Volume 25, Number 7 December 2010 / January 2011

LEED Certification
For Hotels
Low Cost
Internal Controls
Managing
Social Media Use
Time to Revise
the USFRC?

PLUS:
AA Look at the Details from
the 2010 Compensation and
Benefits Survey • New ProLinks
Webinar Schedule • Guidelines
for Proper Employee Dismissals

T H E J O U R N A L OF HOSPITALITY FINANCIAL AND TECHNOLOGY PROFESSIONALS ®

 C O N T E NTS

The journal of
hospitality FINANCIAL AND
TECHNOLOGY PROFESSIONALS
Volume 25, Number 7

HFTP® and HITEC® are registered service

marks of Hospitality Financial and Technol-
D E C E M B E R • 2 0 1 0 / J A N U A R Y • 2 0 11
ogy Professionals. GUESTROOM 20X is a
service mark of Hospitality Financial and
Technology Professionals.

Submissions and Inquiries F eatures

Individuals interested in submitting an article
for publication should contact the editor. The
Bottomline is a peer review journal. All ma-
10 The Cost of Efficiency
terials submitted for publication are reviewed When trimming the fat, be careful not to treat internal control structures as a luxury
by members of the editorial review board or By Stephen R.J. Robinson, CPA and Philip G. Newman, CPA, CIA
recognized experts in the field.
The Bottomline (ISSN 0279-1889), the jour- 16 LEED Certification for Hotels
nal of Hospitality Financial and Technology What you’ll need to know and do, and why you’d want to do it
Professionals, Inc., is published bimonthly
with two special editions by HFTP®. Copy- By Darren Johnston and Patty Breech
right © by Hospitality Financial and Technol-
ogy Professionals. All rights are reserved. 20 I Can’t Believe You Said E-mailed Texted Posted Tweeted That!!!!!
All opinions expressed herein represent the How to positively manage the social media explosion amongst employees
views of the authors. The Bottomline and
HFTP disclaim any responsibility for views
By Joe Pittel
expressed or statements made in any articles
published. HFTP disclaims any liability with 24 USFRC — Time to Revise
respect to the use of or reliance on any such A club executive survey demonstrates enough industry changes to warrant a new edition of the
information. The information contained in
this publication is in no way to be construed
Uniform System of Financial Reporting for Clubs
as a recommendation by HFTP or any By Agnes DeFranco, Ed.D., CHAE, CHE and Raymond S. Schmidgall, Ph.D., CPA, CHAE
industry standard, or as a recommendation
of any kind to be adopted or binding upon 27 2010 HFTP Compensation and Benefits Survey
any member of the hospitality industry.
A look at the details
Written consent must be obtained from HFTP
before reprinting articles. Subscription fee By Tanya Venegas
of $30 for HFTP members is included in
the membership fee. HFTP is headquartered
at 11709 Boulder Lane, Suite 110, Austin,
Texas 78726. Periodicals Postage Paid at
Austin, Texas. POSTMASTER: Send ad-
dress changes to The Bottomline, 11709
Boulder Lane, Suite 110, Austin, Texas
78726, (512) 249-5333.
D epart m ents
5 Between the Lines
Reaching Members Off and Online — The HFTP Board amps up its online presence through
webinars, a new blog and discussion forums

6 Q&A From The HFTP Research Institute

Employee Terminations — Guidelines for proper dismissals, whatever the reason

7 HFTP Calendar
8 HFTP News and Notes
A Standing Date with HFTP’s ProLinks Webinars — New Webinar Schedule Offers
Free Education to Members Twice a Month

31 The Bottomline Resource Guide

The Bottomline 
 THE BOTTOMLINE STAFF
Frank I. Wolfe, CAE
Executive Vice President/CEO
Frank.Wolfe@hftp.org

Eliza R. Selig
Editor/Director of Communications
Eliza.Selig@hftp.org

Jennifer Lee
Advertising Sales / Director of Marketing
Jennifer.Lee@hftp.org

2009–2010 HFTP OFFICERS

President
Thomas G. Smith, CHAE

Attend live sessions over your high-speed Internet

Westmoor Country Club
Brookfield, Wis.

connection. Learn from industry experts without Vice President

Lisa Funk, CHAE
Alexis Hotel
leaving your office. HFTP members have access Seattle, Wash.

Treasurer
to free, interactive sessions that include live au- Raman P. Rama, CHA, CHTP, CHAE
JHM Hotels

dio, chat and slide presentations.

Greenville, SC

Secretary
Jerald Trieber, CPA, CHAE, CFE, CFF
Crestline Hotels and Resorts
Fairfax, Va.
Get Started: Immediate Past President
Terry Price, CHAE, CHTP, CPA
The Grove Park Inn Resort & Spa
Asheville, N.C.
Visit the Membership/ProLinks section of the
HFTP web site at www.hftp.org. 2010–2011 EDITORIAL ADVISORY COUNCIL
Chair
Ab M. Echenberg, CHAE, CHTP
AME Consulting
UPCOMING WEBINARS: Council:
Kaye Chon, Ph.D., CHE
December 16, 2010 February 3, 2011 Hong Kong Polytechnic University

Human Resources 101 The Redesigned Cihan Cobanoglu, Ph.D., CHTP

Courtyard Newark- University of Delaware

January 6, 2011 IRS Form 990 Daniel J. Connolly, Ph.D.

University of Denver

PCI Compliance:
Dennis DuBois, CHAE
February 17, 2011 Carlson Hotels Americas

Myths and Rumors CHAE Review Series 2 Mehmet Erdem, Ph.D, CHTP
UNLV

Jason R. Filippini,
January 20, 2011 LeMaster Daniels

CHAE Review Series 1 Mark A. Gage, CHT

Scottsdale Community College

Melih Madanoglu
Florida Atlantic University

Brian Miller, Ph.D.

University of Delaware

Christina E. Miller, CAM, CHAE

Ginn Reunion Resort & Club

Arlene Ramirez, MBA

The Woodlands

Raymond S. Schmidgall, Ph.D., CPA, CHAE

Michigan State University

Franklin John P. Sikich, CPA, CHAE

Franklin John Patrick Sikich, CPA

Paul A. Willie, CHAE, CHTP, CHA, CMA

Niagara College

11709 Boulder Lane, Suite 110 • Austin, TX 78726–1832

+1 (512) 249-5333 • (800) 646-4387 • Fax +1 (512) 249-1533
®
www.hftp.org • www.hitec.org

 December 2010 / January 2011

 Between the Lines 
A Letter from the HFTP President

Reaching Members Off and Online

The HFTP Board amps up its online presence through
webinars, a new blog and discussion forums

nars are not new, you can now look
for live presentations every first and
third Thursdays of the month. HFTP
members can partake in the one-hour
webinars completely free. Plus, CHAE
and CHTP holders can get one CPE
credit for participating.
The topics range from the techni-
cal — tax law; to the trends — social
media; to personal achievement — how
to eliminate fear. And if you can’t make
a scheduled presentation; then at your
convenience, pick one from the list of
archived presentations, take a seat and
Thomas G. Smith, CHAE click on the link. Learn more about
ProLinks in this issue on page 8.
Interaction through online communi-
Thomas G. Smith, CHAE
ties and social networks is no longer an
activity exclusive to millennials. As we
ute. It is our collective knowledge that
helps all of us progress.
In addition to our message boards,
HFTP.org will soon feature a blog, with
regular contributions from industry
experts, HFTP leaders and more. Stay
tuned for the announcement of its
debut. And to come full circle, stay in
the loop with the association’s @HFTP
Twitter account and its Facebook page.
Last, I wanted to briefly mention the
recent announcement of the formation
of HFTP University (HFTP-U). HFTP
has teamed with Datanamics, Inc. to
offer a one-stop resource for high level
technical and end user training. All
courses within the Datanamics listing
are available to HFTP members at a 20
percent discount, and can be custom-

H
ere it is, an opportunity I’ve
been looking forward to for
several years — taking on the
role as HFTP Global president. For two
decades I’ve been an active member of
the association, as I’ve built my career
in the club industry. HFTP has helped
me progress with valuable education
and memorable networking opportuni-
ties, as well as the satisfaction of being
part of something that contributes to
the growth of the industry as a whole.
One area I think HFTP has been
successful at, is adapting to the chang-
ing business environment by deliver-
ing benefits that align with modern
practices. As an example, and some-
thing that I look forward to using in
the coming year, is our growing online
education and community. HFTP has
had an online presence for many years,
but recently the Board has given the
green light to amp it up.
First is the emphasis for easy ac-
cess to online education on a regular
basis. While HFTP’s ProLinks webi-
increasingly go mobile, many of us have ized to fit specific needs. This is a great
started to take for granted that Internet opportunity for HFTP members to get
access follows us throughout our day. the most current training in a quickly
We use the resource for fast answers to changing industry. To learn more about
questions, and for back-and-forth dis- HFTP-U visit the HFTP web site, as
cussion, professional and personal. well as participate in the orientation we-
When it comes to the HFTP mem- binar coming this winter.
bership, the Global Board thinks it is Right at the get-go I have a lot of
time to strengthen the HFTP online HFTP news to share. I look forward to
community to complement conferences continuing over the next year, whether
and chapter meetings. I would like to it’s online or in person.
request that you take the time to visit
the HFTP message boards on a frequent
basis. While you may not have any spe-
cific questions to post, you most likely
will have experiences you can contrib-
One area I think HFTP has been successful at, is adapting
to the changing business environment by delivering
benefits that align with modern practices. As an example,
and something that I look forward to using in the coming
year, is our growing online education and community.

Thomas G. Smith, CHAE is the chief financial officer for the Westmoor Country Club in Brookfield, Wis.

