Accounting Tips

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Welcome to the basic operational accounting guide. Our day to day activities as Controllers, CFO’s, and Accounting Managers in our professional lives as well as our personal lives expose us to educational opportunities on a daily basis. The basic accounting guide is for those who are interested in many accounting topics and issues and are looking for a forum to actively discuss changes and events in Accounting, Corporate Finance, and Personal Finance. The blog will cover a myriad of topics including corporate accounting, taxes, wage and labor issues, personal tips and tricks for saving, accounting software reviews, and many others. We encourage active participation in each topic and look forward to discussion of any topics.

technology-palm-beach-gardens-jupiter-jason-bloomFocusing on Accounting and Finance will lead us quickly into a technological landscape that is full of a myriad of options.  Accounting, General Ledger, Payroll, Vendor Management,  and Accounts Receivable modules are available in multiple different software solutions many of which we will take time to review and discuss the benefits and drawbacks.  Some industry experts believe that cloud based solutions are the answer as many solutions attempt to provide a one stop shop for Accounting solutions.  Although there are many benefits to cloud based services, such as a decreased need for infrastructure, automated updates, and better data backup, there are also several drawbacks including a complete dependence on the internet to maintain business continuity as well as a more one size fits all solution void of customization.  Over the next several months we will closely look at the link between efficient and accurate accounting and technology and automation.

jason_bloom_palm_beach_accounting_cfoAbout the Author: The main blog contributor has a diverse background in many different areas of accounting and finance as well as operations in hotels and resorts. Throughout the years, Jason Bloom has worn many different hats in accounting and finance including CFO, Director of Finance, Controller, Assistant Controller, and Financial Analyst. As CFO and Director of Finance, Jason participates as an Executive coordinating all financial activities for the organization including financial statements, cash flow management, regulatory compliance, budgets, and forecasts. Prior to his current role as CFO, Jason has held the positions of Controller, Assistant Controller, and Financial Analyst at PGA National Resort in Palm Beach Gardens, FL where he had a diverse exposure to many areas of Accounting including closing duties, journal entries, bank reconciliations, ad hoc reporting, sales tax, and audit coordination.  Jason is currently a resident in Jupiter, FL where he enjoys DIY home improvements, fishing, and website design.

How a CFO can quickly reduce payroll taxes with a Dependent Care FSA (Flexible Spending Account) by Jason Bloom

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The good news is that the IRS provides “Dependent Care Assistance Plans” (DCAP) under section 129 that allows a win/win for employers and employees and can reduce taxes for both.

Employees are able to reduce payroll taxes for Federal, State, Social Security, and Medicare  on up to $5,000 in wages and employers can see a 7.65% reduction in employee taxes for the contribution amounts.

The IRS Code (Section 129) provides for “Dependent Care Assistance Plans” (DCAP), a method of employer-provided assistance for meeting the dependent care needs of employees. One of the popular type of these Assistance Plans is the Dependent Care Flexible Spending Account offered through a flexible benefit plan. Employees can salary reduce on a pre-tax basis up to $5000 annually into a flexible spending account (FSA) for dependent care. The care must be for a child under age 13 or a disabled dependent meeting certain other requirements. Such salary reduction contributions are exempt from multiple payroll taxes such as federal income tax, state income tax, and social security tax (Probenefits, 2014) .

Employers also receive a tax benefit by establishing flexible spending accounts. Employers are not required to pay the employer portion of the Social Security tax—which amounts to 7.65 percent of each employee’s taxable income—on employee contributions to FSAs. In effect, payroll taxes are reduced by 7.65 percent of the total employee contributions to the FSA.

As an example of the savings: If a business with 700 employees and an annual payroll of $20 million. Without the tax advantage of an FSA, the company would owe Social Security taxes of 7.65 percent on its total payroll of $20 million, or $1.53 million in that year. But if, in a most optimistic scenario, all employees each contributed the maximum allowable contribution of $5,000, the company’s taxable payroll would be reduced by $3.5 million, and the company would save $267,750 in taxes for the year. Combined with the tax savings of $1,500 per employee, the total tax reduction for the company and its workers resulting from the FSA would be $1.05 million for the year.

