LHA 201: Hospitality Finance Overview

Course Objectives: 

1. 1. Understand Financial Statements: Participants will learn the fundamentals of the following financial statements, and develop the skills to review and interpret these financial statements effectively:
      • Income Statement
      • Statement of Retained Earnings
      • Balance Sheet
      • Statement of Cash Flows, and

2.  Analyze Profitability: Participants will gain insights into assessing a hotel's profitability by examining the following and learn techniques to identify areas of improvement and develop strategies to enhance profitability.

• • • Summary Operating Statement per the Uniform System of Accounts for the Lodging Industry
    • Revenues, Payroll and related-expenses, and Other expenses
    • Benchmarking Performance - Vertical Analysis
    • Benchmarking Performance - Horizontal Analysis

3. Evaluate Performance Metrics: Participants will become familiar with key performance metrics in the hotel industry and understand how to benchmark their hotel's performance against industry standards and competitors.

• • • Occupancy percentage
    • Average Daily Rate
    • Revenue per Available Room
    • Other room metrics 

4. Select a Comp Set: Participants will learn how to select an appropriate comparison set (comp set) for benchmarking purposes. They will understand the factors to consider when identifying similar hotels in terms of location, size, amenities, and target market. Three topics will be discussed:

• • • What is a Comp Set
    • Criteria in Comp Set Selection
    • Using YOUR Comp Set Effectively

5. Flow and Flex Analysis: Participants will explore flow and flex analysis techniques to evaluate the financial performance of their hotel, in order to identify trends, patterns, and opportunities for improvement by comparing financial data over different periods. 

• • • Importance of Flow Through and Flex Ratios
    • Flow Through Ratios
    • Flex Ratios

By the end of this course, participants will have a solid foundation in financial analysis and benchmarking for the hotel industry. They will have the knowledge and tools to make informed financial decisions, optimize performance, and drive profitability in their hotel businesses.