Top 10 Technology Trends - HFTP · tions, economy and management opportunities. • Restaurant Industry Economic Impact by State. On the National Restaurant Association web site,

THE JOURNAL OF HOSPITALITY FINANCIAL AND TECHNOLOGY PROFESSIONALS

June/July 2008Volume 23, Number 3

Top 10 Technology TrendsStrong Bandwidth StrategiesBuilding a Successful Web Site

Operational Benchmarks for Club and Lodging Industry

Operating Your Club During a Recession

®

Plus: Guide to Restaurant Industry Resources; GUESTROOM 2010’s Global Impact; and Michael Levie Profile

The Bottomline 3

THE JOURNAL OFHOSPITALITY FINANCIAL AND

TECHNOLOGY PROFESSIONALS

Volume 23, Number 3

14 10 Trends in TechnologyWhat you need to know to plan beyond 2008By Dave Berkus

20 Continuing ConnectionsTips for implementing a strong bandwidth strategyBy Jean Pascal Hebert

24 Building an Online PresenceKey issues to consider to ensure a successful web siteBy Peter O’Connor, IMHI

28 Operating Your Club During a RecessionOutlast a recession by managing expenses and optimizing revenuesBy Thomas F. Blaney, CPA, CFE; Patrick J. Halloran, CPA and Chris Casini, CPA

31 Keeping in GearAnnual benchmark survey results provide operational metrics for the lodging and club industriesBy Tanya Venegas, MBA, MHM

5 Between the LinesThe Newly-designed HFTP.org — HFTP’s new web site is a central membership resource

6 Q&A From The HFTP Research InstituteResearch, Reports and Comparables Part III — A quick resource guide for the restaurant industry

10 HFTP News and NotesGUESTROOM 2010’s Global Impact; Certification Call; HFTP Event Calendar

38 Feature Profile: Michael Levie

40 The Bottomline Resource Guide

HFTP® and HITEC® are registered service marks of Hospitality Financial and Technology Professionals. ProLinks and GUESTROOM 2010 are service marks of Hospitality Financial and Technology Professionals.

Submissions and InquiriesIndividuals interested in submitting an article for publication should contact the editor. The Bottomline is a peer review journal. All ma-terials submitted for publication are reviewed by members of the editorial review board or recognized experts in the field.

The Bottomline (ISSN 0279-1889), the jour-nal of Hospitality Financial and Technology Professionals, Inc., is published bimonthly with two special editions by HFTP®. Copy-right © by Hospitality Financial and Technol-ogy Professionals. All rights are reserved. All opinions expressed herein represent the views of the authors. The Bottomline and HFTP disclaim any responsibility for views expressed or statements made in any articles published. HFTP disclaims any liability with respect to the use of or reliance on any such information. The information contained in this publication is in no way to be construed as a recommendation by HFTP or any industry standard, or as a recommendation of any kind to be adopted or binding upon any member of the hospitality industry. Written consent must be obtained from HFTP before reprinting articles. Subscription fee of $30 for HFTP members is included in the membership fee. HFTP is headquartered at 11709 Boulder Lane, Suite 110, Austin, Texas 78726. Periodicals Postage Paid at Austin, Texas. POSTMASTER: Send ad-dress changes to The Bottomline, 11709 Boulder Lane, Suite 110, Austin, Texas 78726, (512) 249-5333.

C o n t e n t s

F e A T u R e S

D e P A R T M e N T S

J u N e / J u L Y • 2 0 0 8

4 June/July 2008

THE BOTTOMLINE STAFFFrank I. Wolfe, CAE

Executive Vice President/CEO [email protected]

Eliza R. Selig Editor/Director of Communications

[email protected]

Laura Renfro Advertising Sales / Director of Marketing

[email protected]

2007–2008 HFTP OFFICERSPresident

Anna McFarland, CPA, CFE, CHAE, CHTP Sofitel Luxury Hotels, North America

Carrollton, Texas

Vice PresidentJules Sieburgh, CHTP O’Neal Consultants Bethesda, Maryland

TreasurerTerry Price, CHAE, CHTP, CPA

The Grove Park Inn Resort & Spa Asheville, N.C.

SecretaryThomas G. Smith, CHAE

Ozaukee Country Club Mequon, Wis.

Immediate Past PresidentAgnes DeFranco, Ed.D., CHAE

University of Houston Houston, Texas

2007–2008 EDITORIAL ADVISORY COUNCIL Chair

Arlene Ramirez, MBAUniversity of Houston

Houston, TX

Board LiaisonKarl A. Munster, CPA, CHAE

HRI Lodging, Inc.New Orleans, LA

Board LiaisonJerilyn B. Schnitzel, CHAE, CHTP, CAM

Schnitzel Hospitality ConsultingPunta Gorda, FL

Kaye Chon, Ph.D., CHEHong Kong Polytechnic University

Hong Kong

Cihan Cobanoglu, Ph.D., CHTPUniversity of Delaware HRIM

Newark, DE

Daniel J. Connolly, Ph.D.University of Denver

Denver, CO

Ab M. Echenberg, CHAE, CHTPAME ConsultingMississauga, ON

Mehmet Erdem, Ph.D, CHTPUniversity of Nevada, Las Vegas

Las Vegas, NV

Alan E. Gallo, CHAERedstone Hospitality Company

Houston, TX

Bridget O. Lee-Young, CPA, CHAEDundee Co.Raleigh, NC

Melih Madanoglu, Ph.D., CHEFlorida Gulf Coast University

Fort Myers, FL

Brian Miller, Ph.D.University of Delaware

Newark, DE

Dipankar Mukherjee, CHAE, CMCHospitality Inns LTD

Calgary, AB

Raymond S. Schmidgall, Ph.D., CPA, CHAEMichigan State University

East Lansing, MI

Franklin John P. Sikich, CPA, CHAEFranklin John Patrick Sikich, CPA

Flower Mound, TX

Paul Willie, CHAE, CHTP, CHA, CMANiagara College

Niagara on the Lake, ON

11709 Boulder Lane, Suite 110 • Austin, TX 78726–1832001 (512) 249-5333 • (800) 646-4387 • Fax 001 (512) 249-1533

www.hftp.org • www.hitec.org

The Bottomline 5

THe NeWLY-DeSIGNeD HFTP.ORGHFTP’s new web site is a central membership resource

Anna McFarland, CPA, CFE, CHAE, CHTP, is vice president of finance for Sofitel Luxury Hotels, North America in Carrollton, Texas.

Between the LinesA Letter From the President

Anna McFarland, CPA, CFE, CHAE, CHTP

T his is definitely not news to any-one engaged in modern commu-nications — I now instinctively

go to my computer to seek out all sorts of information. This habit isn’t limited to work, either. Like many of today’s professionals, I also look up phone numbers, find directions, read hotel and restaurant reviews and seek out movie times online. This resource is an effective and efficient medium and I appreciate its integration with my day-to-day work and personal life.

Acknowledging that these days an attractive, interactive web site is an essential tool, HFTP has recently released its re-designed site to be an essential component to managing your membership. The new online resource is thoughtfully layed-out with organized menus that point to almost every page of the site. When you’re logged in you have a custom-ized experience and are able to fill out conference registration forms, upload Career Center information and interact on the ProLinks discussion forums. In addition, the events section gives you the most current details on all of HFTP events, including session descriptions and conference speakers.

Of course, there is a lot more to take advantage of from HFTP than educa-tion programs. Find out about all of the association’s benefits via the web site, including certification, publications and research.

Having been up for a couple of months now, I have really become comfortable finding my way around

the site, browsing the responses from other members on the ProLinks discus-sion forums, and planning which sessions I want to attend at HITEC this month.

Looking through the HITEC session descriptions, there is plenty of evidence that the Internet is now deeply woven in our business fabric — from a back-of-the-house tool to marketing delivery to a feature for guests. Previewing the 2008 version of GUESTROOM 2010 — HFTP’s model hotel room — I saw numerous technologies that use the Internet to help guests become comfortable in the city they’re visiting. If this is an indi-cation of what’s to come, then I look forward to my future hotel stays.

This newest version of GUEST-ROOM 2010 will be on display at HITEC 2008 in Austin, Texas on June 17 – 19. Also, on Thursday of the show, HFTP will reveal a new name and logo for the exhibit, slated to debut at HITEC 2009 in Anaheim, Calif. If you can’t make it, be sure to see what the technology selection committee has found to include by visiting the GUESTROOM 2010 web site (www.guestroom2010.org) at the end of June. A guide of the room will be posted, giving you a great opportunity to visit HFTP’s newly-built online home.

“ Acknowledging that these days an attractive, interactive web site is an essential tool, HFTP has recently released its re-designed site to be an essential component to managing your membership.”

6 June/July 2008

ReSeARCH, RePORTS AND COMPARABLeS: PART III

Question:

Answer: There are many publications and or-ganizations which provide information to the foodservice industry. The following are just a few examples.

National Restaurant Associationwww.restaurant.orgThe National Restaurant Association is the primary resource for restaurant operators. This organization publishes multiple books, reports, and industry statistics. The National Restau-rant Association conducts research on the restaurant industry including the following reports:• 2008 Restaurant Industry Forecast. This report includes

items such as projected industry sales, operating envi-ronment, restaurateurs’ outlook by segment, consumer outlook, jobs outlook, public policy outlook, and state and regional outlook. This item can be purchased on the National Restaurant Association web site.

• Restaurant Industry Facts. The National Restaurant As-sociation publishes aggregate statistics on the restaurant industry including sales, locations, employees, projec-tions, economy and management opportunities.

• Restaurant Industry Economic Impact by State. On the National Restaurant Association web site, general state-by-state location, sales and employment statistics are pro-vided. Some of the specific items included are expected job growth and employment percentages.

• Restaurant Performance Index. The restaurant perfor-mance index is a monthly statistic which provides infor-mation on the state of the restaurant industry. Items used to calculate the index include: same-store sales, customer traffic, labor, capital expenditures, staffing and business conditions.

Can you provide information on resources for the foodservice industry?

HFTP News and NotesQ&A from the Research Institute

• Restaurant Industry Operations Report 2007 – 2008. This report provides detailed operating/financial statistics on the restaurant industry including breakouts for three different types of full service restaurants and limited service operations. The report also provides data on employee turnover, takeout as a percent of total sales and cost per dollar of sales. This item can be purchased on the National Restaurant Association web site.

Other information which can be found/purchased on the National Restaurant Association’s web site include: Hourly Wages in Foodservice Occupations, Restaurant Spending, Travel and Tourism Facts, Travel and Tourism Issues.

How-To Series — National Restaurant Associationwww.restaurant.org/business/howto/index.cfmAlso available is the How-To Series put together by the National Restaurant Association. This series focuses on three primary areas: general operations, food safety and legal topics. Specifically the topics covered include items such as building lunch business, controlling pests, resolving employee conflict, reducing no-shows, writing an employee manual, reducing food spoilage, serving alcohol responsibly and paying overtime to tipped employees.

Buyer’s Guide — National Restaurant Associationwww.restaurant.org/business/buyersguide/indexThe National Restaurant Association has compiled a buyer’s guide including items in the following categories: beer, beverages, educational, equipment, food, furniture, furnish-ings, decorations, lodging, services, spirits, tableware, linens, technology, entertainment, uniforms and wine.

A quick resource guide for the restaurant industry

8 June/July 2008

Contact InformationTanya Venegas, MBA, MHM HFTP Research Institute Ph: (713) 743-1839 or (866) 572-4387 Fax: (713) 743-2548 E-mail: [email protected]

Since the National Restaurant As-sociation is the primary resource for the restaurant industry, the organization provides information for every aspect of a restaurant’s operations. Other items on the National Restaurant Associa-tion web site include: Running Your Business, Policy and Politics, Careers and Education, and Food Safety and Nutrition.