In reality, a company can expect a participation rate closer to 20 percent. In a 2005 Business Insurance article entitled “Grace Period Complicates FSAs,” author Jerry Geisel states that “Currently, about 15 percent of eligible employees contribute to health care FSAs, with employees contributing on average between $1,100 and $1,200 a year.” (, 2015)

If you are looking to reduce your payroll tax burdens you may want to consider participation in a Dependent Care FSA and educating your team members on its benefits.

If you are looking at it from the employee perspective then the money you set aside in a flexible spending account is not only subtracted from your paycheck before income taxes are calculated, but it also avoids the 7.65% Social Security and Medicare tax. So if you’re in the 15% income-tax bracket, you won’t have to pay the 15% federal tax or the 7.65% Social Security tax, which means that you’ll avoid paying a total of 22.65% in taxes on that money. In that case, contributing the maximum $5,000 to your dependent-care flex plan cuts your tax bill by $1,133. The benefits get even better as your tax bracket rises. If you’re in the 25% bracket, for example, you’ll end up saving 32.65% in taxes on the money you contribute to the FSA — and lowering your tax bill by $1,633. You’ll save even more if your FSA contribution escapes state income taxes (Kiplinger, 2009)


Dependent Care FSA or Tax Credit?

Flexible Spending Account vs. Dependent-Care Credit

Flexible Spending Account (FSA)

The information provided here is intended to help you understand the general issue and does not constitute any tax, investment, financial/accounting, medical, or legal advice. Consult your accounting, financial, tax, medical, or legal advisor regarding your own unique situation.

Author: Jason Bloom, CFO, Jupiter

Jason Bloom looks at a few tips to gain a return on your spending not just your savings with cash back credit cards.

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Jason Bloom examines some ideas of cash back rewards cards and how to get a return on your spending as well as your investments:

Everyone focuses on gaining returns on their investments.  Stocks, Bonds, Mutual Funds, CD’s, CDARS, and Savings accounts are a few investment options everyone looks at when determining how to invest their money.  As a CFO in Palm Beach Gardens, I have to take a look at these options from a personal and professional aspect daily.  Although I am admittedly far from an investment expert I had a few ideas on how everyone could grow their personal or business wealth with a few simple steps.  Many people are always looking at the Amex rewards programs, sky miles, and complicated rewards cards that give you 5% on gas, 2% on groceries etc. I believe a straightforward cash back card can sometimes be the best solution.

citi-double-cash-credit-card-jason-bloom-cfoLooking from a personal perspective it is always important to audit one’s finances and look for ways to save money.  One can obtain the 2% Cash Back Rewards card from Citibank as an example.  There are no annual fees and you receive 1% cash back on upon purchase and 1% cash back upon payment for a 2% cash back on everything you buy each month.  Obviously if you are not paying the card off monthly the 2% will mean little when paying the interest rates on the cards.  If someone is using this card daily for all day to day purchases of gas, cell phone, cable, telephone, groceries, day care, etc it can add up quickly.

A few examples below.  If a family spends $1,000 / month on day care and the facility allows payment via credit card without surcharges you can earn $240 / year in cashback by utilizing the card each month.  If you apply this to your cell phone bill, cable bill, groceries, gas, and other expenses you can see how it can add up fast.  Gaining a 2% return on your expenses as well as your savings can add up quickly.

spark-capital-one-jason-bloom-accounting-cfoBusiness cards can get much more complicated depending on a lot of factors such as need for airline travel, monthly expenses, cash flow and several other items.  Any company CFO needs to really take a look at all of the fine print to determine what is best for them.  If you want to keep it simple you can take a look at the Capital One Spark Cash for Business which pays 2% on all purchases.  Plus you can receive a $500 introductory bonus.  Most businesses and vendors now accept credit cards as a way you life.  If you can pay with a credit card and pay off monthly it is always a quick way to add a 2% discount to your purchases.

In a business environment this 2% can add up quickly.  In a company that can charge $20,000 / month in payables to the card you could potentially receive up to $4,800 a year in cash back just by using the card for the items you will purchase anyway.  As you can see the more you spend the more you can save.

A few of the best offers in 2016 are reviewed below:

Best Cash Back Credit Cards

Best Business Cash Back Credit Cards

The information provided here is intended to help you understand the general issue and does not constitute any tax, investment, financial/accounting, medical, or legal advice. Consult your accounting, financial, tax, medical, or legal advisor regarding your own unique situation.

