Budget Process Review

Leading Hotel Executives on How to Overcome 2024 Budget Challenges

“Data is your friend, and competitive benchmarking is critical.” That’s just one of dozens of takeaways from HotStats’

recent interviews with hospitality leaders around the world. Check out the videos below to learn how to simplify the budgeting process and drive higher performance in 2024.

Neetu Mistry,

Chief Commercial Officer, Cycas Hospitality

2023 has been a phenomenal year in so many ways, positive and negative. We've had the cost pressures, but on the flip side we've had so much demand and as a result some exceptional performance across our hotels. Nobody really knows what's going to happen next, but sentiment remains positive. We could continue on this trajectory because there's still a lot of distressed demand out there. However, supply is increasing too, and that could end up dampening some of that demand.

David Hart

Chief Executive Officer, RBH

We already run a rolling month forecasting process. We do it every month and we find that ultimately when we come to the annual budget that the lion's share of the work has been done. So from our own point of view, it's maybe not the real one off effort that it used to be.

Elena Ladisova

Chief Executive Officer, RBH

What gets measured, gets done, and it sets a benchmark. That kind of logic hasn't really changed. It's true that there's a lot of volatility, and I think month by month forecasting becomes much more important than before. But budgets are still something where you can plan ahead and plan your cash flow at the early stage, and then obviously you adjust for the forecast. So, I think forecasting is gaining more importance over time. 

Joe Pettigrew,

CCO, Starwood Hotel Asset Management

I think the budget process is still useful. Obviously, it has many uses for banks, lenders, and other investors for setting targets, goals, and bonuses, etc. But the most useful aspect is that it is the one time of the year that you all have full alignment on what your strategy is going to be for the next year.

Paul Nisbett,

Chief Financial Officer, EMEA, Valor Hospitality Partners

Regardless of whether we like it or not, you need a stake in the ground for legal requirements and compliance. But I think most people will move to a rolling 12 months. So, the fact is that all this is really a stake in the ground and a review process that has to happen for different stakeholders in the business. But actually, if you don’t use it and put it on the shelf and don't keep it live, you're not gaining anything. So, the rolling position becomes more important.

Pete Sams,

Chief Operating Officer, Davidson Hospitality Group

The budget process is a chance to step back and create your plan. That strategic plan is really more critical to me than the budget. It speaks to where we belong in the marketplace, how we are going to improve our standing, and how we are going to generate the results that we aspire to.

The budget is the financial support behind that plan. And you go into the year and understand that now you're going to update it every month. You're going to constantly reevaluate half of what you assumed may be incorrect, whatever that number may be.

Dimitris Manikis

President EMEA, Wyndham Hotels and Resorts

The way people interpret data and the way they build the story for our team members and our business partners is absolutely critical.

Amy Stevens

Group Director Revenue and Distribution, Rocco Forte Hotels

I think one of the things that we have done is really streamline the forms and the data inputs, the base that we're using across all hotels. So from a consistency standpoint, we all use the same data, we use the same data points, and we have the same system of truth as most companies do.

We've really worked very hard to create a user friendly platform. We do still use Excel and we also use a platform to ensure that everybody is entering that same consistent data. It's also data that we track all year round. So where we're all working or singing from the same hymn sheet, so to speak, and using data that we have already validated and that we trust.

Ajay Singla

Global SVP at Fairmont Hotels and Resorts

Our commercial team performs a lot of research, working with organisations like Oxford Economics, STR, and HotStats. We want to understand where the market is going, what new demand is coming in, what new hotels are coming into the market, what the local tourism authorities are doing, and what the airlines are doing in order to bring business back to the destination.

Michael Grove

Chief Operating Officer, HotStats

I think the annual budget process is a good discipline. It’s basically a strategy meeting. You start with a half-year of actual data and use the forecast to project the rest of the year’s data. Then you build the budget on the back of that based on assumptions about what will happen over the rest of the year and throughout next year. Then you review performance monthly throughout the year.