Aptech Advises Hotel Finance Teams to Re-evaluate their Budget ‘Drivers’

Operators must use their experience to create new drivers and only rely on the history as a guide. The effort in doing this will provide them with a better starting point for the upcoming years.

PITTSBURGH (PRWEB)
September 14, 2021

Budgeting for 2022 will present some challenges for hoteliers. Without a crystal ball operators will need to use their knowledge to form new ways to plan. While historical drivers helped in previous years with future planning, it’s a whole new ballgame today, as the very way a hotel operates is radically different from even a year ago. Comparing departmental profits from previous months is just one piece of the puzzle. To have better, more accurate budgeting numbers for the year ahead, Aptech, a hospitality company providing web-based, customizable, financial-management software for hotels for 50 years, is advising hoteliers to re-evaluate their drivers and establish a new baseline data set.

“Pre-COVID, the most common drivers when working in budgets and forecasts were ‘per occupied room’ and ‘percentage of revenue’ with very standardized values,” said Jill Wilder, Aptech vice president. “By simply adjusting the room occupancy values, expenses and revenues would automatically re-calculate and change accordingly. Today, hotels are different with one key difference due to staffing and capacity limitations. In many situations, cleanliness is key and the length of time for a housekeeper to accomplish their tasks is dramatically different. Therefore, ‘per occupied room’ will not be the only way to calculate their hours. We are advising our clients to consider ‘per check-in or check-out’ as a driver and look at stayover with cleaning vs. stayover without cleaning to determine how it is impacting Housekeeper hours. In the Food & Beverage revenue area, we want them to evaluate how the number of covers/occupied room values have changed and whether or not there should be an outlet capacity that now needs to be included in calculating the revenue per meal period.”

Wilder said hoteliers should also scrutinize other operating expenses. For example, guest supplies may have been budgeted at $1 per occupied room in 2019. Today, it may be best to consider increasing that value to cover the increased supplier cost or look at the number of budgeted daily check ins in addition to the increased cost. Using more than one driver for a calculation may provide a more accurate value.

“Rather than copying and pasting prior year driver values into the 2022 budget and forecast hoping that hoteliers hit the target, they should reconsider what the new driver and/or values are that drive their hotels,” Wilder said. “Operators must use their experience to create new drivers and only rely on the history as a guide. The effort in doing this will provide them with a better starting point for the upcoming years.”

Financial Management Software to the Rescue

The best way to budget and forecast accurately and avoid trying to explain what is happening financially to an owner is to enlist the help of a financial management software company offering web-enabled business intelligence, budgeting, and back-office systems that are 100% hospitality specific. Not only will such a technology partner help each property re-evaluate its existing drivers, but it will identify new drivers to correspond with relevant data sets.

Deploying the right enterprise accounting, business intelligence, and budgeting and forecasting solutions will help operators better prepare for change. Since most management contracts and bonuses are based on the accuracy of what is being forecasted, there is no time like the present to make a change, especially for those properties still writing and relying on individual Excel spreadsheets to hit their targets.

“At the end of the day, we are all shooting for accuracy,” Wilder said. “By automating the budgeting and forecasting process, hoteliers will have one source of the truth. A system like Targetvue from Aptech is equipped operators with Forecast Worksheets that eliminates the need for someone at corporate to create and individual Excel spreadsheet for each hotel and later collect them from the properties and hope the data is accurate. Data can be input via a web browser and cannot impact the logic of the models. Rather than requiring one document per hotel, Targetvue works with drivers to pull in relevant historical data and compare it to years that make sense, such as 2021 vs. 2019, for improved consolidating and reporting.”

It’s widely apparent that it is still not business as usual. As a result, hoteliers need to make some drastic changes if they hope to reopen successfully. Re-evaluating a hotel’s drivers is a critical first step towards financial stability. The most accurate way to compare Plan with Performance is to automate the hotel’s budgeting and forecasting processes with a flexible solution proven to drive accuracy and set realistic goals for the hotel enterprise.

For more information on Aptech solutions, visit http://www.aptech-inc.com or visit Booth 3201 at HITEC, September 28 to 30 at the Kay Bailey Hutchison Convention Center in Dallas.

# # #

About Aptech Computer Systems Inc.

Aptech Computer Systems, Inc., based in Pittsburgh, Pennsylvania, is the only provider of a fully integrated enterprise accounting, business intelligence and planning ecosystem to the hospitality industry. All clients are companies like yours, which own or manage hotels. Its solutions help customers at both the corporate and property levels understand their financial and operational data for faster goal achievement. The company is renowned for introducing business intelligence into the hotel industry and offers a solid resource of hospitality professionals. Aptech is an IBM Software Value Plus partner and Premier Solution Provider, as well as a Prophix Premier Business Partner. Incorporated in 1970, Aptech’s state-of-the-art back office, true business intelligence and enterprise planning solutions are 100% hotel specific. Solutions include PVNG, Execuvue® and Targetvue. Clients comprise over 3,500 properties – including large chains, multiple-property management companies and single-site hotels. Execuvue is registered to Aptech Computer Systems Inc. All other trademarks are owned by their respective holders. For more information, please visit http://www.aptech-inc.com.

Share article on social media or email: