What are controllable expenses in the hospitality industry?

Controllable expenses in the hospitality industry refer to costs that can be managed and influenced through effective management practices. This includes areas such as labor costs, food and beverage costs, and operational costs, which can be adjusted based on decisions made by management. Good management involves monitoring these expenses regularly and implementing strategies to optimize them, such as minimizing waste, efficiently scheduling staff, and negotiating with suppliers for better prices.

In contrast to controllable expenses, fixed costs do not change in the short term, regardless of the level of business activity. Expenses incurred without management oversight lack direct control and are often unpredictable. Fluctuating expenses based on market conditions can be contingent on external factors like supply and demand, rather than management’s ability to regulate them directly. Understanding which expenses are controllable allows hospitality professionals to enhance profitability and ensure efficient operation.