The Franchise Owner's most trusted news source


Log In / Register | May 22, 2018

Hotel Spa Departments Follow Industry Trends

Coming out of the great recession, U.S. hotel operators struggled to earn revenue from sources other than the rental of guest rooms. However, in 2014, we began to see guests spend their money in other areas of the hotel. According to the 2015 edition of Trends® in the Hotel Industry, rooms revenue increased by 7.3 percent in 2014. Concurrently, revenue within the food and beverage and other-operated departments grew by 6.2 percent.

Revenue Premiums Offset Higher Costs in Historic Hotels

Some old hotels age gracefully and have achieved the status of "grande dame" hotels. These properties typically compete in the luxury or upper-upscale market segments, and frequently achieve occupancy and average daily rate (ADR) premiums versus their contemporary competition.

U.S. Historic Hotel Outlook Is Extremely Strong

The outlook for the U.S. lodging industry, particularly historic hotels, continues to be extremely strong, according to PKF Hospitality Research (PKF- HR is a CBRE company).

Consumption and Pricing Influence Hotel Utility Costs

In hotels, utility costs consist of four major components. According to the 2015 edition of Trends in the Hotel Industry, electricity is the largest utility expense comprising 60 percent of total expenditures. Water/service is the next largest utility cost (23.8%) followed by gas/fuel (10.6%), and steam (2.3%).

How Profitable Will RevPAR Growth Be in 2015?

Like other industries, profits in the hotel business are achieved when revenues exceed the cost of operations. In 2015, there are several factors that will enhance the ability of hotel managers to control their operating expenses:

Dual-Branded Hotels: Do Operating Efficiencies Exist?

The pace of new hotel construction is picking up. According to STR, Inc. there were 1,003 hotels under construction in the United States as of January 2015. This is up 31.8 percent from January 2014.

Some Taxing Issues for Hoteliers in 2015

Written by my colleague Leo Parmegiani—The lodging industry was not insulated from the tax challenges of the past year. Reflecting back on 2014, it was a year wrangled with Congressional bickering, partisanship and gridlock and, as a result, no passing of major tax legislation (unless you count the tax "extenders" passed at year-end and expiring only two weeks later).

Protracted Prosperity: Profits and Resulting Values Expected to Increase

U.S. hotels have realized significant increases in occupancy, average daily rate (ADR), and top-line revenue over the past five years.

Budgeting Is Getting Easy

Historical budget accuracy for U.S. hotelsThrow away the Ouija and dart boards. Apparently predicting the performance of U.S. hotels has become very easy for U.S. hotel managers. For the third consecutive year, management's projections of revenues, expenses and profits contained in their budgets have been extremely accurate.

Hotels in Profitable Part of Business Cycle

Despite the slowdown in the pace of rooms revenue (RevPAR) growth in 2013, U.S. hotels were able to sustain strong gains in net operating income (NOI) during the year.