travel, leisure & tourism
Hospitality Benchmark 2012 Figures make it clear! kpmg.nl
Jos Sweers Ilse de Graaff
Foreword Contents
1
2
3
Foreword
1
About the authors
2
Introduction
3
Methodology
4
Market indicators
6
1.1 Key ratios 1.2 Market segmentation 1.3 Personnel
6 10 15
Benchmark analysis
18
2.1 Benchmark analysis 2011/2010/2009
18
Outlook for 2012-2014
25
Explanation of terms used
28
About KPMG in the Netherlands
30
bKPMG, | 7/2011 Amstelveen, June 2012
© 2012 KPMG Accountants N.V. All rights reserved.
For the eight consecutive year, KPMG’s Travel, Leisure & Tourism sector group presents its annual Hospitality Benchmark. We would like to thank all the hoteliers who contributed to our study for their cooperation. In the current challenging economic circumstances, the Benchmark will give hoteliers insight into key ratios and provide a fresh perspective on the latest developments in the hotel industry. This report will allow you to compare the results of your own organisation with the recorded benchmarks for the Netherlands as a whole, the Amsterdam and Schiphol region, and the rest of the country. It will also provide insight into market developments and distribution channels. If you would like to exchange ideas about the vision behind the figures or any of the other topics in this report, you will find a professional discussion partner in KPMG.
© 2012 KPMG Accountants N.V. All rights reserved.
We hope that you will enjoy this report and trust that our study will help you develop your own vision regarding the hospitality market. Amstelveen, 30 June 2012
Jos Sweers Ilse de Graaff Travel, Leisure & Tourism Travel, Leisure & Tourism Segment Leader Manager KPMG Accountants N.V. KPMG Accountants N.V. sweers.jos@kpmg.nl degraaff.ilse@kpmg.nl
Hospitality Benchmark 2012 | 1
About the authors
Introduction
Jos Sweers and Ilse de Graaff have been working as accountants in KPMG’s Travel, Leisure & Tourism sector group for a number of years. Jos heads a multi-disciplinary team that handles financial statement audits, audit-related engagements and advisory engage ments relating to strategic and tactical issues, such as financing issues, mergers and acquisitions, centralisation, outsourcing, feasibility studies and distribution management. Jos and Ilse share a passion for the hotel industry. Each year, they publish the KPMG Hospitality Benchmark report.
This report includes a benchmark for hotel revenue and cost patterns. In addition, the authors outline their vision with respect to developments in the hotel market. Both their activities and this report are consistent with the core activity of the Travel, Leisure & Tourism sector group: reinforcing and sharing KPMG’s knowledge of the hospitality sector.
As in previous years, our 2012 study of the hotel sector was conducted in the second quarter of the year. This year, a record number of hotels participated. We greatly appreciate your contribution to our research! A more extensive and more reliable benchmark will help hoteliers gain insight into their market position in these difficult economic times. As in previous years, we provide this sector report free of charge. This KPMG Hospitality Benchmark report consists of three parts: 1 Market indicators 2 Benchmark analysis 3 Outlook for 2012-2014 The first part of the report provides insight into the development of the key ratios used to manage organisations. Segmentation at various levels, such as star rating, location, room size and price band, will help you compare your organisation with other organisations in the sector.
The second part of the Hospitality Benchmark report consists of the benchmark analysis. This allows you to compare your profit and loss account to that of other hotels in the market. The profit and loss account is presented as a percentage of total sales revenue. The various segmentation levels allow you to reliably assess your hotel’s develop ment. In addition, the benchmark enables you to test and, where necessary, improve your budgeting process. This year, we have added sales revenue from reception venues to our sales revenue group. In the final part of the report, we present our outlook for 2012-2014. Based on our extensive experience in the hotel market, we use this report to share our vision regarding the future of the sector. The development of the market is the annually recurring theme. This year, we also include information on the anticipated future impact of re-financing and the trend towards sustainability.
About the authors | Introduction
© 2012 KPMG Accountants N.V. All rights reserved.
© 2012 KPMG Accountants N.V. All rights reserved.
Hospitality Benchmark 2012 | 3
Methodology Each year, KPMG’s Travel, Leisure & Tourism sector group conducts a large-scale benchmark study in the Dutch hospitality market.
The study method is based on directional in-depth interviews (for the purposes of the quantitative research) and surveys. Approximately 1,400 hotels in the three-, four- and five-star hotel segment are registered with the Chamber of Commerce in the Netherlands.
First we classified the respective hotel organisations by size. We then approached approximately 1,000 three-, four- and five-star hotels in the Netherlands with 20 or more rooms. Of those, 28% completed and returned the survey. This is a very good result.
Breakdown of participants Number of hotels
Number of rooms
Average number of rooms per hotel
2011
2011
2010
2009
2011
2010
2009
282
28.856
16.011
23.381
102
87
104
Groningen, Friesland en Drenthe
23
1.583
883
1.411
69
63
74
Overijssel
15
1.100
690
806
73
86
62
Gelderland
28
1.973
1.780
1.680
70
66
65
Utrecht en Flevoland
18
1.496
1.009
2.005
83
72
100
Noord-Holland
83
12.414
4.350
9.249
150
114
145
Zuid-Holland
45
5.014
4.050
4.010
111
127
138
Total Province
Zeeland
9
604
790
768
67
72
59
Noord-Brabant
29
2.683
1.358
1.901
93
68
106
Limburg
32
1.989
1.101
1.551
62
55
67
Size < 50 rooms
82
2.708
2.244
2.456
33
33
34
50 - 100 rooms
109
8.216
4.858
5.263
75
76
72
101 - 150 rooms
42
5.227
4.035
4.468
124
119
124
> 150 rooms
49
12.705
4.874
11.194
259
271
254
Location Amsterdam + Schiphol
60
10.111
4.275
7.191
169
122
189
Other
222
18.745
11.736
16.190
84
79
87
Star rating Three stars
99
7.049
4.353
2.963
71
59
51
Four stars
170
20.035
10.247
18.313
118
104
117
Five stars
13
1.772
1.411
2.105
136
128
191
Price band
4 | Methodology
< € 65
61
5.095
3.383
4.091
84
83
97
€ 65 - € 80
81
6.462
3.795
5.508
80
68
90
€ 81 - € 105
82
7.963
5.791
8.275
97
97
102
> € 105
58
9.336
3.042
5.507
161
113
134
© 2012 KPMG Accountants N.V. All rights reserved.
This report was prepared on the basis of the data obtained from the surveys. The data have not been audited. The response rate of 28% represents approximately 34% of the capacity (based on the room count) of the accommodation-providing businesses in the three-, four- and five-star market segment. The share of respondents from the Randstad region (the conurbation in the west of the Netherlands) increased by 10% compared to last year. The overall rise in the number of participants meant that there was a major increase in the number of participants from outside the Randstad region.
Respondents by property management (%)
Ownership 37
Lease 63
Respondents by management form (%)
19
31
Independent operator without franchise formula Independent operator with franchise formula Under management of domestic or international chain Part of a chain of own hotels
7
Together, the 282 hotels that participated account for 28,856 rooms. The market for hotels with a star rating has a total capacity of approximately 95,000 rooms. Approximately 85,000 of these rooms are in the three-, fourand five-star market segment.
43
Our sample can be classified by management form and property management as shown below. It is important to note that it is not our intention to draw conclusions regarding the entire population of accommodation-providing businesses. Instead, we aim to provide guidance for interpreting trends in the hotel sector.
© 2012 KPMG Accountants N.V. All rights reserved.
