I have a dream. My dream is that the numbers – the numbers that so many managers agonize over in our industry – are just as accessible as guest service and employee engagement. Let me put this another way for read more...
The morning meeting is a mainstay in almost every hotel. All the key department managers and leaders gather, usually in the front office or sometimes an in-house meeting room, to devour the day’s business at hand. It is a great read more...
Have you ever wondered why we all hear so much complaining and downright all-around annoyance being expressed from hotels about the on-line travel agents? You would naturally think that because there is so much protest being made that hotels would read more...
This title belongs to a classic 1970 Canadian movie about two guys from Nova Scotia, Joey and Peter. They moved to Toronto to seek their fame and fortune. As luck and the writer’s pen would have it, they found little of either. My story read more...
It was the spring of 1995 and I had recently transferred from one hotel back to the regional base and into a newly created position as the regional operations analyst. The job was tailor-made for me. The position was the read more...
Interviews are tricky, for both the candidate and the interviewer. A GM’s job interview is a challenge for the incumbent because they need to be ready for just about anything. This is especially true as it relates to the financial read more...
I tell my Introductory Hospitality Financial Leadership Workshop participants that the concept behind the matching principle is “the most important concept today.” Why? When it comes to producing financial information, it’s the cornerstone of understanding why we do almost everything read more...
With two large shortcomings I can’t see why the average person who has a basic understanding of how the travel world works would ever use an online travel agency. In making this statement it occurs to me that—obviously—most people don’t know read more...
For almost 10 years our industry has been a rocket ship of top line growth driven almost exclusively by big gains in RevPAR driven by solid increases in occupancy and rate. You also can’t go too far inside the online read more...
My primary responsibility as the head of the finance and accounting departments in the hotel was to ensure the books were clean and balanced. What I really got paid for was serving as the “chief financial information officer.” The reality read more...
CFO to CEO: “What happens if we invest in developing people and they leave?” CEO: “What happens if we don’t and they stay?” I found this exchange in, of all places, the internet. Go figure. It’s an interesting back and forth read more...
I have been around awhile and it’s not like I’m ancient or anything, but I have seen some BIG changes in how we as an industry look at numbers and what numbers we focus on. What’s important and what people read more...
Just like baseball has an unearned run as a scoring feature, in business we have unearned revenues. In this piece I will discuss the difference between earned and unearned revenue and how it applies to the hospitality business. First off though read more...
Expedia once stated that “Of all the consumers searching Hotels.com, less than 0.5% is searching for specific large brands.” If the impact of the brands’ name and associated brand value was so important to a consumer, why would they choose read more...
Accounting was a trade that had a global language much like carpentry or plumbing. There were universal rules that applied and these principles were exactly the same in the hotel business. That was good news. Accounting principles are universal. The read more...
The Business Entity Principle This principle dictates that - unless a sole proprietor - the assets of the business and any rights to use these assets are separate and distinct. For example, if Henry Ford was still alive and CEO of the read more...
When you are preparing your budgets, an incredibly valuable tool is what I refer to as the “citywide supply and demand analysis.” I didn’t come up with this, however, I am going to explain how it works, why it’s so read more...
This thing in the title of this piece, I want to say was a fad that died already. Benchmarking and KBI’s were all the rage a decade ago and now, today, you don’t hear much at all about their usefulness read more...
(Continued from article "Benchmarking and Key Business Indicators (Part 1)". Here is how to lay out the foundation to collect the data: Record every single bit of your data in your financial system (general ledger) and financial statements. Create GL codes for read more...
This is a question I have been asked many times. Exactly what is financial leadership and why hospitality? Finding the three words together “HFL” in a sentence three years ago was not possible. I know because I tried to google read more...
Tis the season and most hotels are already well under way with their annual grunt work to prepare a 2020 plan for the regional and corporate teams to review and then it is onward to ownership seeking their approval. In most read more...
It is common sense to know: With more knowledge and skills your career prospects and advancement possibilities are enhanced. In hospitality it is not quite as well understood. There exists a counter culture to growing up, to raising one’s self out read more...
Just like your auto mechanic checks your car’s health you can completely review your hotel’s financial performance and get a clear reading on as many as 21 different flow thru performance points. Further to that you can even see what read more...
Continuation from "How to use 21-point flow-through inspection (Part 1)" by David Lund 13. Minor operating departments. Depending upon the variety and size of these operations we need to pinpoint one by one the variance in revenues and profits. Zeroing in read more...
Who was the one person in your career you would have done anything for? Be you for a moment and re-live the experience you had when your career really took off. That place in your past that had you really growing read more...
