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THE JOURNAL OF HOSPITALITY FINANCIAL AND TECHNOLOGY PROFESSIONALS
Jn/Jl 2007Vlm 22, Nmbr 4
www.HFTP.ORG www.HITEC.OR G
Insid:European Hospitality CIOs Discuss I.T. Challenges and Priorities; I.T. Spending Strategies; Ready ora Revenue Management System?; Tech Trend: Legacy versus VoIP Phone Systems; Diversitys Impact on theworkplace; Ne Regulations or Electronic Data Storage; Feature Intervie: Floor Bleeker
http://www.hftp/http://www.hitec.org/http://www.hitec.org/http://www.hftp/ -
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THE JOURNAL OFHOSPITALITY FINANCIAL AND
TECHNOLOGY PROFESSIONALS
Volume 22, Number 4
16 Whats n th Agnda in 2007?European hotel CIOs discuss their biggest I.T. challenges and priorities
By Peter OConnor, IMHI
22 I.T. Spnding StratgisA look at lodging managers current technology expensesBy Tanya Venegas, MBA, MHM
27 Rad r RMS?Knowing when a revenue management system is right or your propertyBy Bonnie Buckhiester
30 Tch Trnd DilmmaPBX legacy or VoIP?By Steve Powell
32 Divrsits ImpactAs markets, customers and employees become more diverse, culturally-relevant
considerations are increasingly important in the workplaceBy Paul Manley
5 Btwn th LinsHFTP Builds a Bridge to Hong Kong Networking and education ll the agenda
6 Q&A Frm Th HFTP Rsarch InstittElectronic Data Storage New regulations dictate how long companies need to keep inorma-
tion and communications
10 Chaptr Prl: HFTP Gratr Pgt Snd
12 HFTP Nws and NtsUSALIHighlights, 10th Revised Edition Undistributed Operating Expenses, Management
Fees and Fixed Charges; HFTP Calendar o Events; HFTP Hospitality Technology Award o
Merit; 2007 HFTP Hospitality Technology Hall o Fame Inductee John Springer-Miller
26 Fatr Intrviw: Flr BlkrPutting the I.T. in Hosp-IT-ality;By Lou Cook
HFTP and HITEC are registered servicemarks o Hospitality Financial andTechnology Proessionals. ProLinks andGUESTROOM 2010 are service markso Hospitality Financial and TechnologyProessionals.
Sbmissins and InqirisIndividuals interested in submitting an articleor publication should contact the editor.TheBottomline is a peer review journal. All ma-terials submitted or publication are reviewedby members o the editorial review board orrecognized experts in the eld.The Bottomline (ISSN 0279-1889), the jour-
nal o Hospitality Financial and TechnologyProessionals, Inc., is published bimonthlywith two special editions by HFTP. Copy-right by Hospitality Financial and Technol-ogy Proessionals. All rights are reserved.All opinions expressed herein represent theviews o the authors. The Bottomline andHFTP disclaim any responsibility or viewsexpressed or statements made in any articlespublished. HFTP disclaims any liability withrespect to the use o or reliance on any suchinormation. The inormation contained inthis publication is in no way to be construedas a recommendation by HFTP or anyindustry standard, or as a recommendationo any kind to be adopted or binding uponany member o the hospitality industry.Written consent must be obtained rom HFTPbeore reprinting articles. Subscription eeo $30 or HFTP members is included in
the membership ee. HFTP is headquarteredat 11709 Boulder Lane, Suite 110, Austin,Texas 78726. Periodicals Postage Paid atAustin, Texas. POSTMASTER: Send ad-dress changes to The Bottomline, 11709Boulder Lane, Suite 110, Austin, Texas78726, (512) 249-5333.
C n t 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 7
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THE BOTTOMLINESTAFF
Frank I. Wole, CAEExecutive Vice President/CEO
Eliza R. SeligEditor/Director o Communications
Laura HumanAdvertising Sales/Marketing Account Manager
20062007 HFTP OFFICERS
President
Agnes DeFranco, Ed.D., CHAEUniversity o Houston
Houston, Texas
Vice President
Anna McFarland, CPA, CFE, CHAE, CHTPAnna McFarland & Associates
Kauman, Texas
Treasurer
Jules Sieburgh, CHTPJSI Consulting
Bethesda, Maryland
Secretary
Terry Price, CHAE, CHTP, CPAThe Grove Park Inn Resort & Spa
Asheville, N.C.
Immediate Past President
Ralph R. Miller, CA, CBV, CHA, CHAEInntegrated Hospitality Management, Ltd.
North Vancouver, B.C.
20062007 COMMUNICATIONS
EDITORIAL ADVISORY cOUNCIL
Chair
Franklin John P. Sikich, CPA, CHAE
Franklin John Patrick Sikich, CPA
Board Liaison
Karl Munster, CPA, CHAEHRI Lodging, Inc.
Council
Amitava Chatterjee, CHTPIBM Business Consulting Services Travel and
Transportation Hosp and Leisure
Ab M. Echenberg, CHAE, CHTPAME Consulting
Mehmet Erdem, Ph.D, CHTPUniversity o Nevada, Las Vegas
Ted HornerE Horner & Associates Pty Ltd
Peter OConnor, Ph.D.ESSEC Business School
Arlene Ramirez, MBA
Conrad N. Hilton College, University o Houston
Kevin F. Reilly, CPA, JDPKF Witt Mares
Raymond S. Schmidgall, Ph.D., CPA, CHAEMichigan State University
Jerilyn B. Schnitzel, CHAE, CHTP, CAMSchnitzel Hospitality Consulting
Joseph Seminerio, MBA, CHAE, CHTPBaltusrol Gol Club
Paul A. Willie, CFM, CHAE, CHTP, CHA, CMANiagara College
11709 Boulder Lane, Suite 110 Austin, TX 787261832001 (512) 249-5333 (800) 646-4387 Fax 001 (512) 249-1533
www.htp.org www.hitec.org
mailto:[email protected]:[email protected]:[email protected]://www.hftp.org/http://www.hitec.org/http://www.hitec.org/http://www.hftp.org/mailto:[email protected]:[email protected]:[email protected] -
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HFTPbuildsabridgeToHongKong
BETWEEN THE LINES
a letter from the president
Education and networking fll the agenda
Agnes DeFranco, Ed.D., CHAE, is a professor at the Conrad N. Hilton College at the University of Houston in Houston, Texas.
accounting in Hong Kong and China.
Both Frank and I were also interviewed
by WIWIH.com where we spoke about
GUESTROOM 2010, HFTP and HITEC.
On the last day o our trip, we returned
to the Hong Kong Polytechnic University
once again. Frank gave the GUESTROOM
2010 presentation to the research students,
aculty, designers and architects as the uni-
versity is slated to open a our- to ve-star
hotel by 2010. I had the honor to work with
the universitys hotel and tourism aculty in
the aternoon when we discussed teaching.Another successul result rom this trip
was the nalization o plans or the brand
new Asian Hospitality Financial and Tech-
nology Conerence. The conerence, which
will be produced with the HFTP Asia
Chapter, will be co-located at FHA 2008
(Food&HotelAsia), April 22 25, 2008 at
the Singapore Expo Center in Singapore.
It was wonderul to meet with both
practitioners and academics on this trip.
It is also a wonderul eeling to see that
anywhere in the world, we all have similar
goals. The practitioners in the U.S.,
Europe, Canada and Asia are passionate
about their work. They want to nd ways
to do their job better and advance the in-
dustry. Along the same vein, educators are
no dierent. We want to provide proper
education to the next generation, so that
the practitioners will have a quality supply
o uture employees. We also like to work
on projects, rom the Uniform System to
other research projects, providing a ser-vice to our great partners.
This month comes HITEC 2007 and
the second incarnation o Guestroom
2010, which will eature multiple new
technologies, promising to be another
show stopper.
May is a month o celebration in
the world o higher education as
commencement ceremonies take
place at various campuses. At the same
time, the month o May was also a month
o celebration or HFTP, as the associa-
tion had many accomplishments in Asia.
First on the list is the charter o the
HFTP student chapter at the Hong Kong
Polytechnic University. Frank Wole,
CAE, HFTP executive vice president, and
I traveled to Hong Kong last month tojoin the students at their inauguration cer-
emony. At the same time we also attended
HOFEX 2007 (Asian International Exhi-
bition o Food & Drink, Hotel, Restaurant
& Foodservice Equipment, Supplies &
Services). HOFEX is the Asian version o
the International Hotel/Motel & Restau-
rant Show in New York, as many coun-
tries showcase their products to buyers
in Asia. On the rst day, Frank presented
a GUESTROOM 2010 slideshow to the
General Managers Forum. The presenta-tion highlighted the numerous technolo-
gies eatured in the model hotel room
which debuted at HITEC 2006 in Minne-
apolis. Frank gave his presentation again
on the second and third day o the show,
which attracted a large number o hote-
liers rom all over Asia, especially China.