Hospitality Benchmark 2012 | 5
1 Market indicators The key ratios for hotel organisations (occupancy rate, average room rate, revenue per available room (RevPAR) and total revenue per room) are shown in the accompanying table. The adjoining table shows the segmentation of the key ratios by region, room size, star rating and price band. 1.1
Key ratios
In the current downturn caused by the recession, the hotel sector keeps hoping for a recovery in the market. In 2010, a small increase in the occupancy rate and the average room rate appeared to indicate that a recovery was on the horizon. While this trend seems to have continued in 2011, it has not had any positive impact on total revenue in the hotel sector. The average occupancy rate for the Netherlands as a whole increased by 1.6% to 65.2%. Another positive development in 2011 was the increase of the average room rate by EUR 3 to EUR 90 (2010: EUR 87). Combined,
6 | 1 Market indicators
these two developments resulted in the RevPAR increasing by 8.0% in 2011 to EUR 59 compared to the previous year. However, this increase in the occupancy rate did not occur in all the regions and all market segments. In fact, part of the hotel sector has been experiencing a decrease in occupancy rates that has continued unabated since the start of 2008. This mainly concerns the provinces of Overijssel and Zeeland, where the occupancy rate fell by 11.0% and 1.5% respectively. By contrast, in the Utrecht and Flevoland region, which recorded the biggest increase, the occupancy rate rose by 2.2% to 65.8%. In the province of North-Holland, the increase was smaller and came to 1.2%. However, the resulting average occupancy rate of 74.3% means that North-Holland continues to lead the Netherlands on this key ratio. In 2010, we saw that three-star hotels in particular struggled, while four-star and five-star hotels benefited from a lower room rate. Remarkably, this trend now seems to have reversed. In 2011, three-star hotels saw their occupancy rate increase by 4.6% to 64.8%. In the Amsterdam and Schiphol region, three-star hotels recorded an even greater increase in their occupancy rate. Here it increased by 16.2% to 78.1%. By contrast, at four-star hotels the occupancy rate decreased by 0.5%
to 65.7%. Five star-hotels, however, also recorded an increase in their occupancy rate, which came to 63.1% in 2011 (2010: 62.3%). It appears that in 2011, due to the recession, guests preferred cheap hotels. A remarkable development in 2011 was the decrease in total revenue per room, which on average fell by 14.4% to EUR 39,694. Three-star hotels recorded the steepest decrease. Here, total revenue per room decreased by 28.5% and came to EUR 28,935. In addition, total revenue in the four-star market segment also decreased, by 11.4%. Despite an increase in demand and in the average room rate, rooms in this market segment generated less revenue in 2011. This may be explained by the fact that guests are making less use of the other facilities available at hotels such as restaurants and reception venues. This is, in turn, is attributable to a decrease in the number of conferences, workshops, receptions and parties that are being organised. Five-star hotels, however, did manage to increase their total revenue by 6.2% to EUR 95,248. In the five-star segment, it seems, guests are relatively unaffected by the crisis, or hoteliers are better able to r etain customer loyalty: guests continue to have meals at the hotel restaurant.
© 2012 KPMG Accountants N.V. All rights reserved.
Table 1.1.1: Market indicators Occupancy rate % Total
Average room rate (€)
RevPAR (€)
Total revenue per room (€)
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
65,2
63,6
62,5
90
87
90
59
55
56
39.694
46.374
44.332
59,3
59,8
62,1
78
73
85
46
43
53
39.870
42.815
41.651 41.873
Province Groningen, Friesland and Drenthe Overijssel
54,4
61,2
56,0
79
68
79
43
42
44
35.005
48.785
Gelderland
60,7
60,1
59,2
70
73
78
43
44
46
44.530
49.477
47.663
Utrecht and Flevoland
64,3
63,6
63,0
78
76
88
50
48
55
39.822
66.825
46.646
Noord-Holland
74,2
73,1
66,9
115
114
105
86
83
70
45.316
50.990
46.618
Zuid-Holland
63,9
61,6
60,2
87
91
93
56
56
56
46.702
46.482
40.880
Zeeland
63,1
64,1
67,6
81
83
82
51
53
55
25.329
26.159
31.087
Noord-Brabant
62,2
60,1
60,4
77
78
78
48
47
47
29.684
32.610
39.892
Limburg
60,9
59,9
59,5
79
88
87
48
53
52
31.589
45.220
48.228
Size < 50 rooms
62,9
61,2
63,7
83
87
86
52
55
55
42.957
43.002
43.188
50 - 100 rooms
64,7
65,5
60,7
85
83
90
55
55
55
38.221
51.341
46.242
101 - 150 rooms
64,8
63,2
63,0
92
86
82
60
55
52
36.879
43.302
42.933
> 150 rooms
70,9
65,6
63,3
110
103
103
78
67
65
41.646
44.466
43.926
Location Amsterdam + Schiphol
77,7
73,1
70,9
127
123
122
99
90
86
50.549
56.815
49.980
Other
61,9
61,5
60,8
80
79
84
49
49
51
36.152
43.993
43.101
Star rating Three stars
64,8
60,2
61,8
76
67
78
49
40
48
28.935
40.441
35.019
Four stars
65,7
66,2
63,0
88
91
87
58
61
55
39.033
44.057
43.854
Five stars
63,1
62,3
58,6
216
189
201
136
117
118
95.248
89.649
85.034
Price band < € 65
61,5
61,7
60,3
54
54
57
33
34
34
27.419
39.416
31.668
€ 65 - € 80
62,8
60,5
62,0
72
72
74
45
43
46
29.989
36.802
38.322
€ 81 - € 105
66,3
67,0
63,5
93
92
92
61
62
58
39.047
47.004
45.203
> € 105
71,3
64,8
63,7
149
157
145
106
102
92
61.688
68.392
62.279
© 2012 KPMG Accountants N.V. All rights reserved.
Hospitality Benchmark 2012 | 7
Table 1.1.2: Occupancy rate Occupancy rate (%)
Total
2011
2010
2009
Three stars
Four stars
Five stars
Total
Three stars
Four stars
Five stars
Total
Three stars
Four stars
Five stars
Total
64,8
65,7
63,1
65,2
60,2
66,2
62,3
63,6
61,8
63,0
58,6
62,5
Location Amsterdam + Schiphol
80,5
78,3
67,7
77,7
61,9
77,5
71,2
73,1
81,5
70,0
65,0
70,9
Other
60,8
62,7
55,6
61,9
60,0
63,2
55,0
61,5
59,5
61,8
47,4
60,8
Three stars
Four stars
Five stars
Total
Three stars
Four stars
Five stars
Total
Three stars
Four stars
Five stars
Total
76
88
216
90
67
91
189
87
78
87
201
90
Amsterdam + Schiphol
96
110
274
127
71
113
238
123
93
100
218
122
Other
71
83
122
80
67
85
148
79
76
85
170
84
Table 1.1.3: Average roomrate Average roomrate (€)
Total
2011
2010
2009
Location
Tables 1.1.2 and 1.1.3 provide a detailed overview of the occupancy rate and the average room rate in 2009, 2010 and 2011. The most remarkable increase shown in these tables is the increase in the occupancy rate in the three-star market segment in the Amsterdam and Schiphol region, where it rose by no less than 16.2% to 78.1%. In addition, the average room rate in this market segment increased by EUR 21 to EUR 92. This suggests that increasing price awareness has led to more demand for three-star accommodation. Four-star hotels in the Amsterdam and Schiphol region also recorded an increase in their occupancy rate, which
8 | 1 Market indicators
rose by 0.8% to 78.3%. Their average room rate, however, decreased by EUR 3. Among five-star hotels in this region, the occupancy rate fell by 3.5% and came to 67.7%, but the average room rate increased by EUR 36. In the rest of the Netherlands, occupancy rates levelled off, with three- and fivestar hotels recording a fractional increase. A decrease in the occupancy rate was recorded only in the four-star segment, where it fell by 0.5% to 62.7%. In this segment, there was also a marginal decrease in the average room rate by EUR 2. By contrast, the average room rate in the three-star segment increased by EUR 4 to EUR 71. In 2011, as in 2010, there was again a major
decrease in the average room rate at five-star hotels, which fell by EUR 26 to EUR 122. As in 2010, the biggest increases in room and occupancy rates were recorded in the Randstad region. This is usually the first region to show signs of recovery. Despite these more positive figures, total revenue per room continues to fall. Although there has been an increase in the number of rooms booked, less revenue is being generated per room. It appears that guests are cutting down on restaurant and other expenditure, which means that hotels are still in a weak financial position despite increasing demand.
