For measuring performance how we can flexed our budget in hotel industry where the rates are different in many cases?

Your budget's accuracy can make or break your new hotel. If you overestimate sales or underestimate costs, you might exhaust your financial reserves before you start to turn a profit. Before drawing up a budget, you need a clear idea of the type of hotel you intend to open: A luxury hotel catering to business travelers requires a different budget from a hotel for the middle-class tourist trade. When you know the hotel's location and define the market segment you intend to target, you can begin the necessary market research.

Step1

List hotels operating in the same area yours will open and catering to the same demographic. Research their performance. Note items such as how long guests stay, the revenue per guest and per room, how many last-minute bookings they get, the cancellation and no-show rates, and any other information available. The occupancy rate -- the percentage of rooms rented -- and the average revenue per room are the most important industry metrics. Sources for information about your local market include state and regional tourism bureaus, hotel-industry groups, financial reports from competing companies, and travel and lodging guides. Hotel managers who aren't directly competing with you might be another valuable source.

Step2

Itemize the costs the established hotels incur. Important costs include staffing, maintenance, food, laundry, utilities, taxes, furniture, Internet operations and the computers and other equipment. Calculate your first year's budget based on standard costs adjusted for anything that makes your hotel different. If you intend to be the only hotel in town with a four-star restaurant, your food costs won't match the competition's.

Step3

Compare your hotel's strengths and weaknesses to those of your competitors. If drive-by traffic is important in your market and you're the first hotel visible when cars leave the interstate, that's a strength. If drivers go past a half-dozen hotels before reaching you, that gives you a weaker position. Superior service, a newer, better-looking hotel or more amenities can increase your strength.

Step4

Project your occupancy rates for the first year, based on your study of comparable hotels, adjusted for your strengths or weaknesses. Set your room rates based on your competition's rates and your comparable quality level. Write the figures into a formula for determining annual revenue: (Annual occupancy rate) X (number of rooms) X (days open) X (the daily rate).

Step5

Compare your anticipated income and your expenses. If you expect to break even -- income covers costs -- after a few months, you need enough cash reserves to cover costs until then. If your income runs consistently under expenses, start looking at ways to either cut your costs or increase your revenue.

For measuring  the Performance , first of all you  have to Flex your  standard rates to the Flexed activities and  with that Flexed Budget you can compare the actual results/rates.