When I work with hotel clients around their financial leadership it’s often centered on getting the team to do their monthly financial forecast. A greater interest in doing it produces better and more consistent results. When doing financial leadership workshops read more...
It was the spring of 1995 and I had recently transferred from one hotel back to the regional base and into a newly created position as the regional operations analyst. The job was tailor-made for me. The position was the read more...
Recently I have been working with a client who has four hotels and we worked on putting together an incentive plan for his executives. This is a story about how we structured the incentive and the goals around the plan read more...
When I do financial leadership workshops with hotel teams we often talk about liabilities. I tell my audience that I know for a fact that each one of them have at least two liabilities. I get some puzzled and Kreskin-like read more...
Being a branded or franchised hotel is an expensive endeavor. Especially when you consider the average agreement is 20 years in duration and you’re on the hook for the fees outlined in your agreement plus anything else the management company read more...
Leadership can be a confusing application. Just google leadership and you will get so much information it can make your head spin. I am going to try and simplify the definition of leadership in this article. I am writing this read more...
Food cost is a never-ending battle in a war that does not end. You can never take your foot off the gas, if you do you will slow down. When you slow down in the food cost world it is read more...
As a leader, it is no surprise to hear someone say that teaching others is one of your core responsibilities. When it comes to delegation it is important to remember there is a big distinction between giving the work you do read more...
Creating a financially engaged leadership team takes time, commitment, respect for fair play, resources and a sense of adventure. When creating something new, for me there was always an element of the unknown. In writing my book, it occurred to me read more...
Delegation has three dimensions that are powerful tools. Delegation is also quite often misunderstood. In this article I am going to explain my thoughts on how to use delegation to be more productive, to grow your own abilities and to read more...
Recently I attended a hotel association conference where I was a speaker for one of their breakout sessions. The opening morning of the convention started with a breakfast where we listened to the many great developments within the association in read more...
Like they say, showing up is half the job. Another acquaintance from my last hotel saw me in the cafeteria one afternoon after one of my lunch shifts. She asked me how it was going. I told her it was read more...
Hotels are notorious for ghosts and ghost stories. Especially in old hotels. This is a story about one of my creepier encounters with something while working in one of the oldest and most famous hotels in the world. Ever wonder why read more...
In my career I have worked with a lot of interesting characters. To say the least, they were all quite colorful, usually fanning the flames of the hotel’s drama and adding their own seasoning. One boss I had was particularly read more...
I help hotels manage their profits more efficiently and in the hospitality world, there are only two main cost types that need a system and a strategy to properly control them. The two culprits are payroll and expenses. In this piece, I am read more...
In the business world protecting your assets is a critical strategy. Without it, you are open to “things” happening that can cost you a fortune. I was trained with the concept of separation of duties as a foundation so in read more...
#1 – The Lie is Complexifying Everything That’s a word that means we’re making things complex or what Complexifying also means: You are taking one issue and applying it to many situations or people. For instance, the issue of leaders not read more...
Over the years I have seen a lot of messes in my career. Not only the ones that catch your eye because of the clutter and disorganization you see in the back spaces of your hotel but I’m talking about read more...
Having been around awhile I have seen the changes that have come as a result of major global events. The starkest example is our pre- and post-911 world. It showed us that the idea of getting on an airplane means read more...
“That’s enough detail. I already have a good understanding of the requirements.” – Jeff Haden, New York Times Inside of the hotel company I worked for there has always been a constant movement to increase efficiency, especially inside the financial function. Not read more...
In the business world protecting your assets is a critical strategy. Without it you are open to “things” happening that can cost you a fortune. I was trained with the concept of the separation of duties as a foundation so read more...
The hotel business is a retail business and in order to stay on top of your business you must fully and completely balance your daily revenues and settlements. Every day we begin anew and every day is a story unto read more...
Coaching people around the financials in hotels is what I do. I accomplish this by one-on-one coaching, usually on the phone or through Skype, or in workshops where as a group we explore and debunk the mystery around the numbers. read more...
You can increase the way you lead your team financially. Create an environmentthat has your managers working together on the “business” of running your hotel. It all starts by knowing that it is a team effort and it can’t be done properly read more...
We have all heard of the 80/20 rule. But I am willing to bet most of you have not heard it in conjunction with the words “food cost.” A good friend of mine who was an executive chef explained it to read more...
Applies to financial leaders’ and operational managers’ roles: On the eve of starting my financial leadership course for the third year with Royal Roads University it occurs to me that most people have it somewhat wrong when it comes to how read more...
Applies to financial leaders’ and operational managers’ roles: On the eve of starting my financial leadership course for the third year with Royal Roads University it occurs to me that most people have it somewhat wrong when it comes to how read more...
