Expected return is driven by 2 elements
1. operating profit (from the sale of rooms, food and bev, and meeting services)
2. real estate appreciation
2 principle cost entries on the operating (or income) statement pertaining to facilities operating are
1. Property Operation and Maintenance (POM)
(in the US, lodging properties expend more than $7 billion annually for POM and utilities)
Hotels typically pay around ______% of revenue for POM expenditures and utilities
(POM is usually larger)
The POM (property operation and maintenance) account includes
2. fringe benefit costs in the maintenance dept
3. maintenance supplies and expendibles
4. contract maintenance costs
(labor and fringe usually about 1/2 of the costs)
A US full-service hotel has an avg expenditure of _____% of revenues for POM and utilties, while a limited servcie hotel averages ____% of revenues for these services
The replacement of worn-out furniture, finishes and soft goods. Covers wear and tear, obselecense, regulatory requirements w/ ADA, life safety, franchise product demands, changing technology, market demand for product change.
Can range from near zero to as much as 30% of revenue in a given year
the role of facility design can be understood by focusing on such fasts as
- facility components
- facility layout
- quality and types of construction
heating, ventilation and air conditioning
The general term applied to a property's temperature managment system. It includes heat and refregeratied air systems and attendant ductowork, airflow, machinery, and control devices
Responsibility of facilities management as involving five major areas
- safety and security
- legal and regulatory compliance
- cost control
- asset management
May require management to fund reserves for future maintenance and repair needs, to solicit owner's approval before making building-related expenditures, and to report to the owner regarding how funds are used
quality assuarance facet of systems installation
Process of achieving, verifying, and documenting the performance of each system to meet the operational needs of the building, within the capabitlity of the coumented design and specified equipment capacities, according to the ower's functional criteria
testing, adjusting, and balancing
In the building commissioning process, TAB is one of the verfication elements that ensures the quality of the installation of systems in the facility (Ex, HVAC and water systems)
Facilities Management Companies
Companies with the expertise to provide services such as housekeeping, grounds, and physical plant management to hospitality companies, schools, universities, and various industries
R & M
Repair and Maintenance
Generally applied to costing procedures, R & M comprise the maintenance expenses incurred in the regular and unanticipated repair and maintenance of a property's physical assets
Cash reserves (the amount usually based on a percentage of gross revenues) set aside largely for maintenance and repair needs. Management contracts commonly require that operators fund replacement reserves for FF & E
General upkeep of the property, recurs on a regular basis, and requires relatively minimal skill or training to perfrom
Activities such as grass cutting, leaf raking, etc.
Preventive Maintenance (PM)
inspections, lubrication, minor repairs or adjustments, work order initiation.
Performed using manufacturer's information
Performed to compl with code requirements, corporate requirements, and insurance standards
A form of preventative maintenance.
The inspection of number of items in guestroom
filter changes in aire conditioning units
preparing equipment for changes in seasons.
Periodically required to keep equipment operating at an efficient level
Replacement of equipment
Time and scheduling issues are important
Similar to preventive maintenance, but generally relies on and uses more sophisticated technological methods to increase operational life and target preemptive corrective actions.
Replaces older rule-of-thumb or fixed-time-interval based maintenance planning with diagnostic-based maintenance planning
Ex: infrared and ultrasonic testing of electrical equipment, vibration analysis of operating machinery, system monitoring
Reactive or emergency/breakdown maintenance
Most costly and disruptive form of maintenance since it is unscheduled and unavoidable.
Have to pay overtime
Premium parts costs
Other costs associated with solution
- desire to minimize the commitment to staff on the payroll to handle these needs
- recognition that special tools or licenses are required to perform the work effectively
- a temporary staffing shortage
- need to deal with emergencies
- recognition that the complexity of the task is beyond the skills of the existing maintenance staff
Equipment data cards
Used for all major pieces of equipment to record facts and informaiton of importance for maintenance purposes
Room data card
Used to record information concerning an individual guestroom.
