Housekeeping Budgeting

Housekeeping Budgeting

Budgeting set-up depends on the function of the hotel or establishments. A hotel or facility can be smaller or medium or larger scale depending on its size and investment. The larger they are the more complex it gets on running it. This is the reason millions of rupees is invested on staffing.

In a smaller scale establishments usually there are Front Office, Housekeeping, Food production and food and beverage department. The expenses are controlled mainly by the Owner through the General Manager or Manager. They are the key decision maker in preparing the yearly budget with the assistance of an accountant. The budgeted amount needed to operate for the whole year is based on the expenses incurred on the previous years.

In a larger scale hotel, expenses can be very complicated since the operation varies from the departments created for the smooth operation of the hotel. In Some international hotels, the budget is being prepared by each department head through the assistance of the Financial Controller and verified by General Manager which is then submitted to the owner/B.O.D for approval. Once approved, each department head is then held accountable in ensuring that the budget allocated is monitored and controlled based on the occupancy percentage of hotel. The General Manager gets a copy of the results of the budget every end of the month and discusses them with the department head.

Example of departments in a larger scale hotel are: Administration or functional departments and operational departments like Front Office, Housekeeping(Laundry + Engineering), Food & Beverage and food production mainly. Each of these departments have sub-departments such as Front Office with Reservation, lobby manager and Bell Service/ Concierge; Housekeeping with Laundry, Uniform, Linen, Tailoring, Flower shop, Gardening and Landscaping, Upholstery shop, Engineering with Carpentry, Masonry, Electrical, Mechanical, Computer Technician etc.; Food & Beverage with Banqueting and Outside Catering; Kitchen with Pastry shop; 

Housekeeping and other departments in the hotel operate within two types of budget. The Operational Budget and the Capital Expenditure Budget.

1) Operational Budget is the allocation of expenses for each item required by the department in order to operate smoothly. In case of hotel operation, control of expenses are based on occupancy percentage. The budgeted amount for the month can be variable since there are certain period where occupancy forecasts are unreliable or unpredictable.

The basic Housekeeping operational budget are as follows:

a) Staffing
b) Linen & Towels
c) Guest Supplies & Amenities
d) Cleaning Supplies
e) Laundry Supplies
f) Machine, Tools & Equipment
g) Decoration
h) Miscellaneous
i) Printing and stationary items

There are budgeted item or sections in Housekeeping that are usually divided between other departments such as follows:

1) Repairs and Maintenance

This type of operational budget is usually divided between housekeeping and Engineering

2) Uniform Budget

Uniform expenses is prepared by the Executive Housekeeper with all the elegance, comfort, durability, styles, colors and functionality of the uniform chosen for each department. Once a specific style of uniform has been chosen, it is then coordinated with the concern department and when the Executive Housekeeper gets the approval she then submits them to the General Manager for overall coordination of styles, colors, functionality etc. that reflects the proper image perception of the entire hotel in the eyes of the guests. The last step will be to endorse them to the Financial Controller for allocation of budgeted amount to each department.

3) Decoration

Housekeeping is one of the department in the hotel which helps and assists in the beautification of the hotel inside and outside the building. Decoration can be flower arrangements, fresh and artificial depending on the policy of the hotel since there are hotels that prohibit the use of artificial flower arrangements for fire hazard issue, picture frames, statuary, carvings, tapestry, artifacts and many others are examples of decorations. Requests for flower arrangements seemed to be the most needed items in the hotel whether for the guestrooms, Food and Beverage functions, Outside Catering, Lobby of the hotel, Convention centers and other areas that requires flower arrangements.

4) Printing and Stationeries

Front Office and Housekeeping are the two departments that share this budget.

5) Miscellaneous

This type of budget can be charged between Housekeeping and any other department depending on what type of expenses is incurred.

The second type of Housekeeping budget is Capital Expenditure budget. 

Capital Expenditure Budget is the allocation of funds for a specific project or items that will help and assist the operation of the hotel. In case of Housekeeping, projects can be something that require replacement or additional Housekeepers cart, Laundry washer & dryer, building a new Laundry Shop for outside customers, replacement of vacuum cleaners, replacement of worn out beds or furnitures which is usually done floor by floor or by segments. Usually the fund is allocated same way as how the operational budget has been allocated for the coming year. Therefore on a yearly basis projects are accomplished and completed especially if the item have specific life span where replacement are made specifically each year. This Budgeting is very essential at the same time to avoid depreciation of items if purchased being made in large quantities.

Therefore in order to have a smooth operating and well maintained hotel or facility, it is important that allocation of funds for the operational needs and maintenance of the hotel should be handled and monitored effectively based on occupancy percentage where key department heads are knowledgeable on how to adjust their budget accordingly. Key Personnel responsible for the preparation of the budget should see to it that the allocated fund is spent specifically for what it is intended for. Not being able to monitor the operating budget effectively will lead to the demise of Capital Expenditure.

Moreover, Housekeeping is one of the departments in the hotel that has the most bulk expenses and consumable items. Items like bathroom amenities such as shampoo, conditioner, body lotion or moisturizer, facial soap and body soap; bath towel, hand towel, face towel, bath mat, bathrobe, rubber mat; bed sheet, pillow, pillow case, neck pillow, mattress pad, blanket, duvet/ duvet insert, bed cover; toilet paper, facial tissue; coffee maker, coffee sachet, sugar condiments; ironing board, flat iron; alarm clock; cooking utensils, crockery's and cutlery; give away toothbrush and toothpaste; printing materials, stationery, envelope, note pad, ball pen, folder, telephone directory, Bible or Holy Gita or Holy Quran can have a substantial impact in the hotel's overall expenses.

These are variable assets that when consumed, damaged, lost or become sub-standard are being discarded or removed from circulation, Once removed from circulation or consumed, the same quantities must be replenished or replaced with additional mark-up in order to maintain the high standard or quality of service in the hotel.

Fixed assets like the room's furniture and fixtures such as beds, fridges, television sets, mirrors, sofas, easy chairs, reclining chairs, tables, telephones, lamps, headboards, air-conditioning/heating equipment etc. can be very costly when damaged or become sub-standard. These items are usually included in the Capital Expenditure Budget especially when refurbishment is required. But if its only one or two pieces, this amount can be allocated in the operating budget.

For the machine and equipment, Housekeeper's cart and vacuum cleaners are the most important tool used in the overall cleaning and maintenance of the hotel guestrooms and public areas. Machines like carpet shampoo and water extraction machine, rotary machine for carpet shampoo, floor scrubber and floor polishing, wet and dry vacuum cleaner. hydraulic lift etc. are additional heavy duty machines that help in the overall cleaning requirements of the hotel. These too are included in the Capital Expenditure Budget.

For Laundry area there will be the laundry machine, washer, dryer, dry cleaning machine, laundry folding machine/ calendar, tables, carts, laundry sorter boxes, movable clothes hanger rails, guest laundry printer etc. are Capital Expenditure items, while detergent, bleach, stain remover, dry cleaning fluid, ph level water treatment solution etc. goes to the operational budget.

Preparing Housekeeping Budget

Item: toilet roll @ Rs. 50 per roll

In 2021 the consumption @ 100% occupancy = 50,000 pieces Thus, @ Rs. 50 per roll= Rs. 2500000 was our total expenditure.

2022 forecasted occupancy percentage is 75%

100%- 75% = 25% ( 25% of 50,000 =12,500)

12,500 pieces * Rs. 50 per roll = 6,25000

Thus, 25 lakhs - 6,25000 = ................ Will be our budget.

All the Remaining items are calculated in the same manner till all the items required are included in the next year's budget.

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