This article reports key findings from a comprehensive survey concerning budgeting within UK hotels. A postal questionnaire was sent to company finance directors. The results are based on 44 companies representing a 45.4 per cent response rate. It considered many aspects of budgeting policies and procedures such as: why they use budgets; who is involved in the process; for what time period they produce budgets; the use made of flexible budgets and zero‐based budgeting techniques; and how budgets are used in the control process. Key results indicate that the main use of budgeting was to evaluate performance and aid control. In producing budgets the bottom‐up approach was most commonly used, but not as widely as in the USA. Zero‐based budgeting and flexible budgeting techniques seemed under‐utilised. As 59 per cent of organizations did not review their budgeting policies and procedures on a routine basis it is possible organizations could be making better use of their budgets to aid the organization. It might also be possible that some theoretical techniques are not appropriate in an hospitality environment.

Purpose -The purpose of this paper is to provide an insight into budgetary practice in UK-based hotel organizations and an update on previous survey work in this area. The research aims to cover a broad range of budgeting issues, including: the process used in setting budgets, monitoring and review of the budgetary processes, and the human aspects of the budgeting process. Design/methodology/approach -This research used a census-based questionnaire of hotel organizations' finance directors. The questionnaire consisted of mainly closed questions, with opportunities for further explanation to be given. Statistical analysis tools included Chi-square tests, Spearman's Rank Coefficient, and ANOVA. Findings -The paper finds that the key reason organizations produce budgets are to aid control, evaluate performance and aid planning. Neither the top-down, bottom-up or combination approaches to budgeting dominated in the UK. The results showed a higher rate of the top-down approach in the UK, compared to previous surveys in other countries. Budgets were generally viewed as the main performance indicator in hotel organizations. There is little use of flexible budgeting, budget committees or budget manuals in the hotel industry. The "human aspects" of budgeting identified some interesting contradictions such as the belief that participation is key in budgeting working, yet there is a lack of participation in practice, most significantly amongst hotel department managers. Originality/value -Limited information as to budgetary practice in hotels has previously been published, particularly related to the UK. This survey and further findings from the broader research project it is part of identify hotel industry budgetary practice. This aids identifying change over time and provides an invaluable insight into how budgets are used in the industry.

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