Restaurant Trendmapperwww.restaurant.org/trendmapper/about/about.cfmRestaurant Trendmapper is a subscrip-tion-based service provided by the Na-tional Restaurant Association. Restaurant Trendmapper provides information on economic trends, demographic trends and forecasts of restaurant industry indicators. Also included in the subscrip-tion are detailed reports on sales, traffic, employment and capital expenditures. These reports can be broken down by restaurant industry segment, region and various demographic characteristics.

National Association of Catering executives • www.nace.netThe National Association of Catering Executives (NACE) includes members from all aspects of the catering indus-try including hotels, clubs, restaurants, caterers, and entertainers. Complimen-tary information that can be found on this web site includes catering trends and education opportunities. Further infor-mation is available to members including local chapter meetings and newsletters.

National Council of Chain Restaurants • www.nccr.netThe National Council of Chain Restau-rants (NCCR) is the trade association of operators of chain restaurants. In addi-tion, the NCCR is a division of the Na-tional Trade Federation (NTF), which is the world’s largest retail trade group. The primary focus of this organization is public policy and government affairs. Recent legal information on menu la-beling can be found on this web site.

Nation’s Restaurant Newswww.nrn.comNation’s Restaurant News is a weekly

Q&A from the Research Institute

publication addressing current news in the foodservice industry. Information can also be found on the NRN web site under the topics: food and beverage, operations, human resources and labor, marketing, chains, and independents. Also included in this web site is a prod-uct directory and bookstore. The product directory includes various food items, beverages, equipment, apparel, technol-ogy and software.

Restaurant Businesswww.restaurantbiz.comRestaurant Business is a magazine which focuses on the restaurant entrepreneur, regional chains, emerg-ing chains, multi-concept operators and high-volume independents. Topics covered in the magazine include growth strategies, innovations and restaurant life. On the web site, a section called “Features” is found in the lower-left corner. This section contains links to articles available online.

Restaurant Hospitalityrestaurant-hospitality.comRestaurant Hospitality is a magazine published for full-service restaurants with both chefs and managers in mind. This magazine covers various facets of the restaurant industry including: stand alone restaurants, fast casual restau-rants, hotel restaurants, resort restau-rants, club restaurants, catering opera-tions and other commercial foodservice operations. Articles in this publication can be found on their web site and typically cover the following topics: new food equipment products, current trends, menu ideas, recipe ideas, indus-try news, new technology, food safety, labor and training, restaurant design, and profiles of successful operations.

Restaurants & Institutionswww.rimag.comRestaurants & Institutions, often referred to as R&I in the industry, pro-vides information for all facets of the restaurant industry including: chain res-taurant companies, independent opera-tors, hotels and large institutions. The target subscribers for this publication are executives who operate restaurants,

hospitals, colleges, schools, airline foodservice operations, hotels, resorts, consultants and dealers/distributors in the foodservice supplies industry.

R&I has extensive information on its web site which fall into the categories of commercial, noncommercial, food and menu, recipes, management issues, operations, and industry news. Topics of some of the articles focus on keep-ing prices under control, dealing with a weak economy and high food costs, how to operate a kitchen in a small space and restaurant menu trends. In addition to the basic articles, other items of inter-est include blogs, webcasts, research articles, bookstore, buyer’s guide, events calendar and useful links for informa-tion on the restaurant industry.

Food Managementfood-management.comFood Management magazine is a pub-lication which specifically addresses issues facing noncommercial foodser-vice operators consisting of contract management companies, self-oper-ated facilities, colleges, universities, hospitals, primary schools, secondary schools, nursing homes, lifecare facili-ties, correctional facilities and govern-ment segments. The target market for this publication is foodservice directors, managers and chefs.

Food Management magazine ad-dresses issues such as industry issues, industry events, operational topics and food trends that affect the noncom-mercial foodservice industry. Articles on the following topics can be found on the Food Management magazine web site: food recipes, food preparation, nutrition, labor management, service management, operator profiles, equip-ment, new products, food safety and layout/design articles.

For further information on the foodservice industry contact the HFTP Research Institute. ■

10 June/July 2008

HFTP News and NotesAssociation Focus

It started as a simple idea — what if there was one place where you could see all the latest and upcoming tech-nologies for the hotel industry? A place where you could

touch and see first-hand what possibilities are out there for guestrooms?

With HFTP striving to be the main source of hospital-ity technology information, it was only reasonable that they would take on a project that creates the ultimate guestroom experience for the industry.

GUESTROOM 2010 originated in 2006 with approval from the HFTP Board of Directors and the hard work of the GUESTROOM 2010 Task Force, a group of technology industry experts. The task force researched and surveyed frequent travelers to find out what would make the ultimate guestroom experience.

About the ProjectFor those who have missed GUESTROOM 2010, here is a brief rundown of what the task force created with its new-found knowledge.

GUESTROOM 2010 showcases new and upcoming technologies for the modern hotel room that’s easily adapt-able to the guestroom and provide a specific solution to the needs of guests.

Taking it an extra step, the project also includes an in-novative room layout allowing attendees to imagine all the possibilities of the future guestroom. For example, not only is the bathroom located in the back, in the past it has also fea-tured a switchable privacy glass window from Polytronix Inc. that switches from clear glass to a cloudy white translucent barrier at the touch of a switch. Now guests don’t have to worry about the bell man seeing into their bathroom as they enter the room and guests can easily adjust from jet lag with natural light glowing in the bathroom.

After long hours and scouring the globe for ideas and technologies, the first GUESTROOM 2010 debuted in Min-neapolis, Minn. at HITEC 2006. With packed crowds and the industry buzzing, it was quickly decided that GUESTROOM 2010 would return to HITEC 2007 and beyond.

Catch Up with the Model Hotel Room as It Unveils Its Third Version at HITEC 2008

By Katy Walterscheidt

GueSTROOM 2010’S GLOBAL IMPACT

TechnologiesWhat technologies are featured this year? Well, that knowl-edge is top secret and won’t be divulged until HITEC 2008. But reviewing what has shown in the past gives an idea on what to expect.

It’s easy to assume technology means electronic devices. Sure, GUESTROOM 2010 has shown some innovated elec-tronics like the 3D television from Richardson Electronics and the toilet seat from Toto USA that not only flushes for you, but also automatically lowers the toilet seat down.

However, GUESTROOM 2010 goes outside the box to show that technology can be more than the typical TV or robot. Previous technologies include textiles like Flor’s recyclable carpet, nanotechnology like Target’s organic bath towels, environmentally-friendly products like Sharper Image’s self-pressurizing shower head, mechanical devices like Ezi-Maid’s bed lifting system and more.

Impact on IndustryQuickly after HITEC 2006 ended, requests came in to feature the exhibit at various trade shows and conferences. The mas-sive size and expense of the exhibit makes it hard to travel, so HFTP devised a portable presentation that easily travels around the world.

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Association Focus

And travel it has. GUESTROOM 2010 has been featured in conferences throughout North America, Europe and Asia, educating the industry on the potential of technology for guestrooms.

Media have also created interest in the project, reaching audiences beyond the hospitality industry. GUESTROOM 2010 has been featured on Bloomberg TV, in world-re-nowned publications like the New York Times, in publica-tions for other industries like CIO Magazine and numerous publications around the world.

By providing a forum that showcases and discuss hospi-tality technology, GUESTROOM 2010’s greatest success is the open dialogue that has ensued among industry profes-sionals. Each year it seems the buzz of the project only gets bigger and better, as more industries see the value of GUESTROOM 2010.

Version 3.0Entering its third year, GUESTROOM 2010 not only fea-tures a slew of new technologies, it is also changing the way attendees experience this one-of-a-kind exhibit. Instead of walking through on your own, getting through the crowds to get a glimpse at what’s in the room, attendees now experi-ence the room through a guided tour.

As you go through the room, tour guides point out each technology’s impact on the guestroom. The tours insure you won’t overlook the next must-have technology featured in the room and provides an in-depth understanding of how each technology benefits the hospitality industry.

At the end of the tour, technology representatives are waiting in the pavilion to answer any questions about the different technologies showcased.

GueSTROOM 2010 and BeyondIn 2006 when GUESTROOM 2010 was created, the idea that the technologies portrayed in the room aren’t some distant fantasy, but a concept that can soon be adapted into any guestroom was portrayed in the name. As the year 2010 quickly approaches, GUESTROOM 2010 must evolve to reflect changing times. The project will soon dawn a new name and logo — debuting the last day of HITEC 2008.

Encompassing the impact this project has had on the industry, what will the new name and logo be? You’ll have to stay tuned to find out. ■

To learn about the technologies featured in the 2008 version of GUESTROOM 2010, make a stop in the HITEC exhibit hall or visit www.guestroom2010.com starting the last week of June.

12 June/July 2008

How’s your technical knowledge? Test yourself with these questions found on the CHTP exam

CeRTIFICATION CALL

Question:

Answer:

HFTP News and NotesProfessional Development

In-room systems are tested in the “Hotel Technology” section of the CHTP exam. Candidates should know different systems within a hotel or guestroom. One of these systems is Energy Management System. In the following example question, the main function of EMS is asked.

An energy management system (EMS) is a computer-based control system designed to:

a. Record incoming energy flow for billing comparisons

b. Manage the operation of mechanical equipment in a property

c. Allow a utility/power company to control the local power grid

d. Monitor room occupancy and control energy system use within guest rooms and public areas

To answer this question, the candidate should know that EMS is a computer-based control system that monitors room occupancy through motion and/or body heat sensors and controls energy system use within guestrooms and public areas. The most common practice of EMS is when a guestroom or public space (i.e. rest room) is not occupied for a limited time (i.e. 15 minutes or more). In response, the EMS would turn off some lights and bring the temperature to a preset setting to conserve energy. For this reason, the correct answer is D: monitor room occupancy and control energy system use within guestrooms and public areas. EMS does not record incoming energy flow nor allow a utility company to control the local power grid.

CHTP

Florida Regional ConferenceJuly 23 – 26, 2008Hosted by the Florida Gulf Coast

ChapterHyatt Regency Coconut PointeEstero, Fla.

CHAe & CHTP Reviews and examsAugust 24, 2008Marriott SolanaDallas/Ft. Worth, Texas

Assistant Controllers ConferenceAugust 24 – 25, 2008Marriott SolanaDallas/Ft. Worth, Texas

CALENDAR For more information about HFTP events and CHAE/CHTP reviews and exams, please call (800) 646-4387 or +1 (512) 249-5333, or visit www.hftp.org.

Leadership Academy September 22 – 23, 2008Gaylord Opryland Resort and

Convention CenterNashville, Tenn.

CHAe & CHTP Reviews and examsSeptember 24, 2008Gaylord Opryland Resort and


2008 HFTP Annual Convention & Tradeshow September 24 – 27, 2008Gaylord Opryland Resort and


HITeC 2009June 22 – 25, 2009 Anaheim Convention Center Anaheim, Calif.

14 June/July 2008

10Hospitality TechnologyStrategic Planning

Most of us work in the weeds, making use of technol-ogy as a tool to perform our daily tasks, and are glad for the help technology provides. For those of

us that plan for the future of our properties, companies and management organizations, it is urgent that we understand the bigger picture — the trends in technology that will drive change within our organization and that of our competitors.

