Working capital
As well as the management of our hotel owners’ bottom line, we focus heavily on the management of their cash.
Debtors
We monitor debt aging on an ongoing basis, preparing benchmark reports and addressing issues as they arise.
Our norm for trade debt greater than sixty days old is 5% and we have a number of hotels that regularly achieve less than 3%. This is significantly better than industry norms.
Creditors
We monitor creditor days and maintain the average at between 42 and 46 days.
Our view is that average payment beyond 46 days is damaging to supplier relations and anything less than 42 days is damaging to our hotel owners’ cash flow.
Cash flows
We track ownership cash flows on a daily basis and maintain three-month rolling cash flow forecasts that enable cash peaks and troughs to be effectively managed.
This is essential in ensuring that surplus funds are appropriately invested and that cash injections, which may be required to fund extensive capital refurbishments, are made only as and when required
