The hotel industry is an ever-growing one that has seen consistent growth year on year for many decades now. It’s no surprise then why hoteliers are always looking for new ways to grow their hotel revenue and net income.
One of the more effective areas hoteliers can focus on in order to do so is their budgeting and forecast strategies. Budgeting plays a pivotal role in hotel management as it not only dictates how much money hotel managers have at their disposal for future investments, but also serves as something of a live example of strategic planning that plays out over the course of the year.
Following are some expert tips hoteliers can employ in order to build better budgeting and forecast strategies for their hotel enterprises:
1) Always plan ahead
To get a better idea of hotel revenue and expenditure, hoteliers should always take the long-term view when it comes to planning. Of course, this isn’t to say hoteliers should only plan for next week or month ahead – but rather, hotel managers need to have a good insight into what they want from their hotel enterprise in the future.
2) Don’t just focus on growth
While hotel managers may be tempted to look at maximizing revenue and profit figures while formulating their budgeting strategies for the year ahead, it’s equally important that hoteliers don’t neglect other aspects of hotel management such as customer service and guest satisfaction. In fact, a recent study by Forbes revealed that 70% of consumers would pay more for products which are customized to meet their needs, while 57% of hotel consumers said they would pay more for personalization.
3) Maximize hotel accounting software
Over recent years there has been an explosion in hotel management software solution providers – many of which are designed specifically with budgeting and forecast strategies in mind. Indeed, hoteliers who use hotel management software will find that most providers allow hoteliers to create budgets and forward-looking plans for the year ahead within the same system. This means hotel managers can quickly come up with accurate, detailed forecasting reports that ideally suit their specific hotel enterprises.
4) Use benchmarking as a guide
Revenue benchmarking is one of the best ways hotel managers can get a better idea of how well their enterprise is performing in comparison to their peers. This is because hoteliers can use benchmarks to measure not only hotel revenue but also occupancy rates, ADR, RevPAR and other performance metrics.
5) Beware of external factors
While hoteliers may have a good deal of control over the hotel enterprise itself, it’s important to remember that there are a number of external factors that can affect hotel budgets and forecasting figures. For instance, political instability, natural disasters and even global economic conditions can all have an impact on hotel revenue and expenditure. Hoteliers need to be aware of these factors when putting together their budgeting strategies for the year ahead.
Hotel managers face a unique set of challenges when it comes to creating budgets and forecast strategies. By always planning ahead and taking the long-term view hotel managers can come up with better budgeting plans that build upon hotel performance and hotel revenue growth. The same is true when it comes to hotel software solutions – hoteliers who want to create accurate forecasts should work closely with their hotel accounting software provider in order to get the best results possible. By understanding how external factors can affect hotel revenue and expenditure, hoteliers will be able to create more realistic budgets for the year ahead.