PART II AN ANALYSIS OF IT SPENDING DATA IN THE LODGING INDUSTRY BASED ON REPORTING IN THE NEW USALI SCHEDULE 6 INFORMATION AND TELECOMMUNICATIONS SYSTEMS. THIS REPORT COMPARES SPENDING DATA OVER A THREE YEAR PERIOD. Authors: Agnes DeFranco, Ed.D., CHAE Arlene Ramirez, CHE, CHAE Tanya Venegas, MBA, MHM, CHIA
TABLE OF CONTENTS Properties and KPIs...3 Analysis of participating hotels characteristics by chain scale, hotel type and number of rooms. Plus, room characteristics and key performance indicators. Major Expense Items...5 Analysis of the 2015 2017 spending by number of available rooms (PAR), number of occupied rooms (POR) and as a percentage of total revenue (%TR). Chain Scale, Hotel Type and Size: Comparing Apples to Apples...8 IT spending comparison by chain scale, hotel type and number of rooms. Next Steps...17 Takeaways from this IT spending analysis. AUTHORS Agnes DeFranco, Ed.D., CHAE is a professor and Conrad N. Hilton Distinguished Chair at the Conrad N. Hilton College, University of Houston in Houston, Texas USA. DeFranco is the co-author of five textbooks and has published more than 90 refereed articles. She is an HFTP Global past president and a recipient of the HFTP Paragon Award. adefranco@uh.edu Arlene Ramirez, CHE, CHAE, CHIA is an instructional assistant professor at the the Conrad N. Hilton College, University of Houston in Houston, Texas USA. She has more than 20 years experience in hospitality finance and hotel development and is founder and principal of ADR Hospitality Consulting. Ramirez is an HFTP Global past president. aramir33@central.uh.edu Tanya Venegas, MBA, MHM, CHIA is with HotStats. She is formally the executive director and HFTP fellow at the HFTP Americas Research Center where she oversaw multiple research projects annually and was a frequent contributor of HFTP research reports and blogs. Acknowledgments: We thank Robert Mandelbaum, CBRE Hotels Americas Research, and Pablo Alonso, HotStats, for supplying the data for this research project. This research is partially supported by HFTP. Copyright 2018 by Hospitality Financial and Technology Professionals; Austin, Texas. All rights reserved. No part of this report shall be reproduced or transmitted in any form by any means, electronic or mechanical; including photocopying, recording or in any information or retrieval system, without written permission from Hospitality Financial and Technology Professionals. HFTP and HITEC are registered service marks of Hospitality Financial and Technology Professionals. Hospitality Financial and Technology Professionals Global Headquarters: 11709 Boulder Ln, Ste 110 Austin, Texas 78726 United States +1 (512) 249-5333 (800) 646-4387 (US only) www.hftp.org 2 IT SPENDING IN LODGING INDUSTRY
The year 2017 is the third since the Uniform System of Accounts for the Lodging Industry (USALI), 11th edition s Schedule 6 Information and Telecommunications Systems has been in force. The publication of IT Spending In the Lodging Industry, summarizing the IT spending for the first two years, was posted on the HFTP website in June 2018. At the same time CBRE supplied the research team with the 2017 numbers. Therefore, this report includes the IT spending data for all three years and highlights any interesting patterns and results. THE PROPERTIES AND KEY PERFORMANCE INDICES Although the 2017 database has fewer