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By Steve Schwartz
In reviewing the convention center’s operating budget, the new board
member noticed an apparently very large cost for the facility’s
housekeeping, and asked staff to justify this expenditure. The request
had urgency behind it, as the full board was scheduled to meet in a few
days.
Normally, the manager would begin with an immediate telephone or e-mail
blitz to IAAM colleagues for raw data, which he would compile and break
down for a cost-per-foot comparison. But the manager had participated in
the IAAM Convention Center Expense Benchmarking Pilot Survey, and had
received the final published report. The necessary information was
already collected, compiled, sorted and at hand; the manager could use
the available time to analyze information.
Comparing Data
The manager knew what he had provided to the survey, so he quickly
identified his own facility’s data set. Looking at the other
participating facilities, and looking at the data sorts, the manager
made an educated guess at likely groupings of the data by facility size
and market, created subsets of probable comparable facilities, and
compared his own data with the likeliest matching subset.
The manager chose to compare four sets of housekeeping data that
provided the most responses to the survey: Exhibit Hall Square Feet,
Total Rentable Square Feet, Exhibit Hall Occupied Square Feet and Total
Gross Building Square Feet. He then charted the data (see table below).
Graphing his facility’s performance according to this data, the manager
found four key points:
1. His facility cleaning costs appeared to be within the standard
national and
competitive range for three out of the four metrics.
2. His facility cleaning costs appeared to be below at least one
competitor’s reported
cleaning costs in three of the four metrics.
3.
His facility cleaning costs appeared to be within the standard
national range, but
leading his competitive set, for one metric.
4.
His facility cleaning costs appeared to be above both the standard
national and
competitive range for one metric.
Results and the Real World
The manager concluded that his cleaning costs were generally in line
compared with a competitive set of convention centers.
However, because the IAAM survey was a demonstration project, its
“survey universe” was limited to a small number of facilities. The
manager decided to perform a reality check by comparing his cost data
against two standard facility management benchmark surveys: the regular
surveys published by the International Facility Management Association (IFMA)
and the Building Owners and Managers Association International (BOMA
Intl.).
There were risks in choosing to do so: These associations survey the
operators of all types of facilities, generally facilities with stable
professional occupants and stable cleaning environments. These
associations also rely on voluntary reporting of unaudited data that
reflects the reporters’ accounting and measuring practices, not
necessarily the association’s preferred data. This was weighed against
the board stakeholders’ likely familiarity with these benchmarks, and so
the manager proceeded with his analysis.
Both IFMA and BOMA International calculate costs by Rentable Square
Footage (RSF), which subtracts the areas of major vertical penetrations
(atria, elevators, stair towers and mechanical cores), interior parking
space and void areas from the building gross footprint.
This established his facility’s RSF at 1.6 million within a gross area
footprint of 2.1 million, with a corresponding percentage of 75.5
percent facility rentable space.
This placed the facility between IFMA’s 90th and 95th percentile for
building gross area and facility rentable square feet, and established
that the facility’s closest comparable facility types were Multi-Use,
Health Care, Religious and Hotels. The facility’s housekeeping costs per
RSF were calculated at $2.24 per RSF, which placed it between the
average housekeeping RSF costs for Health Care ($2.37/RSF) and
Hotel/Hospitality ($2.19/RSF) facilities in the IFMA benchmark costs.
This corresponded with the facility’s own self-assessment of cleaning
standards to be achieved and maintained.
The BOMA International benchmarks were similarly useful. These
benchmarks are broken down by city and building size. The most recent
survey (2007) showed the manager that the average housekeeping cost for
buildings with 600,000 or more RSF in his downtown market was $2.20 per
RSF. His costs of $2.24 per RSF compared favorably with this average
metric.
The comparison of the center’s data with comparable data from three
reputable industry benchmark survey results — IAAM, IFMA and BOMA — gave
the board member confidence that the center’s housekeeping expenses were
generally in line with market costs.
fm
Source information: IAAM Convention Center Expense Benchmarking Pilot
Survey, June 2007; International Facility Management Association,
Benchmarks IV; BOMA International Experience Exchange Report 2007.
Steve
Schwartz is a senior research policy manager for the Walter E.
Washington Convention Center in Washington, D.C. |
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