The Bottomline 
 Q&A from the
HFTP Research Institute 
Employee
Terminations
Guidelines for proper dismissals,
whatever the reason
Question
Can you provide the general guidelines for
employee terminations? Please go through
the steps for employees that have not
performed and terminations for reduction-
in-force.
Answer
E
mployee terminations are always difficult no matter
what the reason. With the recent economic downturn,
many employers have had to downsize their workforce
in order for their company to survive. This HFTP Research
Institute Q&A will provide guidance on how to properly ter-
minate employees either for poor performance, inappropriate
behavior or a reduction-in-force.
Step 1. Hire Right
The first step in the entire process is to ensure the right em-
ployees are hired to perform the duties as necessary. First of
all, make sure a proper job description is in place so the em-
ployee has proper expectations of the position for which they
are applying. An appropriate employment application should
be used for anyone applying for a position which includes
things such as the prospective employee’s education and past
job experience (Barr, 1995). Depending on the position, part
of the pre-employment process could also include a medical
exam, drug tests and reference checks.
Once you have decided to hire this potential employee,
they should be provided with a detailed offer letter pertain-
ing to all information pertinent to the position they are being
offered. This letter should include all of the terms and condi-
tions of the job offer and the applicant should be requested to
sign and return a letter of agreement accepting the terms put
forth in the offer letter.
 December 2010 / January 2011
Step 2. Train New Employees
Training new employees correctly is also necessary to
prevent any problems moving forward. It is the employers
responsibility to ensure the employee receives all proper
training materials. Most organizations provide a detailed
employee manual to new hires and require them to sign a
document stating that they received the manual and under-
stand its contents. The employee manual sets forth all of the
basic expectations such as timeliness, dress code, appropriate
conduct, etc. After all of the general items are covered in the
employee manual, then the employee needs to be provided
one-on-one training on their specific position until they are
capable of performing the duties themselves.
Step 3. Employee Evaluations
Employee evaluations are an important part of assessing
whether employees are properly performing their job duties.
Many organizations only conduct formal evaluations once
a year, but in most cases it is more productive to conduct
evaluations on an ongoing basis whether it be bi-monthly
or twice a year. This provides employees better feedback
throughout the year and they are not shocked to find out they
have not met expectations when it comes around to their an-
nual review which is typically tied to a salary increase.
A very important part of employee evaluations is docu-
mentation. Any expectations which are not being properly

met must be extensively documented
and employees should be required to
sign and acknowledge these shortcom-
ings. When documenting, managers
must be specific. In other words, instead
of a manager noting “Suzy is always
late to work,” they should be recording
“Suzy’s shift starts at 8:00 a.m. and she
arrived at 8:15 on Monday and 8:20
on Thursday.” This provides a clearer
picture of the situation.
Step 4. Discipline Procedures and
Improved Performance
Employee discipline should be fair
to the employee, and the same rules
and regulations should apply to every
employee. An example provided in
one article was an employee sleeping
on the job who was terminated. She
complained that she was not treated
fairly because she knew of another
employee who had fallen asleep on the
job and was not terminated. After some
investigation, it was determined that the
employee who was not terminated was
given an excuse because he had stayed
up late the evening before to complete
an important project. Even though one
employee had a “good” excuse, these
employees were not treated in the same
manner.
Again, make sure disciplinary mea-
sures are clearly stated in the employee
manual which should be reviewed by
legal counsel (Bar, 1995). In addition,
the employee manual should state that
employees can be immediately termi-
nated for certain actions. The hopeful
outcome of any disciplinary procedures
is improved performance. Managers
must set clear goals for their employ-
ees and it is advised to receive written
commitment to reach these goals on a
specified timetable.
Step 5. Termination Evaluation
If an employee is not performing or
has exhibited extreme behavior war-
ranting termination, then a termina-
tion evaluation needs to be conducted.
Employees should never be fired on the
spot. If their behavior is unacceptable
they should be sent home and put on
probation until a proper investigation
has been conducted. In either instance,
more than one person should be evalu-
ating the facts and determining whether
to terminate the employee. This avoids
bias from any parties.
Step 6. Termination Procedure
Terminating an employee for any
reason is a highly emotional process
for most people, but the process must
be kept professional and only the facts
need to be presented. There should be at
least three parties present in the room:
(1) the employee, (2) person conduct-
ing the termination, and (3) an impartial
third party. Some companies believe it
is best to simply call the employee in
and terminate them, but most experts
agree that it is best to lay the facts on
the table. Without the facts, the employ-
ees mind can run wild with reasons
they are being terminated. For example,
the employee handbook states that if
you are late more than three times you
will be terminated. Suzy was late three
times last month and here are her time
cards which she signed stating she ar-
rived 15 minutes late these three dates.
Send your research request to hftp@hrm.uh.edu. Please note that the Research
Institute cannot answer every question. Some specific or proprietary type
questions are too difficult to answer.
C ALENDAR
For more information about HFTP events, call (800) 646-4387 or (512) 249-5333,
or visit www.hftp.org.
HFTP-U Seminar: Sharepoint
January 10, 2011
Las Vegas, Nev.
HFTP-U Seminar: Sharepoint
January 19, 2011
Dallas, Texas
HFTP-U Seminar: Sharepoint
January 24, 2011
Orlando, Fla.
HFTP-U Seminar: Sharepoint
January 10, 2011
Washington, D.C.
Development Conference
March 14 – 15, 2011
Green Valley Ranch Resort
Las Vegas, Nev.
 Q&A from the
HFTP Research Institute 
She was provided a written warning
upon each time she was late and on the
third time she was warned she would be
terminated if she was late again. This
example provides a clear cut reason for
Suzy’s termination.
In the case of a reduction-in-force,
employees should be provided the
financial and organizational reasons be-
hind why they are being released. This
will provide the employee being termi-
nated as well as remaining employees
the reason behind the termination.
Otherwise, the remaining employees
will go to work every day wondering
and worrying if they are next.
If you have any further ques-
tions about terminations or employee
discipline, please contact the HFTP
Research Institute. 
Sources
• Barr, Marcia N. Club Management.
St. Louis: Mar/Apr 1995. Vol 74, Iss 2;
pg. 14. Retrieved November 4, 2010
from ProQuest.
AHTEC 2011
May 12 – 13, 2011
Hong Kong Convention &
Exhibition Centre
Hong Kong
HITEC 2011
June 20 – 23, 2011
Austin Convention Center
Austin, Texas
Club and Hotel Controllers Conference
June 21 – 22, 2011
Austin Convention Center
Austin, Texas
Annual Convention & Tradeshow
October 19 – 22, 2011
Omni CNN Center
Atlanta, Ga.
The Bottomline 
 HFTP News & Notes 

A Standing Date with HFTP’s

Prolinks Webinars
New Webinar Schedule Offers
Free Education to Members
Twice a Month

By Katy Walterscheidt

W
ebinars. By this point in the 21st Century, most
professionals have attended a webinar. And if they
haven’t, they at least are familiar with what a webi-
nar is… you know, an education session broadcast live over
the web (hence the WEB-based semINAR name).

About Prolinks Webinars

HFTP held its first webinar in 2004. And ever since then,
the association has offered free education online through its
ProLinks forum. The best thing about HFTP’s webinars is
that they offer you an easy way to get professional develop-
ment at an awesome price — free. And who doesn’t love
free, convenient education? The only downside was that the
webinars were held without a set schedule.
But that’s all changing. Now you can set a permanent
date with HFTP’s Prolinks Webinar Series every first and
third Thursday of the month. Each webinar is free to mem-
bers and offers a wide variety of topics from tax laws, PCI
compliance, human resources, social media strategies and
more. And if your schedule doesn’t fit with the webinar’s
time? Don’t fret — each webinar (from 2006 to the present)
is archived on hftp.org.
The new schedule began in November and will continue
throughout 2011. As webinars are scheduled months in
advance, the schedule is posted on the web site. So you can
plan for which webinars you’d like to attend.
Get CPE credits
We all know the important benefits of attending conferences
like HITEC and HFTP’s Annual Convention. Not only do
you get to network with colleagues and meet helpful ven-
dors, you also get CPE credits through education sessions.
But great conferences only occur several times a year and
sometimes they just don’t fit into your schedule.
This is where the Prolinks webinars come in handy. Get
your continuing education credits right from your office or
home. Because with each live webinar you attend, you’ll
earn one CPE credit. And free CPE credits can’t be beat.
HFTP’s ProLinks Webinar Series often features some fa-
vorite conference education sessions. So if you weren’t able
to make it to a conference, you can still learn from some of
the best conference speakers about the hottest topics in the
industry just by signing up for the free webinar.
New CHAE Series
Those familiar with HFTP conferences know that most con-
ferences begin with CHAE and CHTP reviews and exams.
Now you’ll be able to the take the CHAE review from the
comfort of your home or office.
For the first time, the CHAE review will be available on-
line through a four-part webinar series. Each part of the we-
binar will be presented once a month, with content building
from the previous month. Each session will focus on a topic
— like “everything you want to know about inventory.” This
differs from the live review sessions, which are specific to
chapters of the review guide.

 December 2010 / January 2011

  HFTP News & Notes 

Another beauty of the webinars versus the live review

sessions is that they are broken into one hour sessions,
allowing members to spread out their review when it’s con-
venient for them.
“We understand that the candidates have different learn-
ing styles and time commitments. Certification training
aids currently include study guides, PowerPoint slides and
a four hour live review session,” said Kristopher Shoe-
maker, CMA, CHAE, CHTP, CGFO, Certification Advisory December 16, 2010
Council chair, HFTP Global director and assistant business Human Resources 101
manager for the Orange County Convention Center. “The January 6, 2011
council needed to expand our training offerings to accom-
modate the various learning styles and the one hour webi- PCI Compliance: Myths and Rumors
nars are one of the various changes we are doing this year.” January 20, 2011
Shoemaker said he hopes the webinar series results in CHAE Review Series 1
more people being exposed to the Certification program
and ultimately more people becoming certified. But even February 3, 2011
if members aren’t interested in certification, the topics can The Redesigned IRS Form 990
help with day-to-day job functions. February 17, 2011
And if the initial CHAE webinars are successful, you’ll
find additional topics for the CHAE and the CHTP added to
CHAE Review Series 2
the schedule. 

