Types of Housekeeping Budget

Budgeting depends on the purpose of the hotel/facilities. You can have a hotel or facility that is smaller or bigger. Complexity increases with increasing size.

If the hotel or facility is smaller, there may be a Front Office and Housekeeping. However, the expense control is primarily done by the General Manager. With the help of an accountant or accounting firm, they were the main decision makers in the preparation of the annual budget. The total amount that is needed to run the entire year is determined based upon the expenses incurred in previous years as well as other events that could affect the preparation of the budget for the forthcoming year.

Larger hotels can have more complicated expenses because the operation is different from the departments that are responsible for smooth operation. The budget for international hotels is prepared by the heads of each department with the help of the Financial Controller, and then submitted to the corporation/owner for approval. Each department head is responsible for ensuring that the budget is controlled and monitored based on occupancy percentages once it has been approved. Each month, the General Manager receives a copy of each month’s budget results and shares them with the department heads.

Example of departments in a larger scale hotel are: Administration, Front Office, Housekeeping, Laundry, Engineering, Food & Beverage, Kitchen, Finance, Human Resources, Recreation and any other departments created to suit the function and smooth operation of the hotel. Each department has sub-departments like Front Office with Reservation and Concierge, Housekeeping with Linen, Uniform, Tailoring and Flower shop, Landscaping and Gardening, Upholstery shop (the latter may be assigned to Engineering), Engineering with Carpentry and Masonry, Electrical and Mechanical, Computer Technician, etc.; Food & Beverage with Banqueting and Outside Catering; Kitchen with Pastry shop; Finance with Purchasing, Receiving & Storage; Recreation with Swimming Pool, Golf Course, Tennis Courts, Spa etc.; Human Resources with Training and Clinic.

The budget for housekeeping and other hotel departments is two-fold. The Operational Budget, and the Capital Expenditure Budget.

1) Operational budgetThe department determines the amount of expense required to run smoothly. Hotel operation requires that expenses be controlled based upon occupancy percentage. Because occupancy forecasts for other countries or areas are not reliable or predictable, the budgeted amount can fluctuate.

The following is the Housekeeping basic operational budget:
A) Staffing
b) Linen & Towels
c) Guest Supplies & Amenities
d. Cleaning Supplies
e) Laundry Supplies
f) Machine, Tools & Equipment
g. Decoration
h) Miscellaneous
i) Printing and stationeries

Housekeeping budgeted sections or items are typically divided among departments like the following:

1) Maintenance and repairs

This budget is typically divided between Engineering and housekeeping.

2) Uniform Budget

The Executive Housekeeper will prepare uniform expenses. Each department is given a unique style, color, and functionality. After a particular style has been selected, it is coordinated with the concern departments. The Executive Housekeeper then submits the uniforms to the General Manager for coordination of colors, styles, and functionality. This ensures that the hotel’s image is perceived well by guests. The final step is to endorse them to a Financial Controller for the allocation of budgeted money to each department.

3) Decoration

Housekeeping is a department within the hotel that assists with the beautification of the hotel. There are many decorations that can be used, including fresh or artificial flowers, depending on the policy of the hotel. For example, there are hotels that ban artificial flower arrangements due to fire hazards. The most requested items were flower arrangements for guestrooms and food and beverage functions. Outside catering was also available. Lobby, Convention centers and other areas require flower arrangements are some examples of decoration.

4) Printing & Stationery

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The budget covers both Front Office as well as Housekeeping.

5) Miscellaneous

This budget can be shared between Housekeeping and other departments depending on the type or expense.

Capital Expenditure is the second type of budget for Housekeeping.

Capital Expenditure Budget refers to the allocation of funds to a project or items that will aid in the hotel’s operation. In case of Housekeeping, projects can be something that require replacement or additional Housekeepers cart, Laundry washer & dryer, building a new Laundry Shop for outside customers, replacement of vacuum cleaners, replacement of worn out beds or furnitures which is usually done floor by floor or by segments. The CAPEX funds are usually allocated the same way that the operational budget is for the following year. If the item/s has a specific life span, replacements are made each year. This ensures that the hotel or facility is maintained in a good condition, and is equipped with modern technology. CAPEX fund is the best method to ensure that the hotel is maintained and is in good condition. It also helps to avoid the depreciation on large quantities of expensive items.

It is essential that funds are allocated for operational and maintenance needs of the hotel. This should be done based on the occupancy percentage. Key department heads will know how to adjust their budget accordingly. It is important that key personnel responsible for budget preparation ensure that the funds are spent for the purpose they were intended. Side tracking the set goal is an interminable task that will not lead to a specific accomplishment. Capital Expenditure can be destroyed if the operating budget is not properly managed.

Capital Expenditure BudgetAs important as Operating BudgetWhen it comes to the hotel business.

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