Better Visibility into 2023 Helps Normalize Hotel Budgeting Process
Renovations, Labor Will Be Major Costs for Hoteliers
The recovery of the U.S. hotel industry from the COVID-19 pandemic has progressed to the point that many hoteliers budgeting for 2023 can see some return to normal.
The overall lack of visibility because conditions were changing daily meant hoteliers were less than sure about setting budgets the way they had always done before. As they look ahead to next year, however, they do so with greater clarity, higher levels of demand and strong rate growth. Changes to the Process
The pandemic changed the way Hospitality Ventures Management Group has approached its budgeting process in recent years, said Richard Jones, senior vice president and chief operating officer. Though the industry is still recovering, this year is different from last year, so the company continues to adapt to the realities of the market as there are different levels of recovery for each hotel.
The biggest change is the degree of visibility and greater confidence in expectations heading into 2023 compared to this time of year in 2020 and 2021, he said.
Though there’s never a guarantee or perfect view of the future, HVMG believes there’s enough visibility now to return to its budgeting process used before the pandemic, Jones said. It will use a bottom-up budget strategy in which general managers and leaders in the field drive the process and tell HVMG and hotel owners their expectations for the full potential of their hotels. During the height of the pandemic, the company used a more top-down strategy.
