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Please read through the minutes from HOTEL ABC’s monthly budget review and answer the questions at the end. Financial Controller (FC) OK, the results for February. For the first time in 14 months we did not make budget. That said, total revenue is very good at $876,000, 11% more than last year. A very nice increase, even if under budget. So, I see it as an indication our budget is just ambitious, and perhaps we can't expect to make it each and every month. Year-to-Date (YTD) we are still over budget, so January included we are 1% over. A quick look down the P&L, at GOP; because what we have been very successful at this month is to keep expenses under control. A few expenses were lower than expected. Of course, it's always a special month, February, what with all the conferences in town and the International Athletic Event (IAE). The associated one-off expenses have of course been budgeted, so the moment they turn out to be less than expected, we keep GOP under control. And we did, the bottom line is that while being $22,000 under our revenue budget, we are just $3,000 under in terms of GOP. So, in January we were nicely over budget, GOP-wise, and unfortunately February erased a bit from that. So that's a quick impression of the final result of February. Revenue Manager (DORM) In Rooms we did not make the budgeted revenue. Keep in mind February was the month with the largest budgeted increase versus last year. We did manage to get 105K more than last year, so not quite budget but still an OK increase. The main reason for not making budget is the lower than expected pick-up of the Large Medical Conference (LMC) group; we expected more from that. We received many high room rate cancellations. If you look at our segmentation, you see quite a few room nights less than budget, 325, and also 250 less than last year. Overall in Transient — individual business — we are 8K over budget; most of this is from [the average daily] rate (ADR), $14 over budget. Good segments were 'Corporate', an increase here of $3, and 'Other Discount', which includes our long stays, so our guests who stay more than five nights. Here we were $50 over budget, ADR-wise, so that's positive and $62 more than last year, with an extra 100 nights. In Group Corporate we were on budget in terms of nights, but $22 over our ADR budget. In Group Leisure we were 141 nights under budget, mostly because the tour business did not deliver in February. We are also $8 under our ADR budget there. Overall, we are 40 nights short of budget in Groups, but $2 over budget in rate. A bit surprising is that we are growing in occupancy but not in guest numbers, compared to last year. We did an analysis of the IAE and we sold more doubles then. So, all other weeks and periods we received fewer guests per room. FC I noticed an average number of guests per room of 1.25 and I seem to remember it was 1.37 last year, indeed the average for the full year being 1.37, so yes, that's lower. DORM During the IAE it was much higher, we had a lot of double occupancy, and 100 guests more. FC And how many nights, compared to last year? DORM 35 nights more. FC And the totals for the LMC, how does that stack up to last year? DORM I still have to prepare that overview. In the end, the organization block remained flat, it's just that we didn't get as many participants in. In the last two weeks before the conference, the other hotels in town didn't keep their rates high, so as I just mentioned, we got a lot of cancellations of people who went to other hotels. FC OK. Let's go to Payroll in Rooms. ROOMS DIVISION MANAGER (FOM) I have lower expenses in salaried payroll, but we had to employ more hourly workers because of sick leave and team members taking time off in February. That accounts for the budget variance, as we had to schedule people differently. In the Executive Lounge, Etienne, I don't know if you would like to add anything but I'd say we are quite on budget there. . . . Anything worth mentioning? FOOD AND BEVERAGE MANAGER (FBM) I actually don't get these numbers, but as far as I know results should be exactly on budget. FOM They are. But good to know you don't get these figures. Perhaps the results of the (just-opened) Executive Lounge can also be shared with Etienne as he manages these hours even though they sit within my Rooms Division? FC Payroll Housekeeping, Elisabetta, would you like to comment? HOUSEKEEPING MANAGER (HKM) Yes, we saved $1 ,000 overall; we had some associates on sick leave but that was more than balanced out by salaried people taking time off than budgeted; plus I think we scheduled really well. FC And, of course, occupancy was a bit lower. FOM And a nice average time per room. FOM The hours for extra security during the IAE, are they also included? ASSISTANT FINANCIAL CONTROLLER (AFC) Partly. The hours Danny worked in last