Why hospitality finance must stay close to the guest, the operation and the commercial strategy
Khurram Ashraf
Cluster Director of Finance, Hilton Garden Inn
Finance at the Heart of the Hotel
In hospitality, financial performance is shaped in real time: by occupancy, pricing, service delivery, staffing, guest behaviour and thousands of operational decisions made across the hotel. Khurram Ashraf, Cluster Director of Finance at Hilton Garden Inn, explains why the most effective hospitality finance leaders look beyond accounting and immerse themselves in the business behind the numbers. In this conversation with The Leadership Gazette, he discusses the metrics that matter, the relationship between profitability and guest experience, the inefficiencies that erode hotel performance and the leadership mindset required to build a lasting career in hospitality finance.
1. What is the biggest difference between managing finance in hospitality and in other industries?
For me, one of the biggest differences is that hospitality is a highly dynamic, operationally driven business in which finance is closely connected to what happens with the guest every minute, every hour and every day. Unlike many industries, hotel revenues are relatively well defined across key streams such as Rooms, Food & Beverage and Other Operating Revenues. However, the performance of those streams can change very quickly in response to occupancy, demand, seasonality, market conditions, events, guest behaviour and the competitive environment. Hospitality finance is therefore not only about reporting historical results. It is about being close to the operation, understanding what is driving the numbers and taking action quickly. A Finance Director needs to understand the business behind the P&L – what is happening in Rooms, F&B, Sales, Revenue Management, Engineering, Housekeeping and other departments – and translate that activity into financial performance. I also believe hospitality finance is distinctive because we manage a business in which people, service and financial performance are directly connected. We need to protect profitability while ensuring that the guest experience and brand standards remain strong. That makes hospitality finance both challenging and rewarding. It requires strong financial discipline, but also commercial thinking, operational understanding, speed of decision-making and the ability to work as a true business partner with the entire leadership team.
2. Which financial metrics do you consider most important when evaluating a hotel's overall performance?
I always start with the top line and the bottom line, but I believe the most important consideration is how effectively we convert revenue into profit.Revenue growth on its own does not necessarily mean that the hotel is performing well. I look at the quality of that revenue and whether we are achieving healthy flow-through and conversion into profit. At the top line, I typically focus on metrics such as Occupancy, Average Daily Rate (ADR), Revenue per Available Room (RevPAR), Total Hotel Revenue and revenue mix, while comparing performance against budget, forecast, the prior year and the competitive set. From a profitability perspective, I look closely at Gross Operating Profit (GOP), GOP margin, Total Gross Operating Profit (TGOP), Net Operating Profit (NOP) and flow-through, together with departmental and undistributed expenses. These indicators help determine whether the hotel is not only generating revenue but also managing its cost structure effectively. Financial metrics should never be reviewed in isolation. An increase in ADR may look positive, for example, but if it results in a significant decline in occupancy and total revenue, we need to understand the bigger picture. Similarly, strong revenue growth accompanied by weak flow-through may indicate that the cost structure is not aligned with the additional revenue. Ultimately, my objective as a Finance Director is to ensure that the hotel is growing the right revenue, controlling costs intelligently and converting revenue into sustainable profit and cash flow.
3. How do you balance profitability with maintaining a high-quality guest experience?
I do not see profitability and guest experience as opposing priorities. In a well-managed hotel, they should support each other. Maintaining a high-quality guest experience requires the right level of manning, training and service standards. Trying to achieve short-term savings by reducing resources too aggressively can ultimately damage service quality, guest satisfaction and reputation – and, over time, revenue. At the same time, simply increasing staffing and spending more does not automatically create a better guest experience. The key is to ensure that we have the right people in the right positions, with the right skills and productivity. I strongly believe that training and team development are critical. When colleagues understand the service standards, are properly trained and feel engaged with the business, they are more likely to deliver a consistent guest experience. There is also a commercial opportunity. If we consistently deliver a high-quality experience and provide genuine value for money, we can strengthen our reputation, guest loyalty and pricing power. Guests are generally willing to pay a higher rate when they see value in the overall experience. My approach is therefore to consider service quality, productivity, revenue and profitability together. The objective is not simply to cut costs, but to invest in the areas that directly influence the guest and generate a return, while eliminating unnecessary or inefficient spending elsewhere.
4. What are some of the biggest financial inefficiencies you see within hotel operations?
One of the biggest areas is manning and staffing structures that are not properly aligned with the hotel's business volume and operating model. Payroll is one of the largest controllable costs in a hotel, so it is important to continuously review employee numbers, salary structures, productivity, scheduling and departmental requirements against actual business levels. Having the right structure is much more important than simply having fewer people. Another common inefficiency is the absence of proper business planning and strategy. Hotels sometimes focus heavily on achieving the monthly result without giving enough consideration to the long-term profitability of the business. Finance needs to challenge whether the hotel has the right strategy to generate sustainable revenue and maintain a healthy bottom line. Hotels should also continuously explore additional revenue opportunities rather than relying only on traditional revenue streams. These could include new F&B concepts, events, upselling, partnerships, ancillary services or other opportunities suited to the hotel's market and positioning. Cost effectiveness is another important area. Every significant cost should have a clear business rationale, and we should regularly challenge whether it is delivering the expected value. Finally, timely analysis and benchmarking are critical. A hotel needs to understand not only how it performed against budget and the prior year, but also how it is performing against its competitive set and market. Tools such as STR, HotStats and internal operational analysis can help identify where performance is being lost and where opportunities exist. For me, the role of Finance is not simply to identify that an expense is over budget. It is to understand why it happened, whether it was necessary, what the financial impact is and what action should be taken.
5. What is one piece of advice you would give to someone aspiring to build a career in hospitality finance?
After around 15 years in hospitality, my biggest advice would be: do not look at hospitality finance simply as a job. Look at the hotel as if it were your own business. Hospitality finance requires attention, consistency and commitment. The business changes every day, so you need to remain engaged and understand what is happening operationally, commercially and financially. I would encourage anyone entering hospitality finance to become a true business partner rather than focusing only on accounting, reporting and compliance. Understand the operation, spend time with different departments, follow the guest journey and learn what drives revenue, cost and profitability. At the same time, you need to love what you do. Hospitality is a people business, and finance professionals need to work closely with colleagues across the hotel. Kindness, support, teamwork and a willingness to help are just as important as technical financial knowledge. I also believe strongly in continuous learning and innovation. The industry is changing rapidly, particularly through AI, automation, data analytics and digital technologies. Finance leaders need to embrace these developments and use them to improve decision-making, efficiency and the quality of
financial information.
Finally, I would say: set clear goals, work as a team, track your progress, lead by example and always
try to develop the people around you. A successful Finance Director should not only deliver strong
financial results, but also build a strong team and contribute to the wider success of the hotel.
At the end of the day, hospitality is a beautiful industry because it is fundamentally about people
serving people. If you combine financial discipline with leadership, humanity, kindness and a genuine
desire to make people happy, you can build a very successful and rewarding career in hospitality
finance.
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