Basic characteristics of the guestroom and data on all major elements of the room
FF & E
Used for (preventive) maintenance usually list all the items in the guestroom and provide a brief explanation of the type of inspection, lubrication, or cleaning activity to be performed.
Also involves repair and replacement activities
Material Safety Data Sheets (MSDS)
Inform employees about potentially hazardous materials used in the workplace, how to work safely with them
Shows the relays, timers, fuses, switches, and basic wiring of controls with electrical equipment
Identify flow patterns for air and water, control schemes, equipment and system interconnections, and basic operating parameters
Information about circuit capacities, wire sizes, circuit connections and routing, emergency power circuits
Key provisions in drafting a maintenance contract (outsourcing)
- Insurance - contractor has adequate insurance, specify the type and limit of coverage, property owner should be a named insured on the contractor's policy
- Term - contract for a specific term, no automatic renewal provision
- Cancelltion - right to cancel on agreement on short notice for lack of performance, etc.
- Contractor not an employee - contractor is not an employee
- No assignment of contract
- Contract fee - should be specific on the fees for the services named
Computerized facilities/maintenance management systems (CFMS/CMMS)
Computerized maintenance schedulin, recordkeeping, and archiving systems that streamline the "paperwork and dispatch" of maintenance and repair
Not only controls equipment operation and building comfort but also fir profection interfaces, security and electric power mangement
Improve productivity and provide for more complete records, also provide the basis for more knowledgeable and well-advised decisions up and down the chain of operation
the planning and even the execution of CapEx at hotels is under the oversight of an asset manager, an employee of the owner who serves as a combination of owner representative, investment manager, financial and marketing consultant, and project manager
Developing numerical (and other) standards that allow comparison of a given facility to itself and to other facilities
Motivations for Environmental Concern
- economic considerations
- regulatory issues
- market factors
- social responsibility
A segment of tourism market that places high value on the "environmentality" of a desitnation
ISO 14000 standards
A set of environmental guidelines established by the International Organization for Standardization that are recognized as the global standard for environmental management. Certificiation by the ISO to the ISO 14000 standards is achknowledged in the industry as benchmark achievement
Coalition for Environmentally Responsible Economies (CERES)
Developed Green Hotel Initiative
An environmentally conscious group that is urging its corporate members to include environmental considerations when making lodging purchasing decisions
any materials that destroy other materials by chemical reaction. when in contact with huma tissues, these substances may cause burns and destroy tissue
environmental imapct statement (EIS)
a document stating the effect a planned construction project will have on the surrounding community
any substance capable, by chemical reaction within itself, of producing such a temperature, pressure, and speed to cause damage to the surroundings
any substance that contains viable microorganisms and their toxins, capable of causing disease
a facilities development function in which careful and appropriate planning and mangement is applied to existing real property, structure,s and natural resources to preserve the cultural and social fabric of surrounding community
a method of transforming waste (such as that generated in kitchens) from solid form into a type of slurry by adding water and processing it through a pulping machine. The pulping machine acts much like a household garbad disposer, grinding the waste, pressing out the water, and expelling it into a holding bin
Garbage volume is reduced by 75-80%, which lowers disposal costs
separating certain items of refuse for eventual shredding or melting to their basic materials to be used to make new products
the practice of using items more than once, thereby substantially reducing trash and throwaways
a method of tracking and recoding energy usage by department or function such that usage can be accurately matched to specific operations (such as the laundry) and charged to those operations (if desired)
Relatively inexpensive during new construction
More common as operations conduct more outsourcing of operations such as F&B
a broad approach to environmental consciousness in which environmental issues are addressed within the context of economics, ecology, and ethics
the recognition by hospitality owners and managers of an obligation to protect the environment for their associates, guests, and communities
any substance that causes damage to health, physical or mental impairment, or death when inhaled, ingested, or absorbed
an approach to environmental good practice nvolving reduction, reuse, recycling, and waste transformation to minimize the amount of waste disposed and the cost of its disposal. Its ultimate goal is to ensure that disposal is done in an approved and environmentally suitable manner
the practice of converting waste products into another usable form, such as incinerating burnable items and capturin the heat energy thus created to generate power
The majority of water leaving a hospitality operation (exceptions being cooling tower water lost to evaporation and irrigation water for the grounds)
Hotels w/ on-site laundry operations showed laundry water consumption ranging from _____% of total water usage
A device that submeters water that is used by a prop. but does not flow into the sewer system so that i can be deducted from the sewage disposal bill.
