Rethinking Budget Season: Beyond Room Revenue with Dragonfly Strategist

Budget season in hospitality is here and for many hoteliers, that means long meetings, countless revisions, and a near-exclusive focus on room revenue. But according to Elise Stee, Chief Revenue Officer at Dragonfly Strategist, it’s time to challenge that mindset.

In a recent Industry Chats episode, Stee shared her perspective on how hotels can approach budgeting with clarity, efficiency, and most importantly, profitability in mind.

From Room Revenue to Total Profitability

For years, the budgeting process has revolved around projected occupancy and room rates. But Stee cautions against limiting the conversation to topline numbers.

“Room revenue itself doesn’t have a lot of growth right now,” she explained. “We really should be focused on true profitability, not just of rooms, but of F&B, ancillary spend, and guest experience.”

That requires looking at the total guest value. For instance, a week-long guest may not spend as much after the first few days compared to multiple shorter-stay guests who cycle through dining, spa, and activity offerings. By analyzing true profit contribution, hoteliers can shape offers and experiences that maximize the bottom line.

Repeat vs. Loyal Guests

Another critical distinction: repeat guests aren’t always loyal guests.

“If a guest always books through Expedia, they may look loyal on paper — but you don’t actually recognize them, and you can’t communicate with them directly,” Stee said. True loyalty develops when hotels capture direct bookings and build meaningful guest relationships.

This requires shifting focus away from traditional segmentation models (AAA, corporate, etc.) and instead prioritizing guest behaviors, booking channels, and acquisition costs.

Efficiency, Not Endless Revisions

Budgeting can become a drain on teams when it devolves into 20+ revisions. Stee emphasized the need for efficiency and realistic expectations.

“When revenue leaders are stuck in revisions, they aren’t spending time on today’s strategy,” she noted. Setting clear parameters upfront, and avoiding unrealistic growth targets, protects both profitability and team morale.

Unattainable goals can erode employee satisfaction, creating turnover in an already competitive labor market.

Inflation, Innovation, and Technology

Inflation pressures make simple rate increases a risky strategy. Instead, Stee encourages hotels to re-examine pricing by room type, attributes, and merchandising. Sometimes reducing rate gaps between standard and premium rooms drives more upgrades and ultimately more profit.

Technology also plays a critical role, and Stee believes it should enter the conversation earlier. Labor modeling, scheduling tools, and AI-driven forecasting can identify gaps and improve profitability before budgets are finalized. “Technology shouldn’t come after the budget is set — it should help shape the plan in the first place,” she said.

The Role of AI in Hospitality Budgeting

AI may be a buzzword, but its practical applications are real. Stee pointed to AI tools that can:

• Forecast F&B covers to improve labor scheduling.

• Support purchasing and procurement decisions.

• Analyze guest sentiment and competitive positioning.

Dragonfly Strategist, for example, uses its proprietary Cozy tool to scrape consumer data and align hotels with guest expectations — ensuring budget assumptions reflect reality.

Healthy Budgets, Sustainable Teams

At its core, Stee’s message was simple: budgeting should be a healthy dialogue, not a task list. By focusing on profitability, leveraging technology, and setting achievable outcomes, hotels can use budget season as a strategic advantage rather than a seasonal hurdle.

“Budgeting isn’t just about raising rates,” Stee concluded. “It’s about innovating across your business to ensure profitability in uncertain times.”

About Affixify

Affixify is a decision-support platform built for hospitality. It makes it easy to navigate and compare technology vendors and industry expert consultants—helping hotel teams find the right connections to move their business forward. With an unbiased approach and a hospitality-specific database, Affixify turns complex choices into confident decisions. To learn more, get in touch with us at www.getaffixify.com.