Budgeting Accuracy, Consistent Forecasting & Hotel Projections all point towards a great 2015. Here's why....................

1. Hotel Success
Key Factors
Areas of Interest
Market & Budgeting Tips

2. Budgeting & Planning
3rd Year in a row
• Revenue, Expenses & Profits have
been extremely accurate.
• In 2013 Hoteliers missed their
property revenue by ONLY 0.04%.
• On average, hotels in 2013 exceeded
their budgeted NOI Goals by 0.07%.
This indicates that the market is
becoming more & more consistent &
easier to forecast (for the most part).

3. Budgeting & Planning
Budget Accuracy
• Hotel Revenue was only off budget
by 0.04%
• F&B, Operated Departments, Rentals
& Other Income all exceeded budget
• Budgeted Expenses in 2013 came in
0.01% below the expected growth
rate for that year.
• By cutting expenses below the
growth rate it allowed many hotels to
surpass their budgeted profit levels.
There is a 7.1% projection increase in
RevPar in 2015 which will lead to an
overall 6.9% gain in total hotel revenue!

4. Budgeting & Planning
Healthy Market
• Average selling price per room has
increased 28%
• Many factors contribute to a healthy
economic recovery.
• Competition is intense but equals a
recipe for success.
• It is a good time to own, buy or sell
any property if interested.
• Total Investment Activity in 2013 was
21.8 billion.
• 2014 YTD (September) has
exceeded last year’s pace.
Lodging Econometrics anticipates activity
could finish as high as 25 billion in 2014!

5. Budgeting & Planning
Labor Costs
• Labor cost is a major expense within
a hotel.
• In 2013, labor costs were 61.1% of
total expenses in rooms department
& 59.6% in F&B department.
• Sales & Marketing are just 27.1%
• From 2007-2013 rooms department
labor costs have increased 1.4%, the
greatest increase among all
departments.
• Overall labor costs as a % have
declined in recent years.
• Labor cost measured as a % of
TOTAL EXPENSES has remained
relatively constant.
Employee performance has a significant
impact on the guest experience.
Managers spend a good amount of time
recruiting, training & scheduling
employees.

6. Budgeting & Planning
Recovery
• For the third straight quarter
Construction Pipeline business posts
double-digit growth
• 12 Quarter Uptrend is currently in
process.
• Projects under construction are up
50%
• Projects scheduled to start in the next
12 months are showing gains of 21%
YOY
• AS of Q2 2014, 62% of total pipeline
by projects are in midscale to upper
midscale chains.
• Top 3 Franchises dominating the
pipeline are
• Hilton Worldwide
• Marriott International
• Choice Hotels International