This exercise is an important one for all of us — to recog-nize, analyze and plan using the trends in technology we can identify and their impact upon how we lead, manage, work and compete in our complex world.

Here are 10 trends that you should consider in strategic planning for your enterprise and your personal career.

The Growing Scope of the InternetCharles Giancarlo of the San Francisco Chronicle stated in late 2006: “In three years, 20 typical Cali-fornia households will generate as much traffic as the entire Internet did in 1995.” Every week, 12 mil-lion people join the Internet, most from outside the US. The implication of this tremendous increase in volume affects the capacity, speed and reach of every one of our enterprises, but also provides opportu-

nities for innovation and communication of our message beyond any ever seen in the past.

Unintended consequences of this amazing expansion of the Internet have reached into the very core of big media, especially network television and large newspapers — each transformed or marginalized in ways never thought possible just a few years ago. Our hotel and resort properties have provided access to network television and printed news for our guests for over 50 years. But our guests are increasingly turning to other sources for information and entertainment, and we must be ready with resources to accommodate them.

Over 3,000 books are published every day. There are thousands of podcasts, millions of blogs and now hundreds of Internet television broadcasting entities using the Internet to reach a worldwide audience at a cost far lower than tradi-tional media. The impact of this upon the normal distribution chain is being felt with fewer viewers for network TV, fewer readers for our newspapers, fewer subscribers to magazines. More than 50 percent of our guests’ time in either gathering information or in-room entertainment would be spent using the Internet as the source if only available freely within our rooms and conveniently displayed as it is in guests’ homes.

Just to better understand this tidal wave of new users of the Internet, there are over one and a third billion monthly users of the Internet today, one-fifth of the world’s popu-lation. Nearly 40 percent of these are located in Asia, 28 percent in Europe and only 18 percent in North America. You might guess that the greatest growth will occur in Asia, where only 14 percent of the population is active on the Internet, as opposed to 72 percent active in North America. English is the language of only one-third of the users. Chinese is spoken by 18 percent of the Internet’s users today — over half the size of the English-speaking Internet population and growing exponentially.

Your enterprise reaches out using the Internet to adver-tise, inform, manage and communicate. You need to ask yourself: “How can our enterprise capture at least its share of this expanding marketplace?”

Dave Berkus is an early stage venture capitalist with an eye toward investing in new technologies. He is chairman of several hospitality technology companies and a board member or consultant for many more. Founder of Computerized Lodging Systems (CLS), now part of SoftBrands, Berkus is an inductee to the HFTP International Hospitality Technology Hall of Fame and a general session speaker at HITEC 2008.

TReNDS IN TeCHNOLOGY

What You Need to Know to Plan Beyond 2008

By Dave Berkus

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2Strategic Planning

The Paradise of ChoiceLike no other time in history, consumers have choices available to them, pulling demand for products and services from suppliers rather than the old way in which suppliers adver-tised heavily to push products and services to consumers. Over 69 percent of consumers research online before a purchase. Sixty-two percent look online for peer reviews. And 39

percent compare prices across suppliers before purchase. Our customers have nearly infinite choices.

As a result, our enterprises need to respond quickly to criticism, reinforce compliments with more of the positive actions that engendered good response and recognize that our consumers (guests) are sharing their experiences with willing recipients of information worldwide.

What is your enterprise doing to respond to this new empowerment of the purchaser?

The Audience is the NetworkThe Internet has democratized production, distribution and search. Of these, the latter two are most relevant to our hospitality businesses. Travel agents, once the center of many transac-tions in our niche world, have been disinterme-diated by consumers able to search, compare, seek advice and book directly. Those agents that profited from hoarding information about

services and products of any kind are at risk of becoming obsolete unless reinventing themselves as the specialists of complex knowledge.

More importantly, chains that once relied upon brand recognition to separate them from independent properties in the same geographical region now must compete more democratically with those independent properties that are now equally as visible to the shopper — and potentially rated higher by peers.

As a result, tapping into this newly aware audience requires mastery of keyword placement, prodigious use of blogs and other previously non-traditional exposure resourc-es, and acting to encourage all sorts of social networking within your audience.

How are you tapping into this game-changing marketing opportunity?

Increasing Computer Power Drives Changes In Human Behavior

Over the past 25 years, computing power has been used primarily to enhance productivity. While that push continues, today the massive power available to us and to our enterprises is being used more often to share experiences, communicate, preserve memories, access entertainment, learn and use information to innovate and solve problems.

The question for you is: What products or services could you add within your enterprise that you could not deliver yesterday?

“I’m The Office” — Mobile Computing Changes LivesEach of us, no matter what level within our organization, has been freed from being tethered to our desks. Information and commu-nications are available to us anywhere. Unified communications tools allow us to use our smart phones or pocket PCs to gather informa-tion, communicate and perform many of our previously tethered tasks while we roam the

property or the world. We have our office in our pocket.Have you and your company taken advantage of mobility

as a corporate strategy?

Travelers expect HDTV and Convergence Over 56 percent of all homes in North America now have digital televisions, most are capable of receiving high definition programming. Seventy percent have regular access to the Internet. When segregating those who travel to our properties, the percentages increase beyond 80 percent and 90 percent respectively. These guests show up in your properties expecting at

least the same level of consumer technology in the room as at home. Burdened by legacy decisions, marginal payback and extended contracts, many properties have not responded with upgrades to meet these expectations. And many of those that have moved quickly have not paid attention to the convergence of computing and entertainment, nor to the degree of connectivity expected by today’s average guest, over 60 percent who still carry their own notebook computer when they travel. Although soon much of our data and tools will be hosted and available on demand (if devices for access were available), properties are not planning effectively to integrate computing, communications and entertainment into a cohesive and attractive delivery resource in the room.

What is your company doing to exceed the expectations of your newly-sophisticated consumers?

Web 2.0 enters the MainstreamPodcasts, blogs, social networking communi-ties, media sharing, video blogs and Internet syndication have all become primary social tools for interaction and communication, espe-cially for our younger guests and employees. And it’s for good reason. Social networking provides a better way to communicate one-to-many than any previous vehicle including

television, radio and newspapers. Communication can be two-way, allowing feedback from

the recipient of new knowledge together with a response enabling a never-ending information flow. The timeliness

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and speed of this information flow is greater than at any time in history.

Remember when the fax machine was new and we expected a response to written communication (for the first time) within a day? Then came e-mail, when we expected to receive a response within hours? And instant messaging and texting with expected responses instantaneous? These are all examples of one-to-one communication. Multiply the ef-fectiveness of the communication by enabling one-to-many, and we have Twitter, chat rooms, blogs, Facebook, LinkedIn, Orkut and video blogs. Organizations of all types are using these tools to communicate information both critical and useful to their stakeholders and customers.

How can you better communicate with your stakeholders using new tools and channels?

Web 3.0 and 4.0 — Way Beyond SearchThe next two waves of innovation will be spectacular. Imagine a media-rich invisible card catalog that allows you to find informa-tion, entertainment, visual and audio materials of all sorts by understanding implicitly the semantic context of your request? Find photos that match the same subject and style, books or music that match your unstated preference,

paintings of the same period or artist, articles that match the intent not just to wording of a search. Imagine the web’s response to your needs within the semantic context of your request for information, delivering an article culled from 20 sources, rather than a list of sources using the words re-quested. This “semantic web” requires new tools and levels of intelligence and is in development today.

Beyond this? Consider the arrival by 2010 of Web 4.0 — the ubiquitous web — in which we will connect intelli-gence into a network of smart markets, semantic agents and more. Agents that know and reason as humans do. We will soon see the arrival of smart agent webs that know, reason and learn as humans do, provid-ing us with entire ecosystems in which we slowly abandon control over decision-making for tactical decisions such as trip planning, personal scheduling and efficiency planning details to an intelligent agent. This will arrive positively as a result of increased social con-nectivity, increasing internal systems knowl-edge and computer reasoning power.

To prepare for this: Does your marketing message evoke ‘meaning,’ not just ‘words’?

everything Turns GreenWe see it every week. Energy demands in-crease (up 57 percent between 2007 and 2030) as petroleum consumption rises (from 20 million barrels in 2006 to 25 million in 2030). We are observing a “perfect storm” in energy

demand and cost: price increases, volatility of supply, global awareness and climate change. Airlines are increasing fares to meet higher fuel costs. Driving habits are finally changing due to high fuel costs. And all forms of travel will surely be impacted as a result.

The demand for sustainable buildings increases. For new construction, sustainability

becomes one of the highest priorities in the design process. Our use of energy within our properties must be carefully evaluated for financial reasons as well as good citizenship.

What initiatives have you company undertaken to ensure the betterment of the environment?

The CIO Becomes a Business StrategistToday’s CIO is not your father’s chief technology officer. He or she has be-come an important member of the senior “C” level team, determining how to invest capital more effectively to reduce costs, improve productivity and achieve corporate objectives. The CIO will turn IT into an operational line organization,

not just staff guardians and protectors of the network. Data overload will overwhelm management without effective new strategies to mine and act upon old and new sources of data. Process improvement, not system build-out, will be job number one.

How are you adapting to this new reality? What can you do to improve your positioning in the enterprise and the enterprise’s positioning in the competitive landscape?

These 10 trends and the questions that they engender are critical to your organization. You should internalize them, understand their effect upon your span of authority, act to create strategies that take advantage of these trends and make the most of constant change. ■

Strategic Planning

20 June/July 2008

Hospitality Technology

Internet Access

High speed Internet has become an easily accessible technology that every business traveler uses on a daily basis either at work or on the road. People now

expect to find it almost everywhere they work. Coffee shops, airports, trains and many more environments now offer wired or wireless Internet access. This availability is also quite prevalent in the hospitality sector, where business travelers have been accessing the Internet since the mid-’90s using dial-up connections in their hotel rooms to get to key corpo-rate resources like e-mail, CRM and sales force automation tools. They have grown accustomed to using these services over the past few years, setting a new expectation for the hospitality industry. Not only do customers expect high speed Internet access (HSIA) in the hotels where they stay, but they also expect those services to work properly and be available when they need them.

In the hospitality world, high speed Internet access (HSIA) is now widely regarded as a bottom line resource that must be properly managed to prevent negative impacts on a facility’s revenue. Should a hospitality provider’s HSIA be unreliable, congested or simply provide a negative experi-ence, business travelers will most likely not want to stay at the property again. The short-term financial impact of un-available HSIA is the inability to invoice customers for daily Internet charges or Internet access upgrades. Lower satisfac-tion rates and the long-term financial impact spell the loss of repeat customers, so room, food and drink and other sources of revenue will be negatively affected over the longer term.

Along with this expectation came bandwidth-intensive Internet applications that started to heavily tax HSIA data links or circuits used by hotel sites. Such applications include YouTube, Slingbox, Skype, Bit Torrent and other

peer-to-peer (P2P) applications, rich webmail clients, video-conferencing and Internet-based broadcasts (radio, podcasts, etc.). Combined with the traditional tools used by business travelers, existing telecommunications links (DSL, T1, etc.) have proved to be no longer sufficient to meet demand. Hotel properties also need to consider that guests are increasingly using the technology at all times of the day, especially at sites with conference capabilities.

Leisure travelers are accessing their electronic communi-cations more all the time while on holiday, and with laptop prices hitting record lows every quarter, they are also taking their machines along on personal trips, making it overall bandwidth management even harder.

Taking control of HSIAA great way to solve the HSIA congestion and downtime problem is to implement a strong bandwidth strategy in each establishment that provides Internet connectivity for its guests. To meet and exceed expectations set by customers and the organization, the following items should be considered: • Amount of bandwidth needed• Number of Internet links needed to provide required

bandwidth• Types of Internet links, based on cost and quality• Link management and implementation plan.

