Why Commission a Student Business Project?
Thursday 26th April 2012
Why Commission a Student Business Project?
Frank Wolfe, CEO HFTP – On how the EHL’s SBP added value to a project of global importance...
The world’s top hospitality organisations “leverage” the EHL as a prime research resource for major projects. How does it work?
At the outset of a Student Business Project phase, each participating company makes a presentation, “pitching” their project to the students, and thus competing with all other companies on the podium, as it is the students who select which project they will undertake. One can therefore imagine how tough it is to sell accounting to students, when a number of more “fun” projects are on the table! We spoke to Frank Wolfe, CEO of HFTP, who explained his organisation’s global hospitality accounting project and how HFTP worked with EHL.
HFTP is a global association for anything that touches finance and technology. So our members are IT Directors, CFOs, CIOs and Assistant controllers who work in clubs, resorts, and hotels. We have several chapters around the world and about 20 student chapters. We have 2 certification programmes; one is the hospitality committee executive programme and the other is the hospitality technology professional programme. We produce a number of trade shows and educational conferences such as HITEC, the Asian Hospitality Technology educational conference, the European hospitality educational Technology conference and we are about to go to China in November to do EHTEC there, and we will be running the CIO Conference in India in February next year.
Could you please explain your project to us and why you’ve decided to work with EHL?
The project is a global hospitality accounting project. There are many types of accounting, but it’s very difficult for someone to come in and compare hotels in different parts of the world, because there is no standardised system. North America has a very good system but it’s not widely accepted around the world. We’ve decided to start working on finding solutions, and we chose to start the project with EHL because its number 1 in Europe, the zone in which we wanted to begin research. The school is fantastic, the students are fantastic and we are thrilled with the results that we’ve obtained from them.
In the first phase of our programme, the student started from the very beginning by getting hotels’ financial inventory and to create a searchable database. They’ve analysed the information they obtained from the different kinds of hotel. For example, one hotel’s inventory had about 837 items on it. And the largest hotel had 10,000 items. They’ve taken this and really have now laid the groundwork for our next groups. We want to do this with a series of such a groups – one in Hong Kong with the polytechnic institute (We will start this next month). They will continue for a second phase, as we want to obtain more and more details, to have enough data to finish the project. We are hoping to also undertake surveys in Russia, in India and in China and maybe also in America in addition to the uniform system.
What were the main objectives for students and what has been completed?
What we hope to achieve is to assist, for example, a hotel company that is doing business in Europe, but wants to acquire a hotel, for example, in Russia. They can take the information from this project and can have a better feel about how profitable the hotel is or what kind of capital items they have at the hotel. Sometimes a company may want to buy a hotel, but they don’t know how strong its IT department is. They need to get an idea of what’s in the property and to know if it’s like comparing apples to apples instead of apples to oranges. If they don’t use the same accounting system, it’s very possible that one hotel may appear more or less profitable than it is, due to differences in the accounting system.
Another interesting fact that the students established in phase one is that initially, we are not going to look at revenues, because money is money. In some cases, an enterprise may make purchases before they record the money as revenue. So in reality if you look at that hotel’s financial statement, it may look as though they have 100 million dollars in revenue, but in reality, they have 140 million. In a hotel in the US, you would say 140 million in revenue and 40 million dollars in expenses, and that’s a big difference when comparing hotel properties. So it is complicated to put it all down when you are not familiar with the systems, and the students have achieved a great deal during this 10-week period.