Variable 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 mouse-over the cells with the small black triangle, you will get additional information on the numbers.

Example of all costs in the lats available year, history, and testing four years ahead.

As you can see in this example above which shows the operating review of a demo team after four years: the history we know for sure (these data are available), the other four years are just an impressions how things might develop:

• 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 the decisions made by the new management team.

Overview of the total of the variable costs

Let's check the variable costs, as they looked like at the moment you take over: in the picture the grey area. In the table underneath the green numbers.

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 rewarding 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't influence these variable costs, but they will vary depending on the number of guests-bookings you have in the hotel. They will be automatically calculated related to the occupancy rate and visible on your operational review. They make up 37.63% of the total costs as you take over.There is a ratio between occupancy rate and all of these costs. You cannot influence this, but it will be influenced by the occupancy rate you have created with the way of managing the hotel.
- Variable staff costs: the more guest you have, the more work here will be to be done and the more staff is needed. So additional costs.
- Laundry costs: the more guest the more towels, bed linen etc. needed.
- Cleaning costs: rooms need to be cleaned more often because of more guests and to be cleaned better.
- F&B purchase costs: more guest means more breakfasts etc. for guest and more f&b for additional staff so the purchase costs go up.

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