Are you still concerned about your cost cutting?

 TOP 40 hotel’s cost cutting actions

It is all about profitability. Hotel profitability. Do you believe that cost cutting is still in place? I feel obliged to share with you opinion, ideas and successes within cost cutting in order to increase profitability.

Is the cost cutting in your mind? Nightmare! Where shall we save! Tought time, right? It has been a hard work and for some of us it is still hard work to manage costs under the acceptable level. Let me summarize traditional, non-traditional, effective, creative and brand new ideas of LinkedIn network. Question was: If you could recommend one single action to cut costs and increase profitability within your hotel operation, what would that action be?

Enjoy reading below ideas touching each of hotel’s department. All are great and many of them are success stories of hotel professionals. All suggestions can be easily applied to your hotel, based on current hotel’s operation situation. Hope you will find them useful for your hotel operations.

1. Eric – Have a comprehensive sustainability program
2. Alpana – Power and water saving programme, recycling, if its resort grow your own vegetable garden, staff anc customer awareness programmes
3. Derek – Put all your main supply contracts out to re-tender especially things like your utility services and payment terminal services – if you are a good payer it is suprising how much your existing suppliers willl reduce their rates if they think they might lose your business
4. Tommy – Cut up to 30% from the fuel budget by installing a CH3 conditioner on the main gas supply line, and perhaps boosters throughout
5. Dhanasekar – Measure and improve your customer loyalty
6. Vishwas – Recycling of resources
7. Peter S. – Payroll
8. Navin – Multi tasking the staff to avoid excess staff and cut the labor cost
9. Rohit – Motivate your staff leading to reduction in the time cost there by achieving customer loyalty
10. Matt S. – Monitoring solution to improve the performance and availability of hotel‘s website for customers. See your site from guest’s perspective.
11. Muhammad – Look at F&B outlets, how much remaining food is going into BINS. Keep a close look at passtries (quantity vs consumption), make an analysis and decide which one is the best for NOW. Once situation in your hotel will change, you can make upgrade them easily again
12. Laudia – Sales in advance!! Estimate and program your costs and resources according to demand!
13. Lawrence – Restrict internet access to social networking sites
14. Ravi – Initiate the strategy to keep internal as well as external customer happy
15. Jameel – Cross Training to avoid delays in handling jobs and priorities
16. Bill – Pay attention, it is that simple. Address the details and avoid looking for the one „magic“ bullet!
17. James – Accountability from the top down and a reward system for those that show the greatest improvement (without sacraficing the quality of the services). The second way would be through effective claims management/risk management as a bad year of claims can destroy the bottom line.
18. Keith – Ensure that any bookings that come through your hotels own website are commission free and drive more reservation traffic through your own site by ensuring that rates on your site are slightly lower than any distribution sites or networks.
19. Kassem – Involve your Team to assist you with ideas, including line staff, brainstorming will give great ideas and eventually you will end up forming a well motivated Team, plus you will achieve expenses reduction and a more profitable operation. And aways compare last months and last years expenses, remember that if you can’t measure it, you can’t improve it…
20. Janusz – Not big deal. Motivate your staff setting up reward for idea to increase efficiency. And listen to outcome to use it for your purpose.
21. Germain – Manager your amenity program. Here is one example – the housekeeping department who are sick and tired to either eating apples or throwing them away, can let the kitchen know that one apple and one banana is a good amenity instead of the 3 all color apples, the kiwi, the grapes that go gray and the banana.
22. John – Menu engineeering in Food & Beverage department
23. Mark S – I would do today is replace all the lighting bulbs to LED.
24. Chris – Find software solutions that charge flat fees instead of revenue percentages.
25. Frank • Check the budget
26. Kassem – Employ a highly focused commercial FD with strong reputation in the Hotel and Hospitality industry, who understands your company values and strategic aims and goals, which will ensure that s/he can respond quickly to the business needs and provide the support and assistance appropriate to get a successful result.
