talent throughout the organization, and partnerships
with forward thinking technology companies such as Aptech softened our
exposure to the downturn.�
About Melrose Hotel Company
The Melrose Hotel Company operates upscale, traditional hotels in urban
locations that include The Melrose Hotel, New York (formerly The Barbizon);
The Melrose Hotel, Dallas; The Melrose Hotel, Washington, D.C.; and the
Westin Great Southern Hotel in Columbus, Ohio. The Melrose Hotel
Company is a subsidiary of Berwind Property Group, LTD., a Philadelphia-based,
privately held real estate investment company with a portfolio in excess
of 27 million square feet of hotel, office, residential, retail, and industrial
properties located throughout the United States. Berwind Property Group
is actively pursuing the acquisition of other upscale hotel assets in urban
locations such as San Francisco, Los Angeles, Boston, Chicago and Atlanta.
About
Aptech
Aptech Computer Systems, Inc. is known for valuing human relationships
and evolving technology offerings as the market dictates, a commitment
that has earned the company100% customer loyalty of its 700 users over
the last three decades. Aptech HITEC Booth # 820. |