Want to make your hotel as profitable as possible? Then you need to make and save money running your daily operations. We know you never want to compromise on the quality of your hotel’s service for the sake of a few savings. So, here are eight ways to cut back on costs while maintaining the guest experience — from using hotel automation tools to modernizing your maintenance.
Cut labor costs by cross-training staff
You already know that the cost of labor takes up a huge portion of your operating expense. In fact, one recent study shows that labor costs have increased by up to 31% year-on-year for hotels!
One way to cut down on some of that expense is to cross-train your staff in a second role or skill. It may require some initial upfront investment, but effective cross-training allows you to save costs on hiring new employees by using your existing staff more efficiently.
Ultimately, it’s a way to build flexible teams who can:
- lend a hand when another department hits a busy period
- help out elsewhere when things are slow in their main department
- cover gaps caused by annual leave or sickness
Best of all, cross-training helps you ensure your guests receive a high standard of service at all times. If your staff can move seamlessly into another role when required, then there’s less impact on the guest experience. Everything runs more smoothly.
However, a word of warning: don’t overwhelm your staff! Stick to cross-training team members in one additional area. Make it something they enjoy or that overlaps with their primary job. For example, staff on the front desk are likely to be most comfortable in another customer-facing role.
Lower energy bills by going green
The cost of energy is a major talking point for the hotel industry right now. An astonishing 45% of hoteliers and hosts we surveyed in late 2022 called out rising energy prices as their biggest challenge.*
Energy cost increases have made ‘going green’ look more appealing than ever. Implementing green efficiency measures has become a vital way for hoteliers to save not just energy, but costs.
Here are a few energy-saving actions that can help lower your bills:
- Switch to LED lights. LED light bulbs are often more efficient than incandescent bulbs, so making this switch is one way to bring down your electricity bills.
- Opt for smart or programmable thermostats with occupancy sensors. This stops you from spending money on cooling or heating empty rooms. Consider integrating smart thermostats as part of your hotel automation system.
- Request your guests go green with you. Communicate your energy-saving measures with signs, notes or notifications requesting that guests re-use towels. Make daily housekeeping available on request rather than as standard. You may find your guests are more than happy to help you save energy — and cash.
Use insights to find ways you can redirect spend
To identify where you can reduce costs, you need to account for every penny of spend and revenue.
That’s why analyzing and reporting on your business is so important. Consider conducting a detailed expense analysis to identify where your money is going. Run a performance report showing your key metrics for recent periods.
Then use the resulting data to drive your cost-saving decisions. For example, you may discover you’re spending way too much on goodies for guests’ minibars.
Or let’s say you decide to compare your booking volume & revenue per channel. The resulting data may tell you the channels where you should redirect your OTA (online travel agency) spend.
Remember to run performance reports that compare different time periods. These show you where and how demand fluctuates. You’ll discover the best times to streamline your resources or service without jeopardizing the guest experience.
Maybe you’re thinking all these reports and analyses sound like a lot of work? An effective PMS runs many of these reports for you automatically and displays your hotel’s past and present performance via easy-to-read graphics.
Review your taxes and insurance
This is another area where taking a close look at your current spend helps you identify ways to save.
Review your existing insurance coverage and your property assessment. Ask whether both reflect your hotel business accurately. Are you paying for coverage that doesn’t apply to your business? Is your property tax bill looking unexpectedly high?
Depending on what you find, you may want to look into less expensive insurance options, or explore ways to lower your property tax expense.
If you’d rather leave it to the pros, consider working with business accountants. They can manage your taxes and finances in ways that save you money — while you stay focused on your guests.
eviivo partners with insurance providers and accountants to provide the most value for our customers. Our partners’ services include help with taxes and advice on finding effective business insurance coverage at the best price.
Practice preventive maintenance
Appliances have a nasty habit of breaking down when you least expect it. The resulting repairs are necessary, but often costly!
Preventive maintenance is the practice of routinely performing inspections and maintenance on facilities to reduce the chance of unexpected breakdowns.
In a nutshell, it allows you to keep your hotel’s important equipment running for longer. Over time, you lose less money to sudden repairs.
Don’t believe us? A research study of Hong Kong hotels found that corrective maintenance — meaning maintenance that’s carried out to repair existing faults in equipment — costs hotels 48% more than preventive maintenance.