At the end o the second presentation, a
Chinese hotel owner approached us about
the CHTP certication, expressing his
interest in getting certied. As he said, the
CHTP is the only hospitality certication
that he could nd in the world!While Frank was making his third
GUESTROOM 2010 presentation at
HOFEX, I was with the Hotel Control-
lers and Accountant Association o Hong
Kong, presenting a session on the Uni-
form System of Accounts for the Lodging
Industry and Cost Control. The group is
very interested in working with us to pro-
duce a companion piece to the Uniform
System, helping to better standardize hotel
DFranc rprsnts HFTP in Hng Kng
Top-left DeFranco and wole (cen-ter-right) present the ne Hong KongPolytechnic University Student Chapterith their charter. Top-right Dr. BobMcKercher, proessor at The School oHotel and Tourism Management at HongKong Polytechnic University presentsDeFranco ith a plate commemoratingthe schools 25th anniversary. Bottom-left DeFranco orks ith memberso the Hotel Controllers and AccountantAssociation o Hong Kong.
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eLeCTRoNIC DATA SToRAGeNew regulations dictate how long companies need
to keep information and communications
Question:
I heard there are new regu-
lations regarding the stor-
age of electronic media.
Can you explain the new
rules and what I need to do
to implement them at my
property?
Answer:You are correct, new rules have been
implemented which impact how a com-
pany stores electronic data. The new ruleswere put into action by the U. S. Supreme
Court in April o 2006 and went into eect
on December 1, 2006 (Preimesberger,
2006). These rules pertain to e-discovery
o critical evidence which where insti-
tuted as changes in the Federal Rules o
Civil Procedure, specically Rules 16,
26, 33, 34, 37 and 45 (ONeill, Behre, &
Nergaard, 2007). This is the rst time that
the Federal Rules o Civil Procedure have
changed to address electronically stored
inormation and the obligations o partiesto address e-discovery issues (ONeill, et
al., 2007). It is rumored that the push or
the new rules came about in 2000, when
Al Gore, the vice president at the time,
could not produce e-mails or the Depart-
ment o Justice pertaining to und-raising
activities (Preimesberger, 2006).
The new regulations require businesses
engaged in ederal court proceedings to
be able to quickly nd electronic data
requested by the ederal court. Electronic
data may be in the orm o e-mail, instant
messages, nancial statements, voice
mail, databases and any other type o in-
ormation stored electronically (Preimes-berger, 2006; ONeill, et al., 2007). Other
topics addressed by the new rules include
what constitutes electronically stored
inormation; the ormat in which electron-
ically stored inormation is produced; par-
ties obligations to disclose electronically
stored inormation; limits on discovery
o not reasonably accessible electroni-
cally stored inormation; the inadvertent
production o privileged materials; and
the consequences o the good aith loss or
deletion o electronically stored inorma-
tion (ONeill, et al., 2007).The U.S. Supreme Court has put a
time limit o 30 days to be able to pro-
duce any type o electronic data relevant
to a court case (Preimesberger, 2006).
The rules state any relevant data;
thereore, companies must also identiy
and divulge any electronically stored data
that has not been requested, but could
be relevant to the case (Perkins, 2007).There is an out to this part o the rules
i a company can prove that providing
the evidence will cause the company an
undue burden or excessive costs (Perkins,
2007). Even though the company may not
have to produce the actual document, they
still have to introduce into evidence that
the document exists. The Rules state that
this data is not reasonably accessible,
but many legal experts are debating what
exactly this means and they will have to
continue to guess until a legal precedent
has been set. The accessibility o data willbe determined by the cost and burden o
producing the inormation, which typi-
cally will be driven by the extent which
such data must be restored, converted,
or otherwise manipulated electronically
HFTP News and Notes
Stps t Cmpling with th Nw e-discvr Rls
1. Invntr elctrnicall Strd Data:Company layers should gain aclose orking relationship ith the I.T. department and have a thorough
understanding o the companys electronically stored data. A game plan shouldalso be devised on ho to search and produce the dierent types o documents
in case litigation arises.
2. Implmnt, Rviw and Mnitr Rtntin Plicis:Companies shouldollo industry standards hen determining a retention policy or electronicdocumentation.
3. Dvlp Litigatin Rspns Prcdrs:These procedures should includeinormation on hat electronic documents are being stored and hich arebeing deleted and hy. The procedures should be distributed to all relevant
personnel and updated on a regular basis. (ONeill, et al., 2007)
Continued on page 8.
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beore it can be reviewed or analyzed
(ONeill, et al., 2007). The court encour-
ages the involved parties to come to an
agreement on this during the negotiation
period.
The ederal rules also state that busi-nesses engaged in litigation must agree
on exactly what type o electronically
stored evidence needs to be produced no
later than 30 days beore the rst court
date (Priemesberger, 2006). The compa-
nies then have 120 days to produce all o
the required documents in a orm that is
reasonably usable (Perkins, 2007). The
ormat should be agreed upon in early ne-
gotiations. This clause is included in the
rule in case companies utilize a propri-
etary sotware system unavailable to those
requesting the data.Many companies will wonder i they
need to keep every piece o electronic
data that is ever produced in an extensive
database. The rules state that it is accept-
able to delete documents in the course o
regular business (Priemesberger, 2006).
That brings up another question: What
does regular business mean? Rule 37
states that when the loss o electronically
stored data is due to the routine, good
aith operation o an inormation system,
then the loss can be under the umbrella oregular business (ONeill, et al., 2007).
This exception recognizes the unique
nature o many sources o electronically
stored inormation, which are subject to
automatic deletion or overwriting in the
normal cause o business (ONeill, et al.,
2007). Many lawyers are being advised
to hire computer orensics specialists
to access deleted or encrypted data that
may otherwise not be ound using normal
search procedures (Perkins, 2007).
O course, the changes in the Federal
Rules o Civil Procedure greatly impactthe way businesses store inormation
electronically. Companies now have to
be able to search all o their electronic
documentation in a timely manner. These
regulations have created demand or new
storage hardware and sotware which
identies, classies, and retrieves unstruc-
tured data such as e-mail (Preimesberger,
2006).
The rules may also cause complicatedproblems or multinational corporations
who have to comply with regulations o
several dierent countries. For example,
e-mail regulations instituted by SEC Rule
17a4 confict with European privacy
laws (Perkins, 2007). Lodging companies
with locations around the world have al-
ready had to ace many o these challeng-
es when storing guest data. Companies
must be careul when storing electronic
data and comply with individual country
regulations.
The inormation in this article isintended to provide a general overview o
the new Federal Rules o Civil Procedure
pertaining to e-discovery. As with any le-
gal issues, competent legal advice should
be sought while preparing to comply with
the regulations. I you have any ques-
tions about this article contact the HFTP
Research Institute.
Srcs
ONeill, M. E., Behre, K. D., & Ner-
gaard, A. W. (2007, February). Newe-Discovery Rules: How Companies
Should Prepare.Intellectual Property
& Technology Law Journal, 19(2),
1316. Retrieved May 2, 2007 rom the
Business Source Complete database.
Perkins, B. (2007, April 16). Records
Retention: Who Cares?. Computer-
world, 41(16), 40. Retrieved May
2, 2007 rom the Academic Search
Complete database.
Preimesberger, C. (2006, November
27). Saving The Data: New FederalRules Will Change How Businesses
Store Inormation. eWeek, 23(47),
1112.
Continued from page 6.
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HFTPgreaTerPugeTsound
40 Years in the Northwest
CHAPTeR PRoFILe
HFTP News and Notes
Celebrating 40 years since its 1967 charter, The HFTP
Greater Puget Sound Chapter remains vibrant by continuing
to seek out new programs and ideas, while keeping its tradi-
tions alive. The 85-member chapter is a collection o hospitality
proessionals who together create a group characterized by enthu-
siasm, energy, community-spirit and proessionalism making
chapter meetings always something to look orward to.
Puget Sound encompasses the Seattle-Tacoma, Wash. region.
It is a prosperous area with numerous major corporations head-
quartered there, including Amazon.com, Boeing, Microsot and
Starbucks. With tourism ranked as Washingtons ourth larg-
est industry, the hospitality industry is thriving. Known as an
outdoor paradise, Puget Sound has 500 square miles o water,
1,400 miles o shoreline and some 300 islands. In addition,
nearby Mt. Baker and Mt. Rainier oer year-round recreation.
