Creating an Accurate Preliminary Budget for Your Hotel Making preliminary budgets in any situation can be a daunting task. Creating them in such an unpredictable year can be even more difficult, but more important than ever. Here are a few things to keep in mind that are always true, and a few that will help avoid over or under budgeting during this unique set of circumstances.
Plan your hotel budget early We all know that old saying, “If you fail to plan, then you plan to fail,” but what happens in a year that no one planned for? How do you look ahead when even planning the next few months seems impossible?
Beyond the usual normal considerations, there is so much to consider when it comes to renovating a hotel. However creating an accurate pre-opening or hotel FF&E preliminary budget early can give financial clarity and help avoid other costly mistakes.
Planning in an unplannable year The main staples of creating a preliminary budget remain true. All in all, planning for a hotel renovation hasn’t changed much, but here are a few things to remember like national holidays or other supplier disruptions. Of course, recurring holidays that are typically a big thing to keep in mind are still happening. I’m talking mostly about Chinese New Year, but there are other large holidays that could cause delays in production and freight if not properly taken into account.
A few things that have been a recurring theme for the last few months, and likely will continue, are longer than usual lead times and the rising price of freight. Cargo ships have been consistently booked and overbooked, even with the return of ships that had been docked during the spring and summer months. It may take longer to get a container on a ship, so keep plenty of room in the timeline for lead times and freight to avoid costly delays later in the process.
Why a purchasing agent can help with preliminary budget There are many reasons for renovations including the procurement of a new property, maintaining brand standards through a PIP, refreshing soft goods for a small update, or if it is just time for a full refresh. Regardless of if you have a small hotel, or a large full-service resort, Beyer Brown is here to help, and we can start way before the FF&E purchasing process begins.
With our 42 years in this industry, we’ve been through quite a few “unusual circumstances.” Our seasoned experts have the experience and the knowledge to plan for multiple variables. Having an accurate budget can help to avoid surprises and costly adaptations later in the purchasing process. And who knows the purchasing process better than a purchasing agent? As a purchasing agent, we are in a unique position to help create an early but formal budget based on our knowledge of each and every step of the FF&E procurement process. With so much to worry about, don’t let the FF&E budget be one of the concerns. We will take care of every aspect that is involved in purchasing and procurement, from vendor bidding to freight and installation.