If you’ve ever heard the phrase ‘prevention is better than the cure’, this is your opportunity to test it out! Carry out preventive maintenance on your hotel’s appliances and facilities — think electrical systems, air-conditioning, lighting, plumbing, elevators, kitchen equipment and gym equipment — and see how much you save.
Optimize your marketing costs
Profitable businesses know how to promote themselves. Strong marketing is a cornerstone of the successful hotel — and it doesn’t need to eat into your budget.
There are plenty of inexpensive ways to raise awareness of your hotel business:
- Produce fantastic content, from a well-maintained blog to perfectly-timed marketing emails. The ROI potential of content creation makes it a great way to drum up business without breaking the bank.
- Be active on social media. Use platforms like Instagram to communicate with your audience and show off your best photos & videos. This is another area where cross-training is of use; watch your front-of-house staff leap at the opportunity to do some social media marketing in their downtime!
- Have guests do free marketing for you by requesting feedback that you can post on your website. Find ways to elicit and manage positive reviews from your guests. Having a store of great reviews on your website helps you build a good reputation and may reassure online searchers to choose you over your competition!
Speaking of online searchers: Remember that your hotel’s website is your online storefront, where searchers become guests. eviivo Website Manager enables you to drive direct bookings via a beautiful, customizable website without any expensive hosting or maintenance fees.
Finally, consider using hotel marketing automation to save time, effort and, yes, money on your marketing. Through automation, you can push relevant marketing content to each individual guest, at just the right time.
Streamline your software
Let’s face it, software is a must for the modern hotel. Pretty much every accommodation business needs a PMS to help them manage bookings and a channel manager to make the most of the OTAs.
Then there’s the dedicated software available for managing payments, guests, revenue — and everything else you can think of!
Thankfully, you can lower your costs by choosing software that centralizes all these functionalities on a single platform.
A cloud-based, ‘all-in-one’ booking and property management platform:
- is often less expensive than investing in multiple software products
- saves time by bringing together all areas of your hotel operations and allowing you to automate day-to-day tasks
Of course, hospitality is still about the human touch. You always want good people on-site to attend to your guests. A centralized platform supports this by synchronizing your hotel operations. Your staff spend less time scrambling to collect and keep track of info — and more time keeping your guests happy.
Use hotel automation to cut costs
Automation is the best way to run your hotel business more efficiently — the key to saving costs. By automating key tasks in your hotel, you create cost-saving efficiencies day in, day out.
A property management platform like eviivo Suite automates tasks across all areas of your business.
- Get peace of mind that all bookings, whatever their source, fly into your centralized booking calendar
- Keep your rates, availability and more instantly updated on every OTA you use
- Use a Guest Manager to automate email communications to your guests before, during and after their stay
- Set up rules to automatically adjust your room rates for optimized revenue or occupancy
- Automatically collect guest payments to improve your cash flow
- Make contactless check-in and check-out easy by automating key parts of the process
These automation capabilities reduce time-consuming manual and administrative tasks. Nobody needs to spend hours a week manually updating booking details or your new promos across multiple OTAs. Your staff gain back valuable time to focus on what really matters: the guest experience.
Overall, automation gives you a more cost-efficient way to run your hotel business.
- Creating efficiencies is the best way to cut your hotel costs without compromising on your service quality.
- Consider cross-training your staff as a way to save costs on hiring new people.
- Lower your energy costs with LED bulbs, smart thermostats, and energy efficiency guidelines for guests.
- Identify ways to streamline and save money by analyzing and reporting on key areas of your business.
- Review your taxes and insurance to identify possible savings. Consider using a business accountant for the job.
- Practice preventive maintenance. This keeps utilities and equipment in operation for longer and reduces the chance of costly sudden repairs.
- Adopt low-cost, high ROI measures to promote your hotel. These include staying active on social media and publishing (good!) guest reviews on your website.
- Use an all-in-one booking and property platform. This allows you to save time and cost through a centralized system.
- Automate, automate, automate! Use the hotel automation functionalities of a platform like eviivo Suite to save costs by creating efficiencies across your business.
Discover the savings you can make with an award-winning booking and property management platform at your disposal. Book your free demo of eviivo Suite below.
*eviivo Mood Barometer Survey, conducted November 2022