Author: Jason Bloom, CFO, Jupiter, Palm Beach Gardens, and the Palm Beaches

Accounting: Contract Law and How It Impacts Business in Palm Beach and the World

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Jason Bloom, CFO, Accounting: Contract Law Summary

Basic concepts of contract law are merely a promise between two or more parties.  The promise made is an enforceable agreement, which will allow or should allow each party to meet his or her needs (Reed et al., 2004). According to Reed, Shedd, Morehead, and Corley (2004) who state that the enforcement of contracts is crucial in a property-oriented system of operation.  “A contract need not be formal, written document, and those who make a contract do not have to use the word contract or recognize that they made a legally enforceable promise” (p. 216).   Nonetheless for a contract to be valid there must be basic elements included such as an offer, acceptance, consideration, capacity of parties to contract and lawful purpose (Reed, 2005).

In today’s business environment companies are choosing to renegotiate contracts rather than go to court to have the contracts enforced. A court remedy breach of contract can be lengthy, costly, and in the end no one wins.

Initiating non-litigation tactics such as mediation or other resolution methods is another alternative. “Mediation is the process by which a third person, called a mediator, attempts to assist disputing parties in resolving their differences.” (Reed et al., 2005, p.122)  By implementing non-litigation tactics such as mediation or other resolution methods such as arbitration, could allow a successful resolution without the costs of litigation.


The information provided here is intended to help you understand the general issue and does not constitute any tax, investment, financial/accounting, medical, or legal advice. Consult your accounting, financial, tax, medical, or legal advisor regarding your own unique situation.

Author: Jason Bloom, CFO , Jupiter, Palm Beach Gardens, and the Palm Beaches



Accounting: Leadership and How it Can Change Any Organization

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Jason Bloom – Accounting: CEO and CFO Leadership and How it Can Change Any Organizationjason-bloom-boss-leader-palm-beach-accounting-jupiter

In today’s fast-paced business world, it is vital for companies to experience growth through future developments. To accomplish this task, it is imperative to implement innovative ideas and maintain a level of resiliency, in order to foster a productive organizational culture. As easy as this may seem, only well-formulated and interlinked companies can successfully achieve this state of continual improvements. Often the growth process itself can cause an enormous amount of upheaval from within the organizational culture, if it is not approached in a delicate and well thought through manner. With that being said, it is absolutely necessary for an organization to maintain strong leadership, team vitality, open lines of communication and efficient organizational behavior, to ensure a successful future.

Quality leadership is integral to an organizations success . Despite the varying products and services , it all comes down to how to generate growth and run an organization efficiently.  As simple as this may sound, the high risks and difficulties involved in coordinating the efforts of a large group of people can be daunting.   The imperativeness of a CEO and/or CFO to have the ability “to motivate and guide people toward a goal [because that] is the essence of leadership” is critical.

Company Review:

apple-logo-palm-beach-jason-bloomsony-logo-jason-bloom-palm-beachApple & Sony:

When looking at Apple Inc. and Sony Corp. at different points of their histories, the CEOs were failing to generate organizational growth. As the profit margins began to slump, both companies were quick to introduce new CEOs, in an effort to swiftly resolve the problem. Fortunately, for both of these companies the organizational culture and productivity began to improve due to the CEOs’ strong leadership skills. In these two instances, both CEO’s restored the organization’s cohesion and re-emphasized the manager roles to achieve a more productive environment.

Pepsi & Google:

The value of these management traits are demonstrated by two companies:  Google and Pepsi.  Google demonstrates how the founders of Google had the foresight to launch its IPO in a Dutch auction format (Choo, 2005).  The Dutch auction enabled Google to raise more money with its IPO; save money in underwriting fees; and maintain its corporate culture (Choo, 2005).  This savings enabled Google to cover the extreme costs associated with complying with the Sarbanes-Oxley Act.

google-logo-jason-bloom-accountingPepsi’s emergence from a bleak business outlook in 1996 to gain a brief lead in market share in 2004 is a testament to the foresight and anticipation of Pepsi management (Things, 2005).  Pepsi demonstrated this  by focusing on the future.  Pepsi wisely de-emphasized the markets that Coca-Cola had a stranglehold on, and searched for emerging markets (Byrne, 2000).  Pepsi successfully anticipated the changing consumer tastes and accounted for this by focusing on snack foods and sports drinks as opposed to the sugar-filled soda market.  Ultimately, this anticipation paid off for Pepsi.


