What are variable costs in hotel management?

Variable costs in hotel management refer to expenses that fluctuate based on occupancy levels and the number of guests. This category includes costs such as laundry, housekeeping supplies, food and beverage costs, and other operational expenses that increase as more guests occupy the rooms or utilize hotel services.

As occupancy rises, these costs typically increase; for example, more guests require additional linens, cleaning supplies, or food. Conversely, when occupancy is low, these costs decrease as fewer guests mean less demand for these services. Understanding variable costs is crucial for hotel management as they directly impact the hotel's ability to maintain profitability amid fluctuating occupancy rates.

This contrasts with fixed costs, which remain constant regardless of the number of guests, such as mortgage payments and property taxes.