It Benchmark Findings Final

Hospitality Industry IT Benchmarking Survey Results 2006 April 2008
Copyright and Disclaimer

The information in this document is proprietary and confidential and is copyrighted by Hospitality Upgrade. Reproduction in whole or part without written permission is prohibited. For additional reproduction rights, usage information, or to purchase reprints of this document, contact Rich Siegel at Hospitality Upgrade at 678.802.5301. The information contained herein has been obtained from sources believed to be reliable. Hospitality Upgrade disclaims all warranties as to the accuracy, completeness or adequacy of such information. Hospitality Upgrade shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.
Copyright 2008 Siegel Communications, Inc. The information in this report is proprietary and confidential and may not be reproduced without written permission.
Special Thanks
Industry CIOs/CIO Summit Attendees This research is the product of many lively and engaging discussions that have taken place at various CIO Summits since 2005. Thanks to all past attendees whose thoughts, ideas, commitment and participation have resulted in the formation and completion of this much needed and anticipated body of research! Sponsors All research efforts require significant resources, and this endeavor is certainly no different. There are countless hours that have gone into the preparation, distribution, follow up, data collection, and reporting phases of this study. This effort would not be possible if it were not for the generous financial support of KPMG LLP and HFTP. Thank you! The Hospitality Upgrade Staff The task of completing the first ever Hospitality Industry IT Benchmarking Survey was a journey, not a destination. Thanks to the staff of Hospitality Upgrade for all of their effort, both in helping make this research a success, and their daily effort in making Hospitality Upgrade a continued success.
Hospitality Industry IT Benchmark Survey 2006 Background & Methodology
Familiar?
Filling the Gap

At the 2005 CIO Summit, a survey of the 39 CIOs in attendance indicated that there was a gap in available information regarding IT spend data specific to the hospitality industry 90% of CIOs indicate that they are getting IT Spending metrics from at least one of the sources listed below, indicating a need for this type of information Overall, CIOs indicate that the sources they are currently using are not adequate for making IT Spending comparisons within the Hospitality industry, indicating a need for better information The purpose of this Benchmark is to fill the identified information gap with the goal of providing an ongoing operational toolset for the industry
Filling the Gap

There appears to be a need in the industry for comparative IT Spending metrics that CIOs can use to benchmark their spending, and justify expenses to both internal and external stakeholders CIOs express a willingness to participate in this research 95% report they are Likely to complete the Survey 76% report they are Very Likely to complete the Survey High percentages indicate they are likely to purchase and use the research in their planning 89% report they are Likely to purchase the results, with 42% reporting Very Likely 95% indicate they are Likely to use the results in planning, with 45% reporting Very Likely
Filling the Gap Benchmark Data Uses CIOs indicated they planned to use the research in the following ways:
ID best practices & improvement areas Internal support for budget items Preparing annual budgets Highlight strong performance
73%
54%
49%
30%
Other
3%
8
Filling the Gap Process Steps

Survey Type Determined
In examining the information available to the industry, a benchmarking survey looked to be the best means to fill the information gap
Initial Survey Drafted

Drawing from benchmarking best practices developed by APQC and others, a DRAFT survey was completed
Advisory Board Convened 11 CIOs approached to participate 7 participated in Advisory Board

Jeff Winslow, Accor NA Jim Lamb, Global Hyatt Tom Peck, MGM MIRAGE Richard Tudgay, Omni Hotels Todd Thompson, Starwood Hotels and Resorts Mike Sutten, RCCL Jane Durment, Marcus Corporation
Advisory Board Feedback Incorporated Initial Survey Available to US Companies ONLY Performance Monitor Engaged
Methodology
200 invitations were sent to North American Hospitality companies in December of 2007 Invited participants received a physical mailing that included an introduction to the research, a worksheet for gathering data internally, and a unique user ID/password for entering data into the online Survey instrument. Participants provided financial information for their 2006 fiscal year Study participants were asked to provide more than 600 data points when answering the survey. 28 companies participated in the IT Benchmark Performance Monitor was hired to ensure participant confidentiality and provide stewardship for this sensitive data throughout the process. Performance Monitor followed up with participants in select cases where there were questions about a particular response or lack of response.
10
Methodology (contd)
In many cases study participants did not or could not provide data for every question. To help the reader apply the results, an n= value has been provided on each slide. The n value identifies the number of study participants that answered each question. The n value varies from slide to slide based on the number of study participants that were able to provide data for each question. For this iteration of the Survey, the cruise lines reported in as part of the resort segment. This Survey is by the industry, for the industry so only hotel companies have been included .
11
Methodology (contd)
Two company types are represented in this Survey Brand Franchisors and Owned/Managed Brand Franchisors first reported system wide revenue/expense for all properties Brand Franchisors reported a second time, looking solely at the Owned/Managed portion of their business Owned/Managed companies report revenue/expense figures for properties meeting that criteria The segregation by company type reduces the opportunity to double count revenue/expense data All responding companies further segregated select responses by segment (e.g., IT Operational Spend IT Full Service) The segment data allows us to see variations in IT approach by segment
Luxury Full Service Resort Select Service
Market Segments of Participants

