Hotel Profit Diagnostic
How the Diagnostic works, with a sample report
We start with your existing financial and management reports, including departmental results, sales performance and relevant budget comparisons. Where needed, I request targeted supporting information and discuss the operating context with your team. You receive a concise, two-to-three-page report, and we review the findings together.
What you provide
Your existing reports, in their current format — you do not need to prepare a new reporting package:
- Latest daily sales report showing Today, MTD, YTD, LYTD, budget and forecast — for the total hotel and by department, where available
- Monthly departmental P&Ls for the latest 12 months, with prior-year comparisons and current budget or forecast where available
- Latest balance sheet and cash flow statement
- Management reports the GM and/or owner already receive
- If a report is not available, we discuss what you have during scoping — it does not rule out a Diagnostic.
- Existing operating measures — occupied and available rooms, occupancy, ADR, RevPAR, F&B covers and average spend — are used where available. Further detail, such as departmental payroll and hours, channel revenue or commissions, is requested only when needed to investigate a finding.
- A conversation about your main concerns, the decisions ahead, unusual events such as renovations or closures, staffing or accounting changes, and actions management has already tried.
What you receive
- A concise two-to-three-page report on the most significant financial performance gaps and potential revenue or profit leakage — normally up to three priority findings
- For each finding, what the numbers establish, kept separate from possible explanations
- Recommended next steps to investigate, corrective actions where the evidence supports them, and practical monitoring measures where relevant
- Potential improvements are quantified only when the evidence supports it; otherwise the report quantifies the variance and explains what further investigation is needed
- A review of the findings with you and, where appropriate, your GM or finance lead, to clarify interpretation and agree priorities
No particular number of findings, leaks or savings is guaranteed.
Reports and other deliverables are available in English and Russian.
The Diagnostic is a review of financial and management information. It is not an audit, a fraud investigation, transaction-level revenue assurance or a full balance-sheet review, and it does not include a cash flow forecast — cash flow forecasting is part of the ongoing advisory service.
Sample report
Illustrative sample — fictional hotel and data. Not client results or a full diagnostic.
An excerpt showing how findings can be presented in the two-to-three-page report: what the numbers establish, possible explanations to test, and prioritized next steps. Structure, tables and findings vary with each hotel and the information available.
- Property
- Fictional hotel
- Period
- April–September, compared with the same period last year
- Currency
- All financial values in US dollars (USD)
Executive summary
Key finding
Revenue increased by US$600,000 while GOP increased by US$42,000: 7% incremental GOP flow-through.
This identifies a question for review. It does not prove that any cost increase was avoidable.
Key figures
-
Revenue
- Prior period
- US$7,200,000
- Current period
- US$7,800,000
- Change
- +US$600,000 (+8.3%)
-
GOP
- Prior period
- US$2,300,000
- Current period
- US$2,342,000
- Change
- +US$42,000 (+1.8%)
-
GOP margin
- Prior period
- 31.94%
- Current period
- 30.03%
- Change
- −1.92 percentage points
Incremental GOP flow-through (Change in GOP ÷ change in revenue)
7%
Changes are calculated before rounding. GOP (gross operating profit) is revenue minus departmental and undistributed operating expenses. It is measured before management fees, fixed charges such as rent, property taxes and insurance, interest, depreciation and income taxes. It is not net profit, and it is not cash flow.
Where the US$600,000 revenue increase went
| Line | Increase vs prior period | Share of the revenue increase |
|---|---|---|
| Payroll | +US$300,000 50% | 50% |
| Cost of sales | +US$114,000 19% | 19% |
| Commissions | +US$96,000 16% | 16% |
| Other costs | +US$48,000 8% | 8% |
| Remaining incremental GOP | +US$42,000 7% | 7% |
| Revenue increase | +US$600,000 100% | 100% |
Amounts are increases in each expense compared with the prior period, not total expense balances. Categories are simplified and mutually exclusive for this example.
Interpretation — to be tested
Payroll absorbed 50% of incremental revenue. Review whether additional staffing reflects demand, service requirements, wage rates or scheduling inefficiency before proposing changes.
Prioritized action plan
Recommended order of review. Roles are suggestions for this fictional example, not actual appointments. No savings are estimated: the evidence comes first.
-
Priority 1 Payroll
- Question to investigate
- Did the additional payroll follow demand, service requirements, wage rates — or scheduling?
- Evidence needed
- Departmental labor hours, occupied rooms, wage and overtime data, service requirements
- Proposed next step
- Review demand-aligned staffing, department by department
- Suggested responsible role
- Hotel finance + operations
- Monitoring measure
- Hours per occupied room and GOP flow-through, interpreted in context
-
Priority 2 Commissions
- Question to investigate
- Did commissions rise because of channel mix, commission rates or volume?
- Evidence needed
- Revenue, commissions and acquisition costs by booking channel
- Proposed next step
- Compare net contribution by channel before changing the mix
- Suggested responsible role
- Revenue management + finance
- Monitoring measure
- Net contribution by channel
-
Priority 3 Cost of sales
- Question to investigate
- Is the increase explained by product mix, unit costs or consumption?
- Evidence needed
- Departmental sales, product mix, purchasing and consumption records
- Proposed next step
- Investigate mix and unit-cost changes
- Suggested responsible role
- Department heads + finance
- Monitoring measure
- Relevant departmental cost ratios
Data gaps and boundaries
Not supplied in this fictional summary:
- Occupancy
- Labor hours
- Wage effects
- Channel contribution
- Departmental detail
- Cash movements
More evidence is needed to judge efficiency and cash impact. This summary contains no cash flow forecast: GOP is not cash, and a genuine forecast needs opening cash and the timing of receipts and payments, among other inputs.
Next step
Each engagement is scoped around your property, available data and priorities. Scope and fees are agreed after an initial discussion.
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