Even with increases in technology adoption, many hospitality businesses today still grapple with endless challenges brought about by rigid legacy systems, fragmented data, and outdated technologies. Achieving financial efficiency is not just a best practice, but rather critical for the survival of the business.
In this article, we look at the four main financial management challenges hotel businesses are facing and explore how cloud-based financial solutions can be used to mitigate them.
Read more: Personalisation vs Profit: Which Matters More for Hotels?
Core financial management challenges in hospitality
#1 – Manual data entry
Manual data entry may seem like a minor inconvenience, but across multiple departments, systems and entities, it can quickly drain productivity. Hotel finance often spends hours after hours entering invoice data, cross-checking figures and correcting input errors.
These routine tasks:
– Consume tons of time and cause endless rows of errors
– Slow down decision-making
– Increase operational costs
– Leave organisations more vulnerable to compliance risks
In a business function where timing and accuracy are essential, the cumulative impact can be considerable.
According to a recent study by McKinsey, it is estimated that 27 per cent of finance activities can be automated today using technology solutions and machine learning [1]. This finding highlights the significant potential for hospitality businesses to streamline operations and reduce manual workload within finance functions simply by adopting digital tools.
#2 – Inaccurate reporting & lack of real-time visibility
How do you manage all ten hotels in your portfolio efficiently and pinpoint exactly where revenue leaks? Preferably in the shortest time possible?
When each property operates with its own reservation system, billing, housekeeping, accounting, etc., it becomes increasingly difficult to consolidate data. Trying to get timely insights on all properties? Without a centralised platform, forget about it!
Even a slight regression in data quality can negatively affect pricing and benchmarking. As a result, hoteliers frequently base their decisions on outdated or insufficient information [2].
Here is an alarming fact: 84 per cent of chief executives do not fully trust the data that informs their strategic decisions [3]. This emphasises the critical need for integrated, accurate, and real-time information across hotel portfolios.
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#3 – Inefficient cost allocation
Hotel resources and services are often shared across multiple departments, but their costs are not correctly distributed.
For example, housekeeping services are not limited to guest rooms alone. They may also support cleaning needs for public areas, spa facilities, meeting spaces, and the back office. Similarly, maintenance teams often handle repairs throughout the property, while utility costs are spread invisibly across every department’s operation.
Without a structured cost allocation model, these shared services are often recorded under a single department or distributed using broad estimates that do not reflect actual usage.
The consequence is twofold. First, some departments may be undercharged, giving the illusion of high profitability. Second, other departments may be overburdened, appearing inefficient or loss-making due to absorbing a disproportionate share of shared costs. When this happens, it becomes nearly impossible for hotel leaders to make well-informed decisions. Budgets are blown, not because of overspending, but because the numbers themselves are blurred.
If hoteliers cannot see exactly where resources are going and what each service is costing, they lose the ability to manage proactively.
#4 – Compliance & regulatory challenges
Compliance is not a one-time task to be checked off a list. It is an ongoing responsibility that demands constant attention to a complex web of local, national, and international regulations.
Hotels, especially those that are part of larger regional or global groups, operate across multiple jurisdictions. Each location may be subject to a different set of financial reporting requirements, like tax rules, labour laws, and regulatory bodies. Managing these obligations manually or through outdated systems significantly increases errors, omissions, and risks of non-compliance.
Keeping pace with evolving tax codes, international financial reporting standards, and the documentation required for audits can overwhelm even experienced finance teams. When financial data is spread across multiple platforms or stored in spreadsheets, preparing accurate reports or proving compliance under scrutiny can quickly become an operational burden.
🔶 Case study:Bridging Accounting Standards: How Dusit Le Palais Tu Hoa Hanoi Achieved Compliance and Efficiency
From chaos to control: Building a smarter financial backbone
A modern, cloud-based financial management system can be a foundational shift that enables finance teams to work more accurately, strategically, and with greater confidence. The following capabilities demonstrate how cloud technology addresses the core pain points in hospitality finance.
Centralised financial data and real-time visibility
A cloud-native platform brings together all financial data from multiple departments and locations into one unified system. Instead of managing separate spreadsheets and disconnected software, finance professionals gain access to a single source of truth. With real-time dashboards, drill-down capabilities and live reporting. Therefore, hotel leaders can view their group-wide financial performance instantly and accurately.
Read more:The Next-Generation of Hotel Technology is not just for the Guests
Automation that frees up capacity
Manual tasks (such as invoice entry, reconciliations and approval routing) consume significant time. Cloud-based platforms automate these processes through integrated data capture and workflow automation. This not only reduces redundancy and human mistakes but also frees finance teams to focus on strategic initiatives.
More accurate cost allocation and budgeting
Modern financial systems allow costs to be allocated across multiple departments or properties based on actual usage, rather than estimates. This promotes transparency, avoids internal misreporting and ensures that each cost centre carries a fair and accurate share of expenses. The result is more reliable budgeting and stronger financial accountability across the organisation.
Ready to see the cloud in action?
If your finance team is spending more time chasing numbers than shaping strategy, it may be time to reimagine how financial management works across your hotel group.
As a global market-leading solution provider, TRG International is a trusted provider of enterprise financial solutions, with decades of experience supporting hospitality businesses worldwide. We deliver cloud-based financial management solutions that streamline operations, improve compliance and empower finance teams to drive performance with precision.
Explore our resource page for a collection of case studies in the Hospitality industry to see how hotel businesses worldwide are transforming their finances and operations!
Request a demo today with TRG International and discover how an integrated financial platform can help your team make better and faster decisions. Let us show you what is possible when data is connected, processes are automated, and finance is empowered to lead.
Sources:
1. https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/how-bots-algorithms-and-artificial-intelligence-are-reshaping-the-future-of-corporate-support-functions
2. https://insights.ehotelier.com/suppliers/2021/06/22/hotel-budgeting-and-forecasting-4-reasons-why-data-quality-is-essential-to-recovery/
3. https://assets.kpmg.com/content/dam/kpmg/pdf/2016/06/2016-global-ceo-outlook.pdf