By Jean Pascal Hebert

CONTINuING CONNeCTIONS

Jean Pascal Hebert is vice president of business development for Elfiq Networks.

Tips for Implementing a Strong Bandwidth Strategy

22 June/July 2008

Internet Access

First, define how much bandwidth is needed before making any further decisions. Evaluate the current us-age rate of the existing bandwidth by conducting traffic studies. Such studies provide critical technological infor-mation. Also heed guest satisfaction surveys or anecdotal evidence of poor performance from the HSIA solution (i.e. slow speeds, inability to connect, etc.). Knowing that guest bandwidth usage increases every month suggests that providing too much bandwidth is better than not providing enough, and with bandwidth pricing getting more aggressive, it makes sense to move in this direction.

Second, multiple links should be used to ensure that communications remain available. The main advan-tage to having more than one link is that it maximizes network uptime and eliminates guest complaints. Merging the bandwidth of two or more links allows locations to increase available bandwidth. This kind of setup uses the links simultaneously and provides redundancy, thus ensuring uptime in the event one of those circuits fails. Should a failure occur, the other available link will carry all data transmissions until the failed link is available again.

The third item to consider is a key strategy item — link variety — where using a single type of Internet link will

result in a single point of failure beyond the hotel’s reach and control. Most links used are from local telephone carriers, including T1, DSL, T3, DS3 and fiber links, regardless of the selected pro-vider. According to Infonetics Research, a link should be expected to fail 1.7 times every month for over 60 minutes. Telcos control the physical networks used by Internet access providers, and when the local access point where the links converge fails for any reason, all ISP links go down simultaneously. Common causes of local access failure include municipal infrastructure repairs, accidentally cut cables, defective equip-ment and weather hazards disabling the local point of presence. So, using multiple ISPs with diversified link tech-nology will provide greater assurance of network uptime.

Using a diverse set of Internet connectivity technologies is recom-mended so that failures in one link from a provider will not impact the others. Suggested link technologies other than those available from the telephone com-pany (T1, DS3, xDSL) include:• Cable modems. Cable HSIA pro-

viders typically use an alternative physical infrastructure, but should be investigated locally.

• Utilities fiber networks. Electrical, natural gas and other utilities have started deploying their private fiber

networks, providing an alternative high speed link technology at com-petitive prices.

• Microwave carriers. In some regions, point-to-point microwave Internet access providers offer a competitively priced “wireless” alternative, independent of tradi-tional infrastructures. Their business continuity capabilities should be investigated locally.

• 3G mobile networks. Mobile net-works can provide significant speeds for HSIA as a temporary solution while the main links are being worked on.

• WiMax and Other Emerging Technologies. Organizations should track these technologies; they will offer wireless access with significant performance as of 2008 and should prove to be a worthwhile alternative. WiMax also does not require any wir-ing, so adding them for specific time periods will prove quite affordable.

Low-cost link aggregation should also be considered to address budget-ary concerns. Combining multiple links such as DSL and cable modems to replace or complement more expen-sive lines such as T1 and DS3 can save properties thousands of dollars every year and strengthen Internet access. For example, a T1 line will start at $350 per month (November 2007, Tier-1 ISP, USA) providing a 1.5 Mbps symmetri-cal link. Replacing this link with three DSL links (3 Mbps downstream, 768 Kbps upstream, November 2007, Tier-1 ISP, USA) at $59.99 per month for each link ($179.97 per month for all three) will provide a much faster connection to the Internet. With this DSL strategy complementing a reliable T1 circuit, hotel properties will improve perfor-mance and reduce costs compared to using two T1 lines, and guest satisfac-tion will improve as well.

“ Merging the bandwidth of two or more links allows locations to increase available bandwidth. This kind of setup uses the links simultaneously and provides redundancy, thus ensuring uptime in the event one of those circuits fails.”

The Bottomline 23

Internet Access

The third item to consider is how to manage all the links in an efficient, low-maintenance fashion to maximize uptime and performance. Network-based appliances called link balancers or multi-homed switches are the most popular because they can manage both bandwidth and link failover. These devices provide greater flexibility than other solutions such as dual-WAN rout-ers, which are limited to two links and where link selection flexibility can be limited. Link balancers can grow with your business depending on the model. When new links are needed, the bal-ancer can accommodate them without being replaced, maximizing the unit’s long term ROI. This approach also lets properties stop depending on a single ISP’s equipment and open new avenues to servicing guests.

Finally, a new, sensitive issue is controlling available bandwidth for guests, depending on the applications. The new bandwidth-hungry technolo-gies discussed earlier mean that hotel properties may need to enforce policies on how guests use bandwidth. Quality of Service (QoS) is a good way of han-dling this type of situation because this type of technology will manage traffic promotion and demotion. Promoted traffic will be key business applications such as VPN, VoIP and e-mail, and the QoS service will reserve a minimum of bandwidth on the links to ensure comfortable operations. Demoted traffic will have a maximum bandwidth alloca-tion so it does not step on more busi-ness-sensitive traffic. Hotel properties may want to notify their guests of these policies (for example: online gaming is permitted, but not a traffic priority)

or may even turn this into a revenue opportunity by using an HSIA product that lets guests buy a connectivity pack-age offering more bandwidth.

Planning Ahead — The Future Is Already HereWith new technological advances rapid-ly reaching the marketplace, hospitality properties need to ensure they can capi-talize on them to deliver new services, cut operating costs and keep guests satisfied. Four specific technologies should be on most organizations’ radar: IPTV (Television over IP networks), wireless Internet access, software as a service (SaaS) and Voice over IP (VoIP) telephony. All these technologies will directly impact available Internet band-width use and should be considered when planning an HSIA project.

IPTV technology can deliver guest-room entertainment services over the Internet from a third party location off the hotel property. This technology means servers no longer have to remain on the property, but ISP bandwidth availability will become critical in de-livering such services. However, service interruptions will mean lost revenue and lower guest satisfaction.

Wireless Internet access is becoming increasingly common in the hospitality space, where guests can access Inter-net-based resources from most areas of each site, especially in meeting rooms. Providing this access is an incentive for guests to register for the daily HSIA service, and guests are starting to expect it with each stay.

More and more SaaS focused on the vertical hospitality market are emerg-ing, offering the same functionality

over the Internet as a locally-installed system hosted externally, with no need to manage the system. While this is a great way of streamlining operations for properties, it creates a single point of failure that can be addressed with a strong HSIA strategy.

Mainstream businesses have adopted VoIP technologies in the past few years, resulting in savings and new services for both employees and guests alike. However, should the HSIA system’s connectivity fail or get saturated, voice communications will be impacted nega-tively for both guests and staff.

Customer SatisfactionBandwidth management for hospitality properties through a strong HSIA strat-egy has become a key business driver, moving the guest relationship from an opportunity for additional revenue gen-eration to a critical customer retention service. A property’s HSIA perfor-mance will either positively or nega-tively determine if guests decide to keep coming back to that location, and this metric is becoming progressively more relevant in all regions of the world.

A strong HSIA strategy will not only mean more satisfied guests, but will also make it easier to introduce technologies and services into proper-ties. New and emerging services such as wireless Internet access, VoIP services and IP-based television are exciting op-portunities for the hospitality industry to grow revenues and reduce costs, but they will have a direct impact on avail-able ISP bandwidth, so choosing the right technologies to solve this business problem will be a profitable investment for the future. ■

24 June/July 2008

Depending on you what you want to do, developing a hotel web site can be a simple or an extremely com-plicated process. While the actual technical develop-

ment will in most cases be done by professionals, a lot of decisions still need to be taken by the site owner. Here are some highlights of the key issues that need to be considered to ensure a successful web site.

STeP ONe: Setting Objectives For Your Web SiteObviously, you cannot create a web site until you decide what you would like it to do. Yet many web sites fail pre-cisely because they are not designed with specific objectives in mind. Do you want some pages to make customers aware of your property, or do you want them to be able to make reservations online, or do you want to monitor what they do and what they look at on your site and subsequently custom-ize your interactions with them? Each objective is plausible, but sets you down a path from which it is difficult to change once implemented.

STeP TWO: Register Your Domain NameThe next step is to identify and register your domain names. Think of variations of your name — MajesticHotel.com vs. The MajesticHotel.com vs. MajesticHotelDallas.com — as well as common misspellings. For example, companies such as Marriott stress the value of having registered www.mar-riot.com, www.mariott.com and www.mariot.com, as well as many others. Also don’t forget country specific extensions such as .co, .uk, .fr and .de.

Registering a domain name gives you the right to use it for a period (usually one, five or 10 years) and the first op-tion to renew if you wish at the end of that period. Names can be up to 67 characters in length, can contain letters, numbers and dashes, but not spaces or other punctuation marks. Remember that most people will start by typing your business name followed by “.com,” so if that domain is available you should definitely register it. However since domains are allocated on a first-come, first-served basis, and many are already taken. The simplest way to check is to use a whois service (e.g. www.whois.net). If it’s already taken, the whois will display the owner’s contact details, and you can try to buy it from them. However, with good domain names often changing hands for hundreds of thousands (or even millions) of dollars, this may not be feasible.

BuILDING AN ONLINe PReSeNCe

Hospitality Technology

Web Site Development

Peter O’Connor, IMHI is a professor at the Essec Business School in Cergy-Pontoise, France. He is also a member of the HFTP Editorial Advisory Council, the HITEC Advisory Council and a speaker at HITEC 2008.

By Peter O’Connor, IMHI

Key issues to consider to ensure a successful web site

BuILDING AN ONLINe PReSeNCe

26 June/July 2008


Being able to sell domain names for large sums has prompted some people to speculatively register domains in the hope that someone, someday would be prepared to pay handsomely for them. To cut down on cybersquatting, as this is known, ICANN has introduced guidelines for domain name dispute resolution. If a domain in dispute is identical to or confusingly similar to an existing trademark, if the current owner has no legitimate claim on the name and is using the domain name in bad faith, ICANN can reallocate the address to the trademark holder. Unlike normal legal action, this process is cheap and is decided in weeks instead of months.

STeP THRee: Build Your Web PagesMost web pages are written in HTML (Hypertext Markup Language) which is written using specialized web devel-opment software such as Microsoft FrontPage or Macromedia Dreamweav-er. Very large sites, containing a large number of similar pages (such as for ex-ample on a hotel chain site with pages for each property), are usually devel-oped using a database driven approach. Instead of creating individual HTML pages, a single template, with indica-tions of where the textual, graphical and other elements should be placed, is created. Data is maintained in a database and merged with the template, thus generating the HTML code on the fly. Making changes to the template instantly changes all pages based on it, making it easy to keep pages consistent and make updates.

Page content is obviously very importance. Remember that while how your web site looks is important, it’s not the prime reason why people visit your site. Most come to do something, and your site should help them to do it as

efficiently as possible. Some will have come to find information, and thus your site should provide a one-stop-shop for customers to find out anything they might want to know about your com-pany. Others will have come to make a reservation and thus an appropriate, user-friendly online bookings engine should be included. Such engines, which reach into your PMS to access inventory and rates, can now be bought easily from different suppliers and eas-ily incorporated into your site’s pages.

STeP FOuR: Hire a HostWith your pages designed, the next step is to put them up on the Web. Most companies outsource this to specialist companies called virtual hosts which run vast server farms — buildings full of web servers permanently connected to the Internet by high speed lines, and which provide a guaranteed level of service in return for a monthly fee. Different service levels (e.g. your own web server vs. space on a shared server, more web space for your pages, more capacity for monthly traffic, faster response times, server redundancy, load balancing and guaranteed minimum lev-els of downtime) are usually available and with the company focused solely on hosting, it tends to be expert at main-taining service standards, and thus you do not need to worry about updating software, monitoring traffic levels or other maintenance tasks.

