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

Example of all costs data in the last 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:
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 1-2-3-4 decisions made by the new management team.

Overview of total of the fixed costs

Let's check the fixed 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 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't influence these fixed costs. These are costs which will be created no matter what the occupancy rate is. Over the years there can 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 which have to be paid even if there are no guests at all.
- Costs of premises: costs of maintenance, repairs on small adaptions to the building and the parking lots.
- Insurance & interest costs: costs for insurance for staff, building a liability 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 owners ship, the state (quality) of the premises etc. The file, though, this might give some ideas from a calculative perspective.

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