The Bottomline 
 Internal Controls 

The Cost of Efficiency

When trimming the fat, be careful not to treat internal control structures
as a luxury By Stephen R.J. Robinson, CPA and Philip G. Newman, CPA, CIA

T
he sweeping cost control measures Two Scenarios: Which is Efficient? Scenario 1: Resort Profile in 2006
implemented throughout the hos- With this definition in mind, consider A large resort property with guest
pitality industry over the course of the differences between the two internal rooms, meeting spaces, multiple food
the great recession are common knowl- control structures in the following sce- and beverage outlets, a golf course,
edge and need no repetition. The cur- narios with regard to which scenario is and spa employs a fully staffed ac-
rent climate is characterized by guests really more efficient. counting office comprised of a CFO,
who expect more for less, and property
managers who expect to provide more
with less. The question left looming in
the face of this contradiction is whether
this drive for greater efficiency carries
with it any hidden costs.
Could the internal control structure
of your property have been compro-
mised by indiscriminate cost cutting
which may require more dollars to be
spent in the future to correct internal
control lapses? After all, if the positions
and processes being eliminated or cur-
tailed are not important, why did they
exist in the first place?
Prior to addressing these questions,
let us offer a brief definition of internal
control. According to the Committee of
Sponsoring Organizations of the Tread-
way Commission (COSO), internal con-
trol is “a process, effected by an entity’s
board of directors, management and
other personnel… to provide reason-
able assurance regarding the achieve-
ment of objectives in effectiveness and
efficiency of operations, reliability of
financial reporting and compliance with
applicable laws and regulations.” In
other words, internal control helps us
keep an eye on what our staff members
are doing while offering confidence that
our numbers are correct.

Stephen R.J. Robinson, CPA is a director with McGladrey where he manages financial audits for commercial hotel and hospitality organizations that are regu-
lated by the SEC, resorts owned and operated by the U.S. Department of Defense, and independently owned and operated resorts. Philip G. Newman, CPA, CIA
is a managing director with McGladrey, where he is responsible for projects throughout the United States including internal control and governance reviews,
operational consulting, benchmarking studies, strategic planning and the development and delivery of education products and tools for club boards, CEOs and
CFOs. Newman is a frequent speaker at HFTP educational events.

10 December 2010 / January 2011

 Internal Controls 
controller, and payroll, payables and
receivables administrators. The CFO
deals with strategic financial decisions
and leadership, maintains relationships
with lenders and negotiates new debt
agreements, monitors compliance with
existing loan covenants, reviews daily
flash reports with the general manager
(GM) and provides weekly updates to
the ownership board. The CFO also
performs a detailed review of monthly
financial statements and reconcilia-
tions, coordinates group reports to the
corporate office and franchisor, and
works closely with the property’s IT
administrator to monitor access changes
and system integrity. Meanwhile, the
controller reconciles all ledgers and
supervises payroll, receivables and pay-
ables administrators, and participates in
Internal control activities must be cost justified;
however, recent economic conditions have left
substantial doubt about the amount of consideration
paid to internal control in the drive for expense
reduction and meeting short term financial targets.
periodic inventory counts at the resort’s
stores and outlets. Lastly, the adminis-
trative assistant who reports to the CFO
handles all mail received by and sent
from the accounting office.
Scenario 2: Resort Profile in 2010
To mitigate the economic pressure on
the bottom line of falling revenues the
CFO position is eliminated together
with the administrative assistant, pre-
senting a combined payroll and benefits
saving of $250,000. Leadership for the
accounting departments is placed on the
controller who, due to her workload,
can no longer participate in inventory
counts and these are left in the hands of
the stores’ personnel, and outlet staff
members who are ordinarily responsible
12 December 2010 / January 2011
for inventory custody. To share the ad-
ditional burden, accounting office mail
is handled by the assistants responsible
for each respective area; they are also
granted full access to their respective
ledgers and master files. The review
procedures previously performed by
the CFO are now placed in the hands of
the GM who concentrates on revenue,
rate and occupancy performance, and
largely neglects the balance sheet and
underlying reconciliations.
No one monitors changes to IT
rights. The business of the resort
continues from a guest perspective as
normal; however, “back of the house”
performance begins to slip. Daily flash
reports deteriorate to almost daily with
payroll information frequently missing,
and it becomes increasingly difficult to
meet group reporting deadlines. Credit
control becomes challenged and the ag-
ing profile of the city ledger deteriorates
each month with an accumulation of
older balances.
The annual audit rolls around and the
books are not adequately closed. The
financial statements cannot be audited in
the anticipated timeframe as numerous
reconciliations have not been per-
formed. The property’s relationship with
the bank is strained due to its inability
to meet quarterly covenant reporting
deadlines. However, the bank waives
the requirement for audited financial
statements within 120 days of year-end.
The bank’s new reporting deadline is
met; however, the property has had to
incur $25,000 of additional audit fees in
order to do so. Then there are the issues
identified in the course of the external
audit — food inventory had to be writ-
ten down by $35,000 due to substantial
spoilage and shrinkage. Group receiv-
ables of $50,000 had to be written-off as
the organization, which held a confer-
ence mid-year, had not authorized the
banquet folio for the overage. Fraud
of $15,000 occurred in the payroll
system as a result of the wily payroll
administrator’s realization she could
access the master file, establish a ficti-
tious employee, and lift the paycheck
out of the payroll processor’s reporting
package before the controller and GM
looked at it. After all the audit adjust-
ments were finally posted, the resort has
failed to meet the financial covenants
specified in its loan documents and the
bank enforced its $200,000 covenant
waiver penalty. How does that $250,000
in “savings” look now?
Measuring Internal Controls
While this perfect storm is admittedly
unlikely, the question remains as to how
the benefits of a solid internal control
system are measured. There is no doubt
that accountants like measurements, but
how do we measure the dollar impact
of fraud prevented or bad decisions
avoided due to an effective flow of
information is a critical consideration.
Internal control activities must be cost
justified; however, recent economic
conditions have left substantial doubt
about the amount of consideration paid
to internal control in the drive for ex-
pense reduction and meeting short term
financial targets.
Remember that in a tough economic
climate weak internal control is more
likely to be exploited. Fortunately, a
recent control efficiency assessment
project we conducted for a resort
property demonstrated, internal control
can be strengthened without the need to
spend much at all.
A few areas that are always deserv-
ing of attention when attempting to
improve internal control and do not cost
much, if anything, include: physical se-
curity, logical security, communication,
H o s p i ta l i t y l aw y e r . c o m p r e s e n t s
the
ho
 s p i ta l i t y l aw
2011 conference
focusing on legal, safety & security solutions

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The Information Protection & Privacy, including PCI-DSS,

Workshop Features the Following Sessions:
• Legislative and Regulatory Update: New Laws Regulations and
Their Implications for the Hospitality Industry
• The Massachusetts Privacy Law: One Year After the Effective Date
– Is it a Lion or a Lamb?
• Data Privacy Essentials: Leading Practices to Avoid a Breach
• Level 4 Merchants – Charting a Course for PCI Compliance with-
out Going Broke
• Third Party Service Providers – Do You Know Where Your Risks
Are?
• PCI-DSS Version 2.0 – What’s New?

µ This conference mixes law, accounting, and IT

µ
and delivers value for hospitality professionals
and their attorneys.
Jerry Trieber,
Director Field Accounting,
Crestline Hotels and Resorts

FOR MORE INFORMATION, PLEASE VISIT:

TO REGISTER,
VISIT: REGONLINE.COM/2011HOSPITALITYLAWCONFERENCE
CALL: (713) 963-8800
 Internal Controls 
Low Cost Internal Controls
A few areas that are always
deserving of attention when
attempting to improve internal
control and do not cost much, if
anything, include:
Physical Security
Mitigate theft by limiting access
to restricted areas by locking
doors and cabinets, and routinely
checking that they remain locked.
Logical Security
Protect software applications
and online banking access
by appropriately assigning
administrator rights, and enacting
proper password management.
Communication
Develop an open line of
communication between staff and
managers to encourage the team to
point out issues, and participate in
cost-cutting measures
Technology
Take full advantage of the
functionality of existing applications
to reduce risk of end-user errors.
Credit Control
Prevent unpaid charges by
closely following your property’s
credit terms, which should be
documented, understood by your
customers and enforced.
Segregation of Duties
Involve non-accountants in the
transaction process — have them
stuff vendor envelopes with checks
and handle remittances.
Documentation
Document the performance of key
internal controls and retain the
documentation.
14 December 2010 / January 2011
technology, credit control, segregation
of duties and documentation.
Physical Security
This is common sense. Lock the doors
to areas where access should be restrict-
ed and on all inventory storage areas,
cages and cupboards. Routinely check
that they are locked. Know who has
keys and document it. If you are unsure
and unable to discover who has keys,
consider re-keying all locks, ascertain
how key distribution became out of
control in the first place, and implement
a procedure to ensure key distribution
is properly administered henceforth.
Speak with your human resources col-
league and ensure that employee exit
procedures require them to return uni-
forms, keys and swipe-cards, and to be
marked inactive in the payroll system.
As is already common in the industry,
clear trash bags should be used through-
out the property to mitigate the risk
of theft, and employees should not be
permitted to carry personal bags on and
off the property. Security cameras are
great for detecting theft and even better
for preventing it in the first instance, but
require spending money.
Logical Security
Consider whether administrator rights
to your property’s software applica-
tions are appropriate. The fact that
the controller does not have rights to
approve transactions in your online
banking system does not really count
for much if they are also the system
administrator for online banking.
Likewise, if online purchasing is used,
the purchaser should not be the system
administrator and the property should
obtain written confirmation from the
vendor of a specific dollar order limit.
As a general rule, administrator rights
should not rest with the users. If your
property is blessed with such resources
as a full-time IT manager, administrator
rights should rest with that individual
and standard documentation should be
used to provide evidence of approval of
changes to access rights.
Consider whether passwords to your
property’s information systems are:
• The word “password”
• Shared knowledge among all co-
workers
• The same as when the property first
acquired a computer in 1982
• Written on a piece of paper conve-
niently kept in the shallow drawer
for holding pens and pencils, directly
beneath the computer (together with
the username, of course).
Passwords should be specific to each
user, subject to regular change and
not be written on or near the relevant
workstation. This also applies to front
of the house systems such as point-of-
sale terminals in the restaurant, bar,
spa and pro-shop, with each user being
allocated a specific identification and
appropriate rights.
Communication
Communication channels between staff
members and the GM and/or owner
should be sufficiently open so that inter-
nal control and operating lapses can be
identified and corrected promptly. Em-
ployees realize the economic challenges
currently being faced by the industry
and obtaining staff buy-in to simple
cost control measures, such as turning
off lights in unoccupied areas of the
property and reporting breakdowns in
controls, can help maintain service lev-
els and mitigate despondency. While on
the topic of communication, departmen-
tal communication must be sufficiently
frequent to facilitate appropriate staff
scheduling based on forecasted occu-
pancy and event reservations.
Leveraging Technology
End user computing, such as financial
analysis and budgeting in spreadsheets,
presents a number of risks since simple
clerical errors can lead to management
decisions being made on the basis of
flawed information. Consider where
existing applications, particularly the
property management system, can be
fully used to mitigate risks arising from
unnecessary end user computing. Like-
wise, consider whether the functionality
in “front of the house” applications,
such as point-of-sale systems, is be-

