Hotel room costs: contribution, monthly reconciliation and a review worksheet

Before discussing “room cost”, decide whether you are evaluating an additional booking, a department or the whole property. They require different cost boundaries. Separate the cost layers Incremental servicing: costs caused by additional occupied rooms. Departmental cost: the stated scope of room-department expenditure. Whole-property cost: also includes other departments and property-level expenses. These are management-analysis categories, not a prescribed accounting standard. Ask finance to approve allocation rules. A reproducible illustration All numbers below are hypothetical. A 100-room hotel over 30 days has 3,000 available room nights. Selling 2,100 gives 70% occupancy. Cost item Monthly RMB Per occupied room night Guest supplies 12,600 6 Laundry 25,200 12 Cleaning materials 4,200 2 Allocated servicing labour 63,000 30 Total of these items 105,000 50 RMB50 is neither a full cost nor necessarily the marginal cost of one extra room. Rent, depreciation and other expenses are excluded. It is not an industry benchmark. Contribution is not net profit Another simplified assumption: room revenue RMB300, commission 12% and attributable servicing cost RMB50 give 300 − 36 − 50 = RMB214 contribution before other costs. Align tax, breakfast, refunds and commission bases before using such a calculation. This example does not prescribe accounting or tax treatment. Reconcile four inputs Check consumption against opening stock, receipts and closing stock; separate transfers and losses. Match laundry quantities, rewashes, rates and invoices. Distinguish room servicing from public-area work, training and overtime. Align room nights, revenue, discounts and refunds to the same period. Reduce waste without removing essential service Investigate supply records, rewash causes and peak-time rosters before cutting standards. Track complaints and workload alongside cost. Do not omit necessary cleaning or maintenance to improve a metric. Common questions Higher occupancy does not always reduce cost per room: peaks can trigger overtime. Cross-property comparisons are meaningful only when service and accounting scopes are comparable. Start with your own historical trend. Related reading Hotel pre-opening checklist Commercial dishwasher selection Guestroom renovation planning