Budgeting

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Budgeting

  1. 1. Budgeting and Revenue optimization DESINGED BY Sunil Kumar Research Scholar/ Food Production Faculty Institute of Hotel and Tourism Management, MAHARSHI DAYANAND UNIVERSITY, ROHTAK Haryana- 124001 INDIA Ph. No. 09996000499 email: skihm86@yahoo.com , balhara86@gmail.com linkedin:- in.linkedin.com/in/ihmsunilkumar facebook: www.facebook.com/ihmsunilkumar webpage: chefsunilkumar.tripod.com
  2. 2. A budget is a formal written statement of management’s plan for a Specific period of time, expressed in financial terms. Budget
  3. 3. A budget 1. Helps to establish future goals. 2. Evaluates past activities in relation to planned activities. 3. Prescribes the formulation of work plans. 4. Forecasts the amount of revenue that will be available. 5. Predicts how funds will need to be expended. 6. Measures actual results against planned or desired results. 7. Identifies potential problem areas that need attention. 8. Estimates what will be available at the end of budget period.
  4. 4. Revenue Income earned by food & beverage business from the sales of its goods and services to the guests. Revenue management is a technique to optimize the revenue earned from a fixed, perishable resource. The challenge is to sell the right resources to the right customer at the right time. Revenue Management
  5. 5. Revenue optimization To implement customer-centric pricing strategies. Revenue optimization is the responsibility of revenue management department. Revenue Management implements the basic principles of supply and demand economics in a tactical way to generate incremental revenues.
  6. 6. There are three essential conditions for revenue management to be applicable: • That there is a fixed amount of resources available for sale. • That the resources sold are perishable. This means that there is a time limit to selling the resources, after which they cease to be of value. • That different customers are willing to pay a different price for using the same amount of resources.
  7. 7. Revenue Management is of especially high relevance in cases where the constant costs are relatively high compared to the variable costs. The less variable costs there are, the more the additional revenue earned will contribute to the overall profit.
  8. 8. To illustrate this, we can take the example of the luxury hotel which charges different prices for different customers. In India it is generally practiced in star hotels to maximize the revenues. the customer who is price sensitive and time conscious generally pays lesser tariffs than a customer who is willing to pay more and books the room one or two days before the stay.
  9. 9. Revenue Management in other words tries to maximize revenues by managing the tradeoff between a low occupancy and higher room rate scenario (business customers) versus a high occupancy and lower room rate (vacation customers). DESINGED BY Sunil Kumar Research Scholar/ Food Production Faculty Institute of Hotel and Tourism Management, MAHARSHI DAYANAND UNIVERSITY, ROHTAK Haryana- 124001 INDIA Ph. No. 09996000499 email: skihm86@yahoo.com , balhara86@gmail.com linkedin:- in.linkedin.com/in/ihmsunilkumar facebook: www.facebook.com/ihmsunilkumar webpage: chefsunilkumar.tripod.com

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