With the FF&E on a new hotel project accounting for between 10-15% of the overall construction budget, it is a significant investment and one that can directly impact the ADR [average daily room rate] and RevPAR [revenue per available room] of your hotel. Subsequently, FF&E is also an accounting term that refers to the tangible assets of a business. FF&E products are assets that add value to the business. However, as the useful life of FF&E items can be between 3-7 years, in accountancy terms, these assets are depreciated annually [i.e. their value is reduced year on year over their useful life] On most hotel & commercial projects, an itemised schedule of FF&E with defined costs, from production to installation is created for bookkeeping and accounting purposes. A typical FF&E budget for a hotel project would account for:
All FF&E within guest areas such as lobbies, restaurants, bars, conference rooms, bathrooms and transit areas such as elevators and hallways.
All moveable and non-movable FF&E within guest rooms, including decorative finishes, such as lighting.
All FF&E within staff areas, such as breakrooms, kitchens, equipment areas.
All FF&E within Back of House areas such as offices, laundries & storage
All computer equipment, technical cleaning equipment, and large kitchen appliances.