Efficiency Unleashed: Transforming Hotel Cost Management

Hospitality has experienced an annual growth rate of 7.0% since 2022 – a testament to the resilience of the industry. Hoteliers, however, now face increasing challenges around revenue management.

As room demand continues to increase and customer expectations evolve, there is less margin for stagnation. Departments operating in silos can lead to inefficiencies and missed opportunities, driving up costs and limiting revenue potential.

What’s more, many hotels are still reliant on legacy technologies. To develop in a changing industry, they need to embrace new solutions – or risk getting left behind.

Take Inspiration from Industry Success

Airlines and hotels are increasingly pairing up to reap the benefits of partnership – for example, Hilton Honors has 26 airline transfer partners and Marriot Bonvoy has approximately 40. These partnerships offer guests more points if they use a particular service to encourage the connection between the two. This collaboration produces long-term customer satisfaction, establishes a clear purchase journey, and encourages repeat business.

Hoteliers can also look to airlines for inspiration about how to innovate amid market demand. By taking cues from the airline industry and implementing advanced revenue management software, hotels can unlock significant benefits. This software enables airlines to accurately predict demand, optimize pricing strategies, and streamline operations. By adopting similar tools, hotels can achieve the same advantages – anticipating customer needs, maximizing revenue across departments, and ultimately staying competitive in a fast-paced market.

Following in the footsteps of airlines could be the optimal route for hotel finance leaders looking to grow in the next year. A cloud-based ERP solution that informs management of customer needs and business requirements will ensure all customer data is protected and lead to the transformation of cost management.

Optimize Labor Management

Labor is a major challenge for hoteliers. According to Anthony Capuano, the CEO of Marriot International, a shortage of workers is the most significant challenge faced by hotels in recent years. Despite a high number of job applications, the hotel industry has a large amount of ‘quick quitters’ where staff are onboarded, but do not stay on for the long term.

What’s more, inept technologies can lead to inadequate staff scheduling during slower or busier periods. This not only causes hotels to spend inefficiently on labor costs, but also affects the standard and volume of customer service available to guests.

Poor labor management can be resolved through the implementation of innovative technology and by leveraging data. Access to data insights can facilitate accurate scheduling, leading to flexibility regarding customer needs and hotel operations. Hotel management software enables real-time workload and activity management, automated tasks, and interactions with guests to optimize hotel operations. Staff will have the capacity to delegate or perform multiple tasks without the risk of affecting the overall running of the business, in turn improving staff morale.

Having the correct number of staff on shift will also increase the hotel’s reliability, catering to the needs of guests and ensuring a smooth-running service across departments. It can also ensure the best utilization of staff members across the business.

Streamline Operational Efficiency

Hotels require complex collaboration of departments and systems for day-to-day guest fulfilment and engagement. All too often, departments are siloed – with poor communication between each creating major challenges, such as inadequate resource management.

When resources such as equipment or materials are not effectively allocated or managed, it can create bottlenecks, delays, and increased costs. For example, if a hotel runs out of fresh towels or essential toiletries due to poor inventory tracking, guests may feel inconvenienced, leading to dissatisfaction and negative reviews. Investing in proper resource management tools and strategies helps businesses ensure they have the right resources in the right place at the right time, minimizing disruptions.

Streamlining operations is made all the more urgent due to the anticipated increase in room demand, with global hotel occupancy expected to increase by 2.5% in 2024. Additionally, higher customer expectations require businesses to deliver seamless, high-quality services.

As it stands, many hotels use legacy ERP software solutions that may limit their ability to streamline operations. The solution to streamlining operations is a unified PMS system that removes silos and centralizes data from across the business. Your hotel PMS is the central hub that integrates all primary aspects of operations, directly enhancing the guest experience. By connecting departments such as the front desk, housekeeping, food and beverage, and maintenance, the PMS ensures that every interaction with the guest is coordinated and efficient.

By eliminating inefficiencies and automating routine tasks, employees can focus on more valuable work, leading to faster service and improved guest experiences. Essentially, this kind of productivity boost allows the organization to achieve more with existing resources, driving profitability and growth.

Driving Financial Success for the Hospitality Industry

Leveraging data to optimize pricing, inventory, and marketing strategies is essential for hotels and resorts aiming to enhance profitability and operational efficiency. By aligning cost management with data-driven revenue optimization, finance leaders can make more informed decisions that support their objectives.

As the industry rapidly evolves, the need to partner with a technology provider becomes increasingly urgent. Collaborating with a technology partner ensures that businesses stay ahead of the curve, can quickly adapt to market changes and capitalize on new opportunities for growth.

To learn more about how data can drive transformation, check out our new eBook.