The last weeks of the year are when many small hotel owners ask themselves the same things: what target to set for next year, how to spend, and which months call for money to be set aside. This article is about planning next year's business for a small hotel that is already operating — one with at least a year of real figures — not a plan for opening a new hotel. Someone about to open has to guess; someone already operating holds the best raw material there is: their own figures from last year.
It is written for owners of mini hotels, guesthouses, homestays and serviced apartments who plan on their own, without a finance department. The five-step framework is drawn from international industry sources — the trade publication Hospitality Net, the hotel school EHL (Switzerland) and the hotel consultancy HVS — and trimmed down for a small scale. Occupancy, ADR and RevPAR are not explained again here; they are covered in the first article of the DiOwner series.
Part 1: Five mistakes that turn a plan into "last year plus a few percent"
- 1. Taking last year's figures and adding a percentage. A revenue management consultant writing on Hospitality Net calls this the simplest approach — and one that lacks exactly the most important thing: an action plan. An added percentage cannot say where the growth comes from, in which month, or through what action.
- 2. Planning in a unit that does not match what you sell. The same source cites a resort that budgeted by number of guests instead of number of rooms and so missed its revenue target. For a small property the base unit should be the room night.
- 3. Looking only at history, not at rooms already booked. Last year's figures tell you what happened; the rooms already booked for the coming months, and the booking pace against the same period last year, tell you what is coming.
- 4. Not reviewing staffing costs while planning. According to HVS, rising fixed costs thin out the share of revenue that turns into profit, so the question of whether staffing is the right size has to be answered right now.
- 5. Writing the plan and filing it away. EHL recommends comparing actuals with the plan and the forecast on a regular rhythm — weekly, monthly, by season.
📌 One self-check: if you cannot say whether room revenue next March will be higher or lower than this March, and why, then your current plan is still just one annual figure divided evenly across twelve months.
Part 2: Steps 1–2 — Choose the timing and gather last year's figures
Industry sources indicate that hotel budget season usually starts in late August and closes before year end. A small hotel should start before the year-end peak, once three quarters of figures are in; the remaining months use estimates and are replaced with actuals after the books close.
Four groups of figures to pull, month by month
- Revenue by day and by month, separating room revenue from other revenue such as breakfast, laundry and vehicle hire — the two should be planned separately.
- Room nights sold, occupancy and average rate, taken straight from the reports, not recalculated by hand.
- Revenue by booking source: direct guests, returning guests, each online sales channel, corporate guests. The source determines the rate actually received and the commission cost, and it is where the action plan attaches.
- Receivables: who owes, for how long, in which months they tend to arise. Revenue not yet collected cannot pay salaries.
With cloud AI hotel management software, these four groups are monthly reports exported in a few minutes; with notebooks and spreadsheets, most of the planning time goes into gathering and correcting figures. Before using them, check for the usual distortions in last year's numbers — revenue recorded on the day money arrived, discounts under-recorded — listed in the article on controlling hotel revenue leakage. When bookings, cashiering and reporting all sit within one total hotel management solution, the figures agree with each other from the start.
Part 3: Step 3 — Divide the seasons and set monthly targets
Divide the seasons by the numbers, not by feel
- Rank last year's twelve months by occupancy and group them into peak, shoulder and low season.
- Allow for the calendar: the Lunar New Year moves on the solar calendar every year, and public holidays are longer in some years than others.
- Remove one-off events such as a large group or last year's road works, so the baseline is not pushed up or down in the wrong places.
- Record changes to the property itself: rooms added, removed or renovated — the number of sellable room nights must be recalculated.
Monthly target = room nights sold × average rate, with a stated basis
🧮 Hypothetical example, round numbers: a 20-room hotel has 600 sellable room nights in a 30-day month. Last year it sold 420 room nights at an average rate of VND 500,000, for room revenue of VND 210 million. The new plan sets 450 room nights — basis: opening a direct booking channel for returning guests — and an average rate of VND 520,000 through a weekend rate plan, for expected room revenue of VND 234 million. The two lines of basis matter more than the figures: at month end you know exactly what to check.
The second layer: rooms already booked for the coming months
If next February already has more room nights booked than at the same point last year, that month's target has grounds to be higher; if fewer, find the cause. The DiOwner app shows a forecast for the next 30, 60 and 90 days based on the rooms actually booked in the system — a statistical calculation from real data, not guesswork — so the owner can see this layer on a phone.
Part 4: Step 4 — Fixed costs, variable costs and the plan framework
- Fixed costs: fixed salaries, rent, loan instalments, software fees, insurance, baseline utilities. They do not fall when guests are few, so review each line rather than adding a percentage.
- Variable costs: laundry, single-use amenities, sales channel commission, payment fees. Plan them as a cost per room night and multiply by planned room nights.
