The budget setting depends on the function of the hotel or facility. A hotel or facility can be operated on a smaller or larger scale. The larger they are, the more complex it becomes.

In a smaller scale hotel or facility, there is usually front desk, housekeeping and maintenance and expenses are primarily controlled by the owner through the general manager. They were the primary decision makers in preparing the annual budget with the help of an accountant or accounting firm. The budgeted amount needed to operate throughout the year is based on the expenses incurred in the previous years and other related occasions that will affect the preparation of the budget for the coming year.

In a larger-scale hotel, the expenses can be very complicated since the operation varies from the departments created for the proper functioning of the hotel. In some international hotels, each department head prepares the budget with the help of the financial controller and the general manager, and then submits it to the owner or corporation for approval. Once sanctioned, each department head is responsible for ensuring that the assigned budget is monitored and controlled based on the occupancy percentage. The General Manager receives a copy of the budget results each month end and discusses them with the department head.

Examples of departments in a larger scale hotel are: Administration, Front Desk, Housekeeping, Laundry, Engineering, Food and Beverage, Kitchen, Finance, Human Resources, Recreation and any other department created to suit the function and smooth running of the hotel. Each of these departments has sub-departments such as Front Desk with Reservations and Bell/Concierge Service; Cleaning with Laundry, Uniform, Linen, Tailoring, Floristry, Gardening and Landscaping, Upholstery (the latter can also be assigned to Engineering); Engineering with Carpentry, Masonry, Electrical, Mechanical, Computer Science, etc.; food and beverages with banquets and outside catering; Kitchen with Pastry; Finance with Purchases, Reception and Storage; Recreation with Pool, Golf Course, Tennis Courts, Spa etc.; Human Resources with Training and Clinic.

Housekeeping and other hotel departments operate within two types of budget. The Operating Budget and the Budget of Capital Expenditures.

1) Operating budget It is the allocation of expenses for each item/s required by the department to be able to operate without problems. In the case of a hotel operation, cost control is based on the occupancy percentage. The amount budgeted for the month can be variable since there are certain periods in which the occupancy forecasts in other areas or countries are unreliable or unpredictable.

Housekeeping’s basic operating budget is as follows:

a) Staffing

b) Bed linen and towels

c) Supplies and amenities for guests

d) Cleaning supplies

e) Laundry supplies

f) Machinery, Tools and Equipment

g) Decoration

h) Miscellaneous

i) Printing and stationery

There are budgeted items or sections in Housekeeping that are generally divided among other departments, such as the following:

1) Repairs and Maintenance

This type of operating budget is usually split between cleaning and engineering.

2) Uniform Budget

Uniform expenses are prepared by the Executive Housekeeper with all the elegance, comfort, durability, styles, colors and functionality of the uniform chosen for each department. Once a specific style of uniform has been chosen, it is coordinated with the concerns department and when the Executive Housekeeper gets approval, she forwards it to the General Manager for overall coordination of styles, colors, functionality, etc. that reflects the correct perception of the image of the entire hotel in the eyes of the guests. The last step will be to endorse them to the Financial Controller for the allocation of the budgeted amount to each department.

3) Decoration

Housekeeping is one of the departments of the hotel that helps and assists in the beautification of the hotel inside and outside the building. The decoration can be flower arrangements, fresh and artificial depending on the hotel policy since there are hotels that prohibit the use of artificial flower arrangements due to fire risk, picture frames, statues, carvings, tapestries, artifacts and many others are examples of decorations . Flower arrangement requests seemed to be the most needed items in the hotel, whether it be for guest rooms, food and beverage functions, outside catering, hotel lobby, convention centers, and other areas that require flower arrangements.

4) Printing and Stationery

Front Office and Housekeeping are the two departments that share this budget.

5) Miscellaneous

This type of budget can be charged between Housekeeping and any other department, depending on the type of expenses incurred.

The second type of cleaning budget is capital expenditure (CAPEX)

The capital expenditure budget is the allocation of funds for a specific project or items that will aid and assist the operation of the hotel. In the case of housekeeping, the projects might be something that requires replacement or an additional cart for housekeeping, clothes washer and dryer, construction of a new outside laundry, replacement of vacuum cleaners, replacement of of beds or worn furniture, which is usually done floor by floor. or by segments. Typically, the CAPEX fund is allocated in the same way that the operating budget for the following year was allocated. Therefore, projects are done and completed annually, especially if the items have a specific useful life where replacement is specifically done every year. In this way the hotel or facility is well maintained, equipped and preserved as new. It is through the CAPEX fund that the maintenance of the hotel works better and at the same time avoids the depreciation of items in large quantities where it is difficult to solve since they require a large quantity to achieve.

Therefore, in order to have a smooth running and well maintained hotel or facility, it is important that the allocation of funds for hotel operational needs and maintenance is effectively managed and controlled based on the occupancy rate where key department heads are informed on how to adjust their budget accordingly. Key personnel responsible for preparing the budget must ensure that the allocated fund is spent specifically for what it is intended for. Lateral tracking of the set goal will be a never-ending task that will not have a defined or specific achievement. Not being able to monitor the operating budget effectively will lead to the disappearance of capital expenditures.

Capital Expenditure Budget It is as important as operating budget when it comes to hotel business.