5 5 5 5
Copyright 2008 Hospitality Upgrade Source: 2006 Hospitality IT Benchmark Research
12
12
Methodology (contd)
2006 Data Analysis The results presented in the document are high level and represent trends in the industry at a macro level and across the identified segments. As this is year one of the Survey, no comparative trending data is available. Year over year trends and deeper data analysis will be published later this year with the 2007 Survey results.
13
13
Hospitality Industry IT Benchmark Survey Demographics
14
Definitions
Segments
Luxury: A hotel of superlative quality in terms of both the physical plant and services offered, and by implication, the price charged. These hotels can fall into the Luxury or Upper Upscale chain scale segments as defined by Smith Travel Research (STR) or by independent hotels meeting the same criteria. Representatives of this segment are typified by brand names such as St. Regis, Ritz-Carlton, and Waldorf=Astoria. Full Service: Those hotels meeting the two-to-three Star/Diamond classifications offered by the Mobile/AAA rating services. A hotel in this segment is able to provide a number of services to its guests outside of lodging (e.g., room service, concierge services, food and beverage, etc.). Representatives of this segment are typified by brands names such as Hilton, Marriott or Sheraton. Resort: Located in resort areas where the primary source of business is from leisure or destination travel. These entities are characterized by the number and types of services offered such as golf, spa, retail and food and beverage. Resorts can be either land-based (e.g. hotel, timeshare, vacation ownership and casino) or floating, such as a cruise ship. Resorts may be otherwise indistinguishable from Luxury or Full Service entities. Representatives of this segment are typified by brand names such as Canyon Ranch, Bellagio, and Royal Caribbean Cruise Lines. Select Service: Are characterized by facilities such as meeting rooms, nicely appointed guest rooms, limited amenities, with some special services available. May have a swimming pool and may or may not have food and beverage outlets. The segment includes extended stay properties. Representatives of the segment are typified by brand names such as Hampton Inns and Suites, Holiday Inn Express, Fairfield Inn by Marriott, Hilton Garden Inn, Courtyard by Marriott and Four Points by Sheraton.
Property Type Classifications

Owned: Any property in which your Company holds a controlling financial interest. Managed: Any property managed for third-party owners, including those in which the Management Company holds a non-controlling financial interest. System Wide: Applicable only to Brand Franchisors. All hotels that are owned, managed or franchised as part of the brand family.
15
Company Type
Brand Franchisors were asked to provide system wide data. Brand Franchisors were also asked to break out the portion of their business that pertains only to those properties which they Own / Manage. Because only 24% of study participants provided system- wide data, system wide data is provided at a summary level. The balance of this report is based on the Own / Manage portion of all participants businesses.
16
Brand Franchisor 24%
Company Type
Owned / Managed 76%

n = 25
Ownership Type
Ownership Type
Own Only Own & Manage Franchise, Own, & Manage Manage Only Franchise Only
32% 32% 16% 12% 8%

n = 25
17
Region
Ownership
Region
Regional 12%
Public 40%
National 24%
Private 60%
International 64%
Copyright 2008 Hospitality Upgrade Source: 2007 Hospitality IT Benchmark Researchh
n = 25
n = 25
18
Portfolio
Number of Hotels Owned or Managed 30% 30% 22% 17% 48% Segment Distribution - Own & Manage 52%
Less than 10
10 - 24
25 - 99
100 or more Single Segment

n = 23
Multiple Segments
n = 25
19
Segment Participation
Market Segments of Participants - Own & Manage
14 12
7 5
Luxury
Full Service
Resort
Select Service
Note: As several responding companies participate in multiple segments, the numbers represented here will be greater than the number of actual participants. 20
IT Spending Overview
Operating Budget as a Percent of Revenue - Own & Manage 39% 33% 28% 25% 25% Capital Budget as a Percent of Revenue Own & Manage 50%
Less than 1%
1% - < 2%
2% or more
n = 18
Less than 0.5%
0.5% - < 1.0%
1.0% or more
21
Hospitality IT Benchmark Results
22
Composite Statistics
IT Benchmark Summary Statistics - Own & Manage
Overall Number of Respondents Median Number of Hotels Median Number of Rooms Median Number of Hotels Supported per IT FTE Median Number of Rooms Supported per IT FTE Median IT Operating Budget as a Percent of Revenue Median IT Capital Budget as a Percent of Revenue Median IT Operating Budget Per Room Median IT Capital Budget Per Room
Luxury 7 16 5,881 0.8 404 1.55% 0.44% $484 $208
Full Service 12 10 3,262 0.9 291 1.29% 0.56% $511 $188
Resort 14 6 1,617 1.6 277 0.63% 0.39% $859 $667
Select Service 5 104 12,118 0.1 1170 1.83% 0.69% $482 $92
23 20 4,973 1.1 281 1.32% 0.51% $541 $216
Note: In 2006, average IT spend for North American companies across the board was 2% according to Gartner and InformationWeek. There are wide variations among industries relative to IT spend with Banking and Financial Services coming in at 6%, Media and Entertainment coming in at 3.7 % and Distribution coming in with the lowest reported figure at 1.1% The percentage spend figures for the Resort segment appear depressed in comparison to other segments. The reason for this is the higher rates that the segment commands. The median Resort ADR for the period is $207 vs. $166 overall. 23
Operating Metrics - Occupancy

Occupancy Rate - Own & Manage - Overall
100% 87% 69% 70% 70% 74% 69% 60% 49% 50% 68% 68%
100%
67%
72%
40%
This data point intentionally left blank due to a base size smaller than n = 4.
Select Service n=3
Overall n = 20
Luxury n=7
Full Service n = 10
Resort n = 11
Low
Median
Mean
High
Note: The purpose of reporting these operating statistics is to paint a picture of revenue by segment to better gauge the dollar value of IT spend. The Select Service occupancy operating metric is left blank on this slide to prevent the number from being reverse engineered. The number of companies responding is small enough that an individual companys figures might be identifiable. 24
Operating Metrics - ADR

Average Daily Rate - Own & Manage - Overall
$713.07
$480.00
$324.81 $281.42 $166.28 $196.26 $174.21 $204.96 $139.34 $151.00 $221.00 $144.99 $82.55 $207.30 $143.82
$51.98
Select Service n=3
Overall n = 20
Luxury n=7
Full Service n = 10
Resort n = 11
Low
Median
Mean
High
Note: The purpose of reporting these operating statistics is to paint a picture of revenue by segment to better gauge the dollar value of IT spend. The Select Service ADR operating metric is left blank on this slide to prevent the number from being reverse engineered. 25 The number of companies responding is small enough that an individual companys figures might be identifiable.
Operating Metrics - RevPAR

RevPAR - Own & Manage - Overall
$485.70
$485.70
$237.35 $192.00 $150.52 $106.62 $34.71 $128.00 $143.80 $99.63 $102.50 $101.60 $48.34 $151.00
$229.16
$39.47
Select Service n=3
Overall n = 18
Luxury n=7
Full Service n = 10
Resort n=9
Low
Median
Mean
High
Note: The purpose of reporting these operating statistics is to paint a picture of revenue by segment to better gauge the dollar value of IT spend. The Select Service RevPAR operating metric is left blank on this slide to prevent the number from being reverse engineered. 26 The number of companies responding is small enough that an individual companys figures might be identifiable.
Non-Corporate ITFTE per Hotel - Own & Manage - Overall

7.0 7.0
2.3 1.5 1.1 0.3 0.8 1.1 0.8 0.3 0.9 1.2 0.8 1.6
2.3
0.3
Select Service n=1
Overall n = 14
Luxury n=4
Full Service n=4
Resort n=8
Low
Median
Average
High
27
Number of Rooms Supported per Non-Corporate ITFTE - Own & Manage