27. Henk – One thing that is always overlooked, and that is the cleaning of draught beer lines, the wastage is massive and we have a system that allows you to cut the waste by up to 80% thus increasing your profits.
28. Preston – Add a LEd light bulb for the pool. It should save aprox $500.00 every 6-8 months. The savings come from purchasing less pool lights and ofcourse the energy savings. The side benefit of this is that the pool looks even brighter and more blue in color
29. Bob – If you want real long-term savings, share your hotel mission, vision and values with all your staff. Find out what they think is stopping them making their maximum contribution to hotel operations and profitability and fix what they tell you. Then set up a properly formulated performance managemnent system.
30. Sanjay- Don’t cut cost on anything. Just encourage you client stay more by giving them extra nights on GIT price. Business will grow automatically.
31. Phaedon – Put solar panels and derive electricity from the sun
32. Subodhkumar – I would focus on inventory item as regards to eating. I would select one raw item which can be used again & again to create more number of eating dishes say „egg“ or „potato“. In turn, there will be less pressure on more raw items. Over & above, I will be able to get better buying price since I would buy more „egg“ or „potato“. Out of „potato“, I can think & cook more than 100+ dishes with various „combinations“ & each one carrying different taste. Same way using „egg“, I can introduce more than 50++ eating dishes.
33. Matt S – If the hotel has a website or is part of a group then I do recommend introducing a performance monitoring tool to increase conversion rates and online revenue.
34. Arun – Payroll will be the highest expense in any five star hotel there are departments like secuirty, valet drivers, public area cleaners, kitchen commis, handyman, stewarding associates that can hired from a outside company that supplies quality manpower and save on payroll related expenses.
35. Steven – Increase your website visibility and bring more consumers to your site via strong Search Engine Optimization. Ensure that you are seeing a valid ROI on your website.Try to funnel your consumers through your site given that those rooms are your most profitiable inventory. Use e marketing to promote your hotel throughout the year. Add a reservations tab to your hotels Facebook page in order to add a new revenue stream to the hotel.
36. Ray – the single largest savings opportunity without cutting service through reduction of employees would be through commercial insurance. It falls directly behind payroll, perhaps property taxes, as one of your largest annual expenditures.
37. Stephen – Implement a weekly labor productivity report which compares actual cost POR (per occupied room) vs budget by dept. Have each dept head explain variances between actual vs budget.
38. Robert – Go paperless where possible!
39. Shannon – Lear and respectful communication from those in charge to retain and build staff loyalty and performance. This saves time and money.
40. D.J.C. – Get rid of your sales managers! One director for sales and marketing while utilizing your front office reservations as inside sales managers! One director to make personal contacts, as many reservationists (decreased pay and performanced-based incentives) as it takes to make the relationships grow and increase occupancy once the guests and corporate accounts get to know their contact.

Basic rule to your cost cutting would be: Always ask, as much as you can questions starting with (W) in any thing related to expense or purchasing

• What is this?
• Why we need this?
• When we will use this?
• Who will use this?

Do you have any other cost cutting idea which helped out your hotel to get out of the economic crisis over the last few months or year(s)? Share it with us. We are all keen to try them as well! And don’t forget – read it again, study, select and implement a little improvement plan according to your business. Euro to Euro and here it comes my budget and more effective hotel‘s operation results.

Let me compliment my former GM Ulf. He tought me a lot and he always said „You take care of the revenue and I will take care of the cost“. Let’s work together. Why cut cost? Make sales move and get in more business! It is not easy just to say it! It REALLY hard work and the sale is not only about sales & reservation department. Even our waiters and housekeeping staff are the sale people. Teach them to behave that way – plant to harvest!

Are you still having some rooms available? Contact us to help you with additional sales support in attract travel industry people to come to your hotel 🙂

Mail me, skype me, ICQ-me and call me if you have any questions.