While I have no doubt that you must be making a month end Pnl to analyse the monthly profit and loss, that is a post mortem exercise as you have already spent the money.
A review in the middle of the month sets the tone to understand if you can do something to control your expenses and thereby raise profit for your hotel
What is a fortnightly review?
In a monthly review, you look at expenses and try to explain the variance between budget and expenses. However, in a fortnightly review, you will look at the forecast and expected revenue and planned expenses.
If the business trend is down, you should discuss ways to reduce or defer expenses that are variable or discretionary. This will help you to maintain the desired profit levels in your hotel.
On a high level these reviews consist of few key categories:
Review the forecast
Look forward to the month and decide what will your performance look like. Will you hit the budget numbers or come up short.
- How was the last 15 days and how does the future look like for sales?
- What was the fixed expenses for the 15 days and what are some of the planned expenses
- What was the variable cost per occupied room and is it in line with the budget
Knowing what you know on the future business, what would you do for the next 15 days.
- How can you improve sales over the next 15 days?
- What are the planned expenses that can be deferred if you are coming up short.
- What variable cost can be reduced further
- Can some initiative be taken on labour cost
The system if done well will help you and your HOD leave the meeting with a solid understand on what is going to happen in the next 15 days.
Often times, these review will unearth critical checks that could make the difference between enhanced profit and a loss.
Review the plan
The final step of closing the loop comes during the monthly Pnl critique.
Review your commitments made during the middle of the month.
- What went well? Did you achieve the revenue numbers
- What did not go well. Why.?
- What would you like to change in the process so that next month you have a better result.
Try a fortnightly review for your hotel. At first it may sound a bit complicated and restrictive. But as you complete a few months of this review, you will be amazed at how much focus this process can bring to your hotel and to the profitability.