The states wine industry is growing at an enormous rate, and is
currently the second largest wine producer in the United States,just behind Caliornia. Urban attractions include Seattles Space
Needle and Pikes Place Market, and Tacomas Glass Museum
and Art Museum, as well as state o the art hotels, such as Hotel
1000 and the Pan Pacic Seattle Hotel.
Refecting on the rst-two decades o the chapter, ormer
chapter president twice over Dennis Miller, CHAE,
describes the chapters unctions in the early days as similar to
those today. Having joined in 1973, he explains that back then
the chapter members would decide on a theme or the year, as
well as plan multiple educational meetings and social events.
Customs that started then still remain today, with meetings an-
nually held at the Sorrento Hotel, Inn at the Market and the The
Fairmont Olympic Hotel.
Today, the chapter ollows a similar plan, but keeps its activi-
ties resh by ocusing on its strategic plan which encompasses
our major goals membership growth, membership satisac-
tion, communications and education. Each goal is staed with a
committee that involves several individuals within the chapter.
Th HFTP Gratr Pgt Snd chaptr prvids a grat blnd dcatin andntwrking. Top, The Greater Puget Sound Chapter Board (l to r): Rick Braa, LoriRichardson, Rory Testa, Jessica Vint, Kevin Fisher and Pean Lim. Middle: March2007 chapter meeting hich combined dinner and an educational presentation.Bottom: Particpants at the Greater Puget Sound Chapters frst Amazing RaceSeattle competition.
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HFTP Pgt Snd
2006 2007 Bard and Dirctrs
President
Rick Braa, CHAePrincipal
Clothier and Head
Vice President
Rr TstaDirector, Inormation
Systems
PRO Sports Club
TreasurerJssica VintRegional ControllerThe Hotel Group
Secretary
Lri RichardsnSenior ManagerMoss Adams LLP
Past President
Cammi eatn, CHAeHotel Controller
Hilton Seattle Airport &
Conerence Center
Directors:
Kvin Fishr, CHAeController
Everett Gol & Country Club
Lisa Fnk, CPA, CHAeProject Manager
MTM Luxury Lodging
David GilsController
Fairmont Olympic Hotel
Pan Lim, CHTPPrincipal
Tin Trees, LLC
One successul way the chapter has accomplished its goals
has been to step-up the quality o its education presentations.
Six years ago, the chapter board increased its speaker budget toprovide or well-regarded speakers, and since then its average
meeting attendance is 50 plus. This year presentations have in-
cluded Cyber Crime given by Wenlock Free o Security Metrics;
Internal Controls given by Jerry Trieber rom Hersha Hospital-
ity; Confict to Communication given by Marilyn Sherman o
UpFront Presentations; and What Controllers Need to Know
about I.T. given by Rory Testa o Pro Sports Club. Coming up
is Risk Management given by Jan Schnabel o Marsh Insur-
ance; Accounting & Auditing Update given by Lori Richardson
o Moss Adams and Jason Filippini, Clothier & Head; Liars
Exposed given by Philip Maltin, Silver & Freedman.
To oer team-building and networking opportunities, thechapter designs unique proessional and social activities. Going
on or several years now, the chapter has held a Vendors Expo
along with its business meeting in January. Each year the expo
has grown larger, with more vendors setting up displays, and
attendees having a chance to learn about numerous products and
services available to them. It also provides a valuable opportu-
nity or members to meet ace-to-ace with representatives o the
various companies in attendance.
July is slated or the chapters teambuilding event. For the
past two years, it has held the successul Amazing Race Seattle.
The competition, similar to the TV show, divided members
into teams onsite who were then given $20 and 90 minutes to
complete a course. This year the chapter has organized the Hos-pitality Olympics, which will turn what members do every day
into an evening o rivolity. Events include: a 10-key contest,
clearing tables, making beds and serving drinks.
The peak o the chapters 40th Anniversary celebration will
be this August, the month the chapter normally hosts a social
event. This years will be extra special, with chapter leaders ex-
pecting many old and new members to be in attendance. While
the location has been disclosed the deck o the Inn at the
Market most other details are being kept under wraps.
Excelling at education and networking is not the limit to the
chapters reach. The group also uses its resources to annually
help an area charity. Every year the chapter selects a Charity
o Choice, which it will then provide or or the duration o the
year. Last year the selected organization was the Leukemia and
Lymphoma Society. This year is dedicated to FareStart whose
mission is to provide a community that transorms lives by em-
powering homeless and disadvantaged men, women and amilies
to achieve sel-suciency through lie skills, job training and
employment in the ood service industry. The chapter contrib-
utes to its selected charity by selling one dollar rafe tickets
at every chapter meeting, with the proceeds split between the
rafes winner and the selected charity. It will also volunteer at
FareStarts Guest Che Night in January 2008, when chapter
members will be bussers and servers or the evening.
The chapters great eorts have lead to a successul word-o-
mouth method or recruitment. Most o its current members have
come rom others in the chapter who have brought colleaguesand business contacts to a meeting. While members bring them
in, chapter leaders are working on various techniques to impress
visitors and have them return. Such techniques include providing
First-time Attendee ribbons or name tags which help chapter
members identiy the newcomer, and will in turn make the visitor
eel comortable at the meeting. Ater the meeting, the chapter
president sends out a thank you note to rst-time attendees. This
year the chapter has raised the bar by challenging members to
bring a new colleague to at least two meetings.
When chapter members were asked what makes the chapter
unique, a similar reply was given the group oers an interest-
ing and dynamic blend o personalities who are all dedicated to
helping each other out and promoting HFTP.
The hospitality industry allows us to take peoples most ba-
sic needs o ood, beverage and lodging and blend them into a
uniquely memorable experience, says Marney Zellers, Greater
Puget Sound chapter member and a consultant with Marney
Zellers Restaurant Coaching & Consulting. This magic is
well-represented through the people in the Greater Puget Sound
Chapter o HFTP. Our members have a natural desire to reach
out to and inspire each other and the community. Every time I
participate in an HFTP meeting or program I take something
with me to share in my work and community, and I strive to
give something equally special.
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The Financial Management Com-
mittee o the American Hotel and
Lodging Association (AH&LA), in
conjunction with HFTP, has releasedthe 10th edition o the Uniform
System of Accounts for the Lodg-
ing Industry (USALI). Throughout
2007, the Financial Management
Committee will provide a series
o columns highlighting the major
changes ound in the 10th edition.
This month, we eature Undistrib-
uted Operating Expenses, Manage-
ment Fees and Fixed Charges.
Security, Human Resources and Inormation Systems can be
created as departments, but must be summarized and reported
on the Administrative and General line on the Summary
Operating Statement.
New categories have been added to the Administrative and
General Department or Centralized Accounting Charges and
Corporate Oce Reimbursables.
Transportation Expenses directly related to transporting
guests are now reported as an expense o the Rooms Depart-
ment, unless guest transportation is operated as a revenue-
generating department and meets the criteria set orth under
Other Operated Departments, in which case the cost o guest
transportation is shown in Other Operated Departments.
Franchise ees are included in the Marketing Department.However, the ees paid or licenses other than the hotel
brand (such as ees paid or a restaurant or coee brand) are
uSALI Highlights10th Revised Edition
expensed to the appropriate operating department using the
brand in an account named Royalty Fees.
Revenue will not be credited to the Property Operations and
Maintenance Department. Instead the revenue must be cred-ited to an operating department. Costs will also be transerred
to the operating department. For example, the revenue and
expenses associated with the installation o electrical outlets
or a trade show exhibition will be reported in the Food and
Beverage Department.
Sewer costs and ees are reported on a separate line item in
the Utilities Department.
Management Fees are a separate line item on the Summary
Operating Statement, and reported as a deduction rom Gross
Operating Prot in arriving at Income Beore Fixed Charges.
It represents the aggregate amount o both Base and Incen-
tive Management Fees.
Taxes on Utilities have been moved to the Utilities Department.
Insurance, which includes property, liability insurance,
proessional liability, thet and other incidental lines o
coverages and the associated deductible costs or each line
o insurance is reported under Fixed Charges and includes
the costs o uninsured and under-insured losses. Employee-
related insurance costs or workers compensation coverage
is included in Employee Benets costs in the appropriate
departmental schedule. This section also includes the costs
o legal settlements and audits which result in changes to the
underwriting assumptions used to assess premiums.
T prchas a cp th 10th editin thUniform Systemof Accounts for the Lodging Industry, plas visit th wb sit AH&LAs edcatinal Institt at www.i-ahla.rg.
CHAe & CHTP Rviws and examsAugust 19, 2007
Sheraton Charlotte Airport HiltonCharlotte, N.C.
