The Hospitality Journal

The Hospitality Journal www.hftpnyc.org Chartered Chapter of the Hospitality Financial and Technology Professionals Summer 2009 From the President’s Desk IN THIS ISSUE: Dear Members, 2 2 3 The Justice Files: Hotel Security California Dreamin‟ Technology Investment Can Help Hotels Generate Revenue PKF Perspectives: What‟s New? Current Accounting and Auditing Issues The Fair Value Debate: Is the Economist Versus the Accountant or Will it Go Away? Sharing Information is Key to Your Company‟s Health Microsoft Launches Bing Travel Hard to believe we are half-way through 2009. It‟s been a busy year for our Chapter and it looks like it will become even busier. Our Board of Directors is constantly working on projects to keep our Chapter in good standing and to provide the most informative speakers on current topics. Last quarter, we were hosted by The Tudor Hotel in April, The Yale Club in May and The Century Association in June. As usual, our hosts served a wonderful dinner in pleasant surroundings and our guest speakers provided insightful presentations. We are always appreciative to those that assist us to accomplish our goals to have our monthly meetings and provide education to our members. So thank you to our host properties and guest speakers for the second quarter! After much thought and discussion, the Board has agreed to hold our Chapter‟s 9th Annual Golf Outing on September 29 at Saint Andrew‟s Golf Club. For several years now we have raised funds for the Alzheimer‟s Association of New York City, and they are truly grateful. This year may prove to be challenging, but we are counting on our members and past participants to make this year‟s outing a success. So mark your calendars and look for the invites to be mailed soon. Lastly, we are looking for feedback from our members to ensure that we are meeting your needs. So please, forward any suggestions, comments and feedback. It only helps us to better serve you. Here‟s wishing our members and their families a great summer. I look forward to seeing all of you at our future meetings! Sincerely, Clare E. Cella President 4 6 8 8 Upcoming Events Financial Results 9 11 “Only through focus can you do world-class things, no matter how capable you are. ” BILL GATES Page 2 The Hospitality Journal The Justice Files: Hotel Security A recent article in USA Today by Gary Stoller (May 18, 2009) states that as a result of the current economic recession there has been an increase in the number of crimes committed at hotels. The primary crime committed in hotels is theft. Dave Wiggins, a member and former president of the California Tourism Safety & Security Association, is quoted as attributing significant cuts in security and the fact that hotel employees are working fewer hours and making less money to the rise of incidents of theft by hotel employees. However, hotel employees are not entirely to blame, and guests must bear the responsibility of taking extra precautions. Some of the measures that may help ensure a crime-free hotel stay include: ▪ ▪ Make sure that guest room doors have multiple locks, including a deadbolt. Park your car in a well-lit area as close as possible to the hotel lobby, or consider using a valet. Do not leave any valuables inside the car. Place all valuables in the safe provided by the hotel. Do not open the room door to anyone without verification from the front desk, and do not use your name when answering the phone. In high-rise hotels, request a room on the third floor or above. Request a hotel staff member to accompany you to your room to inspect it during the evening hours or if there is reason to be concerned about safety. California Dreamin’ As I sit here cruising at 35,000 feet, high above the middle of the country, my mind drifts to two thoughts: 1. I hope we don‟t get hit by lightning and suffer the same fate as this month‟s French airliner. 2. What a surprising good time I had at this year‟s HITEC. While I generally do not attend HITEC unless I‟m shopping for new technology (I much prefer attending the Annual Convention), the recent change to hold the Club & Hotel Controller‟s Conference within the same time period has provided the best of both worlds. You can now share in the camaraderie of your fellow “beancounters” while gleaning the knowledge and insights of our techie brethren. And speaking of knowledge, kudos once again to the members of the HFTP Educational Committee, the variety of content and quality of presenters was remarkable at both conferences. I found myself constantly shuttling between tech and accounting sessions, while lamenting those that I had to miss. I don‟t know what the total attendance was at each conference nor the number of booths sold, though HITEC did seem a bit lighter this year, but the level of energy and enthusiasm was not diminished at all by the economic doldrums. The rise of our industry continues apace as witnessed by the many innovations coming our way. The challenges of today and those of our future are being realized now and a walk through