© 2012 KPMG Accountants N.V. All rights reserved.
© 2012 KPMG Accountants N.V. All rights reserved.
Hospitality Benchmark 2012 | 9
1.2
Market segmentation
Traditionally, market segmentation in the hotel industry is based on various guest profiles, the main profiles being business and leisure. The accompanying table provides insight into market segmentation in 2011, 2010 and 2009. Optimising revenues requires insight into the various distribution channels. To this end, on pages 12 and 13 we provide an overview of market segmentation, showing the following distribution channels: • Walk-ins • Direct contact (email and telephone) • Own website • Own reservation system • Online third- party booking agents • Tour operators/travel agents • Auction websites Last year, we expanded our study to include auction websites. On pages 12 and 13 we also include a table showing guests’ area of origin.
10 | 1 Market indicators
© 2012 KPMG Accountants N.V. All rights reserved.
Table 1.2.1: Market segmentation Business individual Total
Business group
Leisure individual
Leisure group
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
35
35
34
16
17
16
39
38
42
10
11
8
32
45
39
17
8
11
45
38
46
6
9
4 20
Province Groningen, Friesland and Drenthe Overijssel
21
19
26
14
8
10
46
41
44
19
32
Gelderland
28
27
29
26
22
23
37
41
40
9
11
8
Utrecht and Flevoland
47
49
43
17
25
23
25
17
29
11
9
6
Noord-Holland
31
29
28
14
18
16
44
41
48
11
12
7
Zuid-Holland
41
39
45
21
23
20
28
31
29
10
7
7 14
Zeeland
22
18
13
9
12
15
63
64
58
6
7
Noord-Brabant
55
57
55
11
14
13
26
22
28
8
8
5
Limburg
27
23
31
13
12
10
48
52
50
12
13
9 13
Star rating Three stars
37
38
31
13
14
14
38
36
42
12
12
Four stars
34
32
35
17
19
17
39
39
42
10
10
6
Five stars
30
31
30
27
19
18
36
43
42
7
8
10
Area of origin Table 1.2.2. provides insight into guests’ area of origin. Overall, there have been no major changes in the areas from which guests originate. The most noteworthy shift concerns the increase in the share of guests from Eastern Europe, which came to 5.2%, a continuation of the strong increase observed last year. While Dutch and other Western-European guests are increasingly opting for the cheaper market segment, guests from Eastern Europe and from outside Europe can increasingly be found in the five-star market segment. Guests from the US in particular account for a large share of
the stays at five-star hotels. In addition, In the five-star segment there has been a major increase in the number of business stays. Market segmentation by distribution channels In 2011, we witnessed a further decrease in the share of bookings through traditional distribution channels (direct contact and tour operators). Their market share was picked up mainly by online third-party booking agents and auction websites. This shift is mainly occurring in the cheaper market segment and outside of the Randstad region. In the five-star
© 2012 KPMG Accountants N.V. All rights reserved.
market segment and the Randstad region, we see an opposite trend. Here, the share of walk-ins and direct contact increased. Nonetheless, online third-party booking agents and auction sites strengthened their position in the hotel market, increasing their market share from 26.4% in 2010 to 29.3% in 2011. In addition to increasing their market share, these third-party websites are also charging higher fees. At present, hotels are spending 15 to 20% of their room revenue on payments to these third parties.
Hospitality Benchmark 2012 | 11
Table 1.2.2: Market segmentation by area of origin Area of origin Total
Nederland
Western Europe (including UK)
Eastern Europe (including Russia)
Asia
United States
Africa / Middle East
Canada / Australia
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
56,2
57,8
57,0
26,2
26,3
28,1
5,2
4,2
3,8
4,3
3,2
3,2
5,2
5,6
4,8
1,5
1,4
1,6
1,4
1,5
1,5
Province Groningen, Friesland and Drenthe
74,4
76,3
79,7
17,9
18,8
12,8
2,4
1,8
1,6
1,5
0,9
1,5
2,0
1,7
3,0
0,9
0,2
0,5
0,9
0,3
0,9
Overijssel
69,3
84,6
80,8
20,8
11,2
13,5
4,4
1,6
2,8
3,3
0,8
0,8
1,1
1,4
1,4
0,8
0,2
0,3
0,3
0,2
0,4
Gelderland
76,5
74,9
73,9
12,2
15,5
17,4
3,7
2,5
1,6
4,0
2,5
1,6
2,5
2,6
2,4
0,6
1,2
2,6
0,5
0,8
0,5
Utrecht and Flevoland
63,6
59,1
55,7
16,8
24,6
28,1
11,4
3,3
4,0
3,8
5,1
4,4
2,8
3,9
4,0
1,2
2,9
2,2
0,4
1,1
1,6
Noord-Holland
31,0
28,5
36,6
38,1
39,6
38,5
6,6
7,3
5,6
7,2
5,6
6,0
11,7
12,9
8,4
2,6
2,3
2,4
2,8
3,8
2,5
Zuid-Holland
55,8
55,3
47,8
26,4
27,0
33,7
5,9
3,7
4,2
4,4
4,4
3,3
3,9
6,7
6,6
1,9
1,7
1,8
1,7
1,2
2,6
Zeeland
52,0
48,2
55,3
45,0
41,0
41,6
0,7
6,1
1,9
0,7
0,8
0,2
0,9
2,4
0,7
0,5
1,2
0,1
0,2
0,3
0,2
Noord-Brabant
55,0
57,3
60,6
25,1
26,4
26,4
6,9
4,3
4,2
5,1
3,1
3,0
5,0
5,5
3,8
1,6
1,6
1,3
1,3
1,8
0,7
Limburg
70,8
72,2
70,8
20,5
18,9
19,8
2,6
3,4
3,6
2,0
1,8
1,5
2,6
2,8
2,7
0,8
0,5
0,7
0,7
0,4
0,9
Three stars
54,5
60,5
58,8
27,6
26,8
28,2
5,6
4,7
4,2
5,0
2,4
2,4
4,2
3,4
3,0
1,4
1,2
1,9
1,8
1,0
1,5
Four stars
58,8
57,4
57,4
25,2
25,4
27,8
4,9
3,8
3,6
3,7
3,5
3,4
4,9
6,6
4,9
1,4
1,6
1,5
1,1
1,7
1,4
Five stars
40,5
45,8
39,6
28,5
30,5
32,2
5,1
4,4
3,9
6,0
5,6
5,2
16,2
10,8
14,3
2,2
1,2
2,1
1,5
2,0
2,7
Amsterdam + Schiphol
26,6
26,7
25,0
37,5
38,7
43,6
7,5
7,4
6,9
8,2
6,2
8,1
13,9
14,8
10,9
2,8
2,0
2,7
3,5
4,2
2,8
Other
63,6
64,4
66,4
23,4
23,6
24,7
4,6
3,5
3,1
3,3
2,6
2,2
3,1
3,7
3,4
1,1
1,3
1,4
0,9
0,9
1,2
Star rating
Location
Table 1.2.3: Market segmentation by distribution channel Distribution channel
Walk-ins
Direct contact
Own website
Own reservation system
Online third-party
Tour operator / travel agent
Auction sites
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
4,9
4,2
4,7
34,3
37,6
46,2
15,0
15,4
13,4
9,3
9,0
7,3
26,4
23,9
20,4
7,2
7,4
8,0
2,9
2,5
Groningen, Friesland and Drenthe
3,6
4,8
4,5
44,4
43,6
53,4
15,7
11,8
12,3
11,5
10,2
9,5
17,4
24,5
14,8
3,6
3,9
5,5
3,8
1,2
Overijssel
3,1
4,6
4,8
39,2
62,8
50,5
21,6
7,8
6,5
7,6
3,0
5,9
18,3
13,8
21,3
5,5
3,6
11,0
4,7
4,4
Gelderland
2,7
2,7
4,0
36,5
42,0
53,1
20,8
18,1
13,9
8,3
9,2
8,1
22,3
20,5
14,8
4,8
5,4
6,1
4,6
2,1
Utrecht and Flevoland
2,7
3,0
3,8
44,7
31,6
43,1
18,5
25,3
17,2
6,1
21,1
9,8
20,2
15,7
20,3
5,3
2,6
5,8
2,5
0,7
Noord-Holland
7,0
4,3
5,0
25,8
21,7
41,6
13,8
15,9
10,4
10,7
8,8
7,4
31,1
30,5
25,7
9,9
15,8
9,9
1,7
3,0
Zuid-Holland
4,1
3,8
3,9
34,9
39,7
50,9
11,2
12,8
9,9
8,5
12,1
7,4
29,0
22,8
19,1
7,5
7,3
8,8
4,8
1,5
Zeeland
2,5
6,8
7,9
32,4
38,2
39,8
22,9
13,0
16,5
1,8
4,7
7,7
27,1
29,2
23,3
11,4
6,1
4,8
1,9
2,0
Noord-Brabant
4,4
3,7
4,5
35,7
47,9
62,1
12,1
16,0
10,8
12,6
8,2
4,6
27,5
19,5
10,0
5,9
3,2
8,0
1,8
1,5
Limburg
6,6
5,2
4,4
35,6
34,6
31,6
11,7
16,2
27,6
8,7
4,5
4,9
28,7
26,9
24,4
6,7
7,5
7,1
2,0
5,0
Three stars
5,1
5,0
6,1
33,1
40,4
41,2
14,8
14,6
15,9
6,4
7,9