ing fully used. For example, cocktail
recipes can be pre-programmed into the
system so that bar staff members know
not to use “top shelf” brand liquors
in mixed drinks when a “well brand”
would be sufficient.
Credit Control
Your property’s credit terms should be
documented, understood by your cus-
tomers and enforced. For those proper-
ties with a “club” membership element,
members should be subject to credit
checks, deposits should be taken, and a
valid credit card should be held on file.
Looking at a basic scenario, consider
a member who dines for two twice per
week with drinks. Such an individual
could easily accumulate $1,000 of
charges in a month. Reflect on whether
your property has sufficient recourse
should the member fail to settle their
house account in a timely manner.
Clear procedures should be established
for members with house accounts to
have balances charged to a credit card
whenever a predetermined amount is
met. Consideration should also be given
to charging a deposit against members’
credit cards when opening an account to
ascertain the validity of the credit card
and partially mitigate the risk of unpaid
food and beverage or spa charges.
Segregation of Duties vs.
Robust Review
Given the limited resources in most
properties’ offices, implementing per-
fect segregation of duties is typically a
challenge. The concept is to segregate
physical control of assets from the
record keeping for those assets. Hence
checks for guest and merchant receipts
should not be handled by the accounts
receivable clerk, signed disbursement
checks should not be handled by the
accounts payable clerk, payroll checks
should not be handled by the payroll
clerk, and inventory counts should not
be performed solely by the purchaser.
The addition of accounting staff
is not the solution to segregation of
duties challenges — a better method
is to involve non-accountants in the
transaction process. Consider if there
is a non-accounting staff member with
capacity to stuff vendor envelopes with
checks and remittances once the checks
have been signed — this would remove
a typical segregation of duties challenge
in the accounts payable cycle. Consider
whether someone is available to make a
list of receipts and compile the bank de-
posit, enabling the accounts receivable
clerk to update the ledger from the list
rather than from the checks, or a non-
accounting coworker can perform the
remote data capture (RDC) scan where
RDC is used. If either situation exists,
The question you should really ask yourself is whether
the integrity of your property’s internal control
structure is an aspect of operations that you can afford
to see as a luxury in this current or, for that matter,
any other economic climate.
then you have substantially addressed a
typical segregation of duties challenge
in the revenue and receipts cycle.
If segregation of duties cannot be
improved due to limited resources, then
the review processes need to be solid.
Does the general manager have a regu-
lar monthly financial reporting packet
that includes reconciliations and reports
detailing changes to masterfile data in
accounts payable, accounts receivable
and payroll? If your accounts payable
clerk changes a vendor address to a
friend’s post office box, will anyone in
the property notice in a timely fashion?
Who reviews the details of guest cred-
its? If your accounts receivable clerk
steals a guest check and posts a credit to
the respective account instead of a pay-
 Internal Controls 
ment, how long is that likely to remain
undetected?
The Documentation Gap
In order to demonstrate sound financial
management and internal control com-
pliance, the property should document
the performance of key internal controls
and that documentation should be
retained. This could be as straightfor-
ward as the GM initialing the monthly
reporting packet referred to above, and
it being scanned onto the property’s
network. Properties should also con-
sider developing standard documenta-
tion to evidence approval of master
file changes for vendors, customers,
employees and staff system user rights.
In the current corporate governance
parlance, “If it isn’t documented, it
didn’t happen.”
A Burdensome Cost?
The cost of enhancing your property’s
internal control structure need not be
financially burdensome. Yes, some of
the items mentioned throughout this
piece will consume additional execu-
tive time, albeit a moderate amount.
The question you should really ask
yourself is whether the integrity of
your property’s internal control struc-
ture is an aspect of operations that you
can afford to see as a luxury in this
current or, for that matter, any other
economic climate. 
The Bottomline 15
 Green Building 

LEED Certification for Hotels

What you’ll need to know and do, and why you’d want to do it
By Darren Johnston and Patty Breech

L
EED certified hotels and buildings stand out in today’s
marketplace. They not only provide benefits for the envi-
ronment and reduce operating costs gained from energy
efficiencies and utility cost savings, but also attract a
growing population of eco-conscious customers.
To date, there are over 6,500 buildings award-
ed LEED certification. In the forefront of this evo-
lution, hotel certifications are growing by almost
100 percent annually. By the end of 2009 there
were 54 LEED certified hotels and 697 hotels that
were in the application process. By August 2010
the number of LEED hotels leaped to 89. Starwood
Hotels and Resorts Worldwide is arguably the lead-
ing chain with current LEED-certified properties
plus those that are pursuing certification totaling 67
in all. Their new chain of Element “eco-hotels” are
all built to pass LEED standards. Three are cur-
rently LEED-certified, with a total of 12 expected to
be open by the end of 2010.
The largest newly-constructed LEED hotels
— The Palazzo, Aria Hotel, Mandarin Oriental
and Vdara Condo Hotel — are all in Las Vegas.
Other notable properties that have seen the “green”
light include Seattle’s first LEED-certified hotel,
the Hyatt at Olive 8; the Avalon Hotel and Spa in
Portland, Ore.; the Terra Resort Group’s Hotel Terra
Jackson Hole in Teton Village outside Jackson,
W.Y.; and the Platinum LEED certified Proxim-
ity Hotel in Greensboro, N.C., the first hotel in the
United States to acquire this highest LEED rating.
The surge in LEED applications and successful
certifications in the last few years points out that,
more than a commendable option, LEED certification
has become a competitive reality for the hospitality
industry.

Darren Johnston is director of business consulting for UHG Consult-

ing, based in Boulder, Colo., where he advises hospitality firms on
how to reduce their operating costs through sustainability programs.
Johnston is a frequent speaker at HFTP educational events. Patty
Breech is an associate consultant for UHG Consulting. Breech is a LEED Ac-
credited Professional with experience in sustainability projects serving
the hospitality, customer service and non-profit industries.

