Budgeting and forecasting (B&F) in the hospitality industry is critical to determine, formulate, and align short-term and long-term goals for an organization. This detailed process is typically managed by a company’s finance department under the Chief Financial Officer’s (CFO) guidance. During the B&F process, businesses will outline their financial direction, create a model of expectations for the next three to five years, allocate resources accordingly, and create a proper financial strategy to benefit the company.
Good budgeting is the foundation for great rate management. Integrating of many factors i.e. positioning your hotel, market segmentation, rate parity along with the assumption of demand periods, laid out on a daily basis, will provide the opportunity to establish a realistic goal of revenues and expenses.
Budgets and forecasts help hoteliers drive their financial performance by having a strong plan in place. To be successful while budgeting and forecasting, companies must identify their competitive advantages, such as having accurate financial reporting analytics, high growth, or increased predictive value. It’s also important to note that even though budgeting and forecasting go hand-in-hand, there are some key differences between the two.
Be the first to know, sign up here and stay up to date with our latest revenue management news, updates and special offers