6,3
28,9
22,5
23,5
8,7
5,5
7,0
3,0
4,1
Four stars
4,3
3,8
4,1
34,2
36,0
48,9
15,4
16,1
12,0
11,7
10,1
7,7
25,1
24,7
19,1
6,2
8,0
8,2
3,1
1,3
Five stars
10,3
1,9
3,7
39,6
34,9
43,9
12,7
15,5
16,2
5,7
7,5
7,4
23,5
26,1
18,7
7,9
13,7
10,1
0,3
0,4
Total
2009
Province
Star rating
12 | 1 Market indicators
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Hospitality Benchmark 2012 | 13
Table 1.3.1: Personnel analysis by number of rooms Number of rooms Total
< 50
51-100
101-150
> 150
Total
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
Administrative & General (including HR)
1,9
1,7
1,9
2,9
2,4
2,4
2,7
3,0
2,7
5,0
7,3
5,8
2,8
3,1
2,9
Rooms
4,9
4,2
4,5
9,6
8,6
9,8
12,0
13,8
13,9
29,8
31,2
31,0
9,9
10,1
12,4
F&B
8,5
7,4
7,1
15,9
16,2
17,3
17,4
25,1
26,7
30,7
33,6
38,2
14,8
15,5
18,9
Sales & Marketing
0,9
0,6
0,4
1,4
1,5
1,3
2,2
1,9
1,6
8,1
3,1
3,1
2,0
1,9
1,4
Property management & Maintenance
0,7
0,5
0,4
1,2
1,1
1,3
1,9
1,8
2,1
4,4
5,8
3,9
1,5
1,5
1,6
Department
Other departments
1,6
1,4
0,8
2,3
2,0
2,8
4,2
2,1
2,2
7,4
1,8
1,9
3,0
2,4
1,9
Totaal
18,5
16,2
15,1
33,3
31,8
34,9
40,4
47,7
49,2
85,4
82,8
83,9
34,0
34,4
39,1
Table 1.3.2: Personnel analysis by star rating Number of stars Total
Three stars 2011
2010
Four stars 2009
2011
2010
Five stars 2009
2011
2010
Total 2009
2011
2010
2009
Department Administrative & General (incl. HR)
1,6
1,9
2,1
3,1
3,4
2,9
4,8
7,7
7,8
2,8
3,1
2,9
Rooms
4,2
5,3
4,8
11,5
12,3
13,8
24,6
21,2
39,1
9,9
10,1
12,4 18,9
F&B
7,5
10,4
7,4
16,5
20,2
20,9
34,2
55,1
59,7
14,8
15,5
Sales & Marketing
0,7
0,7
0,5
2,2
2,3
1,4
6,2
5,4
7,2
2,0
1,9
1,4
Property management & Maintenance
0,6
0,8
0,7
1,5
1,7
1,8
4,5
3,5
4,2
1,5
1,5
1,6
Other departments
1,5
1,8
0,7
3,3
2,7
2,4
7,0
3,2
1,4
3,0
2,4
1,9
Total
16,1
21,0
16,2
38,1
42,6
43,2
81,3
96,1
119,4
34,0
34,4
39,1
1.3
Personnel
Personnel analysis by number of rooms A large share of the revenue of hotels (on average about 30%) is spent on personnel costs. To improve a hotel’s result, it is therefore important to keep this cost item under control, though not at the expense of the staff. This section focuses on personnel and includes various personnel analyses,
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which are segmented by number of rooms and star rating. Overall, the number of FTEs continued to decrease, a trend we have been witnessing since 2008. At small hotels (<100 rooms), however, there was an increase in the number of FTEs. This increase (0.7% for <50 rooms and 1.0% for 51-100 rooms) was mainly accounted for by room staff. It is attributable to a small increase in the
© 2012 KPMG Accountants N.V. All rights reserved.
occupancy rate. In addition, 44% of the respondents indicated that they were maintaining a strong focus on sales to avoid liquidity problems. This explains the increase in the number of sales staff. Personnel analysis by star rating The decrease in staffing levels was especially noticeable at four- and fivestar hotels. In the four- and five-star segments, there was a major decrease
Hospitality Benchmark 2012 | 15
Table 1.3.3: Average payroll costs per FTE (full-time equivalent) (in €)
Administrative & HR
Rooms
F&B
Sales & Marketing
Property management & Maintenance
Total
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
2011
2010
2009
Total
62.480
61.430
58.114
39.281
45.085
41.369
35.672
37.050
34.377
41.847
37.614
34.008
39.238
36.325
39.702
43.392
42.184
38.068
Table 1.3.4: Revenue per FTE (full-time equivalent) (in €)
Total
Total revenue per employee
Total room revenue per room employee
Total revenue from F&B per F&B employee
Absenteeism Last year, we found a 35.4% decrease in absenteeism at the larger hotels (>150 rooms). This year, this decrease has stagnated. It should be noted, though, that there has been an overall decrease in absenteeism, which fell by 0.7% and came to 3.2%. It appears that hotels have improved their internal controls to prevent hidden absenteeism.
2011
2010
2009
2011
2010
2009
2011
2010
2009
116.058
112.941
114.053
187.256
178.539
170.207
93.003
87.101
88.243
Table 1.3.5: Absenteeism by number of rooms (in %)
Star rating Three stars
114.804
114.483
99.210
159.857
156.939
159.440
77.665
93.178
89.942
Four stars
116.351
112.634
119.845
190.583
188.313
175.193
95.131
82.006
87.938
Five stars
116.110
106.879
102.644
219.824
204.353
151.142
105.078
88.714
85.313
Total
Absenteeism 2011
2010
2009
3,2
3,9
4,0
Size
in the number of F&B staff (expressed in FTEs), these staffing levels falling by 18.3% and 37.9% respectively. This is directly attributable to the decrease in guests’ F&B expenditures. In addition, hoteliers are employing less permanent staff, using more flexible staff instead. This shift is especially noticeable for housekeeping, which is increasingly being outsourced. Among three-star hotels, on average 38% of the work was outsourced, for four-star hotels this percentage came to 50%, and among five-stars it was as high as 60%. 35% of the respondents indicated that if they were faced with liquidity problems this year, they would tackle this by further reducing their staffing levels, a rise of 20.6% compared to last year. Another remarkable finding was that the total number of FTEs has remained
16 | 1 Market indicators
at the same level in the three-star segment. There has been a shift away from direct departments to support staff, which indicates an increase in back office services. Overall, staffing levels are increasing mainly in sales & marketing, which demonstrates that during a recession it is important to focus on increasing sales revenue by investing in this department. This shift away from focusing only on cost savings and towards focusing more on increasing sales is an important and necessary development. Average payroll costs per FTE In 2011, average payroll costs decreased for both room staff and F&B staff, by EUR 5,804 and EUR 1,378 respectively. The fact that guests are spending less on food and beverages
has apparently led to personnel cost savings in the area of F&B. In sales & marketing, there has been a remarkable increase in staffing levels. This is probably due to a greater focus on increasing sales revenue, which has led to additional sales activities. Revenue per FTE Looking at the total revenue per FTE, it appears that hotels have improved their efficiency. This is attributable in part to a decrease in the payroll costs of room and F&B staff and an 8.0% increase in RevPAR across the board. In the three-star segment, there has been a remarkable but logical decrease in the revenue per FTE in F&B, which fell by more than EUR 15,000. This appears to be directly attributable to the drop in guests’ F&B expenditure.
