Hotel business is essentially a trade that deals with limited inventory. There’s a strict set of a limited number of rooms for sale, and the possible revenue you can generate out of those rooms is affected by the overall market conditions. Therefore, cutting operating costs for your hotel can significantly improve your bottom line, and make your business worth your while.
Spending patterns businesses make are not very different from patterns a consumer makes. There are usually places where you can cut back, both in supplies and services which are nonessential for your business.
Here are the top 3 ways you can cut back on your hotel costs and improve your bottom line:
1. Tweak your marketing
One place you can usually cut back expenses is your marketing budget. Not everyone needs an expensive digital marketing agency, and it’s not that hard to do it yourself after all. All the information you need is online and it’s free. For example, this article talks about recent trends in digital marketing.
You can also turn to lower-cost methods of approaching your customers. Content marketing via your website or blog is one of those ways. You can also get active on social media and engage with your potential audience. In both cases, you can consider doing paid advertising for the web via Google and Facebook/Instagram. If you do it yourself, instead of doing it via a marketing agency, your overall expenses can be reduced by up to 80%.
2. Hire inexperienced staff
If you’re willing to train people, hire inexperienced but ambitious people may be helpful. For many organizations today the right skills are not as important as the right culture-fit, motivation, ambition and willingness to learn. Therefore, if you are prepared to dedicate some short period of time on staff training, it could pay off in the long run over hiring staff with decades of experience. Alternatively, you can try hiring temp workers when there is a high demand for skilled workforce. Read more about it here.
3. Cross-train your staff
Staff pay is a big part of most hotel expenditures. Another way you can save is by using your staff more efficiently, by offering to cross-train.
With cross-training, both parties win. The benefit to your staff will be the additional skills gained by working for you, and the benefit for you will be the cost savings and increased guest satisfaction levels. For example, you can train your bar staff to work at the reception desk during busy hours (such as check-in and check-out times). You can also train your reception staff to do your social media management when front desk less busy.
4. Negotiate with your existing suppliers
Even if you have long-term relationships with vendors, when their contracts are up for renewal it is worth asking for a better price. Or you can shop around to evaluate if you can get the same from a more competitive supplier.
Keep in mind that for B2B suppliers, it is easier for a seller to offer a better price to an existing customer than to find a new customer. Use that to your advantage.