Overhead Costs

What is the definition of Overhead Costs in the hotel industry?

The word Overhead Costs, also known as overhead expenses, refers to the oblique costs which happen when operating a business, while apart from costs directly connected to the manufacturing of a product or release of a service. Overhead Costs do not directly donate to the generating of income. It refers to all non-labor expenses necessary to function your business. Overhead Costs can be set, variable or semi-variable.

You can reduce your Overhead Costs by leasing equipment, reducing utilities and renegotiating rent contracts. Overhead Costs are all costs on the revenue statement apart from for direct labor, direct materials, and straight expenses.

Instances of Overhead Costs are bookkeeping fees, advertising, insurance, interest, legal fees, labor load, rent, repairs, supplies, taxes, telephone bills, journey expenditures, and utilities.