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< 50 rooms
2,7
3,8
3,5
50 - 100 rooms
3,9
4,4
4,1
101 - 150 rooms
2,7
3,3
3,1
> 150 rooms
3,3
3,4
5,2
Table 1.3.6: Absenteeism by star rating (in %) Total
Absenteeism 2011
2010
2009
3,2
3,9
4,0
Star rating Three stars
3,2
3,5
4,1
Four tars
3,2
4,1
3,9
Five stars
3,5
3,9
4,4
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Hospitality Benchmark 2012 | 17
2 Benchmark analysis 2.1 Benchmark analysis 2011/2010/2009 The second part of the KPMG Hospitality Benchmark report consists of the benchmark analysis. Here you will find four profit and loss accounts:
by region, by number of rooms, by star rating and by price band. With the aid of the benchmark, you can compare your results with the study results and determine how your organisation is developing in comparison to the market.
Table 2.1 Profit and loss account by region (in %)
Groningen, Friesland and Drenthe 2011
2010
2009
Overijssel 2011
2010
Gelderland 2009
2011
2010
Utrecht and Flevoland 2009
2011
2010
2009
Noord-Holland 2011
2010
Zuid-Holland
2009
2011
2010
Zeeland 2009
2011
2010
Noord-Brabant 2009
2011
2010
Limburg
2009
2011
2010
Total 2009
2011
2010
2009
Revenues Rooms
45
47
44
45
42
41
34
40
35
52
57
46
66
58
58
57
50
48
57
50
50
56
49
40
54
40
42
59
50
50
F&B
47
46
49
43
50
53
48
45
48
38
35
46
27
33
33
34
39
42
43
43
48
36
40
46
38
36
43
33
39
40
Halls
3
2
2
5
2
1
4
5
5
7
3
3
3
4
2
3
6
5
0
1
0
4
4
6
3
6
1
3
4
3
Other
5
5
5
7
6
5
14
10
12
3
5
5
4
5
7
6
5
5
0
6
2
4
7
8
5
18
14
5
7
7
Total revenue
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Cost of sales (excluding personnel costs) Rooms
5
4
6
7
6
7
5
5
4
4
8
6
9
9
6
6
6
6
8
6
7
7
7
3
11
6
9
8
7
6
F&B
13
12
15
9
12
14
14
13
14
10
13
13
9
9
10
10
12
14
13
13
15
11
14
14
11
9
17
10
11
12
Other
3
2
1
2
2
1
3
2
2
2
3
1
2
3
2
3
2
1
0
2
1
2
3
3
1
1
3
2
2
2
Total cost of sales
21
18
22
18
20
22
22
20
20
15
24
20
20
21
18
19
20
21
21
21
23
20
24
20
23
16
29
20
20
20
Personnel costs (including social security charges, etc.) Rooms
14
6
12
10
11
11
11
10
12
14
9
12
12
10
13
12
11
11
14
12
12
13
9
10
12
7
11
12
10
12
F&B
19
5
15
17
16
17
18
15
19
13
14
15
11
10
14
13
15
15
16
18
17
14
16
18
14
1
14
13
13
15
Administrative & General & HR
4
1
4
4
4
4
4
4
5
5
3
4
3
5
4
4
4
4
5
7
4
4
4
4
4
3
4
4
4
4
Sales & Marketing
2
0
1
2
1
1
1
2
1
2
1
1
1
5
1
2
1
1
2
2
2
1
2
1
1
1
1
2
3
1
Property management & Maintenance
3
1
2
3
2
2
5
2
2
1
1
2
1
3
2
2
1
1
3
1
2
3
1
2
2
1
2
2
2
2
Total personnel costs
42
13
34
36
34
35
39
33
39
35
29
34
28
33
34
33
32
32
39
40
37
35
32
35
33
13
32
33
32
34
Unallocated operating costs Administrative & General
5
1
2
4
3
3
3
4
4
4
5
3
3
5
4
3
5
3
2
5
2
2
3
3
3
3
3
3
4
3
Sales & Marketing
2
3
2
2
3
2
2
0
4
2
4
3
2
5
4
2
4
3
2
4
3
2
3
2
2
3
2
2
4
3
Property management & Maintenance
5
7
4
6
6
5
4
8
8
6
6
7
3
7
6
6
9
5
7
8
6
4
6
7
3
5
5
4
7
6
Other
4
13
4
6
4
13
5
6
7
2
6
5
4
6
4
6
5
3
10
6
5
5
6
5
3
4
5
4
6
5
Total unallocated operating costs
16
24
12
18
16
23
14
18
23
14
21
18
12
23
18
17
23
14
21
23
16
13
18
17
11
15
15
13
21
17
Total costs
79
55
68
72
70
80
75
71
82
64
75
72
60
77
70
69
75
67
81
84
76
68
74
72
67
44
76
66
73
71
Revenue for allocation of overheads
21
45
32
28
30
20
25
29
18
36
25
28
40
23
30
31
25
33
19
16
24
32
26
28
33
56
24
34
27
29
18 | 2 Benchmark analysis
© 2012 KPMG Accountants N.V. All rights reserved.
© 2012 KPMG Accountants N.V. All rights reserved.
Hospitality Benchmark 2012 | 19
Table 2.2: Profit and loss account by number of rooms (in %)
Table 2.3: Profit and loss account by star rating
< 50 2011
2010
50 - 100 2009
2011
2010
101 - 150 2009
2011
2010
> 150 2009
2011
2010
Total 2009
2011
2010
(in %) 2009
Revenues
Three stars 2011
2010
Four stars 2009
2011
2010
Five stars 2009
2011
2010
Total 2009
2011
2010
2009
Revenues
Rooms
48
48
46
51
48
44
59
51
45
65
52
55
59
50
50
Rooms
69
47
51
59
51
47
49
51
54
59
50
50
F&B
44
41
46
40
40
42
32
40
47
27
35
36
33
39
40
F&B
25
46
42
34
36
42
37
42
36
33
39
40
Halls
4
3
3
3
3
3
4
3
3
3
5
4
3
4
3
Halls
3
4
3
2
5
3
8
3
3
3
4
3
Other
4
8
5
6
9
11
4
6
5
4
8
5
5
7
7
Other
3
3
4
5
8
8
6
4
7
5
7
7
Total revenue
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Total revenue
100
100
100
100
100
100
100
100
100
100
100
100
Cost of sales (excluding personnel costs)
Cost of sales (excluding personnel costs)
Rooms
8
6
6
7
6
5
7
7
6
8
7
6
8
7
6
Rooms
8
6
5
7
6
4
9
7
5
8
7
6
F&B
15
14
16
12
12
13
10
12
14
9
9
11
10
11
12
F&B
7
13
13
10
12
13
14
8
12
10
11
12
Other
3
2
2
2
3
2
1
2
2
2
2
2
2
2
2
Other
1
2
2
2
2
2
4
3
2
2
2
2
Total cost of sales
26
22
24
21
21
20
18
21
22
19
18
19
20
20
20
Total cost of sales
16
21
20
19
20
19
27
18
19
20
20
20
Personnel costs (including social security charges, etc.)
