3 Ways to cut down the hotel’s operating expenses

3 Ways to cut down the hotel’s operating expenses

Manage hotel is not easy

As we know, almost all of the hotel operates 24/7 throughout the year. So the hotelier will need many labors on duty at the front desk, housekeeping, maintenance, and other departments. Undoubtedly, labor costs are the highest operating expenses in a hotel.
In the meantime, the hoteliers have to launch a different marketing plan to attract new customers. Besides that, the electricity fees, maintenance fees, etc. also become part of the expenses of the hotel. From here, we know that running a hotel is really a tough job.
When the hoteliers looking forward to the maximum room occupancy, they surely want to reduce the hotel operating cost as well. Here are ways to help the hoteliers cut down their daily operating costs.

1. Transformation with PMS

In this digital era, all the hoteliers need to transform their business by using the cloud-based hotel management system sooner or later. Because there are more and more travelers will book their hotel rooms online through the handphone. So, most of the hoteliers who manage their business with the traditional manual system should invest in the cloud base PMS now. As a new PMS traveling product in the market, HotelX is one of the good choices for you.

At the same time, with the mobile check-in and check-out system, there won’t be long queues that appeared at the front desk. The housekeeping members also can communicate directly with the front desk colleagues from a mobile device and check which rooms need to clean and which ones are already occupied.
According to Hospitality Technology report, almost half of hotels have used the cloud-based hotel management software.

We also find out that most of the hotel operating costs are shown below:

  • Labor costs account for 44.2% of operating costs
  • Utility costs account for approximately 6% of operating costs
  • Property operation and maintenance costs account for approximately 4%-6% of operating costs
2. Launch free marketing campaigns

Many hoteliers sometimes spend a large budget for the marketing department to promote their hotel, such as publish the advertisement in newspapers, TV or design and print out some flyers. There is also a relatively cheap way to do promotion such as local business referrals and word of mouth.
Since the above-paid promotions did not guarantee the hoteliers to get worthful rewards, most of the hoteliers now will probably use social media platforms like Facebook, Wechat, Twitter and Instagram, etc. to promote their offer packages or new campaigns. These free marketing platforms sometimes can let your hotel get responses from the new customers.
For example, the hotel persons-in-charge can post the news, blog articles or packages, etc. on their Facebook or Wechat page without a single cent. This type of content marketing has become a trend now for businessmen to promote their products and services. On the other hand, the hoteliers also can communicate with the public through these social media platforms.

Hoteliers may try on the following methods to do the low-cost marketing campaign:

  • Produce good content.
  • Write great social media story that spooks the interests of your possible host.
  • Share into platforms like Facebook and Twitter.
  • You can also take brilliant photos of your hotel and show them off on Instagram to your target audience.
3. Minimum staffing and minimize OTA commission

In recent years, most of the hotel management apps provide an online booking platform to help the hotel operators lowering their operating expenses in a different way. As a result, the hotel staff’s workload has been reduced and the hoteliers no longer hire many workers.
This platform also can help hoteliers to create awareness to travelers that booking the accommodations through the official hotel website will be different compared to book rooms through OTA.
Besides that, the online check-in and check-out self-service interface also delivers ultimate convenience and provides great guest satisfaction with less staff. There are lots of cloud-based hotel management software like HotelX, could convert OTA guests to be your loyal customers and help you save the OTA commission.
According to a blog article shows that:

  • 76% of online bookings make through OTA.
  • 50% of the internet users will visit the official hotel website after discovering the hotel through OTA.
Conclusion:

Would you like to save your hotel operating costs from now on? Try to take proactive approaches as stated above to control your hotel daily expense. It is believed that these methods will generate a profit for your hotel sooner or later.

Highlight links
  1. Hotelx— http://www.hotelX.com.my
  2. http://blog.frontdeskanywhere.com/quick-tips-to-cut-your-hotels-costs
  3. https://www.softwaresuggest.com/blog/how-cut-off-hotel-costs/
  4. https://blog.mysoftinn.com/2017/04/25/direct-booking-vs-online-travel-agency-what-hotel-need-to-know-in-2017/
Resources and further reading:

Skytouch (2017) Top 3 ways to optimize your hotel operations costs <https://skytouchtechnology.com/top-3-ways-optimize-hotel-operations-costs/>
Hotel Effectiveness (2016) 8 Guaranteed ways to reduce your hotel’s largest operating costs
Siteminder 10 Smart ways your hotel can cut costs and maximise profits <https://www.siteminder.com/r/hotel-distribution/hotel-revenue-management/10-ways-hotel-cut-costs-revenue/>
Capterra (2018) 7 Straightforward ways to cut back on hotel costs <https://blog.capterra.com/7-straightforward-ways-to-cut-back-on-hotel-costs/>
Hydrofinity (2018) 3 Ways to control hotel operating costs < https://www.hydrofinity.com/blog/3-ways-to-control-hotel-operating-costs>
Hoteltechreport (2019) Hotel Operating Costs: How to Reduce Them <https://hoteltechreport.com/news/hotel-operating-costs-how-to-reduce-them>
Smartfinder (2016) Hotel Guide: How to reduce hotel operating costs without sacrificing quality
Software Suggest (2018) 10 Straightforward Ways to Cut Off Hotel Costs <https://www.softwaresuggest.com/blog/how-cut-off-hotel-costs/>
Frontdesk Anywhere (2016) Quick tips to cut your hotel’s costs <http://blog.frontdeskanywhere.com/quick-tips-to-cut-your-hotels-costs>
Quick Books Operating Costs: Understanding and reducing them for your business <https://quickbooks.intuit.com/r/expenses/8-ways-reduce-operating-costs/>
RoomKey PMS (2017) 6 Ways to Reduce Internal Costs This Low Season <https://roomkeypms.com/blog/6-ways-reduce-internal-costs-low-season/>
Openkey The Hotel Owner’s guide to cutting operating costs <https://www.openkey.co/the-hotel-owners-guide-to-cutting-operating-costs/>

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