USALI-11th-ed-changes

Today’sPresenters•RalphMiller–IntegratedHospitalityManagement,Ltd.•[e-mail]•W.PeterTemling–TheTemlingGroup,LLC•[e-mail]•RobertMandelbaum–PKFHospitalityResearch,LLC•[e-mail]20132PresentationOutline•TheProcessforUpdatingtheUSALI•SummaryOperatingStatement–OperatingDepartments–UndistributedDepartments–Non-OperatingIncomeandExpenses–Labor•FinancialStatements•FinancialRatiosandOperatingMetrics•RevenueandExpenseGuide•TimelineforImplementation•QuestionsandAnswersUSALI20133WhoisResponsibleForChanges•HotelAssociationofNewYorkCityOwnsCopyright•AmericanHotelandLodgingAssociationEducationInstitute–PublisherFinancialManagementCommittee-Author•HospitalityFinancialTechnologyProfessionalsUSALI20134CommitteeMembership•HotelIndustryConstituentsIndividualHotelOwnersHotelChainsEducatorsPublicAccountingSmithTravelResearch/PKFConsultingOwnerRepresentatives/AssetManagersManagementCompaniesConsultantsUSALI20135TheProcess•FinancialManagementCommitteeoftheAH&LA•FirstMeeting-November2011–Processstartedwithareviewof2011surveyofHFTPmembers.–Eachcommitteememberaddedtheirownissues.•Sub-CommitteesTaskedWithDifferentSectionsoftheBook•Quarterlymeetings–Discussions–Research–Votes(simplemajority)USALI20136ReasonsforChanges•Keepupwithchangesinindustrypractice–Technology–ClusterServices–Sustainability–DistributionChannels–Globalization–RatioAnalysis–NewTerminology•Keepupwithchangesinaccountingpractice–IFRS–GAAPUSALI20137SummaryOperatingStatementUSALI20138SummaryOperatingStatementRevenue•Rooms•FoodandBeverage•OtherOperatedDepartments•MiscellaneousIncome•TotalOperatingRevenueDepartmentalExpenses•Rooms•FoodandBeverage•OtherOperatedDepartments•TotalDepartmentalExpensesTotalDepartmentalIncomeUSALI20139SummaryOperatingStatement(continued)UndistributedOperatingExpenses•AdministrativeandGeneral•InformationandTelecommunicationsSystems•SalesandMarketing•PropertyOperationsandMaintenance•Utilities•TotalUndistributedExpensesGrossOperatingProfitManagementFeesIncomeBeforeNon-OperatingIncomeandExpensesUSALI201310SummaryOperatingStatement(continued)Non-OperatingIncomeandExpenses•Income•Rent•PropertyandOtherTaxes•Insurance•Other•TotalNon-OperatingIncomeandExpensesEBITA(EarningsBeforeInterest,Taxes,Depreciation,andAmortization)USALI201311SummaryOperatingStatement-ForOperatorEBITA(EarningsBeforeInterest,Taxes,Depreciation,andAmortization)Less:ReplacementReserveEBITALessReplacementReserveUSALI201312EBITA(EarningsBeforeInterest,Taxes,Depreciation,andAmortization)Interest,Depreciation,andAmortization•Interest•Depreciation•Amortization•TotalInterest,Depreciation,andAmortizationIncomeBeforeIncomeTaxes•IncomeTaxesNetIncomeUSALI201313SummaryOperatingStatement-ForOwnerOperatingDepartmentsUSALI201314SummaryofRoomsDepartmentChanges1.RoomsRevenuesegmentsrevisedandlistedonthefaceofRoomsdepartmentoperatingstatement,anddefinitionsaddedforeachsegment2.PackageRevenuelanguage“tightenedup”andpackagebreakagetreatmentaddressed3.ResortFeesmovedtoMiscellaneousIncome(Schedule4)4.ExpandedLaborReportingontheRoomsdepartmentoperatingstatementtobreakoutmanagementvsnon-managementlabor5.RoomsServiceChargesaddedasthisiscommonoutsidetheU.S.6.RebatesorsubsidiesgranteddirectlytoagroupmovedtoContraRevenuevs.beingtreatedaspartofCommissionsandRebates–Groupexpense7.ExpandedComplimentaryServicesandGiftsexpenseitemtothreeseparateexpensecategories,toincludeComplimentaryFood&BeverageandComplimentaryIn-Room/MediaEntertainmentUSALI201315RoomsRevenueSegmentsMoredetailedroomrevenuereporting,withsegmentationmorealignedwithrevenuemanagementdefinitions10thEdition11thEditionTransient-Commercial/Corporate-Leisure-Government/Military-FrequentGuest/Preferred-TravelPackages,FIT-HotelPackages-InternetTransient-Retail-Discount-Negotiated-Qualified-WholesaleGroup-Corporate-Association/Convention-Government-Tourgroup-SMERF-WholesaleGroup-Corporate-Association/Convention-Government-Tourgroup/Wholesale-SMERFContractContractMaterialChangeinTransientSegments;AddedDefinitionsMinorChangeinGroupSegments;AddedDefinitionsUSALI201316PackageRevenues•EstablishedminimumfrequencyofonceayearforsettingratiosbywhichPackageRevenuesareallocated•Encouragedmorefrequentratiosadjustmentwhereneeded(e.g.,highlyseasonalhotelslikeresorts)•Changedallocationtreatmentforrevenuecomponentsprovidedbythird-partyvendorstoconformwithGAAP,thatis,tobepartoftherevenueallocation•Addedlanguagetodefine“packagebreakage”andprovidedguidancetorecordthisinMiscellaneousIncome(Schedule4),asameansofsimplifyingtheprocessandcausinglessdistortionintheothernon-RoomsdepartmentsUSALI201317ResortFeesandSurchargesAreasofInconsistencies:•Amountoffee(flatfeeor%ofroomrate)•“Allocation”ofresortfeestoproperrevenuedepartments•Mandatoryversusvoluntary•P&Lstatementsusedforbenchmarking•ReportedADR(AverageDailyRate)usedforbenchmarkingTherefore…USALI201318ResortFeesandSurchargesInthe11thEdition:ResortfeesnowrecordedinMiscellaneousIncome(Schedule4)ServiceChargesandSurchargesincludeanymandatory,non-discretion