Don't Miss Out On These Cost-saving Tips For Hotels

With expenses on the rise and guest expectations constantly changing, taking a proactive approach to reducing unnecessary outflows is essential for hotel businesses more than ever. The secret lies not in slashing budgets or compromising the guest experience but in strategic management and resource optimisation.

With the right strategies in place, it is possible for hoteliers to save costs without compromising on quality. If this is up your alley, read on!

Read more: 3 Cost-Cutting Mistakes to Avoid During a Recession

Contents

• Optimisation tip #1: Cross-train staff for optimal resource utilisation
• Optimisation tip #2: Leveraging technology
• Optimisation tip #3: Lower electricity costs by going green
• Optimisation tip #4: Practice preventive maintenance for appliances
• Extra optimisation tips

Optimisation tip #1: Cross-train staff for optimal resource utilisation

Cross-training employees in multiple roles can yield significant cost savings by reducing the need for additional staff during peak periods or unexpected absences. This approach not only enhances workforce flexibility but also fosters a culture of collaboration and continuous learning, empowering staff members to broaden their skillsets and contribute to the organisation's success.

A well-implemented cross-training program leads to a fully interchangeable team capable of supporting each other, thus enhancing the organisation's agility and broadening employees' skills.

Read more: The Best Kept Secrets to Developing Leaders at All Levels

This not only deepens their understanding of the business's operations and goals but also prepares the team to handle disruptions smoothly, safeguarding against common industry challenges such as turnover and absences¹²³.

Implementing effective cross-training

• Identify training opportunities: Determine which jobs are suitable for cross-training and introduce the concept with a structured schedule and certification testing to ensure employees gain adequate knowledge.
• Focus on employee preferences: Train staff members in responsibilities they enjoy or are interested in, as this increases their willingness to learn and perform well in multiple roles.
• Management engagement: Encourage managers to cross-train in various departments to gain a comprehensive understanding of the operation, which aids in developing best practices and solving challenges from a unique perspective.

Cross-training not only improves labour efficiency but also enhances the value provided to customers, leading to a more resilient and adaptable hospitality business. By investing in cross-training, hotels can navigate industry disruptions more effectively, maintain high levels of customer satisfaction, and achieve operational excellence.

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Optimisation tip #2: Leveraging technology

Embracing the right technological solutions can catalyse substantial cost reductions while simultaneously elevating the guest experience. By harnessing the power of automation and data-driven insights, hotels can unlock efficiencies across multiple domains.

Implementing smart technology across various departments such as the front office, accounting, marketing, housekeeping, and procurement offers a multitude of cost-saving opportunities.

For instance, automated reservation and inventory management systems streamline operations, reduce manual errors, and optimise processes within hotel property management systems (PMS).

Similarly, the adoption of smart energy solutions, including IoT-enabled devices, significantly lowers energy consumption, aligns with sustainability goals, and reduces utility costs.

Read more: Generative AI in Business: Real-World Lessons for Decision Makers

Front office automation

Integrating a robust Property Management System (PMS) can transform front desk operations, minimising manual interventions and mitigating the risk of errors. Automated tasks such as check-in, check-out, room assignments, and payment processing not only accelerate turnaround times but also alleviate the workload on front desk personnel, enabling them to devote their attention to delivering exceptional guest service.

Optimised housekeeping operations

Intelligent housekeeping management solutions can help automate room assignments, cleaning schedules, and inventory tracking. This proactive approach not only reduces labour costs but also ensures guest rooms are consistently prepared on time, minimising potential disruptions to the guest experience.

Data-driven Marketing strategies

By capturing and analysing guest data from various touchpoints, hotels can gain invaluable insights into consumer behaviour, preferences, and booking patterns. Armed with this intelligence, Marketing teams can craft highly targeted campaigns, personalised promotions, and tailored loyalty programs, enhancing the likelihood of conversions and repeat business.

Furthermore, leveraging Customer Relationship Management (CRM) systems can streamline re-engagement efforts, nurturing lasting relationships with past guests through timely and relevant communications.

Procurement prowess

Procurement technology enables better inventory management and reduces losses due to last-minute cancellations.

Cloud procurement solutions can empower hotels to negotiate favourable terms with vendors, secure bulk discounts, and maintain real-time visibility into inventory levels. By consolidating procurement processes and fostering transparency, hotels can make informed decisions, mitigate waste, and optimise their supply chain management strategies.

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Optimisation tip #3: Lower electricity costs by going green

Investing in green projects, such as energy-efficient technologies and renewable energy sources, can save hotels up to 30% on energy costs. These initiatives not only make the property more attractive to eco-conscious consumers but also enhance operational efficiency.