Assistant Cntrllrs CnrncAugust 19 20, 2007
Sheraton Charlotte Airport Hilton
Charlotte, N.C.
CHAe & CHTP RviwsSeptember 27, 2007Bay Head Yacht Club
Bay Head, N.J.
2007 HFTP Ladrship AcadmOctober 16 17, 2007
Hyatt Regency Jacksonville Riverront
Jacksonville, Fla.
Calendar For more inormation about HFTP events and CHAE/CHTP revies and exams,please call (800) 646-4387 or 001 (512) 249-5333, or visit .htp.org.
CHAe & CHTP Rviws and examsOctober 17, 2007
Hyatt Regency Jacksonville Riverront
Jacksonville, Fla.
2007 HFTP Annal Cnvntin& TradshwOctober 17 20, 2007
Hyatt Regency Jacksonville Riverront
Jacksonville, Fla.
eHTeC 2008February 10 12, 2008Amsterdam Hilton
Amsterdam, The Netherlands
Asian Hspitalit Financ andTchnlg CnrncApril 22 25, 2008
Singapore Expo Center
Singapore
HITeC 2008June 16 19, 2008
Austin Convention Center
Austin, Texas
2008 HFTP Annal Cnvntin& TradshwSeptember 24 27, 2008Gaylord Opryland Resort and
Convention Center
Nashville, Tenn.
HFTP News and Notes
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Jsph A. MarkMarko was recognized or his work in sales
automation.
Joe Markos contributions to hospital-
ity technology spans 20 years in more roles
than some people have in an entire career,
said Jules Sieburgh, CHTP, a 1998 Hall oFame inductee and the HFTP International
Treasurer. He has always been a great advocate or both the
end-user and the developer o hospitality systems.
While at Sheraton, in conjunction with David Troy, VP o
sales and marketing, Marko conceived, designed and implement-
ed (with the help o many) one o the industrys very rst Sales
Oce Automation Projects (SOAP), introducing a high level o
automation. Marko also introduced Fidelio to the Americas as
ounder, chairman and president o Fidelio USA. He was also
infuential in promoting the spread o hotel systems while at
Micor and Philips Hotel Systems. Over the 25 years that I spent
in hotel technology, I certainly gave it my total dedication. It is
nice to be recognized or something that you put your heart and
soul into. I am very proud o the accomplishments o all o the
companies I was involved with.
HFTP News and Notes
2007 John Springer-MillerWith the creation o SMS | Host, a prop-
erty management system that integratesguest services, John Springer-Miller
changed the ace o hospitality technol-
ogy by creating a guest-centric approach
to sotware. For his contributions to the
hospitality industry, HFTP will induct
Springer-Miller into the International
Hospitality Technology Hall o Fame at the HITEC 2007
Opening Session on Tuesday, June 26 at the Orange County
Convention Center in Orlando, Fla.
The Hall o Fame is, perhaps, the greatest honor one can
receive in this industry, said Springer-Miller. I am honored to
be recognized on the same level as the previous Hall o Fameinductees.
Springer-Miller is CEO o PAR Springer-Miller Systems
(SMS), which he ounded in 1984. Springer-Miller saw a void
in property management systems in the hospitality industry
and elt a need to ll it by providing sotware that is customer
oriented and allows properties to collect detailed inormation to
enhance the guest experience. This sotware, SMS | Host, was
created in 1986 and was nationally launched at HITEC in 1989.
Thanks to SMS | Host sotware, hotels are able to save
customer preerence inormation or uture visits and increase
time management by providing a one-stop shop. Guests can
call the hotel, and with a single point o contact, make hotel
Bill Sllivan, CHTPSullivanwas recognized or his expertise
in hospitality systems design and opera-
tions.
Bill Sullivan has been a true cham-
pion or hospitality technology, said
Richard Brooks, a 1997 Hall o Fame in-ductee. Unlike many others, though, Bill
is not a specialist. He has been a leader in hotel and restaurant,
and is perhaps best known or his work with club technology.
He has been a true Man or all Systems in our industry.
Sullivan worked or 31 years at the DuPont Co. in Wilming-
ton, Del. where he spent considerable portions o his career in
DuPonts hospitality operations. He is now an adjunct instruc-
tor at the University o Delaware, where he teaches a Hospital-
ity Practicum course. Sullivan is also the managing director o
the Courtyard Newark at the University o Delaware and the
University Conerence Centers. One o the great pleasures in
my lie is to teach young students and employees about how
technology can be used to improve nancial perormance and
to improve service to our guests, said Sullivan.
reservations, set a spa appointment, reserve a gol tee time,
book a dinner reservation, inorm the hotel about any specialneeds and more.
Another visionary concept that Springer-Miller brought
to our industry was the users group, said Terry Price, CHAE,
CHTP, CPA, executive IT manager at The Grove Park Inn
Resort & Spa and secretary o the HFTP international board.
Most sotware companies have a users group, however, he elt
that the users group should be owned and operated by the users,
not the sotware company. Springer-Miller helped organize the
Hosts User Group which is owned, operated and managed by
the users and welcomes this groups voice in steering the direc-
tion o the sotware. The success o this venture is sel-evident
in that many companies are trying to replicate this model.In 2004, SMS was acquired by Par Technology Corporation
to become PAR Springer-Miller Systems. Currently there are
ve oces around the world in Stowe, Vt., Las Vegas, Nev.,
London, Toronto and Kuala Lumpur, Malaysia.
The International Hospitality Technology Hall o Fame is
HFTPs highest level o recognition in the area o technology.
Since its inception in 1989, 28 individuals have received this
award as a refection o their contributions to the hospitality
industry. Hall o Fame members have been selected by their
peers as representing the best in innovation and application and
as leaders in their proession. Visit www.htp.org/halloame to
view all o the Hall o Fame inductees.
HFTP Intrnatinal Hspitalit TchnlgHall Fam Indct
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Industry Trends
the month o January 2007. Initial results o the survey were
presented at the EHTEC conerence, and more detail is included
in the discussion below.
Challngs Managing Hspitalit I.T. in anIntrnatinal SttingAs can be seen rom Chart 1 (page 18), participants identied a
very diverse range o issues. Beore discussing each in depth, its
worth pointing out that most are interconnected, not only with
each other, but also with the priorities and barriers discussed later.
The biggest challenge, noted by practically all participants,
is the lack o an appropriate communications inrastructure to
support desired systems unctionality. The challenge here lies
not with inrastructure within any particular country (although
as will be seen, this too can be problematic), but that there is
no single supplier who can provide appropriate services on a
global or even a regional basis. As a result, hotel companies haveto work with dierent vendors in each country, some o whom
are state monopolies, and thus not very responsive to customer
needs. Expansion plans, especially towards Eastern Europe and
the Middle East, exasperate this problem.
Having an appropriate communications inrastructure is
particularly important, as many hotel companies want to move
at least some o their core systems above property level or to
integrate property level systems with centralized systems (see
later section). Achieving this is highly dependent on having a
good quality and reliable communications inrastructure. Partici-
WHATS oN THe AGeNDA IN 2007?
Peter OConnor, IMHI is a proessor at the Essec Business School in Cergy-Pontoise, France. He is also a member o the HFTP Editorial and HITEC Advisory Counc
HITeC 2007 Spakr
Mnda, Jn 25
3:15 5:15 p.m.
Successful Web Strategies for Hotel Distribution
The common perception o technology use in the hotel sec-
tor seems to be highly conservative, with archaic legacy
systems running on ancient hardware, with I.T. proession-
als having a hard time justiying each dollar o spending to own-ers or management companies. In Europe, with its high propor-
tion o smaller and independent hotels, most people eel that the
situation is even grimmer, with investments in I.T. regarded as a
necessary evil, rather than an activity that adds value.
Are such perceptions valid? The little research available
today tends to be exclusively U.S.-ocused. To address this, as
part o the preparations or EHTEC (the rst European Hospital-
ity Technology Educational Conerence organized by HFTP in
January 2007), I spoke with a large number o industry proes-
sionals about the state o hospitality I.T. in Europe, the Middle
East and Arica. The study ocused on three interconnected
issues the challenges o managing hospitality I.T. systems
in this region; participants priorities or 2007 and beyond; andthe barriers that could be oreseen to achieving these objectives.