16 December 2010 / January 2011


What is LEED?
LEED stands for “Leadership in Energy and Environmental
Design,” and is an independent, non-profit, third-party rat-
ing system established by the U.S. Green Building Council
(USGBC) in 1998. The LEED rating system is completely
voluntary and consensus-based, incorporating both established
industry principles and innovative environmental technology.
LEED is the most widely-recognized form of green building
certification in the United States.
Why LEED?
LEED is the international standard for green buildings.
LEED certified buildings are recognized by facilities,
consumers and the media as the most energy efficient and
occupant-friendly structures in the world. The primary
reason most hotels seek LEED is operational efficiencies.
According to Greentech Media, while the average LEED
new construction costs $3 more per square foot to build,
that same building reaps $73 per square foot in energy
savings. For example, it’s estimated that the Hilton Van-
couver put in $125,000 in extra construction cost to be-
come LEED certified; but as a result, now enjoys $85,000
in annual savings.
Businesses occupying LEED certified buildings not only
earn savings from lower operating costs; they also increase
revenue from their “greener” profile. For example, the Wat-
kins Research Group found that “green” qualities are an im-
portant factor for meeting planners when choosing venues.
There are innumerable advantages associated with LEED
certified buildings. Here are the main and obvious benefits,
but this is by no means a complete list:
1. Lower operating costs
• Lower utility bills from increased energy and water ef-
ficiency. The Proximity Hotel in Greensboro uses 39.2
percent less energy and 33.5 percent less water.
• Lower maintenance cost as a result of detailed preven-
tative maintenance plans.
2. Increased property value
• Higher market value for new and existing construction.
• Higher lease-up rate than conventional buildings.
• Not enough data is available in the hospitality indus-
try yet; but with commercial real estate, on average,
LEED properties sell for $171 more per square foot,
have a 3.8 percent higher occupancy rate and rent for
$11.24 more per square foot.
3. Healthier and safer for occupants
• Improved indoor environmental quality.
• Improved lighting and views.
• Better work environment for employees.
4. Certified recognition of green practices
• Approval from a non-biased, accepted authority.
 Green Building 
The primary reason most hotels
seek LEED is operational efficiencies.
According to Greentech Media, while
the average LEED new construction
costs $3 more per square foot to build,
that same building reaps $73 per
square foot in energy savings.
• Physical proof of the values of the organization that
owns and occupies the building.
• LEED is becoming a market differentiator. Sustain-
ability is now the fourth most important decision fac-
tor for consumers when choosing lodging.
The LEED designation from the USGBC is currently the
standard of the green building industry. Nearly every major
company has tried to market itself as “green” in response
to the recent sustainability movement, but only those with
LEED certified buildings have third-party verification of
their claims.
How it Works
The process begins with registration of the LEED project
online along with a registration fee (usually around $1,000).
After registration, the project team demonstrates the sustain-
ability of its property through documentation of various
building processes and characteristics, using the USGBC-
provided forms.
LEED operates on a 100-point scoring system. A prop-
erty must meet a minimum of 40 of these points to attain
certification. While the project team has a good deal of
freedom in selecting which points to pursue, there are also a
set of mandatory prerequisites which carry no points them-
selves, but must be achieved before points are awarded.
For existing buildings, the project team selects a time
frame, called the “performance period,” in which to
demonstrate compliance. The performance period can be
anywhere from three months to two years. To illustrate,
existing buildings can earn points for demonstrating that
a certain percentage of their cleaning product purchases
are sustainable by LEED standards. The project team can
choose to document the building’s purchases from a three
month performance period, a six-month performance
period, or longer — up to two years. However, all perfor-
mance periods must end concurrently.
The Bottomline 17
 Green Building 
The Path to LEED Qualification
The process to qualify for LEED certification requires
heavy documentation demonstrating the sustainability
of the property via various building processes and
characteristics. Here are the basics:
Registration and Application
The process begins with online registration of the
project, along with a registration fee (usually around
$1,000). Once the process is complete (either at the end
of the construction period/or selected performance
period), Leed project managers submit the application
online along with completed forms, additional
documentation and a second fee (which ranges from
$2,000–$30,000).
LEED Points Scale
LEED operates on a 100-point scoring system. Both
new and existing construction can seek certification. A
property must meet a minimum of 40 of these points to
attain certification. There are also a set of mandatory
prerequisites which carry no points themselves, but
must be achieved before points are awarded. Buildings
can qualify for four levels of certification, based on the
number of points achieved in the 100-point scale:
1. Certified: 40–49 points
2. Silver: 50–59 points
3. Gold: 60–79 points
4. Platinum: 80–110 points
Fulfillment
The 100 possible points come from exceeding standards
in seven different categories:
1. Sustainable Sites
2. Water Efficiency
3. Energy and Atmosphere
4. Materials and Resources
5. Indoor Environmental Quality
6. Innovation in Operations
7. Regional Bonus Points
Hospitality Industry Advantage
Hotels are well-suited for LEED certification in many
ways. Here are just a couple:
Waste Reduction — Install environmentally-friendly and
cost savings options like reusable cloth towels in public
restrooms, paperless check-in systems, etc.
Energy Savings — Re-configure lighting and HVAC
schedules and save tens of thousands of dollars yearly.
18 December 2010 / January 2011
Because a national LEED representative never comes on
site, the process relies heavily on the documentation of the
project by a local source. The creation of documentation can
be very time consuming and precise (as one would expect
from documenting several months of purchases, as in the
example above). Thus one individual or firm is normally
charged with managing the LEED certification process as
LEED project manager. This individual or firm normally
works alongside the property management, engineering staff
and third party contractors to ensure that proper documenta-
tion is being created. Since most lodging personnel have
their hands full with their own jobs, it’s often advisable to
seek out assistance in the form of a LEED consultant, par-
ticularly one with creativity and an ability to manage teams
of people.
Applicants must fill in an online application along with
credit worksheets. Once the forms have been completed and
all additional documentation has been collected, the LEED
application is submitted online to the USGBC along with a
second fee which ranges from $2,000–$30,000 depending
on the size and complexity of the project. As you await the
USGBC response, you may need to provide documentation
back-up as required. You may also petition denied credits, if
warranted.
Explaining LEED Standards
While the majority of LEED projects are new construction
(LEED NC), LEED standards are also available for existing
buildings (LEED EB: O&M), commercial interiors, schools
and core/shell. Buildings can qualify for four levels of
certification, based on the number of points achieved in the
100-point scale:
1. Certified: 40–49 points
2. Silver: 50–59 points
3. Gold: 60–79 points
4. Platinum: 80–110 points
These 100 possible points come from exceeding standards
in seven different categories:
1. Sustainable Sites — Where is the building located?
Points here can be achieved for being in a developed urban
area with access to public transportation, for reducing light
pollution and stormwater run-off, for reducing the urban
“heat island” effect by having covered parking, large land-
scaped areas or a living green roof.
2. Water Efficiency — What is the efficiency rating of the
water fixtures? Points can come from super low-flow fixtures
that use less water than the industry standard, for a low-wa-
ter irrigation system or a creative gray water reuse system.
3. Energy and Atmosphere — How does the building’s
energy use compare to the rest? Points for being more energy
efficient than similar buildings in the same size and use cat-
egory, per Energy Star standards; for solar panel systems or
green power purchases. Points are also awarded for commis-
sioning the building to ensure it is running at an optimal level.

4. Materials and Resources — What materials is the
building made from? Points for rapidly renewable, recycled
and regional materials; for diverting waste from the landfill
by recycling or composting; for an existing building, points
for purchasing rapidly renewable, recycled and regional
materials needed for daily operations.
5. Indoor Environmental Quality — How comfortable
is the building for its occupants? Points for exceeding the
minimum outside air or minimum filter requirements; for se-
lecting paints and cleaning products that do not emit harmful
chemicals; for providing daylight and views to the majority
of the interior spaces, and points for providing heating and
cooling systems that can be easily adjusted by occupants.
6. Innovation in Operations — This category allows each
project team the flexibility to address a green building fea-
ture not found in any of the above categories.
7. Regional Bonus Points — Some environmental issues
are highly regional in nature, such as the greater need to
conserve water in the dryer Western states. LEED rec-
ognizes the importance of these issues and awards bonus
points for addressing credits sensitive to the region where
the building is located.
LEED and Hospitality
Properties in the hospitality industry have a wide range of
functions, including food and beverage operations, laundry
operations and maintaining HVAC conditions for guest
comfort, which can make the LEED application process
somewhat complex, but at the same time these nuances offer
many opportunities for improvement and for gaining LEED
points. Hotels then, are well-suited for LEED certification in
many ways. Following are a couple:
Waste Reduction — Environmentally-friendly and cost
savings options can include providing reusable cloth towels
in public restrooms, which significantly reduces the number
of paper towels used; purchasing recycled-content toilet
paper and tissues for guest rooms; switching to a paperless
check-in system; replacing paper cups with reusable plastic
ones; replacing bottled water with water coolers.
Energy Savings — Reconfiguring lighting and HVAC
schedules can save tens of thousands of dollars yearly:
switching to an ozone laundry system which reduces water
usage, uses only cold water and shortens the washing cycle,
and upgrading all applicable guest room lighting to energy
efficient CFL bulbs.
LEED Economic Factors
With LEED NC projects, controllers are often limited by
budget decisions. The cost of going LEED is often kept at
one to five percent of the total project cost. On LEED EB
projects, controllers play a more significant role shaping the
project, with the majority of EB costs going to hiring a sav-
vy, experienced LEED consultant to supervise the project.
In either case, the controller can dictate the success of
the project. Key ingredients to a successful LEED project
 Green Building 
While LEED certification is a lengthy
and detailed process, it is well worth the
effort. In the past two years, survey after
survey shows that the LEED designation
carries considerable weight amongst the
burgeoning population of environmentally-
conscious travelers. Most notably, Trip
Advisor’s “2010 Travel Trends Survey”
reports that 33 percent of travelers now
consider green policies when choosing a
hotel to stay at.
include working with a strong project manager who under-
stands the time commitment involved in the LEED process.
And effective documentation, which means putting systems
in place early to ensure optimal tracking if you are working
with existing buildings and deciding on LEED early in the
process for new construction.
Finish Line
LEED buildings need to be re-certified every five years and
controllers are often tasked with the responsibilities of track-
ing LEED during that time period. To accomplish, this you
will need to put sustainable tracking systems in place.
While LEED certification is a lengthy and detailed
process, it is well worth the effort. In the past two years,
survey after survey shows that the LEED designation carries
considerable weight amongst the burgeoning population of
environmentally-conscious travelers. Most notably, Trip
Advisor’s “2010 Travel Trends Survey” reports that 33 per-
cent of travelers now consider green policies when choosing
a hotel to stay at.
The bottom line is this — the compensations for meeting
LEED standards can be enormous. Properties will realize
cost savings from waste, energy and water use reduction;
as well as savings resulting from improved procurement
policies. Plus having a “green” identity improves public
relations leading to an increase in sustainability-driven
conferences and guestroom sales. It’s no wonder that LEED
certification is fast becoming the norm in the hospitality
industry. 
The Bottomline 19
 Social Media 

I CAN’T BELIEVE YOU SAID E-MAILED

TEXTED POSTED TWEETED THAT!!!!!
How to positively manage the social media explosion amongst employees
By Joe Pittel

W
hat do a graduate student from
Berkeley, a waitress from
North Carolina and an employ-
ee with the Philadelphia Eagles have in
common? They all learned the hard way
of the danger in (electronically) speaking
their mind on social media sites.

A Bitter-tweet Ending
Graduate student Connor Riley became
famous when, upon receiving a job of-
fer from Cisco, she tweeted, “Cisco just
offered me a job! Now I have to weigh
the utility of a fatty paycheck against
the daily commute to San Jose and hat-
ing the work.” She later explained she
was being sarcastic.
Cisco’s Tim Levad wasn’t laughing.
He read the tweet and responded, “Who
is the hiring manger? I am sure they
would love to know that you will hate
the work. We here at Cisco are versed
in the Web.”
Word on the (cyber) street is that
Riley is employed by another firm and What An Extra Point ments went viral. He found himself on
doing well. Apparently, Cisco wasn’t Dan Leone, a part-time stadium op- ESPN, but out of a job.3
the best fit after all.1 erations worker for the Philadelphia Although criticized for the firing, the
Eagles, got sacked (sorry for the pun, Eagles felt that an employee — even
Here’s a Tip: Don’t Insult Your but I couldn’t resist) after he posted a part-time one like Leone — should
Customers on Facebook on his Facebook page that the Eagles not be free to besmirch his employer
Ashley Johnson got stiffed on a tip organization was “retarded” for failing in public. In an odd twist, Philly fans
while working at Brixx Wood Fired to resign Pro-Bowler Brian Dawkins. started a “Re-hire Dan Leone” Face-
Pizza in Charlotte, N.C. She responded If Leone had made this statement at book page in reaction to the firing. In
by skewering the frugal patrons using the counter at Geno’s instead of on his protecting their e-image, the team found
her Facebook page. Her manager got Facebook page, the Eagles wouldn’t itself in a lose/lose situation. Even
wind of the tirade and Johnson is out of have lifted a talon. In the age of Twitter worse, Leone is apparently rooting for
the wood fired pizza business.2 and Facebook, however, Leone’s state- the Redskins and Cowboys this year.

