5 Ways to Reduce Your Hotel’s Operating Expenses

Competition in the market is stiff. Keep your costs down so you can keep up.

People aren’t slowing down their travel habits. Forbes conducted a survey about U.S. travelers’ habits. Eighty-seven percent plan on traveling at least as much as they did last year. Of those, almost half said they plan on traveling even more than they did the year before.

That’s great for the hospitality industry, but it also means more businesses will be looking for a piece of that pie. To ensure you consistently beat out the competition, you have to maximize your profit by cutting costs while still providing the best possible customer service.

Let’s get into a few ways to do that.

1. Keep up with maintenance

The U.S. Department of Energy reports that a clogged HVAC system can increase your energy consumption by 15 percent. In a large building housing hundreds of people, that can be a painful jump in costs. Keeping track of important functions and being proactive about care can keep expenses from getting unnecessarily high.

Implement a preventive maintenance plan that includes routine inspections and maintenance schedules for all aspects of your property, including HVAC systems, plumbing, electrical, and structural elements.

2. Optimize labor-use

Labor costs are one of the most expensive areas in hotel management. First, make sure you have a proper training program in place. Training and losing a single employee can cost you thousands. High turnover rates are not your friend.

Next, cross-train your employees. Cross-trained employees can perform multiple roles, which means that you can operate smoothly even during staff shortages, peak periods, or unexpected circumstances, limiting your need for temporary staff or overtime pay. Cross-training also eliminates your need to pay for specialized employees.

3. Mobile access

Hotels can spend around $2,000 a month on issuing and replacing keycards for their guests. But now there are apps you can have guests use instead. Mobile keycard access is often more secure than traditional keycards. Mobile keys can be encrypted and are typically more difficult to duplicate or hack, reducing the risk of unauthorized access.

Eliminating the need for physical cards also gives you the opportunity to advertise sustainability and eco-friendly practices – which is increasingly important to U.S. travelers.

4. Inventory management

Efficiently managing your inventory can lead to significant cost savings. Monitor stock levels and automatically reorder supplies when needed. Regularly audit inventory to prevent over-ordering or waste. Utilize just-in-time inventory practices to minimize your storage costs and be mindful of high-cost items. If you offer food, see if you’re able to minimize provided portions without leaving guests feeling cheated. Understanding how much your guests actually need can minimize food waste.

5. Outsource

Outsourcing non-core functions can lower your overhead costs by reducing the need for in-house staff and equipment. The businesses you hire consist of experts in their respective fields, ensuring you get high-quality service while allowing you and your staff to focus on creating a positive guest experience. The services you hire third parties for can include laundry, housekeeping, maintenance, and customer support.