Genentech is regarded as one of the best companies to work for and have found that a strong vision and knowledgeable key players where at the core of their success.  According to McShane (2005), knowledge of the business is a key component of successful leadership.  In order to battle these issues Genentech enacted solutions to these obstacles that led to the companies fulfilling their visions. Knowledge of the business is a key component of a successful leader (McShane, 2005). Genentech took the approach of finding the best suited leaders for their executive positions in which the CEO Robert Swanson moved into the Chairman position and was replaced by Kirk G. Raab whose expertise was sales and marketing (Windover, 2000).  Genentech achieved double and almost triple earnings in the next several years due to the aggressive marketing tactics used by Raab (Windover, 2000). Although these aggressive marketing tactics were successful in generating high earnings they resulted in an investigation by the FDA in which Raab was replaced by Arthur D. Levinson whose background in research was more suited for the current company climate. Genentech was able to realize the company’s climate change and make adjustments quickly to attain their immediate goals.


The triple bottom line philosophy in which a company manages to balance their economic, social, and environmental goals is a very important component for success (McShane, 2005).  Abbott created a more socially responsible organization by developing a core set of values that include pioneering, achieving, caring, and enduring (Abbott, 2007). These values were developed by approximately 14,000 employees during their goal setting process.  Abbot initiated training programs and workshops on how to incorporate their values into daily activities making the values espoused within the organization and not just enacted (McShane, 2005). They also included these values in the 2007 goal performance goal setting activities.

Abbott took the dedication to developing a triple bottom line philosophy a bit further when they also communicated to their suppliers their vision of appropriate labor practices, ethical behavior, environmental stewardship, and health and safety practices (Abbott, 2007).  This vision has helped Abbott donate 300 million dollars in grants and products to disadvantaged patients, free medications for patient assistance programs, providing low-cost vaccines for malaria, and causes to help prevent the spread of the AIDS virus as well as help kids with diabetes.

Proctor & Gamble and General Electric:

Establishing a culture of innovation requires a great deal of effort yet Proctor & Gamble and General Electric have achieved this. “Innovation is all about making things that people want to buy” (Brunner, 2001). These two firms CEO’s have established an attitude of continuous growth in their efforts to achieve organizational goals. This attitude keeps new ideas flowing and revitalizes the company. Proctor and Gamble has created an Innovation Leadership Team to fund and speed up the innovation process, while GE is investing in emerging fields and products with the potential to faster growth. Gene One’s vision is to have an innovative culture, but only when the leaders of an organization are keeping up with the shifts and needs of the markets can there be success.

The CEO’s from these two organizations are transformational leaders because “they develop a vision for the organization or work unit, inspire and collectively bond employees to that vision, and give them a “can do” attitude that makes the vision achievable.(McShane & Glinow, 2005). Gene One’s CEO must also do this if he is to achieve his goal of changing the organization to an IPO. He must develop a sense of urgency, embrace new ways of doing things, persist when things get rough and shape a new and supportive culture. (Bolman & Deal, 2003). He must also “energize and direct his employees to a new set of corporate values and behaviors.” (McShane & Glinow, 2005).

To be innovative in an organization there must be a vision and strategy for innovation, a culture that supports innovation, processes, practices and systems supporting innovation and employees must be given the chance to participate in the process.

jason_bloom-accounting-palm-beach-gardens-audit-jupiterThe information provided here is intended to help you understand the general issue and does not constitute any tax, investment, financial/accounting, medical, or legal advice. Consult your accounting, financial, tax, medical, or legal advisor regarding your own unique situation.

CoAuthor: Jason Bloom, CFO, et al, Jupiter, Palm Beach Gardens, and the Palm Beaches


Accounting: Financial Statements Role in Business

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The importance of financial statements has shown to be imperative in making informed decisions within an organization and for investors.  The stakeholders such as the operators, owners, executives, and investors must use the income statement, balance sheet, and analysis of cash flows to determine the right decisions for an organization and themselves.  The income statement, balance sheet, and statement of cash flows all have different purposes and natures for informing the stakeholders of the financial standing of an organization.  The analysis of these statements is important for all stakeholders to make informed and ethical decisions.

