Fixed 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 mouseover the firsts cells with the small black triangle, you will get additional information on the numbers.
As you can see in this example below shows the operating review of a demo Management Team after five years: this is how it looks in your Team File. The Year 1 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 2-3-4-5 decisions made by the new Management Team.

Team File tab Results. Costs overview example of five consecutive years of Hotel The Green Oasis.

Overview of total fixed costs

Let's check the fixed costs, as they looked at the time you took over, in the picture the grey area, in the table below the green numbers. The hotel had 50% occupancy rate at this moment.

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 development 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 not influence these fixed costs. These are costs which will be created no matter what the occupancy rate is. Over the years there will be small fluctuations, but the amounts will stay almost the same. They will be automatically calculated and visible in your operational review. They make up 62.36% of the total costs as you take over.

- Depreciation costs of existing assets: depreciation of all the assets especially the building, fixtures and fittings.
- Fixed staff costs: staff needed to run the hotel and who have to be paid even if there are no guests at all.
- Costs of premises: costs of maintenance, repairs on small adaptations to the building and the parking lots.
- Insurance & interest costs: costs for insurance (liability and other things) for staff and building, and costs for mortgage and other loans.

More numbers

Check basic set-up of costs groups in hotels to have some reference on the numbers.
Of course, any situation is different, any time frame (think of the Covid period), the ownership, the state (quality) of the premises etc. The file, though, offers some insights from a calculation perspective.

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