Our HCC Finance Expert, Kevin Greenwood, runs through some finance checks for you to consider as during this reopening period.
With hotels reopening, it is time to start forecasting your business levels and adjust your cost base in accordance to ensure that your profit levels are planned for success.
Step 1: The starting point of course is to forecast your revenues from June till December i.e. the next 6 months.
Step 2: Rooms revenue is driven by occupancy and demand - and the traditional methods of last years occupancy and rate will not apply so it will be forward demand and business on the books that you need to depend on. The average rate will depend on your pricing in your market - set to drive demand to your hotel.
Step 3: Your Food and beverage and other income from your hotel will to an extent be driven by your occupancy and traditional local demand for your outlets.
Step 4: For your costs, start with a zero-based budgeting approach. Build up your operating costs based on those variable costs which will move with revenue and your fixed costs which should only be introduced to your business if really needed as demand could fall and the cost remain.
Step 5: Review all your overhead costs i.e. Admin and general , Sales and Marketing , Repairs and Maintenance and Heat, Light and Power and forecast only those costs that are essential to the business.
Step 6: You should reforecast your revenues weekly in order to be able to plan your operating costs and reforecast your overheads monthly in order to ensure that your profit levels are met and decisions can be made accordingly.
If you need support - perhaps an extra pair of eyes - to review your hotel's financial position, our HCC Finance Expert, Kevin Greenwood is on hand to support. See all of our Expert's profiles at www.hotelcostclinic.com/team
While you are here, please take time to have a look around HotelCostClinic.com and see where the team might help you over the coming months.
Why not try a free introductory session (Free Treatment) on any area of support. Sign up and drop a note to support@hotelcostclinic.com and we will be happy to help.