Budgeting, Forecasting & Cost Control

Olive Grove Boutique Hotel

A 42-room coastal property. Four brief reports on one page — select a report type to switch.

Prepared byHassan Akkad
PeriodFY 2026 actual · FY 2027 forecast
Rooms42 · 15,330 available nights
CurrencyUSD
Illustrative mock-up — fictional property, all figures invented
Report 01

Forecast — built from a three-year trend study

The 2027 forecast is not a guess at a growth rate. RevPAR for 2024–2026 is fitted to a least-squares trend, and the year is shaped by a seasonality index taken from the three-year average monthly revenue share.

RevPAR trend & 2027 projection

Method
  • RevPAR 2024 → 2026 fitted by least squares; the slope projects 2027.
  • Seasonality index = each month's share of rooms revenue averaged across the three years.
  • Occupancy assumed +1.5 points; the balance of the uplift is carried by rate.
  • Cost ratios hold at 2026 actual except where the cost-control actions land.

A trend this clean is itself a finding — two consecutive years of near-10% RevPAR growth is unlikely to repeat indefinitely, so the forecast should be revisited each quarter.

Monthly rooms revenue — three years actual, 2027 forecast

2027 monthly forecast

Report 02

Budget vs actual — FY 2026

Revenue landed almost exactly on budget. Gross operating profit did not — the gap is entirely below the revenue line.

Revenue — budget vs actual

Gross operating profit — budget vs actual

Monthly budget, actual and variance

Variance shown as actual less budget. For revenue and GOP a positive number is favourable; for cost a positive number is adverse.

Report 03

Variance analysis — what moved GOP

The full-year GOP variance decomposed into its drivers. Rate was strongly favourable and volume was not; both were outweighed by cost.

Budget GOP to actual GOP — variance bridge

Variance by driver

Reading the bridge
  • Rate held the year together. ADR beat budget by $7.02, worth $76,494.
  • Volume missed. Occupancy came in 1.5 points light — a $36,106 drag.
  • F&B spend per guest fell from $58 to $55, costing $45,936 of revenue at high margin.
  • Cost overruns took —, led by payroll, utilities and maintenance.
  • Net: revenue — but GOP —. The property sold the same and kept less.
Report 04

Cost control — breaches, causes and actions

— lines breached tolerance. Each line is tested on the basis that drives it — a variable cost on its rate, a fixed cost on its absolute value. Food & beverage shows why this matters: its absolute cost was only $537 over budget, but that is 41% of a smaller revenue base against a 38% plan.

Variance against tolerance, by line

Measured on each line's own basis, so a variable cost is not flattered by lower volume.

Cost per occupied room

Cost control register

Corrective actions carried into the 2027 forecast
  • Food & beverage cost ratio 41.0% → 38.5%: re-tender produce and protein contracts, reset menu engineering on the lowest-margin dishes.
  • Utilities — per occupied room: BMS scheduling on the west wing, LED completion, monthly consumption review against occupancy.
  • Maintenance back to a planned schedule: the overrun was six unbudgeted emergency repairs, not a rate problem.
  • Payroll: roster to forecast occupancy rather than prior-year actuals, to hold peak-season overtime.

These actions are what carry the 2027 forecast GOP margin to —, against — delivered in 2026. Without them the forecast would simply repeat this year's cost base.