It’s budget season for many hotels, and the fun never stops. Predicting the future is hard enough in normal times, and even trickier in today’s unpredictable market.
NB: This is an article from RoomPriceGenie, one of our Expert Partners
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Taking the time to get the budget right is vital for any property, but it’s particularly important for small, independent hotels where every dollar counts.
A budget is your roadmap for the coming year, showing the revenue you expect to generate and how you’ll get there. If your assumptions are off, your plans for pricing, staffing, and operations can quickly veer off course.
Whether you’re a revenue manager, GM, hotel owner, or another lucky team member tasked with the 2026 budget, here are five do’s and don’ts to make the process smoother and more effective.
Don’t Just Copy-Paste Last Year’s Numbers
The easiest shortcut? Take last year’s actuals, add a few percentage points, and call it a day.
But market conditions can shift dramatically from one year to the next. If you want accuracy, you’ll need to dig deeper.
One option is zero-based budgeting. This involves starting from scratch each year and justifying every expense as if it were brand new. It’s thorough, but also time-consuming.
A practical compromise is to use last year’s results as a baseline, then adjust line by line based on forecasted demand, costs, and market trends.
Do the Research
Budgeting isn’t just about plugging numbers into a spreadsheet. It’s your chance to step back and see the bigger picture. Ask yourself:
- Were there disruptions last year that won’t repeat next year? (Unusually bad weather? A one-off event?)
- Are there more or fewer local events scheduled? (Conferences, concerts, festivals, etc.) How will they impact demand?
- Any changes in local supply? (Like a new competitor opening nearby.)
- How will broader economic and travel trends shape demand? (Think: shifts in leisure vs. business travel, more groups, international visitors, etc.)
The best way to answer these questions is through research: analyzing last year’s data, scanning industry reports, talking to colleagues, and checking your destination marketing organization’s (DMO) outlook.
Make it a team effort. Involve sales, marketing, and operations to get better insights and buy-in. Save time (and revisions) by asking owners early on about their expectations.
