Julie Eisenhauer is a guest author and a CPA at Clark Nuber PS.
Revenue is an important indicator of a hotel property’s financial health. It is used to analyze and interpret financial results using key industry operating metrics ( i.e., average daily rate [ADR] and revenue per available room [RevPAR]).
Revenue may also drive the calculation of certain costs, such as management fees, franchise fees, capital improvement reserves, marketing fees and business taxes, as these are often calculated based on a percentage of revenue. As a result, owners and operators need to be aware of changes coming in financial reporting standards related to revenue recognition effective January 1, 2018 (public companies) and January 1, 2019 (private companies).
Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.