- Seasonal staff follow the season calendar from Part 3 — the place to answer whether staffing is the right size.
Plan framework for one month
| Plan line | Last year (actual) | New year (plan) | Basis to record |
|---|---|---|---|
| Sellable room nights | 600 | 600 | Rooms × days, minus rooms scheduled for repair |
| Room nights sold | 420 | 450 | Rooms booked vs. same period; actions to sell more |
| Average room rate | VND 500,000 | VND 520,000 | Seasonal rate plans, booking source mix |
| Room revenue | VND 210 million | VND 234 million | Room nights sold × average rate |
| Other revenue | VND 20 million | VND 20 million | Planned separately for each service |
| Variable costs | VND 42 million | VND 45 million | VND 100,000 per room night × room nights sold |
| Fixed costs | VND 90 million | VND 95 million | Review line by line, no blanket percentage |
| Income less costs (before tax and depreciation) | VND 98 million | VND 114 million | Calculated from the lines above, never typed in |
Every figure in the table is a hypothetical example, rounded; each property replaces them with its own. What matters is the last column: a line without a basis is not yet a plan.
Part 5: Low-season cash flow — the most often forgotten part
A revenue plan answers "how much will we earn this year"; a cash flow plan answers "which month might we run short" — and the second question usually matters more.
- Find the months where income does not cover fixed costs — those are the months that need a reserve.
- Set money aside from the peak with a specific monthly figure, decided while planning.
- Schedule large spending such as repairs and replacing linen in the low season, but have the money ready beforehand.
- Keep deposits apart from the balance: a deposit for a stay next month is an obligation, not yet revenue — see the article on the year-end peak season.
- Account for receivables delay: if corporate guests pay a month later, the cash arrives a month later.
Part 6: Step 5 — Monthly tracking: actual, plan and forecast
The plan is a commitment set once and kept unchanged for the year; the forecast is updated as rooms are booked and conditions change. Keep the original plan to see how far you have drifted, and update the forecast to see how the remaining months will go.
- One three-column table each month: actual, plan, forecast — following the same lines as the framework in Part 4.
- When the gap is large, look for the cause by booking source: which channel is short of guests, why the average rate slipped.
- Do not rewrite the original plan mid-year; if things change completely, record a new forecast alongside it.
The actuals for this table are available in DiOwner: revenue by source, ADR, RevPAR, occupancy — excluding rooms out of order for repair (OOO) while keeping rooms temporarily out of service (OOS) — and receivables. The owner places them next to the plan at the end of each month, without waiting for anyone to compile them.
Are this year's figures good enough to plan next year?
Tell the DiCloud team how you currently record revenue, occupancy, booking sources and receivables. We will review them against the four groups of figures in Part 2 and say plainly which can be used right away and which need cleaning first — before any talk of a contract.
Get a free data reviewFrequently asked questions
Does a small hotel need a business plan for the new year?
Yes, and the smaller the hotel the more it needs the cash flow part, because small hotels have less financial cushion. A twelve-month table with room nights, average rate, revenue, costs and cash flow is enough.
How do I plan with less than a year of figures?
Use the months you have as the baseline; for the missing months rely on rooms already booked and the local season calendar. Mark clearly which months are actuals and which are estimates.
What percentage increase over last year should I target?
Do not start from a percentage. Set each month: how many more room nights, whether the average rate can rise, and through what action. The annual percentage is the sum of the months, not the starting point.
When should I start planning next year?
Hotel budget season usually starts in late August. For a small hotel the best time is before the year-end peak, once three quarters of figures are in.
What is the forecast in DiOwner based on?
The 30, 60 and 90-day forecast in DiOwner is based on the rooms already booked in the system for the coming days — a statistical calculation from real booking data, used as a check layer for each monthly target.
How often should I review the plan?
At least once a month with the three-column table of actual, plan and forecast; weekly during the peak. The original plan stays unchanged; only the forecast is updated.
Conclusion
A good new-year plan for a small hotel needs exactly three things: monthly targets built from room nights and average rate, each line with a basis; costs split into fixed and variable, with a cash flow plan for the low season; and a monthly rhythm of comparing actuals with the plan. The raw material for all three is already in last year's figures, provided those figures were recorded correctly from the start.
That is why online AI hotel management software such as DiCloud matters most in daily record-keeping: revenue by the night the guest stays, clear booking sources, complete receivables — so that at year end you have real figures to work with. DiCloud is part of the DiHotel Solutions Corps ecosystem, which has served more than 300 accommodation properties over more than 20 years.
If you run a 4–5 star hotel, a resort or a chain of properties, where the budget goes through each department and must be approved by the board, the companion article on the DiHotel Blog covers exactly that tier: building a 2027 hotel budget from operating data, not gut feeling. At that scale the operational work is handled by DiHotel, the AI hotel management software — the original platform for 4–5 star hotels and resorts.