1,470.3 1,470.3
740.0 594.2 394.4 281.5 67.7 99.0 403.8 291.5 340.0 270.9 160.7
277.4
300.1 62.1
Select Service n=1
Overall n = 14
Luxury n=4
Full Service n=4
Resort n=8
Low
Median
Average
High
28
IT Operating Budget as a Percent of Revenue - Own & Manage

4.71%
2.55% 1.81% 1.55% 1.32% 1.29% 1.29%
2.58% 1.79% 1.35% 1.83%
2.42% 1.78% 1.04% 0.63% 0.80% 0.18%
0.18%
0.18%
0.26%
Overall n = 18
Luxury n=6
Full Service n = 11
Resort n=8
Low Median
Select Service n=4

Mean High
Note: The percentage spend figures for the Resort segment appear depressed in comparison to other segments. The reason for this is the higher rates that the segment commands. The median Resort ADR for the period is $207 vs. $166 overall.
29
IT Capital Budget as a Percent of Revenue - Own & Manage - Overall

2.34% 2.06% 1.80%
1.21% 1.01% 0.82% 0.64% 0.51% 0.20% 0.44% 0.22% 0.18% 0.56% 0.39% 0.75% 0.47% 0.33% 0.13% 0.69% 0.73%
Overall n = 20
Luxury n=5
Full Service n = 10
Resort n=9
Low Median Mean
Select Service n=4

High
Note: The percentage spend figures for the Resort segment appear depressed in comparison to other segments. The reason for this is the higher rates that the segment commands. The median Resort ADR for the period is $207 vs. $166 overall. Capital budgets represent expenditures that reoccur infrequently and are depreciated over a period of years to match their life cycle as useful assets. For example, enterprise software licenses and large mainframes may only be purchased once every five years; construction of a new data center facility may occur only once. As a result, growth rates of capital 30 budgets are highly volatile.
IT Operating Budget Per Room - Own & Manage - Overall

$2,624.60
$2,569.86
$2,569.86
$1,307.51 $1,014.70 $722.60 $541.39 $101.24 $483.60 $101.24 $831.66 $511.49 $552.82 $127.94 $111.11 $858.56 $482.00
$1,432.32
$559.16 $126.76
Overall n = 18
Luxury n=6
Full Service n = 12
Resort n=8
Low
Select Service n=5

Median Mean High
31
IT Capital Budget Per Room - Own & Manage - Overall

$1,888.13 $1,888.13
$1,152.20
$826.45 $666.67 $433.38 $216.24 $68.64 $207.65 $357.72 $135.00 $187.50
$750.23
$716.16
$326.36 $106.67 $76.92 $92.25
$294.05 $70.07
Overall n = 20
Luxury n=5
Full Service n = 11
Resort n=9
Low
Select Service n=5

Median Mean High
Note: Capital budgets represent expenditures that reoccur infrequently and are depreciated over a period of years to match their life cycle as useful assets. For example, enterprise software licenses and large mainframes may only be purchased once every five years; construction of a new data center facility may occur only once. As a result, growth rates of capital budgets are highly volatile.
32
IT Operating Budget Own & Manage
33
Definitions
IT Operating Budget Definitions
Operating Budget: Includes lease expense, depreciation, non-capitalized new purchases, support and maintenance fees for client computing (PCs, notebooks and laptops), enterprise computing (servers, and midrange and mainframe systems), document management (printers, scanners and plotters) and network infrastructure (hubs, routers and other network hardware). Software: Includes license charges, support and maintenance fees, subscription fees, one-time fees, and software amortization/depreciation for infrastructure software and applications. Internal IT Staff: Includes development personnel, production/operations personnel, administrative/IT management/other personnel and IT-related human resources/training/recruitment personnel. External Service Providers: Are divided into the following categories:
Business Consulting: Consulting services are advisory services that help you assess different technology strategies and align your technology strategy with your business or process strategy. Business Process Outsourcing/Management (BPO/BPM): BPO/BPM services are intended to improve business operational efficiencies and transform established businesses or create new businesses by analyzing or re-engineering business processes. Development and Integration Services: Development services create new functionality for custom-developed or packaged applications. Development services frequently serve to integrate or link internal or external business processes. These services may include conversion applications to run on different platforms or architectures. Integration services are detailed design, implementation and management services that link applications (custom or prepackaged) to each other or with the current or planned IT. IT Outsourcing/Management (ITO/ITM): ITO/ITM provides day-to-day management and operation of IT assets and processes. Services include three sub-segments: application management services, help desk management services and operations services. Networking and Telecommunications: Includes enterprise networking equipment, mobile handsets and telecommunications services (voice, data and wireless).
Facilities: Includes costs for floor space, electricity, gas, water and rent if those costs are part of the central IT budget. Other Expenses: These expenses may include items such as travel and entertainment costs, temporary help, training, repairs and maintenance, furniture and fixtures, postage and office supplies, depreciation on non-hardware/non-software items, subscriptions and dues, costs directly charged back to business units.
34
2006 IT Operating Budget Breakout - Own & Manage - Overall

