Key Takeaways - Budgets

Earlier this month, our team of General Managers (GMs) from across the country met in Atlanta to discuss budgets and best practices. The GMs helped lead HVMG to a company-wide RPI of 112% in 2023; with a 12% same-store 2023 RevPAR increase over 2022 and a 39% GOP flow over 2022. When preparing a budget for 2025, there are several key takeaways and best practices to consider. Here are five critical elements to focus on:

1. Top-Line Projections and Trends

Key Takeaway: Accurate revenue forecasting is crucial. Given the dynamic nature of the hospitality industry, projections should be based on current trends and historical data.

It’s important to consider special events in a market as well. HVMG currently operates 15 hotels in the greater Atlanta market. In 2026, Atlanta will host eight FIFA Club World Cup matches; our GMs discussed how this will impact our local assets. Bringing together our GMs from all over the U.S. helps them to have discussions with each other about these impacts. For example, they can gain insights from our Phoenix team experiencing the reset from the Super Bowl in 2023. It is essential to drive ADR, allowing for solid flow-through and better margins.

2. Operational Costs and Efficiency

Key Takeaway: Managing operational costs while maintaining high service standards is essential for profitability.

Our team at HVMG regularly reviews and benchmarks operational expenses and conducts cost analysis. With staffing being a major topic of concern across the industry, we continually monitor our staffing levels to make sure they align with occupancy and the needs of the guests based on the service level of each property. Our Talent Acquisition Center of Excellence (TACOE) specifically looks to alleviate the burden on hotels to source line-level talent. It simplifies and streamlines the hiring process, allows the GMs to focus on their duties, and leads to higher-quality candidates.

3. Capital Expenditures

Key Takeaway: Planning for property improvement plans (PIP) and other capital expenditures is vital for maintaining and enhancing property value, as well as improving guest satisfaction.

It is important to focus on the projects that offer the best return on investment (ROI) and align with guest expectations. Our Design and construction team prioritizes the needs and helps our owners through the full renovation process. We also work closely with the brands to ensure that we complete all the brand-mandated property improvement plans (PIPs) in a timely manner.

4. Marketing and Sales Strategies

Key Takeaway: Effective marketing and sales strategies are essential for driving bookings and maximizing revenue.

Our Revenue Excellence (RevX) Team utilizes a three-pronged approach integrating revenue management, digital marketing, and direct sales strategies. The team’s decision-making is data-driven, using a mix of brand and proprietary tools. Our sales and marketing team is part of RevX and uses performance management, website optimization, direct channel and OTA ad placement, among other tools.

5. Financial Monitoring and Reporting

Key Takeaway: Regular financial monitoring and reporting help ensure that the budget is on track and adjustments can be made as needed.

Internally, our teams have weekly calls between the GMs, RevX team, and VPs of Operations, along with monthly P&L calls. We continually track KPIs such as RevPAR, ADR, and occupancy rates. Our team makes the necessary adjustments based on market conditions and performance data. Markets that experience a lot of weather-related shifts, such as Florida, given the impact of hurricanes and tropical storms, can experience a lot of uncertainty and daily or weekly shifts during the hurricane season.

By focusing on these key areas and incorporating current trends, hotel management companies can better navigate the complexities of budgeting and set themselves up for a successful 2025.

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