5 Tips from Hotel Experts in Reducing Operations Costs During The Current Crisis
Hoteliers are slowly adjusting to the “new normal” but the situation of the crisis changes everyday.
To help hoteliers take control of the situation, industry experts from ZEN Hospitality Solutions shared their expertise on how hotels can optimize and reduce operations cost during a live webinar. Following the success of the first webinar, attendees of this second talk were provided tips on identifying savings opportunities and managing the impact of COVID-19 with their overhead and fixed costs.
Identifying the 2 Main Sources of Hotel Operations Costs
1. Consumption of utilities
In the next 6 to 12 months, guests are expected to stay inside their hotel rooms. This is because clean hotel rooms isolate them from the outside world where the virus persists. With that, hoteliers should expect increased consumption in utilities (up to 3x) and increased use of hotel amenities like laundry bags, and soap.
2. Safety Measure Costs
Safety will be the top priority of guests over the next 12 months. In adherence to government regulations and guest expectations, hotels need to be extra vigilant and enhance their safety procedures. Therefore, hoteliers need to invest in Personal Protective Equipment (PPE; which includes a complete overall suit, gloves, face mask, and face shield) for the hotel staff. Additionally, there will be additional costs on putting hand sanitizers and alcohol at certain parts of the hotel, and printing safety signs and banners to guide hotel guests.
5 Actionable Steps in Optimizing Hotel Operations Costs
1. Review contracts with current suppliers
Revisit existing partnerships with suppliers and save up to 25% on costs. Many long-term contracts are not competitive anymore due to the economic changes brought by COVID-19. When canvassing for new suppliers, make sure to compare at least 3-5 options. Before deciding, do not forget to check hidden costs and charges, as well as additional shipping fees and taxes. Prices may look slightly lower because these were not included in the original computation of fees.
2. Renegotiate property leases
For hoteliers who lease their properties, it is important to check back on the details and the fine print of the lease contract. Check all the terms that can be negotiated and present all the government regulations that can help lower the lease price. Since the real estate market is experiencing an average decline of 15%, lessors need their tenants to uphold leases. In turn, hoteliers can use this as an opportunity to renegotiate. Once lessors agree to the newly presented terms and conditions, make sure everything is well documented to avoid future issues.
3. Optimize human resources
Manpower is the most important resource of the hotel because their skill cannot be replaced. When faced with adversity, do not fire then hire afterwards. To fire, hire, and proceed to train a replacement costs about 33% of a staff’s yearly salary. Instead, cross-train staff to increase efficiency and allow flexible working conditions. Minimize the number of working hours to save costs on salary but provide job security to the staff. Maximize labor subsidies that are available to the staff to help compensate the staff.
4. Focus on long-term savings
Initial investments will pay off in the long run, in some cases, within 3 months. Replace old and obsolete appliances since they consume more energy. Switch to Halogen/LED lights or use split-type air conditioning to save costs on electricity. Buying bulk from suppliers will also save extra costs since this type of purchase has special discounts.
5. Go digital and use automation tools
To save time and avoid expensive staff errors, invest in a long-term digital solution for the hotel. A digital automation tool like a Property Management System (PMS) consolidates guest data, standardizes check-in and check-out procedures, and updates revenue and room occupancy automatically; no need for the manual use of logbooks and ledgers. Since the PMS would cost around $59 monthly and can do the job of 2 hotel staff, savings are increased in staff wages. A PMS can also help in customer care and enhancing guest experience because of its feature to send guest reminders automatically after one-time setup.
ZEN eManager: An all-in-one hotel solution to reduce costs and increase efficiency
During these challenging times, an expert all-in-one solution will help hoteliers manage their hotel from the safety of their homes, avoid staff errors, and increase productivity. It’s time for hoteliers to go digital.
ZEN eManager comes with:
A cloud-based hotel management system: eZee Absolute is a Property Management System (PMS) that allows hoteliers and other staff to manage the property remotely while ensuring that hotel operations are smooth and guest satisfaction is excellent. Through the mobile app, the hotel staff will be able to coordinate on tasks without staying close to each other.
Advantages of eZee Absolute:
- Automation of hotel operations – The PMS allows auto-assignment of rooms to the hotel guests so the staff does not have to manually check which rooms are available. It also provides the staff an easier way to input in guest details and check them in the hotel.
- Tracking of hotel performance – The PMS provides increased visibility on hotel data like guest insights, room occupancy, and financial status. This allows hoteliers to quickly re-plan their strategies for the next few days or weeks.
- Integration with Channel Manager – eZee Absolute can seamlessly be connected to the hotel’s Channel Manager. Since more bookings are coming from Online Travel Agencies (OTAs), it is important to synchronize external bookings with in-house reservations and current bookings.
ZEN eManager also includes:
- A cloud-based Channel Manager: eZee Centrix, a Channel Manager allows real-time monitoring of bookings and cancellations, easy rate management, and viewing of hotel listings across all Online Travel Agencies (OTAs) — all done through the computer software and the mobile app. eZee Centrix can also be connected to eZee Absolute PMS for hassle-free monitoring of bookings across all booking platforms.
- A dedicated revenue manager: ZEN eManager also includes a dedicated revenue manager straight from ZEN Headquarters. The assigned revenue manager applies the most advanced pricing algorithm, the ZEN Pricing Model, to ensure that hoteliers get maximum profit no matter the season.
Book a free demo of ZEN eManager at www.zen-hs.com/book-a-meeting to find out more.