the Anaheim Convention Center clearly demonstrates how companies are finding new and exciting ways of meeting those challenges. In addition to the excellent conferences, whether you were hitting the rides at Disney or strolling the boardwalk at Santa Monica you would have been hard pressed to feel as though you were visiting Arnold‟s nearly bankrupt State (though the smog on one day quickly reminded you of where you were). The city was bustling and inviting, with no shortage of things to see and do. All in all, a terrific time was had and I‟m looking forward to visiting Mickey at his weekend home in Orlando at next year‟s HITEC from June 21-24, 2010. Contributed by Humphrey Feliciano Union Club of the City of New York ▪ ▪ ▪ ▪ Contributed by John A. Hyland, Esquire, Sherry & O’Neill Summer 2009 Page 3 Technology Investment Can Help Hotels Generate Revenue Revenue optimization is an area of the hotel business that is well established. The majority of hotel companies has some type of revenue optimization plan in place and high-tech systems to support its goals. Hotels face a new way of thinking about their investments in the current economic environment. While lodging properties must decide which projects to invest in and which to cut to keep operational costs manageable while revenue streams diminish, technology upgrades, seem like prime targets for cutbacks. However, they‟re not, and with good reason. Technology investment can help hotels generate revenue. “We are in a competitive market, New York city is still running relatively decent occupancy, but the rates are significantly down,” says Kevin Croke, director of sales and marketing at The Roosevelt. “Hotels that were a three– or four-star property now find themselves competing with the luxury brands, so from our perspective everything, including technology, needs to escalate to remain competitive.” Despite the economy, the hotel made the decision to make several technological changes in the wake of the new-found competitiveness in the market. That included investing in a central reservation system from Utell this past January. Croke said, “And we continue to look at our technology… to be more competitive. I think technology is something that we need to continue to concentrate on not only for these tough times, but also to establish ourselves for the future. Eventually, we will pull out of this recession and we want to make sure we are in a position to be more competitive when we‟re back into an upswing.” BEING CREATIVE, STAYING COMPETITIVE Just because occupancy may decline and rates may fall in the recession, there remain certain operations within a hotel business that can‟t simply be ignored. A hotel can‟t sacrifice service quality in the name of cost-cutting, or it risks losing even more guests than the recession has already taken. Dawn Koenig is vice president of performance support for Homewood Suites. She says that when it comes to her brand‟s properties, the right technology investments have helped keep processes such as staff training on schedule, while still helping Homewood Suites‟ property managers make their operations more cost-effective. One of the ways Homewood Suites streamlined its training process is through iPod training videos. Koenig says that the iPod training, started a few years ago, has especially helped hoteliers during the recession. “If you go to more basic DVD video that‟s a very expensive methodology for team-member training, and it has a shelf-life of about three years. We wanted to find something that allowed us more flexibility. It also costs less, and it‟s innovative in the minds of the employees,” says Koenig. GUEST SATISFACTION While back-of-the-house systems are an area where hotels can streamline processes to save money while continuing to increase productivity, one area where technology investment decisions may not have such definitive benefits is in the guestrooms. However, technologies such as new TVs, phone systems, automated minibars, and increased Internet capabilities are also technologies that hoteliers do not want to completely ignore due to their importance in keeping guests coming back. The decision to invest in these technologies is more difficult because the return-on-investment is generally more indirect than technologies such as system-wide reservation system or property management systems. “This hotel has 1,015 rooms,” Croke says of The Roosevelt. “We replaced all of our televisions and added wireless Internet access to all of our guestrooms and public spaces. We saw a need for that, especially for the type of customer we covet.” Croke says that despite the economy, in order to stay competitive, his hotel will continue to look a these type of technologies to stay on top of the modernization trends. “Things like flat-screen TVs and 24-hour business centers, not to mention wireless Internet, were some things that our customers were requesting and we responded by investing some capital in it.” Carlson Hotels is also investing in guestroom technologies, depending on the priorities