142% increase
TRANSCRIPT
Economic Conditions
The Hotel Business Model Today
Michael DominguezSenior Vice President, SalesMGM Resorts InternationalState Of The Industry?
The Landscape
Record Demand In North America
New Supply Is Slow
Pipeline Is Starting To Move
Transient Drives Recovery
Group Is Strong
Forecast Major Markets
Forecast Major Markets
Transient Premium Returns
What Demand Looks Like
Record Nights
Days Of The Week
What Days Are Driving ADR
Forecast By Scale
Recovery Cycles
Fuel Cost Impacts Meetings
142% IncreaseHow Is A Hotel Built?
Direct Cost
Rooms 75% Lost Profit FigureF&B Highest Direct Cost CenterOther Smallest Profitability2007 versus 2013Commodity Costs
Commodity Pricing
Beef Prices
Beef Prices
Pork Price
Shrimp Price
Coffee 1 Year - Price
Potatoes 9.2%Oranges 12.2%What is Happening in 2014
Tomatoes 6.9%Eggs 5.7%What is Happening in 2014Price Of Cotton
Cotton Prices
43% Increase
Income Before Debt
Debt Expenses
Elevate The Dialogue43Revenue Per Occupied Group Room
$20,000 Food & Beverage Spend200 Total Room NightsRevenue Per Occupied Group Room
Your Expected F&B Contribution Per Group Room Night$100Hotels Expected F&B Contribution Per Group Room Night$150You have less leverage with rate and concessionsRevenue Per Occupied Group Room
Your Expected F&B Contribution Per Group Room Night$200Hotels Expected F&B Contribution Per Group Room Night$150You have a ton of leverage with rate and concessionsITEMS TO NEGOTIATE47CONNECTED WORLD
Not Convinced?
Pope Inauguration 2005
Pope Inauguration 2013
Circuits$25k - $30K
Signal$25k - $35K
25% to 35%
50% to 80%
80% to 100% Labor is the #1 Cost in a Hotel/Resort Separate locations for Reception/Dinner Outdoor Spaces run more labor typically Turning rooms (Labor Intensive) Good Information (Manifest/Arrival Times) Turndown Service (VIP only) Smaller Groups using Restaurant for Meals Roll-in Buffets
Negotiation Considerations57Thank YouMichael [email protected]
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Facebook - /dominguezm68