Another term for the profitability forecast is the profitability calculation.
A hotel is profitable if, after preparing and checking the profit and loss account, it shows higher revenues than expenses. In other words, profitability is assumed when the quotient of income and expenses is greater than 1.
The preparation of profitability forecasts is part of daily hotel consulting or feasibility studies.
As a rule, all the values required for the calculation of profitability can be found in the balance sheet or profit and loss account of a hotel.
The situation is different when calculating the profitability of a new hotel or a hotel after an extensive renovation phase. For this task, forecasts have to be made, which are partly based on analyses (what demand or what turnover is realistic?) and partly on cost figures typical for the industry.
For new hotel buildings in particular, a realistic profitability forecast is a very important basis without which an investment should not be tackled.
Improve occupancy and prices, e.g. by expanding distribution or introducing a revenue management concept.
Expanding target markets, e.g. a focus on short-stay and weekend guests.
Increasing revenue per guest, e.g. through new services or
Optimisation or automation of operational processes to save working time and thus reduce personnel costs.
Reducing material costs through better purchasing conditions
Saving interest costs by switching to low-interest loans
Reducing energy costs through measures such as central electricity switches in the room, improving insulation, reducing water consumption or even reducing food thrown away (zero waste).
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