Ways to Reduce Hotel Operating Costs

Running a hotel is definitely not an easy task. Aside from hiring the right staff, and having exceptional organizational skills, you should also try to find a way to reduce your operating costs, in hopes of reaching the best possible return on investment.
While this is the goal of every business person, you need to know where exactly you can cut some costs, without sacrificing the quality of the services you are offering. Check out some of the ways you can reduce your costs and boost your profits.

Optimize labor scheduling and staff training

Labor cost is a major proportion of a hotel’s operating expenses: 50 percent, on average. Labor is an obvious place to begin looking for savings, but solutions require creative thought and careful balancing. Of course, you don’t want your staff overscheduled and underutilized, but at the same time, you don’t want to be caught short-staffed with unhappy guests and stressed employees.
The first step in optimizing labor expenses and scheduling is to forecast staffing needs and plan accordingly. Then, consider cross-training employees so staff members can help in another role when needed. Cross-trained staff can provide coverage during another staff member’s vacation or an emergency (such as a sudden sick leave).

Attend to energy saving

Labor may be the highest operating cost for hotels, but utilities are the fastest-growing. You can’t measure what you don’t track so start tracking energy performance as soon as possible. You can do it yourself or, if you’d like to outsource the whole process, look into energy audits in your state or region. Certain programs provide energy audits for free, with no obligation. Audits may examine lighting, HVAC (heating, ventilation and air-conditioning), insulation and refrigeration systems, and make recommendations for reducing energy use. Other programs that vary by region provide rebates for purchasing energy efficient equipment: look into these when it’s time to replace laundry, restaurant, or HVAC equipment.
Cost saving options include:
• Switching to energy efficient light bulbs like compact fluorescent or LED
• Training staff to turn off lights, TVs, and heating or cooling in empty rooms
• Installing timers on bathroom heat lamps
• Installing motion sensors for lighting
Let the guests know about your energy-saving measures. Signs about the environmental friendliness of reusing towels, for example, can produce both cost savings and customer goodwill.

Stay on top of maintenance

Maintaining systems will minimize energy consumption, extend equipment life, and reduce the likelihood of a catastrophic breakdown. System breakdowns or other maintenance issues are costly to the hotel and inconvenient to guests.
Develop and implement a schedule for maintaining your building’s equipment. For the heating, ventilation and air-conditioning system, this might mean scheduling the replacement of filters every one to six months, inspecting fans, bearings, belts, and the area around the air intake every six months, and inspecting for leaks, and cleaning and testing dampers yearly.

Work on food waste management

Track hotel food waste using AI technology to organize a more cost-saving kitchen management and food preparation. Although food waste automatically means money loss and environmental burden, hoteliers don’t seem to pay the appropriate attention to this matter. Most hotels use outdated ways to organize their F&B departments and attribute poor care on food waste management. Using data of consumptions and waste, you can more accurately predict resource allocation. Managing your F&B departments wisely can definitely increase your profit margin and support your sustainable image as well.

Improve the employee onboarding experience

Employee turnover is sadly high in the hospitality industry and that’s a costly problem. It costs an employer an estimated 33 percent of a worker’s salary to find, hire, and train a replacement. Start your valuable employees off on the right foot by making your hotel employee onboarding as positive as possible. Standardize your onboarding with a process that helps employees feel welcome, understand expectations, and get up to speed successfully. Consider using checklists to keep onboarding on track – before, during, and after an employee’s first day. Before their first day, for example, send an email outlining essential information like how to dress (including uniform requirements and costs, if applicable), where to park, who to report to, and when to arrive. Standardize the email with a template, but don’t forget to personalize it with the new hire’s name.
On the first day, move through a checklist of orientation items, paperwork requirements, and essential training. Provide the employee with information about policies, procedures, and acronyms. Assign a supervisor who can answer questions, explain work tasks, and introduce them to the team.

Take advantage of technology to automate processes

Percent of customer interactions handled with artificial intelligence is increasing from year to year. In the hotel industry, this percentage is likely to be lower, since customer service is a significant component of our product. But still, face-to-face interaction is important; telephone calls to the front desk or a centralized call center are appreciated by many groups. The ability to text the front desk for requests or directions is increasingly popular as well. Some systems let hotels preload answers to common questions, or even use AI to generate an answer that the front desk staff can confirm or correct, and send on with a click. Hotel managers can automate many processes with technology, freeing up employees to deliver services tech can’t manage.
CRM can set automatic reminders for the sales team to follow up with leads, schedule onsite visits, send contracts, and get signed contracts returned. Streamlining this process saves staff time, keeps details organized and makes planners’ lives easier. Consider offering a check-in and check-out app, eliminating the need for customers to wait in line. Beacon technology can even automatically push a mobile check-in option when guests walk in the door, and deliver a mobile check-out option the morning of departure.
The thoughtful and directed use of technology can increase efficiency, save time, reduce labor costs, and provide a positive experience for your customers.

As you can see, reducing the operating costs of your hotel business is not science fiction. You just need to conduct thorough research, determine the areas where you can make the most savings and focus on them. Even though it might not seem much individually, you’ll notice just how much resources you were wasting once you accumulate all the amount of money you’ve managed to save here and there.