Interviews were carried out by telephone with 18 CIOs / SVPs
o technology o hotel chains operating in the region during
By Peter OConnor, IMHI
European Hospitality CIOs Discuss their Biggest I.T. Challenges and Priorities
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pants pointed out that in Europe, there are
problems not only with the availability o
appropriate services, but also with service
quality, thus limiting what hotel com-
panies can do. Furthermore, operating
systems across national borders usuallyimplies dealing with multiple suppliers,
which makes addressing quality issues
dicult. Interestingly, while cost was also
mentioned as an issue, it was perceived to
be much less important than either avail-
ability or quality. In act the main chal-
lenges mentioned in relation to cost was
not price levels themselves, but variability
across countries and the lack o a logical
pricing model. Purchasing a particular
service can cost 10 times more in one
country than another that is assum-
ing it is available in the rst place andmay be based on a fat ee in one country
and on bandwidth used in another. This
increases complexity, making managing
the system more dicult.
The second issue cited was what can
only be described as a deep level o dis-
satisaction with I.T. vendors. Much o
this seemed to be caused by the organi-
zational structure o vendor companies.
Although the latter supposedly operate
as global brands, in reality most choose
to use a network o local distributors or
agents. As a result, a chain trying to roll-
out a standardized solution across Europe
cannot just deal with the central oce,
but must liaise with local distributors in
each country. Instead o working withone set o people, in eect they must start
rom scratch in each country, address-
ing the same issues with a new vendor
team. The distributor / agent structure
also has cost implications, as prices, and
even business models, requently vary,
making it dicult or hotel companies to
construct a standardized solution or all
properties. And nally local distributors
are seen as problematic when it comes
to the provision o support. Getting any
level o support in both English and the
local language can be an issue, and inmany cases the useulness o the support
provided is questionable, with several
respondents claiming that they requently
have more expertise available within the
property than that provided by the local
distributor.
Frustration with suppliers also has a
second source. Participants noted that
there were too ew suppliers that can
oer and support I.T.-based systems (be
they inrastructure or applications) suit-
able or use across an entire chain. Thus
while hotel companies wish to be unique
in terms o the systems they oer to the
properties that they manage, in reality the
alternatives available are limited, as there
are only a ew (overworked) companies
who can work on a global basis. Everyoneeectively ends up using the same sys-
tems, making it dicult to gain competi-
tive advantage through I.T. usage. And
since the same small number o vendors
dominate the market, these companies
are extremely busy, and requently do
not have the capacity to respond to user
requirements in a timely ashion. Further-
more these vendor companies are so oc-
cupied servicing current user needs, that
respondents eel there is little research
and development going on, and thus inno-
vation, in terms o the solutions oered,is severely lacking. Several elt that hotel
I.T. solutions were very basic in compari-
son to those available or other industries.
Respondents rmly placed the blame or
this on vendors, who they say are so busy
installing more o the same that they
have no time or resources available to
work on developing the next generation
o hospitality inormation systems.
Paradoxically, in addition to there be-
ing too ew vendors, respondents also elt
that there were also too many vendors!However in this case they were reerring
to smaller suppliers oering local solu-
tions or local markets. A typical example
is high speed Internet access rom a
brand perspective chains want to have one
(or a very limited number o solutions),
but in every local market there is usu-
ally someone who can do it better, aster,
cheaper. Making use o such systems
decreases standardization, increasing
costs in the long run as expensive (and
sometimes unreliable) interaces have to
be developed. A key question is how todraw the line between what really needs
to be standardized rom a brand perspec-
tive, and where a local solution to a local
problem can be used.
The third key challenge identied was
the consolidation o data to give a single,
uniorm and holistic view o both cus-
tomer and organization. A key question
is How do I get a consolidated picture
o whats happening in a single language
in a single currency? Integrating data
Cmmnicatins Inrastrctr
Vndr Isss
Data Cnslidatin Isss
Intracs
Standardizatin Isss
Cntr-spcic Rqirmnts
Channl Managmnt
Bdgt
0 20 40 60 80 100
Chart 1. Challngs Prcivd in Managing Hspitalit I.T. in anIntrnatinal Stting
PERCENT
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rom multiple diverse systems, in multiple
languages and sometimes multiple cur-
rencies is o course problematic. Stan-
dardization would help to simpliy this
process, but in Europe this is dicult as
each country has specic taxation, admin-
istrative, nancial or similar requirementswhich need to taken into account. Thus,
despite what chains would like to do, in
many cases local systems have to be used
to supplement or replace the corporate
system, increasing the level o complexity
and raising the overall cost o running the
system. This challenge is becoming worse
as hotel companies expand to new and
developing countries, where issues such
as dierent character sets become more
o an issue.
Lastly, managing electronic channels
o distribution was also clearly identi-ed as a key challenge. Within Europe,
electronic distribution both GDS- and
Web-based has grown exponentially
over the past ve years, and hotels now
typically use dozens o ways to distribute
their product. However, the portolio o
channels diers greatly rom country to
country, meaning that to address target
markets, hotels typically have to manage
inventory and rate on multiple systems.
In most cases, updates need to be carried
out manually on extranets, which is timeconsuming (and thus expensive). In many
cases, hotel properties neglect to man-
age their distribution on such systems,
resulting in lost opportunities. Many
respondents also expressed rustration
with the OTA (Open Travel Alliance)
a standard that theoretically permits
distribution systems to interconnect and
thus eliminates the need to manage data
manually. While acknowledging that its
development is a step in the right direc-
tion, respondents claimed that its utility
is limited, it is not dened tightly enoughand everyone uses a slightly dierent
favor, thus using it to interace systems
requires major development work rom
both parties. Also in the electronic dis-
tribution area, respondents pointed out
that the level o technology inrastructure
needed to support distribution is grow-
ing as a result o an exploding look-to-
book ratio. While in the past, reservation
systems might have had to service (say)
50 availability / booking requests per
minute, now as a result o direct connects
to online travel agencies and the growth
o technologies such as Metasearch, the
same system may need to be capable o
servicing 1,000 or even 5,000 requests,
while at the same time only generating thesame number o conversions. To maintain
response speed, more powerul hardware
and more sophisticated systems must be
provided, but the investment is dicult to
justiy given that booking levels have not
increased.
Shrt t Mdim Trm PriritisAs discussed above, hospitality CIOs see
many challenges in running hospitality
I.T. systems in the European context.
Its not surprising, thereore, that their
priorities or 2007 and 2008 were oteninterconnected with these issues.
To acilitate consolidation and help
achieve a uniorm view o the customer,
the majority o international chains have
plans to standardize their PMS and other
core systems. Having a single set o sys-
tems minimizes the expense o develop-
ing interaces and acilitates the consoli-
dation o data. It was very noticeable that
i you divided the chains interviewed
into (lets call them) multinationals
(operating in Europe, U.S. and Asia) and
regional (operating primarily in single
countries within Europe), that the multi-
nationals seemed to be urther along this
path to standardization, and in practi-
cally all cases expected to be nishedby the end o 2007. Both types were en-
couraging properties to change over by
signicantly enhancing the unctionality
o their systems (i.e. not just switching
a PMS or a newer PMS to give a newer
and more expensive way o checking
people in and checking people out, but
adding signicant new unctionality in
the orm o revenue management and
customer recognition). Several chains
were also putting nancial incentives in
place to encourage existing properties to
change over to new systems.Many o the chains interviewed also
had the desire (and requently were ad-
vanced on plans) to move their core guest
acing systems above property into an
ASP-based solution. In most cases this o-
cused on the PMS, but sales and catering
was also requently mentioned. Benets
cited included reeing hotel properties
rom costly hardware purchase and main-
tenance, and overcoming the deployment
wheel-o-doom, whereby as soon as in-
Standardiz PMS
Mv cr sstmsabv prprt
Cnslidat gst data
enhanc nlin distribtin
Rcs in-rm sstms
Channl managmnt
Imprv data scrit / privac
enhanc nctinalit cr sstms
PCI
0 10 20 30 40 50 60
Figr 2.Shrt-trm Priritis erpan Hspitalit CIos
PERCENT
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stallation o a solution across the chain is
completed, an upgrade becomes available
and the entire process has to start again.
Having systems available on a central-
ized server is also advantageous in terms
o time to market. Upgrades in one place
and the entire chain are done at once.This desire to move to ASP solutions
goes a long way to explain the ocus on
communications inrastructure discussed
earlier, as the success o such solutions
depends 100 percent on having access
to high-quality, reliable, cost-eective
communications services. In act, several
interviewees admitted that currently they
were having only limited success in im-
plementing new systems, due primarily to
problems in battling the communications
problem. However all pointed out that the
benets o success are so great that it willhappen eventually!
A second priority was to improve
the consolidation o guest data. Mov-
ing towards a standardized ASP-based
solution will help to achieve the desired
chainwide holistic view o the customer,
as would having a single, standardized set
o core applications. However, there will
always be additional systems that need
to be interaced on a case-by-case basis,
and many respondents highlighted the
need or a set o standards to simpliy this
process. Most made reerence to HTNG
(Hotel Technology Next Generation) and
commented that while progress was be-
ing made, vendors need to commit more
thoroughly to the project and incorporate
its requirements into their systems. Manyalso recommended that HTNG take things
a step urther, and ocus on integra-
tion rather than just complex interaces.
