10 Straightforward Ways to Cut Off Hotel Costs


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cut off hotel costs

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You have been a good manager the stakeholders are falling head over heels. You know how to run a tight ship. And wherever possible, you know to keep the cost of running the hotel business low. But the changing economic times are not so forgiving. Your business is no different. Regardless, you have to find a way to cut off hotel costs and increase revenue in an era where the cost of living is on the rise.

A recent study found out that “About 50% of Americans admit that their expenses are equal or greater than their incomes.”

10 Methods to Cut Off Hotel Costs

So put your boots on and get ready! for these 10 methods, you could take advantage of them to reduce hotel operating costs.

1. Hire Top Talent in the Industry

It is much safer (financially speaking) to hire someone that knows their stuff than to hire someone who is learning on the job. Experienced people can deliver more. They can bring up a fresh perspective on the business. They can also find new and better ways of handling the job at hand.

But, if you have to hire inexperienced people, don’t look for grades. Go for the ambitious kind of people. These are the kind of people who have a good attitude to training and learning new things. The good thing about these people – they are and could save your hotel a lot of money compared to someone with a decade of experience in the industry.

2. Provide Outstanding  Service to Guests

You can never go wrong in providing top-notch services. In fact, it’s a double-edged sword. Not only does it keep customers addicted to your services, but it also triggers them to share the experience with your clients. Word-of-mouth reviews are gold to your business. So, you won’t be spending a lot marketing your hotel. Again, you will not have incidents of bad reviews that might give your customers a bad rap about your business and cost you thousands of dollars of PR trying to recoup the lost glory.

3. Train Your Employees to Handle More Than One Role

In every business, the cost of labor makes up nearly 50% of hotel expenses. To cut off hotel costs, you might want to find ways to make the best use of the human resources at your hotel instead of hiring new faces.

One of the most brilliant ways you can do that is by cross-training your staff. It’s a way of giving them more skills they can use in the hotel industry. For eg., you can train your employees to help out at the help desk during peak times. And during downtime, front desk people can also work as social media marketers.

Looking for Hotel Management Software? Check out SoftwareSuggest’s list of the best hotel management tool solutions.

4. Employ Diligent Marketing Tricks

Marketing is one of the places you can get quite some fat. In fact, not many people understand marketing. That is why most people just throw money at it, without taking into consideration the return on investment (ROI) they are getting out of it.

You can turn low-cost strategies for making the customer understand that your hotel exists. One of the ways you can do it is by leveraging social media platforms.

  • Produce great content.
  • Write good social media copy that spooks the interests of your would-be hosted.
  • Share into platforms like Facebook and Twitter.
  • You can also take brilliant photos of your hotel and show them off to your target audience on Instagram.

5. Cut Energy Costs by Going Green

Actually going green, in this case, means more than just saving the environment. For eg., you could invest in a programmable thermostat. That way, you won’t be spending money warming or cooling hotel rooms when you don’t have guests in those rooms. You could also introduce LED lighting to cut energy costs. LEDs, according to the US Department of Energy use less than 75% of energy compared to the ordinary bulb. And, most importantly, those last 25 times longer than the incandescent bulbs.

6. Perform a Detailed Expense Analysis

Sit down and generate some reports on the expenses using your hotel management software. Take your time and crunch the numbers Try to spot the trends in expenditure. See where the money goes. You might be in for a few surprises. For example, you might discover an eerily huge spike in IT expenses occasioned by employees’ bandwidth usage. You might even be surprised that you are spending around 4 times more on those supposedly affordable shampoos.

7. Negotiate with Vendors for Discount

You might have accepted the first offer from your hotel management system vendors. Now that the contracts you entered in are coming to an end, it is time you need to take them up on the issue. Remember you are tightening the belt. That is it. So, it won’t sound unreasonable to ask for a discount. In fact, it is much easier for them to lower the price for you to win you over for a long-term deal than to find another regular customer. But, if they are not up for your new offer, you might want to shop around for those who are willing to offer a better deal that gives you some leverage.

8. Consider Open-Source Software

If you don’t have a lot of money to invest in one of those best hotel management software out there, go for the open-source versions. Also, if you are running a boutique hotel with a handful of employees, it might not make any sense to invest in costly hospitality management software you might never use. Just so you know, here are some of the best open-source hotel management software out there you might want to look at.

Also, read: Latest Hotel Management Software Trends

9. Reduce the Cost of Doing Laundry

Encourage your guests to reuse their towels goes a long way to reducing the loads of laundry that will be done every day. One of the best ways of doing it is by placing small signs in the guestrooms that encourage them to reuse the towels. This move also helps cut off hotel costs related to water and sewer energy. The initiatives also serve to increase the lifespan of towels and other lines. As a result, it reduces the cost of replacements too. According to the Association for Linen Management, such programs help hoteliers save up to $6.50 a day per occupied room.  

10. Work Harder to Increase Point-of-Sale (POS) Revenue Generating Opportunities

You can partner with local vendors – for eg., restaurants software, concert venues, car rental companies, and amusement parks – that allow you to sell additional services to your guests. You can use your gift shop or front desk to sell tickets. You can also offer car rentals or even offer your guests special discounts. If you want to take it further, you can come up with hotel-branded products for sale to hotel guests like T-shirts, shampoos, soap, or pieces of linens.

Bottom Line

Even in the highly competitive hotel industry, you can always find a way to keep the expenses low and still keep shining. But, it is a lot of jobs figuring out where you need to lay your jab. By embracing creative and proactive solutions, you can easily cut off hotel costs and increase revenues.

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