hotels (5,078), the distribution among chain scale, type and size as indicated by the number of rooms were very similar across the three years (see the Figures below for details). The average available rooms, average occupied rooms and occupancy percentage all saw increases from 2015 to 2017. In particular, the occupancy percentage grew from 73.6 to 74.2 percent. The ADR, however, sustained a decrease of $1.32 from 2016 to 2017, pulling the RevPAR down slightly by 4 cents from $105.00 in 2016 to $104.96 in 2017 (see Table 1 on page 4). Hotels by Chain Scale Luxury Upscale 2015: 5.9% 2016: 6.4% 2017: 5.9% Upper Upscale Upper Midscale 2015: 20.1% 2016: 19.7% 2017: 19.7% 2015: 30.7% 2016: 31.4% 2017: 33.7% 2015: 18.0% 2016: 18.8% 2017: 17.8% Midscale Economy 2015: 12.6% 2016: 11.6% 2017: 10.5% 2015: 12.7% 2016: 12.1% 2017: 12.4% Number of Hotels: 2015: 5,193 2016: 5,640 2017: 5,078 Note: All currency is in U.S. Dollars. 3 IT SPENDING IN LODGING INDUSTRY
Hotels by Type Convention/Conference* 2015: 2.7% 2016: 2.5% 2017: 2.7% Extended Stay 2015: 26.5% 2016: 25.5% 2017: 27.8% Full Service Limited Service 2015: 37.7% 2016: 38.8% 2017: 38.1% 2015: 22.5% 2016: 22.6% 2017: 20.8% Resort All-Suite 2015: 4.5% 2016: 4.8% 2017: 4.5% 2015: 5.9% 2016: 5.7% 2017: 6.1% Number of Rooms <250 rooms 251 500 rooms 2015: 79.7% 2015: 15.1% 2016: 79.9% 2016: 14.8% 2017: 80.0% 2017: 14.7% 500 1,000 rooms 2015: 3.9% 2016: 4.0% 2017: 4.0% >1,000 rooms 2015: 1.3% 2016: 1.3% 2017: 1.4% Table 1. Room Characteristics and Key Performance Indicators No. of Properties Avg. Annual Available Rooms Avg. Annual Occupied Rooms Number of Hotels: 2015: 5,193 2016: 5,640 2017: 5,078 All currency is in U.S. Dollars Occupancy Percentage ADR RevPAR 2015 5,193 72,185 53,611 73.6% $136.02 $101.62 2016 5,640 72,135 53,306 73.2% $141.57 $105.00 2017 5,078 72,320 54,042 74.2% $140.25 $104.96 4 IT SPENDING IN LODGING INDUSTRY
MAJOR EXPENSE ITEMS If at least 20 percent of the total hotels in the database report a certain line item, that line item was then designated as a major IT expense. The nine major expenses that span the three-year study period are: Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses Cost of Phones Total Labor Costs and Cost of Internet Services Total Other Employee Benefits Operated Departments Total Table 2 below summarizes the results by number of available rooms (PAR), number of occupied rooms (POR) and as a percentage of total revenue (%TR). If one examines the expense items by available room, a number of these expense items stayed quite constant: employee benefits only noted a change of 2 cents over the three-year period. System expenses for both operations departments and undistributed departments only had a four cent differential. Only a 5 cent change was seen in cost of phones, and a 7 cent change was recorded for the cost of Internet. The item that has changed the most was total other expenses which went from $0.45 in 2015 to $0.92 in 2016 and kept on increasing to $1.07 in 2017 a total change of 113 percent; and total labor costs and related expenses had a change of 11 cents, which equated to an 8 percent change. A similar pattern was also noted in the number of occupied rooms and percent of total revenue. Chart 1 (page 6) combines all three measurements of per available room (PAR), per occupied room (POR) and as a percent of total revenue (%TR) for 2017. Please refer to the IT Spending in the Lodging Industry report on the HFTP News website regarding the graphic representation of the 2015 and 2016 figures. However, Charts 2 4 (pages 7 8) compare the three years side by side with three charts, one each for the PAR, POR, and %TR respectively. Table 2. 