If you are in the hospitality industry, and run or own a hotel, it is important that you look ahead and are able to forecast profits for your hotel. You need to know where to spend money today to make a profit tomorrow. You need to make educated judgements about where you can see your hotel making money in the future and know which areas you need to improve on now.
Knowing what you think you will make in profits in the future will help you divert your cash flow towards the right areas and will mean your hotel will continue to grow as a business. Property valuation software will give you an initial insight into working out the value of your property, particularly when your hotel is being constructed. Knowing what budget you have to work with at all stages of your hotel’s development is really important.
Look to the past
Looking to what trends have happened in the past can help you estimate what is going to happen in the future. One thing you will need to be able to forecast is how the tourist industry is going to grow in the future. Tourism is where you business comes from and you can forecast your future profits by looking to research done by government bodies and private companies into how they expect the tourism industry to grow in the future.
You can also make judgements yourself by looking at whether there are any big tourist attractions or events coming to your region that will affect your future profits. Find out how many people are estimated to be attracted to these events and work out what percentage you expect to want to stay at your hotel.
Additional income
You will need to keep good records of all your sales and income earned from hotel bookings. If your hotel earns any income from additional sources then you will need to track the performance of these areas too. You may have space in your hotel lobby for a few shops and you could also have a restaurant.
Maintain your profit and loss statements for these added income earners and over a few years you will hopefully see a steady rise in your profits. Once you have a been in business a while it will be easier to forecast future profit in these areas as you can estimate profit based on past performance.
Software
You can invest in hotel feasibility software that will help you forecast profits for your hotel. This software will help you evaluate the performance of your hotel and provide information that is useful when you are looking ahead at future profits.
The software can help determine not only the start up costs of your hotel but the cost of any future development. It can also work out the income that will be generated from your additional income, such as your food and beverage services.
It will also calculate the figures that determine the performance of your hotel and you can then use this information to forecast your profits on your hotel.