Pl Variance

HospitalityOS™ Hotel Intelligence Suite — P&L Variance Analysis & Financial Reporting

This skill delivers comprehensive monthly P&L variance analysis, budget-to-actual reconciliation, and role-specific financial narratives rooted in variance decomposition, flow-through analysis, and departmental performance tracking. Use this skill whenever you need to:

• Break down revenue and expense variances into root causes and quantified drivers
• Analyze GOP (Gross Operating Profit) flow-through and identify where incremental revenue went
• Calculate CPOR (Cost Per Occupied Room) by department to track efficiency independent of occupancy
• Provide role-specific financial commentary (GM executive narrative, Finance deep-dive, Department head scorecards)
• Deliver owner-ready financial packages with talking points and forward guidance

Data Acquisition

Read the shared DATA_ACQUISITION_PROTOCOL.md (../DATA_ACQUISITION_PROTOCOL.md) to understand the three-tier acquisition framework.

Data Requirements for This Skill

This skill requires the following data inputs. Follow the tiers in order; use the best available method:

Tier 1 — MCP Direct Integration:

• Gmail MCP: Daily flash report emails from PMS (arrival count, revenue, occupancy), monthly accounting close summary email
• Google Drive MCP: Monthly P&L file (Excel or PDF export), budget file with departmental detail, prior-year actuals

Tier 2 — Browser-Assisted Pull:

• M3 (RealPage): Financial Reports → Income Statement → select month → department-level detail → Export Excel
• Opera PMS: Reports → Financial → Manager's Report → select date range → Flash Report (daily revenue, occupancy, ADR)
• Sage Intacct: Reports → Income Statement → departmental detail → Export
• ProfitSword: Dashboard → Monthly Close → P&L by department → Compare to Budget → Export

Tier 3 — Manual Upload:

• If Tier 1 and Tier 2 fail, ask the user to provide:
  1. Monthly P&L (Excel): Columns needed: Account Code, Account Name, Actual YTD, Budget YTD, Actual MTD, Budget MTD, Prior Year YTD. Rows: revenue by center, all operating expenses by department, fixed costs (admin, utilities, insurance).
  2. Daily Flash Report (CSV): Current month YTD occupancy %, ADR, RevPAR, rooms sold, room revenue. Include same-day occupancy and MTD pace vs. budget.
  3. Labor Report (Excel): By department: hours worked (salaried, hourly, management), labor cost YTD, labor % of revenue, overtime hours.
  4. Budget File (Excel): Mirror P&L structure with annual budget, monthly budget, priors-year actual for comparison.
  5. AP Aging (Excel): Invoice date, vendor, amount, days outstanding — to assess cash timing and payables position.
  6. Capital Expenditure Tracker (Excel): Project name, budgeted amount, YTD spend, status — to reconcile capex P&L impact.

Property Context

Read the shared PROPERTY_PROFILE_TEMPLATE.md (../PROPERTY_PROFILE_TEMPLATE.md) and ensure the property profile is complete.

Before analyzing any P&L data, load the property's:

• Department Structure: Which revenue centers (Rooms, F&B, Spa, Golf, Parking, etc.)? Which cost centers (Rooms, F&B, Admin, Utilities, Marketing, etc.)?
• Ownership Reporting Requirements: Does the owner need monthly reporting? What format (one-pager, full P&L with narrative)? What KPIs matter most (NOI, GOP, cash position)?
• Fiscal Calendar: Month-end date, consolidation timeline, audit schedule
• Budgeted vs. Actual Seasonality: Peak months vary — budget should reflect this. Compare monthlies, not just YTD, to avoid seasonal distortion.
• Labor Model: Staffing by department, typical labor % of revenue, known seasonal ramp-ups (summer F&B, winter housekeeping)
• Fixed Cost Commitments: Annual management fee, property taxes, insurance, mortgage — compare to budget

Role Detection

Adjust output format and depth based on who is asking. Infer from context; ask if unclear.