Having a comprehensive guest database
would be a very valuable asset, and thus
respondents also stressed the need to
upgrade systems to provide high levels o
security, both to protect the asset and also
to conorm to legislation requirements
such as Sarbanes-Oxley andEU Privacy
Directives. However, given the diverse
types o legal structure (owned, managed
or ranchised), and diering rules and at-titudes as to data usage in dierent coun-
tries, implementing an eective global
standard was seen as highly challenging.
In the medium-term, respondents
indicated that implementing systems to
better manage electronic distribution
would become a priority. Most agreed on
the need to change current practices, but
also indicated that the limited number o
technology-based systems available were
not adequate. A single solution, capable
o managing not only rates and avail-
ability, but also content such as property
descriptions, hotel pictures and multime-
dia on any distribution channel is whats
needed. And in the long-term, many
respondents said that they would ocus
on enhancing the technology oeredin the guest room. Some o the items
mentioned included interactive TV, high
speed Internet access and real-time guest
inormation systems. There was a eeling
that what we currently oer was not very
appealing, and guest-acing technology
was an area where hotels could dierenti-
ate their product rom competitors. While
respondents indicated that a lot o money
would need to be spent in the medium- to
long-term, most were vague on their exact
plans, saying that there were more press-
ing issues to be solved rst.
Barrirs t ImplmntatinWith ambitious plans or their I.T.-based
system, respondents also noted that there
are signicant barriers to success. The
most requently cited challenge was a
critical shortage o skilled personnel.
With so many companies currently invest-
ing in enhancing their systems, nding
and retaining skilled people has become
critical. This applies equally to inra-
structure knowledge and to an in-depthunderstanding o hotel-specic systems
(Fidelio and Opera skills in particular
seemed to be in very short supply). The
problem is exacerbated by geography
its not enough to have the right
people, you need to have them in the right
place and capable o working in Europes
multicultural and multilingual environ-
ment. Finding people with knowledge o
local standards and local requirements is
also challenging but important, given the
expansion plans o many hotel chains.
Respondents elt that in many casessta shortage is caused by the act that
the I.T. unction is under-appreciated
within hotels. Oten it is a little orphan
tucked away in the nance department
that just doesnt get the recognition that
it deserves. Pay rates are noncompetitive
and opportunities or advancement are
limited, making it dicult to attract and
develop talent. Shining stars tend to be
poached away quickly both by vendors
suering rom a similar stang crisis,
Skilld ppl
Making bsinss cas
Vndr rganizatin
Rsistanc t chang
Lack standards
Inrastrctr availabilit/cst
Figr 3. Challngs Prcivd b erpan Hspitalit CIos
0 10 20 30 40 50 60
PERCENT
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and by online intermediaries needing sta
with similar skill sets, but oering more
tempting positions.
Making the business case to justiy
investment is also problematic. In Europe,
the high percentage o managed proper-
ties means that investments are otenjustied on a property-by-property basis.
Individual owners need to be convinced
o the need to update systems. However,
as the cost o I.T. has risen consistently,
but hasnt really developed much in terms
o unctionality, making a convincing
argument has become more dicult.
Instead o trying to mandate particular
systems, respondents recommend trying
to bundle value-added services into sys-
tems to make them more appealing to the
property. Closely linked to the diculty
in encouraging investment in I.T. is anindustry-wide resistance to change. The
types o I.T.-based systems being intro-
duced have the potential to radically alter
both management practices and day-to-
day operations, and thus its not surpris-
ing that many respondents anticipate
challenges in this area. The robustness
and reliability o systems is also an issue
here, as any ailures, however temporary,
can have a major eect on the credibility
o the I.T. department.
CnclsinThe survey results clearly show that
the use o I.T.-based systems within theEuropean hotel sector is rapidly develop-
ing. Better managed, more technologi-
cally advanced systems with very clear
strategic objectives are currently being
deployed, and their successul imple-
mentation should help to greatly enhance
productivity, customer service and thus
protability.
However its also clear that managing
such systems in the European context is
problematic. CIOs ace the challenge o
translating solutions developed or the
more homogeneous U.S. market to copewith the requirements o the more diverse
European situation. Despite this, CIOs
have ambitious plans or the uture. Most
are ocusing on standardization o sys-
tems using ASP-based technology as their
preerred strategy. Diculties in sourcing
appropriate communications inrastruc-
ture across the continent, coupled with
varying operational and reporting require-
ments in dierent countries and a critical
shortage o skilled personnel will make
this problematic. Similarly the shortage o
suitable vendors may delay the deploy-
ment o suitable solutions. However the
benets are so great that solutions (per-haps initially not optimum solutions, but
solutions none the less) will be ound and
these barriers overcome.
However its important that the next
generation o systems be more than just a
more technologically advanced version o
what we already have. The unctionality
o most hospitality I.T.-based systems has
not changed in 20 years. Several re-
spondents commented that hotel systems
seemed stunted that they had the
potential to be much more that they cur-
rently are, yet they continue to oer thesame eatures and unctionality they have
always had. With such radical changes
being introduced in the way our systems
are being delivered, one can only hope
that the major hotel chains have taken
this opportunity to also re-examine their
unctionality and strive to develop the
hotel system o the uture.
August 1920, 2007
Sheraton charlotte Airport Hotel
charlotte, N.c. USA
HFTP presents a brand new educationopportunity, with the Assistant ControllersConference. The conference will offer aprogram designed to keep professionalscurrent on the latest industry standards andtrends. Look for the omplete programand registration on the HFTP web site.
HFTP Assistant controllers conferene
NEW! Find more info atwww.hftp.org.
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Managers and owners are constant-
ly searching or nancial bench-
marking data or all aspects
o their companys business. Company
executives want to make sure that their
business is making the mark by compar-
ing revenues and expenses to competitors
in their industry. In this particular case,
the HFTP Research Institute developed
a benchmarking survey to determine the
industry standard or inormation tech-
nology (I.T.) spending and other issues
acing technology executives.
The survey was distributed to execu-
tive level technology managers because
these are the individuals that make yes-
or-no decisions pertaining to technology
implementation at multiple properties.
This survey specically targeted lodging
industry executives because this segment
o the hospitality industry has a dened
hierarchy when it comes to the I.T.department. In the case o clubs, technol-
ogy at many properties is managed by the
controller or another high ranking ocial.
By conducting this survey, HFTP
wants to provide a look at the big picture
as it pertains to technology spending.
Technology spending is going to vary
rom company to company depending
upon their corporate philosophy and
view on technology implementation.
Some companies jump in and install new
technologies as soon as they are available
to stay on the cutting edge, while others
only employ technology when it is neces-
sary to stay competitive. For this reason
alone, it is hard to determine an industry
standard on technology spending.
Rspndnt PrlThe 2007 HFTP Research Institute
Technology Survey was distributed to 85
HFTP members who hold executive level
I.T. positions at their respective compa-
nies. O this group, 14 members repre-
senting nearly 4,000 properties worldwide
responded, yielding a 17 percent response
rate. Hal o the responses were rom
those holding the position o director.
Those with the title o director included
members with the title o director o
I.T., director o inormation systems,
or director o inormation services. Jobtitles o other respondents included chie
inormation ocer, vice president o
I.T., regional director o I.T. and revenue
systems manager.
Hal o the responses were rom resort
properties, ollowed by three responses
rom hotel management companies, three
rom hotel companies and one respondent
rom a casino company. Respondents
were also asked about the types o proper-
ties within their companys portolio.
The types o properties represented by
the respondent companies ranged romall suite and boutique hotels to resorts,
convention/conerence centers, ull
service hotels, limited service hotels, and
timeshare properties. Again, the majority
o the respondents worked or compa-
nies managing resort properties ollowed
closely by ull service hotels. Two o the
respondents in the resort category work
exclusively with timeshare properties.
The number o properties within each
Tanya Venegas, MBA, MHM, is program director o the HFTP Research Institute at the University o Houston.
Chart 1. Indstris Rprsntd
Hotel Mgmt. Co.21.4%
Resort50%
Hotel21.4%
Casino7.2%
Industry Research
I.T. SPeNDING STRATeGIeSA look at lodging managers current technology expenses
By Tanya Venegas, MBA, MHM
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companys portolio ranged rom one at a
resort company up to over 3,500 proper-
ties or a respondent rom a hotel man-
agement company.