of each of the brands in the Carlson family. Carlson has a set of standards for technology in the guestrooms that has been upgraded to be comparable to what most people experience in their own homes. However, the company pushed back the deadlines for branded properties to adhere to those standards in order to help individual properties address the harsh economic conditions first. Hotel technologists recognize the importance of making strategic investments in their properties. One day, the economy will turn around and when it does they‟ll have their systems in place to push forward into the future. Adapted from “Technology Investment: Despite a Recession, Hotels Can’t Afford to Cut Back,” by Len Vermillion, Lodging Magazine Page 4 The Hospitality Journal PKF Perspectives: What’s New? Current Accounting and Auditing Issues Accounting standard-setting bodies, in collaboration with industry, have issued or are considering issuing, promulgations which will affect the clarity and quality of financial reporting. This publication provides for an overview of some of these issues . Fair Value Accounting (“Mark-to-Market”) In September 2006, the Financial Accounting Standards Board (FASB) released Statement of Financial Accounting Standard (SFAS) No. 157, entitled Fair Value Measurements, which is effective in calendar year 2008 financial statements. SFAS No. 157 provides a definition of fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosure requirements in financial statements that incorporate fair value measurements. SFAS No.157 is applicable when measuring assets and liabilities under existing accounting literature. The objective of fair value accounting is to give investors an accurate view of the books of financial companies. Dan Noll, the Director of Accounting Standards for the American Institute of Certified Public Accountants (AICPA) recently opined: “I think what mark-to-market accounting has done for us in this recent financial crisis is given us transparency , and it has gotten the bad news out. I’d rather have the bad news out fast so companies and the markets can cleanse themselves.” In a nutshell, SFAS No. 157 provides a hierarchy of three levels of input data for determining the fair value of any asset or liability as follows: Level 1: quoted prices for identical items in active, liquid or visible markets, such as stock exchanges. Level 2: observable information for similar items in active or inactive markets, such as two similarly situated buildings in a downtown real estate market. Level 3: unobservable inputs to be used in situations where markets do not exist or are illiquid, such as the present credit crisis. At Level 3, the fair market valuation becomes highly subjective. The huge losses reported by financial firms on subprime assets have led to a debate over the implementation of SFAS No. 157 in circumstances where markets collapse and price inputs are not readily available. In early April 2009, the FASB released three new FASB Staff Positions (FSPs), all related to fair value accounting and reporting issues. These are: FSP FAS 157-4, entitled Determining the Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. FSP FAS 115-2 and FAS 124-2, entitled Recognition and Presentation of Other-Than-Temporary Impairments. FSP FAS107-1 and APB 28-1, entitled Interim Disclosures about Fair Value of Financial Instruments. The result of these FSPs is to ease the controversial guidelines on “mark-to-market” accounting by allowing companies more leeway in valuing their investments. The FASB revised the rules to allow companies to use more judgment in determining the “fair value” of certain assets. The issuance of these FSPs will benefit many financial firms by softening the mark-to-market rules which require companies to record the value of their investments based upon the ups and downs of the market. Many banking executives have contended that during the current financial crises, when many markets are frozen or not functioning smoothly, the rules have unfairly pushed fair market valuations lower, and forced them to take big losses on the basis of market fluctuations that are temporary. Lease Accounting: Planned New Guidance As part of the convergence process of accounting standards, the FASB and the International Accounting Standards Board (IASB) are working together to change the landscape related to lease accounting so that financial statements will be reflective of the substance of lease accounting transactions. Many professionals believe the current U.S. GAAP literature on lease accounting is more reflective of the “form” of the lease rather than the “substance” of the lease. Because the current lease accounting model is a “bright-line based” model, it is not uncommon to see lease arrangements structured in a manner so that terms of the lease are such that lessee entities fall just below the criteria required to classify the lease as a capital lease. Both the FASB and IASB have agreed that the “bright-line” approach to classifying leases is not reflective of the