Article by Hotel News Now October 21, 2021
Historical Data Carries Less Weight in Setting Future Budgets
Even in the best of conditions, setting up next year’s budget includes some amount of guesswork, relying on historical performance data and trying to predict the future.
Much like last year, budgeting for 2022 is proving a challenge for U.S. hoteliers.
“Budgeting is always kind of a crystal-ball question, and I think this year is particularly cloudy,” said Barbara Purvis, president and director at Essex Hotel Management.
Budgeting for 2022 means trying to figure out what the baseline is, because 2021 had a lot of leisure business along with higher rates, she said. But the questions remain whether leisure demand will remain as strong as this year and when corporate demand will return and how quickly.
“Those are just all the questions that we're grappling with,” she said.
The 2022 budget will be a product of looking at 2019 actuals, the 2020 budget and a review of 2021, Purvis said. All those elements will be part of what’s going forward, and next year should be more stabilized.
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