STeP FIVe: Publish Your PagesWith your hosting organized, your HTML pages can be published and made available for the world to see at the domain name(s) previously regis-tered. While this might seem like the end of the development journey, in fact it is only half the process. The more

significant challenge is attracting (and re-attracting) visitors to your site.

STeP SIX: Driving Business to Your Web SiteOne of the most effective ways of at-tracting visitors to your site — direct navigation — has already been men-tioned. Put simply, visitors often find your site by typing your domain name (or what they think is your domain name) into their browser. Thus having the appropriate set of domain names is critical. Of course this only works if the customer is aware of your exis-tence — if not, how can they type your domain name? Thus representation on search engines is also very important.

Although in certain circumstances, a search engine may accidentally discover your site, in most cases you need to inform it of your existence. The engine will then send a special piece of software, known as a “spider” along to examine your site, try to figure out what each page is about, and classify it for inclusion in its database. How spiders perform these classifications is based on a constantly changing secret algorithm. Each has its own idiosyn-crasies, but certain things are known to help increase your ranking. These include links into, out of and between your pages. Most spiders examine not only the quantity of links but their qual-ity, with links from popular sites having more of an effect than links from sites that no one visits. Pages should be highly-focused as this helps the spider to more accurately identify the subject matter of the page, resulting in better classifications and thus higher listings. Thus to be successful, you should break your content up into small, special-ized pages which the spider can easily analyze and classify. Each page should

The Bottomline 27


feature the keywords under which you would like to be classified multiple times. They should also be included in the meta tags — invisible code in the header which gives visiting spiders information about the page, specifically in the “Title,” “Description” and “Key-words” tags. Having an accurate title is important as it’s one of the main clues used by spiders to classify the page. It also appears in the search results listing and thus may be critical in determining whether a user clicks on your site or one of the others listed. The description tag is also used for both classification purposes and is displayed in search results, so once again, accurate and compelling text is vital here to influence both the spider and the searcher looking at search results. Lastly, most spiders, at least to some extent, use the keywords listed in the meta-tags to help in their classification, so each page needs to have unique keywords and phrases that accurately reflect its content.

Most search engines also feature paid links displayed at the top of their search results. For every keyword, you can bid a certain amount per click, and your position is determined by the amount bid relative to the other bidders. Pay-per-click (PPC) advertis-ing is performance related — if no one enters the keywords in question, or if no one clicks on your listing in the results screen, then you pay nothing. However if you are successful at picking the right keywords and encouraging people to click through to your web site, then us-ing PPC can get expensive very quickly. Imagine bidding $1 per click for a particular set of keywords (this is not an unreasonable amount — for example, at the time of writing the keywords “Paris Hotel” had a highest bid of about $3 on Yahoo Search Marketing) and having

thousands of people click though to your site — this would result in a bill for thousands of dollars. Would it be worth it? This would depend on the suc-cess of your site at converting lookers into bookers, and thus your conversion ratio should help you determine how much it is economical to bid.

STePS SeVeN, eIGHT AND NINe: Maintaining Your Web SiteYour web site is up and running, and hopefully attracting customers and fa-cilitating bookings. Now is not the time to relax! The most important factor in building a successful web site is main-tenance — keeping it up-to-date and constantly refining it to make it better.

One of the simplest ways to refresh your site is to add additional content. Consider adding sections that cater for special interest groups, such as for meeting planners, couples planning their weddings or honeymoons, travel agents or any other large customer segment. In such cases, having more in-depth content than the regular ‘bro-chureware’ increases the ‘chewiness’ of your site, making it more attractive to search engines, as well as keeping people on the site longer and thus giv-ing you more opportunity to convert them into customers. You also need to monitor the effectiveness of existing material, and cut out the dead wood to make your site cleaner and more effective. Tools such as Webtrends help you to analyze the server’s log files and develop a clear picture of what visi-

tors to your web site actually do. Log files contain a wealth of information — what pages have been viewed (and not viewed), how long surfers spend on each page, the most popular paths (i.e. the sequences of pages that people usual follow through the site), where they come from (both physically and the site they visited before they came to your site), and much more. This allows you to develop an understanding of visitor behavior and thus to refine your content and features to more closely match the needs of your customers.

Remain Focused on Key IssuesThis article has outlined the steps typi-cally involved in creating a hotel web site. Even though most readers will never actually sit down at a computer and complete all of these steps for themselves, it helps focus on the key issues so that they can discuss them intelligently with their web develop-ment team — whether that be technical staff within the company or a special-ized outside web developers. That being said, the process is not that complicated (otherwise how would there be millions of sites out there created by ordinary people like you or me)? Creating a simple site is easy, and the great thing about the web is its tremendously flexibility. If you don’t like what you have created, you can change it again and again until you get it right, or get rid of it completed if you want, and no one will ever know the difference. Stop thinking about it and just do it. ■

“ Your web site is up and running, and hopefully

attracting customers and facilitating bookings.

Now is not the time to relax! The most

important factor in building a successful web

site is maintenance — keeping it up-to-date

and constantly refining it to make it better.”

28 June/July 2008

Housing foreclosures, higher fuel and food prices, and the devaluation of the dollar are all signs of an economic down-turn. These factors affect the club industry in many ways. From a membership standpoint, many members will review their personal spending habits and prioritize their cash flow. Unfortunately, club usage will not be a top priority. Mem-

bers may curtail their dining, limit the number of guests they invite to the club, ask for a leave of absence or even resign. From an operational standpoint, clubs can expect to experience significant loss of revenues (declining membership and less usage) as well as increased expenses (especially energy related — utilities and by-products of petroleum such as chemicals, fertilizers and cleaning supplies).

Time for ReviewLike all businesses, the way for a club to outlast a recession is twofold — managing expenses and optimizing revenues.The largest expenses at most clubs are payroll, food and beverage, insur-ance, utilities and real estate taxes or rent. An in-depth review of these areas as well as other areas should be performed.

Since payroll can account for approximately 50 percent of a club’s total expenses, monitoring these expenses is essential. All non-management employees should be re-quired to “clock in” via a modern electronic time system and all department heads should be instructed to monitor, and if possible, eliminate all overtime. Clubs should track member usage of the dining room to determine adequate staffing levels and reasonable hours of business. Restaurant hours should be curtailed if it is determined that member support on a given day is minimal and the costs of opening the club are far greater than the convenience to the members of being open. Savings would not only be achieved in labor, but also through ancillary costs such as utilities and food spoilage.

Clubs with defined benefit retirement plans should explore the option of “freezing” or closing these plans and replacing them with contributory 401(k) plans. This would shift the burden of funding of employee retirement from the club alone to both the employee and the club. Employees would be able to choose their investment allocation, use pretax wages as their source of funding, with earnings within the plan being tax deferred until retirement.

Competitive quotations should be obtained, preferably in writing, via electroni-cally or fax for all food and beverage purchases. It is crucial that these quotations are forwarded to the accounting office to verify that the prices charged equal the prices quoted. Additionally, clubs should review their cash flow situation and take advantage of vendor discounts for prompt payment and buying in bulk. In addition,

OPeRATING YOuR CLuB DuRING A ReCeSSION

Thomas F. Blaney, CPA, CFE, Patrick J. Halloran, CPA and Chris Casini, CPA are the directors of the private club division of O’Connor Davies Munns & Dobbins, a Certified Public Accounting firm that provides accounting and tax services to over 1,200 not-for-profit organizations in the Northeast.

The way for a club to outlast a recession is twofold: manage expenses and optimize revenues

By Thomas F. Blaney, CPA, CFE, Patrick J. Halloran, CPA and Chris Casini, CPA

Accounting Operations

Budget Management

The Bottomline 29

clubs should review all contractual ex-penses to determine if the services they receive are reasonable and if they are getting the services that are being paid for. Many service contracts that have monthly payment plans are reviewed when they are initiated, but are not subsequently reviewed to determine if the services are still needed.

A private club’s food operation can use over 250 different products. Thousands of dollars are spent each year on groceries, equipment, tableware and linens. Most chefs or purchasing stewards are not aware of the percent-age mark-up being charged by their food distributor. They may tell you however, that the prices they pay are the lowest ones offered by their vendors. In theory, clubs get bids on everything before they make any purchases. Practi-cally speaking, for most clubs, staff has limited time to undertake a comprehen-sive bid analysis to select the lowest priced items. Frequently, the club will take bids on meat and seafood items. Once a week the club will take bids on several dairy and produce items, and, once a month, at most, the club will ask for prices on a dozen or so grocery items. On everything else, price bids are rarely sought unless a large purchase of a particular item is going to be made. This process results in a large percent-age of products purchased, on which there are no quotes. The vast majority of a club’s purchases are being priced at whatever suppliers think the club will pay. Therefore one approach clubs may consider is to join a group buying cooperative program.

Insurance ConsiderationsClubs that use a committee structure should establish (if they have not done so already) an insurance committee. Some clubs have increased deductibles and co-pays for major medical resulting in significant savings. One country club recently saved approximately $35,000 during the first year even after the club reimbursed each employee for their share of the increased deductible or co-pay. This club used a third party administra-tor at an annual cost of $3,000 to oversee the additional bookkeeping needed.

On an annual basis, club manage-ment should review the adequacy and costs of all types of insurance. In this litigious society, it is prudent for clubs to have general liability insurance and sufficient umbrella policies as well as directors’ and officers’ liability insur-ance and employee dishonesty insur-ance. Clubs should periodically put

their insurance out for bid to determine that they are not being over charged. This process should involve several independent brokers reporting to the club their best possible insurance pack-age. Clubs sometimes use their one insurance broker to get competitive bids from multiple companies, but the process is not the most advantageous to

Budget Management

30 June/July 2008

the club since the broker is only aligned with certain insurance companies. Through this process, the club can also determine if they are over insured or under insured in any one area.

Further AuditsOn a periodic basis, all types of utility and energy efficient audits should be per-formed. For example, electric golf carts should be recharged at non-peak times, pool motors should not run constantly and clubs should consider installing solar energy panels and perhaps even wind-mills. Clubs should inquire if there is a third party energy supplier available in their area to compare the price the third party supplier is charging compared to their current utility company.

Clubs that own their property should consider certiorari proceedings to reduce real estate valuations. Many at-

types of “gimmicks” to attract members (especially families). An “early bird” special night whereby members, not just seniors, who have dinner before 6:00 p.m. and receive a 20% discount is a novel idea used by some clubs. In addition, many clubs are promoting family usage by having a “movie night” for the children in one area of the club while the adults dine in another area. While rounds of golf are down in most parts of the country, bowling is making a comeback and as a result, many clubs that have closed or demolished their bowling alleys are refurbishing them. Senior members have been teaching children the “rules of the game” and clubs have been combining family nights with bowling nights. Some clubs have also interviewed children on what they want to see on a children’s menu. Menu items like tacos, wraps and cluck-in-Russians are added to the traditional items of hot dogs, grilled cheese and chicken fingers.

As our economy heads into uncertain times, it is prudent for clubs to be ahead of the curve in maximizing revenues and controlling expenses. The future for all clubs is dependent on maintain-ing a stable membership count while continuing to provide the services that the members expect and at the same time keeping in mind the cost/benefit factors in the decisions made to operate the club. ■

On a periodic basis, all types of utility and energy efficient audits should be performed. For example, electric golf carts should be recharged at non-peak times, pool motors should not run constantly and clubs should consider installing solar energy panels and perhaps even windmills.