substance of lease arrangements from the perspective of lessee reporting entities. There seems to be a general consensus that the “right-of-use” model is the way to go in determining how lessees need to reflect lease arrangements in financial statements. Summer 2009 Page 5 In using this model, lessee entities would recognize an asset associated with the right to use the asset subject to lease, then there would be a need to recognize a liability for the obligation associated with the rental payments. FASB Accounting Standards Codification Effective July 1, 2009, it is expected that the FASB Accounting Standards Codification will be launched as the sole source of authoritative accounting technical literature for nongovernmental reporting entities when preparing financial statements in conformity with U.S. generally accepted accounting principles. On March 27, 2009, the FASB issued a proposed SFAS entitled The Hierarchy of Generally Accepted Accounting Principles. When this exposure draft becomes final, it will replace extant guidance in SFAS No. 162 (with the same title). At that time, the Codification will be the only source of accounting authoritative technical literature (non-governmental entities), so that existing individual technical literature documents no longer will be considered authoritative; and all guidance that is excluded from the Codification (other than certain SEC requirements that must be utilized by public companies) will be considered nonauthoritative. In re-writing the literature in a more user-friendly format, it is possible that some reporting entities will find that there is a need to change how items, events, and transactions had been accounted for in the past using the literature that was applicable before the Codification became effective. Through codifying all of the accounting authoritative literature in one place, the primary goal of the FASB is to simplify user access to the literature by providing all guidance related to each topic in one location. The Codification will have an effect on the way reporting entities reference U.S. GAAP authoritative literature in financial statements. As an example, it is not uncommon for reporting entities to refer to specific Statements of Financial Accounting Standards in footnote disclosures. When the Codification becomes effective, the authoritative accounting literature will be located in pertinent sections of the Codification so that referencing a particular SFAS no longer would be appropriate. Given that the literature needs to be implemented by July 1, 2009, now is the time for reporting entities, and practitioners associated with those entities, to become familiar with guidance in the Codification. Business Combinations In December 2007, the FASB issued SFAS No. 141R, entitled Business Combinations, replacing the original SFAS No. 141. Effective prospectively for business combinations where the acquisition date is on/after the beginning of the first annual reporting period that begins on/after December 15, 2008 (calendar year 2009), the guidance within SFAS No. 141R changes the landscape related to accounting and reporting for business combinations. When business combinations are being accounted for using the acquisition method of accounting (SFAS No. 141R), reporting entities are required to: ▪ Identify the acquirer ▪ Determine the acquisition date ▪ Recognize and measure identifiable assets acquired, liabilities assumed, and non-controlling interests ▪ Recognize and measure goodwill or any gain resulting from a bargain purchase In accordance with SFAS No. 141, the accounting for a business combination involved accumulating costs of acquiring a target entity and allocating those costs to individual assets acquired and liabilities assumed. In certain circumstances, this approach resulted in amounts recognized for assets accrued and liabilities assumed based on a combination of measurement attributes, including acquisition date fair value and historical carrying values. In its deliberations on SFAS No. 141R, the FASB concluded that accounting bases relating to transactions or events occurring before the acquired company‟s inclusion in the acquirer‟s consolidated financial statements are not relevant to users of those consolidated financial statements. Continued on page 9 Page 6 The Hospitality Journal The Fair Value Debate: Is the Economist Versus the Accountant or Will it Go Away? Already over six months elapsed since the new President was inaugurated, yet many still remain angry about leveraging the United State‟s military by warring with Iraq and the relevance of the cause. Let‟s examine our US military and the excellent track record these men and women have had in going to war and executing the commander and chief‟s request so brilliantly. None among us can question the reliability of our military notwithstanding the many body bags that maybe flown back to the U.S. shores. What we can call into question, though, is the relevance of each mission the military undertakes. The foregoing argument is analogous to