Cost-Saving Ideas For Hotels

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Customer service is the most significant factor that drives the hospitality industry. It is a challenge, especially for hotels, to achieve the opportunities and maximize the resources available.

One of the biggest problems that the hospitality industry takes is reducing costs and saving money while maintaining excellent customer service. It is one of the absolute truths in every industry regarding cutting costs. Once you provide a poor service, you will lose customers and guests. The opportunities that you will experience, however, lie in the uniqueness of hospitality. And according to studies in the hotel industry, it makes a way to get the guests’ loyalty.

It all lies down with the hotel’s management system; how they handle customers at the front desk, conduct cross-training, maintenance, and even housekeeping. Remember that the first step you need to consider in hotel management is the long-term processes; it gives the best guest experience that no one ever had.

Your techy hoteliers will be the ones to search for ways to reduce costs and manage customers’ expectations. If you do not have any idea yet, here are the things that you need to consider to save money in your hotel business.

How Can Hotels Save Costs?

Maximize the skills of your employees and conduct cross-training and staff training

The hotel’s operating costs are directly proportional to labor. The higher the number of staff and workers, the greater the cost is. The labor costs can vary up to 50 percent of your expenses. And if you are looking for expenses, labor is one of the parts you can look into. However, it is not something that you need to do impulsively. The solutions to these problems need to have careful and creative management. It is to prevent your staff from being underutilized and even overscheduled. In the same manner, you should also not aim your hotel to be short-staff and consuming their time dealing with stressed employees and guests.

The first thing you can do to maximize your employees’ schedule is to plan ahead and predict your staffing needs. It would be great if you make sure that your timeline is connected to your staff scheduling. Ensure that you divide your forecast. It is from the checkouts, front desks, luxury suites housekeeping. Pay close attention to places that guests use for stay overs and even smaller rooms.

It would also be best to conduct cross-training your employees to give your staff member the opportunity to share their ideas and provide another beneficial role if time permits. You can use cross-training to bring out the best in your staff in a time of emergency. Knowledge is also meant to be shared once your trained-staff are equipped with the experience; you can use this opportunity to conduct another training.

Studies also suggest that exercise your staff members is one of your responsibilities as a hotel business owner.

Pay close attention to your utilities

There is no denying that labor is the highest operating expense you can have in your hotel business. However, that is not mostly the case – your utilities keep on growing, and without proper action, it will create a huge impact. Keep in mind that once you established effective energy efficiency, it will build a good reputation in your business, and you will be able to save money for other expenses.

Tracking your utility expense will not be easy if you do not know and do not have the resources to follow it. However, you can look for a benchmarking tool, look for an outsource, or look for energy audits near your business. There are available energy sources that offer free energy auditing, and you do not have the obligation or responsibility to commit. With the audit technology, you can quickly examine the HVAC, lighting, insulation, and even refrigeration systems. It helps you decide and make alternative ways to save money, save the environment, and reduce energy. Some programs are offering rebates for every purchase of energy-efficient tools. It gives you money cut back in case you will buy or replace equipment in your hotel.

The following are cost-effective ways that you can do to reduce costs, time for your hotel.

  • Use energy-efficient bulbs like LED or compact fluorescent.
  • Inform and train your staff to turn off the lights, heating or cooling, TVs in empty rooms.
  • Make sure that heat lamps in every room have timers.
  • Install occupancy sensors for the lighting.

One of the best ways to reduce costs is also informing the guests about the energy-saving processes. You can start with environment-friendly ways like reusing towels; it is a perfect example of producing customer goodwill and cost savings.

Keep your maintenance at the top level

Do not postpone any repairs in your hotel because it can create additional 15% energy consumption. Making sure that all your systems are working properly will help you reduce your energy consumption. It can also extend your equipment life and minimize the catastrophic breakdown of your hotel. It is important to note that system breakdowns of the costly expenses of a hotel; it inconveniences your guests, radiates undesirable aura, and is not good to keep experience.

It would be best if you prioritize developing and implementing a system maintenance schedule. It will give you enough time to schedule a replacement for fans that are not working, damaged bearings and belts, and even leaks. You can efficiently cut the costs of the possible damages once you undergo inspection. Ensure that your hotel follows the schedule strictly to reduce further damage.

Consider Upgrading your Employee Onboarding

Having a proper turnover is one of the ways to improve your hotel’s service. There is an estimate that more than 33 percent of the hotel’s revenue is allotted to the process of finding, hiring, and giving training to employees. It is incredibly costly, so making room for improvement through proper onboarding can help you as an owner, and the hoteliers provide exceptional service. You can start by giving a positive hotel onboarding experience. Make the environment as pleasant as possible, and even the new employees feel safe and welcome, provide realistic expectations, consider independent yet new ideas from them.

