By Jeff Hodgson, General Manager, Lumley Castle.
Welcome to the glamorous world of hotel finance—where spreadsheets reign supreme, budgets haunt your dreams, and you can calculate the cost of a broken minibar item faster than you can say “complimentary robe.”
To the untrained eye, hotel finance might seem dry-just numbers on a screen, a calculator, and the occasional mysterious coffee stain on a profit-and-loss report. But behind the scenes, it’s a high stake balancing act of revenue, expenses, forecasting, and trying to figure out how someone managed to spend £50 on cashew nuts in one night.
The Art of Budgeting:
Also known as Creative Fiction Writing
Let’s begin with budgeting. Each year, finance teams across the industry sit down to predict the future. It’s less crystal ball, more optimistic fanfiction about how next year’s profits might look-if absolutely everything goes perfectly.
We start with last year’s figures, adjust for inflation, toss in a dash of “projected growth,” and cross our fingers that no bachelor party ends in a £5,000 room repair bill.
Then comes feedback: “Trim expenses by 10%” and “increase revenue by 20%.” No problem-we’ll just conjure up guests out of thin air and upsell them to the King James Suite because the soap’s a bit fancier.
Revenue management:
Playing tetris with room rates
Hotel finance isn’t just about reigning in costs. It’s also about squeezing every penny from every available room. That’s where revenue management enters-an alchemy of data, strategy, and occasionally, pure gut instinct.
Rates shift constantly based on seasonality, occupancy, and local events. If Beyoncé’s in town? Double the price. Rainy Tuesday in February? Throw in a free breakfast and hope for the best.
Few things match the thrill of a fully booked weekend-followed by the heartbreak of discovering the last guest paid with points, a 40% discount, and a loyalty voucher from 2011.
The joy of auditing:
“Who spent £800 on candles?!”
Every month brings the sacred ritual of reviewing expenses. That’s when you stumble upon financial gems like:
A mysterious £400 bar tab charged to the maintenance team.
An invoice for “emergency lightbulb delivery”.
A trail of full-colour printing despite repeated memos (and printer warnings).
Auditing is part financial control, part detective work. You track receipts, chase down missing invoices, and occasionally question a line cook about a curious entry labelled “cheese emergency.”
And when the books finally balance? That’s nirvana. You feel like a rock star-albeit a sleep-deprived, coffee-fuelled one armed with a calculator.
Capex:
Big dreams, bigger bills
Capital expenditure-Capex-is where finance really breaks a sweat. The Castle wants a swimming pool Fantastic-just find the six-figure funding.
From renovations and tech upgrades to new furniture and infrastructure overhauls, Capex requires planning, strong ROI projections, and at least one painfully detailed PowerPoint.
And then, of course, there’s the classic: “Let’s replace all 300 room carpets-next week!” Sure. Just let us check the petty cash drawer.
Behind the scenes – but running the show
Here’s the thing: guests rarely think about hotel finance. They check in, relax, and (hopefully) pay their bill-never knowing there’s a team behind the curtain keeping the lights on, the spreadsheets balanced, and the filet mignon profitable.
Hotel finance is equal parts math, forecasting, troubleshooting, and a constant chorus of “wait, what now?”
It may not always be glamorous, but it is essential-and yes, occasionally hilarious.
www.lumleycastle.com