The hospitality industry is rapidly transforming thanks to next-generation technologies and data-driven tactics. As exciting and beneficial as these innovations are, however, implementing them into your hotel does not eliminate classic business concerns—specifically, bolstering the bottom line. So, while it’s important for hotels to create rich guest profiles and targeted digital marketing campaigns to attract and retain more guests, they must always remain laser focused on boosting the hotel’s ‘incomings’ while minimizing their ‘outgoings’.
There is a lot that hotels can do to drive revenue, but even if their efforts are met with resounding success, hotels must still think about costs. Cutting them is a priority, but those cuts can’t compromise the guest experience or degrade the reputation of the hotel. That is a tough balance to strike, but these strategies can help hotels slim down effectively.
1. Focus on Housekeeping Costs
Housekeeping is a major ongoing cost due to the high demand for labour and resources. Hotels can save money by outsourcing their laundry requirements or upgrading to more efficient equipment. Any strategies that help existing housekeeping resources to be more efficient and productive can have a major cumulative effect on costs.
2. Switch to Flexible Scheduling
Fixed scheduling typically results in hotels always being over or understaffed. Since labour is a prominent cost for hotels, it’s crucial that hotels ensure they are always fully staffed but never redundantly staffed. Finding the right mix is much easier with flexible scheduling that calls in staff as needed, ensuring the customer experience is always high without wasting unnecessary resources.
3. Audit Marketing Channels
A lot is spent on marketing, but when efforts are misdirected, much of that money is wasted. When a campaign produces a few extra bookings, it is easy to conclude that the investment was successful—but only data tells the truth. Auditing campaigns and being honest about their relative success or failure leads to smarter marketing spending overall. It can be easy to convince yourself that a particular channel is doing good things for your hotel because you know it has produced good results in the past or for your competitors, but if the data shows that this channel has a low ROI, then it makes financial sense to remove it from your budget.
4. Implement Greener Initiatives
Each year, hotels spend about 6% of their operating costs on energy—and not all of this usage is necessary. Thanks to advances like smart thermostats, integrated lighting systems, advanced HVAC and other energy-efficient technologies, it’s possible to reduce energy waste and expenses. Other initiatives like cutting down on food waste, reusing towels and collecting grey water for landscaping can also lead to lower energy costs, which will be directly reflected in your bottom line.
5. Upgrade Hotel Technology
Every aspect of a hotel depends on technology, but licensing, securing and maintaining a patchwork of applications is expensive. Plus, as these technologies age, they deliver less value while creating more disruption. Upgrading to a modern PMS system with an extensive array of modules, customizations and APIs is a new cost, but it can replace and streamline many legacy costs. Better still, relying on an integrated platform for hotel management makes it easier to identify and reduce waste and redundancy throughout the hotel.
Cutting spending isn’t about operating with a skeleton crew. It’s about eliminating what isn’t necessary so that hotels can focus on what is essential. Cutting costs raises the bottom line, but more importantly, it empowers hotels to invest ambitiously in engagement, innovation and improvement property-wide. Best of all, cutting costs is a lot easier than you think: all it takes is a little critical thinking to identify areas where wasted spending can become extra revenue.
Keeping costs in check is easy with technology pioneered by RoomKeyPMS. Hotels gain oversight and autonomy over properties, which leads them to be as efficient and profitable as possible. If you’re ready to take control of the bottom line, contact our team for a demo.
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