The hospitality sector’s budgeting season is fast approaching, meaning hoteliers need to start planning how to forecast occupancy, allocate funds and maximize profits for the coming year. A well-planned budget is a strategic asset that can help hotels stay profitable throughout all seasons. Conversely, a poorly-planned budget creates disruptions and lost opportunities that hurt the health of your hotel. Follow these strategies and best practices to be sure that you’re setting your property up for success this Q4.
Solicit Honest Feedback
Before you dig into the numbers, have an open and honest conversation with your employees about the past year. This dialogue should help identify what is working and what isn’t from the perspective of those who are on the front lines of the hotel. While feedback may be subjective, it can help you to better understand performance indicators and set priorities within your budget. After all, your staff has useful information about both employee and customer satisfaction that is vital to the health and reputation of your hotel.
Study Performance Indicators
Understanding how well your hotel did over the previous year reveals strengths and weaknesses to focus on in the coming year. This process must be data-driven in order to be successful, because assumptions are never actionable. An integrated system that can instantaneously reveal Revenue Per Available Room (RevPAR) and then break down that figure based on user-defined variables will help you know where to spend money to make property-wide improvements.
Identify Key Metrics
What will your priorities be over the coming year? What sorts of performance indicators will you use to define success or failure over the next 12 months? There are many to choose from, but it’s important to limit your focus. Trying to improve and enhance every metric only spreads your efforts thin. Identify a few goals for 2018, then identify the metrics that will define your progress towards that goal.
Forecast Booking Trends
Don’t rely on your memory to recall the busiest and slowest times of the previous year. Instead, rely on a sophisticated property management system (PMS) to reveal when bookings and revenue were at their highest and lowest throughout 2017. Those same patterns may not hold true for 2018, but understanding when, where and why they occurred helps you to better forecast and adjust your budget priorities accordingly.
2018 may follow an identical course to 2017, or it may prove to be entirely different. Hotel booking trends rely on a number of factors, such as new technologies, annual or special events, the economy, weather patterns and so on. It’s impossible to predict everything, but you should take a close look at the calendar and begin forecasting booking trends for the coming year. Using a PMS enhanced with analytics and forecasting capabilities can help make sure your staff are not caught off guard by unexpected peaks or valleys in occupancy.
Consider the Hospitality Industry
The forces that affect the hotel industry as a whole will also impact your business. Spend some time looking at trends in the hospitality industry and trying to identify strengths and weaknesses as they apply to your own properties. Understanding the forces that are out of your control gives you greater power over the forces that are in your control.
Invest in New Technology
Investing in new or supplemental technology is both a cost and a benefit. It may be appropriate to budget for new technologies in 2018 or it may not—it all depends on the capabilities of the technology and the state of your current IT infrastructure. As you begin to put your budget together, pay close attention to the parts of the process that seem inefficient or vague. There is likely a tech tool or integration that can streamline things for you.
RoomKeyPMS can help you manage your budget with up-to-the-minute reporting that provides in-depth analytics on all details of your property. With an innovative PMS, you can make sure your budgeting efforts are based on accurate data from your hotel, so that all decisions you make are benefiting your business.
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