Budget Management

torneys work on contingency so there is very minimal cost to the club if they are unsuccessful. Clubs that rent their prop-erty should consider third party audits of any escalation charges to verify the accuracy of those charges.

The main component of any recession is a stable membership base. Years ago there was a saying, “Clubs run on dues and booze.” Today, efficiently operated clubs depend on dues and usage. In order to keep dues increases to a minimum, and at the same time, contribute to pay-ing the clubs overhead, all clubs should consider increasing the number of out-side functions. Generally speaking, the Internal Revenue Service (IRS) allows a non-profit membership-owned club to generate up to 15 percent of its total revenue from non-member sources.

In order to increase membership usage, clubs must consider different

erties. The majority, 91.2 percent (290 respondents), indicated that they had access to the figures the survey looked to gather. Twenty-two respondents (6.9 percent) indicated that they did not have access to property level information and six respon-dents (1.9 percent) chose not to answer the question.

Another qualifying question asked respondents in what part of the hospitality industry they presently worked. The greatest number of respondents were from the club industry which consisted of clubs and club management companies (155 responses, 48.7 percent). Clubs were followed closely by lodging properties which consisted of hotels, hotel management companies and resorts (132 respondents, 41.5 percent). In addition, HFTP members from the following segments responded to the survey: casinos, restaurants, con-dohotels, conference centers, homeowner’s associations and mixed-use properties.

Lodging and Club Segmented DataGiven the fact, that lumping all of the data together would be meaningless to hospitality managers, segmented data was analyzed for the two largest segments: lodging segment and club segment. The information in this report is divided even further to provide a better fit in each segment. For example, in the lodging segment analysis was done by hotel rating

HFTP strives to be the premier provider of financial and technology information to the hospitality industry. One of the ways that HFTP does this is by conducting

surveys, such as the HFTP Benchmark Survey, to collect data to assist members in their managerial decisions.

Several years ago, the HFTP Research Institute began conducting benchmark surveys to collect operational data that other organizations were not collecting or reporting. The design process for this survey began as focus groups at the HFTP Annual Convention five years ago. During these focus groups we questioned members from various seg-ments of the industry on what metrics should be collected. The original survey was distributed in 2004 requesting only 20 metrics on a monthly basis. Over the years, the number of metrics collected has grown; therefore, the format was adjusted to an annual format to avoid bombarding members with monthly survey requests.

The most recent version of the HFTP Benchmark Survey was launched on January 29, 2008. The survey was distrib-uted via e-mail to 1,996 HFTP members who had agreed to receive communications from HFTP. Of those e-mails distributed, nearly 250 were undeliverable, leaving a total of 1,746 actual recipients. Responses, both partial and complete, totaled 318 for an 18.2 percent response rate. Many recipients indicated that they were unable to provide property-level data because of corporate or company policies. This will always be a challenge when conducting surveys of this type.

All respondents were asked whether they had access and could provide property level operating information. This question was a qualifying question entered into the survey to eliminate corporate level members who oversee multiple prop-

Tanya Venegas, MBA, MHM, is program director of the HFTP Research Institute at the University of Houston.

KeePING IN GeARKeePING IN GeARKeePING IN GeAR

By Tanya Venegas, MBA, MHM

Industry ResearchOperational Benchmarks

Annual benchmark survey results

provide operational metrics for

the lodging and club industries

32 June/July 2008

which includes the following types of properties: all suite, convention, full service, limited service and resort.

Lodging SegmentThe lodging segment consisted of respondents from hotels, hotel management companies and resorts which accounted for 41.5 percent of all respondents. These respondents were asked to provide detailed information about their properties in order to correctly segment the data for comparability. The first question asked of the lodging members was to provide the rating of the property where they worked. The largest percentage of lodging respondents (59.8 percent, 79 respon-dents) indicated that they worked at full service properties followed by 15.2 percent (20 respondents) which worked at resort properties. Other ratings included all suite, conven-tion, limited service, boutique, and corporate offices.

When analyzing property data it is also important to look at the location of the establishment. For example, proper-ties in New York City will charge higher rates and therefore earn higher revenues than their counterparts in Atlanta. The greatest number of responses were from the following states: Florida (13 responses), California (11 responses), Texas (11 responses), and New York (10 responses). Given the fact that numbers give the data more power, respondents are segmented into regional groups for detailed analysis rather than analyzed by state. Figure 3 provides information on the number of respondents from each region.

For the purpose of this report, all operational data is broken out by lodging property rating in Figures 4 – 7. The segments or questions with three or greater responses are presented for your reference to the right. The overall category also includes responses from the following types of properties: all suite, convention, boutique and corporate of-fice. Therefore, rows will not necessarily total to the overall column.

Looking at trends, nearly all of the categories increased slightly, but there were a few exceptions. One instance occurred in gross operating profit at limited service proper-ties which decreased nearly $330,000 between 2006 and 2007. Another unusual drop occurred for resorts in the area of rooms labor cost which decreased just over $22,000. Twenty-two thousand dollars is not a significant decrease, but it is interesting to see a drop in this category. Decreases were also seen for group catering revenue and number of restaurant covers in both full service and resort properties.

In nearly every revenue and expense category, full service properties were the highest and there appears to be one pri-mary contributing factor for this occurrence. When looking at occupancy statistics, full service properties are consider-ably higher than the limited service and resort segments. Looking at 2007, full service properties had a total of 98,593 paid rooms occupied which is 1.2 times the number for limited service hotels (80,581) and 1.5 times higher than re-sort properties (65,293). There are many variables that may factor into the reason that full service properties have higher figures and occupancy is one of the most obvious.

Club 52%

Club Mgmt Co 2%

Hotel 24%

Hotel Mgmt Co 12%

Resort9%

Restaurant 1%Figure 1.Hospitality Segments Represented

LODGING SeGMeNTLODGING SeGMeNTLODGING SeGMeNT

Figure 2.Type of LodgingProperty

Full Service 60%

Ltd Service 9%

All Suite 1%

Resort17%

Convention 4%

ReSPONDeNTSReS[PMDeMTSReSPONDeNTS

Figure 3. Lodging Segment RegionsRegion Percentage

New England 4.3

Middle Atlantic 10.4

South Atlantic 24.3

East North Central 13.9

East South Central 1.7

West North Central 1.7

West South Central 12.2

Mountain 5.2

Pacific 12.2

Canada 7.0

Other 7.0

TOTAL 100.0

Operational Benchmarks

Full Service Limited Service Resort Overall

Total Revenue2007 $26,962,521 $4,954,874 $25,041,492 $25,666,967

2006 $25,958,013 $4,760,281 $24,065,014 $24,875,705

Net Income2007 $4,365,766 $3,522,759 $3,485,967 $3,820,791

2006 $3,911,167 $346,199 $3,050,611 $3,353,221

Total Gross Operating Profit

2007 $11,757,095 $1,554,399 $8,074,181 $10,049,964

2006 $11,158,642 $1,884,327 $7,548,211 $9,200,026


Rooms Revenue2007 $16,810,304 $4,603,303 $13,939,996 $16,243,468

2006 $15,865,832 $4,413,598 $13,136,448 $15,458,628

Total Rooms Department Cost

2007 $5,477,410 $1,355,225 $3,776,500 $4,750,402

2006 $5,127,311 $1,313,549 $3,524,971 $4,527,982

Rooms Labor Cost2007 $3,359,030 $1,042,188 $2,143,677 $2,865,317

2006 $2,911,263 $998,767 $2,165,928 $2,605,505

Rooms Profit2007 $14,441,556 $3,248,077 $11,129,647 $12,606,298

2006 $13,745,826 $3,100,048 $10,570,628 $12,032,547


Total Paid Rooms Occupied

2007 98,593 80,581 65,293 84,947

2006 91,653 77,544 66,008 79,724

Group Paid Rooms Occupied

2007 35,340 22,888 29,997

2006 37,037 23,961 32,210

Transient Paid Rooms Occupied

2007 53,062 37,934 41,328 48,311

2006 52,350 39,116 41,617 48,304

Contract Paid Rooms Occupied

2007 7,887 8,443 7,998

2006 7,503 7,525 7,194

Complimentary Rooms

2007 1,539 263 1,224 1,386

2006 1,445 227 1,374 1,373

Temporary Closed Rooms

2007 1,662 1,599

2006 3,579 2,810

Figu

re 4

.O

vera

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pera

tions

*Fi

gure

5. R

oom

s*Fi

gure

6. O

ccup

ancy

*

Full Service Resort Overall

F&B Revenue2007 $7,408,161 $5,354,009 $6,834,736

2006 $7,333,210 $4,745,203 $6,785,258

Total Catering Revenue

2007 $2,593,104 $1,429,029 $2,353,293

2006 $2,541,505 $1,384,203 $2,280,991

Social Catering Revenue

2007 $1,534,036 $999,845 $1,453,908

2006 $1,433,329 $826,257 $1,342,268

Group Catering Revenue

2007 $2,229,982 $1,420,882 $2,119,650

2006 $2,294,736 $1,433,657 $2,177,316

Number of Restaurant Covers

2007 139,091 189,180 142,183

2006 146,573 204,400 153,703*Results are the response average for each Lodging category.

Figu

re 7

. Foo

d &

Bev

erag

e*

The Bottomline 33


34 June/July 2008

Lodging Food and Beverage DataRespondents were also asked to indicate whether their prop-erty offered food and beverage services. Since the majority of the respondents indicated that they work at full service and resort properties, it makes sense that 111 respondents (84.1 percent) indicated that their property did offer food and beverage services to their guests. As with the overall and rooms department figures, full service properties experi-enced the highest revenues and expenses. It is interesting to note that resort properties had a greater number of restaurant covers, nearly 1.4 times that of full service properties during both 2006 and 2007.

Club SegmentThe club segment consisted of members from both club and club management companies accounting for nearly 50 per-cent of the responses to this survey. These respondents were asked to provide detailed information such as type of club, location and public versus private status to correctly segment the data for comparability. The first question asked of respondents was to indicate the type of property for which they worked. The majority (93 respondents, 60 percent) worked at country clubs. Followed by golf clubs with 29 respondents (18.7 percent), city clubs (13 respondents, 8.4 percent), and yacht clubs (10 respon-dents, 6.5 percent). Other responses were received from the following types of clubs: tennis/racquet club, beach club, fields club, hunt club and a multiple use club (boating, golf, tennis, room rentals, etc.).

Number of club members is an important determin-ing factor when analyzing comparability between clubs. A property with 250 or less members operates very differently from a property with 1,000 or more members. As seen in the pie chart, the majority of respondents have memberships between 251 and 500 members (64 respondents, 43.5 per-cent) followed by 501 to 750 members (28 respondents, 19.0 percent). At the extremes, 15 responses came from those at clubs with less than 250 members and 11 responses came from respondents at clubs with more than 1,500 members. As a matter of fact, there were several respondents at very large clubs with memberships of nearly 6,000 members.

As with hotels, when analyzing property data it is important to examine property location. For example, golf club properties in Florida can operate year-round because they do not experience inclement weather like their northern counterparts. The greatest number of responses was from the following states: Florida (32 responses), California (18 responses), New York (15 responses), and New Jersey (10 responses). Respondents were also broken into regions (Figure 10) which allows for better analysis in states with low response rates. The largest response was from the South Atlantic region which is made up of Maryland, Delaware, West Virginia, Virginia, North Carolina, South Carolina, Georgia and Florida.

