The Importance of Ownership Expectations in Hotel Budgeting: The opinion of Mariano Faz, CEO at AHM - Ace Hospitality Management

Source: Publituris Hotelaria

One of the most critical moments in hotel management occurs during the budgeting phase. The budget is a statement of intent: what is expected for the upcoming fiscal year, how revenues and expenses are projected, what investments are planned, and which strategies will be prioritized. This process follows a well-known script: historical data is analyzed, market behavior is observed, and forecasts are adjusted based on identified trends and opportunities.

However, there is one element that, despite its relevance, often remains in the background: ownership expectations. Throughout my experience in various markets and with different types of ownership structures, I have observed how this key aspect is rarely structured or communicated proactively. This lack of clarity can become a serious obstacle to efficient and strategic budgeting.

The Gap Between Management and Investment

Hotel budgeting often turns into a balancing act between the operational capabilities of the hotel and the investor’s profitability ambitions. But it's common for this process to begin without the management team having a clear vision of what ownership truly expects. Ownership expectations often emerge only at the end of the process, in the form of a “final comment,” a “necessary revision,” or a “request for adjustment.”

This reactive approach leads to several problems: multiple versions of the budget, wasted time, and, most importantly, strategic misalignment. It’s not just about hitting certain numbers; it’s about building a realistic path for the hotel asset to reach its full potential.

Two Distinct Natures, One Common Goal

The hotel, as an operational entity, tends to follow a logic of underpromise and overdeliver. Ownership, on the other hand, seeks clear commitments and solid results: for what was promised to be delivered—and ideally exceeded. This tension is legitimate and understandable, but if not managed with transparency and strategic planning, it can derail the entire budgeting process.

This is where aligning expectations becomes crucial. Not only in the short term, such as an annual GOP or RevPAR target—but also in the medium and long term: What is the desired positioning? Is an eventual category upgrade planned? Are there structural investment or rebranding plans? What return is expected over a three- to five-year horizon?

Advantages of a Shared Vision

When expectations are clearly communicated from the beginning of the budgeting cycle, the impact is immediate: uncertainty is eliminated, processes are simplified, and a more strategic dialogue between management and ownership is fostered. This not only improves the quality of the budget but also strengthens its function as a tool for alignment and commitment.

Additionally, it enables bolder decision-making. For example, if ownership intends to reposition the hotel to a higher segment, it makes sense that for one or two years the focus be on investment in training, renovation, or marketing, at the expense of immediate profit. In such cases, the budget can reflect temporarily lower profitability, but aligned with a more ambitious goal that, once achieved, will multiply the asset’s value.

An Uncomfortable but Essential Discussion

The conversation about expectations should not be feared. Many owners avoid being transparent about their goals out of fear of seeming too demanding or of losing negotiating flexibility. However, this opacity doesn’t protect; on the contrary, it weakens the process. Clarity, far from being a sign of vulnerability, is a demonstration of leadership and strategic vision.

These conversations should be supported by data: industry benchmarks, independent consulting reports, comparisons with the competitive set. Anything that helps turn expectations into plausible hypotheses and, from there, into solid operational plans.

In short, for the budget to truly be a management tool—and not merely an administrative exercise—ownership expectations cannot be an afterthought. They must be front and center in the process: well-defined, discussed, and shared. Only then can a solid path be built toward the sustainable growth of any hotel.