In hotel business or every business, The first thing which owner will focus on since the start of the business is "Breakeven Point" and "Breakeven Point" will be different to every business. How about the hotel breakeven point, how many year should it be, we need to look in many things such as
- Investment budget
- Hotel positioning, how many stars?
- Hotel's facilities
- Average Daily Rate
The above details will have different "Breakeven Point" some will be 7 year, 10 years. For me, "Breakeven Point" will be set up since I've designed the budget. But I will have 1 more "Breakeven Point" which is "Operating Breakeven Point" which is The time which owner doesn't have to inject his money for the "Operating budget" Easy meaning is every month the operating income is more than operating expenses. Only operating figures, not include of the Loan, bank interest or owner expenses. This is my "First Breakeven Point" Normally, I will set the achievement of "Operating Breakeven Point" for 6 months.