Certified Hospitality Manager (CHM) Practice Exam

Controlled costs in hotel management refer to expenses that the hotel can directly manage and influence, such as labor and supplies. These costs represent those areas where management has the authority to implement changes and make decisions that can directly affect the overall expenses of the hotel. For instance, a hotel manager can determine staffing levels, negotiate supply contracts, and control inventory, which in turn influences labor costs and the cost of goods sold.

Understanding controlled costs is crucial for effective financial management within the hospitality industry, as it allows management to identify areas for cost savings and efficiency improvements. In contrast to expenses that fluctuate wildly without management control, or those that arise from specific complaints, controlled costs are within the scope of managerial oversight and strategies. Thus, focusing on these costs facilitates budget control and profitability.