The audience of many of the financial reports is similar and varies depending on the stakeholders interests.  The operators and line managers of the organization focus mainly on the income statement as it shows the net profit and loss of the organization over a specified period.  This profit and loss statement is almost considered a report card for many operational managers.  Beyond the income statement operational managers also use the balance sheet so that they can monitor the overall health of the organization.  As the balance sheet is an ongoing calculation of the health of an organization it provides additional information to operators regarding the long-term success of their strategic plans.

financial_statements_palm-beachThe ownership and executives of an organization are focused on the income statement, balance sheet, and cash flow statements as each has an impact on the decisions they make.  The ownership views the income statement to determine if the current strategic plan is working in the short term and if they are meeting prescribed budgetary goals.  The balance sheet plays a role in the decision making process for ownership and executives by giving them an opportunity to view the overall health of the organization.  This health can be partially measured by reviewing the ratios of assets and liabilities.  These ratios help ownership and executives determine the best time to implement new strategies that may involve large capital outlays.  The cash flow statements help ownership and executives in determining the organizations ability to meet its current liabilities over the near future.  These liabilities include mortgage payments, payroll, accounts payable, and other short term liabilities.  The cash flow statements help ownership and executives when it will need additional funding or when it will have the appropriate cash on hand to pay dividends or reinvest in additional capital projects.

The investors in a publicly traded company mostly refer to the income statement and statistics produced from the balance sheet to make decision on investing in an organization.  The income statement of an organization shows its investors if the current strategies, market conditions, and year over year trending are showing a positive environment for investing.  This statement shows investors if a company is doing well in the present and if they are showing profitability in line with projections.  The risk for investors is partially determined by an organizations balance sheet.  The balance sheet outlines an organizations assets, liabilities, stockholder equities, and overall net worth each of which can be helpful in determining the risk of investment (Block & Hirt, 2005).

As different stakeholders have different informational needs the income statement provides a valuable resource of information for many of them. The main purpose of the income statement is to measure the profitability of an organization over a specified period (Block & Hirt, 2005).  The profitability can be a measure used to determine management’s effectiveness, current market conditions, and the year over year trending of the organization.  This profitability can be measured in months, quarters, or years and show interested stakeholder’s important information pertaining to these periods.  The nature of the income statement is to record the verifiable business transactions that happen over a specified period.  These transactions not only include revenues but also included cost of sales, payroll, operating expenses, fixed expenses, and other expenses related to the operations of the organization.

The balance sheet captures a snapshot of the organizations financial well being at a specified point in time based on the reported assets, liabilities, and owners interest (Block & Hirt, 2005).  The purpose of the balance sheet is to outline in liquidity order the assets and liabilities of an organization and determine the stockholder equity and retained earnings.  It allows stakeholders to review balance of assets to liabilities and determine what stock payouts are available to investors.  As the balance sheet outlines plant and equipment, it must be noted that the balance sheet records plant and equipment at original purchase value and does not take into consideration value changes in the land or buildings.

The statement of cash flows represents an outline of the immediate inflows and outflows of needed cash for an organization (Block & Hirt, 2005).  The statement is usually representative of cash inlays and outflows that are readily available within the next 90 days.  The main purpose of the statement of cash flows is to ensure enough cash is available to meet the immediate and short term future debts of the organization.  The statement of cash flows is also useful in determining when it is appropriate to pay stock holders dividends or invest monies into plant and equipment improvements.  The overall nature of the statement of cash flows is to ensure an organization can meet its debts.

The use of these reports is an important aspect of making informed and ethical decisions.  It is important to understand the current organizations profitability to determine if the organization’s strategic plan is working, management is operating the organization effectively, and if the performance is in line with prior year accomplishments.  Investment decisions are also impacted by the availability and reliability of these reports.  It is important to consider these reports when deciding on operating, investing, and financing opportunities.  The importance of these reports is very imperative regarding the ethical implications of an organization in reporting to investors who can make informed decisions.  The availability of these reports allows investors to gauge risk and possible return on investment available for them.