• General Manager (GM): Executive narrative (1 page max), headline variances, talking points for ownership conversations, forward outlook, confidence in next month.
• Finance Director / Controller: Detailed variance decomposition by line item (dollar and %), audit trail of assumptions, cash flow implications, close calendar status.
• Revenue Manager: Room revenue variance decomposition (occupancy, ADR, mix), flow-through impact on GOP, rate strategy contribution to variance.
• Department Head (Food & Beverage, Housekeeping, etc.): Their department P&L only, comparison to budget and prior year, variance drivers in their control, peer benchmarking (CPOR, labor %).

Core Analysis Framework

1. Revenue Variance Decomposition (Rooms Segment)

Break room revenue variance into three quantified components. Never just say "room revenue is down." Say why.

Formula:

Total Room Revenue Variance = Occupancy Variance + ADR Variance + Mix Variance

Occupancy Variance = (Actual Occupancy% − Budget Occupancy%) × Budget Occupancy × Avg Budget ADR
ADR Variance = (Actual ADR − Budget ADR) × Actual Rooms Sold
Mix Variance = Revenue shift between room types or segments (e.g., more suites sold @ higher ADR)

Example:

• Budget: 75% occupancy, 200 rooms, $120 ADR = $18,000 room revenue
• Actual: 73% occupancy (146 rooms), $128 ADR = $18,688 room revenue
• Variance: +$688 (favorable despite lower occupancy)
  • Occupancy Variance: (73% − 75%) × 75% × 200 × $120 = −$3,600 (unfavorable)
  • ADR Variance: ($128 − $120) × 146 = +$1,168 (favorable)
  • Mix Variance: +$3,120 (booking higher-ADR segments)
  • Net: +$688 — rate strategy and segment mix offset occupancy softness

Why it matters: Identifies which lever (volume, rate, mix) is driving performance. Occupancy down but ADR up? Rate strategy is working. Occupancy down and ADR down? Demand problem, not pricing.

2. GOP Flow-Through Analysis

Calculate what percentage of incremental revenue reached the bottom line (Gross Operating Profit).

Formula:

Flow-Through % = (Actual GOP − Budget GOP) ÷ (Actual Revenue − Budget Revenue) × 100

Example:

• Budget: $100K revenue, $30K GOP
• Actual: $105K revenue, $31.5K GOP
• Incremental revenue: $5K
• Incremental GOP: $1.5K
• Flow-Through: $1.5K ÷ $5K = 30% (poor; expected 40%+)
• Investigation: Where did the other $2K go? Check labor (is the property over-staffed on incremental occupancy?), F&B COGS, utilities, commissions.

Interpretation:

• 50%+ flow-through: Healthy — incremental revenue drops mostly to GOP
• 30–50%: Acceptable but investigate specific cost drivers
• <30%: Poor — labor, commissions, or COGS are consuming the incremental revenue

Why it matters: Shows operational leverage. If you can't convert incremental revenue to profit, occupancy growth doesn't help the bottom line.

3. CPOR (Cost Per Occupied Room) Analysis

Track operational efficiency independent of occupancy swings.

Formula:

CPOR = Departmental Operating Expense ÷ Occupied Rooms

By Department:

• Rooms CPOR: Housekeeping + laundry + amenities + maintenance ÷ occupied rooms. Typical: $20–$40/room. Trend this month-over-month and vs. prior year.
• F&B CPOR: F&B labor + COGS ÷ covers (or covers per occupied room for hotel properties). Flags inefficiency (labor per cover too high) or COGS creep.
• Admin CPOR: Admin salary + utilities + insurance ÷ occupied rooms. Lower is better but constrained by fixed costs.

Why it matters: Two hotels at 70% occupancy can have very different unit economics. CPOR isolates operational efficiency from demand.

Example:

• Property A: $15K housekeeping spend, 600 occupied rooms = $25/room
• Property B: $15K housekeeping spend, 750 occupied rooms = $20/room
• Property B is more efficient (lower CPOR) despite same cost, because of higher occupancy and labor productivity.

4. Department-Level Variance Analysis

For each revenue center and cost center, compare actuals to budget and prior year. Flag variances >5% or >$5K (whichever is larger).

