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Hotel Operating Expenses Checklist

Tracking operating expenses is vital in understanding your hotel’s financial performance and positions you to better manage costs, which could potentially increase your profit margins. Given that gross operating profit is calculated by subtracting total operating expenses from total operating revenues, minimizing expenses and maximizing revenue is obviously key to boosting profits.

Operating expenses are those required to keep your hotel running, such as costs of food and beverage, commissions, and utility costs. These expenses are found within all operating departments, which include rooms, sales & marketing, and property operations, to name a few.

The importance of completing your operating expenses checklist

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P&L Operating Expenses Checklist

The more information you provide in your P&L statement, the greater insights you will discover. Ultimately, this could be the key to identifying where costs can be reduced and revenue maximized.

At the very least you should include a summary level for each department, which would cover labor and all other expenses per department. However, if you were to provide detailed information on expenses for the rooms department and include the likes of salaries & wages, payroll-related expenses and travel agent commissions, you’d gain a clear breakdown of which items cost the most and where you can identify potential cost savings.

In doing so, you will be able to purchase P&L reports that includes a breakdown of these items on ratio-to-sales, per-available-room, and per-occupied-room night bases, for both your hotel and competition. This offers the opportunity to discover how your costs compare to your competitive set and determine possible cost savings. 

Download the full Hotel Operating Expenses Checklist

For further P&L insights, discover the benefits of understanding P&L for hoteliers and check out our P&L examples for hotels.

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Profit and Loss
Hotels
Educational