the ongoing debate of relevance and reliability in using Fair Value, FV, and Accounting. FV is relevant to financial statement users or decision makers, be it average-consumers, stakeholders, shareholders or the management of the company who will all rely on data derived there-from to increase the likelihood of positive earnings results over time. Relevance considers the element of consensus, a fundamental principle of Fair Value while reliability consider the past, tried and proven, not necessarily relevance or consensus driven. Why consensus matters in financial statement valuation is a function of market forces. Market forces determine price an element of cost, and are driven by buyers‟ and sellers‟ willingness to exchange (a consensus). In the last issue of the hospitality journal focus was given to the overall business valuation and examples of economic and accounting methods frequently used cited. In this issue we weigh in on another, somewhat micro level, valuations that continue to impact legal, accounting and economic professional, intrinsic valuations of assets and liabilities. Simplistically, how can we truly say what the value of the Golf Cart on one of Donald Trump‟s, re-knowned, signature courses is worth as opposed to the same cart being used in a less popular Golf Club. Herein remains the debate of assets and liabilities true worth. What number should be on the balance sheet? Is the perceived value of the cart, relevant because of who endorses the item or is reliability considering what was paid for the cart and its current useful life net of depreciation? The answer here may seem obvious but becomes far more complicated when big hotels, clubs or other corporation investments are considered: Bearing-mind one of the fundamental principles of accounting, consistency. As with the military, a relevant mission is far more critical to focus and yields desirable results than demonstrating reliability based on past performance. So too, in accounting the relevance of a transaction is far more critical for value creation and growth determination than reliability of historical records. Reliability is based on tried and true historical data, fact. Despite this essential truth, financial statements based on Historical Cost Accounting, HCA, do not predict nor guarantee reliability and relevance of a company‟s financials now or in the future. Based on historical cost accounting, a verifiable amount or the cost of an asset or liability can be determined. For this reason, HCA remains one of the most reliable methods of accounting for assets and liabilities. Historical cost hinges heavily on transaction based accounting where a third party to a transaction exists, referred to as an arms length transaction. Many argue that the third party existence lends credence to the cost or transaction incurred. Regardless, the reliable argument advanced in favor of Historical Cost Accounting remains incomplete because of its historical nature, financial transactions that have already happened may have no bearing on the firms‟ current financial position. In essence, HCA fails fundamentally to capture market dynamism. Some examples of economic considerations or market forces that are crucial cost drivers not captured in the reliable Historical Cost Accounting are the following: ▪ Changes in consumers‟ taste and preference will influence demand, price and hence cost: cost that directly impacts the true value of an entity. Fair Value accounting captures these changes ▪ Inflation: means prices are increasing yet cost of assets and liabilities under HCA does not keep pace and as such will impact the value of a company. Historical cost, though reliable, is not as relevant as Fair Value, in capturing the dynamic market and price changes due to inflation. ▪ Fair Value is relevant in valuing assets and liabilities at market so that each are not kept artificially low as noted with Historical Cost Accounting. Depreciation and amortization are often arbitrary amounts established that ignore market forces. Consider for example the advent of a giant internetbased company whose existence is independent of the traditional brick and mortar establishment. Further consider these internet companies‟ (and there are many) complete reliance on market forces for their viability. The values of these firms are constantly being changed almost daily relative to stakeholders‟ and shareholders‟ demand for these companies. In addition, many of these internet based companies are constantly evolving either through technology research and development or the acquisition of intellectual capital. Fair value provides for these changes and captures these companies‟ true valuation. The importance of capturing a company‟s true value in real terms cannot be discounted. Financial institutions have come to rely heavily on the current valuation to determine growth potential and credit worthiness among other issues. Summer 2009 Page 7 ▪ Changes in demand and supplies of company related assets and liabilities in the market place will increase