Re-examination of the use being made of available public space in our hotels has resulted in more
profitable utilization in a number of instances.
As prices of food, liquor and supplies have increased, and as labor costs mounted, our hotels
have adjusted their prices in the restaurants, bars
and rooms as necessary to maintain fair profit levels.
The generally favorable results achieved by the
company in 1950 were reflected in operations of
the rooms department. The department's net sales
totaled $18,857,836, of which $13,525,301, or 71.72
per cent, was operating profit compared to sales in
1949 of $17,565,405, and an operating profit of
$12,352,296, or 70.32 per cent. Comparison with
other years is shown in the accompanying graph.
These improved results were obtained despite
the fact that the room occupancy ratio for the year
receded to 78.6 per cent from 79.8 per cent in 1949.
During the first half of 1950 the trend of occupancy was gradually lower, as had been the case
for the past several years, but an improvement
took place in the final six months.
Based on the experience of the last half of 1950,
there seems to be reason to believe that the occupancy ratio reached its low point during the year,
and that the basic trend is now upward. Strengthening this belief is the fact that increased travel and
expanded demand for hotel accommodations usually accompany rising industrial activity.
Food and Beverage Department
Sales of food and beverage in our hotels, and the
profits from such operations, reached new high
levels in 1950. The sales volume amounted to
$19,400,593, compared with $18,152,315 in the
preceding year. Operating profit of $5,013,561 was
25.84 per cent of sales, well ahead of the $4,361,842
in 1949, which was 24.03 per cent of sales.
COMBINED FOOD AND BEVERAGE
Minor Operating Departments
Operating profits for minor departments amounted
to $1,307,975 in 1950, compared with $932,856 the
preceding year. Other income, comprising commissions, concessions, purchase discounts, waste
sales and similar items, increased from $717,148
in 1949 to $753,598 in 1950.
Maintenance and Improvement
It has been the policy since Hilton Hotels Corporation was organized to maintain each hotel in
first class condition and to make use of the most
modern equipment and highest quality furnishings
obtainable. Outlays of nearly $22,600,000 for these
purposes during the past five years have served to
maintain our public rooms, night clubs and restaurants in a strong competitive position, and have
contributed to the prestige of Hilton Hotels among
the nation's discriminating travelers.
At a time when the industry again faces shortages
and restrictions on the use of some materials and
equipment, our hotels are in a good position to meet
such problems as may arise.
The cost of repairs and maintenance for the year
1950 was $2,282,600. Capital additions, consisting
of expenditures for new furniture, equipment and
modernization of properties, amounted to $2,028,-
242. Comparison with previous years is shown in
the accompanying charts.
Gross income and net profit of the Hotel Waldorf-
Astoria Corporation for 1950 were the highest since
the opening of the hotel. Gross sales and other
operating income in 1950 amounted to $19,857,731,
as compared with $18,484,333 in 1949. The net
profit after income and excess profits taxes for this
year was $1,009,349, as against $696,001 last year,
or an increase of 45.02 per cent. As was the case in
our wholly owned properties, increased costs and
taxes were overcome by adjustments in selling
prices and by careful attention to the control of
Capital expenditures for major improvements
totaled $514,223 during 1950 and included extensive work on and additions to the air conditioning
The principal amount of outstanding Debentures was reduced during the year from $5,702,000
to $4,115,500 by the operation of the sinking fund
and additional purchases for the treasury.
Operations of the Mayflower Hotel in Washington,
D. C. shov/ed satisfactory improvement. Gross rev-