Tracking hotel operating expenses is vital in understanding your property's financial performance and better managing costs, which is part of the equation for increasing your profit margins. Given that gross operating profit is calculated by subtracting total operating expenses from total operating revenues, minimizing expenses and maximizing revenue is the obvious approach to boosting profits.
Hotel operating costs are those required to keep your hotel running, with examples like food and beverage expenses, commissions, and utility costs. These expenses are found within all operating departments, which include rooms, sales & marketing, and property operations, to name a few.
