Variable costs
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Structure of the costs groups
In your operating review at the tab results there are three major groups of costs. On mouse-over the firsts cells with the small black triangle, you will get additional information on the numbers.
As you can see in this example above shows the operating review of a demo Management Team after four years: this is how it looks in your Team File. The year 0 is your starting position, (these data are available), the other four years are just an impressions of how things might develop:
More info on costs:
- the fixed costs have stayed the same during all four years, the fixed depreciation costs are one of them.
- the variable costs depend on the occupancy rate like laundry: the more rooms occupied the more laundry.
- the Costs Management Team Decisions, will depend on the Year 1-2-3-4 decisions made by the new Management Team.
Overview of the total of the variable costs
Let's check the variable costs, as they looked like at the moment you take over: in the picture the grey area. In the table underneath the green numbers.
| Costs | ||||
|---|---|---|---|---|
| Costs: fixed | Depreciation costs of existing assets | € 525,187 | 34.64% | |
| Fixed staff costs | € 550,271 | 36.29% | ||
| Costs of premises | € 390,473 | 25.75% | ||
| Insurance & interest costs | € 50,012 | 03.29% | ||
| Total fixed costs | € 1,515,943 | 100% | 62.36% | |
| Costs: variable | Variable staff costs | € 355,170 | 38.95% | |
| Laundry costs | € 118,390 | 12.94% | ||
| Cleaning costs | € 236,780 | 25.88% | ||
| F&B purchase costs | € 204,312 | 22.33% | ||
| Total variable costs | € 914,652 | 100% | 37.63% | |
| Costs: team decisions | Marketing costs | € 0 | 00.00% | |
| Extra staff rewarding costs | € 0 | 00.00% | ||
| Extra depreciations costs | € 0 | 00.00% | ||
| Market research costs | € 0 | 00.00% | ||
| Other costs | € 0 | 00,00% | ||
| Total team decisions costs | € 0 | 100% | 00.00% | |
| Total all costs | € 2,430,595 | € 2.430.595 | 100% |
Explanations on this
You can't influence these variable costs, but they will vary depending on the number of guests-bookings you have in the hotel. They will be automatically calculated related to the occupancy rate and visible on your operational review. They make up 37.63% of the total costs as you take over. There is a ratio between occupancy rate and all of these costs. You cannot influence this, but it will be influenced by the occupancy rate you have created with the way of managing the hotel.
- Variable staff costs: the more guest you have, the more work here will be to be done and the more staff is needed. So additional costs.
- Laundry costs: the more guest the more towels, bed linen etc. needed.
- Cleaning costs: rooms need to be cleaned more often because of more guests and to be cleaned better.
- F&B purchase costs: more guest means more breakfasts etc. for guest and more f&b for additional staff so the purchase costs go up.
More numbers
Check basic set-up of costs groups in hotels to have some reference on the numbers.
These pages, though, give some ideas from a calculative perspective. Of course, any situation is different, any time frame (think of the Covid period), the owners ship, the state (quality) of the premises etc.
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