The hotel and lodging industry is heavily influenced by economic conditions as well as local factors. Sports, weddings, local attractions, and events drive seasonal fluctuations for this industry. Customer service, location, amenities, and price are all areas that customers consider when deciding what accommodations they will reserve. Distinguishing quality, value, and service levels are critical to this industry to attract and retain customers. With all of this, you need a partner and advisor to guide you on everything financial.
Business professionals need easy access to information to make timely decisions. SVA has what you need, when you need it. Choose a topic below or just contact us directly. Our expertise is ready anytime you need it.
A cash flow forecast ensures you have the financial resources to fund your strategic growth, or simply to maintain operations when the economy affects your business. SVA can help by making sure all costs are considered and your pricing aligns with the marketplace. In the hospitality industry, seasonality and peak business times need to be considered in your cash flow planning. Let us help you clearly define your average per-room cost and revenue, as well as determine your monthly fixed expenses. Once you know your break-even point, you can more effectively plan your cash flow.
Operational reviews should be performed regularly as their purpose is to look at your operational efficiency to determine areas that are performing well and areas that need improvement. The reviews can uncover opportunities that may increase profit, drive more revenue, or reduce costs without affecting your service quality. These reviews should also inform your strategic planning and budgeting process. At SVA, we use our in-depth knowledge of the hospitality industry to complete operational and profitability reviews that include a consultative plan to address any concerns that might arise. Getting a review is the start. Putting expert advice into practice is the goal.
Your financial statements include the balance sheet, statement of cash flows, and the income statement. This information is used to calculate financial ratios that help you understand the financial performance of your business. The ratios you should be reviewing are the liquidity ratio, gross profit margin, and net profit margin. Additionally, revenue per available room (RevPAR) is a vital indicator of your hotel’s overall financial health. SVA will review your financial statements and ratios to determine how your business aligns with your industry-specific peers.eGuide: Profitability Review: Using Ratios as a Scorecard for Your Business
Understanding sales and use tax in the hospitality industry can be complex and improper reporting can lead to issues if you are audited. Your POS system needs to be set up correctly to track taxable items which provides accurate reporting from purchase to sale. If you are a part of a franchise, you need to understand how that POS system transfers data for your specific business reporting. There are also tax implications if you provide meals for employees or give away meals. While you don’t get revenue for those meals, you are obligated to report those as part of your sales and use tax process. SVA can help you navigate the complexities and ensure you have accurate reporting processes for everything related to sales and use tax.
The volatility of pricing in the restaurant and hospitality industry makes it vital for business owners to monitor key ratios and compare them to industry standards. Your ratios become the scorecard for your business. This eGuide showcases ratios calculations and how those ratios can be used to measure performance.
The hospitality industry has been hit hard by the pandemic. Now it is time to ask, "How Can I Prepare My Hospitality-based Business for 2021?"