Personnel costs (including social security charges, etc.)
Rooms
14
11
11
12
10
13
14
10
11
12
11
12
12
10
12
Rooms
15
11
12
12
10
11
8
11
12
12
10
12
F&B
16
14
16
15
15
16
13
14
16
11
11
13
13
13
15
F&B
8
16
15
13
13
15
17
11
16
13
13
15
Administrative & General & Personnel costs
4
1
5
4
1
5
4
1
4
4
6
4
4
4
4
Administrative & General & Personnel costs
4
4
5
4
4
4
5
7
5
4
4
4
Sales & Marketing
2
2
1
1
1
1
2
1
1
1
3
1
2
3
1
Sales & Marketing
1
2
1
2
1
1
2
9
1
2
3
1
Property management & Maintenance
2
5
2
4
4
2
2
4
2
2
5
2
2
2
2
Property management & Maintenance
2
2
2
2
1
2
2
4
2
2
2
2
Total personnel costs
38
33
35
36
31
37
35
30
34
30
36
32
33
32
34
Total personnel costs
30
35
35
33
29
33
34
42
36
33
32
34
Unallocated operating costs
Unallocated operating costs
Administrative & General
3
3
4
4
5
4
4
3
3
2
6
3
3
4
3
Administrative & General
2
3
5
3
5
2
3
6
6
3
4
3
Sales & Marketing
2
3
4
2
3
4
2
4
2
2
5
3
2
4
3
Sales & Marketing
1
3
5
2
4
2
3
4
5
2
4
3
Property management & Maintenance
6
9
8
5
7
7
4
5
5
3
8
5
4
7
6
Property management & Maintenance
3
6
9
5
9
5
3
4
6
4
7
6
Other
5
4
10
4
6
7
4
5
4
5
7
3
4
6
5
Other
3
5
9
5
6
7
4
6
6
4
6
5
Total unallocated operating costs
16
19
26
15
21
22
14
17
14
12
26
14
13
21
17
Total unallocated operating costs
9
17
28
15
22
16
13
20
23
13
21
17
Total costs
80
74
85
72
73
79
67
68
70
61
80
65
66
73
71
Total costs
55
73
83
67
71
68
74
80
78
66
73
71
Income before fixed charges
20
26
15
28
27
21
33
32
30
39
20
35
34
27
29
Income before fixed charges
45
27
17
33
29
32
26
20
22
34
27
29
20 | 2 Benchmark analysis
© 2012 KPMG Accountants N.V. All rights reserved.
© 2012 KPMG Accountants N.V. All rights reserved.
Hospitality Benchmark 2012 | 21
Table 2.4: Profit and loss account by price band (in %)
< € 65 2011
2010
€ 65 - € 80 2009
2011
2010
€ 81 - € 105 2009
2011
2010
> € 105 2009
2011
2010
Total 2009
2011
2010
2009
Revenues Rooms
49
48
36
58
47
44
58
49
50
62
54
58
59
50
50
F&B
42
39
51
34
41
49
33
40
38
30
36
33
33
39
40
Halls
5
6
6
3
4
3
2
2
3
4
4
3
3
4
3
Other
4
7
7
5
8
4
7
9
9
4
6
6
5
7
7
Total revenue
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Cost of sales (excluding personnel costs) Rooms
7
7
5
7
6
7
7
7
5
8
7
7
8
7
6
F&B
12
12
15
10
12
15
10
13
11
10
8
11
10
11
12
Other
2
2
2
2
2
2
1
2
2
3
3
2
2
2
2
Total cost of sales
21
21
22
19
20
24
18
22
18
21
18
20
20
20
20
Personnel costs (including social security charges, etc.) Rooms
15
10
11
14
9
13
13
10
12
11
11
12
12
10
12
F&B
15
14
19
13
12
16
13
15
14
12
12
14
13
13
15
Administrative & General & Personnel costs
4
3
4
5
3
4
4
4
3
4
5
5
4
4
4
Sales & Marketing
1
2
1
1
1
1
1
2
1
2
5
1
2
3
1
Property management & Maintenance
3
1
2
2
1
2
3
2
2
2
3
1
2
2
2
Total personnel costs
38
30
37
35
26
36
34
33
32
31
36
33
33
32
34
Unallocated operating costs Administrative & General
3
3
3
4
3
2
3
4
3
3
6
5
3
4
3
Sales & Marketing
2
2
3
2
3
2
2
4
3
2
5
4
2
4
3
Property management & Maintenance
5
4
7
4
6
5
4
9
6
3
7
5
4
7
6
Other
5
2
5
5
5
4
4
6
5
4
7
5
4
6
5
Total unallocated operating costs
15
11
18
15
17
13
13
23
17
12
25
19
13
21
17
Total costs
74
62
77
69
62
73
65
78
67
64
79
72
66
73
71
Income before fixed charges
26
38
23
31
38
27
35
22
33
36
21
28
34
27
29
22 | 2 Benchmark analysis
© 2012 KPMG Accountants N.V. All rights reserved.
© 2012 KPMG Accountants N.V. All rights reserved.
Hospitality Benchmark 2012 | 23
3 Outlook for 2012-2014 In this part of our report we discuss the outlook for 20122014. Each year, based on our knowledge of the market, we outline our vision of the future of the hotel sector. Market development is an annually recurring topic and this year our outlook also covers sustainability and re-financing. Market developments 2011 saw a slight increase in the average room rate as well as the occupancy rate for the Netherlands as a whole. Despite this positive development, total revenue per room decreased by 14%. This appears to be partly attributable to the drop in expenditure in hotel restaurants and bars. Another factor is the decreasing demand in the business segment for venues for conferences, corporate workshops and parties. In addition, 65% of the hoteliers in our survey indicated that their average room rate in the first quarter of 2012 was equal to or lower than their average room rate in the first quarter of 2011. In the second quarter of 2012, 57% of our respondents saw their occupancy rate level off or decrease compared to the first quarter of 2011. A substantial majority of our respondents (65%) indicated that they are going to take action to improve their cash position. In general, they are doing
24 | 3 Outlook for 2012-2014
© 2012 KPMG Accountants N.V. All rights reserved.
so by postponing investment and maintenance, by requiring guests to pay in advance, by stricter enforce ment of terms of payment, and by reducing their staffing level. With profit margins and liquidity under pressure, the hotel sector is experiencing difficult times. As in previous years, the rise in the occupancy rate and the average room rate occurred largely in the Randstad region, particularly in Amsterdam. Especially three-star hotels in the Randstad benefited from increased consumer price awareness. We expect this trend to continue; consumers will increasingly choose accommodation without a star rating but with high-quality amenities. Hotel accommodation in a unique location and/or building or offering unique services will also remain popular, as shown by the rising number of boutique hotels. Hotels without this competitive advantage will run in to increasing difficulties. Postponing investment and maintenance in particular will trigger a downward spiral at many hotels. With customers demanding ever more value for money, hotels will have to adopt an anti-cyclical investment strategy to stay afloat. Banks, however, are increasingly reluctant to provide the credit required to fund these investments. They now set strict requirements in terms of the contribution of equity, the hotel’s profitability, and its location and branding. As a result, hotels are
© 2012 KPMG Accountants N.V. All rights reserved.
increasingly joining renowned hotel chains so that they can more easily meet bank requirements. Beside the need to obtain such financing or refinancing, other factors will also be contributing to an increase in the market share of chain hotels. These include the need to invest in reservation systems, sales and marketing programmes, IT, and personnel development programmes. Furthermore, hotel chains may have lower purchasing costs due to joint purchasing, as well as lower overheads. Often the burden of having to pay fees to a hotel chain is offset by the strength of chain’s brand name, which allows for slightly higher room rates, and by the fact that high-quality hotel chains have a loyal international customer base, which can help raise the occupancy rate. We therefore expect that hotel chains will be expanding their market share at the expense of independently operating hotels in the coming years. In an economic downturn, a good strategy for management teams is to focus 70% of their energy on increasing sales and their profit margin, and 30% on cutting costs because in the end, recovery depends on increasing sales. Moreover, it is much more positive and enjoyable to focus on increasing sales than an cutting costs. Often, however, the default reaction of management teams is focus 70% of their energy on cutting costs, and only 30% on increasing sales and the profit margin.