week, yes, they are in. The hours during the IAE? No, those are in Administrative and General. FOM Good, so total Payroll Rooms in line with budget even though we had lower occupancy. In the controllables, we see a higher laundry which is the result of our linen replacement in February. We also expect a credit invoice related to this which will make us on budget again, Year-to-Date. Printing and stationary we ordered in February for our new Executive Lounge. Guest Amenities is under budget because we already took an accrual in February of $2,000. Travel agents commission is lower, which is interesting as this usually only seems to go up . . . also, uniforms this month, we took an accrual in January so no expenses in February. The Executive Lounge gives me the feeling we are "in control" expense wise, looking at the budget. Do you share that feeling? EXECUTIVE CHEF (EC) Yes, food-wise no excessive expenses for the Lounge and operations appear to go smoothly. We are going to run some numbers on how much we are spending per guest so we can fine-tune our ordering if we have the forecast. GENERAL MANAGER (GM) I think we have to take into consideration that the IAE week was something special; and with the LMC you'd say usage of the Executive Lounge was very high. Perhaps the two cancel out? AFC No, it doesn't. But if we take February and March, next month we'll have two comparisons and will be better able to analyze expense per guest. FC By the way, I sent all of you that email this morning to make sure all breakfast cost of sales will be booked in the kitchen cost. EC That is the case, and I get the breakfast revenue through the rate code. GM Back to the analysis: hotel occupancy is obviously not so important for the forecast; it's about the occupancy of the rooms that have access to the Executive Lounge; so, an overall occupancy of 80% could mean we could close part of the Lounge if there are no high-tier Loyalty Program member guests. Does everyone have that kind of occupancy info? FC I feel that the next few months, at the end of March perhaps, we'd have to see which ratios we can use and track each month, to optimize purchasing, for how much goes into it. FOM OK, so controllable expenses Rooms is within budget, even a bit under, $18,000, making for a bottom-line Rooms department profit of 66, almost 67 percent. GM Which is a great result. FC Definitely. And definitely compared to last year, because it means $95,000 more revenue and almost $95,000 more profit. So a flow-through of almost 100 percent. More questions about Rooms . . .no? Then on to the F&B Department Etienne, can you comment on revenue? FBM $172,000 in total revenue; unfortunately we did not make budget; we were 7% under. The shortfall is from all outlets, Banqueting excepted. Especially breakfast did not perform; we're about $6,500 short, or nine percent. The average spend is $16.50 which is a dollar over budget but at a lower occupancy; I assume we had more rooms booked without breakfast, because the Executive Lounge breakfast revenues are part of the $6,500 revenue. FC In the end we had a somewhat lower capture ratio of in-house guests having breakfast. FBM Definitely. There's a downward trend there. The budgeted capture ratio has gone up, for the past year or so, whereas the actual one goes down and down. We need to monitor this. DORM Indeed, if I look at the numbers, we are down 150 nights for rates including breakfast FBM Any idea as to why? DORM No, the supplement for breakfast is $15, so that is an attractive price. Perhaps many people book solely looking at the rate, which is of course lower if breakfast is not included . . . No, I don't have a logical explanation for it. AFM We are looking into that for the last 6 months, the booking patterns of rates excluding breakfast. FC And how about the Corporate rates this year, without breakfast? There's a few of them, right? AFM Indeed, mainly Large Automotive Company . . . but because of the loyalty status of many of those guests, the majority has breakfast included. On top of that we had fewer leisure guests, this month versus last year. FBM OK, well, at least let's make sure we're on the ball on this one. All outlets except for Banqueting and Minibar showed an increase from 2017. Last year February, Banqueting hosted That Big Corporate Party, you remember, in the Ballroom, so it was really impossible to reach that revenue level. Next week we start the minibar project to see if our product range is the right one, and if we couldn't create alternative or additional revenues, like something in the lobby. The shortfall of $12,000 in revenue had to be compensated on the cost side. We tried really hard and low and behold: for the very first time: full time equivalents $17.59 actual and $17.59 budget so exactly on budget (receives applause]. Thank you! EC To continue in that same vein: we have a food cost of . .