or decrease the firm‟s value. FV avoids transaction-based accounting and captures the paradigm shift in economies facilitating better measurement of value creation in our current global economy. In the past, investors were blind-sided by performance of companies overseas because of historical cost based financial statements that were useless and irrelevant by the time the shareholders received them. ▪ The historical cost book entry ignores the willingness of buyers and sellers, market forces, which are the fundamental decision makers in determining asset and liability values. The absence of an arm‟s length transaction (characteristic of Historical Cost Accounting) in FV cannot suffice to discount the reliability of market forces, willing buyer and willing sellers. For this reason, Fair Value remains far more relevant and functional in determining a company‟s true value. In, addition, the company‟s management ability and intellectual capital does not get capitalized in the firm when HCA is used. These company‟s CDOs declined in value precipitously while their liabilities escalated. In addition, the returns on these assets, income streams, also declined relative to the cost. Unrealized gains or losses were not fully captured either because of fraud or other reasons, as Fair Value accounting principles require. Deteriorating operations, declining liabilities or assets values, insider selling are not captured by Historical Cost Accounting. Fair Value accounting captures these elements in a firm‟s value determination. Each of these elements may be harmless individually, with Historical Cost, but collectively, with FV, remain deadly as they have contributed significantly to the collapse of many companies in the past. One cannot argue that recording organizations‟ performance based on historical financial transactions is functional. As well as cite the possibility of significant overstatement of losses due to recognition of an intangible unrealized loss from investment portfolios, specifically CDOs which suppresses the tangible owner‟s equity. Be reminded that an unreasonably established depreciation and amortization schedule could have the opposite effect that misrepresents profits and camouflages obsolete assets and over-value a firm. Therefore, HCA does not provide an apt basis for measuring the value creation potential of a company in both directions, increase or decrease in value. Fair value captures the company‟s growth and potential for it to achieve full capacity and, hence, far more relevant to the current and future of a firm. Historical cost fails to capture inflation, growth or growth potentials; all crucial elements, among others, that determine a company‟s true value. Reliability is a function of relevance and cannot be ignored. While Fair Value has inherent weaknesses it remains a fundamentally good foundation upon which a company‟s accounting practice must be built. Yes, there are measures that can be taken to increase FV reliability such as incorporating sound attributes of Historical Cost accounting when using Fair Value. However, consider the changing global market place coupled with the advent of so many giant internet-based companies, where most of their assets and liabilities are intangibles, only Fair Value accounting will measure precise worth. Fair Value has proven to be most effective when assets are held for trading purposes or when a hotel or club business is based and managed on fair value. These companies‟ expected cash flows and earnings are based on buying and selling in the markets. The internet and its related companies have been woven in our lives, whether as part of our investment portfolio or as tools to help our guest and club members, and cannot be unthread. Therefore improvement in Fair Value accounting is what necessary as it its here to stay in one form or another. For example, recently FASB changed its definition of fair value (SFAS 157), now requiring that "exit price" be used. Can you define “exit price?” Contributed by Calvester Legister, Cosmopolitan Club Let‟s examine, for example, a case of unreliable Historical Cost Accounting in the recent sub-prime debacle, specifically the collapse of the mortgage companies due to sub-prime mortgages packaged as Collateralized Debt Obligations (CDOs). CDOs are asset-backed securities whose value and income payments are derived from and collateralized (or "backed") by a specified package of underlying assets. The package of assets is typically a group of small and illiquid assets, mortgages, credit card debts and car loans, which are unable to be sold individually. How is all this information relevant? Many companies owned millions of dollars of CDOs on their balance sheet at Historical Cost, arm‟s length purchases of bundled mortgages and other debt instruments from other banks with the aim to earn fixed income while the mortgage market was „hot.