Morrissey Hospitality applies disciplined financial practices to help hospitality businesses protect profitability, manage volatility, and make smarter operational decisions — in strong markets and more challenging chapters.
Creating Financial Clarity in a Revenue-Driven Industry
Hotels and restaurants often measure success through revenue-focused metrics like ADR, RevPAR, covers, or check average. These indicators matter, but they only tell part of the story. Revenue alone doesn’t guarantee profitability, and without disciplined financial management, businesses can grow top-line performance while still losing margin.
Our Finance & Payroll Services team takes a comprehensive approach that prioritizes how revenue becomes profit — not just how revenue is generated. Two key tools in this approach are flow-through and flex, which evaluate how well a business converts revenue into operating income across different market conditions.
A Smarter Way to Manage Profit in Real Time
Flow-through measures how much profit is generated from each incremental dollar earned during periods of revenue surplus.
Flex measures how effectively expenses are managed when revenue falls below expectations.
Both metrics help owners understand the true financial performance of their business, and empower leadership teams to respond quickly, adjust spending, and preserve profitability.
By tracking these metrics every performance period, Morrissey Hospitality helps partners maintain financial stability, protect margins, and build a stronger foundation for sustainable growth.
Guiding Properties Through Volatility and Expansion
These financial disciplines were instrumental during some of our industry’s most unpredictable years. Between 2017 and 2019, flow-through helped properties maximize profit during high-demand periods. During the COVID-19 pandemic years, 2020-2022, flex became essential in navigating revenue shortfalls while maintaining and protecting our teams.
Across multiple properties, consistently applying these practices has improved informed decision-making, increased transparency, and ensured the “best use” of every revenue dollar, regardless of market conditions.
Every property varies in terms of continual improvement, as the majority of factors are externally driven and apply to flow-through and flex. So, traditional year-over-year predictions are not particularly helpful. A property’s dynamism is best indicated by either using the budget, or better yet, real-time forecasting.
In April of 2020, we switched to an emergency flex model. By July of 2022, despite severely reduced revenues and, in some cases, complete closures due to state mandates, we were already seeing flex numbers that averaged 70%. During the peak of the pandemic in late 2020 and into the summer of 2021, our company’s flex average was 115%, with two properties consistently near or at 130%.
In late 2022, as the pandemic eased and revenge spending increased, we pivoted our focus to flow. We were still not operating with a budget, per se, but were reliant on 30-60-90-day forecasts. During this period, which lasted into mid-2023, we saw that our flow averaged 60% in some cases, up to 90%. The residual effect of being in flex so long made the transition back into flow-through a win-win.
By using pre-pandemic budgets as a metric, we mitigated our losses enterprise-wide by 78% from 2020-2023, significantly improving cash flow management and even positioning us to acquire five management contracts during the height of the pandemic.
In the last half of 2023 and through most of 2024, a new reality appeared, confirming that we would never be returning to the “boom years” of 2016-2019. Too much had changed — specifically a significant increase in variable labor costs and similar increases in our cost of goods related to the supply chain being turned upside down.
As we have adapted to a new normal in 2025, 84% of our properties are in flow-through, and 15% are still at some level of flex. The levels vary — again due to external factors — but when you combine the flow-through and the savings from flex, we estimate that in one year, an additional $750K is returned to the bottom line.
Services Provided:
Operations Management
- Daily operations reporting and dashboards
- Market trends related to revenue
- Robust forecasting, continually updated.
- F&B Cost Mitigation & Expense Analysis
- Capital budgets and annual business plans
Financial & Payroll Services
- Coaching on flow-through and flex strategies
- Proformas and modeling
- Monthly and yearly financial reporting
- Payroll and accounts payable