If You Can’t Measure It,You Can’t Improve It. Management thinker Peter Drucker is often quoted as saying, “You can’t manage what you can’t measure.” Drucker means that you can’t know whether or not you are successful unless success is defined and tracked. In read more...
Most hotels measure payroll as a percentage of revenue or, as it is commonly referred to, labor cost percentage. This is not helpful. Why, you ask? Well, first of all, if sales magically increase because of an increase in the read more...
The hotel business is unique with owners, brands and assets all vying for their individual needs and attention. All the while this delicate balance has some interesting business characteristics that are essential for hospitality financial leaders to understand. It’s not read more...
“All Children, except one, grow up” – Peter Pan In the hotel business we don’t want to grow up either. That’s why so many people find our business so exciting and interesting and that’s why they stick around and work crazy read more...
The chapter below is an excerpt from my new book. It’s fiction but some of the characters and story lines are based on people I have worked with and events that have taken place in the hotels I have worked read more...
Hands down - one of the best experiences I ever had in my career was being part of the team that reviewed the financial performance of the hotels in my region. The reason I enjoyed it so much, and have read more...
Now it’s time to review the MOD’s – any other department that makes revenues in the hotel. Here we take a different approach and do a top-down review looking at the whole picture. My boss is always looking for the read more...
In the hotel business if you want to get ahead you better be ready to move. It’s the way in which you can multiply your opportunities and increase your chance for greater personal prosperity. That’s the way it was explained read more...
By someone’s estimate there are roughly one million hotels in the world. I take it that number includes all the different kinds of hotels from small inns and hostels all the way up to your full-service multi-outlet mega hotel operations. read more...
I have been thinking about this topic for some time. Especially now in 2020 with the social unrest in this country and elsewhere in our world I think it’s time to speak up. For me, that means offering what I read more...
As you know the front office is the command post for your operation, and it’s also the point where all the receipts come through. Making sure you have solid internal controls at the desk is not only good business, it’s read more...
In the hotel business, there are three pillars: the guests, the colleagues, and the money. They are not equal. They are not equal because we ignore the third pillar and we do so at our own peril and out of a read more...
Pillar 3 – The Money The money, the P&L, the owner, it all boils down to the same thing, providing a superior return for the stakeholder. How is this pillar different? Well, really it is not different. We just treat it read more...
I am a big fan of the Uniformed System of Accounts for the Lodging Industry (USALI), or as she is affectionately called “You Sally.” It has been the guide that our industry uses to properly present financial information for a long…long time, read more...
Getting your hotel leadership team excited about accounting is like someone thinking its fun to go to the dentist. Your average person wants nothing to do with it because they have a predisposed notion that it’s yucky, boring and better read more...
Almost 40 years ago now I was a busboy at a large and busy resort in the Canadian Rockies. I had transferred west a few months earlier from another hotel in the same chain where I had worked for two read more...
In the hotel business if you want to get ahead you better be ready to move. It’s the way in which you can multiply your opportunities and increase your chance for greater personal prosperity. That’s the way it was explained read more...
We all have predisposed ways that we look at our world and the things, people and circumstances inside of it. It’s what makes us human and we either have an open mind or one that’s closed. Another way to express read more...
I like to talk to my workshop participants about this important view of their world before we begin. I know that most have come to my workshop thinking we are going to talk about accounting and for most people, that’s read more...
In my career, I have worked in some incredible hotels and resorts. One of my resort experiences included a summer where a group of us would gather each morning and play nine holes of golf before work. This story is read more...
The hotel business is a retail business and in order to stay on top of your business, you must fully and completely balance your daily revenues and settlements. This means dotting the eyes and crossing the Ts, examine them. Every read more...
Practice is what we are missing. Practice with the financial piece is somehow a foreign concept. But in the hotel world practice is everywhere, right? If you and I worked in banquets and we were both rookies, we would show read more...
Forecasting is incredibly important because we need a fresh and current plan to help us execute our financial strategy and as the saying goes, “Without a map any road will take you where you want to go.” I know for many hotels read more...
Forecasting is incredibly important because we need a fresh and current plan to help us execute our financial strategy and as the saying goes, “Without a map any road will take you where you want to go.” I know for many hotels read more...
We have just completed a year that has been so unprecedented. It has re-written the goalposts for so many things, especially for the hotel and other service industries where people are the main ingredient in what we offer. This article read more...
When we think about solving a problem or fixing a situation and especially when it is a complex issue, we tend to put our head in the sand, throw up our hands and say, “This is not working. It’s so read more...