It would be best to get a checklist to handle the onboarding well during your employee’s first day. Before they report on their first day, provide them an email that outlines the important information like the dress code, which they should contact or notify to, the parking area, and the time to arrive. Send a standardized template, but ensure that you address your new employee’s name well.

To keep track of the processes, make sure that you follow your checklist, the paperwork requirements, and your training process. Provide your employee the essential information about the acronyms, policies, and procedures. It would be best to assign a mentor that can assist and answer the questions they have. If you want to keep, your employees start helping them with the bearings, explaining the tasks they need to accomplish, and making a proper introduction to the team.

Maximize Technology to Improve your automated processes

Increasing the efficiency of your hotel can be possible with a thoughtful and direct usage of technology. It can help you minimize labor costs, save enough money for your business operation, maximize your time, and leave a positive impression on your guests.

Consider the hassle that hoteliers and staff experience when they are manually checking the booking of your hotel. Coordinate properly with experts, and maximize the available technology. Making an automatic reminder to meet the deadlines and target tasks is also one factor that simplifies the work needed to accomplish. You can easily follow up the leads on time, schedule your onsite visits in your hotel, update and send contracts. Technology can process your work in a timely and simplified manner. It helps you keep organized and detailed work and plan according to your needs.

With the current technology available at hand, you can easily create and offer an app that allows the guests to check-in and out of your hotel. It eliminates the hassle of waiting in line for hours. You can also use technology to automatically push the mobile checkout process once the guests leave the hotel. Though being careful is a must, sometimes the system’s cost is low, but it can attack your expenses once you need to maintain it. Paying attention to trouble like viruses is also a must to protect the important files of your business.

International Business Machines researched technology. And the finding is exciting. Robots rule about 85 percent of the interaction with customers with artificial intelligence. However, the hotel industry has a different story. Customer service provides an essential role in keeping the customers accommodated, especially in this industry. But, there, you can still use artificial intelligence in answering fundamental questions related to your service. It helps you save your time and cutting down your call center needs.

The direct human contact process is a must for the hotel industry. And, face to face interaction is essential to clarify things and attend to your customers’ needs. The front desk is also vital for receiving calls or provide a centralized receiver for all operations. The process of texting the front desk to request or ask for directions is now becoming popular. Some hotels allow preload answers to accommodate common questions. There is also artificial intelligence that generates responses in the front desk staff to confirm and correct information.

Automating the process using technology is one way to reduce your employees’ workloads like tech-related services. It will be only possible if there is a system that employees can use and work well. You can pick systems that involve accounting, EAM/CMMS, CRM, customer service, PMS, labor scheduling, online booking, and the like. Integration of the system management is essential, and devoting yourself to staff training is necessary.

Make a smart move for your food and beverage (F&B) to reduce waste

If your hotel is providing food and beverage as a banquet, the F&B system’s execution can help. It can help you increase your revenue by attracting guests to order food. A study was also conducted on a food and beverage services platform that produced more revenue than the hotels that do not offer services.

The F&B services are efficient to hotels that cater banquet and menu services with the same preparations and ingredients. It is another way of reducing waste. For example, you will cater to 2 events with different groups; you can come up with different menus, but those events can share some prep work, and ingredients can be shared. Maximize your event management system to evaluate the menu requirements. It would also be best to come up with preparation sheets for your cook to minimize food waste and over-preparation.

Pay close attention to your end of meal plates like its portion size. It is essential to keep your guests satisfied.

Watch your taxes and Insurance policy

The CBRE conducted a survey for over 7,000 hotels about the expenses the hotel allotted in their budget. The findings are there was a 3.6 percent allotted budget for the property taxes of the overall operating revenue and 0.8 percent for the insurance policy. Cost-cutting comes with the proper management of the hotel. You can start by assessing the insurance policy, equipment, and property.

Having insurance is one of the ideal processes of cost-cutting. It helps you transfer the responsibility of one person to another. Make sure that your hotel can benefit in many ways, like protecting every property and guest you have. Work through changes if something is off, upgrade to get the best offers, and improve your portfolio. With this, you can serve every guest in a room with proper security and peace of mind.

Knowing your taxes well can help you cut costs of your expenses. It enables you to save more and while maintaining the operational activities of your business.

Bottom Line

The hotel industry is one of the many industries using a lump sum of money as capital. However, it causes a lot of drawbacks, especially if they did not handle it well. That is why every hotel has its ways to cut costs of their day-to-day operations if they want to minimize the expenses. They check every aspect of the management processes like accounting, housekeeping, food, and beverages to simplify the tasks. Improving the service creates a huge impact to get the trust of the guests. The above process is one of the ways to reduce the hotel’s cost. Take it one step at a time. Remember your cost-saving goal, and always direct your path in it.

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Michael Hammelburger

Michael Hammelburger

In 2019, Michael founded the Bottom Line Group, an expense reduction consulting firm helping companies reduce their expenses by thousands of dollars by focusing on areas not typically looked at by the leadership team.

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