Budgets - who's driving the bus?

BON Hotels Blog - Budgets

I’ve learned that financial statements tell a story, a movie recapping all that has happened in terms of trading over a period of time. We have recently completed our financials for the fiscal year 2015, and budgets for F2016, and these certainly do tell our story!

From a budget outlook, we survived a shaky 2015, mostly due to underperformance of ‘bums in beds’ and occupancies not reaching each property’s capabilities. What is also very apparent is that our food and beverage departments are over-achieving – although this is positive, it is not a good formula for success.

2015 will go down as a learning curve – we made mistakes and we learned important lessons. Our fiscal story for 2016 is going to play out differently. Face it: although we love what we do, we are in business to make profit. So, the big question in any hotel management storyline is – WHO IS RESPONSIBLE FOR ACHIEVING BUDGET?

I personally loathe the term team work. Characteristically, it’s likely that the team is broken somewhere, so a team doesn’t always work. I do, however, like the term collaboration which is defined (as per Google Thesaurus) as follows:

“Teamwork [there it is!], Partnership, Association, Alliance, Relationship, Cooperation, Group Effort”.

At BON Hotels, the lessons learnt in 2015 prompted us to make a fundamental shift in the way we do business. We’ve placed financial responsibility on our general managers. This is quite a load to carry – agreed – but what we also insist on is collaboration. A general manager cannot sit at the desk and wait for guests to waltz in the door, or wait for the sales team to lure in the groups. A general manager cannot succeed without collaboration from staff, head office and, very importantly, the sales and marketing departments.

We want our general managers to make sure that head office, reservations, and sales and marketing are all pulling in the same direction. Achieving budgets should not be driven by head office – although it is tempting to meddle and interfere in each property’s business. With the correct collaboration, a general manager has all the tools necessary to achieve. When occupancies are low, our general managers are expected to be on the phone to all concerned, to collaborate and by joint effort move into crisis mode to remedy any situation. General managers should be fully aware of every cent spent, every sales call, every marketing campaign running, and in fact, should be driving sales and generating fresh ideas.

The buck stops there – with the general manager. And although this is a huge responsibility, if it is not placed entirely on one person, human nature dictates that people within departments start pointing fingers – which breaks down these VERY important relationships.

Targets are definitely achievable. I am 100% confident that F2016 is going to be a different year for us from a financial point of view, a really exciting story!

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Chief Executive Officer

Having grown up in the corridors and reception areas of Cape Town hotels, Guy Stehlik is no stranger to the hospitality industry.

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