In the past, hospitality finance was mainly involved in analyzing financial statements. However, as Gabriel mentioned in his interview, analyzing future sustainability investments and their potential impact is one of the main focuses for today’s asset managers. He further explained that green initiatives are a major deciding factor for today’s consumer. It is important that company owners and leaders promote sustainability efforts, as this can benefit the organization from a marketing perspective, and also from a financial perspective. This is because many eco-friendly initiatives are also cost-saving strategies. These strategies include calculating return on investments (ROI) regarding eco-friendly systems, as hotels can be viewed as 24-hour, energy-guzzling operations. To find the most cost-effective sustainable solutions, asset managers work with internal departments such as engineering and external groups, such as LEED consultants and local government agencies.
Inclusion & Diversity
Finance and accounting have historically been male-dominated departments. Although this has been a large barrier to combat, current trends show a gradual increase in gender and ethnic diversity in financial roles. As shown, Lily Feng, an Asian Female is currently the Area Director of Finance for her company. Kim Deans, a Caucasian Female, is the current CFO of her company, and as Gabriel Stein mentioned, his company has a near 50/50 ratio of men and women in senior-level and partner-level positions. He also mentioned that his company hires diverse individuals from all around the world and the company takes additional steps to assist their employees by helping them obtain visas. Though the incidence of gender and ethnic diversity is increasing in finance and accounting roles, there is still much work to be done to provide truly equal opportunities. As evidence, Miller (2019) mentions that women are roughly one-third as likely as men to rise to executive vice president (EVP) or senior vice president (SVP) which are often finance roles in the hospitality industry. For this reason, hospitality organizations are taking new steps to overcome this disparity. For instance, the president of Hilton endorses the “UN Women’s Empowerment Principles” which focuses on programs that promote women in leadership, women as business partners, and invest in women through education, training, and professional development (Hilton, 2015).
Kim Deans mentioned that in 1991 when she started at her first Club, the accounting software was the first technology of its kind for clubs and the Financial Professional was responsible for all aspects of technology. However, as the years went by the “front of the house” was the first to be automated. The Point of Sale technology, including hardware and software, expanded following in the footsteps of retail and restaurants. The Financial Professional became the point person for the implementation and maintenance of each of these systems. Starting from the early 2000s, computer network infrastructures were key to the business and, again, it was the Financial Professional who took responsibility for the daily operations of the technology. Due to the advancement and the complicated nature of technology, many Clubs employed an outside technology company to assist.
In terms of large hotel corporations, the finance department uses sophisticated statistical software to make future sales predictions as well as to find optimal solutions to operational issues. Other internal databases are also used to manage budgets and predictions. Property Management Systems (PMS) manage all hotel room and banquet operations such as check-in/check-out, guest information, other preferred amenities, housekeeping, and total sales. Data from the PMS are used to track and analyze organizational success.
For restaurants, Point-of-Sale (POS) systems have revolutionized both accounting and finance departments. The system has allowed hospitality accounting departments to properly calculate restaurant expenditures and sales. For finance departments in restaurants, the POS provides valuable internal information such as average guest check, sales trends, and percentage of ingredient cost over revenue. The information is used to evaluate the restaurant’s performance and help future business decisions for the operation.
Finally, a trend in data analytics, called Machine Learning (ML), is emerging which is expected to also affect finance departments. Using ML applications, hospitality companies can make more accurate predictions and better understand guest decision making to allow for more informed operational planning.
Looking to the Future
Analyzing a company’s future investment in technology and sustainability is becoming ever-more important, as the future of the hospitality industry is increasingly uncertain. The future does show that cost/benefit analysis and budgeting will be a dominant factor in changing the course of a company’s vision. For this reason, knowledge about finance and accounting becomes a vital component in today’s hospitality industry not only in the finance and accounting departments but for all operational managers in any hospitality organization. This implies that finance and accounting departments will work closely with management-level employees and the importance of the department in the current economy will only increase. Managers will also need to understand the business language of finance and accounting to be proficient in informed decision-making. Kim Deans mentioned that thirty years ago, most financial professionals were bookkeepers who handled day-to-day operations, while the auditing firm prepared financial statements. However, currently, Clubs are looking for financial professionals who handle a wide range of administrative responsibilities: accounting, payroll, human resources, employee benefits, business insurance, taxes, cash management, technology, website administration, etc. Her statement shows that in today’s world, financial professions require a diverse skill set and a broad knowledge across all finance and accounting related subjects.
"Hilton Worldwide Commits to Promote Equal Opportunity for Women", Hilton, All Rights Reserved, Retrieved October 13, 2020.
"Hotel industry finance roles lack female representation" by Dana Miller, All Rights Reserved, Retrieved October 13, 2020.