Hospitality industry is not only a very popular business venture for many but it also plays the role of a second home for almost everybody who is travelling. Irrespective of whether you are travelling for business purposes or for leisure or whether you are travelling to Dubai or New York. To run and manage such a special endeavor lots of care, prudence, flexibility and multitasking is required. The managers of hotels are required to do several hats to run a hotel successfully. Sometimes they need to look into customer service and the management of staff and at other times they engage in marketing and planning different events.
However, to maintain the happiness and safety of the customers the hotels should have a strong finance and to ensure this, the hotel’s administration has to be supported by good finance team and audit firms. This clearly goes to show that a flawless finance management is at the heart of any successful business. The finance team that manages a hotel is expected to engage in many activities, so before you hire the best team you must have an idea about all these activities so that you may accurately enquire and measure how good a job that team is doing. Some of the most important activities of finance team are as follows:
- Creation of an annual budget:
The annual budget is the best tool to get an idea about where finance of that hotel is proceeding as it gives a very vivid picture of where exactly the financial progress of the hotel stood at different time of the year. This helps in measuring the effectiveness of plans at different times of the year thereby, giving a chance to calibrate the strategy.
- A model to track the operations
After getting the budget, the hotel managers need to track the revenue and all the expenses, the profit and the loss. Depending on the requirements of the hotel the operation tracking model could either be a very simple one or a highly sophisticated one.
- Comparison of the actual results with the budget
After getting the overall view of the operations of the hotel, the managers need to be assisted by the financial team in auditing how much is exactly being spent in each and every area against the financial budget prepared. Through this, managers get a chance to circle out the areas which are showing inconsistencies and the areas which are doing much better than planned. For example, there may be some inconsistency in the expenditure on food or in the rates at which the rooms are getting occupied over a fixed period of time. The identification of these trends gives the managers a chance to strategically increase the profits and decrease the losses.
- Adapt to the external variables
With the help of an efficient finance team the managers may find it easy to amend their policies according to the external situations. For example, if the costs of the fuel start to increase then this might put some stress on the expenses of some operations of the hotels thereby affecting the profits over a fixed period of time. However, with the help of organized worksheets the managers could find out the areas where the expenses could be deducted so as to account for the rising fuel prices. Hence, the external variables are very important to consider. Since, these variables cannot be controlled and so the managers are required to be prepared for them proactively.