76%
50% 41% 35% 20% 10% 11% 1% 3% 44% 41% 39%
17% 9% 4% 10% 0% 10%
14% 2% 0% 8% 2% 0% 4%
16% 5% 0%
Hardware
Software
Internal Personnel
External Service Providers
Networks & Telecom

Low
Facilities
Other Costs
Average
Median
High
n = 23
35
2006 Hardware Budget Breakout - Own & Manage

95% 86% 76% 80%
44%
48%
24% 9% 0% 0%
23% 14% 0%
19%
15% 0% 0% 2% 0%
0%
Lease Expense
Depreciation
Non-Capitalized New Purchases
Support and Maintenance Fees

Low Average Median
Other Costs
n = 15 High
36
2006 Software Budget Breakout - Own & Manage - Overall
100% 86% 83%
78%
56%
51% 45%
23% 16% 0% 10% 1% 6% 0% 7% 0% 12% 0% 0% 0%
20% 0% 2% 0%
Licence Charges
Support and Subscription Fees Maintenance Fees
One-Time Fees
SW Amort/Depr
Other Software Costs

High n = 20
Low
Average
Median
37
2006 Internal Personnel Budget Breakout - Own & Manage - Overall
100%
67%
70% 64%
43% 24% 17% 10% 0%
23% 13% 0%
HW/SW Tech Support

Application Development
Low
Other Internal Personnel Costs

n = 22 Average Median High
38
2006 External Service Providers Budget Breakout - Own & Manage - Overall
100%
100%
100% 85%
35%
31% 13% 14% 0% 18% 10% 0% 0%
30% 10% 1% 0%
13% 0% 0%
0%
2% 0%
0%
IT Consulting
Business Consultants
IT Outsourcing
Development & Integration
Business Process Outsourcing

Average Median
Other External Services Costs

High n = 16
Low
39
2006 Networks & Telecom Budget Breakout - Own & Manage - Overall
100% 93% 88% 75% 68% 57% 49%
24%
25% 11% 10% 0% 0% 0% 6% 0%
0%
0%
5%
0%
Data
Voice
Wireless
Outsourced Services
Low Average
Other Related Network Costs

Median High n = 20
40
2006 IT Operating Budget Detailed Breakout - Own & Manage - Overall

57%
45% 43%
35%
25% 23% 20% 15% 12% 10% 10% 7% 2% 3% 4% 0% 0% 2% 4% 10% 8% 5% 0% 4% 10% 20% 16% 12% 10% 21%
24%
12% 10% 10% 5%
2%
1%
0%
1%
1%
2% 0%
0%
1%
O th er
F& Su A pp ly Hu Ch m ai an n Re Tr so ai ni ur ng ce s In & R Le oo ar m ni ng Sv cs (m In ov R oo ie s) m Sv cs -T V' s W ire le ss F& B PO O th S er F& B Sy s Re ta il Se PO cu S ri t y Sy st em s
es Re er ve v nu e M gm Pr op t er Ev ty en M gm tS t al es & Ex ec Ca ll Ce In nt te er r/r s a/ ex tr Ca ane m pa t ig n Lo M ya gm lty t Pr og ra m s Da ta CR W M ar eh ou si ng
Ce n
tra lR
n = 20
Median
Average
High
41
IT Capital Budget Own & Manage
42
2006 IT Capital Budget Breakout - Own & Manage - Overall
97%
72%
75% 69% 65%
40% 22% 27% 8% 0% 30% 29% 13% 3% 17% 0% 0% 8% 0% 0% 5% 0% 0% 4% 0% 0% 2% 0% 28% 23%
0%
4%
Computing Equipment
Storage Equipment
Software
Networks & Telecom
External Service Providers
Other Capital Budget Items

