By: Samuel Grant, VP of Finance

The year is quickly coming to a close, which means it’s that time again – creating the annual operating budget. By its nature, budgeting is a very slow process, so attempting to complete the full annual operating plan in a short amount of time – say in a couple of months – will only produce a very ineffective plan and at the expense of long-term operational efficiency. However, by starting off on the right foot, involving the right people and championing these key components, you can still manifest a Zen end to the fiscal year.

All About That Prep

Before looking at the numbers and fleshing out the expenses, your prep really starts with your Revenue/Sales & Marketing department. You’ll need their help researching the markets that may be ambiguous to your corporate office in the sky, but your revenue and sales colleagues are knee-deep in throughout the year. This can take several months, so be sure to tap them early on in this process.

To keep everyone on track, a governing timeline is a key component. This allows all parties involved to take ownership of their budget “parcel” and assist in managing their time. It may seem like elementary advice, but be sure to have a start date and an end date for each application of the budget. 

The People You Know & Need

samuel-grant-vp-finance-twenty-four-seven-hotels

Samuel Grant, VP of Finance, in a strategy session with Twenty Four Seven corporate team

Besides your Revenue/Sales & Marketing department, your VP of Revenue Strategy, VP of Operations and VP of Finance should be involved in the process up front.

Once your budget has the initial “O.K.” from the executive team, it is crucial to involve your hotel staff and others who the budget will affect. By involving a wider hotel ecosystem, you’ll find it easier to obtain operational “buy-in” to the methodology of creating the budget and, in turn, utilizing the budget as a working document throughout 2017 (and beyond).

The Budget is Set, Now What?

As if the budgeting process weren’t already an exhausting, self-contained feat, a whole new process begins upon its completion – staying on budget for the year. Twenty Four Seven has many tools that its hotels utilize in managing their business within the budget goals.  Managing and controlling labor and expenses is key to ensuring the hotel is flowing any residual income to the bottom line, or flexing the needed savings.  As the revenue team strategizes on the daily with room rates, the operations team, likewise, strategizes on operating the hotel as efficiently as possible.  As such, all major constituencies are met – employees, ownership, and management – to deliver the expected financial results monthly. 

Throughout the year, should you find yourself off budget, the first step is to act quickly and give your team a reasonable chance to recoup.  Secondly, don’t leave them in the disciplinary dust – create a plan to get your hotel back on track and implement immediately.

Creating an annual budget takes time, collaboration and even a bit of organizational psychology. However, once your above- and on-property colleagues learn the value of a proactive and ongoing budget process, I personally guarantee a Zen end to the fiscal year, every year.

______________________________________________________

About Samuel Grant

Samuel joined Twenty Four Seven Hotels as Director of Finance in 2014. Prior to joining Twenty Four Seven Hotels, Samuel was the Director of Finance for Petit Ermitage Hotel and prior to that held a multitude of Finance positions in the hospitality industry.

As the Vice President Finance, Samuel and his team manage the Twenty Four Seven Hotels portfolio of hotel accounting procedures, which include the daily balancing of systems, Accounts Receivable, Accounts Payable, Budgets and Profit and Loss Statements.

Samuel has a Master of Business Administration from Southern New Hampshire University and B.A. Economics from Ohio State University. He teaches Hospitality Finance and Critical Thinking for University of Phoenix.

About Twenty Four Seven Hotels

Twenty Four Seven Hotels specializes in providing hotel management, investment and development for premium brand select-service and lifestyle hotels segments in the Western U.S. We offer a full spectrum of services in Hospitality Management, Hotel Investment, Hotel Design & Construction and Hotel Asset Management.

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