What is the meaning / definition of Capital Expenditure in the hospitality industry?
Capital Expenditure, also known as Capex, refers to all capital improvement costs of owning hotels over an asset’s life span, including such capital costs that prolong the economic life of the asset.
Capex thereby includes all money spent by a business on acquiring, maintaining or fixing assets such as land, buildings and equipment. Thereby capital expenditures can include everything from repairing a roof to building, purchasing a piece of equipment or building a brand new factory. Capital expenditure is often needed to undertake new projects or investments by the firm. This type of financial outlay is also made by companies to maintain or increase the scope of their hotel operations.
- Capital Reserve
- Capital Expenditure