hotel expenses
Hospitality Financial Leadership: Top 10 List for Controlling Hotel Expenses
David Lund | January 16, 2023
By David Lund The word “expenses” needs to be defined and refined for this article. Expense broadly refers to any cost a business has including payroll, goods and services and cost of goods, “the cost required for something; the money spent on something.” That is its definition according to Oxford Dictionaries. To refine that we need to step back and see that hotel expenses are specifically goods and services, and not payroll or cost of goods (e.g., food cost). To put even a sharper focus on this distinction, it is hotel expenses defined according to the Uniformed System of Accounts for the Lodging Industry (USALI). That ...
Hospitality Financial Leadership – How to Prepare a 5-Year Proforma
David Lund | December 5, 2022
By David Lund Preparing a five-year financial plan for your hotel might sound daunting, but it is all in your head. Let’s lay it out. You are either dreaming about a business that does not exist yet and you need a plan, or you are up and running and you want to look into the future and pave a path forward. Either way you need to same tools. The first tool you need is market information: CBRE or STR are both helpful. CBRE can provide you in-depth marketplace analysis that will draw you a very clear picture of the rates and occupancy of several different hotel asset classes in your area. If you are already up and running, it is yo...
Hospitality Financial Leadership – How to Do a Breakeven Analysis Using REVPAR
David Lund | July 18, 2022
By David Lund I have recently read more than one article on breakeven analysis and they all miss the mark in my books because they focus on what occupancy is needed. Occupancy is only half of the final recipe. You also need rate and really in the end you come up with your real break-even point using REVPAR. The key ingredients that need to be assembled and analyzed are fixed expenses, variable expenses based on occupancy and finally the expenses that are directly related to revenue. I will lay out examples of these in the paragraphs below. For the sake of time and simplicity were going to assume this is a limited-service hotel without...
Hotel Property Taxes – An Opportunity to Cut a Cost
Robert Mandelbaum | May 26, 2022
By Robert Mandelbaum and Mark Whitney According to the March 2022 edition of CBRE’s Hotel Horizons® national forecast report, the total revenue for a typical U.S. hotel is not expected to return to pre-COVID 2019 nominal dollars until 2023. Accordingly, hotel owners and operators continue to seek ways to control expenses. One potential reduction opportunity is property taxes. Based on a sample of 3,400 hotels from CBRE’s Trends® in the Hotel Industry database, U.S. hotel property tax expenditures declined by 13.0% from 2020 to 2021. This decline put 2021 property taxes 9.9% below 2019 levels. Unfortunately, this compares u...
Controlling Telecommunication Costs
Robert Mandelbaum | July 6, 2021
Although telecommunications costs account for a small percentage of expenses, data during 2015 through 2019 revealed a significant upward trend in telecom-related expenditures. To achieve more efficient hotel operations and survive the changing landscape, hotel owners and operators are finding new ways to control telecommunications expenses. By Robert Mandelbaum & Michael Kane To gain a better understanding of telecommunication expenditures at U.S. hotels, CBRE analyzed the costs of phone and internet service within the Information and Telecommunications Systems Department (IT Department) of nearly 3,000 hotels that participated in ...
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