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Learn. Perform. Achieve! February 2023: Budgeting for 2023 and beyond.

PERFORM, PERFORM 2023 Choice Hotels

Every month we highlight opportunities for leaders and managers to improve the performance of their teams. Plus, we are pleased to announce Operator Certifications (HOST/Extended Stay Essentials) completions and acknowledge the achievement of those who are now operator certified.

“If you don’t know where you’re going, any road will take you there.” This quote is from the Lewis Carroll’s classic children’s tale, Alice in Wonderland.

The Cheshire Cat

It means if you don’t know your numbers or have goals for those numbers, then how do you know what success looks like and if your strategies are working?

Budgeting allows you to:

  • Keep score
  • Find inefficiencies
  • Adjust accordingly
  • Be more profitable!

What gets measured, gets managed!

It’s common in the hotel business to hear the mantra that if you take care of your people they’ll take care of your guests, and the numbers will take care of themselves. This is simply not true. The numbers don’t look after themselves.

It’s YOUR job to manage your hotel’s financial performance. Whether you’re the owner, GM, or department head, you all have skin in the game! Anyone who is affected by the budget should be involved in the budget development. This creates engagement and knowledge about the business.

Here Are Some Things to Consider

  • Reacting to events after they’ve happened is not a good recipe for success.
  • The more information you know, the easier it is to determine a way forward.
  • It’s essential to plan and tightly manage your hotel’s financial performance.
  • Whether you are an owner or a manager at the hotel, it is vital that you know your numbers.
  • Creating a budgeting process is the most effective way to keep your hotel, and its finances, on track.

Now, let’s talk about some of the hurdles that you may have encountered when budgeting.

Budgeting makes me anxious.
Facing your financial situation head-on can be scary. And if you’re afraid, it’s easy to put off a close examination of your situation, especially if you suspect the picture isn’t pretty. But, as with most things, running away from it won’t help.
My hotel doesn’t make enough money to use a budget.
We barely get by, so we just buy the least amount of everything possible. There is no extra revenue to budget for anything else. Without a doubt, when money is tight it can be difficult to face up to the situation.
We need to buy this right now!
Budgeting is the monetary equivalent of eating your vegetables. And you don’t get to eat dessert — that is, spend money on a non-essential item — until you’ve earned the revenue/profit for it. Saving up for capital budgeting items/costly stuff can seem like a drag, but you’re better off putting aside a piece of the pie every month to save toward your goals.
I don’t know how to make a budget.
Good news! here is a free easy-to-use template, or you can use Excel or Google Sheets and create your own too.
We started a budget before but never made any progress.
Starting a budget is one of the first steps on the financial journey toward profitability success. It won’t solve all your problems overnight, but each step you take toward understanding your finances/numbers will assist you in reaching your goals.

What are some benefits of budgeting?

  • Minimizing Costs/Expenses
  • Monitor performance for continuous improvement
  • Meet your objectives
  • Finding leakage – wasted chemicals, spoiled food, overspending on water, etc.
  • Goals to strive toward/Increase motivation  – incentives and reasons to put forth the effort
  • Improve decision-making by using real data to support them. Gain confidence when making decisions!
  • Anticipate problems before they occur – reactive management is not good for anyone
  • Plan for the future/capital budget items – save up for items that may fail in the future or improve business

Great… I still don’t know where to begin.

Typically, the aim of a budget is to maximize the hotel’s revenue while identifying areas where you can reduce expenses which in turn should free up money to achieve your goals. Now, everyone’s goals are different of course. So, the first step should be setting achievable goals! Remember back to the quote at the beginning of this blog from Alice in Wonderland? “If you don’t know where you’re going, any road will take you there.”

If the owner’s profit goals are not shared from the top down, then it will be much harder for the team to help the owner hit the target. This doesn’t mean that as an owner you have to share every detail about your profitability goals, but elements of the goal should be shared so that all employees know a relevant target. This is done through numbers that are relevant to that employee. An example would be a Guest Service Agent at the front desk understanding the ADR and Occupancy goals. Then, they are also given practical ways to help achieve these targets.

Work with your Area Director or Area Manager if you are unsure of what achievable goals could be for your hotel’s operations.

Last thoughts

You don’t have to be perfect, but you do have to be 100% committed.

Commit to budgeting today!

Additional resources for increasing profit can be found here in Your Key to Profit.

Additional ChoiceU.com Training

Hotels Helping Hotels: Budgeting – A Framework to Your Financial Destination

School of Profitability and Financial Management

School of Hotel Profitability and Financial Management Learning Track 

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Operator Certifications (HOST/ExtendedStay Essentials) Earned in January!

Congratulations to the following individuals who earned their operator certification in September. Operator certification currently includes the HOST program for most brands and EMBARK for WoodSpring Suites hotels.

  • Vipul Patel AL496 Econo Lodge
  • Ashton Golding AR133 Comfort Suites
  • Jamie Moody CN877 Quality
  • Willem Berkhout CO052 Comfort Inn
  • Fernando Pava FL202 Comfort Inn
  • Andrea Samaroo FL664 Sleep Inn
  • Emmanuel Vazquez FL717 Quality
  • Pratik Patel IL019 Sleep Inn
  • Simmy Tailor IL433 Quality
  • Ashley Lawrence IL646 Mainstay Suites
  • Jakkia Dalcour LA223 Suburban
  • Narissa Chapman LA316 Comfort Inn
  • Tiffany Parker LA427 Comfort Inn
  • Corina Alvarnaz MA191 Clarion
  • Brian Console MA266 Quality
  • Bernerd Cannavan ME068 Comfort Inn
  • Amanda Wain ME401 Quality
  • Andy Nofar MI113 Comfort Inn
  • Deep Multani MI307 Quality
  • Gina Smith MI563 Mainstay Suites
  • Michelle Cramer MN226 Comfort Inn
  • Alishia Briggs NC017 Comfort Suites
  • Amit Kumar NC124 Sleep Inn
  • Shawn Verma NC511 Quality
  • Christina Wallace NC616 Suburban
  • Jonathan Best NC931 WoodSpring
  • Ken Hardy NC982 WoodSpring
  • Stephanie Most NE100 Quality
  • Sherri Andrews NE165 Comfort Suites
  • Robert Winchip NY338 Ascend
  • ERIC PYAE OO NY548 Comfort Inn
  • Keysha Ashford NY652 Quality
  • Dimple Patel OH086 Quality
  • Nora Bakhos OH167 Comfort Inn
  • Megh Oilwala OH428 Quality
  • Bimlesh Bhavsar OH498 Comfort Inn
  • Falguni Patel OH567 Quality
  • Carol Wheeler OH795 Quality
  • Christi Homer OK149 Comfort Suites
  • Kori Gouldsby OK173 Comfort Inn
  • Raju Chintalpati PA031 Comfort Suites
  • Barbara Christian PA354 Comfort Inn
  • Illhaam laaouina TN278 Comfort Suites
  • Usaid Alam TX546 Comfort Suites
  • Dipal Ratanji TXG77 Sleep Inn
  • LaNetta James TXH47 Comfort Suites
  • Mala Patel TXN95 Quality
  • Mohammad Islam TXP05 Econo Lodge
  • Nipa Patel TXP42 Rodeway Inn
  • Wendy Akers VA872 Ascend
  • Char Garza WA347 Ascend
  • Puree Hill WI288 Sleep Inn
  • Tommy Rowley WV121 Suburban