2015 2017 Major IT by PAR, POR and %TR Account Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses By Number of Available Rooms By Number of Occupied Rooms As a % of Total Revenue 2015 2016 2017 2015 2016 2017 2015 2016 2017 $0.99 $1.04 $1.06 $1.34 $1.43 $1.45 0.38% 0.39% 0.39% $1.37 $1.44 $1.48 $1.86 $1.96 $2.01 0.52% 0.54% 0.54% Employee Benefits $0.51 $0.49 $0.50 $0.67 $0.66 $0.68 0.18% 0.18% 0.18% Cost of Phones $0.36 $0.32 $0.31 $0.50 $0.45 $0.43 0.42% 0.39% 0.37% Cost of Internet Services $0.31 $0.35 $0.38 $0.43 $0.49 $0.53 0.33% 0.37% 0.41% $0.58 $0.60 $0.62 $0.78 $0.83 $0.83 0.48% 0.50% 0.52% $0.51 $0.51 $0.55 $0.70 $0.71 $0.78 0.40% 0.39% 0.44% Total Other $0.45 $0.93 $1.07 $0.61 $1.28 $1.45 0.26% 0.55% 0.60% TOTAL EXPENSES $1.57 $1.87 $2.02 $2.14 $2.59 $2.77 1.21% 1.38% 1.50% 5 IT SPENDING IN LODGING INDUSTRY
Chart 1. 2017 Major IT by PAR, POR and %TR $3.00 $2.50 By Number of Available Rooms By Number of Occupied Rooms As a % of Total Revenue 1.50% $2.00 $1.50.60% $1.00 $0.50.39%.54%.18%.37%.41%.52%.44% $0.00 $1.06 $1.45 $1.48 Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses $2.01 $0.50 $0.68 Employee Benefits $0.31 $0.43 $0.38 Cost of Internet Svcs Cost of Phones $0.53 $0.62 $0.83 Operations Dept. $0.55 $0.78 Undistributed Dept. $1.07 $1.45 Total Other $2.02 $2.77 Total 6 IT SPENDING IN LODGING INDUSTRY
PART II. IT SPENDING ANALYSIS Chart 2. 2015 2017 Major IT Expense Items by Per Available Room 2015 2016 2017 $2.00 $1.50 $1.00 $0.50 $0.00 $0.99 $1.04 $1.06 Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses $1.37 $1.44 $1.48 $0.51 $0.49 $0.50 Employee Benefits $0.36 $0.32 $0.31 $0.31 $0.35 Cost of Internet Svcs Cost of Phones $0.38 $0.58 $0.60 $0.62 Operations Dept. $0.51 $0.51 $0.55 Undistributed Dept. $0.45 $0.93 $1.07 Total Other $1.57 $1.87 $2.02 Total Chart 3. 2015 2017 Major IT Expense Items by Per Occupied Room $2.50 2015 2016 2017 $2.00 $1.50 $1.00 $0.50 $0.00 $1.34 $1.43 $1.45 Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses $1.86 $1.96 $2.01 $0.67 $0.66 $0.68 Employee Benefits $0.50 $0.45 $0.43 $0.43 $0.49 Cost of Internet Svcs Cost of Phones $0.53 $0.78 $0.83 $0.83 Operations Dept. $0.70 $0.71 $0.78 Undistributed Dept. $0.61 $1.28 $1.45 Total Other $2.14 $2.59 $2.77 Total 7 IT SPENDING IN LODGING INDUSTRY
Chart 4. 2015 2017 Major IT Expense Items as a Percent of Total Revenue 1.5% 2015 2016 2017 1.2% 0.9% 0.6% 0.3% 0.0% 0.38% 0.39% 0.39% Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses 0.52% 0.54% 0.54% 0.18% 0.18% 0.18% Employee Benefits 0.42% 0.39% 0.37% Cost of Internet Svcs Cost of Phones 0.33% 0.37% 0.41% 0.48% 0.50% 0.52% Operations Dept. 0.40% 0.39% 0.44% Undistributed Dept. 0.26% 0.55% 0.60% Total Other 1.21% 1.38% 1.50% Total CHAIN SCALE, HOTEL TYPE AND SIZE: COMPARING APPLES TO APPLES Using the STR chain scale rubric, all 5,000+ hotels in the database were divided into one of the six categories of luxury, upper upscale, upscale, upper midscale, midscale and economy. Due to the size of the table and the ease of reference by