When I was an assistant controller, my boss at the time was fond of saying the following about our general manager, “I could do his job, probably not as good as he can, but I could still do his job.“BUT,” read more...
I like writing stories about hotels and my experiences in the hospitality business. It is no wonder, I guess, in part because I grew up in a unique place. Guess what it had and still has? A great hotel. A read more...
A lot gets written about certain things in the hotel industry and others not so much as a mention. I am not saying it is simply a matter of blatant favoritism or anything like that but it is not lost read more...
Giving the proper credits to your food and beverage operation is an important task. You want to ensure it is done consistently and fairly. This article examines all the usual credits, different types, the proper way to take them and read more...
One of the most overlooked tools hoteliers have is the ability to create and use rooms market segmentations. Market segments are customer types not geographical. In the manufacturing world, like the old days with VCRs, you have one company making read more...
I do not know about your experience, but for me growing up in the hotel world, and especially my first decade working in F&B and rooms, the adage, “Look after the guests and the money will look after itself,” was read more...
A lot has been speculated about what could and should change because of the pandemic. There is one aspect of the hotel business that desperately needs to change and the Covid crisis is not to blame. However, it will most read more...
When it comes to investing in oneself many times people overlook the outcome and instead concentrate on the up-front cost. When we look at the opportunity to improve our own personal prosperity, we need to see the full picture. We read more...
Interviews are tricky, for both the candidate and the interviewer. A GM’s job interview is a challenge for the incumbent because they need to be ready for just about anything. This is especially true as it relates to the financial read more...
Continued from last week Interviews are tricky, for both the candidate and the interviewer. A GM’s job interview is a challenge for the incumbent because they need to be ready for just about anything. This is especially true as it relates read more...
Managing labor costs is a never-ending battle in any hotel. No wonder it adds up to on average 50 percent of the total revenue in hotels around the world. To say labor cost is important is an understatement so in read more...
Continued from last week Managing labor costs is a never-ending battle in any hotel. No wonder it adds up to on average 50 percent of the total revenue in hotels around the world. To say labor cost is important is an read more...
Productivity is like our health and fitness. We are never just staying in one place for long. You are either moving toward a better picture or you are moving away from the ideal shape you want to be in. In your read more...
I heard this about 40 years ago and it has stuck with me. I was a newbie cocktail waiter working part time in my hometown hotel. One of my regular weekend customers was the controller and he was telling me read more...
If you complete a regular monthly close in your hotel, and I certainly hope you do. And if closing your books takes longer than three-five working days, then this is meant for you. Doing your month-end and having a final read more...
The hotel business is a form of retail business. Every day we must balance our revenues with our settlements, just like you would if you owned a store. Or for that matter any business that has sales every day and read more...
GO PAR is the new and exciting measurement everyone is talking about in the hotel business. But let’s be honest. It is a bit of a stretch to comprehend. It is a little more complicated than REVPAR. Why you ask? Well, read more...
In your hotel internal controls are a mission critical element you must have up and working well to adequately safeguard your assets. If you forgo these controls, you leave yourself wide open for – and I hate to use this read more...
Having a monthly financial statement for your hotel is the key to creating an effective management process inside your business. But, like many things in life, hotel financial statements are not all equal. To be effective your statement needs to read more...
You might be reading this and saying to yourself, “Well, for sure every hotel needs a daily pick-up report.” But I bet you would be surprised how many hotels do not use their pick-up report and or they do not read more...
The budget is a BIG deal. Heck, it consumes so much time and energy in the hotel. Getting it right is a critical element to any branded, managed hotel. If you are reading this and you do not prepare an read more...
In our lives we are continuously evolving as people. When thought of most of the time, this evolution seems like a continuous stream of challenges to overcome. This persistent development is both personal and professional. The bridge is what I refer to read more...
I am willing to bet that title got your attention; you’re probably wondering what that is all about. Jetstream is a Canadian company that has developed software and a platform of services that I think will revolutionize our industry. I read more...
As I write this piece, I am proud to say I am 58 years young. So far, my life has been great. Many challenges to overcome like anyone and many bumps in the road for sure. Someone once said that read more...
I recently watched a documentary on fraud and why the auditors were unable to detect anything even when they were right on top of what was so obvious to the person featured in the interview. The narrator also explained very read more...
Having a financial system that produces regularly scheduled information about your hotel and the direction it is going is paramount to your survival. Without this regular reporting, you are really flying by the seat of your pants. But what exactly read more...
If you do not have all three of these metrics on your radar screen at the same time, you are flying the profit picture in your food operation with at least one eye closed. All three metrics must work together read more...