‟ Once the economy started contracting, due to increasing interest rate and inflation, Collateralized Debt Obligations, CDOs declined in value. The result was insolvency for many companies as the national press captured it. Summer 2009 Page 8 Sharing Information is Key to Your Company’s Health Communication is the lifeblood that keeps organizations healthy. To maximize the flow, put these practices into effect: Respect. Treat your employees like grownups, not children. Don‟t “protect” them from bad news, dismiss their concerns, or talk down to them. Take the time to listen to them and answer their questions; it shows you value their input. Microsoft Launches Bing Travel Hot on the heels of the news of the launch of Bing, Microsoft‟s new search engine, is the announcement of Bing Travel which Microsoft says, “will help consumers make smart travel decisions through a variety of innovative tools and features." Billed as “the new Decision Engine offered by Microsoft and aimed to help travelers easily find and book airfare and hotel accommodation for trips,” Bing Travel combines the airfare and hotel tools Microsoft acquired with its purchase of Farecast with the editorial content from MSN Travel. According to Microsoft, a Bing Travel survey found that 52% of travelers search three or more sites before booking airfare. The survey also found that 42% of travelers spend between one and four weeks weighing travel options. Bing Travel‟s general manager Hugh Crean said, "Bing Travel has a simple goal: help people make smarter, more informed decisions regarding travel. Travelers face plenty of challenges – from airport security and luggage restrictions to finding their hotel in an unknown city or trying to speak a foreign language. Researching and booking travel should be simple and easy, and now Bing Travel is here to help." Bing Travel tools include a price predictor, rate indicator, travel deals for flight and hotel, comparison flight and hotel search, fare alerts and original travel editorial content. Honesty. Your employees deserve the truth. That doesn‟t mean spilling trade secrets or being rude. It does mean trusting them with the facts, or at least explaining why you don‟t have the answer to a question. Openness. Don‟t hoard information nor give the impression that your organization is keeping secrets. Unless the information can be used to damage your company or hurt someone, share it so people know you trust their judgment. Timeliness. Employees should always hear your organization‟s news from you before anyone else. Tell your people what you know as soon as you know it. If you don‟t have the whole story, let them know. Then update them as soon as you‟re able. Attention. Communication should travel in both directions. Remove distractions and refuse interruptions when they have something important to say. Respond to their e-mails. The better you are at accepting their ideas and opinions, the more they‟ll respect you. Adapted from “Cop and Attitude for Effective Employee Communications,” by Barry House, Communication World Magazine Morris Sim, founder of Circos.com, noted in his blog, http:// circos.wordpress.com on June 9, “If the launch hype translates into repeat users, Bing will change the travel landscape yet again in the next 12 months. The OTAs and meta-searches will have to deal with a new breed of mash-ups following the trail of Bing that not only looks for the best price but also, the best personal fit.” Ram Badrinathan, general manager-Asia for PhoCusWright Inc, calls Bing “Microsoft's first major salvo to take on the Google juggernaut. The positioning is around Bing being a decision engine which should allow meaning and context to emerge from the Intent. That is not yet happening, for instance when I type „Las Vegas five star hotels‟, one, the display is akin to Google and two, it does not provide insights, context yet – it displays list of suppliers.” Saying it‟s just the beginning, he said, “If Microsoft applies focus, they have known to succeed. As far as Bing Travel goes, it is similar to a travel search engine and gives customers another choice.” Adapted from “Bing - Pong or Bang?” by Yeoh Siew Hoon on www.4hoteliers.com Summer 2009 Page 9 Continued from page 5, PKF Perspectives On the Road to IFRS SFAS No. 141R requires the use of the acquisition method to account for business combinations. The application of the acquisition method is based on the overall principle that a business combination is a transaction in which an entity takes control of another entity, and that the fair value of the underlying exchange transaction should be used to establish a new account basis of the acquired entity. Taking control is the triggering event for a business combination in accordance with SFAS No. 141R, regardless of how control is obtained. The use of the acquisition method to account for business combinations results in the recognition of assets acquired, liabilities assumed and non-controlling interest at fair value as defined in SFAS No. 157, with certain exceptions. Some potholes have been encountered on the road to International Financial Reporting Standards (IFRS). Under the existing roadmap, the SEC is scheduled in 2011 