Layer 3: Structural / Ownership Costs

By Charles Tan These are the true ownership burdens. Depreciation Loan interest Land lease Insurance Executive salaries (e.g., GM) Central marketing expenses This is where the real financial pressure lies.

 Layer 2: Department Fixed Costs

By Charles Tan These are costs within the Rooms Division that do not fluctuate with occupancy. Front Office salaries Reservation staff Supervisors Maintenance team PMS and operational systems Many hotels forget to allocate these costs on a per-room-sold basis.

Understand the Three Layers of Cost

By Charles Tan Layer 1: Variable Costs These occur only when a room is occupied. Housekeeping labor Laundry Guest amenities Electricity and water (per occupied room) Coffee/tea set or welcome drink This is commonly referred to as CPOR (Cost per Occupied Room).

The True Cost of a Hotel Room

By Charles Tan Understanding the real cost of a hotel room is the foundation of sustainable profitability. Many hotels calculate room cost incorrectly. They only look at housekeeping, laundry, and amenities. But the true cost per room must be viewed from an owner-level perspective.

The Right Strategy: Maximizing “Net Profit” Over OTA Volume

By Charles tan The goal isn’t just to increase OTA bookings, but to maximize Net Profit from OTAs without compromising your ADR (Average Daily Rate) or Direct Channels. Framework: OTA Growth Without Profit Damage (The 5 Pillars) 1. Master the “Cost of Acquisition” Standard OTA commissions range from 15–25%, but you must look deeper at […]

The Professional Catering Workflow

Inquiry & Availability Check: Receive the initial request and verify venue availability in the master calendar. Quotation & Contracting: Issue a formal proposal and contract, clearly outlining the terms and conditions, including the cancellation policy. Confirmation: The booking is secured once the signed contract is returned and the deposit is paid (Status: Confirmed). BEO Issuance: […]

Cancellation & Refund Policy

By Charles tan To mitigate financial risk and minimize Opportunity Cost, the hotel must implement a transparent and strictly enforced policy: 1. Cancellation Procedure Verbal & Written Requirements: While a cancellation can be initiated via phone, it must be followed by a “written confirmation” (email or official letter). This serves as a vital legal record. […]

Event Data Essentials

By Charles Tan To ensure a seamless flow of information across all departments, the system must capture the following details: Event Logistics: Room name, date, and precise timing—including dedicated slots for setup and post-event knockdown. Customer Profile: Name of the organizer, company details, direct contact information, and guest history (if applicable). Setup & Technical Requirements: […]