Company annual revenues or the
respondents ranged rom $10 million or
a company with one property up to in ex-cess o $8 billion dollars or a large hotel
management company. This proves that
the I.T. executives that responded to this
survey hale rom many dierent types
and sizes o companies. From the small
one property resort earning $10 million
in revenues a year up to the large hotel
management company earning billions.
When asked which country their
company operates in all o the respon-
dents indicated that they operate in North
America. In addition, three companies op-
erate properties in Asia and Europe, twoin Australia, and one company operates
in Arica. Those companies that oper-
ate in multiple continents include hotel
management, resort and hotel companies.
This proves that those responding to this
survey are exposed to diverse technol-
ogy environments in various continents
around the world.
Rspndnt RspnsibilitisRespondents were also asked i they were
responsible or providing I.T. to all o theproperties within their companys port-
olio. All but three respondents indicated
that they solely oversee their companys
I.T. unction. Those individuals respon-
sible or a raction o their companys I.T.
hold the titles o CIO, regional director o
I.T. and revenue systems manager. Those
that oversee some o their employers
properties work or companies with large
portolios ranging in size rom 75 proper-
ties up to over 3,500 properties.
Another aspect o responsibility is
supervision. Respondents were asked howmany employees they directly supervise
within their company. These responses
varied rom a revenue systems manager
who is responsible or none all the way up
to a CIO in charge o 80 employees. Upon
urther analysis there appears to be a cor-
relation between a respondents title and
the number o employees they supervise.
For example, those holding a director
position tend to directly supervise a small
group o between two and seven employ-
ees. CIOs in this study supervised more
employees than the rest o the respondents
which relates directly to their level o
responsibility.
I.T. Spnding
I.T. spending diered signicantly romcompany to company. Respondents were
asked to report their companys 2006 total
revenues and 2006 I.T. budget in dollar
amounts which were utilized to calculate
the percentage allocated to each compa-
nys I.T. budget. Out o eleven companies
providing this inormation, the responses
or I.T. spending ranged rom 0.5 percent
to 2.5 percent o total revenues with an
overall average o 1.39 percent or all
properties. In this category, two respon-
dents let the question blank with one re-
spondent at a hotel management companyindicating that their budget is directly
tied to company needs. The dream o I.T.
executives is to have an I.T. budget on an
as needed basis.
As exhibited in Table 1 below, resort
properties indicated that they spent the
greatest amount on technology with a
1.61 percent average as compared to only
0.74 percent or hotel respondents. It is
interesting to note that resort companies
in this survey, as a percentage o rev-enues, spent more than twice as much as
hotel respondents.
Respondents were also asked to report
whether their 2007 I.T. budget would
either experience an increase or decrease.
Six companies indicated an increase in
I.T. spending and that their budgets will
realize an increase ranging rom 4 to 20
percent depending on the company. Three
o these companies indicated a minimal
4 to 5 percent increase to accommodate
or cost o living increases or salary
and vendor support increases. For thosecompanies reporting a decrease in their
I.T. budget these changes ranged rom 10
percent up to 50 percent. The company
reporting a 50 percent decrease indicated
Tabl 1. Hw mch was spnt n I.T. in 2006?
% o 2006Revenues
CapitalExpenditures as
% o Revenue
CapitalExpenditures as
% o I.T. Budget
Resort Properties (7) 1.61 0.42 26.27
Hotel Properties (3) 0.74 0.25 50.0*
Overall (11) 1.39 0.42 32.67
*Average ith only to companies reporting.
Chart 2.Ttal Annal Rvn in 2006
$10 50 million31%
$51 100 million31%
$101 million 1 billion
31%
1 billion +15%
Chart 3. Prcntag t b Spnt in2007 ovr r undr 2006 Bdgt
Increase44%
Decrease21%
Stay the Same14%
No Response21%
-
8/14/2019 Bottomline-2007-06 07
24/362 June/July 2007
the change was due to the implementation
o a new property management system
and point-o-sale system in 2006. In addi-
tion, two respondents indicated that their
budget will remain the same and three
respondents did not answer this ques-
tion or were unaware o changes in their
technology expenditures or 2007.
I.T. Capital expnditrsIn addition to overall I.T. spending,
respondents were asked to report how
much their company spent on I.T. capital
expenditures in 2006. As a percentage o
total revenues, I.T. capital expenditures
ranged rom zero at a company that oper-
ates hotel properties up to 0.75 percent at
a hotel management company.
Capital expenditure amounts were also
analyzed as a percentage o the overall
I.T. budget. Again, the lowest gure wasrom a hotel company that reported no
I.T. capital expenditures in 2006 up to
100 percent or another hotel company.
These two responses appear to be outliers
since the rest o the respondent compa-
nies spent anywhere between 7.1 percent
and 42.9 percent o their technology
budget on capital expenditures.
otsrcingMany companies utilize outsourcing
because it is more cost eective than hir-
ing an additional employee and training
them in that competency. Respondents
were asked what percentage o the I.T.
unction their company outsourced. For
the purposes o this study, outsourcing
was dened as an arrangement in whicha company provides services or another
company that could also be provided in-
house. Four respondents (30.8 percent)
indicated that their company does not par-
ticipate in outsourcing, and our additional
respondents (30.8 percent) indicated that
they outsource 5 percent or less o their
I.T. needs. The remaining ve respondents
(38.5 percent) indicated that they out-
source between 25 and 40 percent.
When analyzing outsourcing by sec-
tor, the type o companies indicating the
most outsourcing needs were resorts andthe sole casino respondent. The casino
respondent indicated that they outsource
40 percent o their I.T. needs, which is to
be expected since casinos have very com-
plex technology requirements. The seven
resort respondent properties ollowed in
second place by outsourcing 13 percent
o their technology needs. The interesting
actor in this segment is that respondents
ell into opposite ends o the spectrum.
Four o the respondents outsourced 5 per-
cent or less, while the remaining three re-spondents in the resort sector outsourced
25 percent to 30 percent o their technol-
ogy needs. In addition, hotel respondents
outsourced 8 percent and hotel manage-
ment company respondents outsourced a
mere 3 percent o their technology needs.
The percentage o the I.T. unction
outsourced can be based on many ac-
tors. In this case, smaller resort and hotel
companies indicated the greatest amount
o outsourcing (25 to 30 percent); while
larger companies expressed that they
outsourced the least (no outsourcing to 5percent). These percentages make sense
when examining the complexity o the
company and I.T. needs. Smaller compa-
nies do not want to be burdened with hir-
ing employees to cover every technology
competency. On the other hand, larger
lodging companies have a greater need
and can hire employees to cover all I.T.
requirements.
Survey participants were also asked to
list what major I.T. unctions are out-
sourced by their company. Respondents
indicated several unctions which were
outsourced by their companies including:
payroll processing, central reservations
and booking, wiring, cabling, network
management and support, server instal-
lations, programming, sotware support,PBX support, wireless HSIA, and guest
network help desk. O those unctions,
outsourced network management, support
and security management appeared the
most oten. Others that were mentioned
more than once included wiring and
cabling, programming, and high speed
Internet access.
Tchnlgis Implmntd in 2007Survey participants were asked what
major technologies or solutions they
would be implementing or upgrading in2007. Specically, they were asked i
they would be installing the ollowing:
accounting system, back oce system,
property management system, point-o-
sale system, data security system, energy
management system, guest room technol-
ogy, revenue management system and
new wiring/cabling. As shown in Chart 4
(page 25), the majority o the respondents
will be implementing new wiring/cabling
(71.4 percent) and guest room technology
(64.3 percent). These two technologiesgo hand-in-hand since the majority o
new guest room technologies are Inter-
net-based. Other technologies that ell in
the middle included data security (50.0
percent), property management system
(42.9 percent), accounting system (42.9
percent), and revenue management sys-
tem (35.7 percent). Few companies intend
to implement new point-o-sale systems
(28.6 percent), energy management
systems (21.4 percent) and back oce
systems (21.4 percent) in 2007.
In addition, survey participants wereencouraged to write in other technolo-
gies that their company was planning on
implementing in 2007. These technolo-
gies included business intelligence sot-
ware, customer relationship management
(CRM) databases and programs, VoIP
capabilities, homeshoring, spa processing
sotware, and human resources inorma-
tion systems (HRIS). Most hospitality
proessionals have heard o CRM and spa
processing sotware but may be unamil-
Tabl 2. What I.T. nctinsds r cmpan tsrc?
