In the hospitality industry, the customer is the king. Efficient customer service and guest experience can make or break a hotel business. This fact can be both a challenge and an opportunity for the hotelier.
For the former, the challenge is controlling costs while maintaining a good standard of service. It is a truism for any industry that incompetent service can drive customers away. The opportunity, unique to the hotel business, is that with delightful service, the hotel can form loyal customers generating improved revenues. The key is a balance of the two. Do not cut corners to save little money as that can put customers away from the assets. Instead, smaller improvements with a farsighted strategy can provide much better results. Rather than focusing only on driving revenues and increasing profits, equal attention should be paid to streamlining the current operations, making sure of complete utilization of space and resources, and adopting smart technologies to improve business.
Here are 7 things that you can focus on to cut costs and increase profits without driving the customers away.
Look over your expenses
The first step is to analyze the current expenses of the hotel property. With the constant hustle-bustle of daily operations, check-in, check-out, events, and a plethora of other functions, hoteliers fail to pay adequate attention to the unnecessary charges incurred in detail. There might be an unusual spike in the linen cost, Wi-Fi bandwidth, or other avoidable expenses that can be optimized with prompt action. Well, better late than never!
Make it a habit to analyze the accounts after regular intervals. The most practical way is to use a hotel or property management system with automated cloud-based technology to keep a track of the upfront costs without investing too much time or effort. This system can be of great help in generating expenses and revenue reports.
Optimize resource utilization
Labour costs play a significant role in the hotel's overall expenses. Additionally, hiring staff requires a large segment of time and effort. Therefore, labour is an obvious place to look for cost-saving but should be carefully understood and creatively solved. Overworking or underutilizing the staff can have an equally negative impact and lead to disgruntled guests and stressed employees.
The first step is to accurately forecast staffing needs and plan accordingly, avoiding last-minute chaos. Another solution calls for cross-training the staff for multiple roles, avoiding frequent hiring. This can be a win-win situation for both the employees, gaining new skills and knowledge and the hotelier, saving on costs and resources.
Streamline F&B to reduce wastage
Food and beverage form a substantial part of the hotel expenditure. Especially with banquets and multiple restaurants, streamlining collaboration, and execution with computerized systems can make a measurable impact on the profit. Moreover, the menus for the diverse F&B outlets can be made more efficient by using similar ingredients for prepping and serving.
Lastly, it is extremely important to pay attention to the waste food in the end-of-meal plates. Consider reducing the portion size according to the amount of food leftover and scaling back without affecting customer satisfaction. For beverages, train the staff to the standards and review every so often to ensure minimal wastage due to out-pouring.
Reduce marketing costs
Marketing is an art. Just throwing money on paid promotions doesn’t guarantee results and can trouble the expenses. It is important to understand the right tactics and adopt an effective marketing strategy to spread awareness about the hotel property.
Try auditing the marketing approach and using free, organic channels for promotions. Invest in writing high-grade content and generating quality photographs of the hotel. Utilize the power of social media to advantage to reach the maximum audience with minimal investment. Tie up with local vendors to garner bookings. Make sure to constantly analyze the marketing strategies, take prompt action, and thereby ensure optimal results.
Take advantage of technology
With technology advancing at a fast pace, the hotel industry is spearing ahead with adopting modern systems as well. Although many hotels shy away from adopting technology due to the requirement of substantial initial investment, technology does not necessarily suggest an increase in expenses. Contrary to belief, these advancements can help in cutting costs.
Integrated hotel automation systems, streamlining day-to-day operations, employing booking engines, applications for check-in, check-out, payment management channels, online reviews, billing, housekeeping, and every function can be improved with thoughtful and directed use of technology. Hotel managers can automate several operations with technology, freeing up resources to deliver services that cannot be managed by tech. This helps save time and cost, with increased profitability.
Adopting energy-saving measures is beneficial for the hotel and the environment. Maintaining systems with minimal energy consumption increases their economic life and reduces the cost burden of the hotel. Similarly, utilizing energy star appliances, LED lights, smart curtains, and windows saves costs and energy.
Controlling lighting in rooms, optimizing existing resources, saving on air-conditioning by adopting sustainable measures, and educating staff towards the benefits of energy-saving, are a few preliminary steps towards going green and cutting operating costs of the hotel property.
Find a use for under-utilized spaces
Look at every nook and corner of the property and locate the negative or under-utilized spaces. Put on the creative hats to find alternate uses for the typical hotel spaces. The landscaped green lawn can be used for a wedding, party, or any other event. The minimal space under the staircase or escalator can serve as a small kiosk or help desk. The banquet hall can be rented out for yoga or dance classes.
Another upcoming trend is of using the lobby, lounge, or café areas as a workspace or social hotspot. Setting up this service will add value to the property along with generating income. Any dead corner might be utilized as a promotional space, displaying hotel accomplishments and attracting the public. Think out of the box to convert any space into a novel feature of the property!
The above-listed ideas are worth considering for cutting costs without cutting corners. In contrast to driving customers away from the asset, these modifications can attract guests to the uniqueness of your hotel property. Adopt these smart strategies to diminish operating costs, boost income, and enhance revenues!