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Hotel Industry Updates

6 Ways to Reduce a Hotel’s Operating Cost


If you are currently part of the hospitality sector, the chances are high that you are facing heavy competition. Your customers will not be satisfied by merely serving them what they want. You need to delight and surprise your customers to keep getting repeat business. With the rising demand for the best services, it has become a challenge to control the expenses.

A hotel has so many expense avenues, including room inventory maintenance, staff salary, food and beverage (F&B), housekeeping, etc. All these must perform at a top-notch level for the customer’s satisfaction. But to achieve that, managers need to remember to control the costs within their humongous operations. Below are six “out-of-the-box” solutions to control your ever-rising operation cost while providing the best services.

Managing Staff Optimally: Scheduling, Training and Cross-Training

Various studies have shown staffing costs as the biggest chunk of the operating cost of any hotel. Thus, it is vital to manage your resources in the right way. Proper scheduling of staff is a critical factor. Overstaffing will burn a hole in your pocket while understaffing will affect your customer experience. Business volume on weekdays, weekends, holidays and off-season days should be kept in mind while making the schedule.

“It is crucial to be a tech-savvy employer/manager nowadays. Technology saves a lot of time, effort and energy if it is used in the right manner.”

Along with being trained in their roles, they need to be trained for connected roles as well. For example, a front desk executive should be able to do social media promotion in free time and vice versa. In this way, you can complete a maximum amount of work with less people.

A Stitch in Time Saves Nine

There should be a timely check schedule set for electrical items like electrical switches and electrical cable, and plumbing items like taps and showers should be regularly examined. Breakdown of such basic facilities will create a wrong impression for your hotel. Make sure your vendors are committed like you for the sake of your intact goodwill in the market.

Green Management of Utilities

Being responsible for the environment is ethically required, and it also will improve your brand value. Use energy-efficient LED bulbs, train staff in switching off lights and the thermostat when not in use, and encourage your guests to reuse towels and only use toiletries when necessary. This will save the extra burden on the environment and your balance sheet as well.

Use Technology to Save Time and Money

It is crucial to be a tech-savvy employer/manager nowadays. Technology saves a lot of time, effort and energy if it is used in the right manner. Many works can be focused on automation. For example, they can be used for a guest’s check-ins and checkouts, the maintenance status of inventory, employee working hours and marketing on digital platforms.

Streamline F&B to Reduce Waste

F&B is an inseparable aspect of any good hotel. But it’s tricky. The chef needs to be aware of the correct volumes required for all the ingredients. The exotic ingredients can be filled in limited quantities and the basic ones in large amounts. Food waste is the biggest challenge for this department. Keep an eye on what product is often thrown away or expires without use. Put a leash on that; otherwise, it will eat out on whatever profit you make from this channel.

Tax and Insurance: The Most Underrated

Tax rebates and insurance options available to you vary according to your area, expansion volume and F&B operations. Most managers overlook this aspect in their day to day operation hassles. Take out time to do a deep dive with your finance manger and certified accountant. Work out the tax rebate available in your category. Don’t be surprised if you discover that there were rebates available to you, which you were not using for years. Ensure the assets to avoid losses due to unforeseen events.

Going Forward

We won’t lie to you. All these will take a lot of vigilance, but it will all be worth it. Apart from annual checks, day to day, casual audits will be required. An outsider as a consultant is always a good idea. He or she can present the overview which you might skip.

The above mentioned techniques need to be customized according to your kind of operations. But I can guarantee you will increase your business volume along with saving on expenses.

Jeson Pitt works with the marketing department of D&F Liquidators and regularly writes to share his knowledge while enlightening people about electrical products and solving their electrical dilemmas.


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