Invariably, every hotel is forced to endure a slow period at some point in the calendar year. Whether it’s due to changes in the weather or trends in the travel industry, most hoteliers are familiar with the sinking feeling associated with looking at their hotel’s occupancy rates and seeing several beds empty. These seasonal lulls can be a huge drain on a hotel’s bottom line, as when bookings drop drastically, the cost of operating a hotel can get dangerously close to exceeding revenue. However, this danger can be averted if the right strategies are adopted to track your hotel’s budget and identify places where expenditure is being wasted during the low season.
Cutting costs is essential, but managers must walk a fine line to ensure that those cuts don’t degrade the guest experience. The next time there is a seasonal lull looming, implement these nine operational tactics to ensure your hotel is both efficient and effective:
- Re-calibrate your needs – To effectively cut costs within a hotel, hoteliers need to first understand how much money they need to spend to keep the hotel running to a satisfactory standard during the low season. To do this, look at past data to forecast occupancy during slow seasons, then calculate what resources it will take to run the hotel at less than full strength. This ensures that cuts are as deep as possible without having unintended consequences.
- Take a new approach to labour – Working with seasonal staff makes it easy to thin out the ranks as bookings begin to decline. Cross-training the staff who are permanent allows hotels to fill every role with less employees overall. Finally, utilizing a labour management system helps hoteliers to easily coordinate staff resources based on the daily needs of the hotel.
- Repurpose some of your space – An empty room is a wasted opportunity for revenue. Repurposing rooms for things like conferences, retreats and informal gatherings may not bring in as much revenue as traditional hotel room bookings, but it does ensure that the cost of utilities and maintenance for those rooms is not a waste.
- Prioritize energy efficiency – Technologies like smart HVAC systems and intelligent lighting give managers the ability to scale back how utilities are used in a very precise way. It’s possible to cut energy bills without having to close off an entire wing of the hotel.
- Adjust your ordering – During seasonal lulls, you need to keep less inventory in the hotel bar and send fewer linens off for laundering. The danger is that cutting inventory too much could compromise the guest experience. Good forecasting tools make it easy for hotels to accurately predict bookings and adjust ordering accordingly.
- Target your marketing efforts – During slow seasons, hotels often spend more on marketing but see a lower ROI. Targeting feeder cities and specific demographics of guests that have a tendency to book at your property allows hotels to cut back their marketing spend while still connecting with qualified potential lodgers.
- Reuse towels – A study showed that when hotels ask guests to reuse towels, it cuts total laundry costs by 17%, which can add up to about $6.50 a day per room. Framing this as a sustainability initiative rather than a cost cutting measure helps to secure guest buy-in.
- Maximize management time – Focusing the same amount of time on daily operations when the hotel is only half full is a waste of the manager’s schedule. Seasonal lulls are an ideal time to focus on long-range planning and big-picture projects that can generate additional revenue down the line.
- Focus on service – Use surplus resources to enhance the guest experience as much as possible. If guests feel like they are staying in an empty, under-staffed hotel, they are unlikely to return. However, if they leave feeling like they got additional value for travelling off-season, they are more likely to return to the hotel and recommend it to friends. It’s a small investment with a big dividend.
While seasonality can be a huge blow for hotel profitability, it is possible for hotels to preempt this lost revenue. The key is to take a data-driven approach, one that makes use of the information readily supplied by an advanced property management system like RoomKeyPMS. Driving more bookings in the slow season is one obvious way to boost profit, but it’s equally important to consider ways to lower your hotel’s overheads when occupancy slumps. To ensure you are cutting costs in the right places, investing in a quality PMS should be your first step—the valuable insights it will offer into your daily operations are truly priceless.
RoomKeyPMS makes collecting, analyzing and deploying data incredibly easy, meaning hotels are better equipped to come in under budget during seasonal lulls. Contact us to learn more about our best-in-class PMS.
Photo Credits: Shutterstock / Dragon Images