HTD 500 Lecture 6: Chapter 5

• School: Ryerson University
• Department: Hospitality and Tourism Management
• Course: HTD 500
• Professor: Richard Wade

Document Summary

Unusual property characteristics: some hotels costly to operate than others (higher maintenance expenses, energy cost) Assumed competent management: projected expenses reflect competent management while actual management may better, equal/ less than usual. Industry average: categorizes operating statistics & ratios according to property size, room rate & geographical location, data represent average operating results & management ability used to evaluate existing operation/ project revenues & expenses. Revenues: room, food, beverages, telephone, rental & other income. Financial analysis techniques: maximize long-term revenue & minimize long-term expenses. Dollar-per-available-room: best when evaluate expense items that have high fixed expense (energy cost, property operations & maintenance, property tax & insurance) Property operations & maintenance: secondary unit of comparison: % of department revenue: departmental expenses (f&b, telephone, rental & other income expenses) due to directly to volume of departmental revenue. Presence of active local banquet & catering business which hotels has appropriate facilities to host events.