The income statement, balance sheet, and the statement of cash flows are important predictors of an organizations future potential.  The stakeholders in an organization must determine which statement best suites its informational needs.  As their needs are defined they must be aligned with the statements purpose and nature.  The importance of making informed decisions will help all stakeholders make better and more ethically sound decisions regarding the organization.


jason_bloom-accounting-palm-beach-gardens-audit-jupiterThe information provided here is intended to help you understand the general issue and does not constitute any tax, investment, financial/accounting, medical, or legal advice. Consult your accounting, financial, tax, medical, or legal advisor regarding your own unique situation.

Author: Jason Bloom, CFO , Jupiter, Palm Beach Gardens, and the Palm Beaches


Palm Beach County Operating Environment for Hotels and Resorts

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breakers-palm-beachOperating Environment Case Study: The operating environment within industries in the United States varies due to many different macroeconomic factors.  The Leisure and Hospitality Industry is not exempt from these environmental changes.  The main macroeconomic variables that affect the hospitality industry include the Gross Domestic Product and the employment rate.  These variables have been shown accurately to predict the operating environment for accommodation and food service enterprises.  As the Gross Domestic Product increases food service and accommodation operations tend to follow the same trends.  The trends creating an increase in Gross Domestic Product lead to an increased employment rate lowering the available candidate wanting to work in the hospitality industry.

The PGA National Resort & Spa consists of 339 guest rooms, 41 cottages, 11 restaurants and lounges, and maintains 39,900 square feet of meeting space, while offering access to 5 golf courses.  The resort operates in the Leisure and Hospitality industry.  The Accommodation and Food Services sector is where the resort resides within the Leisure and Hospitality industry.  According to the Bureau of Economic Analysis (2007), 6.34% of the labor force in 2005 was employed in the Accommodation and Food Service sector of the industry.  As hospitality represents a good percentage of the labor force, it also represented 2.64% of the Gross Domestic Product in 2006 (Bureau of Economic Analysis, 2007)

Several macroeconomic variables affect the hospitality industry.  Gross domestic product, inflation, interest rates, and unemployment all play a role in the successes and failures of the hospitality industry.  Gross domestic product declines many times result in lower disposable income in which customers tend the reduce expenditures on a vacations and eating out leading to a decrease in overall spending within the hospitality industry.  Inflation also plays a role in the hospitality industry as customers are less likely to spend their money if they feel prices for accommodation and food service are too high.  These prices are driven to higher levels due to the increase in goods needed to create the appropriate accommodation and food service experience.    Interest Rates can help or hurt the hospitality industry as consumers will save their money and delay vacations when interest rates are high while spending more aggressively when interest rates are low and consumers find it less appealing to save.  As the increase and decrease in demand for accommodation and food services vary, the unemployment rate tends to mirror that trend in the hospitality industry.  The employment ratio in hospitality is very elastic and stretches and contracts as the industry does.

The relationship between Gross Domestic Product (GDP) and the hospitality industries expansion over the past five years is directly related.  The increases in GDP that seen over the past five years have trended directly with the contribution to GDP made by the accommodation and food services sector.  The macroeconomic environment created many opportunities for the hospitality industry over this period.  As the disposable income increased with the increased GDP, many people found their way to the accommodation and food services industry to spend their surplus of disposable income. The disposable income was the remaining monies available to the consumers after they have paid their taxes (McConnell & Brue, 2005).  Although inflation has been controlled well with respect to increases in GDP, the operating environment would face challenges if inflation were to increase the costs associated with delivering the expected goods and services in the hospitality industry and could create a challenging operating environment.  The additional increases in GDP have also presenting challenges with maintain team members and staffing appropriately in the hospitality industry as the increased demand for employees has driven the available pool of labor down for hospitality managers.

The employment rate has risen over the preceding five years in both the United States as well as the hospitality industry (Bureau of Economic Analysis, 2007).  This increase in employment rate corresponding to a decreased unemployment rate has challenged the hospitality industry by depleting the available pool of human resources.  The operating environment has been challenged to find qualified team members to service the guests while still operating in a profitable operating environment.

PGA National Resort & Spa is one small contributor to the accommodation and food services sector but has faced similar market trends as the macroeconomic variables have determined.  The GDP and employment rates within the industry tend to mirror that of the remainder of the country over the past several years.  The increase in GDP has left many consumers with additional disposable income allowing them to take an extra vacation and lift the accommodation and food service sector.

Attachment A: Gross Domestic Product Analysis in Millions (more…)