CLuB SeGMeNTCLuB SeGMeNTCLuB SeGMeNT

Figure 8.Type of Club

Country 60%

Golf19%

Other 3%

Yacht6%

No Response 3%

City8%

Tennis/Racquet 1%

Figure 9.Number of Club Members

251 – 50044%More than 1,500

7%

0 – 25010%

501 – 75019%

751 – 1,0008%

1,001 – 1,2505%

1,251 – 1,5005%

Figure 10. Club Segment Regions

Region Percentage

New England 6.5

Middle Atlantic 20.0

South Atlantic 32.9

East North Central 10.3

East South Central 1.3

West North Central 3.9

West South Central 5.8

Mountain 1.9

Pacific 12.3

Canada 0.6

No Response 4.5

TOTAL 100.0


The Bottomline 35

City Country Golf Yacht Overall

Total Revenue2007 $6,880,384 $8,860,155 $7,026,411 $5,679,963 $8,043,606

2006 $6,646,452 $7,576,646 $6,649,808 $5,441,289 $7,098,509

Salaries And Wages2007 $1,890,758 $3,493,555 $2,437,047 $2,086,624 $3,006,272

2006 $1,832,931 $4,045,065 $2,348,821 $1,992,432 $3,355,473

Payroll Taxes and Employee Benefits

2007 $624,919 $935,592 $514,309 $421,689 $780,722

2006 $562,389 $886,265 $508,857 $408,510 $742,434Figu

re 1

1.

Ove

rall

Ope

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ns*

Figu

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2. F

ood

& B

ever

age*

City Country Golf Yacht Overall

Total Food Revenue2007 $1,152,290 $1,796,195 $1,091,914 $1,383,346 $1,558,563

2006 $1,135,356 $1,686,463 $994,054 $1,315,016 $1,464,644

Food Cost2007 $608,296 $705,652 $437,217 $688,674 $636,355

2006 $647,606 $662,488 $389,122 $667,300 $601,734

Total Banquet Food Revenue

2007 $754,975 $982,716 $576,507 $594,170 $8,054,508

2006 $813,793 $845,455 $567,423 $555,352 $757,452

Member Banquet Revenue

2007 $310,798 $571,503 $433,003 $207,151 $493,902

2006 $303,879 $605,895 $453,390 $263,706 $515,935

Nonmember Banquet Revenue

2007 $383,752 $244,496 $210,783 $370,682

2006 $391,571 $188,409 $283,058 $364,490

A La Carte Food Revenue

2007 $258,281 $872,325 $522,484 $1,033,769 $803,154

2006 $323,145 $844,654 $522,635 $855,548 $764,582

Total Beverage Revenue

2007 $492,413 $553,240 $341,040 $618,885 $507,747

2006 $433,034 $515,229 $308,240 $593,757 $470,370

Beverage Cost2007 $128,702 $186,393 $106,780 $190,761 $165,023

2006 $113,863 $166,923 $99,350 $179,386 $148,971

Figu

re 1

4. G

olf O

pera

tions

*

Country Golf Overall

Total Rounds of Golf2007 25,917 27,676 25,952

2006 25,182 24,656 24,709

Complimentary Rounds2007 807 934 841

2006 796 628 757

Total Golf Course Maintenance Expenses

2007 $1,293,875 $1,394,892 $1,301,085

2006 $1,240,961 $1,339,266 $1,246,800

Golf Course Maintenance Payroll and Related Expenses

2007 $816,608 $806,666 $802,544

2006 $773,085 $805,319 $767,673

Golf Course Maintenance Expenses

2007 $629,376 $508,532 $600,579

2006 $615,645 $498,374 $588,108

*Results are the response average for each Club category.

Percentage

9 Holes 1.3

18 Holes 78.5

21 Holes 1.3

27 Holes 8.9

36 Holes 5.1

54 Holes 5.1

TOTAL 100.0Figu

re 1

3.

Tota

l No.

of H

oles


36 June/July 2008

participants also indicated how many holes were on the golf course at their respective properties (Figure 13). The major-ity of the responses (62 respondents, 78.5 percent) were from properties with 18 holes. Other properties ranged from nine golf course holes up to 54 golf course holes.

Golf courses are a major expense category for all clubs with golf operations. For the purposes of this study, respon-dents were asked to provide information on the number of rounds of golf played at their property and golf maintenance expenses. These items can be seen in Figure 14. Respon-dent properties saw slight increases in both rounds and golf expenses.

Lodging and Club Technology DataTechnology is an integral part of any company’s success; therefore, technology benchmarks are important standards that managers can utilize in their everyday operations. One question on many manager’s minds is how many employees they should have in charge of the IT function. The answer to this question is interesting. In this survey, both the lodging and club segments indicated they either had zero or one dedicated employees in charge of the property’s information technol-ogy needs. That brings us to the conclusion that the properties which indicated zero, either have one of their other managers (probably a controller) in charge of IT or they outsource their IT needs. Another popular option is regional IT teams for organizations with multiple operations in close proximity.

Analyzing IT spending can be a difficult task, especially when analyzing small data sets like in this survey. For example, look at the figures for city clubs. In 2006 average spending was $49,334 and it increased to $144,796 in 2007. At first glance, you might think the numbers were incor-rect, but they are not. Several of the clubs invested in new technologies in 2007 which skewed the numbers upward. The same phenomenon happened in 2006 with full service hotel properties. Spending decreased from $222,765 in 2006 to only $44,593. It is interesting to see the increases/de-creases and view when properties are investing in significant IT projects at their properties. Overall, the greatest spending appears to be in the resort segment in which both 2006 and 2007 figures were in the $200,000 range.

Other IT measurements taken in this survey included: number of computers, number of computer servers and num-ber of software upgrades at the property level. The majority of the properties experienced between one and two software upgrades in both 2006 and 2007. The highest number of upgrades is in the full service hotel category with 2.17 up-grades in 2006 and 2.67 upgrades in 2007.

If you have any questions about this survey or you would like a specialized report for your property, please contact the HFTP Research Institute at [email protected]. ■

Several other important qualifying questions were asked of club respondents. Nearly all of the completed surveys from the club segment were from private - member’s only establishments (146 responses, 94.2 percent). Two respon-dents indicated they worked at a property that is both private and public, one respondent indicated that their establishment is open to the public, and one respondent stated that their property is semi-private. In addition, 18 members (11.6 per-cent) stated that they have hotel rooms at their property.

For the purposes of this report, all operational data is bro-ken out by club property rating in Figure 11. The segments or questions with three or greater responses are presented for your reference. The overall category also includes responses from the following types of properties: tennis/racquet, beach club, fields club, hunt club, and a multiple use club (boat-ing, golf, tennis, room rentals, etc.). Therefore, rows will not necessarily total to the overall column.

Total revenue, salaries and wages, and payroll taxes and employee benefits increased for nearly every segment. The only exception is in the category of private country clubs where salaries and wages decreased a little over $500,000. It is unusual to see such a drop in salaries and wages, but with tight times on the horizon, many properties are looking to cut costs in various ways.

Club Food and Beverage DataEighty-nine percent of respondents stated that their prop-erty offered food and beverage services. Figure 12 provides data on food and beverage operations for this group. It is interesting to note that total food revenue for all segments increased between 2006 and 2007. Food and beverage costs also increased for the majority of segments, but food costs decreased approximately $40,000 for city clubs. A $40,000 change is not very significant and can probably be explained by the fact that in 2006 there were eight respondents, while in 2007 only seven respondents provided food cost data.

Even though Total Food Revenue increased, banquet rev-enues fluctuated between member and nonmember income. In several of the categories (country, golf and yacht club) member banquet revenues decreased in addition to non-member banquet revenues decreasing for country and yacht clubs. Properties made up for these decreases in a la carte food revenues and beverage revenues.

Club Golf DataSince golf courses are an integral part of many clubs, respondents were given several questions to collect opera-tional data in this area. First of all, survey participants were asked whether they had a golf course at their property. Out of the 155 golf respondents, 87 or 56.1 percent indicated that they have a golf course at their property. In addition, survey


Lodging Club

Zero Employees 36.7% 36.7%

One Employee 63.3% 63.3%

Lodging Clubs

One — All 28.9% 48.0%

Two 11.1% 11.0%

Three 4.4% 9.0%

Four 28.9% 14.0%

Five — None 26.7% 18.0%

2007 2006 2007 2006

City 1.57 1.6 Full Service 2.67 2.17

Country 1.7 1.44 Limited Service 1 .25

Golf 1.4 1.33 Resort 2 1.29

Yacht 1 1.38 Overall 1.84 2.35

Overall 1.58 1.45 *Results are the response average for each category.


TeCHNOLOGY uSeTeCHNOLOGY uSeTeCHNOLOGY uSe

The Bottomline 37

Figure 15. No. of IT employees

Figure 16. Percentage of IT Outsourced

2007 2006 2007 2006

City $144,796 $49,334 Full Service $44,593 $222,765

Country $50,295 $47,849 Limited Service $35,623 $30,620

Golf $33,826 $39,124 Resort $228,160 $246,345

Yacht $30,050 $42,794 Overall $656,793 $460,632

Overall $52,185 $47,868

Figure 17. Total IT expenses — Clubs* Figure 18. Total IT expenses — Lodging*

City 18.87 Full Service 65.44

Country 26.95 Limited Service 15.83

Golf 22.72 Resort 93.62

Yacht 16.67 Overall 65.25

Overall 24.38

Figure 19. No. of Computers Onsite — Clubs*

Figure 20. No. of Computers Onsite — Lodging*

City 1.50 Full Service 4.46

Country 1.97 Limited Service 2.33

Golf 1.83 Resort 8.22

Yacht 1.78 Overall 5.02

Overall 1.84

Figure 21. No. of Servers Onsite — Clubs*

Figure 22. No. of Servers Onsite — Lodging*

Figure 23. No. of Software upgrades — Clubs*

Figure 24. No. of Software upgrades — Lodging*

38 June/July 2008

Feature Profile

MICHAeL LeVIeBuilding Affordable Luxury

By Lou Cook

Michael Levie

His title isn’t a mistake. Michael Levie is CEO of citizenM, an inventive name for a new concept. Levie heads this start-up hotel chain created to bring “affordable luxury” to business travelers. From the modular build-

ing design assembled like giant Legos™ to controlled mood lighting, these innovative lifestyle hotels will combine five-star amenities and cutting-edge technology at three-star prices. Levie and his partners will focus on price con-scious business travelers. “They are not very spoiled,” he says, “so we wanted a niche aimed at their needs.”

Levie, a native of The Netherlands, has worked in the hospitality field since high school. He studied in Luzern, Switzerland and received his masters in hotel administration from Cornell/Essec Cergy in Pontoise, France. After a ca-reer built in several countries and many cities, Levie could have kicked back as he hit his mid-forties and chosen less heavy lifting than that required to build a new endeavor. He’s already experienced the construction and opening phases of hospitality, the management responsibilities and the turnovers. Levie’s been there, done that. “I enjoy running hotels and working with a group of people providing service, but now I’d rather work with a group of people devoted to innovation and technology. I don’t want to be fenced in by titles.”

In 1983 he earned his first title: sales manager for the Sonesta International European Sales Office in Holland. Next he moved to Sonesta in Florida be-coming Villa manager at Sonesta’s Beach Resort in Key Biscayne, Fla. From 1985 to 1987 he was resident manager at Sonesta Village in Orlando. Sonesta is a family-owned business, and Levie grew with the organization running the hotels and filling a variety of roles.

