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Hotel Financial Management Tips From the Experts

The hotel business is one of the most challenging industries in today's economy. If you want to be successful, you need to be thinking like a financial expert. Here are some tips that will help you manage your finances just as a financial expert would! 

Get good software to keep up with your expenses

Every transaction must be recorded and accounted for, and the more you know about your finances, the more control you have over them. Good hotel accounting software will help you create reports of all your expenses and you can use these reports to make better decisions on how to allocate your resources. This is the first step to take when you want to be like a financial expert.

In addition, time management software is helpful in allocating the right amount of time to different tasks. With this information, you can prioritize your activities and multi-task in an efficient way.

They say that knowledge is power and that's true. When it comes to finances, the more you know about your money, the more powerful you are in controlling it.

Know what type of hotel you want to run

Here's a tip: if you want to open a hotel, start by thinking like a financial expert who has opened many hotels before. Think about why some hotels are successful while others fail. Try to identify trends that make the difference between failure and success - these are usually management practices or clientele characteristics (and there's no "one size fits all" solution).

You should know by now that a hotel's success depends a lot on the type of clients they attract. If you want to attract families, then your hotel should have enough rooms with extra beds or sofa cots available in case someone comes in late and needs to stay over. In this respect, it is important to add extra items such as microwaves and mini-fridges in every room so guests can easily heat food or keep their leftovers if they come back from a night out hungry. On the other hand, if you attract mostly business guests, provide desks, printers and fax machines in every room.

Above all, remember that you should target customers who would use your hotel most often. It doesn't make sense to try to compete with a nearby five-star hotel by installing a pool on the roof of your mid-range hotel.

Different types of hotels require different management approaches

On one hand, if you own a smaller boutique hotel with fewer than 10 rooms it's very likely that you work directly with your guests. On the other hand, if you own a larger hotel complex with hundreds or even thousands of rooms, you would need to have a lot of trained employees to deal with your guests, and in that case, you will end up managing and overseeing them.

Even though you don't necessarily need to interact with every guest in person, it's still important to make sure that all clients are satisfied and receive the best service possible. To accomplish this, try delegating some responsibilities but make sure you know what's happening at any given time. You can use software to help you accomplish this task by having an accurate map of your staff members' activities at all times (a tool like StaffMap comes in very handy for this type of task).

In the end, delegating some tasks while doing others yourself will prove to be a profitable strategy in your quest to manage your hotel.

Make sure your employees aren't stealing from you

This is a common problem in the hotel industry and many managers don't tend to notice it until it's too late. If you want to prevent this from happening, make sure your employees take breaks at regular intervals: one hour break for every four hours of work should be enough (and the shift rotations must also allow employees enough time off). Not taking these steps can lead to employees not being satisfied. This means they are more likely to steal from you, or at least they won't be your best employees.

Of course, another great tip is to use an item tracking software like TrackAbout to monitor your inventory day by day. This way you always know what each item is worth and how much raw material has gone in or out of stock - which is very important when it comes to preventing theft (theft from within).

Keep in mind what part of the year is the busiest

Hotels should be managed just like a business: the idea is to keep your finances healthy and your clients satisfied. However, some parts of the year are busier than others, which means you should be prepared for this type of demand. For example, Christmas and Easter always result in increased sales (but it doesn't mean they will stay high until everyone has finished celebrating) and periods after that are usually popular for business trips. This is why it's so important to know when the busiest times of year for your resort or hotel are, so you can plan ahead and get enough workers in at that time.

When you are aware of your popular periods, you can manage your profits easier. In fact, you can even hire extra workers during these months. This way, you will be fully prepared in the busy seasons and your profits won't suffer because of extra customers!

Be careful with discounts and promotions!

There's a fine line between offering a promotion that brings in more business and one that does nothing but drain profits from your hotel or resort. When planning promotions for your hotel or resort, start by finding out how much things cost and what kind of margin you want to aim for  (the industry standard is around 30%). Then add 5% on top of this amount to account for any unexpected expenses.

If the promotion you're planning on offering is too generous then it's not worth your time (it even has a negative effect because it drains profits). However, if the promotion doesn't result in increased sales, then it hurts you in the long run by creating a bad reputation for your resort.

All in all, managing a hotel correctly isn't much different from running any other successful business: You should organize yourself properly and delegate tasks to your workers when necessary. If you do this, then you will be able to take advantage of peaks in demand and make sure all guests are satisfied. Also, make sure to keep track of how much employees really cost so that they don't steal from you!