keeping the data of the three years side-by-side, three separate tables are shown below. Table 3 (page 9) represents the major expenses for luxury and upper upscale hotels, Table 4 (page 10) summarizes the data of upscale and upper midscale properties, and finally Table 5 (page 11) denotes the data of midscale and economy lodging operations. For the third year in a row, luxury and upper upscale hotels spent more resources on IT than the other four categories. Economy did not report separate labor cost under IT as small properties normally just have a certain manager or employee to also be in charge of IT. However, the economy sector did spend more on cost of phone than upscale, upper midscale and midscale hotels consistently over the three years. 8 IT SPENDING IN LODGING INDUSTRY
Table 3. 2015 2017 Average Major IT by Chain Scale: Luxury and Upper Upscale USALI Account Luxury Upper Upscale 2015 2016 2017 2015 2016 2017 N 251 305 251 630 693 619 Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses $228,353 $227,133 $225,762 $177,978 $164,285 $181,249 N 254 308 254 640 710 631 $326,508 $324,659 $327,135 $260,465 $241,833 $263,513 N 249 299 250 611 683 605 Employee Benefits $102,877 $102,740 $105,705 $89,315 $84,703 $89,394 N 243 246 170 781 614 645 Cost of Phones $61,903 $52,295 $44,238 $53,604 $27,191 $30,622 N 108 153 133 323 373 475 Cost of Internet Services $38,702 $38,356 $46,211 $35,223 $32,476 $33,329 N 162 158 110 571 480 546 $91,404 $115,620 $127,706 $72,696 $80,881 $71,473 N 244 240 162 776 693 617 $137,511 $181,094 $191,353 $118,933 $87,635 $111,420 N 230 304 263 557 884 823 Total Other $130,249 $248,733 $316,032 $109,893 $260,767 $300,927 N 307 359 298 1044 1113 1001 TOTAL EXPENSES $593,446 $716,348 $755,028 $401,245 $481,153 $556,842 As seen in Table 3 above, the total IT expenses for luxury hotels increased over the three year period from $593,446 to $755,028 or 27 percent. The same can be said for the upper upscale properties from $401,245 to $556,842, or 39 percent. This high percentage increase is also found at 34 percent for the upscale properties from $60,866 to $81,585 (Table 4). However, for the upper midscale, the total IT expenses only increased by 6 percent (Table 4); for midscale, 7 percent (Table 5). Finally, in a totally different direction, economy hotels reported a decrease of 7 percent in its total IT expenses, dropped from $24,063 to $22,356 (Table 5). 9 IT SPENDING IN LODGING INDUSTRY
Table 4. 2015 2017 Average Major IT by Chain Scale: Upscale and Upper Midscale USALI Account Upscale Upper Midscale 2015 2016 2017 2015 2016 2017 N 215 156 116.0 91 85 43 Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses $30,225 $37,262 $39,915 $85,095 $75,604 $61,692 N 219 166 128 95 89 67 $39,055 $47,387 $49,747 $118,918 $105,521 $88,682 N 58 80 68 51 57 43 Employee Benefits $35,422 $25,667 $25,550 $69,677 $52,018 $47,794 N 1323 1080 1169 741 841 796 Cost of Phones $15,744 $17,470 $16,165 $11,281 $11,626 $11,261 N 558 744 848 427 595 676 Cost of Internet Services $22,136 $22,969 $21,954 $18,993 $18,668 $19,492 N 584 697 731 444 621 601 $28,554 $27,942 $31,278 $25,061 $24,385 $25,138 N 1,289 1,122 1,131 717 837 758 $20,530 $25,252 $29,206 $26,603 $19,472 $20,017 N 566 1,110 1,042 363 462 426 Total Other $14,830 $36,860 $38,087 $15,148 $16,049 $18,625 N 1,591 1,769 1,711 935 1,058 902 TOTAL EXPENSES $60,866 $76,801 $81,585 $69,367 $66,788 $73,611 10 IT SPENDING IN LODGING INDUSTRY
