Finance, Op Planning & Forecasting

Based on a sample of more than 3,000 hotels from CBRE’s Trends® in the Hotel Industry database, U.S. hotel property tax expenditures averaged $2,626 per available room (PAR) in 2022. This is 10.8% less than the $2,943 PAR recorded in 2019, before the COVID-19 pandemic. Concurrently, the earnings before interest, taxes, depreciation, and amortization (EBITDA) for these same properties fell by 1.7%.

Yes, yes, yes the contemporary tech systems the hospitality industry has been waiting for are available now and offer incredible open-ended solutions...ready for implementation.

Since room sales generate lodging tax revenues, an overview of hotel market trends provides a perspective on the industry’s current and future fiscal impacts. While the negative impacts of the COVID-19 pandemic were unprecedented, as documented in our 2022 HVS Lodging Tax Study, nearly all lodging markets have reached or exceeded pre-COVID levels of revenue generation. Revenue per available room (“RevPAR”), the product of average daily room rate and occupancy rate, is a standard industry metric that combines the effects of occupancy and average daily room rate changes on hotel revenue performance. The figure below compares the amounts of RevPAR in the 25 US urban markets for each month from January 2019 through July 2023.

Walking the halls, meeting other attendees and watching sessions at last week’s Lodging Conference in Phoenix, the general sentiment pointed to an industry that is back firing on all cylinders.

Budgeting effectively is a challenge at the best of times, but hoteliers looking to set their 2024 budgets have to do so amid lingering uncertainty across the travel industry. While travelers may be more excited than ever to set out on their next adventure, economic factors are changing the way people travel and how much it costs to provide exceptional guest experiences.

I literally can’t turn on my computer anymore without another pop-up company, telling me they’re going to ‘revolutionize the travel planning ecosystem with deeply integrated generative AI architecture’. What they actually mean is that they’re going to clumsily write “how to organize trip to miami” into ChatGPT’s API, and then present the result on screen. Truly revolutionary!

Just as ensuring hotel safety requires leaving no asset or process unexamined, the quest for affordable property coverage requires casting a wide net.

As the hotel industry prepares for its annual budget planning for 2024, we’re at a critical moment where technology and financial strategy blend together. This goes beyond simply setting aside funds for new digital tools; it’s about fully integrating technology into our financial and operational plans. This guide will navigate the complexities of the evolving budgeting landscape, focusing on how a tech-centric approach can reshape your hotel’s path to success in the competitive world of hospitality.

Over the years, the fees hotel owners pay to franchise companies have typically grown at a pace greater than the rise in hotel rooms revenue. Most franchise-related fees are charged as a percent of rooms revenue, and therefore, by assessing the relative changes in rooms revenue and franchise fees we can make some assumptions.

The convergence of Artificial Intelligence (AI) with Large Language Models (LLMs) is spearheading transformative changes in the hotels, travel, and tourism sectors. Imagine a world where AI-powered virtual assistants handle hotel bookings and curate personalized experiences for guests. Or where LLMs seamlessly bridge linguistic divides, offering instant translations for travelers. AI’s prowess in forecasting flight patterns and streamlining itineraries dovetails with LLMs’ capability to help tourism agencies craft content that resonates across cultures. Together, they promise not just enhanced experiences for travelers but also streamlined operations for businesses in the travel sector.