Steps:

1. Rooms Revenue: Compare total, by segment if available (transient, group, etc.). Tie to occupancy %, ADR, mix.
2. F&B Revenue: Compare by outlet (restaurant, bar, room service, catering). Investigate covers (traffic) vs. check average.
3. Operating Expenses (Rooms, F&B, Spa, Admin, Sales, Utilities, etc.):
   • Actual YTD vs. Budget YTD
   • Actual YTD vs. Prior Year YTD
   • Trend this month alone vs. budget month and prior year month
4. Flag & Comment: If variance >5% or >$5K, write a one-sentence root cause (e.g., "Labor up 8% due to holiday week staffing").

5. Labor Analysis

Labor is typically 25–35% of revenue at hotels. Drill into it.

Metrics:

• Labor cost as % of revenue (YTD, MTD, by department)
• Overtime hours and cost (flag if >5% of total hours)
• Productivity metrics:
  • Housekeeping: rooms cleaned per FTE per shift (target: 16–20 rooms/shift)
  • F&B: covers per server or per labor hour (target: 15–20 covers/hour)
  • Bell desk: arrivals per FTE (target: 40–60 arrivals/shift)

Compare:

• Actual labor % vs. budget labor %
• Actual overtime vs. budget overtime
• Actual productivity (rooms/housekeeper, covers/server) vs. budget and prior year

Why it matters: Labor variance is usually the biggest controllable cost variance. A 2% labor variance on a $1M hotel is $20K.

Output Formats

This skill can deliver analysis in multiple formats depending on the request:

Daily Flash Report (1 page)

• Yesterday's Results: Rooms sold, occupancy %, ADR, revenue vs. plan
• MTD Pace: Occupancy %, ADR, revenue vs. budget and prior year (% complete)
• Occupancy Forecast: Expected week-end occupancy vs. budget
• One Sentence Outlook: "On pace for 71% occupancy; ADR flat to budget; expect to hit GOP target."
• Delivered by 8 AM

Monthly Variance Report (3–5 pages)

• Full P&L (revenue by center, expenses by department, GOP, NOI) with variance columns ($ and %)
• Revenue variance decomposition (occupancy, ADR, mix for rooms; covers, check average for F&B)
• GOP flow-through analysis (incremental revenue → incremental GOP)
• CPOR trends by department
• Department-level commentary (one sentence per material variance)
• Labor analysis with overtime and productivity flags
• Forward outlook (confidence in next month, any headwinds or tailwinds)

Executive Summary (1 page)

• Headline P&L (room revenue, F&B, other revenue, total operating expenses, GOP, NOI)
• Top 3 variances (bullet format, with root cause and action item)
• Confidence statement ("On track for annual budget" or "At risk if labor costs don't moderate")
• Suitable for owner/asset manager email

Department Performance Cards (per department)

• Single-page card for each department head
• Their P&L (revenue, expenses, contribution), vs. budget and prior year
• CPOR and productivity metrics relevant to their department
• Variance narrative (what's driving their number, and what they control)

Narrative Commentary Guidelines

Every material variance requires a root cause and action item.

Poor narrative:

"F&B revenue is $12K below budget."

Useful narrative:

"F&B revenue is $12K below budget (−$4K in April YTD). Driven by 8% lower breakfast covers due to the pool deck renovation, which closed outdoor dining April 1–30. Covers are expected to recover 100% May 15 when renovation completes. No action needed; seasonal impact."

General Operating Principles

• Never guess data. If you don't have a trial balance or P&L export, ask for it explicitly with Tier 3 guidance.
• Always validate hotel math. Revenue should = Rooms + F&B + Other. GOP should = Revenue − Operating Expenses. If it doesn't, stop and debug.
• Show your work. Every variance decomposition, flow-through calculation, and CPOR metric should be transparent and traceable to source data.
• Adjust for seasonality. A 10% revenue variance in January vs. December means different things. Always compare like months (Jan vs. Jan, not Jan vs. Dec).
• Include materiality thresholds. Flag variances >5% or >$5K (whichever is larger). Below that, they're noise.

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