Beyond the Budget: Building a Smarter Business Plan for 2027
August 17, 2026
A successful financial roadmap combines capital needs, commercial strategy, and operating performance
By Wayne West
It is that time of year when many of us in the hospitality industry begin formalizing our business plans for the coming year. While the budget is an important part of the process, it should never be developed in isolation.
At Newport Hospitality Group, our annual business plan consists of three primary elements: a capital plan, a commercial strategy, and an operating budget. Each requires a different discipline, but aligning all three is crucial to developing a meaningful roadmap for success.
The capital plan begins with knowing your physical assets and understanding what they will require over the next several years. It’s important to document physical plant equipment, preventive maintenance performed, end-of-useful-life considerations, and the dollars being expended to maintain proper performance. Also, incorporate guest comments, online reviews, brand audits, and changes in brand initiatives. All of these can provide important information about where investment may be required.
Newport leverages the Quore technology platform to track much of this information. It is a user-friendly and affordable platform that our property teams maintain under the oversight and guidance of our corporate office. Our VP of Capital Projects works closely with the onsite management team to produce a three-year capital plan, explanations for the expenditures, and estimated costs. We present this to ownership during the business plan review to provide a clear picture of the property’s physical needs and to allow capital decisions to be considered alongside the hotel’s commercial and financial objectives.
Developing the Commercial Strategy
The second element is the commercial plan, led by our Senior Vice President and Chief Commercial Officer. The process starts with an in-depth evaluation of current local market trends. We use historical CoStar data to understand the hotel’s immediate competitive set and our position within it. Our corporate team evaluates industry projections by segment and works with brand leaders, ownership, and property leadership to develop the most informed, honest, and opportunistic forecast possible.
It’s important to be great brand citizens and take full advantage of our brand partners’ ability to generate revenue through efficient distribution systems. Our forecasts are reviewed by multiple people within the organization to ensure we are realistic while remaining aggressive when market conditions indicate an opportunity to grow faster than the competitive set.
The commercial strategy therefore goes beyond projecting revenue. It establishes where we believe the opportunity exists and how we intend to capture it.
Translating the Plan Into the Operating Budget
The final element is the operating budget, which is developed with the capital plan and commercial strategy already in view.
Today, we are fortunate to have systems that allow us to benchmark our hotels against hundreds of comparable properties based on factors such as size, brand, age, RevPAR and geography. That data gives us a much broader perspective than simply comparing a hotel’s performance with its own prior year.
Using those insights, our Senior Vice President and Chief Operating Officer develops a roadmap for delivering great guest service while creating the best opportunity for excellent operational results. The important distinction is that the budget reflects the other components of the business plan. It is not a standalone financial exercise.
That alignment is the heart of our business planning process. Capital decisions affect the guest experience and a hotel’s ability to compete. Commercial expectations influence how the property must operate. And operating decisions directly impact financial performance and the owner’s investment. Each component informs the others.
As an industry, we can no longer think of the annual budget as the business plan; in fact, we have not approached it that way for many years. Our responsibility as operators is much broader. We need to understand the asset’s physical needs, identify its commercial opportunities, and establish an operating plan to deliver the desired results. Only then will we have a clear roadmap for the year ahead.
ABOUT THE AUTHOR
Wayne West III is president of Newport Hospitality Group. He has spent more than four decades in hospitality and believes success never happens by accident. At Newport, he is the steady voice who’s tough when needed, loyal to his teams, and relentless about keeping performance on course. He grew up on the water and still finds his rhythm there, most often behind the wheel of a boat. Inside the company, he’s just as recognizable. The rock everyone leans on and the one famous for firing off early-morning texts that prove he’s already thinking three steps ahead.
