Reexamining Hotel Expenses To Identify Cost Saving Opportunities

COVID-19 has affected nearly every industry—and the hotel industry has taken one of the hardest hits. With fewer people traveling for both personal and business, hotels likely won’t see the traffic they’re accustomed to until 2023 at the earliest. This means that monitoring your hotel expenses is more critical than ever. Finding ways to reduce your largest operating costs can be the difference between staying in business and closing your doors.

Let’s discuss a few ways you can proactively reduce your hotel’s operating costs and ensure operation in a post-COVID-19 era.

Adjust the Staff Schedule to Align with Business Volume

Avoid creating fixed schedules for the hotel’s hourly employees. Having set hours in place for each employee can result in either overstaffing or understaffing, both of which can be detrimental to the satisfaction of your customers. Not to mention that overstaffing is unintentionally throwing hotel profits down the drain!

Use a forecast model to understand the ebbs and flows within your hotel’s occupancy levels. Are there specific weekends that are always busy? Are there specific month’s where fewer guests are staying there? Consider all of these factors—and then consider the reduced travel for COVID-19. Were any of these busy weekends impacted by music festivals or conferences that are no longer happening this year? Understanding how many guests will check-in at your hotel will allow you to staff adequately (and find areas where hours can be reduced to cut costs).

With fewer guests checking in, you can reduce the number of staff manning the front desk. You might also opt to install self check-in kiosks, which can significantly reduce the labor costs associated with these roles. If fewer rooms are booked, you might reduce the number of cleaning staff on the schedule each day. If your hotel has a restaurant or bar that is operating at 50% capacity, you likely can have fewer staff members waiting on those guests.

Keep in mind that reducing your staffs’ hours can cause dissatisfaction. Ensure you explain the reasoning behind the schedule changes and an estimated timeframe of when they’ll see their hours increase again.

Cross-Train Your Hotel Staff

Training is an important part of having well-equipped and efficient staff. Throughout their onboarding process, you equipped them with the tools and resources needed to perform their role well—but did you enable them to help out with anything apart from their day-to-day responsibilities? It’s a cost-effective idea to equip your staff with the skills to perform multiple jobs throughout the hotel, allowing them to step in as needed. This will enable you to use the team you already have in a role temporarily while (or instead of) searching for a permanent solution. It also makes your staff more well-rounded, helping them out in the hospitality industry longterm.

Invest in “Green” Enhancements

Using eco-friendly practices throughout your hotel can significantly reduce your operating costs. Consider investing in the following:

• LED Lighting – Did you know that LED bulbs use at least 75% less energy and last 25 times longer than incandescent bulbs? Making this switch will save energy, and as a result, will reduce your hotel’s electricity bill. Whether you swap the common spaces, lobby, hallways, or guest rooms, eventually switching out all incandescent bulbs will make a noticeable difference to your monthly operating costs.
• ENERGY STAR® – From your hotel’s commercial HVAC system to the coffee makers in guest rooms, making the switch to ENERGY STAR appliances will reduce the amount of energy being used each month. Keep in mind that the more appliances you switch, the larger your savings will be.
• Smart Windows – While the upfront costs will be a bit costly, in the longterm smart windows are one of the best investments you can make to reduce your electric bills. Smart windows work by automatically adjusting their tint throughout the day, controlling how much light passes through them. This allows guests to maintain a warmer or cooler room without even touching the thermostat.
• Towels – According to the American Hotel and Lodging Association, requesting that guests reuse their towels for more than one use reduces loads of laundry by 17% (directly impacting your water, sewer, energy, and labor costs!). Placing small signs in guest bathrooms requesting they reuse towels is a small step you can take for significant change.

At MyHotelAccountants, we’ve successfully helped many hotels throughout the United States find ways to increase hotel value and profits. If your hotel needs assistance navigating these uncertain times, contact MyHotelAccounts for a consultation.