Baird/STR Stock Index Up 5.0Percent for November 2017
The Baird/STR Hotel Stock Index increased 5.0% in November, closing the month at 4,732. Year to date through the first 11 months of 2017, the index was up 27.8%.
That's right, your eyes and the headline are not fooling you. I learned this from a client in a backward kind of way and now I want to share it with you. It is a powerful way to justify and prove a return on investment (ROI) for financial leadership training. I use this story as well to show my clients what they are leaving on table in the way of profits and asset value if they are not using financial leadership in their hotel.
One expense that management has less control over are franchise fees. Most of the fees charged by the franchising companies (brands) are assessed as a percent of a source of revenue. Therefore, owners and operators have mixed emotions when franchise-related costs rise. After all, if you are paying more franchise fees, then it is likely that your propertys revenue is also on the rise.
The following is an overview of a six-month financial leadership project that I recently completed at a full-service hotel. The project consisted of six half-day hospitality financial leadership workshops delivered in-house and monthly 1-1 leadership coaching appointments with the 15 managers assigned to the program.
This study presents the current lending environment for hotels. It consists of four topics, (1) lending parameters, (2) availability of debt by project and chain-scale segment, (3) loan characteristics, and (4) an outlook on lending criteria.
Within the lodging industry, there are other metrics that have historically been reliable indicators to measure the potential for hotel profit growth. One is the change in rooms revenue, or RevPAR. Using data from our annual Trends® in the Hotel Industry, we find an 86 percent correlation between annual changes in RevPAR and Gross Operating Profit (GOP) from 1960 to 2016. This implies that changes in RevPAR do provide a very strong indication of changes in GOP.