Seasonal Cash Flow Cannot Be Managed with Annual Averages
A hotel can finish the year profitably while facing severe liquidity pressure in the low season. A 13-week cash flow forecast helps hospitality leaders anticipate receipts, payroll, taxes, debt, purchasing, CAPEX and operational decisions.
I have seen hotels close a financial year with a profit and reach February wondering how to pay payroll without delaying payment to an essential supplier. The contradiction seems impossible until we understand that making money and having cash available are not the same thing. The annual result may be positive while the bank account goes through several weeks of genuine vulnerability.
This pressure is especially acute in seasonal Hospitality. Revenue is concentrated in certain months, but many obligations remain, fall due or need to be prepared for when the hotel has already lost commercial momentum. Insurance, taxes, debt, maintenance, advance purchasing, contracts, payroll and reopening work do not politely wait for demand to return.
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