Maximizing the profits of your hotel business is simple: increase your revenue while lowering your costs. Because there are so many things that you must do to keep up with guests’ expectations, that second part can seem impossible. You can, however, curb your hotel’s expenses by reducing your overhead. Here are six ways to do just that:
1. Reduce your paper use
A minor reduction in paper use saved Yale hundreds of thousands of dollars in 2011. Your hotel can experience similar savings with less paper. Small steps like paperless billing, digital documents and digital faxes will yield great benefits for your hotel’s finances.
2. Share your marketing costs
More than most other businesses, successfully running a hotel is all about building partnerships. You can use these relationships to get a lot of things done, including marketing for your hotel. You could work in tandem with a nearby restaurant that has a theme close enough to that of your hotel for your marketing campaigns to flow together. This will significantly reduce your own financial demands for marketing while expanding your reach.
3. Moderate your event expenses
Although your hotel provides a perfect venue for people to hold events, entertain guests, etc, you shouldn’t overdo it with the amenities here. People will be expecting to do a lot of the legwork themselves anyway, so limit additional services for your events to equipment that you already have.
4. Manage your supplies
For hotels, supplies such as shampoo, soap, etc are a loss leader. That being said, you can minimize this loss with some judicious supply management. You can, for example, do the following two things:
- Invest in smaller sized personal cleaning products
- Encourage guests to reuse their towels (will save you about 72,000 gallons of water and 480 gallons of detergent each year)
5. Invest in LED lightbulbs
In addition to lasting 25 times longer and sucking up 75% less energy than incandescent bulbs, LED lighting also looks a lot better. This more than offsets their higher — and rapidly declining — initial costs.
6. Switch merchant services providers
High merchant fees can be a big problem for a hotel. This necessary service takes a chunk out of your profits before you even see it; sometimes the rates can be outlandishly high. However, this doesn’t mean that you have to settle for whatever your current hotel or timeshare merchant account services company is asking you to pay. Instead, you should routinely audit the cost of your current merchant services company. If you find a better offer, then you should switch. This simple process will save your hotel countless dollars in overhead costs each year.
Don’t assume that your expenses are what they are
One of the biggest mistakes that you can make as a hotel manager or owner is to assume that your overhead expenses are set in stone and that success will require you to work around them. By taking steps like the ones discussed in this article, you can reduce overhead and increase profits.