He spent one year as rooms division director at the 400-room Royal Sonesta in Cambridge, Mass. and took over as general manager at Sonesta’s Beach Hotel and Casino in Aruba. There he had 300 hundred rooms, three restaurants, three bars and a shopping center in his charge and represented the company from 1988 to 1991 through construction, pre-opening and the first years of the property’s operation.

In 1991 he returned to Cambridge, Mass. as vice president and general manager and in 1996 went to Cairo, Egypt as vice president of the regional of-fice. Levie took charge of nine operating hotels with two more under construc-tion and also oversaw Sonesta’s Nile cruise ship operations.

When he speaks of his life in Egypt, Levie says, “My kids had a wonderful time, and my wife Carolina and I were really fortunate in Egypt to meet and get to know incredible people we still keep in touch with.” Levie believes that although it can be difficult to completely immerse yourself in a local culture, the rewards are great. He has taught his children a willingness to see the in-credible things in the world. “Plunge into the deep and explore new languages and cultures.” He walks the walk and definitely talks the talk in English, Dutch, French, German and Spanish. (Carolina is a native of Colombia.)

In 1999, the family returned to The Netherlands. Levie says, “My experi-ences with Sonesta had been incredible, but comes a moment when you need to change. We had been living as gypsies, and the kids needed to root. I opted for an opportunity to create a home for us, even though I would stay in one

“ I enjoy running hotels and working with a group of people providing service, but now I’d rather work with a group of people devoted to innovation and technology. I don’t want to be fenced in by titles.”

The Bottomline 39

base.” (Michael and Carolina now have four offspring: ”Martin age 19, who has just entered hotel school at the Hague, Michelle age 16, Sara age 12, and Si-mon age 7.)

Levie began his job search as his oldest child reached 10 years. Golden Tulip Hotels based in Amsterdam need-ed someone to help with the integration of their merger with Krasnapolsky, and Levie became their area director. For a little over a year, he was in charge of 13 hotels and one restaurant, but at about the same time, the company’s board was focused on its next merger with NH Hoteles. This unsteady environment led Levie to take advantage of a new opportunity.

A friend from SynXis had asked him to introduce a new and revolution-ary central reservation and connectivity system to Europe. He took the offer and from August 2000 to September 2001, Levie took charge of the setup and roll-out of the new system. (SynXis presently is Central Sabre System.)

By October 2001 a Spanish group had bought Golden Tulip, and Levie returned as business unit director for NH Hotels’ The Netherlands, Belgium and International division. He headed 52 hotels and three restaurants. Levie’s pre-vious merger experience now could be put fully to work. “The two companies centralized the back office with new ERP software (enterprise resource plan-ning), sales and marketing per country, purchasing and human resources,” Levie says, “and the job was done relatively fast. Soon corporate responsibilities narrowed individual drive.” He sensed it was time to step into the big world on his own and left NH in December 2003. “I decided to do the trick for myself.”

In January 2004, he formed EMCO Hospitality Inc., to take advantage of economically distressed properties on both sides of the ocean and to basically turn them around. His partner Elmer Coppoolse, lived in Bethesda, Md. and the pair acquired three properties: Hotel Newport in The Netherlands, The Netherlands Inn in Lancaster, Penn.; and The Resort at Glade Springs in

Daniels, W.Va. Levie says, “Elmer did the US, and I did Holland, but an ocean between gave us little possibility as partners on all the projects.” They split, with Elmer keeping the US properties, and Levie retaining the Dutch property.

He formed a new partnership and prepared to launch a new brand, first known by the working title Onestaris-born. On September 3, 2007 the brand became citizenM with the slogan “Af-fordable luxury for the people.” It would feature deluxe amenities at budget prices.

“People look quite differently at lux-ury these days,” says Levie. citizenM is designed for the business traveler who spends a significant amount of time on the road and knows what he or she wants to pay for and what they don’t. Levie believes that road warriors want a nice king-size bed with luxurious bed and bath linen, a rain shower and technology available.

Discriminating use of technology adds luxury to citizenM. The brand, working with Philips Ambient Tech-nology, developed a touch-screen electronic mood pad that can control lighting, climate, ambience music, TV, blinds and wake-up calls. Guests can adjust the ambient light to activities or moods and all preferred settings can be recorded in their room profile. “War-riors are pleasantly surprised when getting all this for free, at these budget rates. They are not necessarily inter-ested in a lot of space because they’re arriving late at night and leaving early in the morning,” says Levie. He and his investors believe that road warriors generally face the choice of overpay-ing for an upscale hotel experience or skimping on amenities to get a reason-able room rate in accommodations that may fail to meet their (technology) expectations.

As an HFTP member and an EHTEC speaker, Levie has emphasized the disconnection in hotel technology between what hotels need and what is actually produced.

Levie lists three major costs in the hospitality industry: construction, labor

and cost of acquisition. To keep con-struction costs down, rooms are fully prefabricated off-site and then shipped by boat, train or trucks and placed on the chosen location. Entire rooms are built in the factory and stacked atop a steel table, which houses the lobby. Two rows of rooms are connected by a hall corridor, and lobbies are huge living rooms with several multi-functional, modern and colorful “Vitra” designer furniture. In the lobby, guests can work, relax and find light food.

Lobby kiosks will handle guests checking in and out, enable them to pull up their online booking and to enter personal preferences. These will be programed, entered on key cards and adjusted before guests enter their rooms. When they depart, guests take the RFID cards to serve as luggage tags that will remain active until their next stay.

F&B service is 24-hours, but not labor intensive. Retailing is self-ser-vice, or as Levie puts it, “It’s more like coming home and opening up your own fridge.” canteenM with beverages and a 24-hour choice of signature sandwiches salads, sushi, warm dishes, etc. Coffee is prepared by in-house baristas.

The new brand plans for 20 hotels in approximately five years and has chosen sites alongside four- and five-star properties in major European cities. This strategy allows citizenM guests access to urban locations with nearby amenities. “Because construction costs are kept low and because of the effec-tive use per square meter, we are able to settle at A-1 locations,” Levie says.

For the first two sites, the new chain chose Amsterdam’s Schiphol Airport and a site near Amsterdam’s World Trade Center. “These two placements are the best available in The Netherlands,” says Levie, “and will help us keep better control in the initial stages of our new venture.” Several others are in the pipe-line: Glasgow, London and Berlin.

“It takes a crossroads to make all this happen,” says Levie. “You must have great partners coming together to make it come about. It’s not a venture you undertake quickly.” ■

40 June/July 2008

The Bottomline Resource GuideAmerican Resort Development Association www.arda.orgThe American Resort Development Associa-tion (ARDA) is the Washington D.C.-based trade association representing the vacation ownership and resort development industries. Established in 1969, ARDA today has over 1,000 corporate mem-bers ranging from privately held firms to publicly traded companies and international corporations with expertise in shared ownership interests in leisure real estate.

Answer I.T., LLCwww.answeritlive.comHigh-Speed Inter-net Access (HSIA) Solutions for the Hospitality Industry. Answer I.T. provides 24 x 7 Toll-Free, U.S. Based Technical Support and HSIA Network Design & Installation Services. Our networks meet all brand require-ments including Terms of Use, Authentication, Redirect / Portal pages and more! Call now for more information 1.888.265.0889 x 702.

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Clubdining.com www.clubdining.comThe Clubdining.com reservations solution, provided exclusively by The Lipsitt Group, was designed specifically for the dining and event reservation needs of private membership clubs. Clubdining.com will help you increase accu-racy, create accountability, reduce overbooking, decrease time spent on the phone, reduce com-munication errors, and most importantly, improve member satisfaction. Contact us at (720) 851-8373.Comtrol — Lodging LinkHotel Device Integration Solutionswww.comtrol.com/hpdComtrol is a worldwide leader in network enabling solutions. Our hospitality products division supplies Lodging Link interface technology to PMS vendors and guest service systems. Lodging Link has a library of almost 500 device interfaces to offer instant compatibility for a hotel’s property management system and its guest service systems.

easy (ez) Revenue Management Solutions Limitedwww.easyrms.com For almost 10 years EasyRMS has been the leading provider of Internet Revenue & Yield Management Solutions and independent Con-sultancy Services worldwide. With more than 30 years of combined industry knowledge EasyRMS is dedicated to the introduction of new generation technology and procedures within the hospitality industry and aims to deliver these services to its Clients in an ‘Ez and professional’ manner.

ADVeRTISe HeRe Advertise your services with a brief listing in this new Resource Guide. Listing includes 50 words and a color logo. Prices as low as $105! BONUS: Full- and Half-page advertisers get a free listing in the Resource Guide section.Contact Laura Renfro, HFTP Director of Marketing, at [email protected]; 001 (512) 249-5333; (800) 646-4387 x 25.

The Bottomline 41

elfiq Networkswww.elfiq.com Elfiq Networks is a leading manufacturer of link balancers, enabling hospitality organizations to provide fast and dependable HSIA to their guests. With Elfiq’s products, the use of multiple Internet connections simultaneously including low-cost links like DSL and cable modems easily and se-curely will increase guest satisfaction and loyalty.

Hospitality Sales & Marketing Association International www.hsmai.orgHSMAI is an organiza-tion of sales and marketing professionals repre-senting all segments of the hospitality industry. HSMAI has become the industry champion in identifying and communicating trends in the hos-pitality industry, and bringing together customers and members at 15 annual events.

Hotel & Motel Management Magazinewww.hotelmotel.comHotel & Motel Man-agement magazine has been delivering news, analysis and operational strategies to hotel owners, general managers and other hotel management for over than 132 years. With crisp editorial content and the latest breaking news, Hotel & Motel Management satisfies the need for hospitality information in the industry.

JackRabbit Systemswww.jackrabbitsystems.comJackRabbit Online Travel Widgets provide high-quality web services that upgrade the core functionality of tourism-oriented websites. Our maps, surveys and reservation engine will help you attract and retain visitors who may otherwise be lost to sites like Travelocity or Hotels.com. JackRabbit – the missing pieces in your website puzzle.™

Lodging Hospitalitywww.LHonline.comLodging Hospitality serves the domestic U.S. lodging industry, which includes hotels, motels, motor inns and resorts. LH covers site selection, operations, design and decor, financing, building, personnel, maintenance, computerization, mer-chandising and renovation. Editorial is targeted to executives and managers of properties with more than 50 rooms, the segment most often targeted by vendors.

O’Connor Davies Munns & Dobbins, LLPwww.ODMD.comODMD provides accounting, tax and compliance-related services to over 1,200 not-for-profit organizations including private clubs and private foundations. ODMD currently ranks as the 65th largest accounting firm in the nation and is comprised of 225 professionals including 40 partners. Our specialized partners regularly publish specific industry updates and speak on a wide range of industry related issues.

Thing5www.thing5.comThing5 is a provider of next generation voice solutions that include outbound and inbound calling, hosted voicemail, ACD and hosted PBX - all in a secure, fully redundant environment. Since 2004 Thing5 has supported thousands of properties and has proven to re-duce telecommunications costs by up to 60%. Contact us at (877) 241.2516 to find out how to improve and streamline your telecommunications infrastructure.

XRoads Networkswww.xroadsnetworks.com XRoads Networks is the leading developer of net-work optimization appliances for the hospitality market utilizing unified bandwidth management (UBM) technology. Our network optimization ap-pliances provide security, stability, and reliability for hoteliers through network traffic shaping, and multi-WAN network load balancing.

Voice, revolutionized

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Documents

Top 10 Technology Trends - HFTP · tions, economy and management opportunities. • Restaurant Industry Economic Impact by State. On the National Restaurant Association web site,