Financial costs in hotels

Admittedly, when we refer to the term cost, it creates a relative stress in both a household and a business. The same will happen to a hotel business especially when it assumes that it knows the cost accurately, when in fact it is spent on paying attention to the cost only from specific sectors (food & beverage, etc.) and not the total and mainly on time.

The periodic cost is that which is "consumed" or concerns a management period of one year (annual) from 01/01 to 31/12. Depreciation of fixed assets (equipment, construction, engineering, cars, etc.) is temporarily not taken into account, or the financial cost of interest (and not arrears, ie the amortization of the capital of a loan per year). Whether the hotel is high or low occupancy, this cost is "running". Because the hotel industry focuses on services, salaries are often a big part of fixed costs. Fixed costs change over time, but are generally stable and predictable, making it easier to manage than variable costs. Hotel costs are basically divided into two categories: fixed (variable) and variable (variable).

Fixed costs in a hotel business are: 1) rentals, 2) human resources (dinner, reception, chef, maître, reception, reservations, etc.), 3) contracts (parking, security services, internet, software), 4) energy or which is wasted regardless of completeness, etc.

Variable costs are for example any costs created by the need to serve a unit of measurement (a customer or an occupied room): 1) food & beverage per night, 2) energy (electricity, lpg, water outside the gardens), 3) supplies from reservations (booking, expedia, etc), 5) room division (cleaning of rooms, cleaning of linen), 4) payroll of human resources (housekeepers, service), etc.

For proper cost management, we must use a system of measurement, recording, storage, and display in specific financial statements so that we can have reliable and measurable information. A properly structured income statement allows us to analyze revenue and costs by department and sector. The income statement shows the total revenue minus the total expenses in each segment, providing the total profit per segment. Maintaining a detailed profit-loss statement allows areas to be improved to improve all levels of management of a hotel unit.