Table 5. 2015 2017 Average Major IT by Chain Scale: Midscale and Economy USALI Account Midscale Economy 2015 2016 2017 2015 2016 2017 N 53 51 39 / / / Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses $73,292 $69,218 $67,415 / / / N 58 54 39 / / / $93,375 $88,029 $94,650 / / / N 47 44 35 / / / Employee Benefits $32,580 $27,805 $30,347 / / / N 262 606 516 652 679 630 Cost of Phones $11,401 $9,339 $9,002 $18,760 $17,346 $16,696 N 175 260 187 649 676 629 Cost of Internet Services $16,487 $20,393 $246,76 $3,343 $3,763 $3,615 N 187 186 134 6 14 5 $45,189 $28,823 $35,049 $4,065 $7,742 $7,472 N 480 503 435 646 655 631 $18,372 $21,063 $20,428 $2,113 $2,298 $2,003 N 213 227 135 15 23 4 Total Other $19,658 $21,497 $14,817 $7,577 $18,422 $3,077 N 655 656 534 661 685 631 TOTAL EXPENSES $50,121 $55,742 $53,440 $24,063 $23,882 $22,356 11 IT SPENDING IN LODGING INDUSTRY
The hotels are then grouped by their types and analyzed. Per STR s definitions, the hotels were divided into conference, convention, extended stay, full service, limited service, resort and suite hotels. The major IT expenses in 2017 all followed a certain pattern: convention hotel spent the most in all major IT expenses with a total labor costs and related expenses as high as an average of $650,544 and another $943,165 in total other expenses. The total IT expenses for convention hotels topped at $1,716,201 in 2017. This figure was almost half a million more than the $1,273,086 in 2015 (Table 6). Resort hotels came in second in 2017 with an average of $312,674 in total labor costs and related expenses, $395,063 in total other expenses and a total it expenses of $824,352 (Table 8). The only expense item that had a different pattern was cost of Internet services. Resort hotels took the top spot at $47,421, followed very closely by convention hotels at $43,459, and then conference hotels at $42,046. The differential between all hotel types was only $36,220 with extended stay hotels reporting the lowest expenditure at $11,201. Again, due to the size of data, the average major IT expenses by hotel type are depicted in Table 6 for conference and convention hotels, Table 7 for extended stay, full service and limited service hotels, and Table 8 for resort and suite hotels. Table 6. 2015 2017 Average Major IT by Hotel Type: Conference and Convention USALI Account Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses Conference Convention 2015 2016 2017 2015 2016 2017 N 21 23 24 101 100 98 $118,365 $100,490 $105,797 $425,982 $389,454 $430,556 N 21 23 24 102 100 98 $155,813 $140,965 $146,986 $641,789 $611,718 $650,544 N 19 23 22 102 100 96 Employee Benefits $41,390 $40,475 $44,933 $219,983 $222,264 $224,571 N 29 20 20 81 47 33 Cost of Phones $44,696 $29,542 $31,237 $142,222 $60,528 $97,676 N 14 19 17 11 19 27 Cost of Internet Services $37,382 $40,156 $42,046 $84,594 $56,892 $43,459 N 15 15 11 48 36 33 $92,694 $55,283 $64,062 $175,520 $199,346 $173,064 N 27 19 18 81 50 33 $57,585 $112,892 $140,277 $285,177 $163,682 $311,330 N 17 29 30 67 102 100 Total Other $21,655 $140,919 $117,533 $374,269 $816,870 $943,165 N 37 36 35 106 106 104 TOTAL EXPENSES $228,452 $324,109 $332,276 $1,273,086 $1,549,521 $1,716,201 12 IT SPENDING IN LODGING INDUSTRY