Joe Pittel is an attorney with Secrest Wardle. He can be reached at jpittel@secrestwardle.com. The information provided is general and educational, and is
not legal advice. For more information, please visit www.hospitalitylawyer.com.

20 December 2010 / January 2011

 Social Media 

Implement A Social Media Policy

SOCIAL MEDIA? NO PROBLEM Some might argue that implement-
Ways to positively manage social media use ing a social media policy is redundant
because rules that require employees to
behave appropriately offline apply to
their online behavior. This philosophy
Social Media Policies — Social media policies help managers and employees ignores the unique nature of online
understand their obligations when it comes to social media. The best ones communication. Social networking
acknowledge and embrace the fact that employees use social media. The makes communication instantaneous,
policies are designed to protect, as well as complement, the business. accessible and permanent. Low level
employees — like those individu-
Social Media Departments — Whether a company creates a whole als described above — have an easy
department or just tasks marketing managers with the job, directing focused medium in which their opinions can be
attention to such outlets is a great marketing opportunity. Plus, dedicated transmitted and magnified. Moreover,
employees are in the best position to watch the company’s online “back.” smart phones have shortened the time
between an individual’s knee jerk reac-
Internal Blogs — Use this as a forum for staff to anonymously vent their tion to something and its publication.
frustrations, discuss ideas or ask questions. Providing a relief valve for The Eagles’ Dan Leone said he lost
an employee’s complaints might go a long way towards preventing an his head and immediately regretted his
embarrassing, public situation online. comments. Unfortunately, as soon as
Leone posted his comments they were
Measured Reaction — Reacting to every negative byte will surely smash a burned into Internet history.
manager’s nerves to bits. Be wary of the paranoia that results from scouring A social media policy will help
the Internet for negative comments and firing every employee who makes a managers and employees understand
questionable online decision. Instead, resist the temptation to address every their obligations when it comes to
unflattering post and save the fight for serious infractions outlined in the social media. The best social media
social media policy. policies are those that acknowledge and
embrace the fact that employees use
social media and that it can be a benefit
to the company.
In each of the above examples, for those wondering about the Con- A cursory review of social media
an employee used social media to stitution, the First Amendment only guidelines from a sample of private
criticize their employer, or worse, the protects an individual from govern- and public entities shows that there is
company’s paying customers. If you ment action. There is nothing stopping no universal set of guidelines that each
think the problem is limited to the a private sector organization from company follows.5 Most social media
anecdotes noted above, OMG, u r way canning someone for making nega- policies:
off! In a 2009 study of large compa- tive comments about their employer.) • Give employees notice that business
nies, 17 percent reported having issues Yet, any manager who thinks that a conduct guidelines, including anti-
with employees’ use of social media. company can protect itself simply by harassment policies, apply to online
Eight percent reported having actually tightening social media controls needs communications.
dismissed someone for social media to update his profile. There are more • Instruct employees to refrain from
behavior, double the percentage that than 350 million Facebook users in posting information that might be
was fired the previous year.4 the world and three million “Tweets” harmful or embarrassing to a client
It’s scenarios like these that have are sent every day. In sum, there is too or customer.
managers around the world “texting” much information, too many users and • Urge employees to use disclaimers
their shrinks. The biggest cause for too many portals of access to com- if they disclose information relevant
therapy is the realization that there pletely shield your company from a to the company, with the disclaimer
is no easy solution to this relatively social media assault. stating that views expressed are not
new problem. It’s true, a statement a The courts are working feverishly to the views of the company.
person makes about his employer on address social media issues, but the le- • Prohibit the release of confidential or
a social media site is treated the same gal process is slow and social media, in proprietary information.
as a statement he or she might make in contrast, changes with alarming speed. • Inform the employee of his or her
front of a crowd of customers. Hence, Experts say, however, there are some responsibility for potential liability
an employer’s initial instinct might things a company should do in the face for slander, copyright infringement
be to rule with an iron fist. (Note: of the social media explosion. and other civil causes of action.

22 December 2010 / January 2011


It is worth remembering that social
media is as new to the individual
employee as it is to the company. Thus,
many social media policies contain
tips for effective communication such
as how to avoid picking online fights,
how social media can be used to as-
sist employees in their job, and when
an employee should identify himself
or stay anonymous. Social media is
a reality of our time and it is here to
stay. Companies should acknowledge
it with a thoughtful and specific policy
designed to protect, as well as comple-
ment, the business.
Create a Social Media Department
Despite the dangers, most savvy man-
agers agree that social media represents
an incredible marketing opportunity.
In fact, many companies have already
established social media departments
specifically designed to find ways to
use social media to the company’s
advantage. Others have hired social
media managers. Whether a company
creates a whole department or just
tasks marketing managers with the job,
focusing on social media makes sense.
Plus, although focused on marketing,
social media specialists are also in the
best position to watch the company’s
online back.
Venting Frustrations Risk Free
Several companies have internal blogs
which provide a forum for staff to anon-
ymously vent their frustrations, discuss
ideas or ask questions. Some companies
even require managers to review these
blogs so that they can implement sug-
gestions or benefit from the constructive
(if not vitriolic) criticism. Providing a
relief valve for an employee’s com-
plaints might go a long way at prevent-
ing employees from blowing their stack
and embarrassing the company or its
clients on their Facebook page.
Resist the Urge to Overreact
People have been “twitching” about
their workplaces since the first em-
ployee went to work for the first
employer. Keeping this in mind,
companies should resist the tempta-
tion to address every unflattering post.
This is not to say that serious infrac-
tions shouldn’t be harshly dealt with,
especially when an employee’s online
chatter threatens business by criticiz-
ing customers or divulging secrets.
Companies should be wary, though, of
the paranoia that results from scouring
the Internet for negative comments and
firing every employee who makes a
questionable online decision. React-
ing to every negative byte will surely
 Social Media 
smash a manager’s nerves to bits.
In addition, managers should keep
in mind that the public is naturally
suspicious of what they find on the
Internet. Although recognizing it as a
stellar information source, most people
acknowledge that the Internet is filled
with misinformation and inaccuracies.
Certainly, the outrage and hurt feel-
ings that come when an employee or
customer makes an unflattering remark
is understandable. A company might
serve its interests best, however, by
keeping its powder dry and recogniz-
ing that sticks and stones can break
your bones, but e-words can (only
sometimes) hurt you. 
Sources
1. www.msnbc.msn.com/id/29901380
2. www.huffingtonpost.com/2010/5/17/
brixx-pizza-fires-waitres_n_578847.
html
3. sports.espn.go.com/nfl/news/
story?id=3965039
4. www.marketwire.com/press-release/
Proofpoint-Survey-Says-State-
Economy-Leads-Increased-Data-Loss-
Risk-Large-Companies-1027877.htm
5. socialmediagovernance.com/
policies.php
The Bottomline 23
 Club Accounting 

USFRC — Time to Revise

A club executive survey demonstrates enough industry changes to warrant
a new edition of the Uniform System of Financial Reporting for Clubs
By Agnes DeFranco, Ed.D., CHAE, CHE and
Raymond S. Schmidgall, Ph.D., CPA, CHAE

T
he Uniform System of Financial
Reporting for Clubs (USFRC) is
the guide to reporting for external
and internal users of club finance in-
formation. The first uniform system of
accounts for clubs dates back to over 65
years with a few copies published of the
Proposed Uniform System of Accounts
for City Clubs in 1942. In 1954 the
Uniform System of Accounts for Clubs
covering both country and city clubs
was first presented for sale. In 2003, the
sixth revised edition, and most current
edition, of the USFRC was issued. The
sixth revised edition is followed by
many clubs.
Our research directed to club finan-
cial executives posed the following:
• Does your club follow the USFRC?
• What is the single major benefit of
the USFRC?
• What is your level of satisfaction
with the current edition?
• If there is one thing you could change
in the USFRC, what would it be?
• Is it time to update the sixth revised
edition?
tives receiving our questionnaire. Just The titles of respondents varied from
Answers to these questions based on over one hundred (107) were returned staff accountant to CFO. Just over four
our research will be provided in this ar- resulting in a response rate of nearly 12 of every five respondents (81.1 percent)
ticle along with our recommendations. percent. held the title of controller. Another 6.6
In conducting our annual balance percent were assistant controllers and
sheet ratio research, we added another Overview of Respondents the same percentage were CFOs. The
page containing the above research The titles of the respondents, the type of remaining 5.7 percent had titles such
questions. Our questionnaire was club employing them, the size of their as club accountant, director of finance
mailed to 1,000 HFTP members associ- clubs based on number of members, and treasurer. Clearly, it appears that re-
ated with clubs. Eighty questionnaires the location of their clubs and the profit spondents were in positions of financial
were returned as “undeliverable” thus orientation were the demographics responsibility and knowledgeable about
resulting in 920 club financial execu- requested (see charts on page 25). club accounting and finance.

Agnes DeFranco, Ed.D., CHAE, CHE, is a professor and the assistant vice president for undergraduate studies at the Conrad N. Hilton College of Hotel &
Restaurant Management, University of Houston. DeFranco was the 2006 – 2007 HFTP Global President. Raymond S. Schmidgall, Ph.D., CPA, CHAE, is the Hilton
Hotels Professor at The School of Hospitality Business at Michigan State University. He is also a member of the Communications Editorial Advisory Council
and a recipient of the 2002 HFTP Paragon Award.

