Reducing Hotel Operating Costs

An established businessman in Palm Beach County, Florida, E. Llwyd Ecclestone, Jr., works as a commercial real estate developer for National Investment Company. E. Llwyd Ecclestone, Jr., also actively operates three hotels in California, Texas, and Kansas.

In the hotel industry, cutting operational costs without sacrificing customer experience is key to success. As with most entities, hotels have a mix of fixed costs (such as utility bills and staff salaries) and variable costs (such as hourly wages and housekeeping supplies).

Staff costs make up the largest portion of hotel operating expenses at an average of 50 percent of the total operating budget. Managing these expenses requires careful balancing and creativity. While hoteliers don’t want to keep underutilized staff, not having enough people around stresses employees and dampens the customer experience. Preventing this involves accurately forecasting staffing needs and planning schedules accordingly so the hotel has the right amount of staff.

Cross-training employees teaches staff members the skills necessary for multiple positions. This helps cover a hotel’s emergency staffing needs and keeps things running as smoothly as possible when someone unexpectedly calls out sick or doesn’t show up.

Utilities are another major cost for hotels. In-room energy management sensors help keep these costs down, yet few hotels in the United States incorporate them. Other options for reducing utility costs include limiting water usage in laundry operations and adding high-efficiency lighting and energy-efficient appliances to rooms, such as more efficient mini-refrigerators or air conditioning units.