Marriot Hotel in UK - Budgeting and Cost Control

The assignment discusses the importance of effective cost management in the hospitality industry, using Marriott International as a case study. It explores the company's budgeting process, cost control strategies, and provides recommendations for improving profit margins.

Group report-
Marriot hotel in UK

Table of Contents
EXECUTIVE SUMMARY ............................................................................................................3
Budgeting and controlling cost...................................................................................................3
Recommendation for the hotel ...................................................................................................4
REFERENCES................................................................................................................................6
.........................................................................................................................................................6

EXECUTIVE SUMMARY
Hospitality sector is one of the leading industries that has captured success in market. The
hoteliers have to establish a good management and functioning at their organisation for attracting
more number of customers (Gupta and Pradhan, 2017). Housekeeping department of Hotel deals
with the room service and general upkeep of hotel. Hotels offers various facilities like laundry,
dry cleaning, mini bars, etc. Hotels must establish new trends in their hotels for making
customers happy and satisfied. These includes remote cleaners, protection of items from dust,
green rooms, effective staff management, new communication techniques, new lightnings in
hotel, ceiling motion sensor lightning, change in Mini fridges, etc. Housekeeping employees are
a requirement of hotel industry and they have to be skilled in order to maintain cleanliness of the
Hotel ambience. Housekeeping employees are the ones who take care of the hygiene, cleanliness
and development of Hotel's architecture and place. Budgeting process is necessary for Marriott
hotel for knowing the cash inflows and outflows of the operations of business. This helps
company in controlling the cost incurred in performing different hospitality operations like
housekeeping, cleanliness, food and beverages, transportation, etc. In Marriott International
Hotel, overhead expenses like guest entertainment and transportation, data processing, property
maintenance, administrative and general expenses are minimised for cost control. Environmental
policies play an important role in the organisations. Marriott hotel takes care about
environmental policies and initiatives for developing a good image in front of customers and
government.
Budgeting and controlling cost
The hoteliers uses budgeting and forecasting for their strategic planning and financial
control. This helps in measuring the standards of the performance of the hotel. A business cannot
achieve it's targeted return or profit if it does not has an overview of a clear budget. The
budgeting process is a valuable control tool that helps in operation establishment of hotel
industry in offering services to tourists and travellers (Renda, 2017). The process of budget in a
hotel begins with departmental budget. This will provide overall cost that is related to different
operations of hotel like housekeeping, valet, repairs and maintenance, reception, room service,
etc. The cash budget for hotel is prepared by collecting the knowledge of departmental revenue

and expense. This estimates the overall cost of hotel. In a Hotel like Marriott International Ltd,
departmental budget is a time consuming process and requires a lot of manpower. In the
management of Marriott International, the departmental budgeting process is divided into four
steps described below-
 The department mangers are given a task for collecting information about revenue,
expenditure and cost.
 The old trends are analysed and revenue that is produced by revenue centres like
Restaurants, banqueting, Brassiere, Front office, room service, business centre is
estimated by these managers.
 Expenditures are subtracted from estimated revenue of the department.
 Information is finalised by the managers of department and combining this data into
report.
The revenue and expenses are combined with budgeted cost and revenue report in
department budget and after this the management of Marriott International Hotel establishes a
cash budget. This hotel adopts a cash budget for making effective decisions for the management
and it will increase their future abilities for paying expenditures and debts. Cash budget also
helps management of hotel to determine cash inflows and outflows.
Controlling cost is defined as the practice of identification and reduction of business expenses for
maximising profits of business. Controlling cost help Hoteliers in maximising the revenue and
return on investment. In Marriott they increases revenue per room and average daily rate for
maximising profits. There are three areas on which Marriott Hotel focuses for controlling cost
and these are labour, direct expenses and overhead expenses (Harrison, and Lock, 2017).
Marriott hotel uses cross training for cost control efforts. In Marriott International Hotel,
overhead expenses like guest entertainment and transportation, data processing, property
maintenance, administrative and general expenses are minimised for cost control.
Recommendation for the hotel
The recommendation for Marriott International for increasing the profit of organisation
are listed below-
 Marriott should use new trends of management of hospitality industry like effective staff
management.

 New communicative techniques should be followed at workplace which will help in
planning of an effective housekeeping.
 Outsourced housekeeping is a good option for controlling cost of Marriott hotel.
 A proper budget is required by this organisation for proper functioning of operations and
management of hotel services.
 Marriott should follow environmental policies so that it will develop it's brand image and
reputation.

REFERENCES
Books and Journals
Gupta, D. and Pradhan, B. B., 2017. Capital Budgeting Decisions in India: Manufacturing Sector
Versus Non-Manufacturing Sector. IUP Journal of Applied Finance. 23(1).
Harrison, F. and Lock, D., 2017. Advanced project management: a structured approach.
Routledge.
Renda, A., 2017. One step forward, two steps back? The new US regulatory budgeting rules in
light of the international experience. Journal of Benefit-Cost Analysis. 8(3). pp.291-
304.