24 December 2010 / January 2011


The majority of financial executives
were employed by country clubs (67.9
percent). Other types of clubs represent-
ed included golf clubs (13.2 percent),
city clubs (6.6 percent), yacht clubs (6.6
percent) and other clubs (5.7 percent).
The remaining 5.7 percent of respon-
dents indicated their clubs included
university, tennis and pool clubs.
The number of members of the
clubs ranged from less than 300 to over
2,000. The most common size (25.2
percent) were clubs with 501–750
members followed by clubs with 1,001–
1,500 members (19.4 percent), clubs
with 300–500 members (17.5 percent),
and clubs with 751–1,000 members
(16.5 percent).
The two additional dimensions were
location and profit orientation. Just
over half (50.5 percent) of the clubs of
responding financial executives were
located in the Eastern part of the U.S.,
followed by 32.4 percent in the Central
region, and 17.1 percent in the West.
Most clubs (88.3 percent) have a not-
for-profit orientation while 11.7 percent
were organized for profit purposes.
Thus, the most common respondent
was a controller employed by a not-for-
profit country club with a membership
of between 501–750 members located
in the Eastern portion of the United
States. The following section of this
article includes our research findings.
How about the USFRC?
The fundamental question regarding the
USFRC was simply, “Does your club
follow the USFRC?” As mentioned at
the beginning of the article, the USFRC
dates back to the early 1940s. It has
been the standard for financial reporting
for several decades.
Just over half (52 percent) of the fi-
nancial executives indicated their clubs
follow the USFRC. That also means
48 percent of the clubs apparently do
not. We were very surprised that nearly
half the clubs do not base their finan-
cial statements on the recommended
standard for the club industry. To be
fair, one in 12 respondents indicated
they “do not know” whether their clubs
follow the USFRC. This response was
 Club Accounting 
taken as a “no, their club does not fol-
low the USFRC.” PROFILE OF
For those clubs following the Uni- RESPONDENTS
form System, the major benefit revealed
by 68 percent of the responding finan-
cial executives is that they are able to
properly compare their club’s financial Titles
results to published club industry aver-
ages. PKF publishes national averages
while a number of consulting firms Other, 6%
publish regional operating averages. Controller, 81%
The remaining 32 percent of financial CFO, 7%
executives whose clubs use the uniform
system consider the greatest benefit to Asst.
Controller,
be that they “follow an accounting sys-
6%
tem designed for clubs.” Since the ad-
vantages of using a uniform system are
apparent, perhaps HFTP should provide
more information on financial reporting
to their members associated with clubs, Club Type
especially stressing the importance of
being able to compare results by using a Golf, 13%
recognized system. City, 6%
Specific suggestions for changes in
the Uniform System were received from Yacht, 7%
Country, 68%
only 11 respondents. Notable sugges-
Other, 6%
tions included the following:
• Combine telephone and clubhouse
departments
• Include a schedule for reporting
capital expenditures
• Make schedules for a yacht club Membership Size
• Provide more clarification of
account titles
• Provide schedules for 300 – 500
501 – 750
residential clubs 18%
25%
<300
Responses to overall satisfaction 10%
were threefold. Thirty-five percent of 751 – 1,000
>1,500
17%
the respondents were satisfied, while 11%
10 percent were dissatisfied. However, 1,001 – 1,500
55 percent of the financial executives 19%
indicated overall they were indifferent.
Again, when the majority has no strong
feeling, it is difficult to determine how Location
they really might feel.
Regardless of the few suggestions of
West, 17%
specific changes and the small percent-
age of dissatisfied users, 64 percent of Central, 32%
the club financial executives suggested
the USFRC could use some minor
updating. Another one-fourth of the East, 51%
respondents suggest “leave it as is” and
other views from the remaining 11 per-
cent of responding club financial execu-
The Bottomline 25
 Club Accounting 
Many accounting standard changes
are right at our front door and will be
in place in the next couple of years.
Preparation is the key. It is high time to
revise the Uniform Standards.
tives included “it certainly needs it” and
“will need to be reviewed periodically.”
So what is to be done?
Our Suggestions
It is obvious that standards are good
to facilitate comparison within and
between clubs. While doing this re-
search, it is also obvious that the club
industry is continuously evolving. New
demands, economic conditions and new
means of establishing clubs indicate
that the club industry is not solely made
up of the traditional 501(c)(7) club any
longer. Wendy Zurstadt, CPA, CHAE,
CHTP, CAM chief financial officer
of The Polo Club at Boca Raton and
Leonard Bartello, CHAE, CHTP, CPA,
LCAM, owner of Forty Years Consult-
ing in Florida, were members of the
committee that revised the last edition
of the USFRC. Zurstadt states there are
four major types of clubs: traditional
stand alone, residential country club,
large scale association, and manda-
tory membership residential. Bartello
has also seen a sharp growth of new
“bundled-community” clubs as his
clientele. Indeed, Philip Newman, CPA,
managing director for McGaldrey, and
Tammy Tassitano, CPA, national direc-
tor of club services for McGladrey, also
share the same sentiments (2010).
Due to the growth of these new
categories, Zurstadt indicates that the
current USFRC, is too heavily concen-
trated on the traditional 501(c)(7), and
should be revised to address bundled
communities. Thus, the first sugges-
tion for the revision committee for a
new USFRC is to include a substantial
section for these clubs. If not, perhaps
26 December 2010 / January 2011
another book entitled the Uniform
System of Financial Reporting for
Residential Club Communities would
be helpful. Bartello concurs, as he has
been assisting clients to include such
configurations whenever their club
software is upgraded or changed so
their accounts can better reflect their
type of operation. Newman and Tas-
sitano (2010) further explain that many
of these bundled communities have the
choice of following either the USFRC
or the Common Interest Realty Associa-
tion (CIRA) Guide. But, many discrep-
ancies exist amongst the two sets of
accounting practices that make true
accounting, let alone benchmarking and
comparison, a difficult task. One such
difference is the method of reporting on
common property where property under
CIRA may not be recognized as assets
under the balance sheet. The industry
therefore needs to respond and pro-
vide an updated tool for its managers
and owners to assess the strengths and
weaknesses of their operations.
Second, we suggest the USFRC
be revised following a set schedule.
Consider starting the revision cycle five
years after publication. In the begin-
ning of the sixth year, form a group
of industry users, representatives of
firms that provide financial informa-
tion to clubs, club financial managers
and club general managers. It is also
important to use complementary venues
such as the CMAA World Conference
and the HFTP Annual Convention &
Tradeshow to conduct focus groups
and send surveys to financial users to
solicit input. At the beginning of year
seven, start the editing and publication
cycle so a new version can be released
every seven to eight years. Newman
also suggests that an opportune time for
revision is to start the organizational
work now and have the first convening
meeting next summer since the final
ruling of leases as a consequence of
the convergence work of the IASB and
FASB is due out in June 2011.
Third, marketing is always the key.
Since many respondents mentioned
they are not aware of the standards,
perhaps more intentional marketing
information and tactics are needed.
Many clubs still believe that since they
are independent operations, compari-
sons are not needed. There is also the
belief that each club is its own entity
and clubs are not like hotels within a
corporation that have to follow a “set”
standard; they should be able to pick
whatever accounting guidelines they
want to follow. However, if one looks
at the industry as a whole, there have
been many changes since the last edi-
tion, and standardization, especially
in accounting reporting, is needed. It
might be good to include information
sessions at key club related conferences
as those mentioned previously. It is also
important that such marketing should
not be done only when a new edition is
first published, but should be done on a
consistent basis to increase awareness.
For the hospitality educational commu-
nity, perhaps more articles explaining
the USFRC and the benefits of follow-
ing this standardized reporting system
can be published in selected journals.
Treat the USFRC as vitamins that
are needed to sustain the financial
health of a club. An apple a day keeps
the doctor away. A page of the US-
FRC a day keeps the integrity of your
club finances strong. Many accounting
standard changes are right at our front
door and will be in place in the next
couple of years. Preparation is the key.
It is high time to revise the Uniform
Standards. 
Sources
• Tassitano, T. and Newman, P.
(2010). Everything You Know Is
Wrong. The Bottomline, 25(6), p.
23–25.
2010 HFTP
D
ata from the “2010 HFTP Compensation and Benefits
Survey” conducted by the HFTP Research Institute

Compensation
was released in the September 2010 issue of The
Bottomline. This report provided an overview of the num-
bers and statistics generally giving information on all groups
of respondents. As most of you know, it is hard to compare

and Benefits apples to oranges, such as controller salaries at club and ho-
tel properties. For this reason, the following article provides
further details pertaining specifically to the club and hotel

Survey
segments of the hospitality industry. These two segments
were chosen because there was a significant number of
respondents in these two groups.

A Look at the Details History and Introduction

The first survey of the HFTP membership was published in
The Bottomline in 1989. This article was titled “A Profile
of the IAHA Member” and provided general demographic
By Tanya Venegas information. Through the years the survey evolved into the
HFTP Compensation and Benefits Report which was first
published in 2000. The 2000 report was conducted by a
consulting firm, with the first report by the HFTP Research
Institute published in 2002. The HFTP Research Institute
has continued to conduct this survey since 2002 on a bien-
nial basis; therefore, comparative data is available for 2002
through 2010.
The 2010 report was distributed via e-mail to 2,862
members of HFTP who had agreed to receive communica-
tion from HFTP. Out of the 2,862 who received the e-mail
invitation, 414 individuals responded to the survey providing
a 14.5 percent overall response rate. The survey was distrib-
uted using SurveyMonkey.com, an online survey provider.
An online survey is preferred because it allows for dynamic
questions to adjust to the respondents answers. For example,
members that indicated they worked for clubs were only
asked questions specific to club properties.
In order to conduct detailed analysis it was important to
determine the largest groups of respondents to the survey.
The majority of respondents were either from club properties
(45.8 percent) or lodging properties (41.9 percent). By job ti-
tle, the largest number of responses were from those with the
title of controller (38.4 percent) followed distantly by those
with the title of director of finance (11.6 percent). For this
reason, most of the data analyzed focuses on club or lodging
controllers. For a complete breakdown of responses, please
reference the complete report published in the September
2010 issue of The Bottomline.

Club vs. Hotel Controller Salaries

One of the best places to start is by comparing club and
hotel controller salaries. The question pops up from time
to time as to which segment of the industry pays better.
According to the respondents in the 2010 survey, hotel and

Tanya Venegas is program director of the HFTP Research Institute at the

University of Houston and frequent speaker at HFTP conferences.