Hospitality Benchmark 2012 | 25
While some hotel chains do have the right focus on raising sales, unfortunately we often will still see that the main emphasis on cutting costs. We hope and expect that in the coming years hotel chains will focus even more on increasing their sales. This should result in a reinforcement of sales & marketing departments, in client satisfaction surveys, new products and services, new pricing strategies, and invest ments in product development. No less than 65% of the surveyed hoteliers has plans to try to generate more bookings via their own website to avoid having to pay high commission rates to third parties. Studies have shown, however, that many hoteliers do not have the expertise and/or time to properly achieve this properly. Consequently, in the coming years there will be increasing demand for specialists who can assist hoteliers in this process. Due to the recession and the stricter requirements set by banks for refinancing, there will is very likely be a growth in sale-and-leaseback transactions in the coming years. This converts into cash hidden reserves embodied in buildings, allows for the repayment of loans, and improves the solvency ratio by reducing the balance sheet total and raising equity. Even healthy hotels are increasingly adopting an ‘asset light’ strategy, which means that instead of having ‘bricks’ on their balance sheet, they rent or lease their
26 | 3 Outlook for 2012-2014
Hotel chains will increasingly focus on the IT data security, including the security of their guests’ data. Only 24% of the surveyed hoteliers indicated that they feel that it is necessary to investigate whether their IT data are adequately protected against hacking. We expect this percentage to increase rapidly in the coming years, as any security leaks can lead to major reputational and other damage.
buildings. The funds freed up by the sale- and-leaseback transaction are often used for further expansion. The drawback of sale-and-leaseback constructions, however, is that hotels are often tied for years to high lease instalments, unable to benefit from any value increases on their buildings. Asked about IT, 67% of the hoteliers indicated that they feel that guests should be provided with internet access in all areas, 24/7 and free of charge. Having to pay for internet after having booked an expensive room is a common bugbear for hotel guests, especially as internet is often available for free at cheap fast food and coffee chains. We expect most hotels will be providing free internet access in the near future.
Sustainability
In line with the strong growth of social media, 52% of our respondents indicated that one of their staff members has been made responsible for handling hotel publicity. We expect a rapid increase in this percentage in the coming years.
In recent years, hotels throughout the Netherlands have been making their operations more sustainable. This change is driven by a number of important social developments. Businesses and government agencies are increasingly selecting hotels with sustainable operations, and consumers are trying to adopt a more sustainable and healthy lifestyle. This trend allows hotels to gain a competitive advantage by positioning themselves as a sustain able businesses. But does this also improve their profitability? And is there a future in sustainable operations?
Although hoteliers recognise the growing importance of the internet, only 20% have a staff member who is responsible for helping guests with IT or internet problems. Nothing is more irritating for guests than being unable to connect to the internet or having other IT problems. We expect that more hoteliers will have cards placed in the rooms informing guests that they can call reception if they have IT problems.
In 2012, about 34% of the three-, fourand five-star hotels in the Netherlands had a sustainability label, and their number is increasing. 40% of the hoteliers in our survey found that guests and businesses are more reluctant to choose a hotel if it does not invest in sustainability. This statement appears to be supported by the average room and occupancy rates for different types of hotels. At four-star hotels with a sustainability label, the average room
© 2012 KPMG Accountants N.V. All rights reserved.
and occupancy rates are 13% and 3% higher respectively than at four-star hotels without such a label. In the fivestar segment, this rises to 21% for the average room rate and 10% for the occupancy rate. In the three-star segment these differences are smaller. Here, the average room rate was over 9% and the occupancy rate over 8% higher than at sustainable hotels. While other factors obviously also play a part, these findings nonetheless suggest that making your operations more sustainable is a profitable investment. This trend is expected to result in more sustainable hotels in the coming years. This raises the question whether in a few years’ time having a sustainability label will still give you a competitive advantage. KPMG foresees that sustainable operations will become the benchmark and that labels will become a less effective means of encouraging the growth of your hotel. The trend towards corporate social responsibility will therefore become ever more important for the hotel industry. More and more people will be wondering what the actual social impact is of your business operations. Not only major companies but also private individuals will stop booking with hotels that are not sustainable. Hoteliers that understand the market have a different perspective on sustainability. If you try to run a hotel sustainably purely to draw in new guests, in the end your strategy will probably fail. Awareness is increasing that corporate social responsibility
should be a goal in itself, not a means to attract more guests. Corporate social responsibility need not be driven by society’s expectations; it can also be based on an internal need to act responsibly towards society. Transparency plays an important part in this; stakeholders should be actively involved in defining the hotelier’s role in society. This is the way to build mutual trust and run a healthy business. Our study shows that may hoteliers are worried about the disappointing sales trend. Attempts to attract guests by cutting rates have not contributed to a sustainable sales improvement, nor have they led to customer loyalty. It is evident that a different approach is needed. One of the solutions is to win the confidence of social stakeholders. One way to do this is by demonstrating that you do not just have that CSR label on your front door to paper over the negative side effects of your business operations. Hoteliers who identify their corporate social responsibility and actively take this in hand can regain the confidence of their guests, enabling them to gain a unique position in the market.
low profitability in the hotel industry, and the stricter requirements set by banks, we do not expect this to improve any time soon. The stricter requirements set by banks for financing investments in hotels relate to the contribution of equity, the hotel’s profitability, and its location and branding. When times were still good, hotels often needed to contribute only 25% in equity to get financing, now this is usually around 40%. If a hotel has had poor results in recent years, this is a further impediment to obtaining refinancing. There are now less banks in the market for hotel financing, particularly when it comes to hotels that are outside of the Randstad region and not part of a chain. In the case of smaller hotels, family or friends might provide more financing. For larger hotels, we see a greater interest from private equity investors, both in Netherlands and on the international stage.
Another aspect of sustainability is using organic, natural and preferably locally sourced products, and the number of hotels doing this is rapidly increasing. Financing and refinancing Currently it is difficult to get financing or refinancing for investment in hotels. Given the recession, the often
© 2012 KPMG Accountants N.V. All rights reserved.
Hospitality Benchmark 2012 | 27
Explanation of terms used Room revenue
Average room rate
Cost of sales
This category comprises the sales revenue from guest accommodation. It does not include any sales revenue from the use of available services.
The average room rate is calculated by dividing the room revenue by the total number of rooms occupied during the year.
This category comprises the purchase cost of the goods or services sold by the department in question. It does not include the purchase cost of goods or services sold to employees.
F&B revenue
RevPAR
This category comprises the sales revenue from food and beverages sold to guests in the restaurant/café or via room service. It does not include revenue from staff purchases.
The RevPAR (revenue per available room) is calculated by dividing the room revenue by the total number of rooms available during the year.
Unallocated operating costs This category includes other costs such as energy costs, maintenance expenditure, travel expenses and consultancy fees.
Total revenue per room Income before fixed charges
Other revenue This category comprises parking charges, exchange rate gains, and revenue from telephone, laundry and dry cleaning services. Occupancy rate The occupancy rate is calculated by dividing the number of rooms actually occupied during the year by the number of rooms available throughout the year.
28 | Explanation of terms used
© 2012 KPMG Accountants N.V. All rights reserved.
The total revenue per room is calculated by dividing the total revenue by the total number of rooms. Personnel costs
This is calculated by deducting the cost of sales, personnel costs and unallocated operating costs from the total revenue.
This category comprises the payroll costs of the staff at the department in question. These costs include the statutory social insurance contributions, holiday pay, pension contributions and other related costs.
