The Hospitality Research Group
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Transcript The Hospitality Research Group
Financial Benchmarking
Your Resort
&
U.S. Resort Industry
Overview
Presented by
Mark Woodworth
[email protected]
Robert Mandelbaum
[email protected]
Presentation Outline
Industry Overview
Benchmarking defined
When did benchmarking start?
How to benchmark!
Why use benchmark$
Resort financial benchmarking
Uniform System of Accounts
Methods of financial comparison
Case study
HRG’s Benchmarker®
U.S. Resorts
Annual Change In Total Revenue
12%
8%
7.1%
6.5%
8.9%
8.6%
5.0%
5.2%
2.5%
4%
3.1%
0%
-4%
-3.5%
-8%
-8.4%
-12%
1995
1996
1997
1998
1999
Resorts
Source: PKF/HRG Trends in the Hotel Industry
2000
2001
All Hotels
2002
2003
EST
2004
PROJ
U.S. Resorts
Change In Total Revenue By Region
Region
2001
2002
2003
Preliminary
Northeast
-5.4%
-6.2%
-5.8%
North Central
-1.7%
3.6%
-2.8%
Southeast
-7.6%
-5.6%
-1.3%
South Central
-9.2%
3.4%
0.3%
Mountain/Pacific
-9.3%
-3.3%
0.0%
Source: PKF/HRG Trends in the Hotel Industry
U.S. Resorts
Annual Change In Rooms RevPAR
12%
8%
8.1%
7.7%
6.2%
8.0%
4.0%
3.2%
2.5%
4%
2.2%
0%
-4%
-4.1%
-8%
-8.0%
-12%
1995
1996
1997
1998
Occupancy
2000
1999
ADR
2001
2002
All Hotels RevPAR
Source: PKF/HRG Trends in the Hotel Industry
2003
EST
2004
PROJ
U.S. Resorts
Annual Change In
Total Revenue And Expenses
12%
8.9%
8%
7.1%
4.3%
6.5%
8.6%
6.5%
5.0%
4.8%
4.3% 5.2%
5.5%
6.7%
2.8% 3.1% 3.1%
2.5%
4%
0%
-1.1%
-4%
-3.5%
-6.0%
-8%
-8.4%
-12%
1995
1996
1997
1998
1999
Revenues
2000
Expenses
Source: PKF/HRG Trends in the Hotel Industry
2001
2002
C.P.I.
2003
EST
2004
PROJ
U.S. Resorts
Annual Change In Net Income*
24%
18%
17.0%
15.9%
12.2%
12%
13.8%
6.9%
3.2%
4.4%
6%
1.6%
0%
-6%
-12%
-10.5%
-18%
-14.7%
-24%
1995
1996
1997
1998
1999
Resorts
2000
2001
2002
2003
EST
2004
PROJ
All Hotels
Note:* - Before capital reserve, rent, debt service, income taxes, amortization, and
depreciation
Source: PKF/HRG Trends in the Hotel Industry
Comparative Operating
Performance
Other Property Types
2003 Estimates
Total RevPAR
% Rooms Revenue
% F&B Revenue
% Other Operated Revenue
Total Payroll and Related Costs
% Operated Dept. Income
Income Before Fixed Charges
N.O.I.* % Revenue
N.O.I.* $ PAR
Resorts
$66,257
56.3%
33.1%
8.8%
33.7%
54.9%
31.2%
23.6%
$15,623
Full
Service
$36,435
65.5%
28.7%
3.0%
33.9%
58.0%
30.9%
23.3%
$8,502
% - Percent of total revenue
* - Before capital reserve, rent, debt service, and income taxes.
Source: PKF/HRG Trends in the Hotel Industry
Limited
Service
$14,739
96.4%
N/A
1.7%
25.5%
72.1%
42.5%
32.5%
$4,790
Convention
$58,417
61.0%
32.2%
3.0%
32.6%
58.3%
36.8%
27.8%
$16,217
Comparative Operating
Performance
Comparable Full-Service Hotels
Average Number of Rooms
Occupancy
ADR
Total RevPAR
% Rooms Revenue
% F&B Revenue
% Other Operated Revenue
Total Payroll and Related Costs
% Operated Dept. Income
Income Before Fixed Charges
N.O.I.* % Revenue
N.O.I.* $ PAR
Resorts
374
66.3%
$154.25
$66,257
56.3%
33.1%
8.8%
33.7%
54.9%
31.2%
23.6%
$15,623
Full
Service
367
66.9%
$146.75
$55,957
63.1%
31.1%
2.3%
35.6%
59.0%
32.4%
25.2%
$14,049
% - Percent of total revenue
* - Before capital reserve, rent, debt service, and income taxes.
Source: PKF/HRG Trends in the Hotel Industry
Definition
“bench-mark-ing” Noun (1976):
the study of a competitor’s
product … in order to improve
the performance of one’s own
company
Merriam-Webster’s Collegiate Dictionary
When & Who Started
Hotel Benchmarking?
Harris Kerr & Foster [PKF Consulting]
Laventhol & Horwath
Smith Travel Research
The Hospitality Research Group [HRG]
Benchmarker®
The COMP Set
vs.
Competitive
- Sub Market Geography
- Top Line
- Market Share
Comparable / Criteria
- Also Geography
- Occ – ADR – RevPAR
- Mix of Revenues
- Bottom Line Comparison
* Segment
* Size
* Location
How To Benchmark!
Subject /
Pro Forma
Property COMP Set
'A'
$ 197,000
+ 9.1%
vs.
$ 170,000
'B'
$
192,000
$
722,000
'C'
'D'
$ 176,000
/
4
=
$
184,000
$
180,500
Why Use Benchmarking?
•
•
•
•
•
Loan Application
Insurance – loss
Tax - reduction
Measure management
Budgeting
Applying Financial Benchmarking
To The Hotel Industry
Common Language
Uniform System of Accounts
for the Lodging Industry
9th Edition – Current
10th Edition – Release in 2004
For Use in 2005
Uniform System of Accounts
Operating Departments
– Rooms, Food, Beverage, Minor Operated, Rental
and Other Income
Undistributed Departments
– A&G, Marketing, P.O.M., Utilities
Fixed Charges
– Management Fees, Property Taxes, Insurance
Methods of Financial
Comparison
Total Dollars
Percent of Department Revenue
Percent of Total Revenue
Dollars Per Available Room
Dollars Per Occupied Room
Comparable Property
Selection Criteria
Subject Hotel
Property Type
Geography
Affiliation
Rooms
Occupancy
A.D.R.
Comparable
Criteria
Resort
Resort
Florida
Southeast
Chain Affiliated Chain Affiliated
252
200 - 300
67.6%
60% - 70%
$294.60
$275 - $325
Comparable Property
Selection Criteria
Recreation
Other Operated Dept.
% Of Total Revenue
Subject Hotel
Comparable
Criteria
Tennis
No Golf
6.8%
Tennis
No Golf
5% - 15%
The Hospitality Research Group
of PKF Consulting
Benchmarker®
…of Hotel Profits
Benchmarker
Customer selects
properties
Choice of 7 segments
All U.S. cities
24 hour delivery
$175 on up
Excel XLS format
®
Thank You
Contact Information
(404) 842-1150
[email protected]
[email protected]