A Hotel Manager Budgeting is a Hotel Manager dealing with money, the Hotel’s money and Hotel sponsor’s money, depending on how the Hotel organisation functions (carry on reading or watch the post).
Hotel Budgeting is a process which is the responsibility of Senior Hotel Management and Hotel Financial staff. Hence these members of staff must have accurate and up to date Hotel Budgeting skills.
Hotel Budgeting is not a simple process, but it is an ongoing system that needs monitoring, controlling, recording and reporting whilst following the Hotel country’s legal and regulatory requirements.
Budgets are developed by Managers for each 12-month Hotel financial year and in their essence, we could say they are a commitment by a Hotel Manager to deliver a financial performance.
Hotel Managers often have to develop budgets for their own areas of responsibility and then hand it over to the finance department.
These draft Hotel budgets are then reviewed by Senior Hotel Management and later approved by a committee, or something similar depending on the Hotel. Often outside of the Hotel itself.
Once you have created a Budget for your Hotel; now it is your responsibility as a Senior Hotelier to manage them.
As I said … Managing a Hotel Budget is an ongoing process for any Hotel and it requires continuous monitoring, controlling and reporting, which is the Hotel Manager’s and Financial Manager’s responsibility.
How will you achieve this?
Budget monitoring is done to make sure that Hotel Resources are being utilised as per plans on the Hotel budget. Tracking or monitoring the way that financial resources are utilised or effectively used is very important for every Hotel department and the organization. It is through this monitoring that you will be able to make budgeting decisions and take necessary or appropriate actions whenever or wherever necessary.
Hotel income and expenditures need to be monitored to find any change in patterns so that appropriate Management actions can be taken. This monitoring procedure can be done at regular intervals.
Look at any variations, if any, both positive and negative, take necessary actions to rectify them. In each step, it is important to document (record) all facts and actions.
It is required to report the Hotel income and expenses to higher management levels through regular meetings. There must be effective cash flow management, as it is very important for the services and products that the Hotel delivers.
You should be able to analyse and provide an explanation for any variation from the proposed expenditure, the Hotel Budget, be it positive or negative. This has to be accompanied by an action plan. This will ensure that the resources were used economically, efficiently, and effectively in the Hotel.
Hotel Budgets are essential Hotel Management tools and Hotel Budgeting is an essential Hotel Management skill.