In his book First Things First (1994), Stephen Covey compares direction and purpose to a compass that must be accurately determined before starting a task and increasing its speed, which he likens to a clock.
The compass must come before the clock. Therefore, rushing into a task without ensuring the correct direction and purpose is a futile effort. This aligns with Benjamin Franklin's famous quote, "If You Fail to Plan, You Plan to Fail."
In line with the above, before a hotel operates, its operational budget must first be prepared. The budget serves as a compass in the hotel's operations. However, the reliability of the compass must first be ensured. If the quality of the compass used is poor, it will not be able to show the correct direction and purpose, and as a result, the intended outcomes will not be achieved.
Therefore, when preparing an operational budget for a hotel, it should not be done haphazardly or carelessly. The budget must be prepared as well as possible, based on valid data and by competent and experienced individuals.
Here are some of the main benefits of a budget:
1. Budgeting sets clear and realistic financial goals.Â
With a budget, operations can determine income, cost, and profit targets for a certain period.
2. Budgeting serves as a cost control tool.Â
A budget allows operations to monitor and control expenditures and ensure that funds are allocated efficiently.
3. Performance Measurement.Â
It serves as a benchmark for assessing operational performance. By comparing actual results with the budget, it can be clearly identified which areas have underperformed.
4. Cash Flow Planning.Â
It helps ensure financial liquidity to meet routine expenditures, short-term obligations, and anticipate long-term liabilities.
5. Budget as a reference for strategic decision-making, such as adding workforce,
improving facilities, or refurbishment.
In today's technological era, many operating system software (PMS) have been developed to assist in the daily operations of a hotel. A good PMS can accommodate the budget that has been prepared and input into the system.
The system will record all actual data that occurs over time, and then systematically provide the necessary reports related to the five points mentioned above. With these complete reports, decision-makers are expected to follow up appropriately.
Effort is important, but knowing where to make an effort makes all the difference!
About Writer :
Ojahan Oppusunggu : Former Technical PM – DTS ACCOR Indonesia & Malaysia, Former CTO of Topotels Hotels & Resorts, Former Director of Technical & Technology of Artotel Group and Currently as Project Director/Owner Rep. Kapuk Hills Hotel Jakarta – Handwritten Collection
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