American hospitality companies take advantage of the Mutual Credit System and unique Business Methodology provided by the American Trade Cooperative to increase the operation’s working capital, generate new business and increase cash flow and profits.

The unique feature of the Mutual Credit System is that it allows a hotel to secure a credit line using, as collateral, assets that are not acceptable to traditional lenders (as  an example, a hotel might use as security a due bill, i.e. 10,000 room nights). The credit line is made available to the hotel in its trade account and used, in conjunction with U.S. Dollars, to make purchases from vendors, also members of the Cooperative.

Companies must meet the following qualifications to be admitted to the Cooperative:

1.  Be well established.

2.  Have unused and unsold capacity and a desire to increase sales by providing services to other

    Co-op’s members. Members must be able to “earn” ATC Trade Credits by selling goods and services

3.  Have use for goods and services provided by other members of the Cooperative. Members must

     be able to “spend” Trade Credits by buying goods and services from other members on a part-

Example:

A hotel operation, member of the Cooperative, bids on a corporate event and is more likely to secure the contract because it provides better terms than the competition by requiring the client to use less cash to pay for the event. (50% cash, 50% Trade Credit).

The Company then purchases advertising and other goods and services typically needed by hospitality operations on a part-cash, part-Trade Credit basis. (Note: This methodology has been used by hotels operations effectively for over 30 years in Switzerland).  

It is important to understand that the cost to the hotel of making these additional sales is quite low because the fixed costs are absorbed by the all-cash business it does. Example: A hotel with 30 million dollars in revenues and 27 million in expenses covers all its costs, such as leases, payroll, insurance, advertising, etc. and the incremental cost of making sales to other Co-op members will be limited to the direct cost of providing those additional services.

If the hotel’s cost of the generating the additional sales is 30% of the sales price and additional sales are made on 50% cash, 50% Trade Credit basis, the cash received easily covers the cost and the rest is positive cash flow and when the company uses the 50% in Trade Credits, together with cash, to pay for goods and services from vendors also members of the Cooperative, those savings add directly to the bottom line of the business.

Examples of Products and Services available from Suppliers members of the American Trade Cooperative:

            Advertising of all types

Replacement items such as carpets, furniture, equipment, etc.

Maintenance and other services provided by contractors

          Business Services and more….