The budget setting depends on the function of the hotel or facility. A hotel or facility can be operated on a smaller or larger scale. The bigger they are, the more complex it becomes.
In a hotel or smaller-scale facility, there is usually Reception, Cleaning and Maintenance and the expenses are mainly controlled by the Owner through the General Manager. They were the key decision makers in preparing the annual budget with the help of an accountant or accounting firm. The budgeted amount required to operate throughout the year is based on expenses incurred in previous years and other related occasions that will affect the preparation of the budget for the next year.
In a larger-scale hotel, expenses can be very complicated since the operation varies from the departments created for the proper operation of the hotel. In some international hotels, each department head prepares the budget with the help of the financial controller and the general manager and then presents it to the owner / corporation for approval. Once sanctioned, each department head is responsible for ensuring that the assigned budget is monitored and controlled based on the percentage of occupancy. The General Manager obtains a copy of the budget results each month end and discusses them with the department head.
Examples of departments in a larger-scale hotel are: administration, reception, cleaning, laundry, engineering, food and beverage, kitchen, finance, human resources, recreation, and any other department created to suit the function and smooth running of the hotel. Each of these departments has sub-departments such as Front Office with Reservations and Bell Service / Concierge; Cleaning service with laundry, uniform, bedding, tailoring, florist, gardening and landscaping, upholstery shop (the latter can also be assigned to engineering); Engineering with Carpentry, Masonry, Electricity, Mechanics, Computer Technician, etc .; Food and beverages with banquets and outdoor catering; Kitchen with pastry; Finance with purchasing, receiving and warehousing; Recreation with pool, golf course, tennis courts, spa, etc .; Human Resources with Training and Clinic.
Cleaning and other hotel departments operate within two types of budget. The operating budget and the capital expenditure budget.
1) Operating budget It is the allocation of the expenses of each item that the department requires for its correct operation. In the case of a hotel operation, the cost control is based on the percentage of occupancy. The amount budgeted for the month can be variable since there is a certain period in which the occupancy forecasts in other areas or countries are not reliable or unpredictable.
The basic cleaning operating budget is as follows:
b) Bed linen and towels
c) Guest supplies and amenities
d) Cleaning supplies
e) Laundry supplies
f) Machines, tools and equipment
i) Printing and stationery
There are budgeted items or sections in the cleaning department that are generally divided among other departments, as follows:
1) Repairs and maintenance
This type of operating budget is generally divided between cleaning and engineering.
2) Uniform budget
Uniform expenses are prepared by the Executive Housekeeper with all the elegance, comfort, durability, styles, colors and functionality of the uniform chosen for each department. Once a specific style of uniform has been chosen, it is coordinated with the concern department and when the Executive Housekeeper gets approval, they send it to the General Manager for overall coordination of styles, colors, functionality, etc. that reflects the correct perception of the image of the entire hotel in the eyes of the guests. The last step will be to endorse them to the Financial Controller for the allocation of the budgeted amount to each department.
The cleaning service is one of the hotel departments that helps and assists in the beautification of the hotel inside and outside the building. The decoration can be flower arrangements, fresh and artificial depending on the policy of the hotel as there are hotels that prohibit the use of artificial flower arrangements due to fire risk, photo frames, statues, carvings, tapestries, artifacts and many others are examples of decorations. . Flower arrangement requests seemed to be the most necessary items in the hotel, whether it be for rooms, food and beverage functions, outdoor catering, hotel lobby, convention centers and other areas that require flower arrangements.
4) Printing and stationery
Front Office and Housekeeping are the two departments that share this budget.
This type of budget can be charged between Cleaning and any other department depending on the type of expenses incurred.
The second type of cleaning budget is capital expenditure (CAPEX)
The capital expenditure budget is the allocation of funds for a specific project or items that will aid and aid the operation of the hotel. In the case of cleaning, the projects can be something that requires replacement or additional cleaning cart, washer and dryer, construction of a new laundry for external customers, replacement of vacuum cleaners, replacement of beds or worn furniture that is usually done floor by floor . or by segments. Generally, the CAPEX fund is allocated in the same way as the operating budget for the following year. Therefore, projects are carried out and completed on an annual basis, especially if the items have a specific useful life in which they are specifically replaced every year. In this way the hotel or the facilities are well maintained, equipped and preserved as new. It is through the CAPEX fund that the maintenance of the hotel works best and at the same time avoids the depreciation of items in large quantities where it is difficult to solve since they require a large amount to achieve.
Therefore, in order to have a well-functioning and well-maintained hotel or facility, it is important that the allocation of funds for the operational needs and maintenance of the hotel is effectively managed and controlled based on the percentage of occupancy where the bosses key departments are informed on how to adjust their budget accordingly. Key personnel responsible for preparing the budget must ensure that the allocated fund is spent specifically for its intended purpose. Lateral tracking of the set goal will be a never-ending task that will not have a defined or specific achievement achieved. Not being able to monitor the operating budget effectively will lead to the disappearance of capital expenditures.
Capital expenditure budget It is as important as Operating budget when it comes to hospitality.