Application Building
Central Reservations
Guest Netork Help Desk
Netork Management and Support
Netork Security
Payroll Processing
PBX Support
Programming
Report writing
Server Installations
Sotare Support
wireless HSIA or Guests
wiring and Cabling
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8/14/2019 Bottomline-2007-06 07
25/36The Bottomline 2
iar with homeshoring or the capabilities
o business intelligence sotware. First
o all, homeshoring is the word utilized
to describe allowing employees to work
rom home, typically reerring to call
center employees. Many companies
have begun investing in the technologyto allow employees to work rom home
while elding reservations or customer
service phone calls. Business intelligence
sotware is another term that many may
have heard beore, but are not amiliar
with its capabilities. Basically, business
intelligence sotware enables executives
to scour through excessive amounts o
data to determine patterns and solutions.
Another type o useul sotware which
was mentioned is a human resources
inormation system (HRIS). An HRIS is
a sotware system which allows humanresources proessionals to keep track o
employee inormation in a database. For
example, these databases can contain
inormation such as department, job title,
salary history, supervisor and visa status
making it simple to create government re-
quired reports. Another name or a HRIS
is human resources management system
(HRMS).
Challngs Facing I.T. exctivs
Everyone in every position aces chal-lenges on the job, so these industry execu-
tives were asked what specic challenges
they ace on a daily basis. The ollowing
are the challenges listed by these tech-
nology industry proessionals. All o the
responses can be broken down into our
categories: budgeting issues, employment
issues, technology implementation issues
and other technology issues.
Budgeting Issues
Budgeting o I.T. yearly expenses and
capital items Capital unding and prioritization
I.T. tends to be an aterthought in our
business, which makes it hard to stay
ahead o the curve
Keeping current with a reasonable an-
nual capital budget.
Employment Issues
Developing managers to be directors
because many have phobias about
administrative duties
Employee retention
Getting approval to sta at proper
levels
Implementation Issues
Implementation o new/existingsystems
Implementation o technologies in new
construction because architects tend
not to make provisions or cabling and
equipment room environment
Inrastructure upgrade on backbone
cabling
Lack o interoperability and interex-
change o system components
Setting correct expectations and hav-
ing enough resources to complete
projects in a timely manner
Standardization
Vendor incompetence
Other Technology Issues
Changes in ownership
PCI and SOX Compliance
exciting Nw TchnlgisThe nal question to the 2007 HFTP Re-
search Institute Technology Survey asked
what I.T. executives elt was the most
exciting technology that will impact the
hospitality industry in the next 24 months.
Out o the 12 responses to this question,
six respondents (50 percent) mentioned
that RFID will be the next technology
to impact the hospitality industry. RFIDstands or radio requency identica-
tion and is a technology that uses radio
waves to automatically identiy items. For
example, items in a guest room can be
tagged with RFID tags and the hotel can
track the movement o items in and out o
a room. This technology has many impli-
cations and can greatly assist in inventory
and loss prevention.
Several o the new technologies
mentioned relate to sending and receiving
data over an Internet connection including
VoIP, IPTV, and slingboxes. Voice overInternet Protocol (VoIP) was mentioned
by two respondents. Basically, this tech-
nology allows user to make Internet based
phone calls rather than utilizing a regular
phone line. Another internet technology
listed by these technology executives was
IPTV, Internet Protocol Television. IPTV
reers to a system which receives digital
video over the Internet and displays it
as a video stream on the television. The
third type o Internet device mentioned is
0 10 20 30 40 50 60 70 80
Chart 4. Majr Tchnlgis/Sltinst b Implmntd r upgradd in 2007
Back Ofce 21.4%
Energy Management 21.4%
POS 28.8%
Revenue Management 35.7%
Accounting 42.9%
PMS 42.9%
Data Security 50%
Guest Room Technology 64.3%
wiring/Cabling 71.4%
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8/14/2019 Bottomline-2007-06 07
26/362 June/July 2007
a slingbox. A slingbox is a device which
is hooked up to the television allowing
the user to view and control their televi-
sion over the Internet. This allows the
user to view television content playing on
their television at home rom a computer
anywhere in the world. This technology
has the potential to impact the number o
guests viewing pay per view movies in
their hotel rooms.These I.T. executives also mentioned
several other cutting edge technologies.
These technologies include near-eld
communications (NFC), business intel-
ligence sotware, mobile computing,
and energy management. Most o these
technologies do not need an explanation
because many managers are amiliar with
ing industry and issues acing hospitality
technology executives. The respondents
to this survey represent nearly 4,000 lodg-
ing properties around the world. As oten
argued, not enough money is spent on I.T.
and this survey shows that on average the
respondents are spending 1.39 percent ototal company revenues on this unction.
These proessionals also indicated that
many o the challenges center on the I.T.
budget and capital improvements. As
industry executives start to budget or
next year they can look orward to new
technologies on the horizon including
VoIP, slingboxes and IPTV. Some hotels
have already begun implementing these
technologies and with uture renovations
many more installations are to ollow.
I you have any questions about the
results o this survey contact the HFTPResearch Institute.
Srcs Wi-Fi Planet. (2002, September 27).
Near-Field Communications. Re-
trieved May 20, 2007 rom www.
wi-planet.com.
Tabl 3. What is th mst xciting nw tchnlg that blivwill act th hspitalit indstr in th nxt 24 mnths?
Business Intelligence Near Field Communications
Energy Management RFID
IPTV Slingboxes
Mobile Computing VoIP
mobile computing and energy manage-
ment, but NFC may be a new concept to
some. NFC reers to the technology that
allows short-range wireless connectivity
between devises (Wi-Fi Planet, 2002).
NFC technology has been compared to
Bluetooth, but with some restrictions.
NFC technology connects objects which
are no urther than 8 inches apart and
allows or the transmission o data at 212kilobits per second (Wi-Fi Planet, 2002).
The major advantages o NFC are that it
is inexpensive to implement at a cost o
20 cents per chip and utilizes less power.
CnclsinThis survey was intended to shed some
light on technology spending in the lodg-
http://www.wi-fiplanet.com/http://www.wi-fiplanet.com/http://www.wi-fiplanet.com/http://www.wi-fiplanet.com/ -
8/14/2019 Bottomline-2007-06 07
27/36The Bottomline 27
Its been almost a year since I shared the stage with three
esteemed colleagues at HITEC 2006 and talked about thechallenges o acquiring a Revenue Management System
(RMS). Since then, although Ive had innumerable discussions
with clients about RMS acquisition strategies, the number one
question remains: How do I know when Im ready? You
would think the central ocus might be on system unctionality
or integration issues; or implementation and support; or on the
vendors background and list o clients. But these questions take
a back seat to the undamental question o knowing when youre
ready or an RMS.
So let me begin by laying my cards on the table. I believe that
in the not too distant uture RMSs will be as common as PMSs.
The complexity o distribution combined with shorter lead times
and the gravitation o all segments (transient and group) to theInternet makes it impossible, even today, or hotels to optimize
demand manually. As well, except perhaps or the smallest o
hotels, a dedicated revenue management person is not just a
needed resource, but an essential one. At the very least, smaller
hotels should nd ways to share the position or outsource the
role altogether.
Its interesting, thereore, that the decision making process or
RMS acquisition is less about the absolute unctionality o a giv-
en system and more about whether the hotel is really ready or a
sophisticated RM tool. Few would argue that most computer sys-
tems are highly under-used. A perect example is the traditional
property-level sales/catering system. Sales/catering systems havehad revenue management unctionality or 20 years, but how
many hotels ully use eatures like selective selling guidelines,
F&B prot proles and dynamic baselines? When it comes to ac-
quiring an RMS, the crux o the issue is knowing what questions
to askyourself, not the RMS vendor. The rst two questions may
not be the most interesting, but certainly the hardest.
Qstins t AskIs there an established revenue management culture at the
property?When it comes to revenue management there are three
primary pillars (or building blocks) or organizational change.
The rst involves building a culture o revenue management
within your organization by making RM a priority throughoutthe hotel. This means aligning all revenue centers to one central
goal optimizing the asset. The second is the development o
an integrated decision making orum to overcome traditional
departmental barriers to revenue optimization. The third is to be
willing and ready to shit your thinking rom tactical to strategic
RM. Hotels tend to ocus on the tactical side o Revenue Manage-
ment, i.e. opening and closing rates and dates and lengths o stay,
channel by channel. A more strategic question would be whether
the pricing hierarchy is optimal or the position the hotel holds in
the competitive marketplace.
Bonnie Buckhiester is a member o the International Society o Hospitality Consultants and president o Buckhiester Management USA Inc. in Washington DC.Contact Buckhiester at [email protected].
ReADy FoR RMS?
Knowing when a revenuemanagement system isright or your property
By Bonnie Buckhiester
HITeC 2007 Spakr
Tsda, Jn 26
4 5:15 p.m.
Untangling the Network of Distribution Channelsand Their Impact on Revenue Management
