There are many, varied challenges associated with running a successful hotel, and as well as getting guests through the door, and ensuring that they have an enjoyable stay, it’s important that all the background operations run smoothly too.
Hotel owners need to constantly examine their operations to ensure that they are controlling costs and maximising profit. Here, Simon Tee, managing partner for leading accountancy firm, and hospitality specialist, Kilsby Williams, highlights the five key questions that hoteliers should be asking themselves.
- Are you claiming enough capital allowances?
The short answer is, probably not! Capital allowances offer a significant tax relief for commercial property owners and a subsequent reduction in overall tax paid. Many owners are unaware of the potential unclaimed capital allowances tied up in their property and have never claimed the tax back.
- Are you correctly analysing project costs between repair and capital?
Thanks in part to heavy footfall and room turnaround, regular refurbishment is important in the hotel trade. There is an important decision to be made on how these costs are reflected in the accounts as they affect the reporting of financial performance and also taxation. An expert will help you find the best treatment for you.
- Does your accountancy software allow you to properly monitor performance?
Well designed management reports can be created from most accountancy software packages which ensure you focus on the key matters that affect the amount of profit you can make.
- Are your financial accounts in shape if you decide to sell your business in the future?
The process of selling a hotel can be long and convoluted, you really need to be planning several years ahead to make sure that you are properly reflecting the performance of your business to sell at the best possible time. Well-organised finances are a must, the more organised you are, the clearer picture you will give potential buyers. It’s also vital to have a clear and well-presented record of costs, overheads, room rates and occupancy.
- Are you looking after your employees when wages are rising?
A rise in the National Minimum Wage and the introduction of the National Living Wage have both had a significant impact on hotels operating costs. Although this can be daunting for operators, it’s important to ensure staff rewards are flexibly organised so that you retain the best possible people for your business.
Simon Tee is Managing Partner at Kilsby Williams and has worked with some of the UK’s best known hospitality brands including Bespoke Hotels Limited, The Celtic Manor Resort and the Hallmark Group.