Too often in our professional environments, operational specialties are left to the experts. Employee actions are left to human resources, customer acquisition to marketing and wireless infrastructure in the domain of information technology. But as you move up in the decision-making chain, you need to be familiar with each area to help contribute to the success of your organization. This is especially true in the area of budgeting; every department needs to be conscious of finances—helping to make the best investment with the resources your company has.
Recently, the HFTP Americas Research Center conducted an analysis of IT lodging spending using data submitted to CBRE Hotels’ Americas Research. The data are the recorded expenses from Schedule 6: Information and Telecommunication Systems, a new schedule that was implemented in the Uniform System of Accounts for the Lodging Industry (USALI), 11th edition (enacted in 2015). Here are highlights of those numbers as a comparison reference for you.
First, a bit of background on the data to provide a picture of the properties submitting the expenses. The properties are U.S.-based with a majority in the upscale/upper-upscale category (51.1 percent) and midscale/upper midscale taking up the next largest portion (30.4 percent). There are only two years of data analyzed, 2015 and 2016, with 2015 being the first year to use Schedule 6. The numbers for 2015 are: 5,193 properties reporting, 72,185 average available rooms, and 53,611 average occupied rooms. The numbers for 2016 are: 5,640 properties reporting, 72,135 average available rooms, and 53,306 average occupied rooms.
One of the largest expense items for many operations is labor costs. This is an area of great interest on a personal level (“how does my salary compare?”) and professional level (“how much personnel does the company need to invest in to cover IT support?”). For management positions, the average cost per property for a single manager was $66,990 in 2015 and $62,189 in 2016. For non-management positions, the average cost for all positions (i.e. IT tech or assistant IT manager) was $147,457 in 2015 and $143,632 in 2016. Breaking it down by room count, the total salaries, wages, service charges, contracted labor and bonuses was as follows: $1.04 per available room and $1.43 per occupied room.
Tech Services Spending
The other big topic of interest is how much is spent on tech services. Internet access for operations and guests is a crucial line of communication. But how much is spent on access year-in and year-out? For 2015, it was $18,336 and $19,287 in 2016. The room costs are 35 cents per available room and 39 cents per occupied room, making internet access one of the smallest IT expenses.
Spending on system expenses for operations—rooms, food and beverage, plus other operated departments—was $47,470 in 2015 and $45,074 in 2016. The room costs are 60 cents per available room and 83 cents per occupied room. Spending on system expenses for undistributed departments—administrative and general, sales and marketing, and utilities—was $43,470 in 2015 and $36,734 in 2016. The room costs are 51 cents per available room and 71 cents per occupied room.
I know that the above doesn’t make for the most thrilling topic of discussion, but it is important. With the first two years of IT expenses reporting under the USALI 11th edition, it is prudent for hotel companies to start measuring certain statistics and comparing them to their competition. It is only through an improved understanding of a hotel’s cost structure that owners and managers can better operate their properties, turning more revenue dollars into profits.
For further details on this analysis, contact Tanya Venegas, executive director and HFTP fellow at the HFTP Research Institute, at [email protected].