The Bottomline 27
 Survey Report

2010 Projected Controller Salaries club controller salaries are fairly evenly matched with hotel
controllers indicating that they earned just $344 more than
Clubs vs. Hotels their club counterparts.
On the other hand, when you compare overall compensa-
Clubs Hotels
tion, club controllers make slightly more ($731) than their
Number of Responses 96 34 hotel counterparts. The differences lie in deferred compensa-
tion and bonuses. As defined in the 2010 survey, deferred
2010 Salary $ 84,828 $ 85,172 compensation includes pensions, retirement plans, stock
options and other forms of income which will be paid out at
2010 Deferred Compensation 9,807 4,040 a later date. Club controllers earned $5,767 more deferred
compensation than their hotel counterparts. Hotel controllers
2010 Bonus 6,505 11,197
projected to earn $4,692 more in bonuses in 2010 than their
Totals $101,140 $100,409 club counterparts. Either way, it appears that there are not
any major discrepancies between compensation for hotel and
club controllers.

“ It appears that hotel controllers are Job Responsibilities

able to focus more of their time and
energy on the primary job function
in the accounting/finance department
while their club counterparts are
required to be a jack-of-all-trades…”
Departments Supervised
Club vs. Hotel Controllers
Accounting/Finance
Technology
Human Resources
Administrative/Office Staff
Security
Time Working at Home, Office, and Traveling
Club vs. Hotel Controllers
Club
Overall
Properties Properties
Even though there may not be any major differences in sal-
ary, it is interesting to note that job responsibilities tend to
differ between the two segments of the hospitality industry.
Overall respondents indicated that they oversee the follow-
ing departments: accounting/finance (87.9 percent), tech-
nology (58.9 percent), human resources (40.1 percent) and
administrative/clerical staff (29.3 percent).
It starts to get interesting when you analyze departments
supervised by industry. It is expected that the majority of
controllers would be in charge of the accounting/finance
function, approximately 82 percent from both segments of
the industry. Responsibilities tend to separate for the other
categories. First of all, 50.9 percent of club controllers
Clubs Hotels supervise the technology function with only 39.5 percent
of hotel controllers overseeing this department. The dra-
82.5% 81.6%
matic differences are seen when data is analyzed for human
50.9 39.5 resources and administrative/office staff. Fifty-six percent
of club respondents oversee the human resources function
56.1 13.2 with only 13.2 percent of their hotel counterparts doing the
same for a difference of nearly 43 percent. In addition, 39.5
39.5 5.3 percent of club respondents oversee administrative/office
staff and only 5.3 percent of hotel respondents do the same
4.4 5.3
for a difference of 34 percent. Both segments of controllers
were fairly evenly matched when it comes to overseeing
security operations at their respective properties. It appears
that hotel controllers are able to focus more of their time and
energy on the primary job function in the accounting/finance
department while their club counterparts are required to be a
jack-of-all-trades and supervise not only accounting/finance
Hotel Hotel functions, but also technology, human resources and admin-
Mgmt Co. istrative duties.

Home 14.1% 6.7% 25.0% 13.3% Hours Worked

Moving along to another important question, how many
Office 76.1 89.8 64.0 76.8 hours do club and hotel controllers actually work during an
Travel 7.1 2.4 7.6 7.8 average work week. In general, hotel controllers indicated
an average work week of 51.6 hours with club controllers
Other 2.7 1.1 3.4 2.1 averaging a slightly shorter work week of only 45.3 hours.
(Look at the Details continued on page 30.)

28 December 2010 / January 2011

CASE STUDY

cOST-OF-LIVING IMPACTS REGIONAL SALARIES

S hortly after publication of the 2010 HFTP Compensation
and Benefits Report, an HFTP member in the Phoenix,
Ariz. area contacted the HFTP Research Institute requesting
salary data for hotel controller and assistant controllers.
In addition, the member specifically wanted to look at
properties in his region which earned greater than $15
million in annual revenues. Unfortunately, there were not
enough properties to make a comparison within his region,
but we were able to pull nine assistant controller and 13
controller salaries at lodging properties which earned
greater than $15 million in annual revenues.
On average, the data indicated that assistant controllers
were projected to earn nearly $70,000 in 2010 and controllers
would earn nearly $94,000. I sent the information to the
member and he shared the data with his general manager
who indicated that the controller salary appeared accurate,
but the assistant controller salary was entirely too high for
the Phoenix area.
Further analysis was needed to determine why there was
such a discrepancy. The annual revenues were the same
and other demographics were calculated such as size of
hotel, years in current position, type of property, work at
the regional or property level, education and geographic
location. The only deciding factor was determined to
be location. Out of the nine respondents with the title of
assistant controller, six had provided geographic location
information. These six individuals were from places with
very high cost-of-living indices such as Los Angeles, San
Diego, Toronto and Washington D.C. Recent reports indicate
that cost-of-living at these locations can be greater than 150
percent when compared to other cities such as Phoenix.
Once this was factored into the equation, it was determined
a realistic salary for an assistant controller in Phoenix would
be approximately $55,000. The general manager indicated
that this was more on par with what his idea of an assistant
controller salary should be in their area.
In addition, controller salaries were also analyzed. It was
determined, that the controllers who responded to the survey
were from locations with similar cost-of-living indices to
Phoenix and no adjustments were needed.

Profile: Controller Salaries

Assistant Controller
Projected Annual Annual
Annual Base Salary — 2010 Base Salary — 2009 Base Salary — 2008
Number of Respondents 9 9 8
Mean $69,671 $67,511 $64,888
Median 65,000 63,000 60,500
Percentiles:
25th 60,018 56,800 55,150
50th 65,000 63,000 60,500
75th 83,500 81,500 77,250

Controller
Projected Annual Annual
Annual Base Salary — 2010 Base Salary — 2009 Base Salary — 2008
Number of Respondents 13 13 13
Mean $93,906 $92,290 $89,745
Median $93,030 $92,000 $89,500
Percentiles:
25th $87,250 $86,000 $85,000
50th $93,030 $92,000 $89,500
75th $100,000 $100,000 $96,000

The Bottomline 29
 Survey Report

hotel controllers only spend 33.0 hours of their work week

Even though hotel controllers tend
to have a longer work week, they
indicated that they spend less than 40
hours per week in the office and have a
more flexible work schedule than their
in the office, 12.9 hours working from home, and 3.9 hours
traveling. When calculated, club controllers average 40.7
hours in the office, 3.0 hours working from home, and only
1.1 hours traveling. Even though hotel controllers tend to
have a longer work week, they indicated that they spend less
than 40 hours per week in the office and have a more flexible
work schedule than their club counterparts.

club counterparts. Paid Leave

In the 2006 and 2008 issues of the HFTP Compensation and
Benefits Survey many members indicated that their employ-
Average Hours Worked at Home, Office ers were beginning to offer paid-time-off (PTO) rather than
and Traveling vacation and sick leave. For that reason, questions were
Club vs. Hotel Controllers included in the 2010 survey to determine how many proper-
ties were offering PTO. Club and hotel properties were fairly
Clubs Hotels evenly matched when it came to offering paid-time-off.
Home 3.0 12.9 Twenty-eight percent of club properties offered PTO leave
with 30 percent of hotel properties offering PTO leave. The
Office 40.7 33.0 difference lies in the number of days offered. Clubs only
Travel 1.1 3.9 averaged 9.1 days and hotels averaged 13.4 days, for a dif-
ference of just greater than four days.
Other 0.5 1.8 The remaining 70 plus percent of hotels and clubs offered
a traditional combination of vacation and sick day paid
leave. Club respondents received an average 15.2 vacation
days and 6.8 sick days, while their hotel counterparts aver-
aged 15.1 vacation days and 6.1 sick days.
One thing is certain, those respondents One thing is certain, those respondents who receive PTO
days versus traditional vacation/sick days receive far less
who receive PTO days versus traditional paid leave. For respondents from the club industry, those
vacation/sick days receive far less with PTO leave receive 12.9 days less paid leave than their
club counterparts that receive vacation/sick leave. In addi-
paid leave. tion, hotel respondents with PTO leave receive 7.8 less days
of paid leave than those with vacation/sick leave.
Paid Leave Conclusion
Clubs vs. Hotels As noted in this article, there are multiple differences when
Clubs Hotels it comes to the demographics of club and hotel properties.
The differences extend far beyond industry segments and
PTO Days 9.1 13.4 continue by size of property, geographic location, annual
Vacation Days 15.2 15.1 revenues, ownership, tax status, etc. For this reason, it is
Sick Days 6.8 6.1 very important to thoroughly analyze data before any spe-
cific comparisons can be made.
In the past, the HFTP Research Institute has been able to
provide regional reports with adequate accuracy. Unfortu-
Given the fact that pay is nearly the same for individuals in nately, the response rate to the 2010 survey was somewhat
both segments of the industry, many will argue that hotel lower than in previous surveys making it difficult to provide
controllers are getting the short end of the deal. any general regional reports. For this reason, we encourage
Further analysis was conducted to determine what per- you to contact the HFTP Research Institute and request a
centage of time hotel and club controllers spend working in specialized report for your property. Please refer to the case
the office, at home, and traveling. Hotel controllers indi- study provided (page 29) for an example report of the in-
cated that they work a greater amount of time at home (25 formation and research we can provide. Feel free to contact
percent) than club controllers (6.7 percent). When you take the HFTP Research Institute with any questions you have
the number of overall hours worked and multiply that by pertaining to the 2010 HFTP Compensation and Benefits
the percentage of time worked in the office, it indicates that Survey Report or to request a specialized report. 

30 December 2010 / January 2011

 The Bottomline Resource Guide
Culinary Software Services HFTP University
www.ChefTec.com www.hftp.org
Culinary Software Services HFTP and Datanamics, Inc.
is the leading provider of have partnered to bring
foodservice software to the hospitality industry. quality, timely and in-depth
CorTec and ChefTec software provide state-of-the-art education to your very own
inventory control, recipe and menu costing, purchas- city via HFTP University (HFTP-U). The program is a
ing and ordering, production management, requisi- one-stop resource to provide high level technical and
tions and transfers and nutritional analysis. Systems end user training for the hospitality industry with a
are available to meet the needs of small restaurants to comprehensive curriculum ranging from subject mat-
complex and multi-unit operations. ter expertise to certifications.

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information.

The Bottomline 31