Low Average
Facilities
Other Costs
n = 22 Median High
43
2006 IT Capital Budget Detailed Breakout - Own & Manage - Overall

81%
60% 55%
42%
40% 35% 32%
39% 30% 25% 20% 15% 12% 9% 0% 0% 0% 10% 0% 0% 0% 3% 5% 0%
40% 35% 30% 20% 19% 10% 3% 0% 0% 0% 1% 0% 2% 0% 0% 0%

O th e r
6% 0%
tra lR
8% 0%
F& Su A pp ly Hu Ch m ai an n Re Tr so ai ni ur ng ce In s & R Le oo ar m ni Sv ng cs (m In ov R oo ie s) m Sv cs -T V' s W ire le ss F& B PO O th S er F& B Sy s Re ta il Se PO cu S ri t y Sy st em s
es Re er ve v nu e M Pr gm op t er Ev ty en M gm tS al t es & Ex ec Ca ll Ce In nt te er r/r s a/ ex tr Ca ane m pa t ig n Lo M ya gm lty t Pr og ra m s Da ta CR W M ar eh ou si ng
Ce n
n = 20
Low
Median
Average
High
44
Other Findings
45
Operating Budget as a Percent of Revenue - Own & Manage 39% 33% 28%
Less than 1%
1% - < 2%
2% or more
n = 18
46
Change in 2007 IT Operating Budget by 2006 IT Operating Spend as a Percent of Revenue

40%
Avg. Change:
+13.2%
+10.6%
+8.1%
The intention of this slide is to identify patterns in where operational spending will increase moving forward. The 15 study participants were broken into three groups based on their 2006 operational spending: <1% of revenue
% Change for 2007 IT Operating Budget
20%
1% - <2% of revenue > 2% of revenue On average, 2007 spending increased slightly more (+13.2%) among those spending less than 1% of revenue on their IT operating budget.
0% 1% 2% 3%
0%
Increases gradually decreased as 2006 IT operating budget increased.
-20% 2006 IT Operating Budget as a % Rev

Only includes cases with both data points
47
IT Operating Budget as a Percent of Revenue

Overall Number of Participants Internal Personnel External Service Providers Hardware Software Networking & Telecom Facilities Other 23 44% 4% 10% 20% 10% 0% 4% Less than 1% 1% - < 2% 6 54% 2% 3% 16% 9% 2% 4% 6 41% 2% 10% 21% 11% 1% 3% 2% or more 4 23% 23% 10% 18% 18% 0% 0%
Note: The percentages in the table above do not sum to 100% because the median values are represented. Median values are used to avoid the influence that extreme values have on mean values.
48
Percentage of IT Operating Budget Dedicated to Growing the Business by IT Operating Budget as a Percent of Revenue
Overall Run the Business Grow the Business 83% 18% Less than 1% 1% - < 2% 90% 10% 77% 23% 2% or more 80% 20%
49
IT Staffing & Efficiency by IT Operating Budget as a Percent of Revenue

Overall IT FTE Per Hotel Number of Rooms / IT FTE Number of IT EU / IT FTE 1.08 281 190 Less than 1% 1% - < 2% 1.06 216 203 1.42 297 100 2% or more 1.10 505 247
Note: Definitions used in this slide are: IT FTE Number of IT Full Time Equivalents and IT EU Number of IT End Users.
50
IT Staffing Comparison - Owned vs. Managed Properties 1.13 0.91
Owned Properties
Managed Properties
51
Certifications, Methodologies, and Standards
RUP PMBOK ITIL CObIT CMMI

14%
29%
43%
50%
64%
Copyright 2008 Hospitality Upgrade Source: 2007 Hospitality IT Benchmark Researchh
52
Time to Address Identified Skills or Capabilities Gaps

26.0
12.0
11.9
4.0
Number of Weeks
Low
Median
Average
High
53
Workforce Volatility
27%
14% 9% 7% 5% 0% 1% 0% 1%
15%
6%
0%
Retire Within 1 Year

Newly Hired Within 1 Year

Low
Replaced Within 1 Year

Median Average High
54
Expenditures Per IT FTE For
$5,810
Every participating company funds IT-specific training
$3,571
$1,439 $743 $169
63% of participating companies fund employee retention programs

