Protecting Hotel Cash Flows By Balancing Personnel Costs With Revenues 
By: Mark C. Lynn and George A. Bertram

In the four months since the events of September 11, it has become increasingly apparent that the hospitality industry has been severely impacted by the current downturn in travel. Unfortunately, there is no manual that provides management with a step-by-step approach describing the actions that should be taken to reduce costs and preserve the financial integrity of either an individual hotel operation or a corporate organization when business plummets by 50% overnight, resulting in a severe overhead imbalance. 

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Hotel Internet Distribution Channels
By:  Christian Desira & Namit Malhotra

Since its advent, the Internet has been touted as a tool that would revolutionize the way the hotel industry does business, primarily by providing additional distribution channels. The lodging industry has not been exempt from this expectation. In particular, the greatest impact on the lodging industry has been in the arena of guest reservations. With “Internet bookings” coming into existence approximately five years ago, the pace of online hotel bookings has grown exponentially.

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Hotel Spas: The Value May Not be in the Profit
By:  Rachel White

During the last development cycle, numerous full-service upscale hotels opened in resort locations. Although these hotels varied in size, amenities offered, and orientation, many of them had one commonality: a spa. Like irons, ironing boards, and coffeemakers in mid-scale hotels, the spa became a compulsory amenity at upscale lodging facilities. As upscale resort hotels with spas sprang up, hoteliers and developers, not to be outdone by their new competitors, created larger and more elaborate havens of health and beauty in existing hotels as well, both in resort and urban settings. As hotel developers and operators started building and running spas, in light of limited market data and their limited experience in spa operations, factors such as the impact on RevPAR, profitability, size of facility, and amenities often went unexplored. Spas were considered necessary forms of competitive defense. Now that the spa industry has evolved and spa operations have stabilized, these questions can now be addressed.

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HVS International Presents the 2001 Hotel Development Cost Survey
By:  Elaine Sahlins

The San Francisco office of HVS International, the global hospitality consulting and hotel appraisal firm, has just released its annual Hotel Development Cost Survey. Published annually since 1979, the survey tracks nationwide hotel development costs. HVS International has completely revised its methodology and reporting for the 2001 Hotel Development Cost Survey. This year, we are launching a redesigned hotel development cost survey to include a larger range of hotel products and a new classification of development cost categories. While prior years’ surveys differentiated between three general property types—luxury, standard, and economy—the HVS International Development Cost Survey considers the evolution of hotel facilities, resulting in six hotel product categories.

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The Texas Hotel Market: Stabilization on the Horizon
By:  Rod Clough, Gretchen Hazel & Amanda Repert

It is no surprise that Texas hotel markets experienced substantial decline in 2001.  Well before the horrific events of September 11, local hotel markets tied closely to demand generated from the technology and telecommunications upswing - such as north Dallas and Austin - had seen negative turns early in the year.  Most other sectors important to the hotel industry soon followed suit and weakened, some more than others, and the slowdowns in the Texas lodging industry became more widespread.  But indications now point to a bottom for those markets hardest hit.  Although some weakening may persist during the first quarter of 2002, a stabilization period is expected to follow, leaving the market positioned for better times in 2003.  The following discussion outlines the major market influences that should lead to this anticipated stabilization.

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Hotel Markets Around Asia After September 11th... What's Next?
By:  Erik van Keulen

Following the financial crises in 1997 and 1998, values of five-star hotels around Asia have declined by approximately 37%. By the end of 2000, hotel values only recovered by 74% to pre-crises values of 1996. Although 2001 was expected to be another strong year for many markets across the region, the economic slow down in the USA and more recent developments in the world of business and travel, have changed this outlook completely. Instead, markets are likely to slow down with values anticipated to fall again.

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Municipal Bond Markets Provide Opportunities for Hotel Financing
By: Thomas Hazinski

Because of the limited availability of conventional financing for full-service hotels, many governments and private developers are turning to the tax-exempt bond market to finance their projects. Certain hotel developments can be designated to serve a public purpose and consequently qualify for special tax considerations. Convention headquarters hotels and airport hotels have taken advantage of this form of low cost financing. 

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Hospitality F F & E Purchasing
By:  Diane Cudworth

A great challenge for project managers in hospitality purchasing is to relay the importance of their role in a successful hotel project – a role that has changed drastically over the years. Formerly, the role of “the buyer” was one of an in-house processor of the information, and timely delivery of the product. Today, as developers and owners are focused on their core competencies, they are outsourcing non-core functions to experts in a particular field.  The result is a group of independent hospitality FF&E procurement firms, consisting of hospitality and purchasing professionals with a broad range of expertise, who command an expanded role in the new construction and renovation processes. 

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