PLANNING OPERATIONAL BUDGET

PLANNING OPERATIONAL BUDGET: The first step in planning the operating budget is always to forecast room sales, which generates the revenue for operating the various departments. Most of the expenses that each department can expect are most directly related to room occupancy levels. This is especially true of the housekeeping department where salaries and wages, and the usage rates for both recycled and non-recycled inventories are a direct function of the number of occupied rooms. The concept of “cost per occupied room” is the major tool the executive housekeeper uses to determine the levels of expense in the different categories. Once the executive housekeeper knows predicted occupancy levels, expected expenses for salaries and wages, cleaning supplies, guest supplies, laundry and other areas can be determined on the basis of formulas that express costs in terms of ‘cost per occupied room.’ By specifying expense levels in relation to room sales, the budget actually expresses the level of service the hotel will be able to provide. In this regard, it is important for department heads to report how service levels will be affected by budget adjustments. This is especially important for the executive housekeeper. If the top management tones down the operating budget submitted by the executive housekeeper, the executive housekeeper should clearly indicate what services will be eliminated and downgraded in order to achieve the specified reductions. The various heads of expenditure that are normally reflected in a housekeeping operating budget are:

1. Cleaning and guest supplies
2. Office stationery and postage
3. Tailor shop expenses
4. Small cleaning equipment like brooms and brushes
5. Salaries and wages-includes retirement, benefits, bonus, allowances, incentives, etc.
6. Heat, light, and power-air conditioning, heating, electricity consumption
7. Repairs and maintenance
8. Pest control
9. Laundry expense
10. Horticultural expense: includes florist expense (flowers, oasis and vases) and landscaping expense (seeds, manure, saplings and flower pots)
11. Contract cleaning