With rising energy costs and increased public awareness of sustainability, hotels adopting green practices can expect not only to see reduced operating expenses but also to enjoy a competitive advantage in the market⁴.

Read more: What Are CSR, ESG, and Sustainability & Why Do They Matter for Businesses?

Key strategies for lowering electricity costs

1. Transition to energy-efficient lighting: Replacing traditional lights with LED alternatives or utilising natural light sources can significantly reduce dependence on artificial lighting, lowering electricity costs ³⁰.
2. Optimise HVAC systems: Implementing smart HVAC systems and using programmable thermostats can lead to substantial energy savings⁵.
3. Adopt renewable energy sources: Solar panels and wind turbines not only decrease carbon emissions but also offer long-term operational cost savings⁵⁶

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Optimisation tip #4: Practice preventive maintenance for appliances

Implementing a comprehensive preventive maintenance program can significantly extend the lifespan of hotel assets.

The U.S. Department of Energy highlights that, on average, preventative maintenance programs offer 12% to 18% cost savings over reactive maintenance strategies, with the potential for even greater savings⁷.

By sticking to regular maintenance schedules and making use of predictive analytics, hotels can stay ahead of potential issues and resolve them proactively. This ensures that the hotel's facilities and equipment remain in top condition, leading to substantial savings on maintenance costs and avoiding any unnecessary downtime.

Read more: What is Predictive Maintenance (PdM)? Its Pros and Cons

Key components of a preventive maintenance program

1. Regular inspections and servicing: Conduct routine checks on critical equipment, including HVAC systems and plumbing, to identify and address minor issues before they escalate.
2. Maintenance software utilisation: Leverage hotel preventive maintenance software to stay proactive, thus preventing issues and unexpected breakdowns.
3. Inventory management: Keep track of all equipment and systems within the hotel, using asset tracking software for effective maintenance scheduling.

Implementing preventive maintenance strategies

• Develop comprehensive checklists: Create detailed inspection checklists focusing on essential areas such as electrical systems and guest amenities.
• Schedule regular maintenance: Establish a structured maintenance calendar for servicing, cleaning, and equipment calibration based on manufacturer recommendations.
• Train maintenance staff: Provide training on preventive maintenance techniques, equipment operation, and safety procedures.
• Foster departmental collaboration: Encourage communication between departments to identify maintenance challenges and share insights.

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Extra optimisation tips

While cost-saving initiatives are crucial, hotels should also explore avenues to augment revenue streams, thereby strengthening their financial position and mitigating the impact of cost-cutting measures on the guest experience.

Optimise unutilised spaces

Identifying and repurposing underutilised spaces within the hotel can unlock new revenue streams.

For instance, transforming conference rooms or vacant floors into coworking spaces can attract a diverse clientele, capitalising on the growing remote workforce trend.

Similarly, leveraging outdoor areas for events, weddings, or recreational activities can generate additional income while enhancing the overall guest experience.

Harness the power of word-of-mouth

Satisfied guests can become invaluable brand ambassadors, driving organic referrals and reducing the need for costly marketing campaigns. By consistently delivering exceptional service, responding promptly to feedback, and addressing any concerns, hotels can foster a loyal customer base that actively promotes the establishment through positive word-of-mouth recommendations.

In a dynamic and ever-evolving industry like hospitality, cost optimisation is not a one-time endeavour but rather an ongoing process that requires vigilance, adaptability, and a commitment to continuous improvement.

By embracing the strategies outlined in this guide, hotels can navigate the challenges of rising expenses, stay ahead of the competition, and cultivate a sustainable and profitable business model that resonates with both guests and stakeholders alike.

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If you are in pursuit of operational excellence and cost efficiency, finding the right technology partner is crucial, and TRG is here to help. Share your concerns with us by requesting a demo today!

References

1. https://resources.harri.com/blog/benefits-cross-training-hospitality/

2. https://www.socialtables.com/blog/hospitality/reduce-hotel-operating-costs/

3. https://www.unifocus.com/newsroom/newsroom-library/cross-training-benefits-0

4. https://wahospitality.org/blog/the-case-for-green-practices-in-hotels/

5. https://tripleseat.com/blog/hotel-sustainability-top-ways-to-integrate-eco-friendly-practices-at-your-hotel/

6. https://www.midas-travel.com/10-ways-hotels-can-lead-the-sustainability-charge/

7. https://actabl.com/blog/why-is-preventive-maintenance-so-important-for-hotels/