Collection of talks by hotel leaders spreading ideas about what is important.
How to make a hotel budget?
What will you learn in this video?
Learn the steps to make a budget for your hotel or department.
Hello Ramesh, what are you doing?
Hello Jai, I am preparing for the budget presentation. We make a yearly budget to help our business plan for the revenue and expenses.
Great! How do you do that? Can you teach me?
Of course! I will tell you how to make a budget.
A budget is a financial plan of the hotel for the year. So it must be done carefully. It will tell you when you can expect revenue and subsequent expense. And it will also tell you how much profit you can expect during the year.
So it is a very important document.
So what all should you know or take into account before making the budget?
The budget has two parts, the revenue and the expense.
To make the revenue budget, we must know the market conditions, what is likely to happen in future, and details about what the competition is up to. Also since we do host many wedding in the hotel, it is good to know how many wedding dates are there, so that we can plan our banquet budgets properly.
We must also remember to factor if there is any shutdown in our hotel, during the year due to renovation, or any work. After making the revenue projection, we must make the expenses calculation.
All heads of expenses must be considered
What all major expenses does a hotel have?
That is a very good question. In any hotel, the major expense will be wages, electricity and other utilities bills, food and beverage cost, repair and maintenance cost. There are other expenses like commission and taxes as well. Once all this is made and put in the proper format, it is sent to the boss for approval. He further
reviews it, and sends it to corporate office for approval after discussion.
That in a nutshell is how you make a budget. In case you need a format for a budget, I have attached a link to the template in the description box below.
It will help you to prepare a budget for your hotel. The template has sheets for all revenue and expenses and helps you to plan for the year.
Thank you for telling me this Ramesh. And while I feel as a trainee, I may not use this for a long time, I now understand why we sometimes have
restriction on spending. It is all linked to the budget.
Think of a budget as a guide. It will tell you what to do during the year.