6 ways to optimize your hotel budgeting

6 ways to optimize your hotel budgeting

Budgeting is never fun. But like cleaning dirty rooms and doing taxes, it’s one of those unavoidable things that every hotelier must take on. 

We don’t need to stress the importance of a good budget. Without it, you could end up in a pretty messy situation. It’s one of those behind-the-curtain things that is crucial for every hotel, from tiny two-room B&Bs, to massive 1000-room resorts.

Even if you’re a math whiz who lives and breathes numbers, making an effective hotel budget isn’t as easy as just sitting down and writing it out. Especially now, after a tough few years for the travel industry as a whole, there is a critical need to take account of every single dollar in this year’s budget.

It’s a complex process, and you’re definitely not alone if you’re looking for a way to make things a little easier. 

The importance of efficient hotel budgeting

Your hotel’s budget is essentially a business plan for the year ahead. Where do you need to spend money to improve your hotel? Which areas need less cash influx than the year before? Are your staff being paid fairly, and are guests being given the best-possible experience?

It’s a lot to consider!

Having a streamlined process when it comes to hotel budgeting will make things a lot easier. Let’s take a look at some things to consider when crafting your budget, to achieve maximum efficiency. 

6 ways to optimize hotel budgeting

Involve managers from every department

Running a hotel is a complex operation –– you’ve got a lot of teams working together in tandem. Every team needs to run adequately for the whole hotel to succeed. That’s why it’s essential to involve every single team in the budgeting process. 

Have the manager of each team –– eg. housekeeping, dining, front desk –– submit their own budgets, or at least notes on how they operate. 

No matter how involved a hotelier is in the day-to-day operations, it’s the staff on the ground who really know what’s going on. 

Look at your previous year-to-date, rather than projections

If you’re doing your budget in August, for example, take your data from the last twelve months, rather than from January-August plus the next four months’ projection. 

Your projection will look better than your YTD on paper, but if you use that number to inform your budget then you’ll end up being caught short. 

Create a demand calendar

Before starting your budgeting process, set out a calendar for the next year highlighting when you’re likely to see a lot of demand for rooms. Mark your high-, medium-, and low-occupancy periods from this year on your calendar––a color-coded Excel sheet is a great visual medium here. 

Having this overview tool where you can see the whole year at a glance will let you see the demand patterns for your hotel, and any glaring holes that can be addressed. For example, maybe you offered a large group a discount, but that ended up costing you higher revenue opportunities from last-minute bookings. 

Gather market data

It’s not enough to just go off your own historical data, but you need to look at the industry as a whole. Sure, some things you can’t plan for (like a global pandemic, for example). But a hotel budget’s accuracy is directly affected by the effort that’s made to gather market data.

Predicting how the core market served by your hotel will change over the upcoming year is key for an accurate budget. But you need to focus locally, as well!

For example, as the global vaccine rate rises and international borders open, some hotels will see an influx in guests. But if your hotel is a small country motel usually only frequented by in-state visitors, then you can’t rely on that expectation.  

Build a new budget each year

It’s tempting to cut corners by taking last year’s budget and adjusting it up by 5%. Often, this approach will work to some degree, but it won’t make for a thorough and effective budget. 

It’s no one’s favorite activity, but it’s always worth taking the time to build a completely new budget each year, with justification for each expenditure. This will make you actively search for ways to improve your hotel, rather than just coasting along without change. 

If you want to stand out as a first choice hotel for guests and staff, you need to evolve. And a new budget is the way to do it. 

Review special events

See if there are any special events in your local area coming up over the next 12 months, and record them into your calendar and budget. 

For example, a massive convention or concert around the corner could drive room bookings for that night. 

A bank holiday is great if you’re managing a holiday resort, but could mean a dip in guest revenue if you manage a corporate hotel. 

Digitizing your hotel is the next step

There is a lot that goes into managing a hotel. From staff rosters and guest management, to the dreaded yearly budget, we know that hoteliers are constantly juggling a lot of plates. 

That’s where we come in.

HelloShift is an online tool that will help you completely revolutionize the way you do business. Digital hotels are the future, at least when it comes to daily operations. You can save a lot of time and headaches by introducing innovative technology to digitize your hotel. 

Our easy-to-use app with a Facebook-like interface integrates three main pillars:

  • Guest messaging to keep in touch with your guests in a contactless and speedy manner
  • Staff collaboration for easy internal messaging and to promptly deliver on guest requests
  • Housekeeping management to make the most laborious and time-consuming part of hotel management just that bit easier

HelloShift is a cloud-based digital hotel app —- guests can text hotel, checkin on their mobile device, scan and upload documents, digitally sign hotel registration cards, receive mobile keys, and have access to all hotel amenities through a guidebook that is customized with the hotel brand.

Go digital with Guest Messaging, Contactless Checkin, Website Chat, Staff Collaboration, Housekeeping Management and more.

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