1 / 9

HOTEL LIFE CYCLE

HOTEL LIFE CYCLE. Hotel Lifecycle. ______________. Years Occupancy & Income 0 – 2 Introduction to market 2 – 4 Occupancy rises slowly 4 – 5 Gradual increases in income 5 – 7 Stabilized income levels 7 – 10 Decline due to deterioration & obsolescence

zion
Download Presentation

HOTEL LIFE CYCLE

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. HOTEL LIFE CYCLE

  2. Hotel Lifecycle ______________ Years Occupancy & Income 0 – 2 Introduction to market 2 – 4 Occupancy rises slowly 4 – 5 Gradual increases in income 5 – 7 Stabilized income levels 7 – 10 Decline due to deterioration & obsolescence Lifecycles can be lengthened based on maintenance & upgrades

  3. Hotel Lifecycle ______________

  4. Value per Hotel Room ______________

  5. Rooms Division Food & Beverage ______________ Hotel Expenses

  6. Income Calculations ______________ Departmental Expenses = 35% Operating Expenses = 20% Fixed Charges Expense = 5%

  7. What Makes a Hotel Profitable? ______________ • Profits = Income before capital reserve, rent, debt service, income taxes, depreciation and amortization. Hotels that have higher profit margins: • Are smaller • Rely less on Food & Beverage • Able to control departmental expenses

  8. Controlling Labor Costs ______________ • Payroll & Benefits: = 64% of rooms department expenses = 43% of total operating expenses = 33% of total revenue • Growth of hotel revenues is virtually identical to the growth of labor costs. • (Correlation coefficient of 0.9924) Ways to control labor 1. Adjust staffing 2. Adjust salaries & wages

  9. Franchise Fees ______________ Franchise fees are the 2nd largest operating expense after payroll

More Related