The high disposal of water highlights the potential benefits of using a deduct meter on water supply to cooling towers, irrigation and to the swimming pool - can constitute 20-50% of more of a facility's total water usage
Storm sewage system
Disposal of rainwater.
Flows directly to som discharge location where the rainwater enters a river, lake or other drainage system
Sanitary sewer system
the removal of waste products from the facility
System carries waste products to a sewage treatment facility
Suitability for drinking.
Examining the presence of bacteria, nitrates, trace metals and organic chemicals
Others not directly related are color, odor, taste, clearness, mineral content, and acidity/alkalinity
Treatment program for Legionnaires' Disease
A profesionally designed and implemented cooling tower treatment program is among the best preventive tactics available for this disease
What type of fire heaters for indoor pools have been implicated in incidents of what poisoning?
Directly fired heaters
Carbon Monoxide poisoning
Have been increasing in use as a means to control the interior environment around indoor pools, conserve pool water and chemicals, and reduce energy costs.
Overall effect is to reduce the humidity around the pool. This helps reduce corrosion, odor, and other problematic effects of humid, chloorine-laden pool air
a valve used to prevent water rom flowing form one subsystem to another - for example, to prevent water standing in a hose from re-entering the building water system
Directly fired water heater
the mst commonly found type of water heater, in which a fuel is burned and heat is transferred to the water. For all fuel sources, but electricity, a source of combustion of air is required; the combustion gases are sent up a flue. May have integral or separate storage tanks
A device used to capture grease in wastewater before it enters the sewer system. Also called a grease trap
Heat pump water heater (HPWH)
a water heater that extracts heat frm the air within a space, the outside air, or a water source and, using a refrigeration cycle, transfers it to the water being heated
Indirectly fired water heater
a water heater in which steam enters a coil or heat exchanger that transfers heat from the steam to the water
a grouping of rooms in sets of 2 by floor and vertically within the guest-room blocks that share piping for the supply of potable water and removal of waste
combined heat and power (CHP)
a usuable thermal output and electrical power are produced.
done mostly w/ an engine generator - heat from engine is used to heat water or as a heat source
Measure of the electrical potential provided by the utility (often compared w/ water pressure in a water system)
the rate at which an alternating current (AC) power supply alternates the direction of the current flow
(60 hertz, cycles per second)
the number of phases (which is usually one or three) refers to the number of energized or "hot" wires in the electrical supply
The ampere capability of the service refers to the maximum current flow (measured in amperes) for the system
Defined by the wire size feeding the building
One ampere represents 6.251 x 10^8 electrons per second passing through a cross section of the conductor
devices that change (step up or step down) the voltage of the electrical supply
(larger facilities - operated at 208/277 or 480 volts)
Emergency transfer switch
serves to detect the interruption of utility power. When utility power is interrupted, the switch activates the emergency power source and transfers the emergency loads to this source
Older electrical transformers
These that contain oil as an insulating/cooling medium may contain PCBs (polychlorinated byphenyls). If a fire occurs involving these, dangerous chemicals can be produces
More common in older properties, are designed and sized to fail when the current in the circuit in which they are installed is too great for the circuit capacity. Failure indicates an existing safetly problem due to a short circuit or a potential safety problem due to wire overloading
Ground Fault Cirucuit Interrupter (GFCI)
A type of circuit breaker.
Provides a much higher level of protection than a standard circuit brekers, largely designed to protect ppl.
Installed in bathrooms, outside receptacles, swimming pools, spas, etc.
Distribution Panels and wiring
check temp. rise in wires, terminal blocks and motors.
