HA 3550 Hospitality Facilities Management Facilities Management is

HA 3550 Hospitality Facilities Management “Facilities Management is the ‘R’ in Real Estate”

Introductions Instructor Jeanne Varney, BS ’ 85, jmv 59 Teaching Assistants Erica Byun, jb 845 Ari Hyman, arh 86 Katie Minnock, km 442 Jason Mohr, jm 2237 Jeremy Tobin, jtt 49 Sam Trotman, snt 27 Chase Urban, cru 3

A Brief Bio 81 -85 85 84 -88 88 -90 91 -93 94 -96 La Varenne 96 -98 98 -09 09 - Landauer Associates

Administrative Notes Heavy use of Black. Board Lecture notes, require readings, misc. articles, etc. will be posted in Black. Board

Administrative Notes Black. Board organization: Course Documents Lecture Materials Topic Folders(Bldg. Exteriors, Water, HVAC, etc. ) Lecture Power Point Important Readings Folder Extra Articles Folder Stipanuk Book

Administrative Notes Attendance Illnesses – Contact Instructor Laptop/Phone use Grading Schedule – Flexible Accommodations

Syllabus Grading 12% Quizzes (9/17, 9/26, 10/22) 8% Homework (9/12 & 11/14) 20% Prelim I (10/1) 20% Prelim II (10/31) 20% Case Study (Groups of up to 4 due on 11/26) 20% Final Exam (12/16) Extra Credit opportunities

Topics Covered In This Course Building Exteriors Water & Wastewater Systems Electrical Systems Lighting Systems Fire & Life Safety Systems Vertical Transportation HVAC Systems ADA in Hospitality Hazardous Materials: Asbestos, Mold, etc. Building Interiors Role of Facilities Management and Tools & Techniques Used Renovation & Cap. Ex Investments & Project Management Facilities Asset Management Sustainable Building Systems in Hospitality Building Systems Management Issues

Facilities In Hospitality Typically Referred to as Property Operations and Maintenance (POM) or Engineering A Typical Definition: Labor and materials associated with building maintenance operations activities (not including IT or capital expenditures)

Facilities and Finance In Hospitality Costs are usually categorized as either: Operating Costs (P&L in Engineering Dept. ) Salaries & Wages Inventory Supplies Maintenance Contracts Energy & Utilities (P&L in the Utilities Dept. ) Capital Expenditure Costs (FF&E Reserves) Major Renovations Building Systems Equipment

Why This Course Is Important to All Hotelies It’s What Guests Care About Appearance/Design Cleanliness Functionality Safety

Why This Course Is Important to All Hotelies It’s What Guests Care About “Making Customer Satisfaction Pay: Connecting Survey Data to Financial Outcomes in the Hotel Industry”, Pingitore, et. al. Cornell’s Center for Hospitality Research July 2010, pg. 7

Why This Course Is Important to All Hotelies It’s What Hotel Executive Committee’s and Brands Care About Appearance/Design Cleanliness Functionality Safety Expenses Profits Capital Expenditures

Why This Course Is Important to All Hotelies It’s What Business Owners Care About. What equals value? Appearance/Design Cleanliness Functionality – In working order Safety Efficiencies Expenses Profits Capital Expenditures

Why This Course Is Important to All Hotelies It’s What Business Owners Care About Revenues Less: Operating Expenses = Gross Operating Profit (GOP) GOP Less: FF&E Reserve % = Net Operating Income (NOI)

Why This Course Is Important to All Hotelies “Trends in the Hotel Industry USA Edition – 2011” from PKF Consulting, p. 36 ALL HOTELS -- Summary Operating Statement Revenues Departmental Costs and Expenses Total Operated Departmental Income Undistributed Operating Expenses Administrative and General Sales and Marketing Property Operation and Maintenance Utility Costs Total Undistributed Expenses Gross Operating Profit Management Fees *FF&E Reserve Income Before Fixed Charges Property Taxes and Other Municipal Charges Insurance Total Fixed Charges Net Operating Income 2010 % of Revenue 2009 % of Revenue 100. 0% 42. 5% 42. 7% 57. 5% 57. 3% 9. 0% 8. 1% 5. 1% 4. 4% 26. 6% 30. 9% 2. 8% 5. 0% 23. 0% 9. 1% 8. 1% 5. 2% 4. 6% 27. 0% 30. 2% 2. 8% 5. 0% 22. 4% 3. 8% 1. 3% 5. 1% 17. 9% 4. 2% 1. 4% 5. 6% 16. 9%

Why This Course Is Important to All Hotelies Service, Marketing & Ops. Management Hospitality Leadership Finance, Accounting and Real Estate

Why This Course Is Important to All Hotelies Service, Marketing & Ops. Management

Why This Course Is Important to All Hotelies Service, Marketing & Ops. Management “Curb Appeal. ” Property appearance is vital to attracting guests and closing the sale Reputation for safe, clean and functional hotel facilities All managers in the hotel deal with furniture, fixtures and equipment (FF&E) All managers compete for Cap. Ex dollars and deal with renovations All managers are required to provide safe working conditions

Why This Course Is Important to All Hotelies Hospitality Leadership (Law, HR, Mgt. )

Why This Course Is Important to All Hotelies Hospitality Leadership (Law, HR, Mgt. ) Significant impact on liabilities, human capital, productivity, work rules Working Conditions Safety Functionality/Efficiencies Human Comfort Code Compliance Contracts Other Compliance

Why This Course Is Important to All Hotelies Finance, Accounting and Real Estate

Why This Course Is Important to All Hotelies Finance, Accounting and Real Estate Building condition significantly impacts the underlying value of a hotel (not just the land) Appraisals/Highest and Best Use Transactions/Development/Feasibility Asset Management Asset Condition Capital Allocation Cash-Flow Impacts

Why This Course Is Important to All Hotelies It’s Fundamental to Asset Management POM Monitoring Capital Expenditure Allocation Need to understand the condition of the building – You OWN it

What This Course Will Do Provide you with the knowledge needed to face complex facilities situations in the real world You will be able to respond directly or know where to turn for additional aid/information

What This Course Will Do Look at a series of scenarios you might face as a manager in a hotel or restaurant Using these scenarios, expose you to both technical aspects AND management responsibilities for hospitality facilities

What This Course Will Do Scenarios will highlight: Role of Property Operations departments Costs associated with facilities operations Need to protect and conserve the physical asset and to provide a safe working environment for staff and guests

Non Engineers in Facilities Relate everything back to fundamentals Impact on guests Impact on employees and the community Impact on finances

Topic #1 – Building Exteriors Part I Building Exteriors Kansas City Hyatt article under Building Exteriors Important Reading folder Video

Kansas City Hyatt Disaster Were there any physical warning signs that the walkways would fail? What was the cause of the structural failure of the walkway Who was ultimately held responsible for the disaster and why? What role did Hyatt play in the disaster?