May 20, 2020
By Ashima Jain

There is no denying the fact that the travel and hospitality industry has been immensely affected by COVID-19’s economic impact. With revenues dwindling or coming to a standstill, it’s important to keep costs to a minimum. In these challenging times, hotels must stay prepared with a well-managed strategy. Thus, it’s crucial that hotels focus on reducing operational costs and think about cost-efficient steps to navigate through this unprecedented situation — all while keeping customers happy. Here are some great cost-saving ideas for hotels that don’t compromise customer delight.

Explore 6 effective cost-saving ideas for hotels:

1. Optimise labour schedules

Labour cost accounts for almost half of a hotel’s operating costs. An optimised staff roster can provide a lot of relief to profit margins. You don’t want your hotel to be over-staffed or under-staffed. Instead, use a forecast to plan schedules for every position in your hotel, and then update the changes if any adjustments need to be made. Make sure your staff schedules reflect the day-to-day variations in business volume. A flexible shift-based approach allows you to be agile, and utilise your staff efficiently when you need them the most.

2. Cross-train your staff

Cross-training your staff is one of the best ways to save operational costs for your hotel. By doing so, you’ll be able to use your existing staff instead of bringing in new faces for new roles. Cross-trained staff are of great help when another staff member is on vacation or in times when your hotel is short-staffed. Research suggests that cross-training staff is a win-win situation for both the hotel as well as the employee. This, however, should be coupled with an important cautionary tip – ensure that the staff is not getting overburdened.

3. Go green

“Sustainability” is a growing trend in the meetings and events industry. Many big chains in the hotel industry are now shifting towards greener initiatives. Today, hotels and venues are reducing their carbon footprint and thinking creatively to improve the attendee experience. Adopting environment-friendly measures are not only economically beneficial, but they also help in building brand reputation by adding to the customer delight.

Bringing in more natural light, using energy-efficient appliances, streamlining F&B to reduce waste, and educating staff towards energy saving are some of the preliminary steps that can be taken towards going green and cost-cutting. For example, installing timers on bathroom heat lamps or implementing smart windows in your hotel are some of the smartest things to embrace. Smart windows can adjust the cooling or heating required in the room by controlling the amount of light passing through it. This eventually helps in lowering your electricity costs of the air conditioners or room heaters.

4. Make the most of under-utilised spaces

Ideally, reducing operational cost and generating revenue go hand-in-hand. This presents an opportunity to repurpose your venue’s less utilised spaces to earn some side income. This might not necessarily require a permanent set-up. Therefore, this works as a revenue generation strategy as well as a perfectly practical hotel cost-saving idea.

One example is using your garden for social events, weddings or parties. It will contribute to delivering a great experience to guests who might even become future customers. If you have a hall, you can use it for conducting a yoga or dance class. Another upcoming trend is utilising your hotel’s lobby to set up a workspace, a social hotspot or even a cool coffee shop. There are many other ways you can use these spaces and promote your hotel during the off-season. Put on your thinking cap and be creative!

5. Embrace technology

Investing in hotel technology can boost ROI and drive growth. For example, you can make an event planner’s life easier by introducing a sales & catering CRM that can set automatic reminders for the sales team to follow up with leads, schedule onsite visits and send contracts. Another technology that helps you become more productive and efficient is room block management software. An effective room block management software can help you create customised booking pages and allows you to use targeted messaging to generate incremental upsell revenue from extended stays, room upgrades, etc.

Today, when social distancing is the new norm, virtual events are taking the world by storm. However, when in-person events begin again, Hybrid events – a blend of in-person and virtual events – could be the next possible solution. Hybrid events require venues to have technical capabilities and infrastructures in place to support them. To keep up with the future of events, it’s important for hoteliers to be equipped with enough bandwidth and speed to cater to advanced event technologies such as augmented reality (AR) and virtual reality (VR).

6. Focus on customer loyalty

Of all of the cost-saving ideas for hotels on this list, one of the most natural to implement is customer loyalty. A loyal customer is an important asset for hotels. Retaining existing customers is much easier and cheaper, and therefore it should be a priority. There are many benefits of having returning customers. Loyalty, in the business context, means a customer buys a service or product from a company continually over a long period. Moreover, they become an advocate and recommend the service or the product to their colleagues, friends and family.

Put these cost-saving ideas for hotels to good use today!

All of the above cost-saving ideas for hotels may or may not be suitable for every property. Therefore, use them at your discretion, but remember that cost-cutting techniques will prove advantageous to your hotel, as well as your staff.

Up next, learn how to establish a strong hotel marketing strategy to stay visible and relevant during these challenging times by reading The Hotel Manager’s Guide to Marketing During Uncertain Times.


Ashima Jain

Ashima started her writing career with a startup magazine where she wrote content for all its digital channels. During her journalism days, she has contributed stories for some of the top media houses. She has over 3 years of experience in communications and public relations where she was heavily invested in writing digital content for technology brands. When she takes a break from writing, she loves dancing, listening to music and being a globetrotter.
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