to vote on whether or not to move forward on mandatory adoption and, if approved, IFRS would be phased in 2012 to 2014. Furthermore, a small number of very large U.S. companies are being allowed to adopt IFRS as early as this year. They may not want to make the investment in conversion if adoption is not mandated. At her Senate confirmation hearing on January 15, 2009, Mary Schapiro, the new head of the SEC, stated: “I will not be bound by the existing roadmap that’s out for public comment.” The SEC extended the deadline for comments to its proposed timeline for IFRS adoption by U.S. public companies from February 19 to April 20, 2009. While many of the comment letters received support the goal of high-quality globally accepted accounting standards, serious concerns were expressed, including: ▪ Costs associated with the conversion ▪ Quality of the standards ▪ Interpretation of regulatory agencies in each country “Principles-based” as opposed to current U.S. “rules-based” accounting possibly leading to inconsistency, etc. The SEC will review the comment letters from the various interested parties as it considers the proposed roadmap and whether and how to transition U.S. public companies to IFRS from U.S. GAAP. Upcoming Events HFTP ANNUAL CONVENTION & TRADESHOW September 16 - 19 Green Valley Ranch Resort Las Vegas, NV Join us in Las Vegas for unmatched education and networking. Build relationships with fellow HFTP members and get up-tospeed on current topics in the hospitality finance and technology industry. For more information and to register click here. HFTP NYC CHAPTER MEETINGS July & August - Summer Break Wednesday, September 23 Meeting location and details TBA Wednesday, October 28 The Cornell Club Meeting details TBA 9TH ANNUAL CHARITY GOLF EVENT Tuesday, September 29 Saint Andrew's Golf Club for the benefit of Alzheimer's Association of New York City The Hospitality Journal Publisher The Hospitality Financial & Technology Professionals New York City Chapter Editors Clare E. Cella and Fabiola Compres The Hospitality Journal is published by HFTP NYC Chapter, a chartered member of the Hospitality Financial and Technology Professionals. HFTP is not responsible for any inaccuracies contained in material supplied to us by contributors of the newsletter. Items in this publication should not be considered official statements of position, nor advice for individuals or organizations without consulting a professional advisor. This information is not intended to be, nor can it be, used by any taxpayer for the purpose of avoiding tax penalties. For more information, please contact John Haslbauer, Henry Freire or Tom Sorrentino, members of PKF’s Accounting & Auditing Committee. Certified Public Accountants A Professional Corporation 29 Broadway ▪ New York, NY 10006 Tel: (212) 867-8000 ▪ Fax: (212) 687-4346 Certified Public Accountants A Professional Corporation SERVING THE HOSPITALITY INDUSTRY SINCE 1911 Whether your business takes you around the corner or around the world, you can count on PKF to provide quality accounting, auditing, tax and business advisory services to your organization. 29 Broadway ▪ New York, NY 10006 Tel: (212) 867-8000 ▪ Fax: (212) 687-4346 ▪ info@pkfny.com ▪ www.pkfnewyork.com Learn, Connect, Succeed. Page 11 HOSPITALITY FINANCIAL AND TECHNOLOGY PROFESSIONALS NEW YORK CITY CHAPTER PROFIT & LOSS Ending November 1, 2008 - May 14, 2009 TOTALS BOARD OF DIRECTORS OFFICERS President Clare E. Cella, CPA PKF, CPAs, PC Vice President Joseph Delgado The Radisson Martinique Treasurer Elena Mitronich The Cornell Club Secretary John A. Hyland, Esquire Sherry & O‟Neill DIRECTORS Nabil Fahmy The Penn Club Humphrey Feliciano, CHAE Union Club of the City of New York Chuck Harris Jetcom Communications Inc. Calvester Legister, CHAE Cosmopolitan Club Dan Neumann, CPA The Leading Hotels of the World, Ltd. LEGAL COUNSEL Robert P. O‟Neill, Esquire John A. Hyland, Esquire Sherry & O‟Neill Revenue Dinner Meetings HFTP International Membership Funding HFTP International Event Stipend Annual Golf Outing Annual Education Day Annual Holiday Event 50/50 Collections Postage Reimbursement Interest (Bank Accounts) Advertising Miscellaneous Total Revenue Expenses Office Supplies Dues & Subscriptions A/V Rental Donations Scholarship Donations Dinner Meeting Monthly Administrative Services Postage (Including Mailings) Annual Golf Outing (Including Donation) Bank Fees Education Day Holiday Event Travel & Entertainment Advertising Newsletter & Supplies Total Expenses Excess/(Loss) Revenue Over Expenses Closing Balance Citibank Operation Account Closing Balance Citibank Scholarship Account Money Market Account Total Cash Golf Outing Reserve Net Position 0.00 660.00 0.00 21,520.00 3,000.00 13,770.78 2,100.00 820.70 0.00 131.49 0.00 3,565.37 57.00 0.00 1,087.03 $46,712.37 $6,417.90 $15,003.99 $5,246.60 $15,187.10 $35,437.69 ($5,800.00) $29,637.69 12,775.00 9,750.00 0.00 27,320.00 0.00 2,775.00 405.00 0.00 105.27 0.00 0.00 $53,130.27 PO Box 3432 ▪ New York, NY 10163 hftp@optimum.net ▪ www.hftpnyc.org