Table 7. 2015 2017 Average Major IT by Hotel Type: Extended Stay, Full Svc., Limited Svc. USALI Account Extended Stay Full Service Limited Service 2015 2016 2017 2015 2016 2017 2015 2016 2017 N 95 29 14 757 837 686 45 35 33 Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses $6,744 $7,075 $7,063 $134,104 $131,714 $134,053 $9,750 $7,953 $7,590 N 95 33 16 775 856 710 47 39 35 $6,744 $7,419 $7,842 $191,800 $188,493 $191,666 $12,160 $10,555 $11,256 N / 8 4 678 764 641 11 12 13 Employee Benefits / $4,955 $6,647 $69,512 $66,892 $68,834 $12,073 $11,110 $11,036 N 1277 1204 1243 1540 1321 1265 656 1091 978 Cost of Phones $15,567 $16,999 $15,925 $29,738 $23,946 $22,062 $9,181 $7,768 $7,869 N 885 1005 1068 769 952 950 365 553 584 Cost of Internet Services $7,774 $10,621 $11,201 $25,781 $26,926 $28,035 $16,062 $16,302 $17,892 N 336 373 399 919 979 921 365 512 475 $31,489 $20,674 $21,545 $53,027 $56,735 $59,534 $18,987 $19,018 $19,714 N 1195 1174 1154 1526 1386 1203 924 1029 951 $8,347 $8,887 $10,620 $62,340 $66,261 $70,036 $15,239 $13,611 $15,013 N 297 437 399 978 1611 1431 299 383 325 Total Other $5,468 $25,211 $28,251 $55,438 $109,278 $126,287 $5,807 $10,131 $8,754 N 1378 1437 1410 1960 2191 1934 1168 1276 1054 TOTAL EXPENSES $36,917 $42,884 $45,416 $213,802 $250,945 $264,037 $30,806 $36,349 $42,794 13 IT SPENDING IN LODGING INDUSTRY
Table 8. 2015 2017 Average Major IT by Hotel Type: Resort and Suite USALI Account Resort Suite 2015 2016 2017 2015 2016 2017 N 177 214 187 44 53 47 Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses $215,267 $208,884 $221,271 $30,936 $41,668 $33,721 N 180 219 190 46 58 47 $302,739 $293,425 $312,674 $39,379 $52,179 $44,234 N 176 215 188 30 41 37 Employee Benefits $93,129 $90,972 $95,907 $15,009 $19,950 $13,354 N 186 165 129 233 218 258 Cost of Phones $70,439 $54,257 $58,208 $15,871 $12,295 $13,722 N 92 96 100 104 157 202 Cost of Internet Services $54,429 $35,119 $47,421 $19,651 $22,208 $24,678 N 131 104 100 140 137 188 $92,278 $112,007 $102,648 $32,933 $33,081 $33,543 N 183 172 133 216 220 242 $149,168 $161,828 $191,230 $48,282 $29,467 $37,527 N 159 230 206 127 218 202 Total Other $155,612 $328,926 $395,063 $12,566 $26,430 $31,447 N 236 271 229 308 323 311 TOTAL EXPENSES $581,935 $707,556 $824,352 $80,774 $82,510 $104,024 14 IT SPENDING IN LODGING INDUSTRY
Finally, when the hotels were grouped by size according to number of rooms, the results were also quite predictable that the mega hotels spent more than the small hotels. For hotels that had less than 250 rooms (Table 9), the total IT expenses were $60,128 in 2015; this increased over the two years and were at $78,747 in 2017, indicating a 27 percent change. For the 251 500 room category, total IT expenses were $353,481 in 2015 and this increased to $441,361 in 2017, translating to 32 percent. In the 501 1,000 rooms group, total IT expenses in 2015 were $800,044 in 2015 and increased to $1,054,448 in 2017, translating to also a 32 percent increase (Table 10). For the mega hotels that had over 1,000 rooms, their employee benefits line item alone was $328,494 in 2017. Their total other expenses account was over $1.3 million, and their total IT expenses per hotel were just shy a quarter of a million dollars ($2,444,281, Table10). Table 9. 