$820 $363 $42
IT-Specific Training
Employee Retention Programs

Low Median Average High
55
Appendix A How to Read the Charts
Quick Review of the Data

In this example, five people answered the question. Their answers are provided on the line below
Median In the middle Average Low (1+2+3+4+5) / 5 High
3 In this case, the Average and the Median are the same.
57
How to Read the Charts

High - highest value recorded by study participants Range the shaded area portrays the range of values, from the lowest to the highest
Metric Name
32%
Average the average is provided for comparison to the median Median the data point found in the middle of the data when they are sorted low to high
20% 18% 14%
Low - Lowest value recorded by study participants
Low
Average
Median
High n = 25
58

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Hospitality Industry IT Benchmarking Survey Results 2006 April 2008

Copyright and Disclaimer

Hospitality Industry IT Benchmark Survey 2006 Background & Methodology

Filling the Gap

Filling the Gap

Filling the Gap Process Steps

Initial Survey Drafted

Advisory Board Convened 11 CIOs approached to participate 7 participated in Advisory Board

Market Segments of Participants

Copyright 2008 Hospitality Upgrade Source: 2006 Hospitality IT Benchmark Research

Hospitality Industry IT Benchmark Survey Demographics

Property Type Classifications

Owned / Managed 76%

32% 32% 16% 12% 8%

Copyright 2008 Hospitality Upgrade Source: 2007 Hospitality IT Benchmark Research

Copyright 2008 Hospitality Upgrade Source: 2007 Hospitality IT Benchmark Researchh

Copyright 2008 Hospitality Upgrade Source: 2007 Hospitality IT Benchmark Research

100 or more Single Segment

Copyright 2008 Hospitality Upgrade Source: 2007 Hospitality IT Benchmark Research

Copyright 2008 Hospitality Upgrade Source: 2007 Hospitality IT Benchmark Research

Less than 0.5%

0.5% - < 1.0%

Copyright 2008 Hospitality Upgrade Source: 2007 Hospitality IT Benchmark Research

Copyright 2008 Hospitality Upgrade Source: 2007 Hospitality IT Benchmark Research

Hospitality IT Benchmark Results

Luxury 7 16 5,881 0.8 404 1.55% 0.44% $484 $208

Full Service 12 10 3,262 0.9 291 1.29% 0.56% $511 $188

Resort 14 6 1,617 1.6 277 0.63% 0.39% $859 $667

23 20 4,973 1.1 281 1.32% 0.51% $541 $216

Operating Metrics - Occupancy

Operating Metrics - ADR

Operating Metrics - RevPAR

Non-Corporate ITFTE per Hotel - Own & Manage - Overall

Full Service n=4

Number of Rooms Supported per Non-Corporate ITFTE - Own & Manage

Full Service n=4

IT Operating Budget as a Percent of Revenue - Own & Manage

2.55% 1.81% 1.55% 1.32% 1.29% 1.29%

2.58% 1.79% 1.35% 1.83%

2.42% 1.78% 1.04% 0.63% 0.80% 0.18%

Select Service n=4

IT Capital Budget as a Percent of Revenue - Own & Manage - Overall

Select Service n=4

IT Operating Budget Per Room - Own & Manage - Overall

Select Service n=5

IT Capital Budget Per Room - Own & Manage - Overall

$826.45 $666.67 $433.38 $216.24 $68.64 $207.65 $357.72 $135.00 $187.50

$326.36 $106.67 $76.92 $92.25

Select Service n=5

IT Operating Budget Own & Manage

2006 IT Operating Budget Breakout - Own & Manage - Overall

50% 41% 35% 20% 10% 11% 1% 3% 44% 41% 39%

17% 9% 4% 10% 0% 10%

Copyright 2008 Hospitality Upgrade Source: 2007 Hospitality IT Benchmark Research

External Service Providers

Networks & Telecom

2006 Hardware Budget Breakout - Own & Manage

Non-Capitalized New Purchases

Support and Maintenance Fees

Copyright 2008 Hospitality Upgrade Source: 2007 Hospitality IT Benchmark Research

2006 Software Budget Breakout - Own & Manage - Overall

100% 86% 83%

23% 16% 0% 10% 1% 6% 0% 7% 0% 12% 0% 0% 0%