Contribution Margins The third part of my radar screen is the most powerful and, in my experience, the least understood aspect: food contribution margin. It is the inverse of the food cost relationship. When you boil it down, it is: What’s my gross read more...
With my workshops and speaking I often do an exercise where I challenge each leader to find a minimum of $250 in next month’s forecast that can be savings in the form of reduced payroll or expenses. It can also read more...
If Your Challenge is Food & Beverage Then – Meet Your Maker Everywhere you look it’s bleeding. The patient is so messed up it’s not even funny. It will never fix itself. You need CORE on your side. CostOperationsRevenueExecute Patrick is a self-made read more...
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 read more...
They go by many names: owner’s commentary, monthly commentary, executive commentary and more. The names can be different but in essence, they are all the same thing – a review of the prior month’s results plus a forward look into read more...
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 read more...
This is not the case for all GMs, but it is definitely the case for many. The reason is simple: the GM has not been given any formal accounting training and they are intimidated by the numbers and their lack read more...
A lot has been said about why we have such a labor crisis in hospitality. Some would say it is no wonder because we have forgotten – or better still allowed – the forces that be, to drive the agenda read more...
Bootstrapping is a statistical metric that uses random sample replacements. That definition is not for me, so bootstrapping also has a broader slang meaning that most people get. It means you are stuck or at least unable to take big strides read more...
The headline makes a big statement because if you are involved in the budget in your hotel and you have played baseball then you are probably saying to yourself that I am off my rocker. The budget is a mean and read more...
I’ve had my share of dealing with external auditors in my several decades of working in hotels, particularly midway during my hoteliering career, as Front Office Manager. The fact of the matter was that many of the auditors that were read more...
A few years ago, finding the three words "hospitality financial leadership” together in one sentence was not possible. I know because I tried to Google them in 2014 and came up with a grab-bag of ideas on leadership, consulting, courses read more...
You might think that getting your hotel leadership team excited about accounting is like convincing them it is fun to go to the dentist. Your average person wants nothing to do with it because they are predisposed to think it is read more...
The hospitality industry has seen unprecedented volatility over the past few years, which may make creating a budget for 2024 intimidating. However one has to get ready to plan the hotel budget for 2024 pretty soon. Before getting started, let’s remind read more...
Most hotels measure payroll as a percentage of revenue or, as it is commonly referred to, labor cost percentage. This is not helpful. Why, you ask? Well, first of all, if sales magically increase because of an increase in the read more...
In my life, there are few if any financial moments that have created a lasting positive memory. At least that is how it has been for me. Not too many earth-shattering activities, but one on the money side stands out. read more...
Packages are, on the one hand, straightforward. They are a well-established offering in most hotels, customers love them, and they are not going away. On the other hand, most hoteliers are at a loss to properly set up and manage read more...
There is a critical understanding that all hospitality financial leaders need to clearly understand and communicate when it comes to expenses. It is a simple distinction that is many times missed or not clearly understood. That is what this piece read more...
Cash is King. That’s an old expression but it’s also one that still rings true today. Everyone likes cash even if we don’t carry so much with us personally anymore. It’s important to recognize that some people will help themselves read more...
Determining the current selling or asking price for a hotel is a bit tricky. Compared to estimating the present value of a house it’s more like a detailed math exercise rather than a Google search on Redfin. That’s what this read more...
“AR” as we commonly refer to the sub department of the accounting function is a mainstay in any larger group-based hotel. In these juggernauts the importance of efficiently collecting your money is mission critical. Not only do we take the read more...
With my workshops and speaking, I often do an exercise where I challenge each leader to find a minimum of $250 in next month's forecast. That can be savings in the form of reduced payroll or expenses. It can also read more...
Now that’s a big statement to put out there, but I’m very confident that I’m pretty close to 100% correct with my observations. The reason why I’m so sure is that I know most hoteliers are not financial people and read more...
Rolling forecasts are nothing new but I must point out that most hotels don’t use them, and they really should. It’s an incredibly useful tool that is literally worth its weight in gold. That being said, it doesn’t weigh much read more...
A capitalization rate, or cap rate, is a measure of the income return on an asset, such as hotel or rental property, relative to its purchase price. It is calculated by dividing the net operating income (NOI) of the asset read more...
As I have said in many of my earlier posts, Food and Beverage is special. And I mean that with all sincerity because it's an integral part of our business especially with a full service offering. However, there are challenges read more...
Now I bet you’re wondering, excuses for what? Excuses me for not jumping in the deep end with the financials in your hotel career. What’s your imagination telling you that’s wrong in your hotel that holds you back from owning read more...
