publication date: Feb 9, 2016
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author/source: Dr. John J Hogan CHA CHE MHS
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PLANNING FOR PROFITS -- An Overview to Effective Budgeting
Lodging industry profits have always been measured by cost per occupied room; yet many owners and General Managers have incomplete information of their hotels’ specific costs per room, or more importantly, what it costs for a room to remain unsold.
This guide includes a list of definitions of the categories and assumptions that should be helpful to immediately understand cost centers in more detail and to take action to improve profitability. This program is designed to demonstrate your specific cost per occupied room vs. the industry average (provided in base model), fixed and variable costs, monthly and yearly cash flows, monthly and yearly budgets and a host of other information. Lastly, PLANNING FOR PROFITS allows you to perform “What if” scenarios for enhanced forecast planning.
PLANNING FOR PROFITS is a resource that allows you to ask a series of “What if” questions in an excel worksheet that will allow you to examine various scenarios to aid you in making those decisions.
PLANNING FOR PROFITS may be used as a line-by-line profit and loss statement that utilizes the Uniform System of Accounts, the standard of the hotel industry. It can be utilized as a month-to-month income forecast or even annualized for debt service forecasts, which features a list of fixed and variable costs.
