Many factors have to go right for success in the hotel business- everything from ensuring proper customer service to streamlining operations and using every space and resource to its maximum potential. Another fundamental contributor to success is cost savings. Cost-cutting makes it possible to maintain optimum expenses and reduce spending in unnecessary activities, increasing profits and, in turn, success. But how do you cut costs without compromising the quality of customer service? Let’s dive into some cost-saving tips you ought to know:
Evaluate the current expenses
You cannot manage expenses if you have no idea where the money is going. The first step in cost-saving is analyzing the current costs. Evaluate the reports and break down the operating costs. Look at the nitty-gritty details and identify avenues for reducing expenses. Observing your spending makes it easier to identify areas that could use more efficiently and cheaper alternatives.
Make the most of labour scheduling and prioritize staff training
A significant percentage of a hotel’s operating expenses goes to labour costs. Managing labour costs call for a balance between minimizing expenses and ensuring the existing staff is not overutilized. You have to exercise creative thought when looking for savings in the labour department. One effective way of doing that is by anticipating staffing needs and planning accordingly. Also, you could consider cross-training employees to make it easier for them to transfer their skills when needed in another role. That will go a long way in covering staffing emergencies. You will not have to spend extra resources onboarding new staff members.
Scout for the best deals with vendors
Negotiate with vendors to get the best deals. It is easier to secure impressive deals when you have excellent vendor relationships. Ask for discounts whenever possible. Look at different vendors and settle with one that offers the best terms without sacrificing quality. If you are ordering items like industrial paper towels, for example, you are better off liaising with a vendor that can supply quality in bulk and at a good discount. You can go for top-quality towels with a unique fold making it easy to dispense only one fully-opened, absorbent towel. In this case, you will reduce the number of towels used plus you will lower the risk of cross-contamination in your hotel.
Alternatively, working with a Hospitality Procurement company can streamline the entire sourcing process. Instead of negotiating with multiple vendors yourself, a procurement partner brings established relationships, industry expertise, and bulk purchasing power to the table. They can help you secure high-quality products at competitive prices while ensuring consistency and timely delivery. This not only saves time and money but also allows you to focus more on running your hotel while trusting that your supply needs are professionally managed.
Emphasize energy-efficient solutions
Utility bills are some of the fastest-growing operational costs for most hotels. Finding ways to manage them is a sure way to cut costs. Energy efficiency serves the purpose of reducing costs. It also demonstrates care for the environment. The first step in finding energy-efficient solutions is tracking energy performance. Schedule audits to assess HVAC, lighting, refrigeration, and insulation systems.
Gauge where the bulk of utility bills go. Identify what will bring considerable savings if you use energy-efficient options. Other than moving to energy-efficient appliances, other practices can help reduce energy bills. Simple things like training staff to switch lights off when not in use, using energy-efficient bulbs, and having occupancy sensors for light will go a long way in cost-cutting.
Automate processes
Technology saves the day in many aspects. Not only does it increase efficiency and save time, but it also helps minimize labour costs and contributes to an excellent customer experience. Try to leverage technology by using check-in and check-out apps, sales and catering CRM tools, etc. Additionally, with solutions like those from Hotel Metrics, you can even access valuable data insights to improve pricing strategies, boost revenue, and streamline operations. With technology, you can streamline processes, help staff save time, and keep things organized. Moreover, it is an effective way to cut costs.
Final remarks
Cutting costs and reducing expenses is one way to grow your business income. As a hotel business owner or leader, you ought to strive to find ways to save more cash without compromising on quality.