© 2012 KPMG Accountants N.V. All rights reserved.
Hospitality Benchmark 2012 | 29
About KPMG Netherlands KPMG offers services in the field of audit, tax and advisory. We work for a wide range of clients: major domestic and international companies, medium-sized enterprises, non-profit organisations and government institutions. The complicated problems faced by our clients require a multidisciplinary approach. Our professionals excel in their own specialist fields while, at the same time, working together to offer added value that enables our clients to flourish in their own environment. In doing so, we draw from a rich source of knowledge and experience gained worldwide at a broad range of organisations and markets.
The KPMG Travel, Leisure & Tourism sector group has a wealth of expertise with respect to hotels, conference centres, bungalow parks, travel agents, restaurant chains and catering companies, and understands not just the world of the figures, but also what goes on behind the figures. It is a multi-disciplinary team of professio nals with experience in the industry. Many members of our sector group also have qualifications in hotel management.
Optimising the financial organisation We review your financial organisation with you. We identify the strengths and points for improvement, on the basis of which we draft an action plan. The aspects we assess include the quality of the reporting processes, management’s and staff members’ competencies, and efficiency (such as the integration of financial systems).
Below you will find specific examples of how the KPMG Travel, Leisure & Tourism sector group can be of service to you. Audit of the financial statements You can engage KPMG to audit your financial statements, to perform review engagements and to compile your financial statements. Thanks to our knowledge of the hotel sector, we can act as a professional sparring partner. Benchmark – quick scan KPMG compares your figures to the benchmark figures and analyses the differences. KPMG can offer you advice regarding the key differences identified in order to gain better insight into your hotel’s performance. Internal control smart card How well do you know the processes within your company, and to what
30 | About KPMG Netherlands
extent is your staff aware of the internal controls within the processes? KPMG uses handy smartcards to help identify the processes and internal controls at your company.
Travel, Leisure & Tourism (TLT) sector group
Assessing websites KPMG has a staff member with a hotel management qualification and a degree in Information Management, who is specialised in online developments in the hotel industry and changes in the distribution network. We can help you improve your own website in order to generate more bookings via this channel. We also advise you on how use various booking sites more effectively. Improving the budgeting and forecasting process Many companies see the planning-andcontrol cycle as a difficult task. KPMG supports the development of a process that is efficient, in line with your operating management, and allows you to define clear targets. Thanks to our multidisciplinary teams we can use IT solutions to facilitate this.
© 2012 KPMG Accountants N.V. All rights reserved.
Operating capital management Less operating capital means more room to invest in existing or new hotels. KPMG reviews your operating processes from the perspective of cash flow, providing specific sugges tions on reducing the operating capital requirement. This could involve, for example, improving payment terms with suppliers, reducing stocks by improving the ordering process, etc. Cost optimisation KPMG can offer you advice on reducing your costs in the short term and help you raise the cost awareness within your organisation. We prioritise savings opportunities and help you implement improvements. Speeding up and improving reporting processes Companies are increasingly faced with situations where the quality requirements for figures conflict with transparency requirements. This puts a lot of pressure on the reporting processes. KPMG carefully analyses the preparation of the reports. We identify bottlenecks and determine which information is absolutely essential. Sustainability Climate change compels companies to think about the way in which they do business. In the long term, hotel chains need to develop strategies to manage their impact on the environment (their so-called ‘carbon footprint’). KPMG can help you calculate your carbon
footprint and provides insight into how it can be managed and reduced. Fraud How effectively is your company protected against fraud? KPMG help you prevent fraud and draft a plan of action if fraud is discovered. VAT/corporation tax/wage tax scan How well informed are your financial accounts department and HR department about tax legislation and regulations? Find out with the aid of our tax scans. Feasibility studies What is the feasibility of your plan to open a new hotel, to invest in a SPA? KPMG can carry out a feasibility study for you.
Advice on acquisitions and disposals KPMG can help you analyse possible acquisition candidates with the aid of industry experts, who identify the risks and opportunities that may arise if you acquire property from a real estate investor or real estate portfolio. KPMG can assist you in due diligence investigations; as soon as the parties are in contact, we assist our clients, both in their domestic market and abroad, to ensure a detailed quanti fication of the potential risks arising from a transaction. KPMG offers advice on disposals; our broad range of advisory services includes assisting management during the disposal process, preparing vendor due diligence reports, and designing data rooms.
Expanding into new and emerging markets KPMG can help you identify and act on opportunities in new and emerging markets.
Financing KPMG provides advice on structuring financing; we structure property financing for both property-specific financing as well as portfolio and capital markets financing.
Assistance with mergers, acquisitions and disposals Are you looking for a buyer for your company because you have no business successor or would like to realise your economic interest, or due to other (external) developments? Or have you identified opportunities for expanding your company? KPMG can assist you by ensuring optimal management of the process, with minimal disruption to your daily operations and the best possible result.
Information security scan KPMG assists you in designing a practical security policy that is tailored to your organisation’s objectives and strategic priorities and enjoys internal support. Inadequate security aware ness and behaviour within your organisation may give rise to various risks, including the risk of fraud, unauthorised access, loss of personal or sensitive business information, and reputational damage. When performing our scan, we can use ethical hacking,
© 2012 KPMG Accountants N.V. All rights reserved.
Hospitality Benchmark 2012 | 31
which involves IT specialists investi gating whether your hotel’s IT systems and data are secure. Business succession KPMG can support your business succession. Often, the Managing Director and Majority Shareholder [directeur-grootaandeelhouder (DGA)] will have only very limited experience with business succession and/or disposal processes. Given the complexity of the many aspects involved, the DGA needs professional support to assist with the entire process, which takes an average of three to so seven years. KPMG has the required business, legal and tax expertise to provide optimal support to the DGA during the entire process of selling the company or transferring it to a successor.
32 | About KPMG Netherlands
Financing requests KPMG supports companies who want to request financing. If for whatever reason your company needs financing, KPMG can provide support and assistance, helping you draw up a financing request. Business plans KPMG actively assists hoteliers in preparing, redesigning or adjusting a business plan for their company. We coordinate the process, act as a sounding board and provide support by utilising our KPMG tools. The main KPMG tools are the business planning workbook, workshops and our VisionPlanner software package, which allows you to systematically draw up a business plan and the accompanying financial forecasts.
Selecting your IT packages KPMG assists you with the selection of the IT packages you require. We help you chose from a range of IT packages for your Enterprise Resource Planning, Human Resource Management, Customer Relationship Management, and Consolidation and Reporting. Supporting IT implementations KPMG assists you in implementing IT packages, supporting the various components , such as tests, conversions and internal controls. If your organisation wants to obtain assurance regarding the contents of an IT implementation and the progress made on it, we can provide quality assurance regarding the project management.
© 2012 KPMG Accountants N.V. All rights reserved.
Contacts KPMG Accountants N.V. Laan van Langerhuize 1 1186 DS Amstelveen Postbus 74555 1070 DC Amsterdam
Jos Sweers Travel, Leisure & Tourism T: +31 20 656 8081 E: sweers.jos@kpmg.nl Ilse de Graaff Travel, Leisure & Tourism T: +31 20 656 8774 E: degraaff.ilse@kpmg.nl
www.kpmg.nl
© 2012 KPMG Accountants N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263683, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (“KPMG International”), een Zwitserse entiteit. Alle rechten voorbehouden. De naam KPMG, logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. © 2012 KPMG Accountants N.V. Alle rechten voorbehouden. De in dit document vervatte informatie is van algemene aard en is niet toegespitst op de specifieke omstandigheden van een bepaalde persoon of entiteit. Wij streven ernaar juiste en tijdige informatie te verstrekken. Wij kunnen echter geen garantie geven dat dergelijke informatie op de datum waarop zij wordt ontvangen nog juist is of in de toekomst blijft. Daarom adviseren wij u op grond van deze informatie geen beslissingen te nemen behoudens op grond van advies van deskundigen na een grondig onderzoek van de desbetreffende situatie