Values of 15-25 F above ambient may indicate potential problems, while 45 - 90 F above ambient warrant immediate attention
Creep and aluminum wiring
Some older hotels may have aluminum electrical cables.
Aluminum is a good conductor of energy and less expensive than copper.
Aluminum suffers from physical phenomenon called 'creep' - Cold flow that causes connections, especially those using set screws or crimps, to loosen.
loose connections cause temp buildups
Transients in electronic equipment
high voltage, short, fast electrical pulses that can destroy electronic equipment instantly or over a period of time
There are various possible solutions to electrical quality problems:
- wiring-intensive solutions such as wiring upgrades, grounding/bonding upgrades, and isolation of equipment loads
- equipment- intensive solutions such as surge suppression equipment voltage regulators, isolation transformers and battery back up units
Battery back up units and SPS or UPS
These units may be either Standby Power Supply (SPS) units or Uninterruptible Power Supply (UPS) units
SPS - switch from utility power to battery backup when the utility power is interrupted, monetary power outage
UPS- - is always online. Power from the utility feeds the UPS, which stores this power in batteries and supplies the equipment w/ a "clean" power source using the batteries and electronics that create AC power
Multimeter - Electrical Maintenance Equipment
a device capable of measuring volts, ohms, and current over a wide range
wall receptacle analyzer - electrical maintenance equipment
used to deterimine the condition of wall outlets
hydrometer - electrical maintenance equipment
a device that measures specific gravity and is used to check the charge level in batteries
Based on the amount of electricity used by the customer over the billing period
Meausred in kilowatt-hours
A commerical establishment can use tens or hundreds of thousands of kwh in a 30-day period
Based on the business' highest rate of energy usage
Measured in kilowatts
Determined by breaking up the billing cycle up into a series of 15-30 minute windows and measuring the energy usage in each window. Bill is then calculated using the highest average rate of energy usage or demand in these windows during the billing period
high demand during one month can result in a high demand charge for the next 11 - 12 months
National Electrical Code (NEC)
a publication of the National Fire Protection Association that details recommended safety code standards for electrical systems
Costs associated with facilities
- Development and construction
-Renovation and modernization
Energy or utilites costs include
- fuel (gas, oil, propane)
- water, including sewage
Hospitality companies usually allocate _____% of total revenue for renovations and replacements. In reality it is often closer to _____
Budgeting for Maintenance and Property Expenses
POM expenses should have separate categories for salaries and wages, benefits and maintenance expenses.
Major maintenance expenses should have their own line items.
Energy costs should be broken down by utility type.
Actual vs. Budgeted figures should be compared monthly at the very least.
Benchmarking can be utilized for industry comparisons.
Sustainability and the 3 E's
Economics > power and cost savings, reduce maintenance costs, recycling, customer awareness leads to increased revenues
Equity > can we see the value?
hazardous waste - 3 items of concern
1. Gasoline or fuel leaks
2. Polychlorinated biphenals (PCBs) from transformers or electrical devices
Annual water usage in the US lodging industry ins in excess of ____ billion gallons
180 billion gallons
Pipes to carry the water throughout the property can be made of
- plastic (pvc, cpvc)
are suggested to prevent scalding and to provide the correct mix of hot and cold water. They are required in some locales.
Water Heating - dishmachines and sanitation
Food service facilities usually require water of 180°F (82°C) for sanitation purposes.
Chemical sanitizing dishmachines still require 135°F in order to remove fats.
Water heating options
Electric hot water heating is the most expensive.
Natural gas and high efficiency heat pumps are the most cost effective.
Solar water heating may be cost effective in some regions
Water quality and pH of swimming pools
Water must be tested several times daily
pH should be between 7.2 and 7.6, which is slightly alkaline.
pH is controlled with muriatic acid and sodium bisulfate.
pH testing should be done before chlorine is added to the system.
Heated pool water should be maintained between 70-80°F (21-27°C).
Air in indoor pool facilities should be maintained at between 75-80°F and 50-60% relative humidity.
Pool water can be heated by directly fired heaters, indirectly fired heaters or by heat pumps.
Solar pool heaters are becoming popular