2015 2017 Average Major IT by Size of Hotel: <250 and 251 500 Rooms Account <250 Rooms 251-500 Rooms 2015 2016 2017 2015 2016 2017 N 485 451 356 508 564 489 Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses $53,069 $62,498 $65,253 $136,483 $137,167 $132,599 N 500 477 375 517 574 498 Related $69,075 $80,460 $86,126 $192,077 $191,974 $186,946 N 270 333 269 497 555 486 Employee Benefits $32,590 $30,609 $33,707 $60,302 $59,156 $58,145 N 3177 3425 3328 613 495 483 Cost of Phones $16,069 $14,849 $13,889 $43,557 $32,274 $31,202 N 1901 2411 2494 291 319 369 Cost of Internet Services $14,199 $16,071 $17,028 $36,634 $36,234 $37,653 N 1394 1656 1616 425 381 400 $29,875 $26,905 $29,176 $68,498 $84,292 $74,865 N 3327 3346 3174 610 538 447.0 $21,890 $22,506 $24,099 $97,368 $106,095 $120,329 N 1328 2074 1837 445 671 610 Total Other $18,155 $35,940 $40,740 $75,881 $176,935 $200,764 N 4137 4507 4060 784 836 744 TOTAL EXPENSES $62,108 $72,840 $78,747 $335,481 $418,848 $441,361 15 IT SPENDING IN LODGING INDUSTRY
Table 10. 2015 2017 Average Major IT by Size of Hotel: 500-1,000 and Over 1,000 Rooms Account Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses 501 1,000 Rooms >1,000 Rooms 2015 2016 2017 2015 2016 2017 N 181 206 178 66 70 66 $280,787 $260,942 $286,543 $631,438 $565,596 $620,154 N 183 207 180 66 70 66 $422,156 $397,517 $429,792 $966,676 $897,837 $948,648 N 183 205 179 66 70 66 Employee Benefits $144,439 $139,180 $147,251 $335,238 $332,241 $328,494 N 157 111 91 55 35 23 Cost of Phones $78,347 $56,884 $61,111 $204,736 $71,305 $148,744 N 41 56 66 7 15 18 Cost of Internet Services $69,853 $49,608 $47,143 $79,480 $62,613 $60,887 N 100 95 86 35 24 24 $133,365 $153,206 $144,409 $247,520 $248,149 $260,527 N 159 125 88 56 41 24 $155,720 $148,878 $202,649 $438,999 $242,205 $414,380 N 124 194 181 47 71 64 Total Other $245,369 $455,280 $539,964 $448,038 $1,101,116 $1,333,909 N 202 223 203 70 74 69 TOTAL EXPENSES $800,044 $956,588 $1,054,448 $1,856,451 $2,167,250 $2,445,281 16 IT SPENDING IN LODGING INDUSTRY
NEXT STEPS While a meaningful trend cannot be established in a short three-year period, three years can at least start the making of a trend. In terms of total IT expenses, this trend seems to still be climbing and we may need to monitor these costs items a few more years to see if they will stabilized. In the meantime, it is prudent for all hotels to at least consider two items: 1. Follow the guidelines and separate the cost items according to the USALI this will ensure better comparison and evaluation. 2. Perform a quick calculation of all the IT costs over the last three years and compare them to these data points. Using the last tables (Tables 9 and 10) as examples, if your hotel has 501 1,000 rooms, 203 other hotels of your size reported an average of $1.05 million spent on total IT expenses in 2017; so how do you compare? If you are also a resort hotel, then use Table 8 and compare your statistics to the 229 resort hotels who make up the dataset for resort hotels in this report. In making decisions, relevant information is important. We did not have the guidance to measure all individual IT costs, but we were able to do so since 2015. It is always better to be transparent than operating in the dark. Let s get out a pencil and calculator, or better yet, set these calculations in your report system so as soon as your hotel closes out the year, these indicators will be calculated for you automatically! 17 IT SPENDING IN LODGING INDUSTRY