A Financial Plan is a detailed look at the Hotels current and potential future financial position and will differ significantly depending upon the type of Hotel, size of Hotel, culture within the Hotel and the requirements of the owners (carry on reading or watch the video).
Financial plans are the ENTIRE Financial Accounting Overview of a Hotel Business and will often be linked to a country’s Legal requirements and Accounting Standards.
Not every Hotel Manager needs to understand everything about Hotel Financial Planning.
Junior Hotel Managers probably need to understand what Sales and what Costs are expected in their Hotel within their areas of responsibility and how they are likely to achieve those targets?
Less Senior Hotel Managers might work on achieving their targets for any time between 1 week and several months at a time into the Future.
More Senior Hotel Managers need to have a more thorough understanding of a more detailed Financial Plan for the Hotel; the Money that the Hotel is going to earn, the Costs it intends to spend and the Profit it is likely to create.
Hotel Senior Managers need to understand the How, When and Why the Sales are likely to be generated and the How, When and Why the costs are to be spent?
Hotel Senior Managers need to understand Which Divisions, Departments, Products or Services are to be generating the Sales, the Costs and the Profits?
Senior Hotel Managers might work on achieving their targets for any time between 1 months and 36 months at a time into the Future.
More Senior Hotel Managers need to know more about the past, present and future financial targets and results.
An understanding of a detailed Financial Plan, including an understanding of the Value of the Hotel as a Business, is not needed for anybody within a Hotel apart from, often, its Owners and Senior Accounting Team.
Hotel Owners may want to know the Financial Plan for their Hotel for between 1 year and 25 years at a time into the Future?
The purpose of the Financial Plan for a Senior Manager is not to set unrealistic targets to hand to less senior staff only to fail.
The purpose of the Financial Plan is to create realistic forecasts of what is likely to happen into the near future. And then if this is not acceptable. Make changes to Products, Services or Support Activities to allow improvements to be achieved.
The confusion surrounding the term Financial Plans might stem from the fact that there are many types of financial statement reports – there is not a single definition for the term “financial plan”.
Do not worry about Financial Issues in the Hotel unless it is your Job to do so. Focus upon Service Quality and Product Quality.